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                                                                   EXHIBIT 10.11


                               SECURITY AGREEMENT

                THIS SECURITY AGREEMENT (this "Security Agreement") is entered
into as of June 8, 1998 by and between ARDEN REALTY FINANCE III, L.L.C., a
Delaware limited liability company with its principal office at 11601 Wilshire
Boulevard, Suite 401, Los Angeles, California 90025 ("DEBTOR"), and LEHMAN
BROTHERS REALTY CORPORATION, a Delaware corporation with an office at Three
World Financial Center, 200 Vesey Street, New York, New York 10285 ("SECURED
PARTY").

                               W I T N E S S E T H

                WHEREAS, Secured Party and Debtor have entered into a certain
Loan Agreement of even date herewith (the "LOAN AGREEMENT"), providing for a
loan (the "LOAN") from Secured Party to Debtor in the principal amount of One
Hundred Thirty-six Million One Hundred Thousand and No/100 Dollars
($136,100,000.00);

                WHEREAS, in connection with the advance of the Loan, Debtor has
made and delivered to Secured Party a certain Mortgage Note of even date
herewith in the principal amount of One Hundred Thirty-six Million One Hundred
Thousand and No/100 Dollars ($136,100,000.00) (the "MORTGAGE NOTE");

                WHEREAS, the Loan is to be secured by, among other things, first
priority liens on Debtor's assets consisting primarily of twenty-two (22)
parcels of land and the improvements thereon (which improvements consist
primarily of one or more office or industrial buildings on each parcel of land)
(each parcel of land and the improvements thereon individually shall be known as
a "PROPERTY" and collectively, the "PROPERTIES") and related assets, which
Properties are described on EXHIBIT A-1 THROUGH EXHIBIT A-22 hereto; and

                WHEREAS, in order to further secure the full and timely payment
by Debtor of the Loan and all amounts due under or in connection with the Loan
Agreement, the Mortgage Note, and the other Loan Documents (as defined in the
Loan Agreement), Debtor has agreed to grant to Secured Party, among other
things, a security interest in the Collateral (as defined herein).

                NOW, THEREFORE, for and in consideration of the foregoing and of
the mutual covenants and agreements herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending legally to be bound, agree as
follows (and all capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in, or the meanings incorporated by
reference to other documents in, SECTION 7 hereof):


1.      SECURITY INTEREST

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        1.1     COLLATERAL

                As security for the due and punctual payment and performance by
Debtor of each and every obligation, agreement, and covenant of Debtor to
Secured Party, including, without limitation, the payment when due of the full
amount of the Loan, together with interest thereon, the payment of all other
amounts from time to time owing under the Loan Documents, and the full
performance of all obligations of Debtor under the Loan Agreement, the Mortgage
Note, the Mortgage and all other Loan Documents (collectively the "SECURED
OBLIGATIONS"), Debtor hereby assigns and pledges to Secured Party, and grants to
Secured Party a security interest in and lien on, in addition to and together
with the interests granted under the Mortgage and other Security Documents, all
of Debtor's right, title and interest in and to the following, whether now owned
or hereafter acquired (collectively, the "COLLATERAL"):

                (1)     All personal property of whatever kind or nature
whatsoever used in the operation of the Properties or any of them, or in any way
related to the Land, the Improvements or any other improvements on the Land,
whether located on, affixed to, or attached to the Land or Improvements or any
of said Land or Improvements or otherwise related thereto or arising therefrom,
and whether tangible or intangible, direct or indirect, fully matured or
contingent, and all extensions, additions, Improvements, betterments, renewals,
substitutions, and replacements to or of any of the foregoing, including,
without limitation, all oil and gas rights, water rights, minerals and mineral
rights and other rights of every kind or nature, all machinery, all equipment,
all screens, window shades, blinds, storm doors and windows, floor coverings,
awnings, cabinets, chairs, desks, tables, lamps, vases and other items of
furniture and furnishings, all supplies and inventory, all art work, plants and
adornments, all bathroom and other fixtures and appliances, and all telephones,
televisions, radios, remote control units, cable boxes, and other electronic
equipment and all vending and ice machines, and including, without limitation,
all of the foregoing property that now are or hereafter become attached or
affixed to the Land or the Improvements in such a way as to constitute them
"fixtures" under applicable law (the "FIXTURES");

                (2)     Any and all additions and accessions to the foregoing,
and all proceeds thereof, including, without limitation, proceeds of the
conversion, voluntary or involuntary, of any of the foregoing into cash or
liquidated claims, including, without limitation, all Awards and other payments
as a result of any Taking, all Insurance Proceeds, and all proceeds of the Title
Insurance Policies, together with all amounts received by Secured Party or by
the Mortgage Trustee, as applicable, or due and payable to the Mortgage Trustee
or Secured Party, as applicable, pursuant to the Mortgage or other Loan
Documents, including, without limitation, any unearned premiums or refunds of
premiums on any insurance policies covering all or any part of the Collateral
and the right to receive and apply the proceeds of any insurance, or of any
judgments or settlements made in lieu thereof for damage to or diminution of the
Collateral, in accordance with the terms of the Mortgage;

                (3)     All real estate tax refunds and credits and all awards
or payments, including interest on any of them, and the right to receive the
same, which Debtor may have, which may be made with respect to any Collateral,
whether from a Taking thereof or for any 


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other injury to, decrease in the value of, or other occurrence affecting any
Collateral, subject to the rights of tenants under any leases or subleases of
the Collateral to the extent such leases are not subordinate to the terms of
this Security Agreement;

                (4)     All "accounts" (as defined in the U.C.C.), all accounts
receivable, and all Rents (as defined in the Loan Agreement), issues, profits,
revenues, royalties, bonuses, rights and benefits due, payable, accruing or
arising out of, or with respect to any Collateral, including, without
limitation, all vending machine receipts, all telephone revenues, all other
revenues derived from or generated at the Properties or any of them and all
deposits of money as advance rent, for security or as earnest money or as a down
payment or deposit for the purchase of all or any part of any Collateral
(collectively, the "RENTS AND REVENUES"), and Debtor does hereby transfer and
assign to Secured Party all present and future leases, subleases, underlettings,
management agreements, concession agreements, licenses, contracts or other
agreements relating to the ownership of any Collateral or to the occupancy or
use of all or any portion of any Property (including all of Debtor's rights
under any contracts for the sale of any portion of any Collateral, and all
revenues and royalties under any oil, gas and mineral leases relating to the
Land on which any of the Properties are located) (collectively, the "LEASES AND
CONTRACTS") and all Rents and Revenues derived by Debtor therefrom and otherwise
from any Collateral and the right to apply such Rents and Revenues to the
payment of the Mortgage Note and the other Secured Obligations, together with
the security deposits or other payments or instruments delivered as security
under such Leases and Contracts (the grant of such security deposits and other
security being subject to application in accordance with the express
requirements of such Leases and Contracts and any other agreements applicable
thereto); provided, however, that, subject to the provisions of the Loan
Agreement (including SCHEDULE 5.11 thereof) and the other Loan Documents,
Secured Party hereby grants to Debtor the right to collect and receive the Rents
and Revenues as they become due and payable under the Leases and Contracts until
such time as an Event of Default (as hereinafter defined) shall have occurred;
and provided further, that the existence of such right to collect and receive
Rents and Revenues shall not operate to subordinate this assignment to any
subsequent assignment, in whole or in part, by Debtor, and any such subsequent
assignment shall be subject to the rights of Secured Party hereunder and of
Secured Party or the Mortgage Trustee, as applicable, under the Mortgage and
other Security Documents;

                (5)     All "general intangibles" (as defined in the U.C.C.)
relating to any Property, including, without limitation, to the extent
assignable, all rights relating to design, development, operation, and use of
any Property, all certificates of occupancy, zoning variances, building, use or
other permits, approvals, authorizations, licenses and consents obtained from
any governmental agency in connection with the development, use, operation or
management of any Property, all construction, service, engineering, consulting,
architectural and other similar contracts concerning the design, construction,
operation, occupancy and/or use of any Property, all architectural drawings,
plans, specifications, soil tests, appraisals, engineering reports and similar
materials relating to all or any portion of any Property, and all payment and
performance bonds or warranties or guarantees relating to any Property; all
rights in deposit accounts, bank accounts and any investments of Rents and
Revenues, the Cash Collateral Account, the Lockbox Account, the TI Reserve
Account, all rights of Debtor in, to and under the Management Agreement,
Debtor's operating agreement, the Contribution Agreement, and all rights under
the 


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Leases and Contracts, all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
logos, other source and business identifiers, trademark registrations and
applications for registration used exclusively at or relating exclusively to any
part of any Property; all renewals, extensions and continuations-in-part of the
items referred to above; any written agreements granting to Debtor any right to
use any trademark or trademark registration at or in connection with any part of
the Property; and the right of Debtor to sue for past, present and future
infringements of the foregoing; and the right in the name and on behalf of
Debtor to appear in and defend any action or proceeding brought with respect to
any part of Debtor's real or personal property and to commence any action or
proceeding to protect the interest of Debtor in such Collateral;

                (6)     All equipment, inventory, motor vehicles, all items of
personal property described in clause (1) of this SECTION 1.1, all stocks,
bonds, interests in mutual funds and other investments, all rights under
equipment leases and all bills of lading and warehouse receipts and all
securities, security entitlements and other investment property held or for the
Cash Collateral Account, the Lockbox Account or the TI Reserve Account, any and
all related securities accounts in or through which any such security
entitlement is carried, all certificates and other evidences of ownership of or
other interests in securities or other investment property, and all proceeds of
or other distributions on or with respect to securities, security entitlements
or other investment property, including, without limitation, all dividends,
interest, principal payments, cash, options, warrants, rights, instruments,
subscriptions and other property or proceeds from time to time received,
receivable or otherwise distributed or distributable in respect of or in
exchange for any securities, security entitlements or other investment property;

                (7)     To the extent not otherwise included in any of the
classes or categories enumerated above, all equipment, inventory, documents,
instruments, and chattel paper (as each of such terms is defined in the U.C.C.);

                (8)     All extensions, improvements, betterments, renewals,
substitutes and replacements of, and all additions and appurtenances to, all or
any portion of the foregoing or of any other Property, and any Property
hereafter acquired or assembled by or released to Debtor or constructed,
assembled or placed by Debtor on any Property, immediately upon such
acquisition, assembling, release, construction or placement, as the case may be,
and in each such case, without any further mortgage, conveyance, assignment or
other act by Debtor, and any and all such extensions, improvements, betterments,
renewals, substitutes and replacements shall become to the fullest extent
permitted by law subject to the lien of this Security Agreement, and the
security and other interests created hereby, as fully and completely, and with
the same effect, as though now owned by Debtor and specifically described
herein; and

                (9)     To the extent not otherwise included in any of the
foregoing classes or categories of personal property, all proceeds (including,
without limitation, all proceeds as defined in the U.C.C. and all cash and
non-cash proceeds as referred to in Section 552 of the United States Bankruptcy
Code), products, offspring and profits of or from any of the foregoing.


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        1.2     FINANCING STATEMENTS

                Debtor shall execute all financing statements, continuation
statements, assignments, certificates, and other documents and instruments with
respect to the Collateral pursuant to the U.C.C. and otherwise as may be
necessary or reasonably requested by Secured Party to perfect or from time to
time to publish notice of, continue or renew the security interests granted
hereby (including, without limitation, such financing statements, continuation
statements, certificates, and other documents as may be necessary or reasonably
requested to perfect a security interest in any additional property or rights
hereafter acquired by Debtor or in any replacements, products or proceeds
thereof), in each case in form satisfactory to Secured Party, and Debtor will
pay the cost of filing the same in all public offices where filing is necessary
or reasonably requested by Secured Party and will pay any and all recording,
transfer or filing taxes that may be due in connection with any such filing.
Debtor grants Secured Party the right, at any time and at Secured Party's
option, and at Debtor's expense, to file any or all such financing statements,
continuation statements, and other documents pursuant to the U.C.C. and
otherwise as Secured Party reasonably may deem necessary or desirable.


        1.3     INJURY TO COLLATERAL

                No injury to, or loss or destruction of the Collateral or any
part thereof shall relieve Debtor of any of the Secured Obligations.


2.      REPRESENTATIONS AND WARRANTIES OF DEBTOR


                Debtor hereby represents and warrants to Secured Party that:


        2.1     TITLE TO COLLATERAL

                Debtor is the sole owner of, and has good, valid, and marketable
title to, the Collateral, free from all mortgages, pledges, liens, security
interests, hypothecations, assignments, charges, rights, restrictions or
encumbrances (individually an "ENCUMBRANCE" and collectively the "ENCUMBRANCES")
in favor of any person other than Secured Party, except Encumbrances as are
permitted by and in accordance with the Loan Documents (collectively the
"PERMITTED ENCUMBRANCES"), and Debtor has full right and power to grant Secured
Party a lien thereon and a security interest therein.


        2.2     PERFECTED SECURITY INTEREST

                This Security Agreement creates a good and valid lien on and
security interest in the Collateral. Debtor will take all actions necessary to
ensure that such lien will be perfected as a first priority lien on the
Collateral.


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        2.3     BANKRUPTCY MATTERS

                Debtor has not made a general assignment for the benefit of
creditors, filed any voluntary petition in bankruptcy or suffered the filing of
an involuntary petition by its creditors, suffered the appointment of a receiver
to take possession of all or substantially all of its assets, suffered the
attachment or other judicial seizure of all or substantially all of its assets,
admitted its inability to pay its debts as they come due, or made an offer of
settlement, extension or composition to its creditors generally. Debtor is not
insolvent and will not be rendered insolvent by the consummation of the
transactions contemplated hereby or by the Loan Documents.


        2.4     REPRESENTATIONS AND WARRANTIES UNDER THE LOAN AGREEMENT

                The representations and warranties of the Borrower contained in
the Loan Agreement and each of the other Loan Documents are true and correct as
of the date hereof to the same extent as if set forth in full herein.

3.      COVENANTS OF DEBTOR


        3.1     GENERAL COVENANTS RELATING TO COLLATERAL

                Until all of the Secured Obligations have been paid and
performed in full, Debtor hereby covenants that, unless Secured Party otherwise
consents in advance in writing:

                3.1.1   COLLATERAL.

                Debtor shall (a) execute and deliver any and all documents, or
cause the execution and delivery of any and all documents, necessary or, in
Secured Party's reasonable judgment, desirable to create, perfect, preserve,
validate or otherwise protect Secured Party's lien on and security interest in
the Collateral and the priority thereof, (b) maintain, or cause to be
maintained, at all times Secured Party's lien on and security interest in the
Collateral and the priority thereof, (c) promptly upon learning thereof, report
to Secured Party any matters that might materially and adversely affect the
value or enforceability or collectibility of any of the Collateral, (d) defend
the Collateral and Secured Party's interests therein against all claims and
demands of all persons at any time claiming the same or any interest therein
adverse to Secured Party and pay all costs and expenses (including, without
limitation, reasonable attorneys' fees and charges) incurred in connection with
such defense, (e) at Debtor's sole cost and expense, settle any and all such
claims and disputes and indemnify and protect Secured Party against any
liability, loss, cost or expense (including, without limitation, reasonable
attorneys' fees and charges), arising therefrom or out of any matter affecting
any of the Collateral (provided, however, if Secured Party shall so elect after
the occurrence and during the continuation of an Event of Default hereunder,
Secured Party shall have the right at all times to settle, compromise, adjust or
liquidate all claims or disputes directly with any debtor or other obligor of
Debtor upon such terms and conditions as Secured Party reasonably deems
advisable, and to charge all costs and expenses thereof (including, without
limitation, reasonable attorneys' fees and charges) to Debtor's account and to


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add them to the Secured Obligations, whereupon such costs and expenses shall be
and become part of the Secured Obligations).

                3.1.2   NO CHANGE IN PLACES OF BUSINESS OR COLLATERAL.

                Debtor shall (a) maintain its places of business and its
principal office only in the locations set forth in EXHIBIT B attached hereto,
and in such other places as Debtor may select, provided that Debtor shall
provide to Secured Party at least thirty (30) days prior written notice of any
changes in or additions to the locations of Debtor's places of business or of
Debtor's principal office and shall make all filings in the applicable
jurisdictions necessary to maintain Secured Party's lien on and security
interest in the Collateral and the priority thereof in connection with any such
changes or additions, (b) keep, store and maintain the Collateral only at the
foregoing locations, and (c) keep and maintain the records and books of account
relating to the Collateral only at Debtor's principal office or at the Property
to which they relate.

                3.1.3   NO IMPAIRMENT.

                Debtor shall not take or permit to be taken any action in
connection with the Collateral which would impair in any material respect the
value of the interests or rights of Debtor therein or which would impair the
interests or rights of Secured Party therein or with respect thereto.


        3.2     AFFIRMATIVE COVENANTS

                Until all Secured Obligations have been paid and performed in
full, Debtor hereby covenants and agrees that it shall, unless Secured Party
otherwise consents in advance in writing:

                3.2.1   INSURANCE.

                Maintain and keep in full force and effect with Qualified
Insurance Companies, insurance in such amounts and covering such risks as is
required under the Loan Agreement and the Mortgage. Secured Party shall be named
as an additional insured or loss payee, as applicable, with Debtor on all
policies insuring the Collateral or any part thereof, as its interests may
appear, and Debtor hereby assigns to Secured Party all monies payable under such
insurance after the occurrence and during the continuation of an Event of
Default. Debtor directs all insurers of the Collateral to make payment directly
to Secured Party if an Event of Default has occurred and is continuing.

                3.2.2   PERFORMANCE OF CONTRACTUAL OBLIGATIONS.

                Perform in accordance with its terms and conditions, and comply
with all provisions of, each security issued by Debtor and each indenture, note,
lease, commitment, or other agreement, contract, instrument or undertaking to
which Debtor is a party or by which it or any of its property is bound
(including, without limitation, the Mortgage, the Mortgage Note, and all other
agreements or documents referred to herein or therein or contemplated hereby or


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thereby).


        3.3     NEGATIVE COVENANTS

                Until all Secured Obligations have been paid and/or performed in
full, Debtor hereby covenants and agrees that it shall not, unless Secured Party
otherwise consents in advance in writing:

                3.3.1   ENCUMBRANCES.

                Create, incur, assume or suffer to exist any Encumbrance upon
any of its properties, assets or revenues, whether now owned or hereafter
acquired, except: (i) Encumbrances for taxes not yet due and payable or taxes
which are being contested in good faith and by proper proceedings if adequate
reserves with respect thereto are maintained on the books of Debtor in
accordance with generally accepted accounting principles and in accordance with
the terms of the Loan Agreement and the Mortgage; (ii) Encumbrances created
under this Security Agreement; and (iii) Permitted Encumbrances.

                3.3.2   SALE OF ASSETS.

                Sell, lease, assign, pledge, transfer or otherwise dispose of
any of its assets, whether now owned or hereafter acquired, except as permitted
by the Loan Documents, the Mortgage and SECTION 6.5 hereof.

                3.3.3   OTHER AGREEMENTS.

                Enter into any commitment, agreement, or undertaking containing
any provision which would be violated or breached by Debtor's performance of any
of its obligations hereunder or any related agreement.

4.      EVENTS OF DEFAULT

                For purposes of this Security Agreement, the term "EVENT OF
DEFAULT" shall mean the occurrence of any one or more of the following events:


        4.1     REPRESENTATIONS AND WARRANTIES

                Any representation or warranty made by or on behalf of Debtor in
this Security Agreement shall prove to have been incorrect or breached in any
material respect on or as of any date made or deemed made, which failure remains
uncured for a period of thirty (30) days after the receipt of written notice of
such failure; provided, however, that it shall not be an Event of Default if
such failure is curable but is not reasonably susceptible of being cured within
such thirty (30) day period but Debtor promptly commences attempts to cure
within such thirty (30) day period and thereafter diligently pursues such cure
to completion (but in no event later than 


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one hundred eighty (180) days after receipt of such written notice); or


        4.2     MATERIAL BREACH OF COVENANT

                Failure by Debtor to perform or comply in any material respect
with any non-monetary term, covenant or condition imposed in this Security
Agreement, (a) which failure remains uncured for a period of thirty (30) days
after receipt of written notice of such failure, or (b) in the case of any
failure or breach of covenant relating to the maintenance of insurance as
provided herein, which failure remains uncured for a period of ten (10) days
after receipt of written notice of such failure; provided, however, that, in the
case of clause (a), it shall not be an Event of Default if such failure is
curable but it is not reasonably susceptible of being cured within such thirty
(30) day period but Debtor promptly commences to cure within such thirty (30)
day period and thereafter diligently pursues such cure to completion (but in no
event later than one hundred eighty (180) days after receipt of such written
notice); or


        4.3     EVENT OF DEFAULT UNDER THE LOAN AGREEMENT OR OTHER LOAN
DOCUMENTS

                An Event of Default under the Loan Agreement, the Mortgage, or
any other Loan Document shall occur.

5.      RIGHTS AND REMEDIES OF SECURED PARTY


        5.1     MISCELLANEOUS RIGHTS OF SECURED PARTY

                Upon the occurrence and during the continuation of any Event of
Default hereunder, Secured Party shall have the right (a) to declare all of the
monetary Secured Obligations including, without limitation, the obligations of
Debtor under the Mortgage Note, to be immediately due and payable, whereupon all
such Secured Obligations shall become immediately due and payable without
presentment, demand, notice of dishonor, protest or further notice of any kind,
all of which are hereby expressly waived by Debtor, anything contained herein to
the contrary notwithstanding; (b) to exercise any one or more of the rights and
remedies exercisable by Secured Party under any other provisions of this
Security Agreement, or any other related agreement or exercisable by a secured
party under the U.C.C. or under any other applicable law; and (c) to exercise,
in the name of Debtor or in the name of Secured Party, such rights and powers
with respect to the Collateral as Debtor might exercise, including, without
limitation, the right to:

                (i)     enter into any extension, reorganization, deposit,
merger, consolidation or other agreement pertaining to, or deposit, surrender,
accept, hold or apply other property in exchange for, the Collateral or any part
thereof;

                (ii)    insure, process, and preserve the Collateral;


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                (iii)   transfer the Collateral or any part thereof to the name
of Secured Party or to the name of Secured Party's nominee;

                (iv)    receive, open, and dispose of mail addressed to Debtor
relating to the Collateral or any part thereof;

                (v)     collect and endorse, receive, and give receipts for all
dividends, interest, rent, payments, proceeds, and other sums and property now
or hereafter payable on or on account of the Collateral or any part thereof or
on account of its sale or lease;

                (vi)    initiate, pursue, compromise, settle or withdraw any
claims, suits or proceedings pertaining to the Collateral or any part thereof or
to any dividend, interest, rent or other payment on or on account of the
Collateral or any part thereof or on account of its sale or lease;

                (vii)   take possession of and endorse in the name of Debtor or
in the name of Secured Party, for the account of Debtor, any bills of exchange,
checks, drafts, money orders, notes or any other chattel paper, documents or
instruments constituting all or any part of the Collateral or received as a
dividend, interest, rent or other payment on or on account of the Collateral or
any part thereof or on account of its sale or lease;

                (viii)  appoint another (who may be an employee, officer or
other representative of Secured Party) to do any of the foregoing on behalf of
Secured Party; and

                (ix)    take any other action which Secured Party deems
necessary or desirable to protect or realize upon its security interest in the
Collateral or any part thereof, and Debtor hereby irrevocably appoints Secured
Party as Debtor's attorney-in-fact to take any such action, including, without
limitation, the execution and delivery of any and all documents or instruments
related to the Collateral or any part thereof in Debtor's name, and said
appointment shall create in Secured Party a power coupled with an interest which
shall be irrevocable.

provided, that, Secured Party shall have the option of proceeding, to the extent
permitted under applicable law, as to both real and personal property in
accordance with its rights and remedies in respect of the real property under
the Mortgage as an alternative to proceeding in accordance with the provisions
of the U.C.C.

        5.2     RIGHT OF SECURED PARTY TO TAKE POSSESSION AND FORECLOSE

                Upon the occurrence and during the continuation of any Event of
Default, Secured Party shall have the right and power to take possession of the
Collateral and of any and all books of account and records of Debtor relating to
any of the Collateral, the right to place Secured Party's representatives upon
any premises on which the Collateral or any part thereof or any such books of
account or records may be situated with full power to remove the same therefrom,
and the right to exclude Debtor and all persons claiming under Debtor from any
access to the 


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<PAGE>   11
Collateral or to any part thereof, and Secured Party and such representatives
are hereby granted the irrevocable license to enter upon such premises
(including, without limitation, the Properties and all parts thereof) for such
purpose. Secured Party may require Debtor to assemble the Collateral or any part
thereof and to make the same (to the extent the same is moveable) available to
Secured Party at a place to be designated by Secured Party which is reasonably
convenient to Debtor and Secured Party. Secured Party may render the Collateral
or any part thereof unusable without removing the same from the premises on
which it may be situated, and may sell the same on the premises of Debtor if
such Collateral or part thereof is situated thereon. Secured Party may make
formal application for the transfer of all of Debtor's permits, licenses,
approvals, agreements, and the like relating to the Collateral or to Debtor's
business to Secured Party or to any assignee of Secured Party or to any
purchaser of any of the Collateral. Unless the Collateral is perishable or
threatens to decline speedily in value or is of a type customarily sold on a
recognized market, Secured Party will give Debtor at least ten (10) days prior
written notice of the time and place of any public sale thereof or of the time
after which any private sale or any other intended disposition thereof is to be
made, which notice shall constitute reasonable notice (and which notice may be
made in conjunction with the notice of any actions taken or to be taken under
the Mortgage). In addition to exercising the foregoing rights, Secured Party
may, to the extent permitted by law, arrange for and conduct the sale of the
Collateral at a public or private sale, as Secured Party may elect, which sale
may be conducted by an employee or representative of Secured Party and which
sale may, at Secured Party's election, be made contemporaneously with and as
part of any foreclosure or other sale of the Properties or any portion thereof
at which such Collateral is located, pursuant to the Mortgage, and any such sale
shall be considered or deemed to be a sale made in a commercially reasonable
manner. Secured Party may release, temporarily or otherwise, to Debtor any item
of Collateral of which Secured Party has taken possession pursuant to any right
granted to Secured Party by this Security Agreement without waiving any rights
granted to Secured Party under this Security Agreement, the Loan Agreement, the
Mortgage Note, any other Loan Document or any other agreement related hereto or
thereto. Debtor, in dealing with or disposing of the Collateral or any part
thereof, hereby waives all rights, legal and equitable, it may now or hereafter
have to require marshaling of assets or to require, upon foreclosure, sales of
assets in a particular order. Each successor and assign of Debtor, including a
holder of a lien subordinate to the lien created hereby (without implying that
Debtor has, except as expressly provided herein, a right to grant an interest
in, or a subordinate lien on, any of the Property), by acceptance of its
interest or lien agrees that it shall be bound by the above waiver, to the same
extent as if such holder gave the waiver itself. Debtor also hereby waives, to
the full extent it may lawfully do so, the benefit of all laws providing for
rights of appraisal, valuation, stay or extension or of redemption after
foreclosure now or hereafter in force.

        5.3     RIGHT OF SECURED PARTY TO COLLECT AND SERVICE ACCOUNTS

                Upon the occurrence and during the continuation of any Event of
Default, Secured Party may notify or may require Debtor to notify any person or
entity obligated to Debtor under any account forming all or any part of the
Collateral, whether now existing or hereafter acquired, that the same has been
assigned to Secured Party and that such obligor should make payment or
performance of its obligations under such account directly to Secured Party, and
Secured Party 


                                     - 11 -
<PAGE>   12
may take possession of and exercise control over all proceeds of any such
account in Debtor's possession or otherwise, and may take any other action which
Secured Party deems necessary or desirable to collect any such account or the
proceeds thereof. To evidence Secured Party's rights hereunder, Debtor shall, at
Debtor's expense, execute such assignments or endorsements of any such account,
or of the proceeds thereof, as Secured Party may request.


        5.4     RIGHT OF SECURED PARTY TO USE AND OPERATE COLLATERAL

                Upon Secured Party's taking possession of all or any part of the
Collateral, pursuant to any right granted Secured Party by this Security
Agreement or otherwise, Secured Party shall have the right to hold, store,
and/or use, operate, manage, and control the same. Upon any such taking of
possession, Secured Party may (but shall not be obligated to), from time to
time, at the expense of Debtor, make all such repairs, replacements,
alterations, additions, and improvements to and of all or any of the Collateral
as Secured Party may deem proper. In any such case Secured Party shall have the
right to exercise all rights and powers of Debtor in respect of the Collateral
or any part thereof as Secured Party shall deem proper, including the right to
enter into any and all such agreements with respect to the leasing and/or
operation of the Collateral or any part thereof as Secured Party may see fit;
and Secured Party shall be entitled to collect and receive all rents, issues,
profits, fees, revenues, and other income of the same and every part thereof.


        5.5     APPLICATION OF PROCEEDS

                All dividends, interest, rents, issues, profits, fees, revenues,
income, and other proceeds from collecting, holding, managing, renting, selling
or otherwise disposing of the Collateral by Secured Party or any part thereof
shall be applied by Secured Party in the order described in SECTION 2.4.5 of the
Loan Agreement.


        5.6     RIGHT OF SECURED PARTY TO APPOINT RECEIVER

                Upon the occurrence and during the continuation of any Event of
Default, Secured Party shall, as a matter of right and without any requirement
of notice, to the extent permitted under applicable law, be entitled to appoint
a receiver for all of any part of the Property, whether such receivership be
incidental to a proposed sale of the Property or otherwise. All disbursements
made by the receiver under this SECTION 5.6 and the expenses of receivership
shall be added to and be a part of the Secured Obligations, and, whether or not
said principal sum, including such disbursements and expenses, exceeds the
indebtedness originally intended to be secured hereby, the entire amount of said
sum, including such disbursements and expenses, shall be secured by this
Security Agreement and shall be due and payable upon demand therefor and
thereafter shall bear interest at the Default Interest Rate.


        5.7     REMEDIES CUMULATIVE

                The rights and remedies of Secured Party under the Mortgage, the
Loan 


                                     - 12 -
<PAGE>   13
Agreement, this Security Agreement, or any other related agreement are
cumulative and shall in no way affect, or deprive Secured Party of, or be deemed
to constitute a waiver by Secured Party of, any other rights or remedies allowed
to the party at law or in equity. No notice to or demand on Debtor in any case
shall entitle Debtor to any other notice or demand in similar or other
circumstances and the exercise of any one remedy shall not impair Secured
Party's right simultaneously or at any time or in any order to exercise any
other remedy nor shall the exercise of any remedy in one case impair or
otherwise affect Secured Party's right or ability to exercise such remedy
contemporaneously or again in the same case or in any other case.


        5.8     WAIVER OF RIGHTS

                To the extent permitted under applicable law, Debtor waives all
rights and remedies of a debtor under the U.C.C. or other applicable law, and
all formalities prescribed by law relative to the sale or disposition of the
Collateral (other than notice of sale) after the occurrence and during the
continuation of an Event of Default and all other rights and remedies of Debtor
with respect thereto. In exercising its right to take possession of the
Collateral upon the occurrence and during the continuation of an Event of
Default hereunder, Secured Party, personally or by its agents or attorneys, and
subject to the rights of any tenant under any lease or sublease of the Property,
to the fullest extent permitted by law, may enter upon any part of the Land
without being guilty of trespass or any wrongdoing, and without liability for
damages thereby occasioned. In the event Secured Party elects to proceed with
respect to the Collateral, separately from the real property, Secured Party
shall give at least ten (10) days notice of the sale of the Collateral, which
shall for all purposes be deemed to be commercially reasonable.

6.      MISCELLANEOUS PROVISIONS


        6.1     ADDITIONAL ACTIONS AND DOCUMENTS

                Debtor hereby agrees to take or cause to be taken such further
actions, to execute, deliver, and file or cause to be executed, delivered, and
filed such further documents and instruments, and to obtain such consents, as
may be necessary or as may be reasonably requested in order to fully effectuate
the purposes, terms, and conditions of, and the remedies set forth in, this
Security Agreement, whether before, at, or after the occurrence of an Event of
Default hereunder.


        6.2     EXPENSES

                Debtor agrees to reimburse and save Secured Party harmless
against liability for the payment of all out-of-pocket expenses arising in
connection with the administration or enforcement of, or the preservation or
exercise of, any rights (including the right to collect and dispose of the
Collateral) under, this Security Agreement, including, without limitation, the
reasonable fees and other charges of counsel to Secured Party arising in such
connection, and all 


                                     - 13 -
<PAGE>   14
such fees and other charges shall be added to Debtor's obligations secured
hereby.


        6.3     NOTICES

                All notices, demands, requests, or other communications which
may be or are required to be given, served or sent by any party to any other
party pursuant to this Security Agreement shall be in writing and shall be
deemed to have been given when received by the addressee or upon refusal of the
addressee to accept delivery or upon failure of delivery due to change of
address or telecopy number other than in accordance with this SECTION 6.3. All
such notices, demands, requests, or other communications shall be delivered by
hand or by telecopy or mailed or delivered by registered or certified mail,
return receipt requested, postage prepaid, or by reputable,
nationally-recognized overnight courier, delivery charges prepaid, and addressed
or directed as follows:

                IF TO SECURED PARTY:

                           Lehman Brothers Realty Corporation
                           Three World Financial Center
                           200 Vesey Street
                           New York, New York 10285
                           Attn.:  Commercial Loan Surveillance
                           Telecopy:  (212) 528-6659

                IF TO DEBTOR:

                           Arden Realty Finance III, L.L.C.
                           11601 Wilshire Boulevard
                           Suite 401
                           Los Angeles, California 90025
                           Attn.:  Diana M. Laing


        6.4     WAIVER OF RIGHT TO JUDICIAL HEARING; JURY

                DEBTOR HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A JUDICIAL HEARING
PRIOR TO THE EXERCISE OF ANY RIGHT OR REMEDY PROVIDED TO SECURED PARTY UNDER
THIS SECURITY AGREEMENT, AND WAIVES ITS RIGHTS, IF ANY, TO SET ASIDE OR
INVALIDATE ANY SALE DULY CONSUMMATED IN ACCORDANCE WITH THE FOREGOING PROVISIONS
HEREOF ON THE GROUNDS (IF SUCH BE THE CASE) THAT THE SALE WAS CONSUMMATED
WITHOUT A PRIOR JUDICIAL HEARING. DEBTOR HEREBY COVENANTS AND AGREES NOT TO
ELECT TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHTS
TO TRIAL BY JURY TO THE FULL EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST. DEBTOR'S WAIVERS, COVENANTS AND


                                     - 14 -
<PAGE>   15
AGREEMENTS UNDER THIS SECTION 6.4 HAVE BEEN MADE VOLUNTARILY AND KNOWINGLY
AND AFTER DEBTOR HAS BEEN APPRISED AND COUNSELED BY ITS ATTORNEYS AS TO THE
NATURE OF SUCH RIGHTS AND AS TO DEBTOR'S POSSIBLE ALTERNATIVE RIGHTS.


        6.5     TRANSFER OF COLLATERAL

                (1)     Debtor hereby agrees that it will not sell, lease,
assign, transfer or otherwise dispose of any of the Collateral except as
permitted under the Loan Agreement. Debtor shall have the right, at any time and
from time to time, to sell, lease, assign, transfer or otherwise dispose of any
Collateral as and to the extent that such sale, lease, assignment, transfer or
other disposition is permitted by the Loan Agreement.

                (2)     No formal release by Secured Party shall be required in
connection with the disposition of any Collateral in accordance with this
SECTION 6.5. Nevertheless, if any purchaser of such Collateral or Debtor should
desire a release or other quitclaim from Secured Party in order to clear the
record title of such Collateral, Secured Party shall, at Debtor's expense and
promptly after receiving a written request from Debtor, execute an appropriate
release or such other instruments as may be reasonably required to evidence that
this Security Agreement does not constitute a lien on such Collateral.

                (3)     No release by any party of the Collateral pursuant to
this SECTION 6.5 shall in any way alter, vary or diminish the security of the
Collateral.


        6.6     RELEASE AND SATISFACTION

                Upon the termination of this Security Agreement and the payment
and performance in full of the Secured Obligations, (i) the security interest
created hereby shall terminate, (ii) upon written request of Debtor, Secured
Party shall execute and deliver to Debtor, at Debtor's expense, releases and
satisfactions of all financing statements, mortgages, notices of assignment and
other registrations of security, and Debtor shall deliver to Secured Party a
general release of all of Secured Party's liabilities and obligations under all
Loan Documents and an acknowledgment that the same have been terminated.


        6.7     BENEFIT

                This Security Agreement shall be binding upon, and shall inure
to the benefit of, the parties hereto and their respective successors, legal
representatives and assigns.


        6.8     ASSIGNMENT TO TRUST

                Debtor acknowledges and agrees that in connection with the
Securitization contemplated by SECTION 9 of the Loan Agreement, this Security
Agreement, together with the other Loan Documents, may be assigned, along with
mortgage loans made to other borrowers, to, 


                                     - 15 -
<PAGE>   16
among others, an institutional trustee (the "TRUSTEE"), as trustee under a
pooling and servicing agreement (the "POOLING AND SERVICING AGREEMENT"), and,
pursuant to the Pooling and Servicing Agreement, a professional loan servicer of
recognized standing (the "SERVICER") would be appointed to service the Loan,
this Security Agreement and the Loan Documents as provided therein. Upon such
assignment, the Trustee shall for all purposes be Secured Party hereunder (and
all references herein to the Secured Party shall be deemed to refer to the
Trustee). The Trustee, together with the Servicer, shall, among other things,
(i) have the sole and exclusive benefit of and the right and power to exercise,
or to direct the exercise of, all the rights and remedies of Secured Party
hereunder, including, without limitation, the right to inspect the Collateral,
to receive notices and financial information, to grant or withhold consents or
approvals, to benefit from indemnities, to receive, hold and apply proceeds or
any other amount or property provided by Debtor hereunder, and, upon the
occurrence and during the continuation of an Event of Default, to take any
action required or permitted of Secured Party, all in the Trustee's own name,
and to exercise all other rights and remedies of Secured Party hereunder and
under the Security Documents and (ii) be bound by all the terms hereof which
apply to Secured Party. Debtor hereby acknowledges the foregoing and agrees to
be bound to the Trustee, upon such assignment, recognizing the Trustee as
Secured Party hereunder as if the Trustee were named in this Security Agreement
as Secured Party, recognizing that the Servicer shall be entitled to act on
behalf of the Trustee and the Holders under and as provided in the Pooling and
Servicing Agreement and shall be entitled to and shall receive all notices,
financial and other information, agreements and other documents to be delivered
to Secured Party or the Trustee hereunder and accepting and agreeing to all of
the terms set forth in the Pooling and Servicing Agreement and the exhibits
thereto, all of which shall be secured under the Security Documents. Upon such
assignment, Debtor's obligations to the Secured Party specified in this Security
Agreement shall be satisfied by Debtor's tendering full and timely payment or
performance thereof to the Trustee or, if directed by the Trustee, to the
Servicer. With respect to the delivery of documents and other written material,
the Trustee and the Servicer shall have only the obligations expressly required
of Secured Party herein or in the other Loan Documents or of the Trustee or the
Servicer in the Pooling and Servicing Agreement. All rights and remedies of the
Trustee as Secured Party hereunder, including all indemnities running to Secured
Party, shall also operate for the benefit of the Servicer and the Holders as
provided in the Pooling and Servicing Agreement and shall be exercised by the
Trustee and the Servicer in accordance with and subject to the terms and
conditions set forth in the Pooling and Servicing Agreement. The Debtor
acknowledges and agrees that, until the Debtor has received notice to the
contrary from the Trustee, all deliveries and notifications to be made by the
Debtor to the Trustee pursuant to this Security Agreement or any other Loan
Document, shall be made to the Servicer only and not to the Trustee.


        6.9     MODIFICATION; DISCHARGE; AND WAIVER

                No amendment, modification or discharge of this Security
Agreement or waiver hereunder shall be valid or binding unless set forth in
writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought.


                                     - 16 -
<PAGE>   17
        6.10    PRONOUNS

                All pronouns and any variations thereof in this Security
Agreement shall be deemed to refer to the masculine, feminine, neuter, singular,
or plural, as the identity of the person or entity may require.


        6.11    HEADINGS

                Section and subsection headings contained in this Security
Agreement are inserted for convenience of reference only, shall not be deemed to
be a part of this Security Agreement for any purpose, and shall not in any way
define or affect the meaning, construction or scope of any of the provisions
hereof.


        6.12    GOVERNING LAW

                This Security Agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto, shall be governed
by and construed in accordance with the laws of the State of New York (but not
including the choice of law rules thereof).


        6.13    FILING

                A photographic or other copy of this Security Agreement may be
filed in lieu of a financing statement.


        6.14    COUNTERPARTS

                This Security Agreement may be executed in separate
counterparts, none of which need contain the signatures of all parties, each of
which shall be deemed to be an original and all of which taken together shall
constitute one and the same instrument. It shall not be necessary in making
proof of this Security Agreement to produce or account for more than the number
of counterparts containing the respective signatures of, or on behalf of, all of
the parties hereto. In the event the parties hereto exchange signature pages of
this Security Agreement by facsimile, they agree to send the original executed
counterparts of this Security Agreement to one another by overnight delivery
service. 

7.      DEFINITIONS


        7.1     DEFINED TERMS

                The following terms, as used herein, shall have the following
respective meanings (and capitalized terms used herein but not defined herein
shall have the meanings ascribed to them in the Loan Agreement):

                "AWARDS" shall have the meaning ascribed to it in the Mortgage.


                                     - 17 -
<PAGE>   18
                "CASH COLLATERAL ACCOUNT" shall have the meaning ascribed to it
in the Loan Agreement.

                "COLLATERAL" shall have the meaning set forth in SECTION 1.1
hereof.

                "CONTRIBUTION AGREEMENT" shall have the meaning ascribed to it
in the Loan Agreement.

                "DEFAULT INTEREST RATE" shall have the meaning ascribed to it in
the Loan Agreement.

                "DEFEASED NOTE" shall have the meaning ascribed to it in SECTION
2.5(a)(v) of the Loan Agreement.

                "ENCUMBRANCE" shall have the meaning set forth in SECTION 2.1
hereof.

                "EVENT OF DEFAULT" shall have the meaning set forth in ARTICLE 5
hereof.

                "FIXTURES" shall have the meaning set forth in SECTION 1.1(1)
hereof.

                "IMPROVEMENTS" shall have the meaning ascribed to it in the Loan
Agreement.

                "INSURANCE PROCEEDS" shall have the meaning ascribed to it in
the Mortgage.

                "LAND" shall have the meaning ascribed to it in the Loan
Agreement.

                "LEASES AND CONTRACTS" shall have the meaning set forth in
SECTION 1.1(4) hereof.

                "LOAN AGREEMENT" shall have the meaning ascribed to it in the
recitals to this Agreement.

                "LOAN DOCUMENTS" shall have the meaning ascribed to it in the
Loan Agreement.

                "LOCKBOX ACCOUNT" shall have the meaning ascribed to such term
in the Loan Agreement.

                "MANAGEMENT AGREEMENT" shall have the meaning ascribed to it in
the Loan Agreement.

                "MORTGAGE" shall have the meaning ascribed to it in the Loan
Agreement.

                "MORTGAGE NOTE" shall have the meaning ascribed to it in the
recitals to this 


                                     - 18 -
<PAGE>   19
Agreement; provided, however that if the principal amount of such promissory
note shall be divided at any time into one or more Defeased Notes and one or
more Undefeased Notes pursuant to SECTION 2.5(a)(v) of the Loan Agreement,
"Mortgage Note" shall mean, collectively, all such Undefeased Note(s) and
Defeased Note(s).

                "MORTGAGE TRUSTEE" means the "Trustee" as defined in the
Mortgage.

                "PERMITTED ENCUMBRANCES" shall have the meaning set forth in
SECTION 2.1 hereof.

                "PERMITTED INVESTMENTS" shall have the meaning ascribed to it in
the Loan Agreement.

                "POOLING AND SERVICING AGREEMENT" shall have the meaning set
forth in SECTION 6.8 hereof.

                "PROPERTY" and "PROPERTIES" shall have the meaning ascribed to
it in the recitals to this Agreement.

                "QUALIFIED INSURANCE COMPANIES" shall have the meaning ascribed
to it in the Loan Agreement.

                "RENTS AND REVENUES" shall have the meaning set forth in SECTION
1.1(4) hereof.

                "SECURED OBLIGATIONS" shall have the meaning set forth in
SECTION 1.1 hereof.

                "SECURITIZATION" shall have the meaning ascribed to it in the
Loan Agreement.

                "SECURITY DOCUMENTS" shall have the meaning ascribed to it in
the Loan Agreement.

                "SERVICER" shall have the meaning set forth in SECTION 6.8
hereof.

                "TAKING" shall have the meaning ascribed to it in the Mortgage.

                "TI RESERVE ACCOUNT" shall have the meaning ascribed to such
term in the Loan Agreement.

                "TITLE INSURANCE POLICIES" shall have the meaning ascribed to it
in the Loan Agreement.

                "TRUSTEE" shall have the meaning set forth in SECTION 6.8
hereof.

                "U.C.C." means (i) the Uniform Commercial Code as in effect in
the State of 


                                     - 19 -
<PAGE>   20
New York and (ii) "Revised Article 8" as such term is defined in 31 CFR Section
357.2, as adopted in any state as to which the United States Department of the
Treasury has published in the Federal Register a notice indicating that it has
concluded that 31 CFR Sections 357.10(c) and 357.11(d) are no longer applicable.

                "UNDEFEASED NOTE" shall have the meaning ascribed to it in
SECTION 2.5(a)(v) of the Loan Agreement.

                           [SIGNATURE PAGE TO FOLLOW]


                                     - 20 -
<PAGE>   21
                IN WITNESS WHEREOF, each of the parties hereto has caused this
Security Agreement to be duly executed and delivered in its name and on its
behalf, all as of the day and year first above written.

                                       DEBTOR:

                                       ARDEN REALTY FINANCE III, L.L.C.


                                       By:
                                       Name:
                                       Title:

                                       SECURED PARTY:

                                       LEHMAN BROTHERS REALTY CORPORATION


                                       By:
                                       Name:
                                       Title:


<PAGE>   22
                                                                    EXHIBIT B TO
                                                              SECURITY AGREEMENT


                                     OFFICES


Debtor's principal place of business is located at:
                                    11601 Wilshire Boulevard
                                    Fourth Floor
                                    Los Angeles, California  90025

Debtor also maintains offices or does business at the following locations:
                                    See Exhibit B-1 attached hereto

Debtor keeps and maintains the Collateral only at the above locations or at the
following locations (if none, indicate "None"):

                                      NONE