MGI PROPERTIES
                                     By-Law
                    Adopted on December 18, 1997 Pursuant to
                 ss.10.7 of the Declaration of Trust, as Amended

                                    Article I

                            Meetings of Shareholders

     Section 1. Annual Meetings. The annual meeting of shareholders of the Trust
shall be held annually in the City of Boston, at such place and at such hour as
the Board of Trustees may fix, on a day, time and place designated by the Board
of Trustees, for the election of directors and for the transaction of such other
business as may properly come before the meeting.

     At an annual meeting of the shareholders, only such business shall be
conducted as shall have been properly brought before the meeting. To be properly
brought before an annual meeting, business must be specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board of
Trustees, otherwise properly brought before the meeting by or at the direction
of the Board of Trustees, or otherwise properly brought before the meeting by a
shareholder. In addition to any other applicable requirements, for business to
be properly brought before an annual meeting by a shareholder, the shareholder
must have given timely notice thereof in writing to the secretary of the Trust.
To be timely, a shareholder's notice must be delivered to or mailed and received
at the principal executive offices of the Trust, not less than 61 days nor more
than 80 days prior to the meeting; provided, however, that in the event the
annual meeting is scheduled to be held on a date which is less than 330 days
from the date of the previous annual meeting, in order for notice by the
shareholder to be timely it must be so received not later than the close of
business on the 10th day following the day on which such notice of the annual
meeting was mailed by the Trust. A shareholder's notice to the secretary shall
set forth as to each matter the shareholder proposes to bring before the annual
meeting (i) a brief description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at the annual
meeting, (ii) the name and record address of the shareholder proposing such
business, (iii) the class and number of shares of the Trust which are
beneficially owned by the shareholder, along with sufficient evidence of such
beneficial ownership, and (iv) any material interest of the shareholder in such
business.

     Notwithstanding anything in the by-laws to the contrary, no business shall
be conducted at the annual meeting except in accordance with the procedures set
forth in this Section 1 of Article I and the applicable rules and regulations of
the Securities and Exchange Commission, including Rule 14a-8, provided,


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however, that nothing in this Section 1 of Article I shall be deemed to preclude
discussion by any shareholder of any business properly brought before the annual
meeting in accordance with said procedure.

     The chairman of an annual meeting shall, if the facts warrant, determine
and declare to the meeting that business was not properly brought before the
meeting in accordance with the provisions of this Section 1 of Article I, and if
he should so determine, he shall so declare to the meeting and any such business
not properly brought before the meeting shall not be transacted.

     Notwithstanding any other provision hereof, this provision or any other
provision of these by-laws may be amended or altered only when and as authorized
and approved by the affirmative vote of not less than two-thirds of the whole
Board of Trustees, as that term is defined in Section 13.1 of the Declaration of
Trust, as amended, at a meeting duly called and held and as thereafter
authorized or approved, at any meeting of shareholders called for the purpose,
by the affirmative vote of the holders of shares representing not less than 80%
of the total number of votes authorized to be cast by the shares of all classes
then outstanding and entitled to vote thereon.

     In the event that this provision is found to conflict with the terms of the
Declaration of Trust, as amended, then in such case the Declaration of Trust
shall control.



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<PAGE>



                                   Article II

            Nominations of Trustees at Annual Meeting of Shareholders

     Subject to Sections 10.2, 10.3 and 10.4 of the Declaration of Trust, as
amended, and in addition to any other applicable requirements, upon the
expiration of the term of a Trustee, or in the case that the term of office of a
Trustee shall terminate and a vacancy shall occur in the event of the death,
resignation, bankruptcy, adjudicated incompetence or other incapacity to
exercise the duties of the office, or removal of a Trustee, in order for a
nomination for a new Trustee to be properly brought before an annual meeting of
shareholders to elect a new Trustee, the nominating shareholder must have given
timely notice of such nomination in writing to the secretary of the Trust. To be
timely, a shareholder's notice of such nomination must be delivered to or mailed
and received at the principal executive offices of the Trust, not less than 61
days nor more than 80 days prior to the meeting at which the election is to be
held; provided, however, that in the event the meeting is scheduled to be held
on a date which is less than 330 days from the date of the previous annual
meeting, in order for notice of such nomination by the shareholder to be timely
it must be so received not later than the close of business on the 10th day
following the day on which such notice of the annual meeting was mailed by the
Trust. A shareholder's notice to the secretary shall set forth (i) the names(s)
and address(es) of the shareholder who intends to make the nomination and of the
person or persons to be nominated; (ii) a representation that the shareholder
(a) is a holder of record of stock of the Trust entitled to vote at such
meeting, (b) will continue to hold such stock through the date on which the
meeting is held, and (c) intends to appear in person or by proxy at the meeting
to nominate the person or persons specified in the notice; (iii) a description
of all arrangements or understandings between the shareholder and each nominee
and any other person or persons (naming such person or persons) pursuant to
which the nomination is to be made by the shareholder; (iv) such other
information regarding each nominee proposed by such shareholder as would be
required to be included in a proxy statement filed pursuant to Regulation 14A
promulgated under Section 14 of the Securities Exchange Act of 1934, as amended,
as now in effect of hereafter modified, had the nominee been nominated by the
Board of Trustees; and (v) the consent of each nominee to serve as a Trustee of
the Trust if so elected. The Trust may require any proposed nominee to furnish
such other information as may reasonably be required by the Trust to determine
the qualifications of such person to serve as Trustee.

     Notwithstanding anything in the by-laws to the contrary, nominations of
Trustees by shareholders shall also be subject to the applicable rules and
regulations of the Securities and Exchange Commission, including but not limited
to Rules 14a-8(c)(8) and 14a- 11, all of which shall be complied with by the
nominating



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shareholder. No nominations of Trustees by shareholders shall be accepted except
those nominations made in accordance with the procedures set forth in this
Article II.

     The chairman of a meeting at which new Trustees are to be appointed shall,
if the facts warrant, determine and declare to the meeting that a nomination was
not properly made in accordance with the provisions of this Section 1 of Article
II, and if he should so determine, he shall so declare to the meeting and any
such nomination not properly made shall not be made or voted upon.

     Notwithstanding any other provision hereof, this provision or any other
provision of these by-laws may be amended or altered only when and as authorized
and approved by the affirmative vote of not less than two-thirds of the whole
Board of Trustees, as that term is defined in Section 13.1 of the Declaration of
Trust, as amended, at a meeting duly called and held and as thereafter
authorized or approved, at any meeting of shareholders called for the purpose,
by the affirmative vote of the holders of shares representing not less than 80%
of the total number of votes authorized to be cast by the shares of all classes
then outstanding and entitled to vote thereon.

     In the event that this provision is found to conflict with the terms of the
Declaration of Trust, as amended then in such case the Declaration of Trust
shall control.



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