SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20543


                                    FORM 10-Q


                QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


                        FOR QUARTER ENDED March 31, 1997


                           COMMISSION FILE NO. 1-11706


                         CARRAMERICA REALTY CORPORATION
--------------------------------------------------------------------------------


            Maryland                                52-1796339
--------------------------------      ------------------------------------------
(State or other jurisdiction of       (I.R.S. Employer Identification Number)
 incorporation or organization)


             1700 Pennsylvania Avenue, N.W., Washington, D.C. 20006
--------------------------------------------------------------------------------
               (Address or principal executive office) (Zip code)


        Registrant's telephone number, including area code (202) 624-7500


                                       N/A
--------------------------------------------------------------------------------
   (Former name, former address and former fiscal year, if changed since last
                                    report)


            Number of shares outstanding of each of the registrant's
                  classes of common stock, as of May 15, 1997:

               Common Stock, par value $.01 per share: 57,047,297
--------------------------------------------------------------------------------


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 twelve (12) months (or such shorter period that the Registrant was
required to file such report) and (2) has been subject to such filing
requirements for the past ninety (90) days.

                 YES        X               NO
                      -----------               -----------



<PAGE>


                                      Index

<TABLE>
<CAPTION>

                                                                                       Page
                                                                                       ----
Part I: Financial Information

Item 1.  Financial Statements

<S>                                                                                    <C>
          Condensed consolidated balance sheets of CarrAmerica Realty
          Corporation and subsidiaries as of March 31, 1997 (unaudited) and
          December 31, 1996..............................................................4

          Condensed consolidated statements of operations of CarrAmerica Realty
          Corporation and subsidiaries for the three months ended March 31, 1997
          and 1996 (unaudited)...........................................................5

          Condensed consolidated statements of cash flows of CarrAmerica Realty
          Corporation and subsidiaries for the three months ended March 31, 1997
          and 1996 (unaudited)...........................................................6


         Notes to condensed consolidated financial statements......................7 to 12

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations......................................13 to 21


Part II: Other Information

Item 1.  Legal Proceedings .............................................................22

Item 2.  Changes in Securities..........................................................22

Item 3.  Defaults Upon Senior Securities................................................22

Item 4.  Submission of Matters to a Vote of Security Holders............................22

Item 5.  Other Information .............................................................22

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


                                       2

<PAGE>


                                     Part I


Item 1.  Financial Information

         The information furnished in the accompanying condensed consolidated
balance sheets, condensed consolidated statements of operations and condensed
consolidated statements of cash flows of CarrAmerica Realty Corporation and
subsidiaries (the "Company") reflect all adjustments which are, in the opinion
of management, necessary for a fair presentation of the aforementioned financial
statements for the interim periods.

         The aforementioned financial statements should be read in conjunction
with the notes to such financial statements and Management's Discussion and
Analysis of Financial Condition and Results of Operations.


                                       3
<PAGE>


                 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
                      Condensed Consolidated Balance Sheets
                   As of March 31, 1997 and December 31, 1996
--------------------------------------------------------------------------------

(In thousands, except share amounts)

<TABLE>
<CAPTION>

                                                                                    March 31,     December 31,
                                                                                      1997           1996
                                                                                   -----------    -----------
Assets                                                                             (unaudited)
Rental property (note 2):
<S>                                                                                <C>                <C>    
   Land                                                                            $   393,606        356,797
   Buildings                                                                         1,169,160      1,017,313
   Tenant improvements                                                                 107,144         99,760
   Furniture, fixtures, and equipment                                                    2,185          2,128
                                                                                   -----------    -----------
                                                                                     1,672,095      1,475,998
   Less - accumulated depreciation                                                    (133,559)      (119,657)
                                                                                   -----------    -----------
   Total rental property                                                             1,538,536      1,356,341

Land held for development                                                               36,480         32,277
Construction in progress                                                                55,183         31,723
Cash and cash equivalents                                                               27,448         27,637
Restricted cash and cash equivalents (note 2)                                            7,749          8,229
Accounts and notes receivable                                                           14,324         11,899
Investments                                                                             14,142         13,524
Accrued straight-line rents                                                             25,331         23,810
Tenant leasing costs, net                                                               16,777         13,499
Deferred financing costs, net                                                            4,254          3,800
Prepaid expenses and other assets, net                                                  17,092         13,825
                                                                                   -----------    -----------
                                                                                   $ 1,757,316      1,536,564
                                                                                   ===========    ===========
Liabilities, Minority Interest, and Stockholders' Equity
Liabilities:
   Mortgages and credit facilities (note 2)                                            735,060        655,449
   Accounts payable and accrued expenses                                                37,092         32,657
   Rent received in advance and security deposits                                       14,355         10,383
                                                                                   -----------    -----------
     Total liabilities                                                                 786,507        698,489

Minority interest (note 3)                                                              54,797         50,597

Stockholders' equity:
   Preferred stock, $.01 par value, authorized 15,000,000 shares, 1,740,000
     shares of Series A Cumulative Convertible Redeemable Preferred stock issued
     and outstanding at March 31, 1997 and December 31, 1996 with an aggregate
     liquidation preference of $43.5 million                                                17             17
   Common stock, $.01 par value, authorized 90,000,000
     shares, issued and outstanding 48,777,835 shares
     at March 31, 1997 and 43,789,073 shares at
     December 31, 1996                                                                     487            438
   Additional paid in capital                                                          974,662        837,355
   Cumulative dividends in excess of net income                                        (59,154)       (50,332)
                                                                                   -----------    -----------
     Total stockholders' equity                                                        916,012        787,478


                                                                                   -----------    -----------
                                                                                   $ 1,757,316      1,536,564
                                                                                   ===========    ===========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>



                 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
                 Condensed Consolidated Statements of Operations
               For the Three Months Ended March 31, 1997 and 1996

--------------------------------------------------------------------------------




(Unaudited and in thousands, except per common share amounts)
<TABLE>
<CAPTION>


                                                                  1997        1996
                                                                --------    --------

Real estate operating revenue: Rental revenue (note 4):
<S>                                                             <C>           <C>   
      Minimum base rent                                         $ 56,525      21,913
      Recoveries from tenants                                      6,949       2,035
      Parking and other tenant charges                             2,815       1,402
                                                                --------    --------
         Total rental revenue                                     66,289      25,350
   Real estate service income                                      4,178       2,726
                                                                --------    --------
         Total revenue                                            70,467      28,076
                                                                --------    --------

Real estate operating expenses:
   Property operating expenses:
      Operating expenses                                          17,266       6,231
      Real estate taxes                                            6,377       2,760
   Interest expense                                               11,257       6,532
   General and administrative                                      5,156       2,748
   Depreciation and amortization                                  15,916       5,484
                                                                --------    --------
         Total operating expenses                                 55,972      23,755
                                                                --------    --------

         Real estate operating income                             14,495       4,321
                                                                --------    --------

Other operating income (expense):
   Interest income                                                   542         306
   Equity in earnings (losses) of unconsolidated partnerships        (61)         98
                                                                --------    --------
         Total other operating income                                481         404
                                                                --------    --------
         Net operating income before minority interest            14,976       4,725

 Minority interest (note 3)                                       (1,717)     (1,390)
                                                                --------    --------

         Net income                                             $ 13,259       3,335
                                                                ========    ========

         Net income per common share                            $   0.26        0.25
                                                                ========    ========
</TABLE>


See accompanying notes to condensed consolidated financial statements.


                                       5


<PAGE>



                 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
                 Condensed Consolidated Statements of Cash Flows
               For the Three Months Ended March 31, 1997 and 1996

--------------------------------------------------------------------------------



(Unaudited and in thousands)

<TABLE>
<CAPTION>

                                                                             1997         1996
                                                                           ---------    ---------
  Cash flows from operating activities:
<S>                                                                        <C>              <C>  
   Net income                                                              $  13,259        3,335
                                                                           ---------    ---------
   Adjustments to reconcile net income to net cash provided by operating
     activities:
      Depreciation and amortization                                           15,916        5,484
      Minority interest in income                                              1,717        1,390
      Loss on write off of assets                                                211         --
      Equity in (earnings) losses of unconsolidated partnerships                  61          (91)
      (Increase) decrease in accounts receivable                              (2,425)         530
      Increase in accrued straight-line rents                                 (1,521)        (164)
      Additions to tenant leasing costs                                       (4,069)        (282)
      Increase in prepaid expenses and other assets                           (3,889)      (1,108)
      Increase (decrease) in accounts payable and accrued expenses             4,435       (2,416)
      Increase in rent received in advance and security deposits               3,972        2,323
                                                                           ---------    ---------
         Total adjustments                                                    14,408        5,666
                                                                           ---------    ---------
         Net cash provided by operating activities                            27,667        9,001
                                                                           ---------    ---------

Cash flows from investing activities:
   Acquisitions of property                                                 (135,379)    (168,156)
   Additions to rental property                                               (7,232)        (969)
   Additions to land held for development                                     (6,340)        --
   Additions to construction in process                                      (31,128)        --
   Investments in unconsolidated partnerships                                   (608)        (568)
   Acquisition of minority interest                                             --             (3)
   Distributions from unconsolidated partnerships                                 54            7
   Decrease in restricted cash and cash equivalents                              480          193
                                                                           ---------    ---------
         Net cash used by investing activities                              (180,153)    (169,496)
                                                                           ---------    ---------

Cash flows from financing activities:
   Net proceeds from sale of common stock                                    136,111         --
   Net proceeds from exercise of options                                       1,219         --
   Net borrowings on line of credit                                           55,000      180,000
   Dividends paid                                                            (22,081)      (5,914)
   Repayment of mortgages payable                                            (14,589)        (417)
   Additions to deferred financing costs                                      (1,007)        (361)
   Loan to investment venture                                                   (125)        --
   Distributions to minority interest                                         (2,231)      (1,797)
                                                                           ---------    ---------
         Net cash provided by financing activities                           152,297      171,511
                                                                           ---------    ---------
         Increase (decrease) in unrestricted cash and cash equivalents          (189)      11,016
Unrestricted cash and cash equivalents, beginning of the period               27,637        9,217
                                                                           ---------    ---------
Unrestricted cash and cash equivalents, end of the period                  $  27,448       20,233
                                                                           =========    =========

  Supplemental disclosure of cash flow information:

     Cash paid for interest, net of capitalized interest
        of $1,670 and $226 for the three months ended
        March 31, 1997 and 1996, respectively                              $  11,181       6,417
                                                                           =========    =========

    During the three month period ended March 31, 1997, the Company assumed
        $39.2 million of mortgages payable and issued $4.7 million of Units in
        connection with acquisitions of office properties and land held for
        development.
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       6
<PAGE>


                 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

--------------------------------------------------------------------------------



 (1)     Organization, Business and Summary of Significant Accounting Policies

         (a)      Organization and Business

                  CarrAmerica Realty Corporation (the "Company") is a
                  self-administered and self-managed equity real estate
                  investment trust (REIT), organized under the laws of Maryland,
                  which owns, develops, acquires and operates office buildings
                  located primarily in thirteen suburban markets across the
                  United States.

         (b)      Basis of Presentation

                  The accounts of the Company and its majority-owned
                  subsidiaries are consolidated in the accompanying financial
                  statements. The Company uses the equity method of accounting
                  for its investments in and earnings and losses of
                  unconsolidated partnerships not controlled by the Company.
                  Management of the Company has made a number of estimates and
                  assumptions relating to the reporting of assets and
                  liabilities, revenues and expenses, and the disclosure of
                  contingent assets and liabilities to prepare these financial
                  statements in conformity with generally accepted accounting
                  principles. Actual results could differ from those estimates.

         (c)      Interim Financial Statements

                  The information furnished reflects all adjustments which are,
                  in the opinion of management, necessary to reflect a fair
                  presentation of the results for the interim periods, and all
                  such adjustments are of a normal, recurring nature.

         (d)      Rental Property

                  Rental property is recorded at cost less accumulated
                  depreciation (which is less than the net realizable value of
                  the property). Depreciation is computed on the straight-line
                  basis over the estimated useful lives of the assets, as
                  follows:

                      Base building....................   30 to 50 years
                      Building components..............   7 to 20 years
                      Tenant improvements..............   Terms of the leases or
                                                           useful lives, 
                                                           whichever is shorter
                      Furniture, fixtures and
                         equipment.....................   5 to 15 years

                  Expenditures for maintenance and repairs are charged to
                  operations as incurred. Significant renovations are
                  capitalized.

                  The Company reviews its rental property, and certain
                  identifiable intangibles, for impairment whenever events or
                  changes in circumstances indicate that the Company amount of
                  an asset may not be recoverable. Recoverability of assets to
                  be held and used is measured by a comparison of the carrying
                  amount of an asset to future net cash flows expected to be
                  generated by the asset. If such assets are considered
                  impaired, the impairment to be recognized is measured by the
                  amount by which the carrying amount of the assets exceeds the
                  fair value of the assets.


                                       7


<PAGE>

                 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

--------------------------------------------------------------------------------

         (e)      Development Property

                  Land held for development and construction in progress are
                  carried at cost. Specifically identifiable direct and indirect
                  acquisition, development and construction costs are
                  capitalized including, where applicable, salaries and related
                  costs, real estate taxes, interest and certain
                  pre-construction costs essential to the development of the
                  property.

         (f)      Tenant Leasing Costs

                  Fees and costs incurred in the successful negotiation of
                  leases have been deferred and are being amortized on the
                  straight-line basis over the terms of the respective leases.

         (g)      Deferred Financing Costs

                  Deferred financing costs include fees and costs incurred to
                  obtain long-term financing and are being amortized over the
                  terms of the respective loans on a basis which approximates
                  the interest method.

         (h)      Real Estate Service Contracts and Other Intangible Assets

                  Real estate service contracts and other intangible assets,
                  represent the purchase price of net assets of real estate
                  service operations acquired and are amortized on the
                  straight-line basis over the expected lives of the respective
                  real estate service contracts. The Company assesses the
                  recoverability of these intangible assets by determining
                  whether the amortization of the balance over its remaining
                  life can be recovered through undiscounted future operating
                  cash flows of the acquired operation. The amount of impairment
                  loss, if any, is measured as the amount by which the carrying
                  amount of the assets exceeds the fair value of the assets. The
                  assessment of the recoverability of these intangible assets
                  will be impacted if estimated future operating cash flows are
                  not achieved.

         (i)      Revenue Recognition

                  The Company reports base rental revenue for financial
                  statement purposes straight-line over the terms of the
                  respective leases. Accrued straight-line rents represent the
                  amount that straight-line rental revenue exceeds rents
                  collected in accordance with the lease agreements. Management,
                  considering current information and events regarding the
                  tenants' ability to fulfill their lease obligations, considers
                  accrued straight-line rents to be impaired if it is probable
                  that the Company will be unable to collect all rents due
                  according to the contractual lease terms. If accrued
                  straight-line rents associated with a tenant are considered to
                  be impaired, the amount of the impairment is measured based on
                  the present value of expected future cash flows. Impairment
                  losses, if any, are recorded through a loss on the write-off
                  of assets. Cash receipts on impaired accrued straight-line
                  rents are applied to reduce the remaining outstanding balance
                  and as rental revenue, thereafter.

                  The Company receives real estate service revenue for certain
                  properties it manages, leases and develops for third parties.
                  Such revenue is recognized as revenue as earned.


                                       8

<PAGE>

                 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

--------------------------------------------------------------------------------


         (j)      Income and Other Taxes

                  The Company qualifies as a REIT under Sections 856 through 860
                  of the Internal Revenue Code of 1986, as amended. A REIT will
                  generally not be subject to federal income taxation on that
                  portion of its income that qualifies as REIT taxable income to
                  the extent that it distributes at least 95 percent of its
                  taxable income to its shareholders and complies with certain
                  other requirements. Accordingly, no provision has been made
                  for federal income taxes for the Company and certain of its
                  subsidiaries in the accompanying condensed consolidated
                  financial statements.

                  Certain consolidated subsidiaries, organized as partnerships,
                  of the Company are subject to District of Columbia franchise
                  tax. Other consolidated subsidiaries file separate tax returns
                  and are subject to federal and state income taxes. Income
                  taxes are accounted for using the asset and liability method
                  of accounting. These taxes are recorded as general and
                  administrative expenses in the accompanying condensed
                  consolidated financial statements.

         (k)      Per Share Data

                  The computation of earnings per share in each year is based
                  upon the weighted average number of common shares outstanding.
                  When dilutive, stock options and Units are included as share
                  equivalents. The weighted average number of shares used in
                  computing earnings per share was 47,476,503, including
                  5,200,940 Units which are considered common stock equivalents,
                  and 13,574,715 for the three month periods ended March 31,
                  1997 and 1996, respectively. Net income used in the
                  computations for the three months ended March 31, 1997 was
                  reduced by cumulative preferred dividends of $761 thousand.

         (l)      Cash Equivalents

                  For the purposes of reporting cash flows, the Company
                  considers all highly liquid investments with a maturity of
                  three months or less at the time of purchase to be cash
                  equivalents.



(2)      Mortgages and Credit Facilities


         The Company's mortgages payable and credit facilities are summarized as
         follows (in thousands):

                                             March 31,        December 31,
                                               1997              1996
                                             --------         -----------

         Fixed rate mortgages                $465,060           440,449
         Unsecured credit facility            184,000           215,000
         Secured credit facility               86,000              --
                                             ========          ========
                                             $735,060           655,449
                                             ========          ========

         Mortgages payable are collateralized by certain rental properties and
         generally require monthly principal and/or interest payments. Mortgages
         payable mature at various dates from February 1999 through July 2019.
         The weighted average interest rates were 8.3% 


                                       9

<PAGE>

                 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

--------------------------------------------------------------------------------

         and 8.1% at March 31, 1997 and December 31, 1996, respectively. As
         required by the lender, a mortgage payable of $27.96 million at March
         31, 1997 is specifically held at the subsidiary level by Carr Redmond
         Corporation, a wholly-owned subsidiary of the Company, which owns the
         Redmond East office campus.

         The Company also has a $325.0 million unsecured credit facility with
         Morgan Guaranty Trust Company of New York (Morgan), as agent for a
         group of banks. The credit facility bears interest, as selected by the
         Company, at either (i) the higher of the prime rate or the sum of .25
         percent (.5 percent at December 31, 1996) plus the Federal Funds Rate
         for such day or (ii) an interest rate equal to 1.375 percent (1.75
         percent at December 31, 1996) above the London Interbank Offered Rate
         (LIBOR). The credit facility matures in July 1998, with an option to
         extend for one year.

         The Company also has a $150.0 million secured credit facility with
         Morgan, as agent for a group of banks, bearing interest, as selected by
         the Company, at either (i) the higher of the prime rate or the sum of
         .5 percent plus the Federal Funds Rate for such day or (ii) an interest
         rate equal to 1.625 percent above LIBOR. The credit facility is secured
         by certain rental properties and matures in July 1997 with two
         six-month options to extend.

         The annual maturities of debt at March 31, 1997 are summarized as
         follows:

                        (in thousands)
                        1997                 $ 89,517
                        1998                  190,750
                        1999                   33,062
                        2000                   41,503
                        2001                   70,723
                        Thereafter            309,505
                                             --------
                                             $735,060
                                             ========


         Restricted cash and cash equivalents primarily consist of escrow
         deposits required by lenders to be used for future building
         renovations, tenant improvements or as collateral for letters of
         credit.

(3)      Minority Interest

         In conjunction with the formation of the Company and its majority-owned
         subsidiary, Carr Realty, L.P., persons contributing interests in
         properties to Carr Realty, L.P. had the right to elect to receive
         either common stock of the Company or Units in Carr Realty, L.P. In
         addition, the Company has acquired certain assets since its formation
         by issuing dividend paying Units and non-dividend paying Units of Carr
         Realty, L.P. and CarrAmerica Realty, L.P. The non-dividend paying Units
         are not entitled to any distributions until they automatically convert
         into dividend paying Units at various dates in the future. Each
         dividend paying Unit, subject to certain restrictions, may be redeemed
         for either one share of common stock or, at the option of the Company,
         cash equal to the fair market value of a share of common stock at the
         time of the redemption. When a Unitholder redeems a dividend paying
         Unit for a share of common stock or cash, minority interest is reduced
         and the Company's investment in Carr Realty, L.P. or CarrAmerica
         Realty, L.P., as the case may be, is increased. During the three month
         period ended March 31, 1997, 60,192 dividend paying Units, of Carr
         Realty, L.P. or CarrAmerica Realty, L.P., respectively, were redeemed
         for common stock of the Company.


                                       10

<PAGE>
                 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                  (Unaudited)
--------------------------------------------------------------------------------
         The following table sets forth the common stock and preferred stock of
         the Company and the operating partnership Units:
<TABLE>
<CAPTION>

        (in thousands)                       CarrAmerica          CarrAmerica
                                               Realty               Realty
                                            Corporation's        Corporation's         Dividend         Non-Dividend
                                            Common Shares      Preferred Shares      Paying Units       Paying Units
                                             Outstanding          Outstanding         Outstanding        Outstanding
                                          ------------------   ------------------   ----------------   ----------------
<S>                                       <C>                   <C>                  <C>                  <C>
        Outstanding as of:
            March 31, 1997                      48,778                1,740                5,085                540
            December 31, 1996                   43,789                1,740                4,940                540
                                          ==================   ==================   ================   ================

        Weighted average for the
        three months ended March 31:
            1997                                47,254                1,740                4,938                540
            1996                                13,524                   --                3,992                668
                                          ==================   ==================   ================   ================
</TABLE>

         Minority interest in the accompanying condensed consolidated financial
         statements relates primarily to holders of Units.

(4)      Lease Agreements

         The Company receives minimum rentals under noncancelable tenant leases.
         Certain leases provide for additional rentals based on increases in the
         Consumer Price Index (CPI) and increases in operating expenses. The
         increased rentals from operating expenses are generally payable in
         equal installments throughout the year, based on estimated increases,
         with any differences being adjusted in the succeeding year.

(5)      New Accounting Pronouncements

         The Financial Accounting Standards Board has issued Statement of
         Financial Accounting Standards No. 128, "Earnings Per Share" (SFAS No.
         128), which supersedes APB No. 15 for periods ending after December 15,
         1997. SFAS No. 128 specifies the computation, presentation, and
         disclosure requirements for earnings per share. Primary EPS and Fully
         Diluted EPS are replaced by Basic EPS and Diluted EPS, respectively.
         Basic EPS, unlike Primary EPS, excludes all dilution while Diluted EPS,
         like Fully Diluted EPS, reflects the potential dilution that could
         occur if securities or other contracts to issue common stock were
         exercised or converted into common stock.

         On a pro forma basis, Basic EPS and Diluted EPS per share is as
         follows:


                                        Three Months
                                       Ended March 31,
                                       ---------------
                                       1997       1996
                                       ----       ----
                     Basic EPS         $0.26      0.25
                     Diluted EPS       $0.26      0.25


(6)      Subsequent Events

         From April 1, 1997 to May 14, 1997, the Company acquired 16 operating
         office buildings, totaling approximately 1.4 million square feet, and
         land that will support the development of up to 1.1 million square feet
         of additional office space. The total purchase price for the properties
         and land was approximately $167 million. The purchase of the properties
         was financed by the assumption of $5 million in debt, the issuance of
         $13 million in Units by subsidiaries of the Company and payment of
         approximately $149 million in cash.

         The Company sold its 5% interest in Greystone Square 127 Associates
         (1776 Eye Street) for $312,000. In addition, the Company received
         $327,000 for termination of its management and leasing agreement.

                                       11

<PAGE>

                 CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                  (Unaudited)
--------------------------------------------------------------------------------


          On April 18, 1997, the Company sold 8,214,285 shares of Common Stock
          at $26.375 per share. The net proceeds of $209 million derived from
          the sale were used to acquire properties and to repay amounts
          outstanding on the Company's revolving credit facilities.

          At the Company's Annual Meeting of Stockholders on May 8, 1997, the
          stockholders approved the Company's 1997 Stock Option and Incentive
          Plan (the "Plan") which has been established for the purpose of
          attracting and retaining executive officers and other key employees.
          The Company has 3,000,000 shares of common stock reserved for issuance
          under the Plan. As of May 8, 1997, an aggregate of 861,500 options had
          been granted under the Plan to 43 employees.


                                       12

<PAGE>



           Management's Discussion and Analysis of Financial Condition
                    and Results of Operations of the Company
-------------------------------------------------------------------------------

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

         The following discussion is based primarily on the Condensed
Consolidated Financial Statements of CarrAmerica Realty Corporation and
subsidiaries (the Company) as of March 31, 1997 and December 31, 1996, and for
the three months ended March 31, 1997 and 1996. This information should be read
in conjunction with the accompanying condensed consolidated financial statements
and notes thereto. These financial statements include all adjustments which are,
in the opinion of management, necessary to reflect a fair presentation of the
results for the interim periods, and all such adjustments are of a normal,
recurring nature.


Results of Operations - Three Months Ended March 31, 1997 and 1996

Real Estate Operating Revenue

         Total real estate operating revenue increased $42.4 million, or 151.0%,
to $70.5 million for the three months ended March 31, 1997 as compared to $28.1
million for the three months ended March 31, 1996. The increase in revenue was
primarily attributable to a $40.9 million and a $1.5 million increase in rental
revenue and real estate service revenue, respectively. The Company experienced
net growth in its rental revenue as a result of its acquisitions since the first
quarter of 1996 which contributed approximately $41.0 million of additional
rental revenue in the three month period ended March 31, 1997. Rental revenue
from properties that were fully operating throughout both periods decreased by
approximately $.1 million as a result of increased vacancies experienced in
these properties. Real estate service revenue increased by $1.5 million, or
53.3%, for the three months ended March 31, 1997 to $4.2 million as compared to
$2.7 million for the three months ended March 31, 1996, primarily as a result of
development fees earned by Carr Development & Construction, Inc., which was
acquired by the Company in May 1996.

Real Estate Operating Expenses

         Total real estate operating expenses increased $32.2 million for the
three months ended March 31, 1997, or 135.6%, to $56.0 million as compared to
$23.8 million for the three months ended March 31, 1996. The net increase in
operating expenses was attributable to a $14.7 million increase in property
operating expenses, a $4.7 million increase in interest expense, a $2.4 million
increase in general and administrative expenses, and a $10.4 million increase in
depreciation and amortization. The increase in property operating expenses was
primarily attributable to property acquisitions since the first quarter of 1996.
The increase in the Company's interest expense is primarily related to
borrowings for acquisitions. The increase in general and administrative expenses
is predominately a result of the addition of staff to implement the Company's
new business strategy, the addition of approximately $.6 million of general and
administrative expenses associated with Carr Development & Construction, Inc.,
and inflation. The increase in depreciation and amortization is predominately a
result of additional depreciation and amortization on the Company's real estate
acquisitions.

Other Operating Income (Expense)

         Other operating income increased $.1 million for the three months ended
March 31, 1997, to $.5 million as compared to $.4 million for the three months
ended March 31, 1996, primarily due to an increase in interest income.

Net Income

         Net income of $13.3 million was earned for the three months ended March
31, 1997 as compared to $3.3 million during the three month period ended March
31, 1996. The comparability of net income between the two periods is impacted by
the acquisitions the Company made and the other changes described above.

                                       13

<PAGE>



           Management's Discussion and Analysis of Financial Condition
                    and Results of Operations of the Company
-------------------------------------------------------------------------------

Cash Flows

         Net cash provided by operating activities increased $18.7 million, or
207.4%, to $27.7 million for the three months ended March 31, 1997 as compared
to $9.0 million for the three months ended March 31, 1996, primarily as a result
of the acquisitions made by the Company. Net cash used by investing activities
increased $10.7 million, to $180.2 million for the three months ended March 31,
1997 as compared to $169.5 million for the three months ended March 31, 1996,
primarily as a result of capital deployed by the Company for acquisitions of
office properties, land held for future development and for construction in
process. Net cash provided by financing activities decreased $19.2 million to
$152.3 million provided for the three months ended March 31, 1997 as compared to
$171.5 million used for the three months ended March 31, 1996, primarily as a
result of an increase in the dividends paid due to the increase in number of
shares outstanding and the repayment in full of a $13.0 million mortgage
payable.


Liquidity and Capital Resources

         The Company seeks to create and maintain a capital structure that will
enable it to diversify its capital sources and thereby allow the Company to
obtain additional capital from a number of different sources, including
additional equity offerings of common and/or preferred stock, public and private
debt financings, and, when appropriate, asset sales. In order to access the
preferred stock and public debt markets at reasonable costs, the Company will
need to obtain and maintain an investment grade rating. On May 7, 1997, Duff &
Phelps Credit Rating Co. (DCR) assigned its BBB rating to prospective senior
unsecured debt offerings of the Company and its BBB- rating to prospective
cumulative preferred stock offerings of the Company. The Company is also seeking
investment grade ratings from Moody's Investor Service (Moody's) and Standard &
Poors (S&P). There can be no assurance, however, that the Company will be
successful in obtaining such an investment grade rating from Moody's or S&P.
Management believes that the Company will have access to the capital resources
necessary to expand and develop its business. The Company anticipates that
adequate cash will be available to fund its operating and administrative
expenses, to continue debt service obligations, to pay dividends in accordance
with REIT requirements, to acquire additional properties and land, and to pay
for construction in progress.

         On April 18, 1997, the Company used the proceeds from its offering
of common stock to repay $185 million outstanding under its unsecured
revolving line of credit (the "unsecured facility") and $20 million outstanding
under its secured line of credit (the "secured facility"). This reduced the
Company's debt outstanding to $99 million under the unsecured facility and $66
million under the secured facility. The Company has drawn $57 million on the
unsecured facility and $20 million on the secured facility between April 19,
1997 and May 14, 1997. As a result, the remaining availability under the
unsecured and secured facilities was $169.0 and $3.0 million, respectively, as
of May 14, 1997, to acquire properties.

         The Company's total indebtedness at March 31, 1997 was $735.1 million,
of which $270.0 million, or 36.7%, had a LIBOR-based floating interest rate. The
Company's fixed rate indebtedness had a weighted average interest rate of 8.3%
and had a weighted average term to maturity of 5.7 years. Based upon the
Company's total market capitalization at March 31, 1997 of $2.461 billion (the
stock price was $30.75 per share and the total shares/Units outstanding were
56,142,423), the Company's debt represented 29.9% of its total market
capitalization.

         The Company will require capital to invest in its existing portfolio of
operating assets for major capital projects such as large-scale renovations,
routine capital expenditures and deferred maintenance on certain properties
recently acquired and tenant related capital expenditures, such as tenant
improvements and allowances and leasing commissions. With respect to major
capital projects, the Company is planning a renovation of a 327,000 square foot
property in Denver during 1997 which will cost $2.0 million, or approximately
$5.00 per square foot. During 1997, the Company is also completing renovations
of several garages in its downtown Washington, D.C. portfolio totaling
approximately $1.7 million. The Company intends to use cash flow from operations
and its unsecured facility to meet its working capital needs for its existing
portfolio of operating assets.

                                       14

<PAGE>


           Management's Discussion and Analysis of Financial Condition
                    and Results of Operations of the Company
-------------------------------------------------------------------------------


         The Company will also require a substantial amount of capital for
development projects currently underway and planned for the future. The Company
currently has a total of six development projects underway, one of which the
Company intends to sell to a third party upon completion of construction
pursuant to an existing contract. These projects are expected to require a total
investment by the Company of $115 million, with $108 million expected to be
invested in the five properties the Company intends to own and operate upon
completion of construction. Since March 31, 1997 the Company has placed one
development project into service and begun construction on two properties. The
Company intends to use cash flow from operations and its unsecured facility and
secured facility to meet its working capital needs for its development projects
underway.

         The Company's estimates regarding capital expenditures set forth above
are forward-looking information representing the Company's best estimates based
on currently available information. As with any estimates, they are based on a
number of assumptions, any of which, if unrealized, could adversely affect the
accuracy of the estimates. These assumptions include that (i) the Company
experiences tenant retention rates consistent with its expectations, (ii) the
supply/demand characteristics for office space in the Company's target markets
do not vary materially from the Company's expectations, (iii) leasing
commissions associated with obtaining new tenants or retaining existing tenants
are consistent with the Company's past experience and future expectations, and
(iv) the Company does not acquire operating office properties in the future that
require unforeseen substantial renovations.

         Net cash provided by operating activities was $27.7 million for the
three months ended March 31, 1997, compared to $9.0 million for the three months
ended March 31, 1996. The increase in net cash provided by operating activities
was primarily as a result of acquisitions made by the Company. The Company's
investing activities used approximately $180.2 million and $169.5 million for
the three months ended March 31, 1997 and 1996, respectively. The Company's
investment activities included the acquisitions of office buildings and land
held for future development and additions to construction in process of
approximately $172.8 million for the three months ended March 31, 1997, as
compared to $168.2 million in acquisitions during the same period in 1996.
Additionally, the Company invested approximately $7.2 million and $1.0 million
in its existing real estate assets for the three months ended March 31, 1997 and
1996, respectively. Net of distributions to the Company's shareholders and
minority interests, the Company's financing activities provided net cash of
$176.6 million and $179.2 million for the three months ended March 31, 1997 and
1996, respectively. For the three months ended March 31, 1997, the Company
raised $136.1 million through the sale of common stock which was used to repay
$101.0 million of its unsecured facility and to fund acquisitions. For the three
months ended March 31, 1997, the Company's borrowings were approximately $55.0
million to provide adequate capital for the Company's investing activities.

         Rental revenue and real estate service revenue have been the principal
sources of capital to fund the Company's operating expenses, debt service and
capital expenditures, excluding nonrecurring capital expenditures. The Company
believes that rental revenue and real estate service revenue will continue to
provide the necessary funds for its operating expenses and debt service. The
Company expects to fund capital expenditures, including tenant concession
packages and building renovations from (a) available funds from operations; (b)
existing capital reserves; and (c) if necessary, credit facilities established
with third party lenders. If these sources of funds are insufficient, the
Company's ability to make expected dividends may be adversely impacted. At March
31, 1997, the Company had cash of $35.2 million, of which $7.7 million was
restricted.

         The Company's dividends are paid quarterly. Amounts accumulated for
distribution will predominately be invested by the Company in short-term
investments that are collateralized by securities of the United States
Government or any of its agencies.

         The Company believes that funds from operations is an appropriate
measure of the performance of an equity REIT because industry analysts have
accepted it as a performance measure of equity REITs. In accordance with the
final NAREIT White Paper on Funds From Operations as approved by the Board of
Governors of NAREIT on March 3, 1995, funds from operations represents net
income (loss) (computed in accordance with generally accepted accounting
principles), excluding gains (losses) from debt restructuring or sales of
property, plus depreciation and amortization of assets uniquely significant to
the real estate industry and after adjustments for unconsolidated partnerships
and joint ventures. Adjustments for unconsolidated partnerships and joint
ventures will be calculated to reflect funds from operations on the same basis.
Funds from 

                                       15

<PAGE>


           Management's Discussion and Analysis of Financial Condition
                    and Results of Operations of the Company
-------------------------------------------------------------------------------

operations does not represent net income or cash flows generated from operating
activities in accordance with generally accepted accounting principles and
should not be considered an alternative to net income as an indication of the
Company's performance or to cash flows as a measure of liquidity or the
Company's ability to make distributions.

         The following table provides the calculation of the Company's funds
from operations (in thousands):


<TABLE>
<CAPTION>

                                                                  Three Months Ended
                                                                        March 31,
                                                               ------------------------

                                                                   1997        1996
                                                                   ----        ----
<S>                                                             <C>            <C>
      Net income before minority interest                       $ 14,976        4,725

      Adjustments to derive funds from operations:
          Add:
             Depreciation and amortization                        15,016        5,171
          Deduct:
             Minority interests' (non Unitholders) share     
             of depreciation, amortization and net income           (291)        (395)
                                                                --------       ------
      Funds from operations before allocation to
          the minority Unitholders                                29,701        9,501
      Less:  Funds from operations allocable to the
          minority Unitholders                                    (2,866)      (2,164)
                                                                --------       ------
      Funds from operations allocable     
          to CarrAmerica Realty Corporation                     $ 26,835        7,337
                                                                ========       ======
</TABLE>

         Changes in funds from operations are largely attributable to changes in
net income between the periods as previously discussed.

                                       16


<PAGE>

           Management's Discussion and Analysis of Financial Condition
                    and Results of Operations of the Company
--------------------------------------------------------------------------------

Building and Lease Information

         The following table sets forth certain lease related information about
each operating property owned by the Company as of March 31, 1997:

<TABLE>
<CAPTION>

                                                  Company's
                                                  Effective         Net
                                                   Property    Rentable Area       Percent
Property                                          Ownership   (square feet)(1)     Leased(2)
---------                                         ---------   ----------------     ---------
<S>                                                 <C>          <C>               <C>
Consolidated Properties
SOUTHEAST REGION
Downtown Washington, D.C.:
International Square (3 Properties)                 100.0 %      1,017,511           91.7 %
1730 Pennsylvania Avenue                            100.0          229,492           98.7
2550 M Street                                       100.0          187,931          100.0
1775 Pennsylvania Avenue (3)                        100.0          143,981           99.1
900 19th Street                                     100.0          100,804           77.9
1747 Pennsylvania Avenue                             89.7 (4)      152,119           83.6
1255 23rd Street                                     75.0 (5)      304,538           88.4
2445 M Street                                        74.0 (4)      266,902           90.1
                                                                                  
Suburban Washington, D.C.:                                                        
One Rock Spring Plaza (3)                           100.0          205,298           93.8
Tycon Courthouse                                    100.0          416,195           99.0
Three Ballston Plaza                                100.0          302,797           99.1
Reston Quadrangle (3 Properties)                    100.0          260,643           99.9
Parkway One                                         100.0           87,842          100.0
                                                                                  
Suburban Atlanta:                                                                 
Veridian (22 Properties)                            100.0          187,842           97.0
Glenridge                                           100.0           64,431           96.0
Century Springs West                                100.0           94,765           98.9
Holcomb Place                                       100.0           72,991          100.0
DeKalb Tech (5 Properties)                          100.0          163,159           87.5
Midori                                              100.0           99,900           96.0
Crestwood                                           100.0           88,186          100.0
Parkwood                                            100.0          151,020           89.2
Lakewood                                            100.0           80,338           98.2
The Summit                                          100.0          178,382          100.0
Spalding Triangle II (3 Properties)                 100.0           82,102          100.0
                                                                                  
South Florida:                                                                    
Lake Wyman Plaza                                    100.0          159,921           97.1
                                                                   -------           ----
         Southeast Region Subtotal                               5,099,090           95.2
                                                                                  
PACIFIC REGION                                                                    
Southern California:                                                              
Scenic Business Park (4 Properties)                 100.0          137,436           89.7
Harbor Corporate Park (4 Properties)                100.0          147,263           62.2
Plaza PacifiCare                                    100.0          104,377          100.0
Katella Corporate Center                            100.0           79,917           94.0
Warner Center (12 Properties)                       100.0          342,664           94.4
Del Mar Corporate Plaza (2 Properties)              100.0          123,142          100.0
South Coast Executive Center (2 Properties)         100.0          161,301           95.3
Wateridge Pavilion                                  100.0           62,194          100.0
Warner Premier                                      100.0           61,553          100.0
                                                                                  
Northern California:                                                              
AT&T Center (6 Properties)                          100.0          949,281          100.0
Sunnyvale Research Plaza (3 Properties)             100.0          126,000          100.0
Rio Robles (7 Properties)                           100.0          368,178          100.0
San Jose Orchard Business Park - B (6 Properties)   100.0          166,928          100.0
Orchard Bayshore Center (2 Properties)              100.0          195,249          100.0
Orchard Rincon Centre (3 Properties)                100.0          201,178          100.0
</TABLE>
                                       17
<PAGE>

           Management's Discussion and Analysis of Financial Condition
                    and Results of Operations of the Company
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                    Company's
                                                    Effective         Net
                                                    Property     Rentable Area      Percent
Property                                            Ownership    (square feet)(1)   Leased(2)
--------                                            ---------    ----------------   ---------
<S>                      <C>                          <C>            <C>           <C> 
Orchard Office Centre II (4 Properties)               100.0          212,082           62.4
Orchard Office Centre (2 Properties)                  100.0           68,731          100.0
Orchard Centre (2 Properties)                         100.0          102,291          100.0
San  Jose   Orchard   Business   Park  -  A           100.0           67,784          100.0
(2 Properties)                                                                         
3745 North First Street                               100.0           67,582           52.6
Mission Plaza (2 Properties)                          100.0          102,687          100.0
Fortran (4 Properties)                                100.0          299,233          100.0
                                                                                    
Suburban Portland:                                                                  
RadiSys                                               100.0           80,525          100.0
                                                                                    
Suburban Seattle:                                                                   
Redmond East (10 Properties)                          100.0          398,977           99.9
                                                                     -------           ----
         Pacific Region Subtotal                                   4,626,553           97.5
                                                                                    
                                                                                    
CENTRAL REGION                                                                      
Austin, Texas:                                                                      
Norwood Tower                                         100.0          111,992           77.0
Littlefield Complex (2 Properties) (3)                100.0          126,523           54.3
First State Bank Tower                                100.0          258,113           72.8
Great Hills Plaza                                     100.0          135,333          100.0
Balcones Center                                       100.0           75,761           83.5
Park North (2 Properties)                             100.0          132,778           98.7
The Settings (3 Properties)                           100.0          136,183           95.3
                                                                                    
Suburban Chicago:                                                                   
Parkway North (2 Properties)                          100.0          508,778           91.1
Unisys (2 Properties)                                 100.0          353,969           91.4
The Crossings (2 Properties)                          100.0          296,231           95.9
Bannockburn I & II (2 Properties)                     100.0          208,317           94.0
                                                                                    
Suburban Dallas:                                                                    
Greyhound                                             100.0           92,890          100.0
Search Plaza                                          100.0          151,048           95.7
Quorum North                                          100.0          117,790           81.4
Quorum Place                                          100.0          176,562           94.9
Cedar Maple (3 Properties)                            100.0          112,177           94.0
                                                                     -------           ----
         Central Region Subtotal                                   2,994,445           89.3
                                                                                    
MOUNTAIN REGION                                                                     
Southeast Denver:                                                                   
Harlequin Plaza (2 Properties)                        100.0          323,186           98.0
Quebec Court I & II (2 Properties)                    100.0          285,829          100.0
The Quorum (2 Properties)                             100.0          123,876           79.5
Greenwood Center                                      100.0           75,866           94.2
Quebec Center (3 Properties)                          100.0          106,791           91.7
Panorama Corporate Center I                           100.0          100,619           96.4
                                                                                    
Suburban Phoenix:                                                                   
Camelback Lakes (2 Properties)                        100.0          200,453           90.7
Pointe Corridor IV                                    100.0          178,373           92.8
                                                                     -------           ----
         Mountain Region Subtotal                                  1,394,993           94.8
                                                                   ---------           ----
                                                                                    
TOTAL CONSOLIDATED PROPERTIES:                                    14,115,081        
                                                                  ----------        
WEIGHTED AVERAGE                                                                       94.7 %
                                                                                       ----
</TABLE>

                                       18
<PAGE>

           Management's Discussion and Analysis of Financial Condition
                    and Results of Operations of the Company

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>


                                                  Company's
                                                  Effective          Net
                                                   Property     Rentable Area       Percent
Property                                          Ownership    (square  feet)(1)    Leased(2)
--------                                          ---------    -----------------    ---------
       
<S>                                                 <C>           <C>                 <C>
Unconsolidated Properties
Downtown Washington, D.C.:
AARP Headquarters                                   24.0(6)         477,187            99.1
Bond Building                                       15.0(7)         162,097           100.0
Willard Office/Hotel                                 5.0(8)         242,787            91.9
1776 Eye Street                                      5.0(4)         212,774            92.3
                                                                                  
Suburban Washington, D.C.:                                                        
Booz-Allen & Hamilton Building                      50.0(9)         222,989           100.0
                                                                  ---------           -----
                                                                                  
TOTAL UNCONSOLIDATED PROPERTIES:                                  1,317,834       
                                                                  ---------       
WEIGHTED AVERAGE                                                                       97.5%
                                                                                      -----
                                                                                  
ALL OPERATING PROPERTIES                                                          
TOTAL:                                                           15,432,915       
                                                                 ==========       
WEIGHTED AVERAGE                                                                       94.9%
                                                                                       ====
</TABLE>

----------------------
(1) Includes office and retail space but excludes storage space.
(2) Includes space for leases that have been executed and have commenced as of
    March 31, 1997.
(3) The Company owns the improvements on the property and has a leasehold
    interest in all or a portion of the underlying land.
(4) The Company holds a general and/or limited partner interest in a partnership
    that owns the property.
(5) The Company holds a 50% joint venture interest in the joint venture that
    owns this property and a 50% joint venture interest in another joint
    venture, which holds the remaining 50% interest in the joint venture that
    owns the property. As a result of preferential rights to annual
    distributions from another venture, the Company will receive distributions
    of less than 75% (but in no event less than 50%) of the total amount
    distributed with respect to this property in each year until the
    preferential distribution requirements are satisfied, but will receive 100%
    of any subsequent distributions during the year until its aggregate
    distributions equal 75% of the cumulative distributions with respect to the
    property since inception of the partnership. Thereafter, the Company will
    receive 75% of the distributions made during the year with respect to the
    property. Upon sale of the property, the Company will receive 75% of the
    distributions until the Company receives its preference amount, 50% until
    the remaining venturer receives its preference amount, and 75% of the
    distributions thereafter.
(6) The Company holds an effective 24% interest in the property by virtue of a
    48% general partner interest in a partnership that owns a 50% general
    partner interest in the property.
(7) The Company holds an effective 15% interest in the property by virtue of a
    30.6% limited partner interest in a partnership that has a 49% limited
    partner interest in the property.
(8) The Company holds an effective 5% interest in the property by virtue of a
    7.85% limited partner interest in a partnership that owns a 63.7% limited
    partner interest in the property. The partnership in which the Company holds
    an interest owns the improvements on the property and has a leasehold
    interest in the underlying land.
(9) The Company holds a 50% joint venture interest, and is the managing partner.

                                       19
<PAGE>



           Management's Discussion and Analysis of Financial Condition
                    and Results of Operations of the Company
--------------------------------------------------------------------------------

         The following table sets forth a schedule of lease expirations for
executed leases as of March 31, 1997, for each of the 10 years beginning with
1997, for the 179 operating properties consolidated for financial statement
purposes, assuming that no tenants exercise renewal options:


<TABLE>
<CAPTION>

                                                                Percent of Total
           Year of                    Net Rentable Area      Leased Square Footage
            Lease                    Subject to Expiring         Represented by
          Expiration                Leases (Square Feet)        Expiring Leases*
       -----------------            ----------------------   -----------------------
<S>                                  <C>                     <C>
            1997                         1,456,786                 10.9%
            1998                         2,319,318                 17.4
            1999                         1,467,421                 11.0
            2000                         1,543,380                 11.5
            2001                         1,697,268                 12.7
            2002                         1,220,309                  9.1
            2003                         1,035,823                  7.8
            2004                           412,703                  3.1
            2005                           524,345                  3.9
            2006 and thereafter          1,686,734                 12.6

</TABLE>

* Excludes 750,994 square feet of space vacant as of March 31, 1997.


         The following table sets forth certain lease-related information for
the consolidated operating properties presented in order to show downtown
Washington, D.C. operating properties separate from other operating properties.
The table presents leases that commenced during the twelve month period from
April 1, 1996 to March 31, 1997, excluding the leases for operating properties
that were executed prior to the date of acquisition:

<TABLE>
<CAPTION>


                                                 Calculated on a Weighted Average Basis
                           ------------------------------------------------------------------------------------

Downtown                                    
Washington, D.C.                          Tenant              Base
Properties                    Total     Improvements          Rent                                  Leasing
                             Square       & Cash              per       Lease      Abatements      Commission
                              Feet      Allowances per       Square    Life in         in          Per Square
 Type of Lease               Leased      Square Foot          Foot      Years        Months           Foot
 -------------               ------     --------------       ------    -------     -----------     ----------
<S>                         <C>           <C>               <C>          <C>           <C>          <C>    
Office                      234,670       $  14.79          $ 27.69      8.3           2.1          $  5.91
Retail                        9,805          22.13            27.78      9.0           2.1             5.94
                           ------------
Total                       244,475          15.09            27.69      8.3           2.1             5.91
                           ============  ===============    ========   =======    =============   =============

New leases or
  expansion space           151,259       $  17.15          $ 25.98      8.5           3.4          $  6.50
Renewals of existing
  tenants' space             93,216          11.74            30.46      8.0           0.0             4.95
                           ------------
Total                       244,475          15.09            27.69      8.3           2.1             5.91
                           ============  ===============    ========   =======    =============   =============

</TABLE>

                                       20
<PAGE>


           Management's Discussion and Analysis of Financial Condition
                    and Results of Operations of the Company

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>


                                                 Calculated on a Weighted Average Basis
                           ------------------------------------------------------------------------------------
                    
All Other Operating                       Tenant              Base
Properties                    Total     Improvements          Rent                                  Leasing
                             Square       & Cash              per       Lease      Abatements      Commission
                              Feet      Allowances per       Square    Life in         in          Per Square
 Type of Lease               Leased      Square Foot          Foot      Years        Months           Foot
 -------------               ------     --------------       ------    -------     -----------     ----------
<S>                        <C>             <C>              <C>          <C>           <C>          <C>    
Office                     2,031,397       $  6.17          $ 17.78      5.8           0.3          $  2.07
Retail                         9,800          0.00             6.62      7.3           0.0             1.73
                           ---------
Total                      2,041,197          6.14            17.73      5.8           0.3             2.07
                           =========       =======          =======      ===           ===          =======

New leases or
  expansion space            705,573       $  8.88          $ 15.56      5.9           0.9          $  2.93
Renewals of existing
  tenants' space           1,335,624          4.70            18.87      5.7           0.1             1.61
                           ---------
Total                      2,041,197          6.14            17.73      5.8           0.3             2.07
                           =========       =======          =======      ===           ===          =======

</TABLE>

                                       21
<PAGE>


                                     Part II
OTHER INFORMATION

Item 1.    Legal Proceedings.

                  None

Item 2.    Changes in Securities.

                  None

Item 3.    Defaults Upon Senior Securities.

                  None

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

                  None

Item 5.    Other Information.

           On May 8, 1997, the Board of Directors of the Company appointed
           Thomas A. Carr to be the Chief Executive Officer of the Company.

Item 6.    Exhibits and Reports on Form 8-K.

           (a)    Exhibits

           3.1    Amendment to Second Amendment and Restatement of By-Laws of
                  CarrAmerica Realty Corporation effective May 8, 1997.

           10.1   Amended and Restated Revolving Credit Agreement, dated as of
                  April 16, 1977.

           10.2   Second Amended and Restated Agreement of Limited Partnership 
                  of CarrAmerica Realty, L.P. dated as of May 9, 1997.

           27.    Financial Data Schedule

           (b)    Reports on Form 8-K

           a.     Current Report on Form 8-K dated and filed on March 27, 1997
                  relative to certain historical summaries.

           b.     Current Report on Form 8-K dated and filed on February 12,
                  1997 relative to the Company's secured credit facility.

           c.     Current Report on Form 8-K dated and filed on January 31, 1997
                  relative to a legal opinion of Hogan & Hartson.

           d.     Current Report on Form 8-K dated and filed on January 27, 1997
                  relative to certain acquisitions and probable acquisitions.

           e.     Current Report on Form 8-K dated and filed on January 23, 1997
                  relative to the acquisition of Rio Robles Technology Center.

           f.     Current Report on Form 8-K dated and filed on January 3, 1997
                  relative to the acquisition of Unisys Center.


                                       22
<PAGE>

                                   SIGNATURES


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


CARRAMERICA REALTY CORPORATION




/s/ Thomas A. Carr
-----------------------------------------------------
Thomas A. Carr, President and Chief Executive Officer




/s/ Brian K. Fields
----------------------------------------
Brian K. Fields, Chief Financial Officer




Date:    May 15, 1997


                                       23
<PAGE>


                                  Exhibit Index

<TABLE>
<CAPTION>

Exhibit           Description                                                           Page
-------           -----------                                                           ----
<S>               <C>                                                       

3.1               Amendment to Second Amendment and Restatement of By-Laws of
                  CarrAmerica Realty Corporation effective May 8, 1997.

10.1              Amended and Restated Revolving Credit Agreement, dated April
                  16, 1997.

10.2              Second Amended and Restated Agreement of Limited Partnership
                  of CarrAmerica Realty, L.P. dated as of May 9, 1997.

27.               Financial Data Schedule

</TABLE>



                                       24