SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-K/A
    

(Mark One) 
[X]             ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
             THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
                  For the fiscal year ended December 31, 1996
                                       OR
[ ]           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                  THE SECURITIES ACT OF 1934 (NO FEE REQUIRED)
                          Commission File No. 1-12926



                        BEACON PROPERTIES CORPORATION 
             (Exact name of registrant as specified in its charter)

            Incorporated in Maryland                    04-3224258 
         (State or other jurisdiction of             (I.R.S. Employer 
          incorporation or organization)            Identification No.) 

     50 Rowes Wharf, Boston, Massachusetts                 02110 
     (Address of principal executive offices)           (Zip Code) 

        Registrant's telephone number, including area code   617-330-1400 

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

                                           Name of each exchange on 
        Title of each class                    which registered 
   Common Stock, $.01 par value             New York Stock Exchange 

    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 [checkmark] No __

    Indicate by check mark if disclosure of delinquent filers pursuant to Item 
405 of Regulation S-K ((S.)229.405 of this chapter) is not contained herein, 
and will not be contained to the best of registrant's knowledge, in 
definitive proxy or information statements incorporated by reference in Part 
III of this Form 10-K or any amendment to this Form 10-K [ ].


    The aggregate market value of the shares of common stock held by 
non-affiliates as of March 24, 1997 was approximately $1,669.6 million. 

    The number of shares of common stock outstanding as of March 24, 1997 was 
48,233,236. 

                     DOCUMENTS INCORPORATED BY REFERENCE 

    Certain portions of the following documents have been incorporated by 
reference into the 10-K Parts indicated: 



                         Documents                                10-K Parts 
1. The 1997 Proxy Statement (The "1997 Proxy Statement")          Part III 

<PAGE> 


                                EXPLANATORY NOTE

This Amendment to Form 10-K is filed to amend Item 8 and Item 14 which are
restated herein in their entirety.

<PAGE> 


Item 8. Financial Statements and Supplementary Information 

   
    See "Index to Financial Statements" on page F-1 of this Form 10-K. 
    

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

    (a) Financial Statements and Financial Statement Schedules 

    See "Index to Financial Statements" on page F-1 of this Form 10-K. 

    (b) Exhibits 


<TABLE>
<CAPTION>

   
Exhibit No.       Description 
-----------       ----------- 
<S>               <C>
3.1(1)            Articles of Incorporation of the Company, as amended. 
3.2(2)            Amended and Restated Bylaws of the Company. 
3.3(2)            First Amendment to Amended and Restated Bylaws of the Company. 
9.1(3)            Voting Trust Agreement between Edwin N. Sidman and Paula L. Sidman. 
10.1(12)          Amended and Restated Agreement of Limited Partnership of Beacon Properties, L.P., 
                  as amended. 
10.2(4)           Amended and Restated 1994 Stock Option and Incentive Plan. 
10.3(1)           Employment and Non-Competition Agreement between the Company and Alan M. 
                  Leventhal. 
10.4(1)           Form of Employment and Non-Competition Agreement between the Company and each of 
                  Edwin N. Sidman and Norman B. Leventhal. 
10.5(1)           Form of Indemnification Agreement between the Company and each of its directors 
                  and executive officers. 
10.6(1)           Registration Rights Agreement among the Company, Richard L. Friedman and John L. 
                  Hall, II dated May 26, 1994. 
10.7(1)           Registration Rights Agreement Among the Company and certain partners of Beacon 
                  Properties, L.P. dated May 26, 1994. 
10.8(5)           Registration Rights Agreement Among the Company, Wellesley Office Realty Corp. and 
                  Federal 175 Realty Corp. dated October 27, 1994. 
10.9(7)           Registration Rights Agreement between the Company and TMPC, L.P. dated February 
                  15, 1996. 
10.10(12)         Registration Rights Agreement among the Company and the Fairfax County Portfolio 
                  contributors dated September 5, 1996. 
10.11(12)         Registration Rights Agreement between the Company and Metropolitan Life Insurance 
                  Company dated December 27, 1996. 
10.12(3)          Office/Retail Unit Lease, dated as of July 25, 1985 between Boston Redevelopment 
                  Authority as Landlord and Rowes Wharf Associates as Tenant for the Office/Retail 
                  Unit in the Condominium at Rowes Wharf, Boston, Massachusetts, as amended by a 
                  First Amendment to Ground Lease, dated as of June 11, 1987. 
10.13(3)          Lease Agreement, dated as of January 28, 1988, between Massachusetts Bay 
                  Transportation Authority, as Landlord and Beacon South Station Associates, L.P. as 
                  Tenant, as amended by a Lease Modification Agreement dated as of September 30, 
                  1988, and a Second Amendment to Lease dated as of August 1, 1989. 
10.14(6)          Option Agreement (Second Tier Noteholders Loan) by and between CP Holding Corp. as 
                  Trustee of the Note Holding Trust under Indenture of Trust dated as of November 
                  30, 1994 and Beacon Properties, L.P. 
10.15(6)          Option Agreement (Limited Partnership Interest) by and between CP Holding Corp. as 
                  Trustee of the Partnership Holding Trust under Indenture of Trust dated November 
                  30, 1994 and Beacon Properties, L.P. 
10.16(7)          Agreement of Purchase and Sale by and between Metropolitan Life Insurance Company 
                  and Beacon Properties, L.P. dated December 19, 1995. 
10.17(7)          Contribution Agreement by and among Taylor & Mathis Enterprises, L.P., Taylor & 
                  Mathis LTD., Taylor & Mathis/South Terraces, LTD. and Beacon Properties, L.P. 
                  dated December 19, 1995. 


                                        1
<PAGE> 

Exhibit No.       Description 
-----------       ----------- 

10.18(7)          Addendum to Contribution Agreement by and among Taylor & Mathis Enterprises, L.P., 
                  Taylor & Mathis, LTD., Taylor & Mathis/South Terraces, LTD and Beacon Properties, 
                  L.P. dated December 19, 1995. 
10.19(8)          Option Agreement dated March 18, 1996 among John Marshall Associates Limited 
                  Partnership, Greensboro Associates Limited Partnership, Woodland-Northridge I 
                  Limited Partnership, Pimpernell Estates Limited Partnership, Goodridge Drive 
                  Associates Limited Partnership and Beacon Properties, L.P. 
10.20(8)          First Amendment to Option Agreement dated May 17, 1996 among John Marshall 
                  Associates Limited Partnership, Greensboro Associates Limited Partnership, 
                  Woodland-Northridge I Limited Partnership, Pimpernell Estates Limited Partnership, 
                  Goodridge Drive Associates Limited Partnership and Beacon Properties, L.P. 
10.21(8)          Second Amendment to Option Agreement dated May 31, 1996 among John Marshall 
                  Associates Limited Partnership, Greensboro Associates Limited Partnership, 
                  Woodland-Northridge I Limited Partnership, Pimpernell Estates Limited Partnership, 
                  Goodridge Drive Associates Limited Partnership and Beacon Properties, L.P. 
10.22(8)          Third Amendment to Option Agreement dated June 21, 1996 among John Marshall 
                  Associates Limited Partnership, Greensboro Associates Limited Partnership, 
                  Woodland-Northridge I Limited Partnership, Pimpernell Estates Limited Partnership, 
                  Goodridge Drive Associates Limited Partnership and Beacon Properties, L.P. 
10.23(8)          Sale and Purchase Agreement between New York Life Insurance Company and Beacon 
                  Properties, L.P., dated as of July 19, 1996. 
10.24(9)          Purchase and Sale Agreement between LaSalle Fund II and Beacon Properties, L.P. 
                  dated as of September 20, 1996. 
10.25(9)          First Amendment to Purchase and Sale Agreement between LaSalle Fund II and Beacon 
                  Properties, L.P., dated as of October 2, 1996. 
10.26(9)          Purchase and Sale Contract between New England Executive Park Limited Partnership, 
                  et al and Beacon Properties, L.P. dated as of November 1, 1996. 
10.27(9)          Agreement of Purchase and Sale and Joint Escrow Instructions between 10960 
                  Property Corporation and Beacon Properties, L.P. dated October 3, 1996. 
10.28(10)         Contract of Sale between WRC Properties, Inc. and Beacon Properties, L.P. dated as 
                  of December 19, 1996. 
10.29(10)         Sale and Contribution Agreement between Metropolitan Life Insurance Company and 
                  Beacon Properties, L.P., dated as of November 20, 1996, including Exhibit T to 
                  Sales and Contribution Agreement. 
10.30(11)         Restated Revolving Credit Agreement among Beacon Properties, L.P., Beacon 
                  Properties Corporation and the First National Bank of Boston, dated June 27, 1996. 
10.31(11)         Amendment No. 1 to the Restated Revolving Credit Agreement among Beacon 
                  Properties, L.P., Beacon Properties Corporation and the First National Bank of 
                  Boston, dated July 18, 1996. 
10.32(12)         Loan Agreement between Beacon Properties, L.P. and Metropolitan Life Insurance
                  Company, dated March 15, 1996. 
10.33(12)         Mortgage, Security Agreement and Fixture Filing by Wellesley Holding, L.P., Wellesley Holding II,
                  L.P. and Beacon Properties, L.P. to Connecticut General Life Insurance Company, dated January 8, 1996. 
10.34(12)         Mortgage, Security Agreement and Fixture Filing by Center Plaza Associates Limited Partnership to 
                  Connecticut General Life Insurance Company, dated February 9, 1996.
21.1(12)          Subsidiaries of the Registrant 
23.1              Consent of Coopers & Lybrand L.L.P. 
27.1(12)              Financial Data Schedule 
</TABLE>
    

---------------
 (1) Filed as part of the Company's Quarterly Report on Form 10-Q for the 
     period ended June 30, 1994 and incorporated herein by reference. 

 (2) Filed as part of the Company's Registration Statement on Form S-3 (File 
     No. 333-17237) and incorporated herein by reference. 



                                        2
<PAGE> 

Exhibit No.       Description 
-----------       ----------- 

 (3) Filed as part of the Company's Registration Statement on Form S-11 (File 
     No. 33-76316) and incorporated herein by reference. 

 (4) Filed as part of the Company's Registration Statement on Form S-8 (File 
     No. 333-10417) and incorporated herein by reference. 

 (5) Filed as part of the Company's Registration Statement on Form S-11 (File 
     No. 33-88606) and incorporated herein by reference. 

 (6) Filed as part of the Company's Current Report on Form 8-K dated December 
     1, 1994 and incorporated herein by reference. 

 (7) Filed as part of the Company's Current Report on Form 8-K dated February 
     15, 1996 and incorporated herein by reference. 

 (8) Filed as part of the Company's Current Report on Form 8-K dated July 23, 
     1996 and incorporated herein by reference. 

 (9) Filed as part of the Company's Current Report on Form 8-K dated October 
     18, 1996 and incorporated herein by reference. 

(10) Filed as part of the Company's Current Report on Form 8-K dated December 
     20, 1996 and incorporated herein by reference. 

(11) Filed as part of the Company's Quarterly Report on Form 10-Q for the 
     period ended June 30, 1996 and incorporated herein by reference. 

(12) Previously filed as part of this Form 10-K.
    (c) Reports on Form 8-K 

    A Report on Form 8-K dated October 18, 1996 (as amended by Form 8-K/A-1, 
8-K/A-2 and 8-K/A-3) was filed which included information regarding Items 2, 
5 and 7. Included in Item 7 were financial statements, pro forma information 
and exhibits. The Form 8-K was filed in connection with the Company's 
acquisitions of the Rosslyn, Virginia Portfolio, New England Executive Park 
Portfolio, The Riverview Building and 10960 Wilshire Boulevard. 

    A Report on Form 8-K dated December 18, 1996 was filed which included 
information regarding Item 5. The Form 8-K was filed in connection with the 
execution of an Underwriting Agreement of 1,132,400 shares of common stock in 
December 1996. 

                                        3
<PAGE> 



                                  SIGNATURES 

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

   
                                      Beacon Properties Corporation 

                                      By: /s/ Robert J. Perriello
                                      ------------------------------------------
                                      Robert J. Perriello, Senior Vice President
                                      and Chief Financial Officer 

Dated: April 3, 1997 
    

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

<TABLE>
<CAPTION>

   
     Signature                             Title                           Date 
 ----------------------------------------------------------------------    -------------- 
<S>                          <C>                                           <C>
/s/ Alan M. Leventhal
Alan M. Leventhal            President, Chief Executive Officer, and 
                             Director (Principal Executive Officer)        April 3, 1997 

/s/ Edwin N. Sidman
Edwin N. Sidman              Chairman of the Board of Directors            April 3, 1997 

/s/ Lionel P. Fortin
Lionel P. Fortin             Executive Vice President, Chief Operating 
                             Officer and Director                          April 3, 1997 

/s/ Robert J. Perriello
Robert J. Perriello          Senior Vice President and Chief Financial 
                             Officer (Principal Financial Officer and 
                             Principal Accounting Officer)                 April 3, 1997 


Norman B. Leventhal          Director                                       

/s/ Graham O. Harrison
Graham O. Harrison           Director                                      April 3, 1997 

/s/ William F. McCall, Jr.
William F. McCall, Jr.       Director                                      April 3, 1997 


/s/ Steven Shulman
Steven Shulman               Director                                      April 3, 1997 

/s/ Scott M. Sperling
Scott M. Sperling            Director                                      April 3, 1997 

/s/ Dale F. Frey
Dale F. Frey                 Director                                      April 3, 1997 
</TABLE>
    

                                        4
<PAGE> 


                        BEACON PROPERTIES CORPORATION 
                      CONSOLIDATED FINANCIAL STATEMENTS 

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                 Page(s) 
<S>                                                                              <C>
Report of Independent Accountants                                                F-2 
Consolidated Financial Statements: 
Consolidated Balance Sheets as of December 31, 1996 and 1995                     F-3 
Consolidated Statements of Operations for the years ended 
 December 31, 1996 and 1995 and the period May 26, 1994 to 
   December 31, 1994 and for the Predecessor for the period 
   January 1, 1994 to May 25, 1994                                               F-4 
Consolidated Statements of Stockholders' Equity for the years ended 
 December 31, 1996 and 1995 and the period May 26, 1994 to 
   December 31, 1994 and for the Predecessor for the period 
   January 1, 1994 to May 25, 1994                                               F-5 
Consolidated Statements of Cash Flows for the years ended 
 December 31, 1996 and 1995 and the period May 26, 1994 to 
   December 31, 1994 and for the Predecessor for the period 
   January 1, 1994 to May 25, 1994                                               F-6 to F-7
Notes to Consolidated Financial Statements                                       F-8 to F-23 
Report of Independent Accountants on Financial Statement Schedules               F-24 to F-29 
</TABLE>

                                     F-1 
<PAGE> 

                      REPORT OF INDEPENDENT ACCOUNTANTS 


To the Board of Directors and Stockholders of 
Beacon Properties Corporation: 


   
We have audited the consolidated balance sheets of Beacon Properties 
Corporation as of December 31, 1996 and 1995, and the related consolidated 
statements of operations, stockholders' equity and cash flows for the years 
ended December 31, 1996 and 1995 and the period May 26, 1994 to December 31, 
1994. We have also audited the combined statement of operations, owners' 
equity and cash flows of the Predecessor, more fully described in Note 1, for 
the period January 1, 1994 to May 25, 1994. These consolidated financial 
statements are the responsibility of the Company's management. Our 
responsibility is to express an opinion on these consolidated financial 
statements based on our audits. 
    

We conducted our audits in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free 
of material misstatement. An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial statements. 
An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall 
financial statement presentation. We believe that our audits provide a 
reasonable basis for our opinion. 

In our opinion, the consolidated financial statements referred to above 
present fairly, in all material respects, the consolidated financial position 
of Beacon Properties Corporation as of December 31, 1996 and 1995 and the 
consolidated results of its operations and its cash flows for the years ended 
December 31, 1996 and 1995 and the period May 26, 1994 to December 31, 1994, 
and the combined results of operations and cash flows of the Predecessor for 
the period January 1, 1994 to May 25, 1994 in conformity with generally 
accepted accounting principles. 



Boston, Massachusetts                             /s/ Coopers & Lybrand L.L.P. 
January 28, 1997 



                                     F-2 
<PAGE> 



                        BEACON PROPERTIES CORPORATION 
                         CONSOLIDATED BALANCE SHEETS 
               (dollars in thousands, except per share amounts) 



<TABLE>
<CAPTION>
                                                                                          December 31, 
                                                                                    ------------------------- 
                                                                                        1996         1995 
                                                                                    ------------- ----------- 
<S>                                                                                  <C>           <C>
ASSETS 
Real estate: 
 Land                                                                                $  213,858    $ 43,077 
 Buildings, improvements and equipment                                                1,477,672     428,065 
                                                                                    ------------- ----------- 
                                                                                      1,691,530     471,142 
 Less accumulated depreciation                                                           97,535      66,571 
                                                                                    ------------- ----------- 
                                                                                      1,593,995     404,571 
Deferred financing and leasing costs, net of accumulated amortization of $16,370 
  and $14,509                                                                            17,321       9,486 
Cash and cash equivalents                                                                36,086       4,501 
Restricted cash                                                                           2,599       2,764 
Accounts receivable                                                                      11,609       6,128 
Accrued rent                                                                             13,065       6,493 
Prepaid expenses and other assets                                                         1,093       8,060 
Mortgage notes receivable                                                                51,491      34,778 
Investments in and advance to joint ventures and corporations                            52,153      58,016 
                                                                                    ------------- ----------- 
    Total assets                                                                     $1,779,412    $534,797 
                                                                                    ============= =========== 
LIABILITIES AND STOCKHOLDERS' EQUITY 
Liabilities: 
 Mortgage notes payable                                                                 452,212      70,536 
 Note payable, Credit Facility                                                          153,000     130,500 
 Accounts payable, accrued expenses and other liabilities                                41,764      14,022 
 Investment in joint venture                                                             24,735      23,955 
                                                                                    ------------- ----------- 
    Total liabilities                                                                   671,711     239,013 
                                                                                    ------------- ----------- 
Commitments and contingencies                                                                --          -- 
Minority interest in Operating Partnership                                              108,551      36,962 
                                                                                    ------------- ----------- 
Stockholders' equity: 
 Common stock, $.01 par value, authorized 100,000,000 shares, issued and 
   outstanding 48,116,480 and 20,215,822 shares                                             481         202 
 Additional paid-in capital                                                           1,022,110     267,727 
 Cumulative net income                                                                   60,047      23,715 
 Cumulative dividends                                                                   (83,488)    (32,822) 
                                                                                    ------------- ----------- 
    Total stockholders' equity                                                          999,150     258,822 
                                                                                    ------------- ----------- 
    Total liabilities and stockholders' equity                                       $1,779,412    $534,797 
                                                                                    ============= =========== 
</TABLE>


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



                                     F-3 
<PAGE> 



                        BEACON PROPERTIES CORPORATION 
                    CONSOLIDATED STATEMENTS OF OPERATIONS 
               (dollars in thousands, except per share amounts) 



<TABLE>
<CAPTION>
                                                                                              Predecessor 
                                                                                            ---------------- 
                                                                          For the Period     For the Period 
                                         Year Ended       Year Ended      May 26, 1994 to   January 1, 1994 
                                       Dec. 31, 1996    Dec. 31, 1995    December 31, 1994  to May 25, 1994 
                                     ----------------  ----------------  ------------------ ---------------- 
<S>                                     <C>              <C>                <C>                  <C>
Revenues: 
 Rental income                          $   147,825      $    71,050        $    25,144          $5,776 
 Management fees                              3,005            2,203                 --           1,521 
 Recoveries from tenants                     16,719            9,742              4,488           1,040 
 Mortgage interest income                     4,970            2,546                 --              -- 
 Other income                                11,272            5,502              2,301             675 
                                     ----------------  ----------------  ------------------ ---------------- 
 Total revenues                             183,791           91,043             31,933           9,012 
                                     ----------------  ----------------  ------------------ ---------------- 
Expenses: 
 Property expenses                           37,211           18,090              7,034           2,086 
 Real estate taxes                           18,124           10,217              3,325             595 
 General and administrative                  19,331            9,755              3,122           1,399 
 Mortgage interest expense                   30,300           15,226              4,992           2,798 
 Interest--amortization of financing 
  costs                                       2,084            1,370                617             373 
 Depreciation and amortization               33,184           17,428              6,924           2,385 
                                     ----------------  ----------------  ------------------ ---------------- 
 Total expenses                             140,234           72,086             26,014           9,636 
                                     ----------------  ----------------  ------------------ ---------------- 
Income (loss) from operations                43,557           18,957              5,919            (624) 
Equity in net income of joint 
  ventures and corporations                   4,989            3,234                929             198 
                                     ----------------  ----------------  ------------------ ---------------- 
Income (loss) from continuing 
  operations                                 48,546           22,191              6,848            (426) 
Discontinued 
  operations--Construction Company: 
 Income (loss) from operations               (2,609)             (12)               477             102 
 Loss on sale                                  (249)              --                 --              -- 
                                     ----------------  ----------------  ------------------ ---------------- 
Income (loss) before minority 
  interest                                   45,688           22,179              7,325            (324) 
Minority interest in loss of 
  combined partnerships                          --               --                 --             931 
Minority interest in Operating 
  Partnership                                (5,988)          (4,119)            (1,670)             -- 
                                     ----------------  ----------------  ------------------ ---------------- 
Income before extraordinary items            39,700           18,060              5,655             607 
Extraordinary items, net of minority 
  interest                                   (3,368)              --                 --           8,898 
                                     ----------------  ----------------  ------------------ ---------------- 
Net income                              $    36,332      $    18,060        $     5,655          $9,505 
                                     ================  ================  ================== ================ 
Income before extraordinary items 
  per common share                      $      1.32      $      1.09        $       .48              -- 
Extraordinary items per common share          (0.11)              --                 --              -- 
                                     ----------------  ----------------  ------------------ ---------------- 
Net income per common share             $      1.21      $      1.09        $       .48              -- 
                                     ================  ================  ================== ================ 
Weighted average common shares 
  outstanding                            29,932,327       16,525,245         11,816,380              -- 
                                     ================  ================  ================== ================ 
</TABLE>


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


                                     F-4 
<PAGE> 



                        BEACON PROPERTIES CORPORATION 
               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY 
                (dollars in thousands, except per share amounts)



<TABLE>
<CAPTION>
                                                        Stockholders' Equity                       Predecessor 
                                   --------------------------------------------------------------- ------------ 
                                       Common Stock 
                                   ---------------------- 
                                                           Additional                                Owners' 
                                     Shares                 Paid-in      Cumulative   Cumulative     Equity 
                                     Issued      Amount     Capital      Net Income    Dividends    (Deficit) 
                                  -------------  --------------------- ------------- ------------  ------------ 
<S>                                <C>            <C>      <C>            <C>          <C>          <C> 
Balance at December 31, 1993                                                                        $(57,954) 
Net income from January 1, 1994 
  to May 25, 1994                                                                                      9,505 
Contributions and other, net of 
  distributions from January 1, 
  1994 to May 25, 1994                                                                                 1,083 
Issuance of stock for cash-- 
 May 26, 1994--Initial Offering    11,117,850     $111     $  173,341                                     -- 
Issuance of stock in connection 
  with purchase of minority 
  interests                           698,530        7         11,868                                     -- 
Charge to reflect carryover of 
  historical basis of accounting 
  and recognition of minority 
  interest in Operating 
  Partnership for continuing 
  investors                                --       --        (77,600)                                47,366 
Net income from May 26, 1994 to 
  December 31, 1994                        --       --             --     $ 5,655                         -- 
Dividends declared ($0.96 per 
  share)                                   --       --             --          --      $(11,344)          -- 
                                  -------------  --------------------- ------------- ------------  ------------ 
Balance at December 31, 1994       11,816,380      118        107,609       5,655       (11,344)          -- 
Issuance of stock                   8,341,050       84        159,236          --            --           -- 
Issuance of stock under dividend 
  reinvestment and share purchase 
  plan                                 25,437       --            492          --            --           -- 
Issuance of stock by exercise of 
  options                              12,367       --            216          --            --           -- 
Issuance of stock in exchange 
  for Operating Partnership unit 
  redemptions                          20,588       --            174          --            --           -- 
Net income                                 --       --             --      18,060            --           -- 
Dividends declared ($1.24 per 
  share)                                   --       --             --          --       (21,478)          -- 
                                  -------------  --------------------- ------------- ------------  ------------ 
Balance at December 31, 1995       20,215,822      202        267,727      23,715       (32,822)          -- 
Issuance of stock                  27,641,400      276        749,589          --            --           -- 
Issuance of stock under dividend 
  reinvestment and share purchase 
  plan                                101,431        1          2,647          --            --           -- 
Issuance of stock by exercise of 
  options                              97,827        1          1,662          --            --           -- 
Issuance of stock in exchange 
  for Operating Partnership unit 
  redemptions                          60,000        1            485          --            --           -- 
Net income                                 --       --             --      36,332            --           -- 
Dividends declared ($1.765 per 
  share)                                   --       --             --          --       (50,666)          -- 
                                  -------------  --------------------- ------------- ------------  ------------ 
Balance at December 31, 1996       48,116,480     $481     $1,022,110     $ 60,047     $(83,488)    $   -- 
                                  =============  ===================== ============= ============  ============ 
</TABLE>



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

                                     F-5 
<PAGE> 



                        BEACON PROPERTIES CORPORATION 
                    CONSOLIDATED STATEMENTS OF CASH FLOWS 
               (dollars in thousands, except per share amounts) 



<TABLE>
<CAPTION>
                                                                                              Predecessor 
                                                                                            ---------------- 
                                                                          For the Period     For the Period 
                                         Year Ended       Year Ended      May 26, 1994 to   January 1, 1994 
                                       Dec. 31, 1996    Dec. 31, 1995    December 31, 1994  to May 25, 1994 
                                     ----------------  ----------------  ------------------ ---------------- 
<S>                                     <C>               <C>                <C>                <C>
Cash flows from operating 
  activities: 
 Net income                             $    36,332       $  18,060          $    5,655         $ 9,505 
                                     ----------------  ----------------  ------------------ ---------------- 
 Adjustments to reconcile net income 
  to net  cash provided by operating 
  activities: 
   Increase in accrued rent                  (6,572)         (3,741)              (915)          (1,181) 
   Depreciation, amortization and 
  interest-- 
     amortization of financing costs         35,268          18,798              7,541            2,848 
   Equity in net income of joint 
  ventures    and corporations               (2,131)         (3,222)              (469)            (201) 
   Minority interest in loss of 
  combined    partnerships                       --              --                 --           (1,519) 
   Minority interest in Operating 
     Partnership                              5,988           4,119              1,670               -- 
   Extraordinary items                        3,368              --                 --           (8,898) 
   Deferred interest                             --              --                 --              367 
   Increase in accounts receivable           (5,481)         (1,746)            (3,385)            (376) 
   (Increase) decrease in prepaid 
  expenses    and other assets                 (333)            (82)             2,388           (1,940) 
   Increase (decrease) in accounts 
     payable, accrued expenses and 
  other    liabilities                       25,243             332               (107)           1,636 
                                     ----------------  ----------------  ------------------ ---------------- 
    Total adjustments                        55,350          14,458              6,723           (9,264) 
                                     ----------------  ----------------  ------------------ ---------------- 
    Net cash provided by operating 
      activities                             91,682          32,518             12,378              241 
                                     ----------------  ----------------  ------------------ ---------------- 
Cash flows from investing 
  activities: 
 Property additions                      (1,088,775)        (67,610)          (204,582)            (978) 
 Payment of deferred leasing costs           (6,157)         (2,646)            (1,010)            (124) 
 Decrease (increase) in prepaid 
  expenses and  other assets                  5,000          (5,000)                --               -- 
 Purchase of minority interests                  --              --            (11,688)              -- 
 Investments in joint ventures                   --              --            (15,802)              -- 
 Distributions from joint ventures            8,727           3,692              1,637               -- 
 Investments in and advance to 
  corporations                                   --         (41,471)            (5,800)              -- 
 Cash from contributed assets                    --              --              6,978               -- 
 Restricted cash from contributed 
  assets                                         --              --                420               -- 
 Purchase of mortgage notes 
  receivable                                (16,713)        (34,778)                --               -- 
 Decrease (increase) in restricted 
  cash                                          165           2,063             (4,827)              -- 
                                     ----------------  ----------------  ------------------ ---------------- 
  Net cash used by investing 
  activities                             (1,097,753)       (145,750)          (234,674)          (1,102) 
                                     ----------------  ----------------  ------------------ ---------------- 
</TABLE>



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

                                     F-6 
<PAGE> 



                        BEACON PROPERTIES CORPORATION 
               CONSOLIDATED STATEMENTS OF CASH FLOWS--Continued 
               (dollars in thousands, except per share amounts) 



<TABLE>
<CAPTION>
                                                                                              Predecessor 
                                                                                            ---------------- 
                                                                          For the Period     For the Period 
                                         Year Ended       Year Ended      May 26, 1994 to   January 1, 1994 
                                       Dec. 31, 1996    Dec. 31, 1995    December 31, 1994  to May 25, 1994 
                                     ----------------  ----------------  ------------------ ---------------- 
<S>                                      <C>              <C>                <C>                <C>
Cash flows from financing 
  activities: 
 Proceeds from offerings                 $  754,778       $ 160,028          $173,452           $   -- 
 Owners' contributions                           --              --                --               412 
 Owners' distributions                           --              --                --            (4,329) 
 Borrowings on Credit Facility              468,000         124,700           130,300                -- 
 Borrowings on mortgage notes               608,000              --                --               874 
 Repayments on Credit Facility             (445,500)       (124,500)               --                -- 
 Repayments on mortgage notes              (281,814)        (20,400)          (49,677)             (460) 
 Advances (repayments of) amounts 
  due to affiliates                              --              --            (5,355)            2,800 
 Payment of deferred financing costs         (9,811)         (2,457)           (2,852)              (13) 
 Decrease (increase) in prepaid 
  expenses and  other assets                  2,300          (2,300)               --                -- 
 Distributions paid to minority 
  interests                                  (7,631)         (6,230)           (1,858)               -- 
 Dividends paid to stockholders             (50,666)        (26,205)           (6,617)               -- 
                                     ----------------  ----------------  ------------------ ---------------- 
  Net cash provided (used) by 
  financing  activities                   1,037,656         102,636           237,393              (716) 
                                     ----------------  ----------------  ------------------ ---------------- 
Net increase (decrease) in cash and 
  cash equivalents                           31,585         (10,596)           15,097            (1,577) 
Cash and cash equivalents, beginning 
  of period                                   4,501          15,097                --             6,150 
                                     ----------------  ----------------  ------------------ ---------------- 
Cash and cash equivalents, end of 
  period                                 $   36,086       $   4,501          $ 15,097           $ 4,573 
                                     ================  ================  ================== ================ 
Supplemental disclosures: 
 Cash paid during the period for 
  interest                               $   28,777       $  14,738          $  5,278           $ 2,811 
Noncash activities: 
 Acquisition of interests in 
  properties                                     --              --            22,721                -- 
 Increase in minority interest as a 
  result of  acquisition of 
  interests in properties                    74,226              --             9,200                -- 
 Liabilities assumed in connection 
  with  contributions and 
  acquisitions of  properties                55,529             861            93,518                -- 
 Dividends declared to stockholders              --              --             4,727                -- 
 Distributions declared to minority 
  interest                                       --              --             1,524                -- 
 Receivable from equity investment              781           1,057                --                -- 
 Redemption of Operating Partnership 
  units  for common stock                       486             174                --                -- 
 Common stock issued in connection 
  with  purchase of minority 
  interests                                      --              --            11,875                -- 
</TABLE>



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

                                     F-7 
<PAGE> 



                        BEACON PROPERTIES CORPORATION 
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
               (dollars in thousands, except per share amounts) 



1. Organization, Offerings and Acquisitions: 



Beacon Properties Corporation (the "Company") was incorporated on March 4, 
1994 as a Maryland corporation, and commenced operations effective with the 
completion of its initial offering on May 26, 1994. The Company qualifies as 
a real estate investment trust under the Internal Revenue Code of 1986, as 
amended. Concurrent with the initial offering, the Company contributed its 
interests in two properties and the net proceeds of the offering which 
approximated $173.5 million in exchange for an approximate 78% interest in 
Beacon Properties, L.P., (the "Operating Partnership"), which became the 
successor entity to The Beacon Group (the "Predecessor"). 


The Company was formed to continue and expand the commercial real estate 
development, construction, acquisition, leasing, design and management 
business of the Predecessor. Prior to the initial offering, the Predecessor 
was comprised of interests in 13 office properties and entities which 
provided design, leasing, development and construction services to each of 
the properties and unrelated third parties. 

During 1995, the Company completed three offerings totaling 8,341,050 shares 
of common stock. The net proceeds from these offerings totaling $159.3 
million were used primarily to retire indebtedness incurred to acquire new 
properties and to acquire additional properties. 

During 1996, the Company completed three offerings totaling 27,641,400 shares 
of common stock. The net proceeds from these offerings totaling $749.9 
million were used primarily to acquire additional properties. 


The following schedule summarizes the Company's interest in the properties as 
a result of its initial and subsequent offerings, and the related acquisition 
of properties and partnership interests. All properties have been 
consolidated by the Company and its Predecessor unless otherwise indicated in 
the notes: 


<TABLE>
<CAPTION>
                                                           Date        Rentable      Ownership 
                                                       Acquired by      Area in     Interest at    Accounting 
                                                       the Company    Square Feet    12/31/96     Method Notes 
                                                       -------------  ------------- -------------------------- 
<S>                                                      <C>           <C>              <C>            <C>
Properties: 
Wellesley Office Park--Buildings 1-8, Wellesley, MA            (A)       623,000        100%           (E) 
Crosby Corporate Center, Bedford, MA                           (B)       336,000        100% 
South Station, Boston, MA                                      (B)       149,000        100% 
175 Federal Street, Boston, MA                                 (B)       203,000        100%           (E) 
One Post Office Square, Boston, MA                             (B)       764,000         50%           (D) 
Center Plaza, Boston, MA                                       (B)       649,000        100% 
Rowes Wharf, Boston, MA                                        (B)       344,000         45%           (F) 
150 Federal Street, Boston, MA                                 (B)       530,000        100% 
Polk and Taylor Buildings, Arlington, VA                       (B)       890,000         10%           (G) 
One Canal Park, Cambridge, MA                             6/10/94        100,000        100% 
Westwood Business Centre, Westwood, MA                    6/10/94        160,000        100% 
Russia Wharf, Boston, MA                                  8/10/94        315,000        100% 
Westlakes Office Park--Buildings 1-3 and 5, Berwyn, 
  PA                                                           (C)       444,000        100% 
75-101 Federal Street, Boston, MA                         9/29/95        812,000         52%           (H) 
Two Oliver Street and 147 Milk Street, Boston, MA         10/6/95        271,000        100% 
Ten Canal Park, Cambridge, MA                            12/21/95        110,000        100% 
Perimeter Center, Atlanta, GA                             2/15/96      3,302,000        100% 
1333 H Street, N.W., Washington, D.C.                     8/16/96        239,000        100% 
AT&T Plaza, Oak Brook, IL                                 8/16/96        225,000        100% 
Tri-State International, Lincolnshire, IL                 8/16/96        548,000        100% 
John Marshall I, McLean, VA                                9/5/96        261,000        100% 
E.J. Randolph, McLean, VA                                  9/5/96        165,000        100% 
                                                   Continued 

                                     F-8 
<PAGE> 

                        BEACON PROPERTIES CORPORATION 
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
               (dollars in thousands, except per share amounts) 

                                                           Date        Rentable      Ownership 
                                                       Acquired by      Area in     Interest at    Accounting 
                                                       the Company    Square Feet    12/31/96     Method Notes 
                                                       -------------  ------------- -------------------------- 

Northridge I, Herndon, VA                                  9/5/96        124,000        100% 
1300 North 17th Street, Rosslyn, VA                      10/18/96        373,000        100% 
1616 North Fort Myer Drive, Rosslyn, VA                  10/18/96        293,000        100% 
New England Executive Park, Burlington, MA               11/15/96        817,000        100% 
The Riverview Building, Cambridge, MA                    11/21/96        263,000        100% 
10960 Wilshire Boulevard, Westwood, CA                   11/21/96        544,000        100% 
Shoreline Technology Park, Mountain View, CA             12/20/96        727,000        100% 
Lake Marriott Business Park, Santa Clara, CA             12/20/96        400,000        100% 
Presidents Plaza, Chicago, IL                            12/27/96        791,000        100% 
                                                                      ------------- 
                                                                      15,772,000 
                                                                      ============= 
Service Entities: 
Beacon Construction Company, Inc.                              (B)                       99%           (I) 
Beacon Property Management, L.P.                               (B)                      100% 
Beacon Property Management Corporation                         (B)                       99%           (I) 
Beacon Design Corporation                                      (B)                       99%           (I) 
Beacon Design, L.P.                                            (B)                      100% 
</TABLE>

(A) Wellesley Building 8 was acquired May 4, 1995. Interests in the remaining 
    Wellesley Buildings were contributed as part of the initial public 
    offering. 

(B) Interests in this property or company were contributed or acquired as 
    part of the initial public offering. 

(C) Westlakes Buildings 1, 3 and 5 were acquired October 21, 1994. Westlakes 
    Building 2 was acquired July 26, 1995. 

(D) The Company is a general partner in the joint venture which owns the 
    property and utilizes the equity method of accounting for its investment. 

(E) On October 28, 1994, the Company acquired the remaining interest in the 
    175 Federal Street and Wellesley 6 Joint Ventures which owned these 
    properties. Prior to the acquisition of the remaining interest, the 
    Company and its Predecessor used the equity method of accounting for its 
    investments. 

(F) The Company owns an indirect limited partner interest and utilizes the 
    equity method of accounting for its investment. 

(G) The Company owns a 1% general partner interest and a 9% limited partner 
    interest and utilizes the equity method of accounting for its investment. 

(H) The Company is a shareholder in the corporation (private REIT) which owns 
    the property and utilizes the equity method of accounting for its 
    investment. 

(I) The Company used the cost method of accounting for its investments in 
    these subsidiaries prior to 1995. The Company currently uses the equity 
    method of accounting for its investments. (See Note 2). 

2. Summary of Significant Accounting Policies: 

Business 

    The Company is a self-managed and self-administered real estate investment 
trust (a "REIT") which currently has interests in a portfolio of 104 Class A 
office properties and other commercial properties containing approximately 
15.8 million rentable square feet located in Boston, Atlanta, Chicago, Los 
Angeles, Philadelphia, San Francisco, and Washington, D.C. 

    The Company also owns and operates commercial real estate development, 
acquisition, leasing, design and management businesses. The Company manages 
approximately 2.9 million square feet of commercial and office space owned by 
third parties in various locations, including Boston, Waltham, and 
Springfield, Massachusetts and Chicago, Illinois. 


                                     F-9 
<PAGE> 

                        BEACON PROPERTIES CORPORATION 
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
               (dollars in thousands, except per share amounts) 


Principles of Consolidation 

    The accompanying financial statements of the Company have been prepared on 
a consolidated basis which include all the accounts of the Company, its 
majority owned Operating Partnership and its subsidiaries. All significant 
intercompany balances and transactions have been eliminated. The Company's 
consolidated financial statements reflect the properties acquired at their 
historical basis of accounting to the extent of the acquisition of interests 
from the Predecessors' owners who continued on as investors. The remaining 
interests acquired from the Predecessors' owners have been accounted for as a 
purchase and the excess of the purchase price over the related historical 
cost basis was allocated to real estate. The consolidated financial 
statements of the Company include, along with the contributed properties of 
the Predecessor, significant acquisitions of properties and ownership 
interests subsequent to the initial public offering; consequently, the 
operating results of the Company are not directly comparable to the 
Predecessor. 

    The accompanying financial statements of the Predecessor have been 
presented on a combined basis which include all of the contributed properties 
and the management, leasing, and design entities. 

Real Estate 

    Buildings and improvements are recorded at cost and are depreciated on the 
straight-line and declining balance methods over their estimated useful lives 
of nineteen to forty years and fifteen to twenty years, respectively. The 
cost of buildings and improvements includes the purchase price of the 
property or interests in property, legal fees, acquisition costs, interest, 
property taxes and other costs incurred during the period of construction. 
The Company capitalized interest costs of $1.0 million in 1996, $0.1 million 
in 1995, and $0 in 1994. In accordance with Statement of Financial Accounting 
Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for 
Long-Lived Assets to Be Disposed Of, the Company periodically reviews its 
properties to determine if its carrying costs will be recovered from future 
operating cash flows. In cases where the Company does not expect to recover 
its carrying costs, the Company would recognize an impairment loss. No such 
losses have been recognized to date. 

    Tenant improvements are depreciated over the terms of the related leases. 
Furniture, fixtures and equipment are depreciated using straight-line and 
declining balance methods over their expected useful lives of five to seven 
years. 

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

Deferred Financing and Leasing Costs 

    Deferred financing costs include fees and costs incurred to obtain 
long-term financings, and are amortized over the terms of the respective 
loans on a basis which approximates the interest method. Deferred leasing 
costs incurred in the successful negotiation of leases, including brokerage, 
legal and other costs, have been deferred and are being amortized on a 
straight-line basis over the terms of the respective leases. 

Cash and Cash Equivalents 

    Cash and cash equivalents consist of highly liquid assets with original 
maturities of three months or less from the date of purchase. The majority of 
the Company's cash and cash equivalents are held at major commercial banks. 
The Company has not experienced any losses to date on its invested cash. The 
carrying value of the cash and cash equivalents approximate market. 

Restricted Cash 

    Restricted cash consists of cash held in escrow as required by lenders to 
satisfy real estate taxes and tenant improvement costs. 


                                     F-10 
<PAGE> 

                        BEACON PROPERTIES CORPORATION 
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
               (dollars in thousands, except per share amounts) 

Investments in and Advance to Joint Ventures and Corporations 

    The Company and Predecessor use the equity method of accounting for their 
earnings in property joint ventures and corporations which it does not 
control. Losses in excess of investments are not recorded where the Company 
or the Predecessor is a limited partner and has not guaranteed nor intends to 
provide any future financial support to the respective properties. 

    The Company utilized the cost method in 1994 for its earnings from service 
corporations. In 1995, the Company adopted the accounting prescribed in 
Emerging Issues Task Force Issue 95-6 "Accounting by a Real Estate Investment 
Trust for an Investment in a Service Corporation" and utilized the equity 
method for its investment in and earnings of service corporations. The effect 
of this change on 1994 results was not material and such amounts have been 
reclassified to conform to the 1995 presentation. 

Mortgage Notes Receivable 

    Discounts from the principal balance on mortgage notes receivable, net of 
acquisition costs, are amortized as interest income over the term of the 
related notes using the effective yield method, based on management's 
evaluation of the current facts and circumstances and the ultimate ability to 
collect the principal balance of such notes. 

Offering Costs 

    Underwriting commissions and offering costs incurred in connection with 
the initial and subsequent offerings have been reflected as a reduction of 
additional paid-in capital. 

Revenue Recognition 

    Base rental income is reported on a straight-line basis over the terms of 
the respective leases. The impact of the straight-line rent adjustment 
increased revenues for the Company by $6.6 million, $3.7 million and $0.9 
million and increased the Company's equity in net income of property joint 
ventures and corporations by $0.1 million, $0.2 million and $0.3 million for 
the years ended December 31, 1996 and 1995 and the period May 26, 1994 to 
December 31, 1994, respectively. Construction income of the Predecessor was 
recognized on the percentage-of-completion method on the basis of costs 
incurred and expected to be incurred. Management fees are recognized when 
they are earned. 

Income Taxes 

    The Company has elected to be taxed as a REIT under the Internal Revenue 
Code commencing with its taxable period ended December 31, 1994. As a result, 
the Company will generally not be subject to federal income tax on its 
taxable income at corporate rates to the extent it distributes annually at 
least 95% of its taxable income to its shareholders and complies with certain 
other requirements. Accordingly, no provision has been made for federal 
income taxes in the accompanying consolidated financial statements. Certain 
subsidiaries are subject to federal and state income tax on their taxable 
income at regular corporate rates. 

    The Predecessor was not a legal entity subject to income taxes. No federal 
or state income taxes were applicable to the entities that managed and owned 
the properties; accordingly, none have been provided in the accompanying 
combined financial statements. 

Interest Rate Protection Agreements 

    The Company has entered into interest rate protection agreements to reduce 
the impact of certain changes in interest rates on its variable rate debt. 
These agreements are accounted for as a hedge. Amounts paid for the 
agreements are amortized over the lives of the agreements on a basis which 
approximates the interest method. 


                                     F-11 
<PAGE> 

                        BEACON PROPERTIES CORPORATION 
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
               (dollars in thousands, except per share amounts) 


Payments under interest rate swap agreements are recognized as adjustments to 
interest expense when incurred. The Company's policy is to write-off 
unamortized amounts paid under interest rate protection agreements, when the 
related debt is paid off or there is a termination of the agreements prior to 
their maturity. The Company is exposed to credit loss in the event of 
nonperformance by the other parties to the interest rate protection 
agreements. However, the Company does not anticipate nonperformance by the 
counterparties. 

Per Share Data 

    The assumed exercise of outstanding share options, using the treasury 
stock method, is not dilutive and, therefore, such amounts are not presented 
(see Note 9). The income tax status of dividends declared during the years 
ended December 31, 1996 and 1995 and the period May 26, 1994 to December 31, 
1994 are as follows: 

                            1996     1995      1994 
                            ----     ----      ---- 
Ordinary income              91%      87%       66% 
Return of capital             9%      13%       34% 

Risks and Uncertainties 

    The preparation of financial statements in conformity with generally 
accepted accounting principles requires management to make estimates and 
assumptions that affect the reported amount of assets and liabilities and 
disclosure of contingent assets and liabilities. Actual results could differ 
from those estimates. 

Reclassifications 

    Certain prior year balances have been reclassed to conform with current 
year presentation. 

3. Accounts Receivable: 

                                            December 31, 
                                        -------------------- 
                                           1996       1995 
                                         --------- --------- 
Tenants                                   $ 5,072    $2,137 
Other                                       4,228     1,006 
Affiliates                                  3,683     3,322 
Allowance for uncollectible amounts        (1,374)     (337) 
                                         --------- --------- 
  Total                                   $11,609    $6,128 
                                         ========= ========= 

4. Mortgage Notes Receivable: 



    The Company acquired a fifty percent interest in certain mortgage notes 
collateralized by property owned by a joint venture in which the Company has 
an indirect interest. The terms of the notes require interest-only payments 
at 8.71% quarterly on a principal balance of approximately $63.0 million and 
are due on April 1, 1999. The term may be extended for up to three years 
under certain conditions. The Company also has an option to purchase from an 
affiliate other mortgages collateralized by the same property. 


                                     F-12 
<PAGE> 

                        BEACON PROPERTIES CORPORATION 
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
               (dollars in thousands, except per share amounts) 


5. Investments in and Advance to Joint Ventures and Corporations: 

    The following is summarized financial information for the property joint 
ventures and corporation: 

                                                            December 31, 
                                                     -------------------------
                                                         1996         1995 
                                                     ------------  ------------
Balance sheets: 
 Real estate, net                                      $ 410,207    $ 419,096 
 Other assets                                            51,669       55,714 
                                                     ------------  ------------
  Total assets                                         $461,876     $474,810 
                                                     ============  ============
 Mortgage notes payable                                 377,754      380,827 
 Loans and notes payable                                 72,136       68,606 
 Other liabilities                                       13,040       14,072 
 Partners' and shareholders' equity (deficiency)         (1,054)      11,305 
                                                     ------------  ------------
  Total liabilities and equity (deficiency)            $461,876     $474,810 
                                                     ============  ============

<TABLE>
<CAPTION>
                                                                             Predecessor 
                                                                            --------------- 
                                                           May 26, 1994 to  Jan. 1, 1994 to 
                                      1996        1995      Dec. 31, 1994   May 25, 1994 
                                   ----------- --------------------------   --------------- 
<S>                                 <C>         <C>           <C>             <C>
Summary of operations: 
 Rentals                            $117,283    $ 91,048      $ 59,983        $ 38,386 
 Other income                          3,453       3,861         5,717           2,941 
 Operating expenses                  (61,086)    (49,472)      (34,688)        (22,632) 
 Mortgage interest expense           (28,712)    (23,232)      (16,261)        (13,432) 
 Depreciation and amortization       (18,592)    (14,537)      (11,427)         (8,228) 
                                   ----------- --------------------------   --------------- 
  Net income (loss)                 $ 12,346    $  7,668      $  3,324        $ (2,965) 
                                   =========== ==========================   =============== 
</TABLE>


    A reconciliation of interests in the underlying net assets to the 
Company's carrying value of property investments in joint ventures and 
corporation is as follows: 
<TABLE>
<CAPTION>
                                                                                December 31, 
                                                                          ---------------------- 
                                                                              1996       1995 
                                                                          ----------- ---------- 
<S>                                                                          <C>        <C>
Partners' and shareholders' equity (deficiency), as above                    $(1,054)   $11,305 
Deficits of other partners and shareholders                                   23,532     13,259 
                                                                          ----------- ---------- 
Company's share of equity                                                     22,478     24,564 
Excess of cost of investments over the net book value of underlying net 
  assets, net of amortization and accumulated amortization of $122 and 
  $75, respectively                                                            1,310      1,357 
                                                                          ----------- ---------- 
Carrying value of property investments in joint ventures and corporation     $23,788    $25,921 
                                                                          =========== ========== 
</TABLE>



                                     F-13 
<PAGE> 

                        BEACON PROPERTIES CORPORATION 
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
               (dollars in thousands, except per share amounts) 


    The following is summarized financial information for the service 
corporations: 
<TABLE>
<CAPTION>
                                                     December 31, 
                                                 --------------------- 
                                                    1996       1995 
                                                  ------------------- 
<S>                                               <C>        <C>
Balance sheets: 
 Equipment, net                                   $ 1,806    $   715 
 Other assets                                      34,155     29,560 
                                                  ------------------- 
  Total assets                                    $35,961    $30,275 
                                                  =================== 
 Other liabilities                                 37,360     27,124 
 Shareholders' equity (deficiency)                 (1,399)     3,151 
                                                  ------------------- 
  Total liabilities and equity (deficiency)       $35,961    $30,275 
                                                  =================== 
</TABLE>



<TABLE>
<CAPTION>
                                                                                 May 26, 1994 to 
                                                           1996         1995      Dec. 31, 1994 
                                                       ------------ ------------  --------------- 
<S>                                                      <C>          <C>            <C>
Summary of operations: 
 Construction income                                     $ 140,903    $ 108,913      $ 52,429 
 Consulting and management fees                              2,537        7,576         4,848 
 Interest and other income                                     266          383           184 
 Construction, consulting and management fee  costs       (141,167)    (110,835)      (52,388) 
 General and administrative expense                         (5,121)      (4,880)       (3,564) 
 Depreciation and amortization                                (584)        (336)         (186) 
 Minority interest in net income of joint venture              (52)        (130)          (90) 
 Interest expense to stockholder                                --         (650)           -- 
                                                       ------------ ------------  --------------- 
  Net income (loss)                                      $  (3,218)   $      41      $  1,233 
                                                       ============ ============  =============== 
</TABLE>


    A reconciliation of the underlying net assets to the Company's carrying 
value of investments in and advance to service corporations is as follows: 



<TABLE>
<CAPTION>
                                                                                December 31, 
                                                                          ----------------------- 
                                                                              1996        1995 
                                                                          ----------- ----------- 
<S>                                                                         <C>         <C>
Shareholders' equity (deficiency), as above                                 $ (1,399)   $  3,151 
Less equity (deficiency) of other shareholders                                   (29)         11 
                                                                          ----------- ----------- 
Company's share of equity (deficiency)                                        (1,370)      3,140 
Advance                                                                        5,000       5,000 
                                                                          ----------- ----------- 
Carrying value of investments in and advance to service corporations           3,630       8,140 
Carrying value of property investments in joint ventures and corporation, 
  as above                                                                    23,788      25,921 
                                                                          ----------- ----------- 
  Total                                                                     $ 27,418    $ 34,061 
                                                                          =========== =========== 
Per consolidated balance sheet: 
Investments in and advance to joint ventures and corporations               $ 52,153    $ 58,016 
Investment in joint venture                                                  (24,735)    (23,955) 
                                                                          ----------- ----------- 
  Total                                                                     $ 27,418    $ 34,061 
                                                                          =========== =========== 
</TABLE>


                                     F-14 
<PAGE> 

                        BEACON PROPERTIES CORPORATION 
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
               (dollars in thousands, except per share amounts) 

6. Mortgage Notes Payable: 

    The mortgage notes payable, collateralized by the certain properties and 
assignment of leases, are as follows: 


<TABLE>
<CAPTION>
                                               December 31, 
                                          ---------------------- 
                                              1996       1995 
                                          ----------- ---------- 
<S>                                         <C>         <C>
Mortgage notes with fixed interest at: 
 8.00% maturing July 1, 1998                $ 12,970    $13,236 
 6.67% maturing November 1, 1998              56,920     57,300 
 7.23% maturing February 1, 2003              55,000         -- 
 7.23% maturing March 1, 2003                 60,000         -- 
 7.08% maturing March 31, 2006               218,000         -- 
 8.19% maturing January 1, 2007               15,000         -- 
 8.19% maturing January 1, 2007               13,600         -- 
 8.38% maturing December 1, 2008              20,722         -- 
                                          ----------- ---------- 
  Total mortgage notes payable              $452,212    $70,536 
                                          =========== ========== 
</TABLE>

    The Company's restricted cash consists of cash required by these mortgages 
to be held in escrow for capital expenditures and/or real estate taxes. 

    Scheduled maturities of mortgage notes payable are as follows: 

                1997             $  2,127 
                1998               72,611 
                1999                6,602 
                2000                7,608 
                2001                8,171 
                Thereafter        355,093 
                                 -------- 
                Total            $452,212 
                                 ======== 

    The Company computes the fair value of its mortgage notes payable based 
upon the discounted cash flows at a discount rate that approximates the 
Company's effective borrowing rate and the Company has determined that the 
fair value of its mortgage notes approximates their carrying value. 

    In March 1996, the Company repaid a debt and recorded an extraordinary 
item of $1.9 million, net of minority interest, in connection with the 
write-off of fees and costs to acquire the debt. The extraordinary item 
during the period January 1, 1994 through May 25, 1994 represents the gains 
resulting from the settlement of certain mortgage notes payable. As the 
prepayments were a condition to transfering the assets to the Company, these 
items were recorded by the Predecessor entity. 

7. Note Payable, Credit Facility: 

    The Company has a three-year, $300 million revolving credit facility (the 
"Credit Facility"). The Credit Facility matures in June 1999 and is secured 
by cross-collateralized mortgages and assignment of rents on certain 
properties. 

   
    Outstanding balances under the Credit Facility bear interest, at the 
Company's option, at either (i) the higher of (x) Bank of Boston's base 
interest rate and (y) one-half of one percent (1/2%) above the overnight 
federal funds effective rate or (ii) the Eurodollar rate plus 175 basis 
points (1.75%). The Company has an interest rate protection agreement through 
May 1997 with respect to $135 million of the Credit Facility, which provides for
offsetting payments to the Company in the event that 90-day LIBOR exceeds 
9.47% per annum. Effective May 1997 through May 1999, the Company has an 
interest rate protection agreement with respect to $137.5 million of the 
Credit Facility, which provides for offsetting 


                                     F-15 
<PAGE> 

                        BEACON PROPERTIES CORPORATION 
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
               (dollars in thousands, except per share amounts) 


payments to the Company in the event that 90-day LIBOR exceeds 8.75% per 
annum. This interest rate protection arrangement may be applied during any 
four quarters in the period from May 1997 to May 1999. 
    

    The outstanding balance of the Credit Facility at December 31, 1996 was 
$153.0 million. The weighted average amount outstanding during the years 
ended December 31, 1996 and 1995 and the period May 26, 1994 to December 31, 
1994 was $42.3 million, $99.7 million and $50.4 million, respectively. The 
weighted average interest rate on amounts outstanding during the years ended 
December 31, 1996 and 1995 and the period May 26, 1994 to December 31, 1994 
was approximately 7.78%, 8.25% and 7.57%, respectively. The applicable 
interest rate under the Credit Facility at December 31, 1996 was 8.25%. 


    Based upon the Credit Facility's variable interest rate and the Company's 
determination of the fair value of its interest rate agreement based upon the 
quoted market prices of similar instruments, the Company has determined that 
the fair value of these instruments approximate their carrying value. 

    As a result of the substantial modification of the terms of the Credit 
Facility in June 1996, the Company recorded an extraordinary item of $1.5 
million, net of minority interest, in connection with the write-off of fees 
and costs relating to the prior Credit Facility. 


8. Accounts Payable, Accrued Expenses and Other Liabilities: 
<TABLE>
<CAPTION>
                                              December 31, 
                                          -------------------- 
                                             1996       1995 
                                           --------- --------- 
<S>                                         <C>       <C>
Accounts payable and accrued expenses       $29,904   $ 8,092 
Deferred liability                            4,912     1,164 
Affiliates                                    1,258     2,952 
Other liabilities                               504       647 
Security deposits                             5,186     1,167 
                                           --------- --------- 
  Total                                     $41,764   $14,022 
                                           ========= ========= 
</TABLE>

9. Stockholders' Equity: 

Stock Option Plans 

    During 1994, the Company adopted the 1994 Stock Option Plan, which 
initially reserved 1,102,080 shares of common stock. In May, 1996 the 1994 
Stock Option Plan was amended to reserve an additional 1,621,485 shares of 
common stock. The 1994 Stock Option Plan is administered by the Compensation 
Committee of the Board of Directors (the "Committee") and officers and 
certain other employees of the Company are eligible to participate. 
Non-employee Directors of the Company are eligible to receive stock options 
under the 1994 Stock Option Plan on a limited basis. 

    The 1994 Stock Option Plan authorizes (i) the grant of stock options that 
qualify as incentive stock options under Section 422 of the Code ("ISOs"), 
(ii) the grant of stock options that do not so qualify ("NQSOs"), (iii) the 
grant of stock options in lieu of cash for Directors' fees and employee 
bonuses, (iv) grants of shares of common stock contingent on the attainment 
of performance goals or subject to other restrictions, and (v) grants of 
shares of common stock in lieu of cash compensation. The exercise price of 
stock options will be determined by the Committee, but may not be less than 
100% of the fair market value of the shares of Common Stock on the date of 
grant in the case of ISOs. However, in the case of grants of NQSOs granted in 
lieu of cash for Directors' fees and employee bonuses, the exercise price may 
not be less than 50% of the fair market value of the shares of common stock 
on the date of grant. NQSOs granted under the 1994 Stock Option Plan may, if 
approved by the Committee, accrue annually a dividend equivalent right which 
will entitle the option-holder to receive additional shares of common stock 
upon the exercise of the option. The Company has reserved 29,425 shares of 
common stock for issuance under the 1994 Stock Option Plan. Options issued 
vest at such time or times as determined by the 

                                     F-16 
<PAGE> 
                        BEACON PROPERTIES CORPORATION 
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
               (dollars in thousands, except per share amounts) 


Committee except for options issued to independent directors which vest on 
the date of grant. All options have a term of ten years from the grant date. 

    In October 1996, the Company adopted the 1996 Stock Option Plan (the "1996 
Plan"), which provides for the granting of options to purchase up to an 
aggregate of 750,000 shares of common stock to all employees other than the 
senior executive officers of the Company. The Company has reserved 168,500 
shares of common stock for issuance under the 1996 Option Plan. The term of 
each option is fixed by the Committee. The Committee also determines at what 
time or times each option becomes vested and exercisable and, subject to the 
terms of the Plan, the period of time, if any, after death, disability, or 
termination of employment during which options may be exercised. The 
Committee may accelerate the exercisability of any option at any time. 

    Changes in options outstanding under the 1994 and 1996 plans during the 
period were as follows: 

<TABLE>
<CAPTION>
                                                                        Option Price 
                                                                       --------------- 
                                                           Number 
                                                         Of Shares        Per Share 
                                                        Under Option       Average 
                                                      ---------------  --------------- 
<S>                                                     <C>                <C>
Granted at Initial Offering                                630,250         $17.00 
Granted May-December 1994                                   27,500          18.16 
Canceled May-December 1994                                 (15,750)         17.00 
                                                      ---------------  --------------- 
Shares under Option at December 31, 1994                   642,000          17.05 
Exercised--1995                                            (12,367)         17.46 
Granted--1995                                              414,000          20.14 
Canceled--1995                                              (9,662)         17.00 
                                                      ---------------  --------------- 
Shares under Option at December 31, 1995                 1,033,971          18.28 
Exercised--1996                                            (97,827)         17.00 
Granted--1996                                            2,236,550          28.72 
Canceled--1996                                              (7,248)         19.16 
                                                      ---------------  --------------- 
Shares under option at December 31, 1996                 3,165,446          25.69 
                                                      ===============  =============== 
Options available for grant at beginning of year            55,826             -- 
Options available for grant at end of year                 197,925             -- 
</TABLE>

    The Company applies Accounting Principles Board Opinion No. 25 and related
Interpretations in accounting for its plans. Financial Accounting Standards
Board Statement No. 123 "Accounting for Stock-Based Compensation" ("SFAS 123")
was issued in 1995 and, if fully adopted, changes the methods for recognition of
cost on plans similar to those of the Company. Adoption of SFAS 123 is optional;
however, had compensation cost for the Company's 1996 grants for stock-based
compensation plans been determined consistent with SFAS 123, the Company's net
income, net income applicable to common shareholders, and net income per common
share would approximate the pro forma amounts below:
<TABLE>
<CAPTION>
   
                                   1996      1995 
                                 ------------------- 
<S>                              <C>        <C>
Net income: 
 As reported                     $36,332    $18,060 
 Pro forma (unaudited)            35,530     18,007 
Net income per common share: 
 As reported                        1.21       1.09 
 Pro forma (unaudited)              1.19       1.09 
</TABLE>
    

    The effects of applying SFAS 123 in this pro forma disclosure are not 
indicative of future amounts. SFAS 123 does not apply to awards prior to 
1995, and additional awards in future years are anticipated. 


                                     F-17 
<PAGE> 

                        BEACON PROPERTIES CORPORATION 
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
               (dollars in thousands, except per share amounts) 


    The fair value of each option granted under SFAS 123, estimated on the 
date of grant using the Black-Scholes option-pricing model, is $3.38 for 1996 
and $2.04 for 1995. The following table presents the annualized weighted- 
average values of the significant assumptions used to estimate the fair 
values of the options: 

<TABLE>
<CAPTION>
                             1996     1995 
                            ------- -------- 
<S>                          <C>      <C>
Risk-free interest rate      6.22%    5.45% 
Expected life in years        6.0      6.0 
Expected volatility          16.6%    16.1% 
Expected dividend yield       6.0%     6.0% 
</TABLE>

    The following table summarizes information about options outstanding at 
December 31, 1996: 

<TABLE>
<CAPTION>
                 Options Outstanding                           Options Exercisable 
---------------------------------------------------- --------------------------------------- 
                                        Weighted       Weighted                   Weighted 
                        Number          Average        Average       Number        Average 
Range of             Outstanding       Remaining       Exercise   Exercisable     Exercise 
Exercise Prices      at 12/31/96    Contractual Life    Price     at 12/31/96       Price 
 ------------------ --------------  ---------------------------- --------------  ------------ 
<S>                   <C>                 <C>          <C>          <C>           <C>
$12.0625 - $15.0000       2,614           9.48         $13.4150       2,576       $ 13.4230 
 17.0000 - 17.0000      497,396           7.38          17.0000     300,998        17.0000 
 17.1875 - 18.3125       22,936           7.54          18.1680      20,437        18.1580 
 20.1250 - 20.1250      395,000           8.92          20.1250     136,685        20.1250 
 20.3750 - 25.8750      426,000           9.28          24.9049      26,000        22.4807 
 26.0000 - 26.7500       35,000           9.49          26.2142      15,000        26.0000 
 29.6250 - 29.6250    1,779,500           9.85          29.6250           0         0.0000 
 31.0000 - 31.0000        1,000           9.89          31.0000           0         0.0000 
 31.5000 - 31.5000        1,000           9.90          31.5000           0         0.0000 
 32.2500 - 32.2500        5,000           9.94          32.2500           0         0.0000 
                    --------------  ---------------------------- --------------  ------------ 
 12.0625 - 32.2500    3,165,446           9.25         $25.6915     501,696       $18.4333 
                    ==============  ============================ ==============  ============ 
</TABLE>

Stock Purchase Plan 

    In 1995, the Company instituted a dividend reinvestment and stock purchase 
plan for holders of the Company's stock. The plan permits shareholders to 
automatically reinvest their cash dividends or invest limited amounts of cash 
payments in newly issued shares or open market purchases of the Company's 
common stock. At December 31, 1996 and 1995, there were 373,132 and 474,563 
shares reserved for issuance under the dividend reinvestment and stock 
purchase plan. 

10. Transactions with Affiliates: 

<TABLE>
<CAPTION>
                                                                                       Predecessor 
                                                                                     --------------- 
                                                                    May 26, 1994 to  Jan. 1, 1994 to 
                                                   1996      1995    Dec. 31, 1994    May 25, 1994 
                                                  -------- -------- ---------------  --------------- 
<S>                                               <C>      <C>            <C>            <C>
Management, design and construction fees and 
  interest income                                 $9,176   $ 5,640                       $1,809 
Administrative salaries and expenses                  --        --                          469 
Construction costs                                 8,352    11,108        $241               -- 
</TABLE>

    In 1995, the Company entered into an agreement to lease its corporate 
offices from a joint venture in which the Company has an indirect interest. 
It previously subleased corporate office space from another affiliate. Rental 
expense related to these arrangements was $1.3 million, $0.3 million and $0.1 
million for the years ended December 31, 1996 and 1995 and the period from 
May 26, 1994 to December 31, 1994, respectively. 


                                     F-18 
<PAGE> 

                        BEACON PROPERTIES CORPORATION 
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
               (dollars in thousands, except per share amounts) 


    Future minimum rental payments at December 31, 1996 for the Company's 
corporate offices are $1.3 million for 1997, $1.4 million for 1998 through 
2001, and $1.0 million for 2002. 

11. Minority Interests: 

Minority Interest in Operating Partnership 

    Minority interest in the Operating Partnership relates to the portion 
which is not owned by the Company and, at December 31, 1996, amounted to 
11.5%. 

   
     In conjunction with the formation of the Company persons contributing
interests in properties to the Operating Partnership elected to receive either
common stock of the Company or interests in the Operating Partnership ("Units").
Each Unit may be redeemed for cash equal to the fair market value of a share of
common stock at the time of redemption or, at the option of the Company,
one share of common stock. When a unitholder redeems a Unit for a share of
common stock or cash, minority interest is reduced and the Company's investment
in the Operating Partnership is increased. At December 31, 1996 and 1995,
6,273,928 and 3,788,549 units were outstanding, respectively.
    

Minority Interest in Combined Partnerships 

    This amount presented in the financial statements of the Predecessor 
represents the losses of the properties in excess of capital of owners, who 
will continue to hold their respective economic interest in the combined 
partnerships, and are capable of funding their share of future capital calls. 

12. Commitments and Contingencies: 

Pension Plan 

    The Company participates in a defined-benefit pension plan with some of 
its affiliates. This plan covers substantially all full-time non-union 
employees. The Company's portion of pension expense for the years ended 
December 31, 1996 and 1995 and the period May 26, 1994 to December 31, 1994 
was $0.2 million, $0.1 million, and $0.1 million, respectively. The 
Predecessor's comparable allocated portion of pension expense amounted to 
$0.1 million for the period January 1, 1994 to May 25, 1994. 

401K Plan 

    The eligible employees of the Company participate in a contributory 
savings plan with some of its affiliates. Under the plan, the Company may 
match contributions made by eligible employees based on a percentage of the 
employee's salary. The Company matches 25% of contributions up to 3% of such 
employee's salary (up to $30,000). The matching amount may be changed from 
time to time by the Board of Directors. Expenses under this Plan for 1995, 
1994 and 1993 were not material. 

Contingencies 

    The Company is subject to various legal proceedings and claims that arose 
in the ordinary course of business. These matters are generally covered by 
insurance. Management believes that the final outcome of such matters will 
not have a material adverse effect on the financial position, results of 
operations or liquidity of the Company. 

Lease 

    The South Station property is subject to a ground lease expiring in 2024. 
The lease provides for two 15-year extension options. Under certain 
conditions, the lessor reserves the right to terminate the lease at the end 
of the initial term or at the end of the first extension period and pay the 
lessee an amount based on a formula payment 


                                     F-19 
<PAGE> 

                        BEACON PROPERTIES CORPORATION 
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
               (dollars in thousands, except per share amounts) 


of fair value. The minimum rents in connection with the lease are 
substantially based on percentage rent until 1997. The Company is obligated 
to provide loans to the lessor under certain conditions subject to a maximum 
of $0.9 million. As of December 31, 1996, no such loans were outstanding. 

Environmental 

    A former tenant of Crosby Corporate Center has agreed to perform the 
necessary investigation and cleanup actions regarding remediation of possible 
contamination, bear all costs associated with such cleanup activities and 
indemnify the Company for any costs or damages it incurs in connection with 
such contamination. As the owner of the property, however, the Company could 
be held liable for the costs of such activities if the former tenant fails to 
undertake such actions. 

    As a lessee of certain property, the Company has received an indemnity 
from the owner to the extent the Company is assessed costs relating to 
environmental cleanup. 

    Site assessments at the New England Executive Park have identified 
contamination in the groundwater at a monitoring well which flows into an 
aquifer, which supplies drinking water to the Town of Burlington. The Town of 
Burlington has allocated funds for, and is in the process of constructing, a 
groundwater treatment facility at its drinking water supply that draws from 
the subject aquifer. The Company has been advised that such treatment 
facility has the capacity to treat any contaminants which may be derived from 
the groundwater passing beneath the New England Executive Park. 

    Based on site assessments performed at The Riverview Building which have 
identified the presence of oil that slightly exceeds the concentration that 
requires reporting to the Massachusetts Department of Environmental 
Protection, an environmental consultant has advised the Company that 
applicable regulatory requirements can be satisfied without the need to 
perform any remediation at the property. 

    In connection with the acquisition of the John Marshall land, the sellers 
have reported the findings of contamination to the Virginia Department of 
Environmental Quality and have retained an environmental consultant to 
prepare a remediation plan. Units valued at approximately $1.0 million were 
escrowed from the purchase price to be released to the seller upon 
performance of remediation pursuant to a remediation plan approved by the 
Company. The escrow further provides that the Company may receive some or all 
of the remaining escrowed Units upon certain conditions. 

    The Company does not believe that any costs, if incurred, in connection 
with these environmental matters would have a material adverse effect on the 
financial position, results of operations, or liquidity of the Company. 

Other 

    The Company guarantees the surety bonds of an affiliate in an amount up to 
$5.0 million. 

    The Company has an obligation to pay $17.0 million in connection with the 
acquisition of real estate upon the achievement of conditions regarding 
occupancy or rental income levels. 

   
     In connection with the acquisition of the John Marshall I, E. J. Randolph 
and Northridge I properties, the Company has agreed to maintain the non-recourse
financing assumed from the sellers for a five year period and not to dispose of
the property for a seven year period. If the Company should choose not to
maintain the non-recourse provisions of the existing or new debt, or sell the
properties, within these respective time periods it shall be required to make
payments to the sellers of approximately $6.0 million in 1997, reducing ratably
to zero through 2003.
    

                                     F-20 
<PAGE> 

                        BEACON PROPERTIES CORPORATION 
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
               (dollars in thousands, except per share amounts) 


13. Segment Information: 

    The Predecessor operated principally in three segments: rental operations, 
property management, and construction. Revenues for the management segment 
include management revenues earned from the rental operations segment which 
are subsequently eliminated in consolidation. 

    Income (loss) from operations consists of total revenues less total 
expenses excluding the effects of the following items: equity in net income 
(loss) of joint ventures, minority interest in loss of combined partnerships 
and extraordinary gain. 


<TABLE>
<CAPTION>
                                    Rental    Management    Construction    Elimination     Total 
                                   ---------------------- ---------------  -------------- ---------- 
                                                    January 1, 1994--May 25, 1994 
<S>                                <C>          <C>            <C>             <C>         <C>
Revenues                           $ 7,610      $1,766         $24,238         $(364)      $33,250 
Income (Loss) from Operations       (1,848)      1,260             102           (36)         (522) 
Identifiable Assets                 63,335         283          14,141          (289)       77,470 
Depreciation and Amortization        2,383           2              91            --         2,476 
Capital Expenditures                   837          --             141            --           978 
</TABLE>

14. Future Minimum Rents: 

    Future minimum rentals to be received under noncancelable tenant leases in 
effect at December 31, 1996 are as follows: 

<TABLE>
<CAPTION>
<S>         <C>
1997        $  188,032 
1998           175,732 
1999           170,086 
2000           143,288 
2001           113,718 
Thereafter     370,698 
            ---------- 
  Total     $1,161,554 
            ========== 
</TABLE>

15. Geographic Concentration: 

    The Company owns properties with a total cost at December 31, 1996 as 
follows: 

<TABLE>
<CAPTION>
<S>                       <C>
Downtown Boston            $  284,574 
Suburban Boston               279,987 
Suburban Atlanta              343,014 
Suburban Philadelphia          59,018 
Suburban Virginia             178,166 
Suburban Los Angeles          133,307 
Suburban San Francisco        184,207 
Suburban Chicago              175,819 
Downtown Washington            53,438 
                           ---------- 
Total                      $1,691,530 
                           ========== 
</TABLE>

                                     F-21 
<PAGE> 

                        BEACON PROPERTIES CORPORATION 
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
               (dollars in thousands, except per share amounts) 


16. Selected Quarterly Financial Information: (unaudited) 

    The following schedule is a summary of the quarterly results of operations 
for the years ended December 31, 1996 and 1995 and the period May 26, 1994 to 
December 31, 1994: 

<TABLE>
<CAPTION>
                                                     First      Second     Third     Fourth 
                                                    Quarter    Quarter    Quarter    Quarter     Total 
                                                    ---------  --------- ---------  --------- ----------- 
                                                                Year Ended December 31, 1996 
<S>                                                 <C>        <C>        <C>        <C>        <C>
Revenue                                             $33,668    $41,438    $46,602    $62,082    $183,791 
Income from continuing operations                     6,899     10,053     11,603     15,002      43,557 
Discontinued operations--Construction Company: 
 Loss from operations                                  (407)      (663)      (841)      (698)     (2,609) 
 Loss on sale                                            --         --         --       (249)       (249) 
Extraordinary items, net of minority interest        (1,726)    (1,642)        --         --      (3,368) 
Net income                                            4,994      7,550     10,524     13,265      36,332 
Net income per common share                            0.23       0.28       0.34       0.34        1.21 
</TABLE>

<TABLE>
<CAPTION>
                                           First     Second     Third     Fourth 
                                          Quarter   Quarter    Quarter    Quarter     Total 
                                         ---------  ---------  --------- --------- ---------- 
                                                     Year Ended December 31, 1995 
<S>                                       <C>       <C>        <C>        <C>        <C>
Revenue                                   $20,801   $22,124    $23,595    $24,523    $91,043 
Income from continuing operations           3,498     4,620      5,510      5,329     18,957 
Discontinued operations--Construction 
  Company: 
 Loss from operations                          --        --        (12)        --        (12) 
Net income                                  3,081     4,151      5,088      5,740     18,060 
Net income per common share                  0.25      0.26       0.29       0.28       1.09 
</TABLE>

<TABLE>
<CAPTION>
                                                   Second     Third     Fourth 
                                                   Period    Quarter    Quarter     Total 
                                                   -------- ---------  --------- ---------- 
                                                       May 26, 1994--December 31, 1994 
<S>                                                <C>       <C>        <C>        <C>
Revenue                                            $3,997    $11,387    $16,549    $31,933 
Income from continuing operations                     784      1,578      3,557      5,919 
Discontinued operations--Construction Company: 
 Income from operations                                42        165        270        477 
Net income                                            826      1,826      3,003      5,655 
Net income per common share                          0.07       0.15       0.26       0.48 
</TABLE>

17. Pro Forma Results: (unaudited) 


    The following unaudited pro forma operating results for the Company have 
been prepared as if capital contributions and property acquisitions during 
1995 and 1996 had occurred on January 1, 1995. Unaudited pro forma financial 
information is presented for informational purposes only and may not be 
indicative of what the actual results of operations of the Company would have 
been had the events occurred as of January 1, 1995, nor does it purport to 
represent the results of operations for future periods. Pro forma results 
have not been presented for 1994 as the Company operations did not commence 
until May 26, 1994. 


                                     F-22 
<PAGE> 

                        BEACON PROPERTIES CORPORATION 
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
               (dollars in thousands, except per share amounts) 


<TABLE>
<CAPTION>
                                            December 31, 
                                      ----------------------- 
                                          1996        1995 
                                      ----------- ----------- 
<S>                                     <C>         <C>
Revenues                                $299,147    $266,882 
Income before extraordinary items         74,845      69,894 
Net income                                71,416      69,894 
Net income per common share                 1.48        1.45 
</TABLE>

18. Discontinued Operations: 

    On December 31, 1996, certain assets of the Construction Company were 
sold. These assets included fixed assets, general construction contracts in 
progress, and the receivables and payables related to these contracts. All 
employees were transferred to the buyer who is expected to complete all 
outstanding construction work for projects not purchased as part of the sale. 

19. Subsequent Events: 

Declaration of Dividend 

    On January 28, 1997, the Company declared a quarterly dividend of $0.4625 
per common share, payable on February 28, 1997 to shareholders of record on 
February 10, 1997. 


                                     F-23 
<PAGE> 


       REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULES



To the Board of Directors and Stockholders of 
Beacon Properties Corporation: 



Our report on the consolidated financial statements of Beacon Properties 
Corporation is included on page F-1 of this Form 10-K. In connection with our 
audits of such financial statements, we have also audited the related 
financial statement schedules listed in the Item 14(a) of this Form 10-K. 


In our opinion, the financial statement schedules referred to above, when 
considered in relation to the basic financial statements taken as a whole, 
present fairly, in all material respects, the information required to be 
included therein. 


Boston, Massachusetts                             /s/ Coopers & Lybrand L.L.P.
January 28, 1997 



                                     F-24 
<PAGE> 


                                 Schedule III 
                        BEACON PROPERTIES CORPORATION 
                   REAL ESTATE AND ACCUMULATED DEPRECIATION 
                              December 31, 1996 
                            (dollars in thousands) 



<TABLE>
<CAPTION>
                                                                                  Initial Cost 
                                                                            --------------------------- 
                                                                                        Buildings and 
Description                                                 Encumbrances      Land      Improvements 
-----------                                                 ------------  ----------- --------------- 
<S>                                                           <C>           <C>          <C>
Commercial Property: 
Wellesley Office Park--Buildings 1-8--Wellesley, MA           $  55,000     $  9,110     $   75,829 
Crosby Corporate Center--Bedford, MA                               --(1)         978         10,478 
South Station--Boston, MA                                            --           --         21,487 
175 Federal St.--Boston, MA                                      12,970        1,404         24,505 
Center Plaza--Boston, MA                                         60,000        7,301         65,712 
150 Federal St.--Boston, MA                                    56,920(2)      11,265        101,280 
One Canal Park--Cambridge, MA                                      --(1)         931          8,444 
Ten Canal Park--Cambridge, MA                                      --(1)       1,179         10,609 
Two Oliver Street--Boston, MA                                      --(1)       1,796         16,166 
Westwood Business Centre--Westwood, MA                             --(1)       1,159         10,498 
Russia Wharf--Boston, MA                                           --(1)       1,442         12,974 
Westlakes Office Park--Buildings 1, 2, 3 and 5--Berwyn, 
  PA                                                               --(1)       6,335         46,267 
Perimeter Center--Atlanta, GA                                   218,000       46,438        292,305 
AT&T Plaza--Oak Brook, IL                                          --(1)       3,510         31,587 
Tri-State International--Lincolnshire, IL                          --(1)       6,222         55,999 
1333H Street, N.W.--Washington, D.C.                               --(1)       5,337         48,033 
E.J. Randolph--McLean, VA                                        15,000        3,590         19,520 
John Marshall I--McLean, VA                                      20,722        5,996         27,991 
Northridge I--Herndon, VA                                        13,600        1,911         19,264 
1300 North 17th Street--Rosslyn, VA                                --(1)       8,007         46,758 
1616 North Fort Myer Drive--Rosslyn, VA                            --(1)       6,156         38,651 
New England Executive Park--Burlington, MA                         --(1)       7,067         68,259 
10960 Wilshire Boulevard--Westwood, CA                               --       11,200        122,039 
The Riverview Building--Cambridge, MA                                --        4,513         40,616 
Shoreline Technology Park--Mountain View, CA                         --       39,547        101,444 
Lake Marriott Business Park--Santa Clara, CA                         --       12,032         31,128 
Presidents Plaza--Chicago, IL                                        --        7,750         69,752 
                                                          ---------------  ----------- --------------- 
                                                              $ 452,212     $212,176     $1,417,595 
                                                          ===============  =========== =============== 
</TABLE>

                                     F-25 
<PAGE> 


                                  Schedule III
                          BEACON PROPERTIES CORPORATION
               REAL ESTATE AND ACCUMULATED DEPRECIATION--Continued
                                December 31, 1996
                             (dollars in thousands)



Cost Capitalized 

<TABLE>
<CAPTION>
                                                      Subsequent                  Gross Amount at Which 
                                                    to Acquisition              Carried at Close of Period 
                                               ----------------------- ----------------------------------------- 
                                                           Buildings                   Buildings 
                                                              and                         and 
Description                                      Land     Improvements      Land      Improvements      Total 
-----------                                    -------- -------------- ----------- ---------------  ------------ 
<S>                                             <C>         <C>           <C>          <C>            <C>
Commercial Property: 
Wellesley Office Park--Buildings 1-8-- 
  Wellesley, MA                                     --      $12,866       $  9,110     $   88,695     $   97,805 
Crosby Corporate Center--Bedford, MA            $1,505       14,880          2,483         25,358         27,841 
South Station--Boston, MA                           --          861             --         22,348         22,348 
175 Federal St.--Boston, MA                         --        3,196          1,404         27,701         29,105 
Center Plaza--Boston, MA                            --        8,810          7,301         74,522         81,823 
150 Federal St.--Boston, MA                         --        1,326         11,265        102,606        113,871 
One Canal Park--Cambridge, MA                       --          139            931          8,583          9,514 
Ten Canal Park--Cambridge, MA                       --          135          1,179         10,744         11,923 
Two Oliver Street--Boston, MA                       --        1,376          1,796         17,542         19,338 
Westwood Business Centre--Westwood, MA              --          674          1,159         11,172         12,331 
Russia Wharf--Boston, MA                           177        3,496          1,619         16,470         18,089 
Westlakes Office Park--Buildings 1, 2, 3 
  and 5--Berwyn, PA                                 --        6,416          6,335         52,683         59,018 
Perimeter Center--Atlanta, GA                       --        4,271         46,438        296,576        343,014 
AT&T Plaza--Oak Brook, IL                           --           18          3,510         31,605         35,115 
Tri-State International--Lincolnshire, IL           --          950          6,222         56,949         63,171 
1333H Street, N.W.--Washington, D.C.                --           68          5,337         48,101         53,438 
E.J. Randolph--McLean, VA                           --           36          3,590         19,556         23,146 
John Marshall I--McLean, VA                         --          147          5,996         28,138         34,134 
Northridge I--Herndon, VA                           --           41          1,911         19,305         21,216 
1300 North 17th Street--Rosslyn, VA                 --           11          8,007         46,769         54,776 
1616 North Fort Myer Drive--Rosslyn, VA             --           87          6,156         38,738         44,894 
New England Executive Park--Burlington, MA          --           64          7,067         68,323         75,390 
10960 Wilshire Boulevard--Westwood, CA              --           68         11,200        122,107        133,307 
The Riverview Building--Cambridge, MA               --           54          4,513         40,670         45,183 
Shoreline Technology Park--Mountain View, CA        --           49         39,547        101,493        141,040 
Lake Marriott Business Park--Santa Clara, CA        --            7         12,032         31,135         43,167 
Presidents Plaza--Chicago, IL                       --           31          7,750         69,783         77,533 
                                                --------- ------------- ----------- ---------------  ------------ 
                                                $1,682      $60,077       $213,858     $1,477,672     $1,691,530 
                                                ========= ============= =========== ===============  ============ 
</TABLE>

                                     F-26 
<PAGE> 

                                  Schedule III
                          BEACON PROPERTIES CORPORATION
               REAL ESTATE AND ACCUMULATED DEPRECIATION--Continued
                                December 31, 1996
                             (dollars in thousands)

<TABLE>
<CAPTION>
                                                                                                Life on Which 
                                                                                                 Depreciation 
                                                                                                  in Latest 
                                                                   Date of                          Income 
                                                 Accumulated    Construction/       Date          Statements 
Description                                     Depreciation     Renovation       Acquired       is Computed 
-----------                                    --------------- --------------- ---------------  --------------- 
<S>                                                <C>            <C>             <C>                 <C>
Commercial Property: 
Wellesley Office Park--Buildings 1-8-- 
  Wellesley, MA                                    $33,913        1963-1984          1994/1995        (3) 
Crosby Corporate Center--Bedford, MA                 6,702             1981            5/26/94        (3) 
South Station--Boston, MA                           13,434             1988            5/26/94        (3) 
175 Federal St.--Boston, MA                          7,258             1977           10/28/94        (3) 
Center Plaza--Boston, MA                             5,884        1966-1969           12/01/94        (3) 
150 Federal St.--Boston, MA                          8,961             1988            5/26/94        (3) 
One Canal Park--Cambridge, MA                          770             1987            6/10/94        (3) 
Ten Canal Park--Cambridge, MA                          386             1987           12/20/95        (3) 
Two Oliver Street--Boston, MA                          783        1982-1988           10/06/95        (3) 
Westwood Business Centre--Westwood, MA               1,083             1985            6/10/94        (3) 
Russia Wharf--Boston, MA                             1,453        1978-1982            8/10/94        (3) 
Westlakes Office Park--Buildings 1, 2, 3 
  and 5--Berwyn, PA                                  3,931        1988-1990       7/95 & 10/94        (3) 
Perimeter Center--Atlanta, GA                        8,822        1970-1989            2/15/96        (3) 
AT&T Plaza--Oak Brook, IL                              395             1984            8/16/96        (3) 
Tri-State International--Lincolnshire, IL              710             1986            8/16/96        (3) 
1333H Street, N.W.--Washington, D.C.                   601             1984            8/16/96        (3) 
E.J. Randolph--McLean, VA                              217             1983            9/05/96        (3) 
John Marshall I--McLean, VA                            306             1981            9/05/96        (3) 
Northridge I--Herndon, VA                              214             1988            9/05/96        (3) 
1300 North 17th Street--Rosslyn, VA                    325             1980           10/18/96        (3) 
1616 North Fort Myer Drive--Rosslyn, VA                271             1974           10/18/96        (3) 
New England Executive Park--Burlington, MA             291        1970-1985           11/15/96        (3) 
10960 Wilshire Boulevard--Westwood, CA                 439        1971-1992           11/21/96        (3) 
The Riverview Building--Cambridge, MA                  170        1985-1986           11/21/96        (3) 
Shoreline Technology Park--Mountain View, CA           141        1985-1991           12/20/96        (3) 
Lake Marriott Business Park--Santa Clara, CA            43             1981           12/20/96        (3) 
Presidents Plaza--Chicago, IL                           32        1980-1982           12/27/96        (3) 
                                                   -------
                                                   $97,535
                                                   =======
</TABLE>

(1) These properties are collateral for a Note Payable under the Credit 
    Facility. The outstanding balance under the Note at December 31, 1996 is 
    $153,000. 

(2) This property is comprised of two Units. Unit A is collateral for a Note 
    Payable under the Credit Facility. Unit B is collateral for a Mortgage 
    Note Payable in the amount of $56,920. 

(3) Buildings and improvements--19 to 40 years; Personal property--5 to 10 
    years; tenant improvements--over the terms of the related leases. 

                                     F-27 
<PAGE> 


                                 Schedule III 
                        BEACON PROPERTIES CORPORATION 
             REAL ESTATE AND ACCUMULATED DEPRECIATION--Continued 
                              December 31, 1996 
                            (dollars in thousands) 


    Depreciation of building and improvements and personal property is 
calculated over the following estimated useful lives, using straight line and 
declining balance methods: 

    Buildings and improvements--19 to 40 years 

    Tenant Improvements--over the terms of the related leases 

    Personal property--5 to 10 years 

    The aggregate cost for federal income tax purposes was approximately 
$1,390.3 million at December 31, 1996. 

    The changes in total real estate assets for the years ended December 31, 
1996 and 1995, the period May 26, 1994 to to December 31, 1994 and the period 
January 1, 1994 to May 25, 1994 are as follows: 

<TABLE>
<CAPTION>
                                                          Company                    Predecessor 
                                        ------------------------------------------  --------------- 
                                                                    May 26, 1994     Jan. 1, 1994 
                                                                         to               to 
                                             1996         1995      Dec. 31, 1994    May 25, 1994 
                                        ------------- ----------- ----------------  --------------- 
<S>                                       <C>           <C>           <C>              <C>
Balance, beginning of period              $  471,142    $400,419       $207,013*       $81,220 
Acquisitions, Construction Costs and 
  Improvements                             1,220,388      70,723        193,406            978 
                                        ------------- ----------- ----------------  --------------- 
Balance, end of period                    $1,691,530    $471,142      $ 400,419        $82,198 
                                        ============= =========== ================  =============== 
</TABLE>

* Represents initial acquisition cost of properties in the formation of the 
  Company. 

    The changes in accumulated depreciation for the years ended December 31, 
1996 and 1995, the period May 26, 1994 to to December 31, 1994 and the period 
January 1, 1994 to May 25, 1994 are as follows: 

<TABLE>
<CAPTION>
                                                Company                   Predecessor 
                                  ------------------------------------- --------------- 
                                                        May 26, 1994     Jan. 1, 1994 
                                                             to               to 
                                    1996      1995      Dec. 31, 1994    May 25, 1994 
                                  --------- --------- ----------------  --------------- 
<S>                               <C>        <C>          <C>               <C>
Balance, beginning of period      $66,571    $51,115        $45,044**       $37,167 
Depreciation for period            30,964     15,456          6,071           2,055 
                                  --------- --------- ----------------  --------------- 
Balance, end of period            $97,535    $66,571      $  51,115         $39,222 
                                  ========= ========= ================  =============== 
</TABLE>

** Balance reflects prior accumulated depreciation carried over due to 
   accounting for formation acquisitions as poolings of interests. 

                                     F-28 
<PAGE> 


                                 Schedule IV 
                        BEACON PROPERTIES CORPORATION 
                        MORTGAGE LOANS ON REAL ESTATE 
                              December 31, 1996 
                            (dollars in thousands) 



<TABLE>
<CAPTION>
                                                                                                       Principal 
                                                                                                       Amount of 
                                   Final        Periodic                 Face        Carrying       Loans Subject to 
                       Interest   Maturity      Payment       Prior    Amount of     Amount of    Delinquent Principal 
Commercial Property      Rate       Date          Term        Liens    Mortgages   Mortgages (1)      or Interest 
---------------------  ---------  -------------------------   ------  ------------ -------------- --------------------- 
<S>                      <C>       <C>         <C>            <C>     <C>          <C>                <C>
Rowes Wharf 
  Boston, MA             8.71%     4/1/99      Interest-only  --      $63,000      $51,491            -- 
</TABLE>


(1) The aggregate cost of the Company's mortgage loans for federal income tax 
    purposes was $51,491 at December 31, 1996. 

    Reconciliation of Mortgage Loans on real estate for the year ended 
December 31: 

<TABLE>
<CAPTION>
                                       1996 
                                    ---------- 
<S>                                   <C>
Balance at beginning of year          $34,778 
 Additions during period: 
  Acquisition of mortgage loans        16,713 
 Deductions during period: 
  Principal collections                    -- 
                                    ---------- 
Balance at end of year                $51,491 
                                    ========== 
</TABLE>

                                     F-29