<PAGE>

                       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 September 30, 1999
                                        ------------------

                          COMMISSION FILE NO. 1-11706
                                              -------


                        CARRAMERICA REALTY CORPORATION
--------------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)


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


                  1850 K Street, N.W., Washington, D.C.  20006
--------------------------------------------------------------------------------
               (Address or principal executive office) (Zip code)


      Registrant's telephone number, including area code    (202) 729-1000
                                                            --------------


                                      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 November 12, 1999:
                                                     --

          Common Stock, par value $.01 per share: [66,823,469] shares
--------------------------------------------------------------------------------

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
                                                                                    ----------
<S>                                                                                 <C>
Part I: Financial Information
-----------------------------

Item 1.  Financial Statements

     Condensed consolidated balance sheets of CarrAmerica Realty Corporation and
     subsidiaries as of September 30, 1999 (unaudited) and December 31, 1998.........        4

     Condensed consolidated statements of operations of CarrAmerica Realty
     Corporation and subsidiaries for the three months ended September 30, 1999
     and 1998 (unaudited)............................................................        5

     Condensed consolidated statements of operations of CarrAmerica Realty
     Corporation and subsidiaries for the nine months ended September 30, 1999
     and 1998 (unaudited)............................................................        6

     Condensed consolidated statements of cash flows of CarrAmerica Realty
     Corporation and subsidiaries for the nine months ended September 30, 1999
     and 1998 (unaudited)............................................................        7

     Notes to condensed consolidated financial statements (unaudited)................  8 to 12

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations................................................... 13 to 20

Item 3.  Quantitative and Qualitative Disclosures About Market Risk..................       21

Part II:  Other Information
---------------------------

Item 4.  Submission of Matters to a Vote of Security Holders.........................       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 the 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 September 30, 1999 and December 31,
                                      1998
--------------------------------------------------------------------------------

(In thousands, except per share and share amounts)

<TABLE>
<CAPTION>
                                                                                              September 30,       December 31,
                                                                                                   1999               1998
                                                                                              --------------      -------------
                                                                                               (Unaudited)
<S>                                                                                           <C>                 <C>
Assets
------
Rental property:
  Land                                                                                           $  647,402         $  692,484
  Buildings                                                                                       2,019,098          2,051,734
  Tenant improvements                                                                               272,064            192,211
        Furniture, fixtures and equipment                                                           100,862             57,140
                                                                                           -----------------      ------------
                                                                                                  3,039,426          2,993,569
  Less - accumulated depreciation                                                                  (312,686)          (262,458)
                                                                                           -----------------      ------------
      Total rental property                                                                       2,726,740          2,731,111

Land held for development                                                                           123,999            119,141
Construction in progress                                                                            166,398            347,294

Cash and cash equivalents                                                                            58,206             36,499
Restricted cash and cash equivalents                                                                 24,708             48,640
Accounts and notes receivable                                                                        59,202             47,251
Investments                                                                                          90,273            101,679
Accrued straight-line rents                                                                          43,251             39,273
Tenant leasing costs, net                                                                            52,772             42,552
Deferred financing costs, net                                                                        17,583             19,911
Goodwill, net                                                                                       240,595            221,570
Prepaid expenses and other assets, net                                                               33,148             38,563
                                                                                           -----------------      ------------
                                                                                                 $3,636,875         $3,793,484
                                                                                           =================      ============

Liabilities, Minority Interest, and Stockholders' Equity
--------------------------------------------------------
Liabilities:
  Mortgages and notes payable                                                                    $1,680,175         $1,704,359
  Accounts payable and accrued expenses                                                             102,022            133,767
  Rent received in advance and security deposits                                                     50,211             47,692
                                                                                           -----------------      ------------
  Total liabilities                                                                               1,832,408          1,885,818

Minority interest                                                                                   105,347             93,264

Stockholders' equity:
  Preferred Stock, $.01 par value, authorized 35,000,000 shares:
     Series A Cumulative Convertible Redeemable Preferred Stock, $.01 par value, 680,000
      shares issued and outstanding with an aggregate liquidation preference of $17.0
      million.                                                                                            7                  7
     Series B, C and D Cumulative Redeemable Preferred Stock,
      8,800,000 shares issued and outstanding with an aggregate liquidation preference of
      $400.0 million.                                                                                    88                 88
  Common Stock, $.01 par value, authorized 180,000,000 shares, issued and outstanding
    66,798,956 shares at September 30, 1999 and 71,760,172 shares at December 31, 1998.                 668                718
  Additional paid in capital                                                                      1,816,982          1,926,057
  Accumulated other comprehensive (loss) income                                                        (109)               463
  Cumulative dividends in excess of net income                                                     (118,516)          (112,931)
                                                                                           -----------------      ------------
  Total stockholders' equity                                                                      1,699,120          1,814,402
                                                                                           -----------------      ------------
                                                                                                 $3,636,875         $3,793,484
                                                                                           =================      ============
</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 September 30, 1999 and 1998
--------------------------------------------------------------------------------

(Unaudited and in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                                               1999               1998
                                                                                          ------------          --------
<S>                                                                                       <C>                   <C>
Operating revenues:
Rental revenue:
  Minimum base rent                                                                           $107,621          $ 98,127
  Recoveries from tenants                                                                       14,530            12,175
  Parking and other tenant charges                                                               6,160             3,355
                                                                                          ------------          --------
   Total rental revenue                                                                        128,311           113,657
 Executive suites revenue                                                                       62,216            46,860
 Real estate service revenue                                                                     4,202             4,471
                                                                                          ------------          --------
   Total operating revenues                                                                    194,729           164,988
                                                                                          ------------          --------

Operating expenses:
 Property expenses:
  Operating expenses                                                                            30,862            30,033
  Real estate taxes                                                                             10,887             9,897
 Interest expense                                                                               25,924            19,560
 Executive suites expenses                                                                      59,009            38,563
 General and administrative                                                                     10,596             8,379
 Depreciation and amortization                                                                  39,598            28,523
                                                                                          ------------          --------
     Total operating expenses                                                                  176,876           134,955
                                                                                          ------------          --------
Operating income                                                                                17,853            30,033
                                                                                          ------------          --------
Other income:
 Interest Income                                                                                 1,340             1,391
 Equity in earnings of unconsolidated partnerships                                               1,160             1,285
                                                                                          ------------          --------
       Total other income                                                                        2,500             2,676
                                                                                          ------------          --------
     Net income before gain on sale of assets, income taxes and minority interest               20,353            32,709
Income tax benefit (expense)                                                                     2,012              (574)
Minority Interest                                                                               (4,262)           (2,598)
                                                                                          ------------          --------
     Net income before gain on sale of  assets                                                  18,103            29,537
Gain on sale of assets                                                                          21,284             6,844
                                                                                          ------------          --------
     Net income                                                                                 39,387            36,381

Other comprehensive gain (loss)-foreign currency translation adjustment                          2,154               685
                                                                                          ------------          --------
     Comprehensive income                                                                     $ 41,541          $ 37,066
                                                                                          ============          ========

     Basic net income per common share                                                           $0.46             $0.38
                                                                                          ============          ========

     Diluted net income per share                                                                $0.45             $0.37
                                                                                          ============          ========
</TABLE>

See accompanying notes to condensed consolidated financial statements

                                       5
<PAGE>

                CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
                Condensed Consolidated Statements of Operations
             For the Nine Months Ended September 30, 1999 and 1998
--------------------------------------------------------------------------------

(Unaudited and in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                                                1999               1998
                                                                                          ------------          ---------
<S>                                                                                          <C>                <C>
Operating revenues:
  Rental revenue:
    Minimum base rent                                                                         $311,934           $276,199
    Recoveries from tenants                                                                     42,501             35,391
    Parking and other tenant charges                                                            14,572              9,360
                                                                                          ------------          ---------
     Total rental revenue                                                                      369,007            320,950
 Executive suites revenue                                                                      167,524             97,169
 Real estate service revenue                                                                    13,049             10,985
                                                                                          ------------          ---------
     Total operating revenues                                                                  549,580            429,104
                                                                                          ------------          ---------

Operating expenses:
  Property expenses:
    Operating expenses                                                                          90,974             78,223
    Real estate taxes                                                                           33,750             28,858
  Interest expense                                                                              71,536             54,137
  Executive suites expenses                                                                    154,602             82,004
  General and administrative                                                                    28,888             22,841
  Depreciation and amortization                                                                103,232             78,402
                                                                                          ------------          ---------
      Total operating expenses                                                                 482,982            344,465
                                                                                          ------------          ---------
Operating income                                                                                66,598             84,639
                                                                                          ------------          ---------

Other income:
  Interest Income                                                                                3,945              3,698
  Equity in earnings of unconsolidated partnerships                                              3,791              3,753
  Gain on settlement of treasury locks                                                           4,489                 --
                                                                                          ------------          ---------
      Total other income                                                                        12,225              7,451
                                                                                          ------------          ---------

    Net income before gain on sale of assets, income taxes and minority interest                78,823             92,090

Income taxes                                                                                     1,760               (574)
Minority Interest                                                                              (14,430)           (13,549)
                                                                                          ------------          ---------
    Net income before gain on sale of  assets                                                   66,153             77,967
Gain on sale of assets                                                                          49,815             33,030
                                                                                          ------------          ---------
    Net income                                                                                 115,968            110,997

Other comprehensive gain (loss) - foreign currency translation adjustment                         (572)             1,009
                                                                                          ------------          ---------
    Comprehensive income                                                                      $115,396           $112,006
                                                                                          ============          =========

    Basic net income per common share                                                            $1.31              $1.25
                                                                                          ============          =========

    Diluted net income per share                                                                 $1.31              $1.25
                                                                                          ============          =========
</TABLE>

See accompanying notes to condensed consolidated financial statements

                                       6
<PAGE>

                CARRAMERICA REALTY CORPORATION AND SUBSIDIARIES
                Condensed Consolidated Statements of Cash Flows
             For the Nine Months Ended September 30, 1999 and 1998
--------------------------------------------------------------------------------

(Unaudited and in thousands)

<TABLE>
<CAPTION>
                                                                                                1999                     1998
                                                                                           ----------------      ---------------
<S>                                                                                          <C>                      <C>
Cash flows from operating activities:
 Net income                                                                                   $ 115,968             $ 110,997
                                                                                           ----------------      ---------------
 Adjustments to reconcile net income to net cash
  provided by operating activities:
  Depreciation and amortization                                                                 103,232                78,402
  Minority interest in income                                                                    14,430                13,549
  Equity in earnings of unconsolidated partnerships                                              (3,791)               (3,753)
        Gain on sale of assets                                                                  (49,815)              (33,030)
    Change in assets and liabilities, net of acquisitions and dispositions:
  Increase in accounts and notes receivable                                                     (11,951)              (14,886)
  Increase in accrued straight-line rents                                                        (3,978)               (3,725)
  Additions to tenant leasing costs                                                              (7,206)               (8,654)
  Decrease (increase) in prepaid expenses and other assets                                      (23,534)                3,131
  Increase (decrease) in accounts payable and accrued expenses                                  (30,303)               44,358
  Increase (decrease) in rent received in advance and security deposits                           2,519                21,341
                                                                                           ----------------      ---------------
     Total adjustments                                                                          (10,397)               96,773
                                                                                           ----------------      ---------------
     Net cash provided by operating activities                                                  105,571               207,770
                                                                                           ----------------      ---------------
Cash flows from investing activities:
 Acquisition and development of executive suites assets                                         (44,459)             (203,615)
 Acquisition and development of rental property                                                 (29,644)             (323,670)
 Additions to land held for development                                                         (22,118)             (126,915)
 Additions to construction in progress                                                         (199,595)             (283,694)
 Distributions from unconsolidated partnerships                                                  22,660                 4,367
 Investments in unconsolidated partnerships                                                      (7,462)              (50,430)
 Decrease (increase) in restricted cash and cash equivalents                                     23,932               (76,014)
 Proceeds from sales of rental property                                                         432,461                95,836
                                                                                           ----------------      ---------------
     Net cash provided (used) by investing activities                                           175,775              (964,135)
                                                                                           ----------------      ---------------
Cash flows from financing activities:
 Net proceeds from sales of common and preferred stock                                               --               335,960
 Repurchase of common stock                                                                    (109,757)                   --
 Net borrowings (repayments) on unsecured credit facility                                       (66,000)              388,000
 Proceeds from issuance of unsecured notes                                                           --               200,000
 Proceeds from refinance of existing mortgages                                                   51,977                    --
 Repayment of mortgages payable                                                                 (10,160)              (21,848)
 Dividends and distributions to minority interests paid                                        (129,877)             (120,163)
 Contributions from minority interests                                                            6,044                 5,331
 Additions to deferred financing costs                                                           (1,478)              (14,716)
 Other                                                                                              184                    41
                                                                                           ----------------      ---------------
     Net cash provided (used) by financing activities                                          (259,067)              772,605
                                                                                           ----------------      ---------------
     Foreign currency translation adjustment                                                       (572)                1,472
                                                                                           ----------------      ---------------
     Increase in unrestricted cash and cash equivalents                                          21,707                17,712
Unrestricted cash and cash equivalents, beginning of the period                                  36,499                23,845
                                                                                           ----------------      ---------------
Unrestricted cash and cash equivalents, end of the period                                     $  58,206             $  41,557
                                                                                           ================      ===============

Supplemental disclosure of cash flow information:
 Cash paid for interest (net of capitalized interest of $21,729 and $21,408
  for the nine months ended September 30, 1999 and 1998, respectively)                        $  69,620             $  55,839
                                                                                           ================      ===============
Supplemental disclosure of non-cash investing and financing activities:
 During the nine months ended September 30, 1998, the Company funded a portion of the aggregate purchase price of its property
  acquisitions by assuming $11.1 million of debt and liabilities and by issuing $10.0 million of Units.
</TABLE>

See accompanying notes to condensed consolidated financial statements

                                       7
<PAGE>

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

(1)  DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     (A)  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 properties.  The Company's office properties are
          located primarily in 14 suburban markets across the United States.

          HQ Global Workplaces, Inc., previously referred to as Omni Offices,
          Inc., ("HQ Global") and OmniOffices (UK) Limited and Omni Offices
          (Lux) 1929 Holding Company (collectively, "Omni UK/Europe"), the
          Company's executive suites affiliates, are engaged in the business of
          leasing commercial office space in the form of executive office suites
          and providing related communications technology and business services,
          including word processing, desktop publishing, digital color printing,
          conference rooms, training facilities and meeting support and
          scheduling. HQ Global and Omni UK/Europe offered short-term leases and
          service packages at 263 business centers located in over 80 cities in
          17 countries as of September 30, 1999.

     (B)  BASIS OF PRESENTATION

          The accounts of the Company and its majority-owned/controlled
          subsidiaries and affiliates 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)  NEW ACCOUNTING PRONOUNCEMENTS

          In June 1998, the FASB issued SFAS No. 133 "Accounting for Derivative
          Instruments and Hedging Activities", which requires that an entity
          recognize all derivatives as either assets or liabilities in the
          statement of financial position and measure those instruments at fair
          value.  This statement is effective for all fiscal quarters of fiscal
          years beginning after June 15, 2000.  The Company is evaluating and
          has not yet determined the impact of this pronouncement, if any.

     (E)  PER SHARE DATA AND DIVIDENDS

          The following is a reconciliation of the numerators and denominators
          of the basic and diluted EPS computations for net income:

<TABLE>
<CAPTION>
                                                   Three Months                                        Three Months
                                             Ended September 30, 1999                            Ended September 30, 1998
                                     ---------------------------------------------------------------------------------------------
                                       Income                         Per                 Income                             Per
                                       (000'S)        Shares         Share                (000's)           Shares          Share
                                     (Numerator)   (Denominator)    Amount              (Numerator)      (Denominator)     Amount
                                     ---------------------------------------------------------------------------------------------
<S>                                  <C>             <C>            <C>                  <C>             <C>                  <C>
Basic EPS                              $30,454        66,795         $0.46                 $27,418            71,665       $ 0.38
Effect of Dilutive Securities:
    Stock Options                           --           105          (.01)                     --                80           --
    Units in Carr Realty, L.P.              --            --            --                   1,234             4,774        (0.01)
                                     -----------   -------------    --------           ------------      -------------    --------
Diluted  EPS                           $30,454        66,900         $0.45                 $28,652            76,519       $ 0.37
                                     ===========   =============    ========           ============      =============    ========
</TABLE>

                                       8
<PAGE>

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


<TABLE>
<CAPTION>
                                                   Nine Months                                          Nine Months
                                             Ended September 30, 1999                            Ended September 30, 1998
                                     ---------------------------------------------------------------------------------------------
                                       Income                         Per                 Income                             Per
                                       (000'S)        Shares         Share                (000's)           Shares          Share
                                     (Numerator)   (Denominator)    Amount              (Numerator)      (Denominator)     Amount
                                     ---------------------------------------------------------------------------------------------
<S>                                  <C>             <C>            <C>                  <C>             <C>                  <C>
Basic EPS                              $89,452         68,208         $1.31                $84,358           67,504         $1.25
Effect of Dilutive Securities:
    Stock Options                           --            119            --                     --              154            --
                                     -----------   -------------    --------           ------------      -------------    --------
Diluted  EPS                           $89,452         68,327         $1.31                $84,358           67,658         $1.25
                                     ===========   =============    ========           ============      =============    ========
</TABLE>

          Net income has been reduced by preferred stock dividends of $8,933 and
          $8,963 for the three month periods ended September 30, 1999 and 1998,
          respectively and $26,516 and $26,639 for the nine month periods ended
          September 30, 1999 and 1998, respectively.

          The effects of stock options, units and Series A Preferred Stock are
          not included in the computation of diluted EPS for a given period if
          their effect is antidilutive.

     (F)  RECLASSIFICATIONS

          Certain reclassifications of prior period amounts have been made to
          conform to the current period's presentation.


(2)  HEDGING TRANSACTIONS

     In 1998, the Company entered into forward treasury agreements in order to
     hedge against the impact that interest rate fluctuations would have on debt
     instruments the Company planned to issue in the future. At December 31,
     1998, the Company determined that these agreements no longer represented
     effective hedges and recorded a loss of $13.7 million in anticipation of
     terminating the agreements. In February 1999, the Company settled these
     contracts for $9.2 million in cash and recorded a gain of $4.5 million.

(3)  COMMON STOCK

     In April 1998, the Company sold 5,000,000 shares of common stock to Merrill
     Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), resulting in
     net proceeds to the Company of approximately $147 million, in what is
     commonly know as a "forward equity sale" transaction. In 1998, the Company
     paid Merrill Lynch $39.3 million and in March 1999 the Company settled this
     agreement with a final payment of $109.7 million, at which time the
     5,000,000 shares were repurchased by the Company and cancelled.

(4)  GAIN ON SALE OF ASSETS

     The Company has disposed of certain assets that are inconsistent with its
     long-term strategic or return objectives or where market conditions for
     sale are favorable. During the nine months ended September 30, 1999, the
     Company disposed of 60 operating office properties recognizing gains
     totaling $49.8 million. Estimated income taxes of $13.7 million previously
     accrued on gains on sales were eliminated during the quarter when, based
     on revised estimates of REIT taxable income and expected dividend
     distributions, it was determined that the entire amount of these gains
     will be designated as having been distributed to the Company's
     shareholders, resulting in no tax liability at the corporate level
     on those gains.

                                       9
<PAGE>

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


(5)  HQ GLOBAL INITIAL PUBLIC OFFERING

     The Board of Directors of HQ Global decided to postpone an initial public
     offering of it's common stock. The Company expensed all costs associated
     with the postponed offering, approximately $1 million, in the third quarter
     ended September 30,1999.


(6)  SEGMENT INFORMATION

     The Company's reportable operating segments are real estate property
     operations, executive office suites operations and development operations.
     Development operations is primarily third-party development fee income and
     associated expenses.  Other business activities and operating segments that
     are not reportable are included in other operations.

     The Company's operating segments' performances are measured using funds
     from operations.  Funds from operations represent net income before
     minority interest and extraordinary items, excluding depreciation and
     amortization on real estate assets and the executive suites business,
     losses associated with the executive office suites centers under
     development, deferred taxes and gain on sale of assets.

<TABLE>
<CAPTION>
(In millions)                                                         For the Three Months Ended
                                                                          September 30, 1999
                                -----------------------------------------------------------------------------------------------
                                       Real Estate           Executive
                                         Property          Office Suites         Development            Other
                                        Operations          Operations           Operations           Operations         Total
                                ---------------------    -----------------    -----------------    ----------------    --------
<S>                                   <C>                 <C>                  <C>                  <C>                 <C>
Operating revenue                             $128.3                62.2                   1.6                2.6        $194.7
Segment expense                                 41.7                55.1                   1.6                9.1         107.5
                                ---------------------    -----------------    -----------------    ----------------    --------
Net segment revenue (expense)                   86.6                 7.1                    --               (6.5)         87.2
Interest expense                                13.0                 2.4                    --               10.5          25.9
Other income (expense), net                      6.0                (0.6)                   --               (4.4)          1.0
                                ---------------------    -----------------    -----------------    ----------------    --------
Funds from operations                         $ 79.6                 4.1                    --              (21.4)         62.3
                                =====================    =================    =================    ================    ========
Adjustments:
Depreciation and amortization                                                                                             (38.1)
Other, net                                                                                                                 (3.9)
                                                                                                                       --------
Net income before gain on sale
  of assets, incomes taxes and
  minority interest                                                                                                      $ 20.3
                                                                                                                       ========
</TABLE>


                                       10
<PAGE>

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



<TABLE>
<CAPTION>
(In millions)                                                         For the Three Months Ended
                                                                          September 30, 1998
                                -----------------------------------------------------------------------------------------------
                                       Real Estate           Executive
                                         Property          Office Suites         Development            Other
                                        Operations          Operations           Operations           Operations         Total
                                ---------------------    -----------------    -----------------    ----------------    --------
<S>                                      <C>                 <C>                  <C>                  <C>                 <C>
Operating revenue                            $113.7                46.8                    .7                 3.8        $165.0
Segment expense                                39.9                37.1                    .8                 7.7          85.5
                                ---------------------    -----------------    -----------------    ----------------    --------
Net segment revenue (expense)                  73.8                 9.7                   (.1)               (3.9)         79.5
Interest expense                               11.7                 (.1)                   --                 7.9          19.5
Other income (expense), net                     6.5                 1.5                    --                (5.9)          2.1
                                ---------------------    -----------------    -----------------    ----------------    --------
Funds from operations                        $ 68.6                11.3                   (.1)              (17.7)         62.1
                                =====================    =================    =================    ================    ========

Adjustments:
Depreciation and amortization                                                                                             (28.4)
Other, net                                                                                                                 (1.0)
                                                                                                                       --------

Net income before gain on sale
  of assets, incomes taxes and
  minority interest                                                                                                      $ 32.7
                                                                                                                       ========
</TABLE>

<TABLE>
<CAPTION>

(In millions)                                                         For the Nine Months Ended
                                                                          September 30, 1999
                                -----------------------------------------------------------------------------------------------
                                       Real Estate           Executive
                                         Property          Office Suites         Development            Other
                                        Operations          Operations           Operations           Operations         Total
                                ---------------------    -----------------    -----------------    ----------------    --------
<S>                                      <C>                 <C>                  <C>                  <C>              <C>
Operating revenue                        $369.0               167.5                 4.7                  8.4            $ 549.6
Segment expense                           124.7               143.2                 3.3                 25.7              296.9
                                ---------------------    -----------------    -----------------    ----------------    --------
Net segment revenue (expense)             244.3                24.3                 1.4                (17.3)             252.7
Interest expense                           37.7                 6.9                  --                 26.9               71.5
Other income (expense), net                 6.4                  --                  --                 (1.5)               4.9
                                ---------------------    -----------------    -----------------    ----------------    --------
Funds from operations                    $213.0              $ 17.4                 1.4                (45.7)             186.1
                                =====================    =================    =================    ================    ========

Adjustments:
Depreciation and amortization                                                                                            (100.9)
Gain on settlement of treasury
  locks                                                                                                                     4.5
Other, net                                                                                                                (10.9)
                                                                                                                       --------
Net income before gain on sale
  of assets, income taxes and
  minority interest                                                                                                     $  78.8
                                                                                                                       ========
</TABLE>


                                       11
<PAGE>

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


<TABLE>
<CAPTION>
(In millions)                                                         For the Nine Months Ended
                                                                          September 30, 1998
                                -----------------------------------------------------------------------------------------------
                                       Real Estate           Executive
                                         Property          Office Suites         Development            Other
                                        Operations          Operations           Operations           Operations         Total
                                ---------------------    -----------------    -----------------    ----------------    --------
<S>                                    <C>                 <C>                  <C>                  <C>               <C>
Operating revenue                         $321.0                97.1                  1.6                   9.4          $429.1
Segment expense                            107.1                79.0                  1.9                  21.0           209.0
                                ---------------------    -----------------    -----------------    ----------------    --------
Net segment revenue (expense)              213.9                18.1                  (.3)                (11.6)          220.1
Interest expense                            35.0                 1.5                   --                  17.6            54.1
Other income (expense), net                  7.2                  .6                   --                  (1.5)            6.3
                                ---------------------    -----------------    -----------------    ----------------    --------
Funds from operations                     $186.1                17.2                  (.3)                (30.7)          172.3
                                =====================    =================    =================    ================    ========

Adjustments:
Depreciation and amortization                                                                                             (77.3)
Other, net                                                                                                                 (2.9)
                                                                                                                       --------

Net income before gain on sale
  of assets, income taxes and
  minority interest                                                                                                      $ 92.1
                                                                                                                       ========
</TABLE>

                                       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 primarily based on the Condensed Consolidated
Financial Statements of CarrAmerica Realty Corporation and its subsidiaries (the
"Company") as of September 30, 1999 and December 31, 1998, and for the three and
nine months ended September 30, 1999 and 1998.  The comparability of the periods
is significantly impacted by acquisitions completed, development properties
placed in service and dispositions made during 1999 and 1998.  As of September
30, 1998, the Company owned 288 properties.  This number was reduced to 258 at
September 30, 1999.

     The Company's reportable operating segments are real estate property
operations, executive office suites operations and development operations.
Development operations is primarily third-party development fee income and
associated expenses.  Other business activities and operating segments that are
not reportable are included in other operations.

     This information should be read in conjunction with the accompanying
condensed consolidated financial statements and notes thereto.  These condensed
consolidated financial statements include all adjustments, which are, in the
opinion of management, necessary to reflect a fair statement of the periods
presented, and all such adjustments are of a normal, recurring nature.

RESULTS OF OPERATIONS - Three Months Ended September 30, 1999 and 1998

Real Estate Property Operations

     Total real estate property operating revenue increased $14 million, or 12%,
to $128 million for the three months ended September 30, 1999, compared to $114
million for the three months ended September 30, 1998.  This increase resulted
from development properties placed in service and same store rental growth which
exceeded the loss of rental revenue due to dispositions.  Same store operating
income grew by 5% or $3 million over the same period in 1998, primarily as a
result of a 6% increase in rental revenue.  The occupancy rate for same store
properties increased to 96.2% for the third quarter of 1999 from 96.0% for the
third quarter of 1998.

     Real estate property operating expenses increased $2 million primarily as a
result of development properties placed in service. Same store operating
expenses increased by $2 million or 7.9% over the third quarter of 1998
primarily as a result of higher real estate taxes and nonrecurring costs
associated with Y2K compliance work on building facilities. Interest expense
increased by $1.3 million over the three months ended September 30, 1998 as a
result of the refinancing of properties with increased leverage.

Executive Office Suites Operations

     Executive office suites operating revenue increased by $15 million to $62
million, or 32% in the third quarter of 1999 as a result of additional centers
in operation from acquisitions and development of new centers.  The number of
stabilized centers owned and managed increased 34% from 109 centers at September
30, 1998 to 146 centers at September 30, 1999.  In addition to the rental of
executive suites, HQ Global provides services to customers including
communications technology, word processing, desktop publishing, digital color
printing, conference rooms, training centers and meeting support and scheduling.

     Operating expenses increased by $18 million, or 49%, primarily due to the
addition of new centers.  Interest expense increased $2 million in the third
quarter of 1999 as a result of higher borrowing levels under the HQ Global
unsecured line of credit to fund acquisition and development of new centers.

Development Operations

     Development fee income increased $0.9 million to $1.6 million and
development operating expenses increased $0.8 million to $1.6 million for the
third quarter of 1999.  These increases are the result of an increase over the
prior period in the number of development fee projects the Company is managing.

                                       13
<PAGE>

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


Other Operations

     Operating revenues decreased $1.2 million for the three months ended
September 30, 1999 compared to the same period in 1998 primarily from decreases
in leasing fee income and other income.

     Other operations expenses increased $1.4 million primarily as a result of
professional fees associated with the Company's program Project Excellence.  The
project's mission is primarily to examine the Company's current finance,
technology and business processes in order to identify and implement changes
needed to improve them to the level of best practice.

     Interest expense increased from $7.9 million for the three months ended
September 30, 1998 to $10.5 million for the comparable period in 1999.  This
increase resulted primarily from an additional $150 million of senior unsecured
notes outstanding during the quarter and additional borrowings on the Company's
unsecured line of credit.

RESULTS OF OPERATIONS - Nine Months Ended September 30, 1999 and 1998

Real Estate Property Operations

     Total real estate property operating revenue increased $48 million, or 15%,
to $369 million for the nine months ended September 30, 1999 as the effect of
development properties placed in service and same store rental growth exceeded
the loss of rental revenue due to dispositions.  Same store operating income
grew by 6% or $9 million over the same period of 1998, primarily as a result of
a 5% increase in rental revenue.  The same store occupancy rate increased to
96.1% from 96.0% for the same period of 1998.

     Real estate operating expenses increased $18 million primarily as a result
of development properties placed in service.  Same store operating expenses
increased by $4 million or 5% over the same period of 1998, primarily as a
result of an increase in real estate taxes and additional costs associated with
Y2K compliance work.  Interest expense increased $3 million over the first nine
months of 1998 as a result of the refinancing of properties with increased
leverage.

Executive Office Suites Operations

     Executive office suites operating revenue increased by $70 million to $168
million for the first nine months of 1999 over the comparable period of 1998 as
a result of additional centers in operation from acquisitions and development of
new centers.  The number of stabilized operating centers owned and managed
increased 34% from 109 at September 30, 1998 to a total of 146 as of September
30, 1999.  Operating expenses increased $64 million, primarily due to the
addition of new centers.  Interest expense increased from $1.5 million in 1998
to $6.9 million in 1999 as a result of higher borrowing levels under the HQ
Global unsecured line of credit to fund acquisition and development of new
centers.

Development Operations

     Development fee income increased $3.1 million to $4.7 million and
development operating expenses increased $1.4 million to $3.3 million for the
nine months ended September 30, 1999 compared to 1998. These increases are the
result of an increase over the prior period in the number of development fee
projects the company is managing.

Other Operations

     Operating revenues decreased $1.0 million for the nine months ended
September 30, 1999 compared to the same period in 1998 primarily from reductions
in management and leasing fee income.

                                       14
<PAGE>

     Other operations expenses increased $4.7 million primarily as a result of
professional fees associated with Project Excellence and Y2K compliance work.

     Interest expense increased from $17.6 million for the nine months ended
September 30, 1998 to $26.9 million for the comparable period in 1999.  This
increase resulted primarily from an additional $150 million of Senior Unsecured
Notes outstanding during the nine months ended September 30, 1999 and additional
borrowings on the Company's unsecured line of credit.

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, where appropriate, asset dispositions. Management believes
that the Company will have access to the capital resources necessary to expand
and develop its business, 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 as market conditions
permit, and to pay for construction in progress in both the short and long term.

     The Company's debt and preferred stock offerings have been rated by three
rating agencies.  Duff & Phelps Credit Rating Co. (DCR) and Standard & Poors
(S&P) have each assigned their BBB rating to senior unsecured debt offerings of
the Company and their BBB- rating to cumulative preferred stock offerings of the
Company.  As of September 30, 1999, Moody's Investor Service (Moody's) has
assigned its Baa3 rating to senior unsecured debt offerings of the Company and
its Ba2 rating to cumulative preferred stock offerings of the Company .

     The Company's total indebtedness at September 30, 1999 was approximately
$1.7 billion, of which $416.5 million, or 25%, bears a LIBOR-based floating
interest rate.  The Company has a $450 million revolving credit facility, and HQ
Global has a $200 million revolving credit facility, which is guaranteed by the
Company. Currently, these unsecured credit facilities bear interest at 90 basis
points over 30 day LIBOR. The Company's mortgages payable fixed rate
indebtedness bears an effective weighted average interest rate of 8.0% at
September 30, 1999 and has a weighted average term to maturity of 7.5 years.
Based upon the Company's total market capitalization at September 30, 1999 of
$3.7 billion (the common stock price was $21.94 per share; the total shares of
common stock, convertible preferred stock and Units outstanding was 73,975,000
and the aggregate liquidation value of the cumulative redeemable preferred stock
was $400 million), the Company's debt represented 45% of its total market
capitalization. As of September 30, 1999, the Company had $416.5 million
outstanding under the unsecured credit facilities, leaving $233.5 million
available under these unsecured credit facilities.

     Rental revenue, executive suites revenue and real estate service revenue
have been the principal sources of cash to fund the Company's operating
expenses, debt service and routine capital expenditures.  The Company and its
affiliates also require capital to invest in their existing portfolio of
operating assets for major capital projects such as large-scale renovations and
tenant related capital expenditures, such as tenant improvements and allowances
and leasing commissions.  The Company believes that these sources of revenue
will continue to provide the funds necessary for these expenditures.

     Additionally, the Company and its affiliates (including CarrAmerica
Development, Inc.) will require a substantial amount of capital for development
projects currently underway and planned for the future.  As of September 30,
1999, the Company had approximately 2.0 million square feet of office space in
28 development projects under construction which are expected to require a total
investment by the Company of approximately $296 million.  As of September 30,
1999, the Company had expended $216 million, or 73 percent of the total expected
investment. In addition, CarrAmerica Development has made commitments of $34.3
million for three additional development projects that will start construction
in the fourth quarter of 1999.

     HQ Global and Omni UK/Europe are also developing 38 executive office suite
centers.  The total estimated cost of these projects is approximately $89.5
million.  In addition, HQ Global and Omni UK/Europe will periodically consider
acquisitions of existing executive office suite centers.  Future cash

                                       15

<PAGE>

needs for expansion of HQ Global are expected to be met by cash flow from
operations and draws on the HQ Global line of credit facility. Future cash needs
of Omni UK/Europe are expected to be met primarily through third party
financings or through debt or equity investments by the Company.

     The Company recently announced that the Board of Directors of HQ Global
Services, Inc. has delayed the planned initial public offering of HQ Global's
common stock.

     Prior to the second quarter of 1998, the Company met its capital
requirements primarily by accessing the public equity and debt capital markets.
As a general matter, conditions in the public equity and debt capital markets
for most REITs have not been favorable since that time.  In response to these
unfavorable conditions, the Company has curtailed its acquisition program and
satisfied its cash needs through the disposition of selected assets, the
refinancing of selected assets, prudent use of joint ventures that reduce the
Company's investment requirement and utilization of the Company's existing
credit facilities.

     During the third quarter of 1999, the Company disposed of 9 operating
properties, generating net proceeds of $75 million.  As of November 14, 1999,
the Company has 3 projects under contract for sale which are projected to
produce net proceeds of $36.8 million of which $27.6 million is projected for
the fourth quarter 1999.   Due to uncertainties in the disposition process,
there can be no assurance that these sales will close or that they will achieve
the expected net proceeds.

     In addition, during the third quarter of 1999, the Company refinanced one
loan totaling $12 million at a rate of 7.50% secured by one property located in
Washington, D.C., which resulted in net proceeds to the Company of $6 million.

     In March 1999, the Company settled all obligations outstanding under its
forward equity transaction with Merrill Lynch, Pierce, Fenner & Smith
Incorporated.  The Company made a final payment of approximately $109.7 million,
in addition to the $39.3 million paid in 1998, to settle the transaction. The
5,000,000 shares originally issued in the transaction in April 1998 were
repurchased by the Company and cancelled.

     As a result of the Company's disposition and refinancing efforts, the
Company believes that funding is available for all capital requirements thru the
first quarter of 2000, including firm commitments for development
projects. The Company expects to continue to rely on asset dispositions, asset
refinancings, joint ventures and access to its credit facilities to fund capital
requirements for the foreseeable future.

     Net cash provided by operating activities was $105.6 million for the nine
months ended September 30, 1999, compared to $207.8 million for the nine months
ended September 30, 1998. The decrease in net cash provided by operating
activities resulted primarily from an increase in prepaid assets related to
acquisition of executive suites centers and the timing of payments for accounts
payable.  The Company's investing activities provided $175.8 million for the
nine months ended September 30, 1999 compared to the Company's investing
activities using $964.1 million for the nine months ended September 30, 1998.
The Company's investment activities included sales of office buildings,
acquisitions of executive office suites businesses (through HQ Global and
OmniUK/Europe), and land acquired for future development and additions to
construction in progress. Net proceeds from the sales of rental property was
$432.5 million for the nine months ended September 30, 1999. The Company
invested approximately $29.6 million in improvements to existing real estate
assets for the nine months ended September 30, 1999 and $323.7 million in
acquisitions and improvements for the comparable period of 1998.

     Net of dividends paid, the Company's financing activities used net cash of
$129.2 million for the nine months ended September 30, 1999 compared to net cash
provided of $892.8 million for the nine months ended September 30, 1998. During
the nine months ended September 30, 1999, the Company repurchased 5,000,000
common shares issued in its forward equity sale transaction for $109.7 million.
Proceeds from the sale of rental properties were used to fund this transaction
and to repay amounts on the unsecured credit facility. For the nine months ended
September 30, 1999, the Company's net repayments on its unsecured credit
facility were approximately $66 million. Net cash provided for the nine months
ended September 30, 1998 was primarily due to $335.9 million of proceeds from
the sale of common and preferred stock, $200 million from the issuance of
unsecured notes, and $388 million from borrowings on the unsecured credit
facility.


                                       16
<PAGE>

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

Year 2000 Compliance

     The Year 2000 issue results from a programming convention in which computer
programs use two digits rather than four to define the applicable year.
Software and hardware may recognize a date using "00" as the year 1900, rather
than the year 2000.  Such an inability of computer programs to recognize a year
that begins with "20" could result in business or building system failures,
miscalculations or errors causing disruptions of operations or other business
problems, including, among other things, a temporary inability to process
transactions, send invoices or engage in other normal business activities.

     The Company has undertaken a comprehensive program to address the Year 2000
issue.  In the second quarter of 1998, the Company expanded its program and
appointed a Year 2000 Steering Committee to manage centrally its Year 2000
compliance program (known internally as "Project 2000").  The Steering Committee
includes representatives of senior level management representing a wide array of
the organization and is charged with overseeing the Company's comprehensive
action plan designed to address Year 2000 issues.

     During the second quarter of 1998, the Company's Steering Committee engaged
the independent consulting firm of Computer Technology Associates, Inc. ("CTA")
to serve as the Project Manager for Project 2000.  During the first quarter of
1999 and after completion of the assessment phase, CTA's role as Project Manager
was modified and the Company designated two full-time employees as the Project
Managers to oversee the remainder of Project 2000.  As of the end of the second
quarter, the Company ended its engagement of CTA and does not anticipate the
need to use its services during the remainder of Project 2000.

     Project 2000 is organized into two areas of concentration:  (i) Property
Operations Embedded Systems and (ii) Internal Business Operations Technology.
The Property Operations segment of the program focuses primarily on equipment
and systems present in the Company's operating properties that may contain
embedded microprocessor technology (such as elevators and HVAC systems).  The
Internal Business Operations segment focuses primarily on the Company's
information technology, operating systems (such as billing, accounting and
financial reporting systems) and certain systems of the Company's major vendors
and material service providers.  As described below, Project 2000 involves (i)
the assessment of the Year 2000 problems that may affect the Company, (ii) the
development of remedies to address the problems discovered in the assessment
phase, (iii) the testing of such remedies and (iv) the preparation of
contingency plans to deal with the potential failure of important and critical
systems.

     Assessment.  During the course of its assessment phase, the Company
identified substantially all of the major components of its property and
business operations systems which may be vulnerable to the Year 2000 issue.  In
terms of Property Operations, the Company has conducted a comprehensive
inventory of all the buildings' systems and equipment.  Systems were risk ranked
(1-3) based upon each system's importance to the properties' operations.  Those
systems classified as level 2 or 3 (the highest levels of importance) were
compared to CTA's existing embedded systems database to determine the status of
Year 2000 compliance if it was not already known by the Company.  If relevant
information was not contained in the existing database, the system was then
identified for processing through vendor management coordinated by CTA.  Vendor
management involved concentrated communication with the vendor in an attempt to
determine the status of a systems Year 2000 compliance and any available
remedies.  As of the fourth quarter of 1998, inventory of the Company's then
existing operating properties was  complete.  Assessment of property operations
was complete as of the end of the first quarter of 1999.

     In terms of Internal Business Operations Technology, team leaders have been
selected from each business unit and market office to assist in identifying
software, hardware and external interfaces which may be vulnerable to Year 2000
issues.   Inventorying of both core business units and all market offices was
substantially completed by the end of the fourth quarter of 1998.  A routine
application upgrade of the Company's primary billing and accounting software was
complete as of the end of the first quarter of 1999.  The vendor of the software
has

                                       17
<PAGE>

received the Information Technology Association of America (ITAA) 2000
Certification and represents that the system is Year 2000 ready, and the Company
tested the system during the third quarter of 1999. In addition, the Company
continued to communicate with other significant hardware, software and other
material services providers and requested them to provide the Company with
detailed, written information concerning existing or anticipated Year 2000
compliance of their systems insofar as the systems relate to such parties'
business activities with the Company. Relying upon information received from its
service providers, the Company rated the providers as favorable or unfavorable
as to their Year 2000 compliance. As of the third quarter of 1999, substantially
all of the Company's critical service providers stated they are currently ready
or will be Year 2000 ready before December 31, 1999. Based upon these ratings
the Company is developing contingencies and identifying back up vendors in the
event any significant provider should fail to be Year 2000 compliant. The
Company expects to continue to communicate with these vendors throughout 1999.

     Remediation and Testing Phase.  Based upon the results of its assessment
efforts, the Company initiated remediation and testing activities. The
Company completed remediation on important and critical systems by the end of
the second quarter of 1999. Selective validation testing of systems has been
completed during the third quarter of 1999. The activities conducted during the
remediation and testing phase were intended to provide assurance from both the
Property Operation and the Internal Business perspectives that critical and
important applications, systems and equipment will be substantially Year 2000
compliant on a timely basis. In this phase, the Company first evaluated
applications, systems and equipment. If a potential Year 2000 problem was
identified, the Company took steps to attempt to remediate the problem and,
where applicable, has tested to confirm that the remediating changes were
effective and will not adversely affect the functionality of that application.
After the various applications, system components and equipment had undergone
remediation and testing phases, the Company, where applicable, conducted
integrated testing for the purpose of demonstrating functional integrated
systems operations.

     Contingency Plans.  The Company continues to update its contingency plans
to handle its most reasonably likely worst case Year 2000 scenarios. The Company
completed its determination of worst case scenarios after it had received and
analyzed responses to the inquiries it had made of third parties. The Company
expects to complete contingency plans by the end of November of 1999.

     Costs Related to the Year 2000 Issue.  As of September 30, 1999, the
Company has incurred approximately $4.3 million in costs for its Year 2000
program.  The Company currently estimates that it will incur additional costs,
which are not expected to exceed approximately $0.6 million, to complete its
Year 2000 compliance work. The Company believes that a portion of these costs
may be recoverable from tenants but has not determined at this time the extent
to which such recovery can be realized.

     Risks Related to the Year 2000 Issue.  Although the Company's Year 2000
efforts are intended to minimize the adverse effects of the Year 2000 issue on
the Company's business and operations, the actual effects of the Year 2000 issue
and the success or failure of the Company's efforts described above cannot be
known until the year 2000.  Failure by the Company and its major vendors, other
material service providers and material clients to address adequately their
respective Year 2000 issues in a timely manner (insofar as such issues relate to
the Company's business) could have a material adverse effect on the Company's
business, results of operations and financial condition.

                                       18
<PAGE>

Funds From Operations

   The Company believes that funds from operations is helpful to investors as a
measure of the performance of an equity REIT because, along with cash flow from
operating activities, financing activities and investing activities, it provides
investors with an indication of the ability of the Company to incur and service
debt, to make capital expenditures and to fund other cash needs.  In accordance
with the final National Association of Real Estate Investment Trusts (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 (or 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 are calculated to reflect funds from operations on the same basis.  The
Company calculates its funds  from operations by combining the funds from
operations from its real estate operations, calculated in accordance with
NAREIT's definition of funds from operations, and the earnings before
depreciation, amortization and deferred taxes ("EBDADT") of the Company's
executive suites business, excluding operating losses from centers under
development.  The Company's funds from operations may not be comparable to funds
from operations reported by other REITs that do not define the term in
accordance with the current NAREIT definition or that interpret the current
NAREIT definition differently than the Company.  Funds from operations does not
represent net income or cash flow generated from operating activities in
accordance with generally accepted accounting principles and, as such, should
not be considered an alternative to net income as an indication of the Company's
performance or to cash flow 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:

<TABLE>
<CAPTION>
(In thousands)                                                               Three Months Ended             Nine Months Ended
                                                                               September 30,                  September 30,
                                                                        ----------------------------------------------------------
                                                                            1999           1998            1999            1998
                                                                          ---------      ---------      ----------      ----------
<S>                                                                       <C>            <C>            <C>             <C>
Net income before minority interest                                       $ 43,649        $38,979        $130,398        $124,546

Adjustments to derive funds from operations:
 Add:
   Depreciation and amortization                                            38,115         28,382         100,912          77,306
   Losses associated with executive suites centers under
     development                                                             3,888          1,410          11,360           2,952
   Deferred taxes                                                           (1,825)           248          (1,760)            248
 Deduct:
   Minority interests' (non Unitholders) share of depreciation,
     amortization and net income                                              (195)           (60)           (479)           (255)
   Gain on settlement of treasury locks                                         --             --          (4,489)             --
   (Gain) loss on sale of assets                                           (21,284)        (6,844)        (49,815)        (32,450)
                                                                       ------------      ---------      ----------      ---------
Funds from Operations before allocations to the minority Unitholders        62,348         62,115         186,127         172,347
Less:  Funds from operations allocable to the minority Unitholders          (4,025)        (3,677)        (12,563)        (11,565)
                                                                       ------------      ---------      ----------      ---------
Funds from operations allocable to CarrAmerica Realty Corporation           58,323         58,438         173,564         160,782
Less:  Preferred stock dividends                                            (8,933)        (8,963)        (26,516)        (26,639)
                                                                       ------------      ---------      ----------      ---------
Funds from operations attributable to common shareholders                 $ 49,390        $49,475        $147,048        $134,143
                                                                       ============      =========      ==========      =========
</TABLE>

                                       19
<PAGE>

FORWARD-LOOKING STATEMENTS

     Certain statements contained herein constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995 (the
"Reform Act").  Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievements of the Company and its affiliates or industry results to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements.  Such factors include,
among others, the following: national and local economic, business and real
estate conditions that will, among other things, affect demand for office
properties, availability and creditworthiness of tenants, the level of lease
rents and the availability of financing for both tenants and the Company,
adverse changes in the real estate markets, including, among other things,
competition with other companies, risks of real estate acquisition and
development (including the failure of pending acquisitions to close and pending
developments to be completed on time and within budget), actions, strategies and
performance of affiliates that the Company may not control, governmental actions
and initiatives, and environmental/safety requirements.

                                       20
<PAGE>

ITEM 3.  Quantitative and Qualitative Disclosures about Market Risk

   No material changes in the Company's market risk have occurred since the
filing of the Company's Annual Report on Form 10-K for the year ended December
31, 1998.

                                       21
<PAGE>

                                    PART II

OTHER INFORMATION
-----------------

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

         None

Item 6.  Exhibits and Reports on Form 8-K

         (a.)  Exhibits

            10.1  Amendment to Fourth Amended and Restated Revolving Credit
                  Agreement dated as of August 31, 1999 by and among CarrAmerica
                  Realty Corporation, CarrAmerica Realty, L.P., Carr Realty,
                  L.P., Morgan Guaranty Trust Company and the other banks listed
                  therein.

            27    Financial Data Schedule - Nine Months Ended September 30,
                  1999.


         (b.)  Reports on Form 8-K

           a.  Current Report on Form 8-K filed on August 16, 1999 regarding
               certain supplemental data included in the Company's press release
               dated August 6, 1999.

                                       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



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



-------------------------------------------------
Richard F. Katchuk, Chief Financial Officer



-------------------------------------------------
Stephen E. Riffee
Senior Vice President, Controller and Treasurer
Principal Accounting Officer



Date: November 15, 1999

                                       23
<PAGE>

                                 Exhibit Index
                                 -------------


<TABLE>
<CAPTION>
Exhibit  Description                                                       Page
-------  -----------                                                       ----
<S>      <C>                                                               <C>
10.1     Amendment to Fourth Amended and Restated Revolving Credit
         Agreement dated as of August 31, 1999 by and among CarrAmerica
         Realty Corporation, CarrAmerica Realty, L.P., Carr Realty,
         L.P., Morgan Guaranty Trust Company and the other banks
         listed therein.

27       Financial Data Schedule - Nine Months Ended September 30, 1999.   [27]
</TABLE>



                                       24