Exhibit 10.5

                            AMENDMENT AGREEMENT

         AMENDMENT AGREEMENT (the "Amendment Agreement") dated as of July 8,
1998, by and between CarrAmerica Realty Corporation (the "Company") and Merrill
Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S"). Reference is made herein
to the Purchase Price Adjustment Agreement dated as of April 2, 1998 by and
between the Company and MLPF&S (the "Adjustment Agreement"). Capitalized terms
not otherwise defined herein shall have the meaning ascribed thereto in the
Adjustment Agreement.

         WHEREAS, Section 5 of the Adjustment Agreement provides, among other
things, that the Company shall deliver the Interim Settlement Amount in Interim
Settlement Shares; and

         WHEREAS, the Company and MLPF&S desire to amend the Adjustment
Agreement so as to allow for the delivery by the Company of the Interim
Settlement Amount in cash, subject to the terms and conditions hereof,

         NOW, THEREFORE, in consideration of the mutual undertakings herein set
forth, the parties, intending to be legally bound, hereby agree as follows:

         1.   Within 5 Business Days following each Reset Date, the Company may
              deliver the Interim Settlement Amount in cash to MLPF&S or its
              agent for deposit in a collateral account at MLPF&S or a custodian
              or depository designated by MLPF&S.

         2.   MLPF&S or its agent may invest the cash so delivered in such of
              the following securities ("Permitted Investments"), and in such
              proportions, as the Company shall specify in its written
              instructions to MLPF&S:

             (i)   direct obligations of the United States of America or any
                   instrumentality thereof for the payment of which the full
                   faith and credit of the United States of America is pledged;
                   and/or

             (ii)  certificates of deposit of banks, trust companies organized
                   under the laws of the United States of America or any state
                   thereof, and having combined capital and surplus of at least
                   $50,000,000; and/or

             (iii) bank accounts, including savings accounts and bank money
                   market accounts, the entire balance of which are insured by
                   the Federal Deposit Insurance Corporation.

              Cash deposited in the collateral account, any unreinvested
              earnings on Permitted Investments and cash distributions on any
              Interim Settlement Shares held in the collateral account, that the
              Company does not direct MLPF&S to invest in Permitted Investments
              will not bear interest.
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         3.   On any Reset Date, if the sum of (i) the cash value of the
              Permitted Investments on such Reset Date, (ii) the amount, if any,
              in Interim Settlement Shares held by MLPF&S (valued at the Closing
              Price on such Reset Date) and (iii) any cash amounts held in the
              collateral account in which such Interim Settlement Shares are
              held exceeds the Interim Settlement Amount on such Reset Date (or
              150% of the Interim Settlement Amount, in the event that MLPF&S
              holds restricted Interim Settlement Shares that are not the
              subject of an Effective Registration Statement), MLPF&S shall
              deliver to the Company within five (5) Business Days following
              such Reset Date the amount of such excess in cash from uninvested
              cash amounts in the collateral account and cash realized upon the
              liquidation of Permitted Investments ("Available Cash"); provided
              that if the amount of such excess exceeds Available Cash, MLPF&S
              shall deliver the balance of such excess to the Company in Interim
              Settlement Shares.

         4.   This Amendment Agreement may be executed in counterparts, each of
              which shall be deemed an original, but all of which shall
              constitute one and the same instrument.

         5.   Except as hereby amended, the Adjustment Agreement shall remain in
              full force and effect.

         6.   This Amendment Agreement shall be governed by, and interpreted in
              accordance with, the laws of the State of New York, all rights and
              remedies being governed by such laws.

<PAGE>



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



                                      CARRAMERICA REALTY CORPORATION
                        
                    
                    
                                      By:_______________________________________
                                         Name: Brian K. Fields
                                         Title: Chief Financial Officer
                    
                    
                                      MERRILL LYNCH, PIERCE, FENNER & SMITH
                                      INCORPORATED
                    
                    
                    
                                      By:_______________________________________
                                         Name: Matthew Pomerantz
                                         Title: Vice President