<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

               Quarterly Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934


For the Quarter Ended: June 30, 2001          Commission File Number: 1-13829
                       -------------                                  -------

                             CABOT INDUSTRIAL TRUST
                             ----------------------
             (Exact name of registrant as specified in its charter)

           Maryland                                   04-3397866
-------------------------------          ---------------------------------------
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
incorporation or organization)



           Two Center Plaza, Suite 200, Boston, Massachusetts 02108
           --------------------------------------------------------
         (Address of principal executive offices, including zip code)


                                 (617) 723-0900
              ----------------------------------------------------
              (Registrant's telephone number, including area code)



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                   YES X   NO
                                      ---    ---

Indicate the number of shares outstanding of each of the registrant's classes of
Common Stock, as of the latest practicable date: As of August 10, 2001,
41,102,028 Common Shares of Beneficial Interest, $.01 par value, of the
Registrant were outstanding.
<PAGE>

                          PART I. FINANCIAL INFORMATION


ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS


The accompanying unaudited consolidated condensed financial statements should be
read in conjunction with the 2000 Form 10-K of the registrant Cabot Industrial
Trust. These consolidated condensed statements have been prepared in accordance
with the instructions of the Securities and Exchange Commission for Form 10-Q
and do not include all the information and footnotes required by generally
accepted accounting principles for complete financial statements.

In the opinion of Cabot Industrial Trust's management, all material adjustments
(consisting solely of items of a normal, recurring nature) considered necessary
for a fair presentation of results of operations for the interim period have
been included. The results of consolidated operations for the period from
January 1, 2001 through June 30, 2001 are not necessarily indicative of the
results that may be expected for the period from January 1, 2001 through
December 31, 2001.
<PAGE>

                             CABOT INDUSTRIAL TRUST

                      CONSOLIDATED CONDENSED BALANCE SHEET
                    As of June 30, 2001 and December 31, 2000
                        (in thousands, except share data)

<TABLE>
<CAPTION>

                                                                                      June 30, 2001         December 31, 2000
                                                                                   ------------------     ---------------------
                                                                                       (unaudited)
<S>                                                                                    <C>                     <C>
ASSETS:

INVESTMENT IN REAL ESTATE:
Rental Properties                                                                      $  1,688,305            $  1,653,777
Less:  Accumulated Depreciation                                                             (89,203)                (73,857)
                                                                                      --------------          --------------
     Net Rental Properties                                                                1,599,102               1,579,920
Properties under Development                                                                 62,774                  64,296
                                                                                      --------------          --------------
                                                                                       $  1,661,876            $  1,644,216
                                                                                      --------------          --------------

OTHER ASSETS:
Cash and Cash Equivalents                                                              $      3,612            $      3,003
Rents and Other Receivables, net of allowance for uncollectible accounts of $1,078
     and $982 at June 30, 2001 and December 31, 2000, respectively                            4,398                   3,432
Deferred Rent Receivable                                                                     13,787                  11,573
Deferred Lease Acquisition Costs, net                                                        41,149                  34,288
Deferred Financing Costs, net                                                                 5,638                   5,460
Investment in and Advances to Related Party                                                   1,440                     750
Investment in and Notes Receivable from Joint Ventures                                       21,823                  12,518
Assets Held for Sale                                                                          9,228                  35,882
Other Assets                                                                                 23,487                  16,837
                                                                                      --------------          --------------

TOTAL ASSETS                                                                           $  1,786,438            $  1,767,959
                                                                                      ==============          ==============


LIABILITIES AND SHAREHOLDERS' EQUITY:

LIABILITIES:
Mortgage Debt                                                                          $    242,113            $    246,379
Unsecured Debt                                                                              255,000                 255,000
Line of Credit Borrowings                                                                   171,000                 149,000
Accounts Payable                                                                              1,043                   1,160
Accrued Real Estate Taxes                                                                    11,864                  11,385
Distributions Payable                                                                        19,119                  16,069
Tenant Security Deposits and Prepaid Rents                                                    9,619                  11,395
Other Liabilities                                                                            21,539                  22,666
                                                                                      --------------          --------------
                                                                                       $    731,297            $    713,054
                                                                                      --------------          --------------

MINORITY INTEREST:
Preferred Unitholders                                                                  $    238,205            $    238,205
Limited Partner Unitholders                                                                  54,994                  56,920
                                                                                      --------------          --------------
                                                                                       $    293,199            $    295,125
                                                                                      --------------          --------------

SHAREHOLDERS' EQUITY:
Common Shares, $0.01 par value, 140,900,000 shares authorized; 40,729,428 and
     40,624,833 shares issued and outstanding at
     June 30, 2001 and December 31, 2000, respectively                                 $        407            $        406
Paid-in Capital                                                                             770,296                 768,303
Retained Deficit                                                                             (7,595)                 (8,929)
Accumulated Other Comprehensive Income                                                       (1,166)                     --
                                                                                      --------------          --------------

TOTAL SHAREHOLDERS' EQUITY                                                             $    761,942            $    759,780
                                                                                      --------------          --------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                             $  1,786,438            $  1,767,959
                                                                                      ==============          ==============
</TABLE>


  The accompanying notes are an integral part of these unaudited consolidated
                        condensed financial statements.
<PAGE>

                             CABOT INDUSTRIAL TRUST

                 CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
           For the Three Months ended June 30, 2001 and June 30, 2000
                (unaudited, in thousands, except per share data)

<TABLE>
<CAPTION>

                                                                  Three Months Ended        Three Months Ended
                                                                     June 30, 2001             June 30, 2000
                                                                  -------------------       ------------------
<S>                                                                <C>                       <C>
REVENUES:
Rental Income                                                       $       46,913            $        44,994
Tenant Reimbursements                                                        9,042                      7,184
                                                                    ---------------           ----------------
                Total Revenues                                      $       55,955            $        52,178
                                                                    ---------------           ----------------

EXPENSES:
Property Operating                                                  $        5,132            $         4,705
Property Taxes                                                               6,749                      6,022
Depreciation and Amortization                                               10,703                     10,444
Interest                                                                    11,460                     10,560
General and Administrative                                                   2,537                      2,240
                                                                    ---------------           ----------------
                Total Expenses                                      $       36,581            $        33,971
                                                                    ---------------           ----------------

OTHER INCOME:
Interest and Other Income                                           $          870            $           471
Earnings and Fees from Joint Ventures and Advisory Clients                     440                        198
Net Gain on Sale of Real Estate                                              1,465                         --
                                                                    ---------------           ----------------
                                                                    $        2,775            $           669
                                                                    ---------------           ----------------

Income Before Minority Interest Expense                             $       22,149            $        18,876

MINORITY INTEREST EXPENSE:
     Preferred Unitholders                                                  (5,294)                    (4,905)
     Limited Partner Unitholders                                            (1,161)                      (975)
                                                                    ---------------           ----------------

Net Income                                                          $       15,694            $        12,996
                                                                    ===============           ================

Earnings per Common Share:
    Basic                                                           $         0.39            $          0.32
                                                                    ===============           ================
    Diluted                                                         $         0.39            $          0.32
                                                                    ===============           ================

Weighted Average Common Shares:
    Basic                                                                   40,662                     40,619
                                                                    ===============           ================
    Diluted                                                                 40,662                     40,619
                                                                    ===============           ================
</TABLE>

 The accompanying notes are an integral part of these unaudited consolidated
                        condensed financial statements.
<PAGE>

                             CABOT INDUSTRIAL TRUST

                 CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
            For the Six Months ended June 30, 2001 and June 30, 2000
                (unaudited, in thousands, except per share data)


<TABLE>
<CAPTION>

                                                                   Six Months Ended          Six Months Ended
                                                                     June 30, 2001             June 30, 2000
                                                                   -----------------        -------------------
<S>                                                                 <C>                       <C>
REVENUES:
Rental Income                                                       $       94,677            $        87,743
Tenant Reimbursements                                                       17,700                     14,243
                                                                    ---------------           ----------------
                Total Revenues                                      $      112,377            $       101,986
                                                                    ---------------           ----------------

EXPENSES:
Property Operating                                                  $       10,456            $         9,251
Property Taxes                                                              13,252                     11,920
Depreciation and Amortization                                               20,788                     20,247
Interest                                                                    23,168                     20,010
General and Administrative                                                   5,222                      4,741
                                                                    ---------------           ----------------
                Total Expenses                                      $       72,886            $        66,169
                                                                    ---------------           ----------------

OTHER INCOME:
Interest and Other Income                                           $        1,211            $           765
Earnings and Fees from Joint Ventures and Advisory Clients                   1,261                        198
Net Gain on Sale of Real Estate                                              2,414                         --
                                                                    ---------------           ----------------
                                                                    $        4,886            $           963
                                                                    ---------------           ----------------

Income Before Minority Interest Expense                             $       44,377            $        36,780

MINORITY INTEREST EXPENSE:
     Preferred Unitholders                                                 (10,588)                    (9,116)
     Limited Partner Unitholders                                            (2,334)                    (1,931)
                                                                    ---------------           ----------------

Net Income                                                          $       31,455            $        25,733
                                                                    ===============           ================

Earnings per Common Share:
    Basic                                                           $         0.77            $          0.63
                                                                    ===============           ================
    Diluted                                                         $         0.77            $          0.63
                                                                    ===============           ================

Weighted Average Common Shares:
    Basic                                                                   40,653                     40,619
                                                                    ===============           ================
    Diluted                                                                 40,653                     40,619
                                                                    ===============           ================
</TABLE>


  The accompanying notes are an integral part of these unaudited consolidated
                        condensed financial statements.
<PAGE>

                             CABOT INDUSTRIAL TRUST

                 CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
            For the Six Months ended June 30, 2001 and June 30, 2000
                            (unaudited, in thousands)


<TABLE>
<CAPTION>

                                                                                         Six Months Ended        Six Months Ended
                                                                                          June 30, 2001           June 30, 2000
                                                                                       ---------------------    -------------------
<S>                                                                                        <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net Income                                                                            $    31,455             $     25,733
     Adjustments to Reconcile Net Income to Cash Provided by Operating Activities:
             Depreciation and Amortization                                                      20,788                   20,247
             Minority Interest Expense                                                          12,922                   11,047
             Net Gain on Sale of Real Estate                                                    (2,414)                      --
             Straight Line Rent                                                                 (2,266)                  (2,638)
             Cabot Trust's Share of Net Income from Cabot Advisors and Joint Ventures             (351)                     (80)
             Amortization of Deferred Financing Costs                                              950                      614
             (Increase) Decrease in Rents and Other Receivables                                   (966)                     430
             Increase (Decrease) in Accounts Payable                                               (52)                     145
             (Increase) Decrease in Other Assets                                                   294                   (3,410)
             Increase in Accrued Real Estate Taxes                                                 479                    1,229
             Decrease in Other Liabilities                                                      (2,748)                    (868)
                                                                                           ------------            ------------

                     Net Cash Provided by Operating Activities                                   58,091                  52,449
                                                                                           ------------            ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Property and Lease Acquisition Costs                                                       (35,292)               (150,958)
     Notes Receivable from Joint Ventures                                                        (4,705)                 (6,016)
     Investment in Joint Ventures                                                                (4,418)                   (946)
     Proceeds from Contribution of Real Estate to Joint Venture                                   5,076                      --
     Decrease (Increase) in Other Assets                                                          5,940                  (1,299)
     Advances to Cabot Advisors, net                                                               (871)                    326
                                                                                           ------------            ------------

                     Net Cash Used in Investing Activities                                      (34,270)               (158,893)
                                                                                           ------------            ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Line of Credit Borrowings, net                                                              22,000                  20,000
     Distributions Paid to Common Shareholders                                                  (29,465)                (28,231)
     Distributions Paid to Minority Interests                                                   (10,388)                (11,171)
     Debt Principal Repayments                                                                   (4,266)                 (2,044)
     Increase in Deferred Financing Costs                                                        (1,076)                   (681)
     Net Proceeds from Issuance of Common Shares / Payment of Expenses of Issuance                   --                     (85)
     Proceeds From Issuance of Secured Debt                                                          --                  61,900
     Proceeds from Issuances of Preferred Units, net                                                 --                  47,767
     Other                                                                                          (17)                     --
                                                                                           ------------            ------------

                      Net Cash (Used in) Provided by Financing Activities                       (23,212)                 87,455
                                                                                           ------------            ------------

Net Increase (Decrease) in Cash and Cash Equivalents                                                609                 (18,989)
                                                                                           ------------            ------------

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                                                   3,003                  22,007
                                                                                           ------------            ------------

CASH AND CASH EQUIVALENTS - END OF PERIOD                                                  $      3,612            $      3,018
                                                                                           ============            ============
Cash paid for interest, net of amounts capitalized                                         $     22,338            $     20,290
                                                                                           ============            ============
</TABLE>
<PAGE>

                             CABOT INDUSTRIAL TRUST

           CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (continued)
            For the Six Months ended June 30, 2001 and June 30, 2000
                            (unaudited, in thousands)


DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:


In conjunction with real estate acquisitions, Cabot Trust assumed $11,156 of
indebtedness during the six months ended June 30, 2000.

At June 30, 2001, accrued capital expenditures (including amounts included in
accounts payable) totaled $7,749, accrued offering costs totaled $796 and
accrued financing costs totaled $47.

At June 30, 2000, accrued capital expenditures (including amounts included in
accounts payable) totaled $8,304, accrued offering costs totaled $945 and
accrued financing costs totaled $24.


 The accompanying notes are an integral part of these unaudited consolidated
                        condensed financial statements.
<PAGE>

                             CABOT INDUSTRIAL TRUST

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                 June 30, 2001



1.   General

Organization
Cabot Industrial Trust (Cabot Trust), a Maryland real estate investment trust,
was formed on October 10, 1997. Cabot Trust is the managing general partner of a
limited partnership, Cabot Industrial Properties, L.P. (Cabot L.P.), and
conducts substantially all of its business through Cabot L.P. As the general
partner of Cabot L.P., Cabot Trust has the exclusive power under the agreement
of limited partnership to manage and conduct the business of Cabot L.P., and
therefore Cabot Trust consolidates the financial results of Cabot L.P. for
financial reporting purposes.

As of June 30, 2001 and 2000, Cabot Trust owned approximately 93% of the common
equity of Cabot L.P. The remaining 7%, which is owned by investors holding Cabot
L.P. Units, is considered Minority Interest, Limited Partner Unitholders.

Cabot Trust is a fully integrated, internally managed real estate company formed
to continue and expand the national real estate business of Cabot Partners
Limited Partnership (Cabot Partners). Cabot Trust qualifies as a real estate
investment trust (a REIT) for federal income tax purposes.

As of June 30, 2001, Cabot Trust owned 363 industrial properties located in 21
markets throughout the United States, containing approximately 41 million
rentable square feet. These properties were approximately 95.9% leased to 724
tenants at June 30, 2001. Cabot Trust and its affiliates also own 20% interests
in and provide acquisition, development, asset and property management services
to joint ventures (the Joint Ventures) with three institutional partners, each
of which invests in industrial multi-tenant and workspace properties or develops
bulk distribution properties. Cabot Trust's investment in Joint Ventures is
included in Investment in and Notes Receivable from Joint Ventures on the
accompanying consolidated condensed balance sheet. Income earned from the Joint
Ventures is accounted for under the equity method of accounting and is included
in Earnings and Fees from Joint Ventures and Advisory Clients in the
accompanying consolidated condensed statements of operations.


2.   Significant Accounting Policies: Derivative Financial Instruments

Accounting Changes: Standards Implemented and Transition Adjustment
On January 1, 2001, Cabot Trust adopted Statement of Financial Accounting
Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended by SFAS No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities - an Amendment of FASB Statement No.
133". SFAS No. 133, as amended, requires companies to carry all derivative
instruments, including certain embedded derivatives, in the statement of
financial condition at fair value. The accounting for the changes in fair value
of a derivative instrument depends on whether it has been designated and
qualifies as part of a hedging relationship and, if so, on the reason for
holding it. Cabot Trust uses only qualifying hedges that are designated
specifically to reduce exposure to interest rate risk by hedging the expected
future cash payments on certain liabilities. This is typically accomplished
using an interest rate cap, collar or swap agreement. For financial reporting
purposes these transactions qualify as cash flow hedges and the gain or loss on
the effective portion of the interest rate hedge is recorded as a component of
equity, which becomes reclassified into earnings along with payments on the
hedged liability. The effectiveness of the hedging relationship will be
<PAGE>

                             CABOT INDUSTRIAL TRUST

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                  June 30, 2001


assessed each reporting period, and any ineffectiveness measured, if applicable,
will be included in earnings.

As of January 1, 2001, Cabot Trust recorded a net transition adjustment of
$287,000 in accumulated other comprehensive income (equity). Adoption of the
standard also resulted in the recognition of $287,000 of derivative instrument
liabilities. In general, the amount of volatility will vary with the level of
derivative activities during any period.

The following table summarizes, at June 30, 2001, the notional value, carrying
value and fair value of Cabot Trust's derivative financial instruments. The
notional value at June 30, 2001 provides an indication of the extent of Cabot
Trust's involvement in these instruments at the time, but does not represent
exposure to credit, interest rate or market risks.

<TABLE>
<CAPTION>
                                                            Fixed
                                 Notional Value         Interest Rate              Maturity              Fair Value
                                ------------------    ------------------     ---------------------    ------------------
<S>                             <C>                   <C>                    <C>                      <C>
Interest Rate Swap               $    25,000,000            5.891%                   2003               $    (623,000)
Interest Rate Swap                    25,000,000            5.905%                   2003                    (630,000)
</TABLE>


Cabot L.P. has entered into two interest rate swaps relating to the Acquisition
Facility (see Note 4) for notional amounts of $25 million each, which are
intended to result in limiting the variable nature of the LIBOR component of
Cabot L.P.'s interest rate on an equivalent amount of borrowings to 5.891% and
5.905% through October 2003. Cabot L.P. had entered into an interest rate cap
arrangement relating to the Acquisition Facility for a notional amount of $100
million for the period from October 1, 1999 through April 1, 2000. This
arrangement resulted in limiting the variable nature of the LIBOR component of
Cabot L.P.'s interest rate on an equivalent amount of borrowings to no more than
6.50% per annum.

Comprehensive Income
Comprehensive income combines net income and "other comprehensive items" that
represent certain amounts that are reported as components of shareholders'
equity in the accompanying consolidated condensed balance sheet, including
unrealized gains and losses on derivative instruments.

At June 30, 2001, the derivative instruments were reported at fair value under
Other Liabilities of $1,253,000. Other Comprehensive Income reflects unrealized
losses after impact of Minority Interest, of $1,166,000.
<PAGE>

                             CABOT INDUSTRIAL TRUST

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                  June 30, 2001


3.   Property Acquisitions

During the period from April 1, 2001 through June 30, 2001, Cabot Trust acquired
the following industrial properties:

<TABLE>
<CAPTION>

                                                                                                  Acquisition
            Property Location                     Property Type           Square Feet                Cost
------------------------------------------      -------------------      ---------------      -----------------
<S>                                             <C>                      <C>                  <C>
Summit Avenue, Plano, TX                           Workspace                    120,276         $       20,390
E. Plano Parkway, Plano, TX                        Workspace                     67,372
E. Plano Parkway, Plano, TX                        Workspace                     65,135
E. Plano Parkway, Plano, TX                        Workspace                     53,833

Altura Street, Buena Vista, CA                     Workspace                     67,350                  3,745
                                                                         ---------------      -----------------

TOTALS                                                                          373,966         $       24,135
                                                                         ===============      =================
</TABLE>


4.   Debt Activity

On October 24, 2000, Cabot L.P. obtained a $325 million unsecured line of credit
facility (the Acquisition Facility) replacing its previous $325 million credit
facility that was to mature in March 2001. The credit facility matures in
October 2003, has a one-year extension option and a $50 million expansion
option. The credit facility also includes certain financial and nonfinancial
covenants. Cabot Trust is a guarantor of the facility. The interest rate on the
Acquisition Facility for the six months ended June 30, 2001 and 2000 was LIBOR
plus 100 basis points (which includes a 20 basis point facility fee in 2001). As
of August 10, 2001, the rate on the borrowings at Cabot Trust's current credit
rating is LIBOR plus 100 basis points. At June 30, 2001 and 2000, the interest
rate on outstanding borrowings was 4.87% and 7.69%, respectively. The
Acquisition Facility is used to acquire and develop properties and for working
capital purposes.

Cabot Trust assumed certain loans in connection with its formation, entered into
loan agreements during 1999 and 2000, and assumed certain loans in connection
with several real estate acquisitions, all secured by certain existing real
estate assets (collectively, the Mortgage Loans). At June 30, 2001, the Mortgage
Loans totaled $242.1 million, have coupon interest rates ranging from 7.25% -
9.67% and are secured by properties with a net book value of $387.6 million.
Certain of the debt assumed in connection with the acquisition of properties
bears a coupon interest rate that differed from the fair market value interest
rate at the date of acquisition. In accordance with generally accepted
accounting principles, such debt was recorded at fair market value and interest
expense was recorded in the accompanying consolidated condensed statements of
operations based on the fair market interest rate at the date of acquisition.
<PAGE>

                             CABOT INDUSTRIAL TRUST

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                 June 30, 2001

5.  Earnings Per Share

In accordance with SFAS No. 128, "Earnings Per Share", basic earnings per share
have been computed by dividing net income by the weighted average number of
common shares outstanding during each of the periods ended June 30, 2001 and
2000.

Diluted earnings per share have been computed considering the potentially
dilutive effect of the exercise of Unit options and warrants granted by Cabot
L.P. and Cabot Trust. Basic and diluted earnings per share were calculated as
follows:

<TABLE>
<CAPTION>

                                                                       Three Months Ended          Three Months Ended
                                                                         June 30, 2001                June 30, 2000
                                                                       ------------------          ------------------
<S>                                                                    <C>                         <C>
Basic:
Net Income                                                               $   15,694,000              $    12,996,000
                                                                         --------------              ---------------
Weighted Average Common Shares                                               40,662,000                   40,619,000
                                                                         --------------              ---------------
Basic Earnings per Common Share                                          $         0.39              $          0.32
                                                                         ==============              ===============

Diluted:
Net Income                                                               $   15,694,000              $    12,996,000
Effect of Unit Options                                                          (36,000)                     (14,000)
                                                                         --------------              ---------------
Income available to Common Shareholders, as adjusted                     $   15,658,000              $    12,982,000
                                                                         --------------              ---------------
Weighted Average Common Shares                                               40,662,000                   40,619,000
                                                                         --------------              ---------------
Diluted Earnings per Common Share                                        $         0.39              $          0.32
                                                                         ==============              ===============

<CAPTION>
                                                                        Six Months Ended            Six Months Ended
                                                                         June 30, 2001                June 30, 2000
                                                                        ----------------            ----------------
<S>                                                                      <C>                         <C>
Basic:
Net Income                                                               $   31,455,000              $    25,733,000
                                                                         --------------              ---------------
Weighted Average Common Shares                                               40,653,000                   40,619,000
                                                                         --------------              ---------------
Basic Earnings per Common Share                                          $         0.77              $          0.63
                                                                         ==============              ===============

Diluted:
Net Income                                                               $   31,455,000              $    25,733,000
Effect of Unit Options                                                          (76,000)                     (26,000)
                                                                         --------------              ---------------
Income available to Common Shareholders, as adjusted                     $   31,379,000              $    25,707,000
                                                                         --------------              ---------------
Weighted Average Common Shares                                               40,653,000                   40,619,000
                                                                         --------------              ---------------
Diluted Earnings per Common Share                                        $         0.77              $          0.63
                                                                         ==============              ===============
</TABLE>
<PAGE>

                          CABOT INDUSTRIAL TRUST

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                 June 30, 2001

Approximately 5 million and 4 million options which have been granted are
excluded from the above calculations of diluted earnings per share for the three
and six months ended June 30, 2001 and 2000, respectively, since the impact of
consideration of these options was anti-dilutive. In addition, 750,000 warrants
granted in connection with the establishment of a joint venture were excluded
from the above calculation for both the three and six months ended June 30, 2001
since the impact of consideration of these warrants was anti-dilutive.


6.  Joint Venture Activity

Cabot Trust and its affiliates have entered into joint venture agreements
(collectively, the Joint Ventures) with three institutional partners targeted
towards investment in industrial multi-tenant and workspace properties and
development of bulk distribution properties. Cabot Trust and its affiliates
entered into a joint venture agreement with J.P. Morgan Partners (formerly Chase
Capital Partners) on April 12, 2000. Cabot Trust subsequently entered into joint
venture agreements with GE Capital Real Estate (GE) on September 5, 2000 and
Teachers Insurance and Annuity Association - College Retirement Fund (TIAA-CREF)
on November 16, 2000. In connection with the formation of the joint venture with
GE, Cabot Trust issued stock warrants to purchase 750,000 Common Shares to GE at
an exercise price of $27.00 per share for a term of five years, which had an
estimated fair value of approximately $550,000 at the time of issuance. As of
June 30, 2001, the investors have committed approximately $211 million in equity
to the Joint Ventures of which 20% has or will be funded by Cabot L.P. or its
affiliates. As of June 30, 2001, the Joint Ventures had acquired 25 industrial
properties at a cost of approximately $92 million and comprising approximately
1.4 million square feet, had one 573,000 square foot project currently under
development and stabilized two other properties that were under development,
totaling approximately 640,000 square feet.

Cabot Trust earned, in the aggregate, approximately $695,000 in acquisition,
development and asset management fees from the Joint Ventures during the six
months ended June 30, 2001. In addition, Cabot Trust earned income of
approximately $351,000 from the Joint Ventures, which are accounted for under
the equity method of accounting. These amounts are included in Earnings and Fees
from Joint Ventures and Advisory Clients in the accompanying consolidated
condensed statement of operations.

As of June 30, 2001, Cabot Trust and its affiliates provided financing to the
Joint Ventures in the form of notes receivable totaling $8,018,000. These notes
are expected to be repaid from the proceeds of the Joint Ventures' third party
financing. During the six months ended June 30, 2001, Cabot L.P. and its
affiliates earned $277,000 of interest income from these notes receivable.
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

The statements contained in this discussion and elsewhere in this report that
are not historical facts are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These forward-looking statements are based on current
expectations, estimates and projections about the industry and markets in which
Cabot Trust operates, management's beliefs and assumptions made by management.
Words such as "expects", "anticipates", "intends", "plans", "believes", "seeks",
"estimates", and variations of such words and similar expressions are intended
to identify such forward-looking statements. Such forward-looking statements are
not guarantees of future performance and involve risks and uncertainties.
Therefore, actual outcomes and results may differ materially from what is
expressed or suggested by such forward-looking statements. Cabot Trust
undertakes no obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or otherwise. Cabot
Trust's operating results depend primarily on income from industrial properties,
which may be affected by various factors, including changes in national and
local economic conditions, competitive market conditions, uncertainties and
costs related to and the imposition of conditions on receipt of governmental
approvals and costs of material and labor, all of which may cause actual results
to differ materially from what is expressed herein. Capital and credit market
conditions, which affect Cabot Trust's cost of capital, also influence operating
results.

Introduction

Cabot Trust is an internally managed, fully integrated real estate company,
focused on serving a variety of industrial space users in the country's
principal commercial markets. Cabot Trust owns and operates a diversified
portfolio of bulk distribution, multi-tenant distribution and "workspace" (light
industrial, R&D and similar facilities) properties throughout the United States.
As of June 30, 2001, Cabot Trust owned 363 industrial properties. Cabot Trust
also owns 20% equity interests in and provides acquisition, development, asset
and property management services to three joint ventures (the Joint Ventures),
which invest in and develop industrial properties.

Results of Operations

Quarter Ended June 30, 2001 compared with Quarter Ended June 30, 2000
Net income allocable to common shareholders for the quarter ended June 30, 2001
totaled $15.7 million or $0.39 per share, compared with $13.0 million or $0.32
per share for the quarter ended June 30, 2000. The 2001 results include a gain
on sale of real estate of $1.5 million. There were no sales of property during
the quarter ended June 30, 2000. After consideration of the impact of the gain
on sale of property in 2001, the increase in net income in 2001 of approximately
$1.2 million is primarily due to increased income related to acquisitions,
development properties placed into service, additional income generated by the
company's properties and fees from and income generated by the Joint Ventures
offset by the operations of properties disposed of, increased depreciation and
amortization, interest expense, and minority interest expense related primarily
to preferred unitholders.

Rental revenues were $56.0 million, including tenant reimbursements of $9.0
million, for the quarter ended June 30, 2001, compared with $52.2 million,
including tenant reimbursements of $7.2 million, for the quarter ended June 30,
2000. Total rental revenue of $49.9 million and $48.8 million was generated
<PAGE>

in 2001 and 2000, respectively, by the properties owned as of April 1, 2000,
and still owned as of June 30, 2001, excluding properties held for sale, (the
Quarterly Baseline Properties) and total rental revenue of $5.7 million and $1.6
million in 2001 and 2000, respectively, was generated by the properties acquired
or developed subsequent to March 31, 2000. The remainder of total rental revenue
relates to properties held for sale and properties sold in 2001 and 2000. The
growth in rental revenue for the Quarterly Baseline Properties is primarily
attributable to rental increases for new leases, extensions and renewals.

The operating margin (the ratio of total revenues minus property operating and
property tax expenses to total revenues) remained unchanged at 79% for the
quarters ended June 30, 2001 and 2000.

Depreciation and amortization related to real estate assets totaled $10.7
million and $10.4 million for the quarters ended June 30, 2001 and 2000,
respectively. The increase reflects the acquisition of real estate assets, the
placement of development properties into service, and additional deferred lease
acquisition costs offset by decreased depreciation related to properties sold
and Assets Held for Sale.

Interest expense of $11.5 million for the quarter ended June 30, 2001 represents
interest incurred on $200.0 million of unsecured debt issued in May 1999, an
additional $55.0 million of unsecured debt issued in September 2000, borrowings
under Cabot L.P.'s Acquisition Facility and an average of $243.6 million of
secured debt, net of $1,027,000 of interest capitalized to development projects.
Interest expense of $10.6 million for the quarter ended June 30, 2000 represents
interest incurred on $200.0 million of unsecured debt issued in May 1999,
borrowings under Cabot L.P.'s Acquisition Facility and an average of $172.2
million of secured debt, net of $900,000 of interest capitalized to development
projects.

General and administrative expense increased by $297,000, to $2.5 million for
the quarter ended June 30, 2001. The increase is primarily due to an increase in
personnel to manage the acquisition, development, asset management and financing
activity resulting from the increase in the number of Cabot Trust's properties
from 350 to 363 at the end of each period. As a percentage of rental revenues,
general and administrative expense increased to 4.5% at June 30, 2001 from 4.3%
at June 30, 2000.

Interest and other income, which consists primarily of interest earned on Cabot
Trust's invested cash balances and advances to the Joint Ventures, as well as
earnings of Cabot Advisors, increased to $870,000 from $471,000 for the quarter
ended June 30, 2001, compared to the quarter ended June 30, 2000. The increase
is primarily due to fees earned from development of property and interest income
earned on the proceeds received from the sales of property anticipated to be
used to acquire additional real estate assets (related proceeds to be reinvested
are included within Other Assets on the consolidated condensed balance sheet).

Earnings and Fees from Joint Ventures and Advisory Clients consists of
acquisition, development and asset management fees of $174,000 earned from Joint
Venture arrangements for which Cabot Trust performs services, and earnings from
Joint Ventures accounted for under the equity method of $266,000 for the quarter
ended June 30, 2001. During the quarter ended June 30, 2000, Cabot Trust earned
acquisition, development and asset management fees of $178,000 from its Joint
Venture arrangements and recorded earnings from Joint Ventures in the amount of
$20,000. The increase in earnings from Joint Ventures is primarily due to an
increase in the number of properties owned by the Joint Ventures, which
increased from four to 28 at the end of each period.
<PAGE>

During the quarter ended June 30, 2001, Cabot Trust sold four properties, which
resulted in a net Gain on Sale of Real Estate of $1.5 million. There were no
sales of property during the quarter ended June 30, 2000.

Minority interest expense represents net income allocable to holders of Cabot
L.P. Limited Partnership Units and Cumulative Redeemable Perpetual Preferred
Units. At June 30, 2001, Cabot Trust owned approximately 93% of Cabot L.P. and
the minority common equity ownership interest was approximately 7%. During the
quarters ended June 30, 2001 and 2000 the average minority common equity
ownership interest was 7%. Dividends accruable to Preferred Unitholders, totaled
$5.3 million and $4.9 million for the quarters ended June 30, 2001 and June 30,
2000, respectively. The increase in Minority Interest Expense related to
Preferred Unitholders is due to the issuance of additional Cumulative Redeemable
Perpetual Preferred Equity.

Six Months Ended June 30, 2001 compared with the Six Months Ended June 30, 2000
Net income allocable to common shareholders for the six months ended June 30,
2001 totaled $31.5 million or $0.77 per share, compared with $25.7 million or
$0.63 per share for the six months ended June 30, 2000. The 2001 results include
a gain on sale of real estate of $2.4 million, but there were no significant
gains or losses on sales during the six months ended June 30, 2000. After
consideration of the impact of the gain on sale of property in 2001, the
increase in net income in 2001 of approximately $3.3 million is primarily due to
increased income related to acquisitions, development properties placed into
service, additional income generated by the company's properties (including a
significant increase in termination payments - see below for further discussion)
and fees from and income generated by the Joint Ventures offset by the
operations of properties disposed of, increased depreciation and amortization,
interest expense, and minority interest expense related primarily to preferred
unitholders.

Rental revenues were $112.4 million, including tenant reimbursements of $17.7
million, for the six months ended June 30, 2001, compared with $102.0 million,
including tenant reimbursements of $14.2 million, for the six months ended June
30, 2000. Total rental revenue of $95.6 million and $93.2 million was generated
in 2001 and 2000, respectively, by the properties owned as of January 1, 2000,
and still owned as of June 30, 2001, excluding properties held for sale, (the
Baseline Properties) and total rental revenue of $15.2 million and $5.0 million
in 2001 and 2000, respectively, was generated by the properties acquired or
developed subsequent to December 31, 1999. The remainder of total rental revenue
relates to properties held for sale and properties sold in 2001 and 2000. The
growth in rental revenue for Baseline Properties is primarily attributable to
rental increases for new leases, extensions and renewals and an increase of
approximately $850,000 in termination payments, due primarily to a significant
termination payment earned during the six months ended June 30, 2001.

The operating margin (the ratio of total revenues minus property operating and
property tax expenses to total revenues) remained unchanged at 79% for the six
months ended June 30, 2001 and 2000.

Depreciation and amortization related to real estate assets totaled $20.8
million and $20.2 million for the six months ended June 30, 2001 and 2000,
respectively. The increase reflects the acquisition of real estate assets, the
placement of development properties into service, and additional deferred lease
acquisition cost offset by decreased depreciation related to properties sold and
Assets Held for Sale.
<PAGE>

Interest expense of $23.2 million for the six months ended June 30, 2001
represents interest incurred on $200.0 million of unsecured debt issued in May
1999, an additional $55.0 million of unsecured debt issued in September 2000,
borrowings under Cabot L.P.'s Acquisition Facility and an average of $244.2
million of secured debt, net of $1.9 million of interest capitalized to
development projects. Interest expense of $20.0 million for the six months ended
June 30, 2000 represents interest incurred on $200.0 million of unsecured debt
issued in May 1999, borrowings under Cabot L.P.'s Acquisition Facility and an
average of $169.9 million of secured debt, net of $1.8 million of interest
capitalized to development projects.

General and administrative expense increased by $481,000, to $5.2 million for
the six months ended June 30, 2001. The increase is primarily due to an increase
in personnel to manage the acquisition, development, asset management and
financing activity resulting from the increase in the number of Cabot Trust's
properties from 350 to 363 at the end of each period. As a percentage of rental
revenues, general and administrative expense remained unchanged at 4.6% for the
each of the six months ended June 30, 2001 and 2000.

Interest and other income, which consists primarily of interest earned on Cabot
Trust's invested cash balances and advances to the Joint Ventures, as well as
earnings of Cabot Advisors, increased to $1.2 million from $765,000 for the six
months ended June 30, 2001, compared to the six months ended June 30, 2000. The
increase is primarily due to interest income from financing provided by Cabot
L.P. to the Joint Ventures, fees earned from development of property and
interest income earned on the proceeds received from the sales of property
anticipated to be used to acquire additional real estate assets (related
proceeds to be reinvested are included within Other Assets on the consolidated
condensed balance sheet).

Earnings and Fees from Joint Ventures and Advisory Clients consists of
acquisition, development and asset management fees of $910,000 earned from Joint
Venture arrangements as well as from third party clients for which Cabot Trust
performs services, and earnings from Joint Ventures accounted for under the
equity method of $351,000 for the six months ended June 30, 2001. During the six
months ended June 30, 2000, Cabot Trust earned acquisition, development and
asset management fees of $178,000 from its Joint Venture arrangements and
recorded earnings from Joint Ventures in the amount of $20,000. The increase in
earnings and fees from Joint Ventures is primarily due to an increase in the
number of properties owned by the Joint Ventures, which increased from four to
28 at the end of each period.

During the six months ended June 30, 2001, Cabot Trust sold seven properties
resulting in a net Gain on Sale of Real Estate of $2.4 million. There were no
significant sales during the six months ended June 30, 2000.

Minority interest expense represents net income allocable to holders of Cabot
L.P. Limited Partnership Units and Cumulative Redeemable Perpetual Preferred
Units. At June 30, 2001, Cabot Trust owned approximately 93% of Cabot L.P. and
the minority common equity ownership interest was approximately 7%. During the
six months ended June 30, 2001 and 2000 the average minority common equity
ownership interest was 7%. Dividends accruable to Preferred Unitholders, totaled
$10.6 million and $9.1 million for the six months ended June 30, 2001 and June
30, 2000, respectively. The increase in Minority Interest Expense related to
Preferred Unitholders is primarily due to the issuance of additional Cumulative
Redeemable Perpetual Preferred Equity.
<PAGE>

Capital Resources and Liquidity
Cabot Trust intends to rely on cash provided by operations, unsecured and
secured borrowings from institutional sources and public debt as its primary
sources of funding for acquisition, development, joint venture investment and
expansion and renovation of properties. Cabot Trust may also consider equity
financing when such financing is available on attractive terms. Cabot Trust also
expects acquisitions to be funded from reinvestment of proceeds from sales of
property via tax-free exchanges under Section 1031 of the Internal Revenue Code.

On September 7, 2000, Cabot L.P. established a Medium Term Note program eligible
to issue up to $200 million of notes payable. On September 12, 2000, Cabot L.P.
issued $40 million of notes payable with a coupon interest rate of 8.5% due
September 15, 2010. On September 18, 2000, Cabot L.P. issued an additional $15
million of notes payable with an 8.2% coupon interest rate, due September 15,
2005.

As of June 30, 2001, Cabot L.P. had issued an aggregate of $245 million of
Cumulative Redeemable Perpetual Preferred Units in seven separate transactions
in 1999 and 2000. The net proceeds from these transactions were $238.2 million,
which were used to pay down outstanding balances under the Acquisition Facility.
These Cumulative Redeemable Perpetual Preferred Units are callable by Cabot L.P.
at par on or after the fifth anniversary of their respective issuance dates.

On October 24, 2000, Cabot L.P. obtained a $325 million unsecured line of credit
facility replacing its previous $325 million credit facility that was to mature
in March 2001. The credit facility matures in October 2003 and has a one-year
extension option and a $50 million expansion option. The new credit facility
also includes certain financial and nonfinancial covenants. Cabot Trust is a
guarantor of the facility. The rate on the borrowings at Cabot Trust's current
credit rating is LIBOR plus 100 basis points. The Acquisition Facility is used
to fund property acquisitions, development activities, building expansions,
tenant leasing costs and for other general corporate purposes. Cabot Trust
believes cash flow from operations not distributed to Shareholders and
Unitholders will be sufficient to cover tenant allowances and costs associated
with renewal or replacement of current tenants as their leases expire and
recurring non-incremental revenue generating capital expenditures.

As of June 30, 2001, Cabot Trust had $242.1 million of fixed rate debt secured
by properties, $171.0 million of unsecured borrowings under its Acquisition
Facility, $255.0 million of unsecured debt and a 36.9% debt-to-total market
capitalization ratio. The debt-to-total market capitalization ratio is
calculated based on Cabot Trust's total consolidated debt as a percentage of the
sum of the market value of its outstanding Common Shares and Units (excluding
those held by Cabot Trust), the liquidation value of Perpetual Preferred Units
and total debt at June 30, 2001.

Cabot Trust and its affiliates have entered into joint venture agreements
(collectively, the Joint Ventures) with three institutional partners targeted
towards investment in industrial multi-tenant and workspace properties and
development of bulk distribution properties. Cabot Trust and its affiliates
entered into joint ventures with J.P. Morgan Partners (formerly Chase Capital
Partners) on April 12, 2000. Cabot Trust subsequently entered into joint venture
agreements with GE Capital Real Estate (GE) on September 5, 2000 and Teachers
Insurance and Annuity Association - College Retirement Fund (TIAA-CREF) on
November 16, 2000. Stock warrants with an estimated value of approximately
$550,000 were issued to GE in connection with the formation of the Joint
Ventures. As of June 30, 2001, these ventures had acquired 25 industrial
properties at a cost of approximately $92 million and comprising approximately
<PAGE>

1.4 million square feet, had one 573,000 square foot project currently under
development and stabilized two other properties that were under development,
totaling approximately 640,000 square feet. As of June 30, 2001, the investors
have committed approximately $211 million in equity to the ventures of which 20%
has or will be funded by Cabot Trust.

In the normal course of operations, as of August 10, 2001, Cabot Trust has
entered into commitments to purchase approximately $22 million of additional
real estate assets for its own account. Cabot Trust has also entered into
agreements to sell additional buildings, which are included in Assets Held for
Sale on Cabot Trust's consolidated condensed balance sheet as of June 30, 2001.
Because a number of conditions must be met prior to closing, it is uncertain as
to whether these transactions will actually be consummated.

Cash and cash equivalents totaled $3.6 million at June 30, 2001. Cash provided
by operating activities for the six months ended June 30, 2001, was $58.1
million.


RATIO OF EARNINGS TO FIXED CHARGES

We have computed the ratios of earnings to fixed charges and preferred
distributions by dividing income from continuing operations, plus fixed charges,
plus amortization of capitalized interest, plus distributed income of equity
investees, less earnings of equity investees, less interest capitalized, by
fixed charges. Fixed charges consist of interest costs, whether expensed or
capitalized, the interest component of rental expense and amortization of debt
premiums, discounts and issuance costs and preferred distributions.

The ratio of earnings to fixed charges was 1.88x for the three months ended June
30, 2001 compared to 1.80x for the three months ended June 30, 2000. The
increase is primarily due to increased income related to acquisitions,
development properties placed into service additional income generated by Cabot
Trust's properties, fees and income generated by the Joint Ventures and the gain
on sale of property, offset by the operations of properties disposed of, an
increase in minority interest expense, preferred unitholders and an increase in
interest expense and depreciation and amortization as discussed in the "Results
of Operations" above.

The ratio of earnings to fixed charges was 1.88x for the six months ended June
30, 2001 compared to 1.83x for the six months ended June 30, 2000. The increase
is primarily due to increased income related to acquisitions, development
properties placed into service additional income generated by Cabot Trust's
properties (including a significant increase in termination payments), fees and
income generated by the Joint Ventures and the gain on sale of property, offset
by the operations of properties disposed of, an increase in minority interest
expense, preferred unitholders and an increase in interest expense and
depreciation and amortization as discussed in the "Results of Operations" above.

<PAGE>

ITEM 3.  QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

Cabot Trust's exposure to market risk has not changed materially from its
exposure at December 31, 2000.
<PAGE>

                           Part II. OTHER INFORMATION



Item 1.     Legal Proceedings
                   Not Applicable

Item 2.     Changes in Securities and Use of Proceeds
                   Not Applicable

Item 3.     Defaults Upon Senior Securities
                   Not Applicable

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

               On May 10, 2001, at the Annual Meeting of Shareholders, the
               shareholders reelected two incumbent Trustees to three-year terms
               expiring in 2004. The Incumbent Trustees reelected at the meeting
               were Mr. George M. Lovejoy, Jr. and Maurice Segall. Mr. Lovejoy
               received 37,886,250 shares voted in favor of election with 18,412
               shares withheld; and Mr. Segall received 37,885,250 shares voted
               in favor of election with 19,412 withheld. No abstentions or
               broker non-votes were recorded on the election of Trustees.

               On May 10, 2001, at the Annual Meeting of Shareholders, the
               shareholders ratified the appointment of Arthur Andersen LLP as
               the Company's independent public accountants for the year ending
               December 31, 2001. Arthur Andersen LLP received 37,894,714 votes
               in favor of ratification with 7,284 votes withheld and 2,664
               abstentions.

Item 5.     Other Information
                  Not Applicable

Item 6.     Exhibits and Reports on Form 8-K
                  None
<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 as of the 13th day of August 2001.


                                           CABOT INDUSTRIAL TRUST
                                           ------------------------------------
                                                   Registrant


August 13, 2001                            /s/ Neil E. Waisnor
--------------------------                 ------------------------------------
          Date                                 Neil E. Waisnor
                                               Senior Vice President-Finance,
                                               Treasurer, Secretary


August 13, 2001                            /s/ Robert E. Patterson
--------------------------                 ------------------------------------
          Date                                 Robert E. Patterson
                                               President