U.S. Securities and Exchange Commission
                             Washington, D.C. 20549


                                 FORM 10-KSB/A-1

(Mark One)
            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2000

             [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
             For the transition period from __________ to __________

                         Commission file number 1-14462

                            AmeriVest Properties Inc
                            ------------------------
                 (Name of small business issuer in its charter)

         Maryland                                               84-1240264
--------------------------------------------------------------------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

1780 South Bellaire Street, Suite 515, Denver, Colorado            80222
--------------------------------------------------------------------------------
(Address of principal executive offices)                        (Zip Code)

Issuer's telephone number (303) 297-1800
--------------------------------------------------------------------------------

         Securities registered under Section 12(b) of the Exchange Act:

                          Common Stock, $.001 par value
                          -----------------------------
                                 Title of class

         Securities registered under Section 12(g) of the Exchange Act:

                                      None
                                      ----
                                 Title of class

     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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

     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to be the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

     The issuer's revenues for its most recent fiscal year were: $ 7,222,437

     The aggregate market value of the issuer's voting common stock held by
non-affiliates of the issuer as of March 29, 2001 was $13,226,565 (computed on
the basis of $ 5.74 per share which was the reported closing sale price of the
issuer's common stock on the American Stock Exchange on March 30, 2001). Without
asserting that any director or executive officer of the issuer is an affiliate,
the shares of which they are beneficial owners have been deemed to be owned by
affiliates solely for this calculation.

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

     The number of shares outstanding of the issuer's common stock as of March
30, 2001 was 3,171,381

     Portions of the proxy statement regarding the 2001 annual meeting of the
registrant's stockholders are incorporated by reference into Part III of this
Annual Report on Form 10-KSB.

     Transitional Small Business Disclosure Format (check one): Yes   No X

<PAGE>


                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

Overview

     AmeriVest Properties Inc. was incorporated in 1993 in the State of Delaware
and was reincorporated in 1999 in the State of Maryland. We operate and intend
to continue to operate in a manner so that we qualify as a real estate
investment trust ("REIT"). Through our subsidiaries, we own a variety of
income-producing properties focused on small to mid size tenants, including 22
office properties in Colorado, Texas, Indiana and Wisconsin.

     All properties are managed under an agreement with Sheridan Realty
Advisors, LLC, which also manages our day-to-day operations and assists and
advises our Board of Directors on real estate acquisitions and investment
opportunities. Sheridan Realty Advisors receives an administrative fee and a
property management and accounting fee for these services. In addition, Sheridan
Realty Advisors receives incentive compensation in the form of warrants to
purchase up to 750,000 shares of our common stock at $5 per share through
December 2005 that vest based on meeting certain conditions and an advisory fee
based on new real property acquisitions. As of December 31, 2000, Sheridan
Realty Advisors had received $565,642 in cash compensation and has had
approximately 274,000 warrants vest under its agreement with us.

     Since 1999, we have focused our efforts on specializing in multi-tenant
office buildings with an average tenant size of between 2,500 and 3,000 square
feet in selected markets. Since 1990, the principals of Sheridan have operated
almost exclusively in this property type and we believe focusing our efforts on
these properties will generate higher returns to our stockholders than investing
in office buildings without this focus.

Business Strategy

Focus on Multi-Tenant Office Buildings in Target Growth Cities

     After the acquisition of the Keystone Buildings and the addition of two
Sheridan principals to our Board in 1999, we evaluated our existing real estate
portfolio and elected to refocus our efforts on the acquisition and development
of multi-tenant office buildings with an average tenant size of between 2,500
and 3,000 square feet in certain select cities. In addition, we elected to
pursue the sale of our non-office assets, which at the time included one
industrial and four self-storage properties. As of December 31, 2000, all our
remaining assets are office buildings.

     The Case for an Office Focus

     We believe the public equity markets for REITs reward a strongly focused
strategy and that the office sector receives a relatively higher valuation than
do other property types. We believe the reason for this is that the demand for
office space has continued to grow as the economy has transitioned from
manufacturing to service businesses. We believe that demand will continue in our
target markets. Though much has been written recently about the "New Economy"
characterized by information technology, in fact this transition to a
knowledge-based economy has occurred steadily since the turn of the century.
According to Cognetics, Inc., a leading research firm in the area of economic
change and new company formation, the percentage of "white collar"/service
employment rose from 27% in 1900 to 71% in 1995.

                                       2
<PAGE>


     The Case for Small Tenants

     Within the growing office sector, we believe that a niche focus on
properties with small average tenant sizes is appropriate due to the strongly
positive "corporate demographics" of small firms. According to data compiled by
Cognetics, there were more than eight million companies in the U.S. economy in
1997. Fully 98% of these firms employ fewer than 100 employees, and this 98% now
employs almost 50% of all workers. Assuming each office worker occupies the
national average of 150 square feet, most firms require less than 15,000 square
feet of office space. In fact, this research further reveals that 90% of all
firms employ fewer than 20 employees, indicating an average office space
requirement of no more than 3,000 square feet.

     The two frequently cited concerns about the small and mid-sized tenant
office market are its perceived high level of credit risk and its management
intensity. As explained below, we have found that both these concerns are
overstated, and can be addressed by proper staffing and management systems
tailored to this tenant base. These perceived risks are higher than the actual
risks and hence we believe that they provide an effective barrier to entry for
competition and an attractive "expertise-arbitrage" opportunity for us.

     Regarding credit risk, we maintain a high level of credit quality in our
largest office buildings through accounting and collection systems that flag any
late payments and rigorously impose late payment penalty charges. Eviction
action is quickly taken if a tenant does not make timely lease payments. These
control systems are centralized in our Denver headquarters, and monitored by an
experienced accounting staff with many years of service with Sheridan, our
advisor. We believe that we can maintain and improve this high level of credit
quality in all our properties.

     Our experience has shown that the issue of management intensity is largely
a matter of mind-set. Middle market tenants are viewed as problematic primarily
because most property managers are accustomed to giving priority to the large
users. With our deliberate focus on small to mid-size users, we bring a
positive, service-oriented mentality to our tenants.

     Our largest buildings (Sheridan Center, Keystone and Sheridan Plaza) staff
an on-site "Tenant Relations Manager" whose job description is to interface
regularly with all tenants and maximize tenant retention. There also is a
building engineer assigned to these properties to deal with physical
maintenance. The Tenant Relations Manager, unlike a conventional property
manager, does not have responsibility for the physical operation of a building,
but rather is solely dedicated to tenant issues with a singular focus on tenant
retention. The Tenant Relations Manager personifies our service-oriented
mentality and is available to resolve minor tenant service complaints before
they fester into major issues.

     Our Tenant Relations Managers report directly to a senior manager in the
Denver headquarters, providing direct and regular feedback on tenant concerns.
We believe that as we acquire additional buildings of a size sufficient to
support a Tenant Relations Manager, we will improve our tenant retention rates
over those of our competitors. Over time, we believe that smaller tenants
actually are less demanding than large tenants, who use their economic leverage
not only in initial lease negotiations but throughout their tenancy as well.


AmeriVest Growth Cities

     Within the niche of multi-tenant properties with smaller average tenant
size, we have elected to narrow our focus even further by restricting
acquisition or development activities to institutionally-sized product

                                       3
<PAGE>


(generally a building or project containing 100,000 square feet, unless adding
to an existing metropolitan portfolio) within certain target cities where we
hope to build meaningful multi-property portfolios over the short and medium
term. In order to employ our management resources in the most efficient manner,
these target cities were selected to be within a two-hour travel radius by air
from our Denver headquarters. The target cities also had to be large enough in
total office square footage to offer the possibility of multiple acquisitions
and liquidity in the event of a desired sale and had to have a high
concentration of firms of fewer than 20 employees as derived from the Cognetics
data discussed previously. Using a minimum of 45 million square feet of total
office space (this number includes both single-tenant and multi-tenant
properties), and at least 89% of firms fewer than 20 employees, the top ten
cities (ranked in order of projected ten-year growth) within our targeted
geographic range are as follows:

                               1.  Phoenix
                               2.  Salt Lake City
                               3.  San Francisco
                               4.  San Diego
                               5.  Denver
                               6.  Minneapolis
                               7.  San Antonio
                               8.  Indianapolis
                               9.  Dallas
                               10. Houston

     The geographic logic of these proposed cities is strong. Sheridan has
experience owning and managing properties in both Phoenix and Dallas, as well as
its current activities in Denver and Indianapolis. We already have a large
existing portfolio of buildings in Texas that will be complemented by a focus on
the three largest cities in the state. Interestingly, all ten of our targeted
cities score in the upper half of the 1999 edition of the "Momentum Index",
developed by the consulting firm of Landauer Real Estate Counselors to measure
the quality and sustained growth prospects of the 66 largest office markets
nationwide. Initially we intend to focus our acquisition efforts on the Denver,
Phoenix and Indianapolis markets.

Operating Performance and Stockholder Return

     Since 1997 (our first full year as a public company), our average annual
total return to stockholders has been more than 20%. The following table
compares our total return based on stock price appreciation and reinvestment of
all dividends with the Industry and the S&P 500, as reported by Morningstar.

                         Total Return * to Stockholders
--------------------------------------------------------------------------------
                               AmeriVest %      Industry %        S & P 500 %
--------------------------------------------------------------------------------
1 Year  (2000)                    18.1             12.2              -9.1
2 Year Avg.  (1999-2000)          21.6              4.2               6.0
3 Year Avg.  (1998-2000)          14.4             -2.2              13.5
4 Year Avg.  (1997-2000)          21.7              4.8              18.5
Beta **                           0.33              N/A              1.00
--------------------------------------------------------------------------------
Source: Morningstar, Inc. (Morningstar.com) as of 12/31/00

*    Total return based on stock price appreciation and reinvestment of all
     dividends.
**   Beta as reported by Bloomberg.com as of 3/28/01. (Beta is a measure of a
     stock's volatility in relation to market volatility.)

                                       4
<PAGE>


     We believe that by focusing on a specific property type in cities with a
growing small tenant market, we should be able to increase our revenues, our
earnings, and our funds from operations (FFO). Although there is no assurance or
guarantee, it is our intention that growth in our revenues, earnings and FFO
will, over the long term, result in an increase in our stock price and the total
return to our stockholders.

Equity Offerings

     In October 1996, we sold an aggregate of 1,098,870 shares of common stock
and 549,435 common stock purchase warrants in our initial public offering. The
aggregate gross proceeds from the offering were approximately $5.5 million and
the net proceeds to us were approximately $4.5 million. The warrants issued in
this offering expired in November 2000 with none having been exercised.

     In 1997 and 1998, we issued an aggregate of 55,200 shares of common stock
as consideration for the acquisition of three office buildings in Texas. In 1998
and 1999, we issued an additional 249,187 shares of common stock (valued at
$4.50 and $5.00 per share) as consideration for the acquisition of 15 more
office buildings in Texas.

     In 1999, we issued an additional 541,593 common shares valued at $4.75 per
share as consideration for the acquisition of the Keystone Buildings.

     In July and August 2000, we issued an aggregate of 600,000 shares of common
stock and 300,000 warrants in a secondary public offering. The aggregate gross
proceeds from the offering were $3.0 million and net proceeds of approximately
$2.93 million were used to acquire additional real estate properties, repay debt
and increase working capital. The warrants are exercisable for $5.00 per share
until July 10, 2005. In March 2001, 177,442 of these warrants were exercised.

     In September 2000, we issued 131,784 shares and 65,892 warrants valued at
$658,918 as consideration for the acquisition of a 9.639% limited liability
company interest in Sheridan Investments, LLC discussed below.

     In December 2000, we issued 16,305 shares valued at $79,376 ($4.87 per
share) as consideration for the acquisition of a key man life insurance policy
on our Chairman and Chief Executive Officer.

     Since January 2001, we have issued an additional 177,442 shares of our
common stock upon conversion of certain warrants issued in the 2000 public
offering and 17,000 shares of our common stock upon exercise of stock options by
a former director and a former employee.


     We have entered into a letter of intent concerning a proposed public
offering of approximately $10 million of our common stock, with an over
allotment option for the underwriter to purchase up to an additional $1.5
million of common stock for a period of 30 days after the offering at a price
equal to the public offering price less commissions and discounts. We anticipate
that the offering will occur in the second quarter of 2001. The letter of intent
is not binding and there is no assurance that the offering will occur. This
statement shall not constitute an offer of any of these securities for sale. The
offering will be made only pursuant to a registration statement and prospectus
filed with the U.S. Securities And Exchange Commission (the "SEC") in accordance
with applicable securities laws.


Recent Acquisitions

     On August 12, 1999, we completed the acquisition of three office buildings,
known as the Keystone Buildings, located in suburban Indianapolis, Indiana. The
Keystone Buildings contain a total of 95,86236 square feet of rentable space.
The total purchase price for the Keystone Buildings was $7,944,000, which we
paid by assuming approximately $5,255,000 of existing debt and $116,400 of
related escrow balances on the properties and issuing 541,593 shares of our
common stock at $4.75 per share. In conjunction with the assumption of the debt,
we also agreed to indemnify the original guarantors of this debt if we fail to
repay it. See "Item 2. Properties--Description of Specific Properties-- Keystone
Office Buildings" below.

     On December 13, 1999, we sold our industrial office and showroom building
in Denver, Colorado for $2.1 million, resulting in a gain on the sale of the
property of approximately $737,000. We reinvested approximately $514,000 in net
proceeds from this transaction in a tax-deferred exchange under Section 1031 of
the Internal Revenue Code on May 25, 2000, purchasing a 62,000 square foot
three-story office building on six acres of land in Arapahoe County, Colorado
known as Panorama Falls for $5.9 million. See "Item 2. Properties--Description
of Specific Properties--Panorama Falls Building" below.

                                       5
<PAGE>


     On August 25 2000, we sold our four self-storage facilities located in
Denver for $8.4 million, resulting in a gain on sale of approximately $2.5
million. The net proceeds from this sale of approximately $1.8 million together
with mortgage financing and offering proceeds were used to complete an IRS
Section 1031 exchange for three office buildings in southeast Denver, Colorado,
which were purchased on August 31, 2000 for $9.6 million. See "Item 2.
Properties--Description of Specific Properties--Sheridan Center" below.

     On September 29, 2000, we purchased a 9.639% preferred limited liability
company membership interest in Sheridan Investments, LLC, the sole owner of
Sheridan Plaza at Inverness, LLC, which owns two office buildings in Englewood,
Colorado, containing approximately 119,000 square feet and located on
approximately 6.7 acres of land. The aggregate purchase price for the interest
was $658,918, which we paid by issuing 131,784 shares of common stock and 65,892
common stock purchase warrants at $5 per share. See "Item 2.
Properties--Description of Specific Properties--Sheridan Plaza at Inverness"
below.

Disclosure Regarding Forward-Looking Statements And Cautionary Statements

     Forward Looking Statements. This annual report includes "forward-looking
statements" within the meaning of Section 21E of the Exchange Act and Section
27A of the Securities Act. All statements other than statements of historical
facts included in or incorporated into this annual report regarding our
financial position, business strategy, plans and objectives of management for
future operations and capital expenditures are forward-looking statements.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we can give no assurance that such expectations and
assumptions will prove to have been correct.

     Additional statements concerning important factors that could cause actual
results to differ materially from our expectations ("Cautionary Statements") are
disclosed below in this annual report. All written and oral forward-looking
statements attributable to us or persons acting on our behalf subsequent to the
date of this annual report are expressly qualified in their entirety by the
Cautionary Statements.

     Cautionary Statements. In addition to the other information contained in
this annual report, the following Cautionary Statements should be considered
when evaluating the forward-looking statements contained in this annual report:

Real estate investments are inherently risky.

     Real estate investments are subject to varying degrees of risk. The yields
available from equity investments in real estate depend on the amount of income
and capital appreciation generated by the properties held by the entity in which
the investment is made. If we acquire properties and they do not generate
sufficient operating cash flow to meet operating expenses, including debt
service, capital expenditures and tenant improvements, our income and ability to
pay dividends to our stockholders will be adversely affected. Income from
properties may be adversely affected by the general economic climate, local
conditions, the attractiveness of properties to tenants, zoning or other
regulatory restrictions, competition from other office buildings, and our
inability to control certain operating costs, including site maintenance,
insurance premiums and real estate taxes. Income from properties and real estate
values also are affected by such factors as applicable laws, including tax laws,
interest rate levels and the availability of financing.

                                       6
<PAGE>


Real estate development and rehabilitation is inherently risky.

     Real estate development and rehabilitation is subject to other risks,
including the following:

     o    the risks of difficult and complicated construction projects,
     o    the risks related to the use of contractors and subcontractors to
          perform all construction activities,
     o    the risk of development delays, unanticipated increases in
          construction costs, environmental issues and regulatory approvals, and
     o    financial risks relating to financing and construction loan
          difficulties.

Additionally, the time frame required for development, construction and lease-up
of these properties means that we might have to wait a few years for a
significant cash return. Because we are required to make cash distributions to
investors, if the cash flow from operations or refinancing is not sufficient, we
may be forced to borrow to fund such distributions.

We face a strong competitive market.

     The commercial real estate industry is highly competitive, and we compete
with substantially larger companies, including substantially larger REITs, for
the acquisition, development and operation of properties. Some of these
companies are national or regional operators with far greater resources than
ours. The presence of these competitors may be a significant impediment to the
continuation and development of our business.

Our debt level may have a negative impact on our income and asset value.

     We have incurred indebtedness in connection with the acquisition of our
properties and we may incur new indebtedness in the future in connection with
our acquisition, development and operating activities. As a result of our use of
debt, we will be subject to the risks normally associated with debt financing.
The required payments on mortgages and on other indebtedness are not reduced if
the economic performance of any property declines. If any such decline occurs,
our ability to make debt service payments would be adversely affected. If a
property is mortgaged to secure payment of indebtedness and we are unable to
meet mortgage payments, that property could be transferred to the mortgagee with
a consequent loss of income and asset value.

     Our debt to total capitalization ratio exceeds those normally carried by
our competitors and REITs in general. While we believe that our level of
leverage is normal for a direct private or institutional investor, our higher
leverage levels may make it difficult to obtain any additional financing based
on our current portfolio. Our high leverage levels may also adversely affect the
market value of our stock if we are perceived as more risky than our peers.

We may not pay dividends regularly.

     Our ability to pay dividends in the future is dependent on our ability to
operate profitably and to generate cash from our operations. Although we have
done so in the past, we cannot guarantee that we will be able to pay dividends
on a regular quarterly basis in the future.

We may incur tax liabilities as a result of failing to qualify as a REIT.

     We believe that we have been organized and operated so as to qualify as a
REIT under the Internal Revenue Code. However, we cannot assure that we will
continue to be qualified as a REIT. Qualification as a REIT involves the
application of highly technical and complex Internal Revenue Code provisions for
which there are only limited judicial or administrative interpretations. The
determination of various factual matters and circumstances not entirely within
our control may affect our ability to qualify as a REIT. In addition, we cannot
predict that legislation, new regulations, administrative interpretations or
court decisions will not have a substantially adverse effect with respect to the
qualification as a REIT or the federal income tax consequences of that
qualification.

                                       7
<PAGE>


     If we are unable to qualify as a REIT in any taxable year, we would not be
allowed a deduction for distributions to stockholders in computing our taxable
income and would be subject to federal income tax (including any applicable
alternative minimum tax) on our taxable income at regular corporate rates.
Unless entitled to relief under certain Internal Revenue Code provisions, we
also would be disqualified from treatment as a REIT for the four taxable years
following the year during which REIT qualification was lost. As a result, the
funds available for distribution to the stockholders would be reduced for each
of the years involved. In addition, we may incur substantial indebtedness or may
liquidate substantial investments in order to pay the resulting federal income
tax liabilities if differences in timing between the receipt of income and
payment of expenses and the inclusion of those amounts in arriving at our
taxable income. We may have to borrow in order to make the distributions to our
stockholders that are necessary to satisfy the distribution requirements
applicable to REITs. Although we currently intend to operate in a manner
designed to qualify as a REIT, it is possible that future economic, market,
legal, tax or other considerations may cause us to revoke the REIT election.

We may have to make distributions to stockholders.

     In order to qualify as a REIT, we generally will be required each year to
distribute to our stockholders at least 90% of our REIT taxable income
(excluding any net capital gains). In addition, we will be subject to a 4%
nondeductible excise tax on the amount, if any, by which certain distributions
paid by us with respect to any calendar year are less than the sum of 85% of our
ordinary income plus 95% of our capital gain net income for that year.

     We intend to make distributions to our stockholders to comply with the 90%
distribution requirement and to avoid the nondeductible excise tax. We may have
to borrow funds on a short-term basis to meet the 90% distribution requirement
and to avoid the nondeductible excise tax if differences in timing between
taxable income and cash available for distribution exist.

Some of our buildings are subject to special income tax considerations.

     If we sell our Giltedge or Sheridan Center buildings before 2006 (ten years
after the original acquisition date of the property or the exchange property),
we will be required to pay tax at the highest applicable corporate rates on the
difference between its fair market value and its adjusted bases at the time of
our REIT election. By utilizing a property exchange under Section 1031 of the
Internal Revenue Code, we may be able to defer the recognition of gain until
after the 10-year period expires in 2006 so that we are not subject to the
highest applicable corporate rates. If we are subject to the highest corporate
rate, the amount of this tax could be substantial and would be significantly
more than if we would be permitted to use our own adjusted basis. There is a
risk that we would not have sufficient cash available to pay the additional
taxes resulting from the lower adjusted bases for these properties. As long as
these higher tax liabilities apply, we currently do not intend to sell this
property unless other economic, financial and business consequences of the sale
would offset the higher tax liabilities and lead us to believe it would be in
our best interests to effect such a sale. The factors we would consider at the
time of selling these properties include the price we are able to receive and
our ability to defer the taxes through a Section 1031 exchange.

                                       8
<PAGE>


There is limited liquidity in our real estate investments.

     Real estate investments are relatively illiquid. Our ability to vary our
portfolio in response to changes in economic and other conditions will be
limited. We cannot ascertain whether we will be able to dispose of an investment
when we find disposition advantageous or necessary or that the sale price of any
disposition will recoup or exceed the amount of our investment.

There is a limited market for our shares.

     Historically, there has been an extremely limited public market for our
common stock. We cannot guarantee that the market will be sustained or will
expand. Due to the limited trading volume and small capitalization of our common
stock, many investors may not be interested in owning our securities because of
the higher risks associated with limited trading volume and small market
capitalization such as the inability to sell a substantial block of stock at one
time without driving down prices. This could have an adverse effect on the
market for our common stock. In addition, there is no assurance that an investor
will be in a position to borrow funds using our securities as collateral because
lenders may be unwilling to accept the pledge of these securities because of the
limited market.

     Our equity market capitalization places us at the extreme low end of market
capitalization among all REITs. As a result of our small market cap,
substantially all of our investors are retail investors. Institutional investors
who have traditionally provided support for most REIT shares represent an
insignificant percentage of our total ownership. This limits the ability for
investors to acquire substantial blocks of our stock. This also places a
near-term cap on capital appreciation for our shares if significant stockholders
decide to sell.

Our uninsured and underinsured losses could result in loss of value of
properties.

     We maintain comprehensive insurance on each of the properties, including
liability, fire and extended coverage. We believe this coverage is of the type
and amount customarily obtained for or by an owner on real property assets. We
will obtain similar insurance coverage on subsequently acquired properties.
However, there are certain types of losses, generally of a catastrophic nature,
such as earthquakes and floods, that may be uninsurable or not economically
insurable, as to which our facilities are at risk in their particular locales.
Our management will use its discretion in determining amounts, coverage limits
and deductibility provisions of insurance, with a view to requiring appropriate
insurance on our investments at a reasonable cost and on suitable terms. This
may result in insurance coverage that in the event of a substantial loss would
not be sufficient to pay the full current market value or current replacement
cost of our lost investment. Inflation, changes in codes and ordinances,
environmental considerations, and other factors also might make it not feasible
to use insurance proceeds to replace a facility after it has been damaged or
destroyed.

We may suffer environmental liabilities.

     Under various environmental laws, a current or previous owner or operator
of real property may be liable for the costs of removal or remediation of
hazardous or toxic substances including, without limitation, asbestos-containing
materials that are located on or under the property. These laws often impose
liability whether the owner or operator knew of, or was responsible for, the
presence of those substances. In connection with our ownership and operation of
properties, we may be liable for these costs. Also, our ability to arrange for
financing secured by that real property might be adversely affected because of
the presence of hazardous or toxic substances or the failure to properly
remediate any contamination.

                                       9
<PAGE>


Non-compliance with the Americans With Disabilities Act could result in fines.

     Under the ADA, all public accommodations are required to meet certain
federal requirements related to physical access and use by disabled persons.
While we believe that our properties comply in all material respects with these
physical requirements (or would be eligible for applicable exemptions from
material requirements because of adaptive assistance provided), a determination
that we are not in compliance with the ADA could result in imposition of fines
or an award of damages to private litigants. If we were required to make
modifications to comply with the ADA, our ability to make expected distributions
to our stockholders could be adversely affected; however, we believe that this
effect would be minimal.

Certain Factors may Inhibit Changes in Control of AmeriVest Properties.

     Charter and Bylaw Provisions. Certain provisions of our charter and bylaws
may delay or prevent a change in control of our company or other transactions
that could provide our common stockholders with a premium over the
then-prevailing market price of their common stock or that might otherwise be in
the best interests of our stockholders. These include a staggered board of
directors and the ability of our board of directors to authorize the issuance of
preferred stock without stockholder approval. Also, any future series of
preferred stock may have voting provisions that could delay or prevent a change
in control or other transaction that might involve a premium price or otherwise
be in the best interests of our stockholders.

     Ownership Limit. In order to assist the company in maintaining its
qualification as a REIT, our bylaws contains certain provisions generally
limiting the ownership of shares of capital stock by any single stockholder to
9.8% of our outstanding shares, unless waived by the Board of Directors. These
provisions could also delay or prevent an acquisition or change in control of
our company that could benefit our stockholders.


                                       10
<PAGE>


ITEM 2. PROPERTIES

     At December 31, 2000, we owned and operated 22 office properties in
Colorado, Texas, Indiana and Wisconsin. Other than as described under
"Description of Specific Properties", we have no plans to renovate our operating
office properties other than for routine capital maintenance. We believe all our
properties are adequately covered by insurance. We believe that, as a result of
our unique operating model and experience as an owner, operator and developer of
small tenant office properties, given access to capital, we will continue to be
able to identify and consummate acquisition and development opportunities and
operate our portfolio more effectively than competitors without such experience
in our specific property type in the markets we target. We compete, however, in
all of our markets with other real estate operators, some of which may have been
active in such markets for a longer period than us.


     The following chart illustrates the geographic distribution of our property
portfolio as of December 31, 2000 by square footage:


[Data points for graph:

        42% Colorado
        38% Texas
        12% Indiana
         8% Wisconsin]



                                       11
<PAGE>


     The following table sets forth certain information about each of our office
properties owned as of December 31, 2000:

<TABLE>
<CAPTION>
                                                                                      Percentage
                                         # of          Year          Leasable         Occupancy        Annual Rent
Location                              Buildings      Acquired    Sq. Footage (1)    At 12/31/2000    Per Sq. Ft. (2)
--------                              ---------      --------    ----------------   -------------    ---------------
<S>                                       <C>          <C>            <C>                <C>             <C>
Small Tenant Office
-------------------
Denver, CO - Sheridan Center              3            2000           143,210            90.0            $11.53
Englewood, CO - Sheridan Plaza (3)        2            1999           118,720           100.0            $23.01
Indianapolis, IN - Keystone               3            1999            95,862            93.7            $15.87
Englewood, CO - Panorama Falls            1            2000            61,963           100.0            $21.77 (4)
Appleton, WI - Giltedge                   1            1996            59,459            86.9            $12.55

Bank of America Buildings (5)
--------------------------
Mineral Wells, TX                         4            1998            59,617            96.6            $14.78
Georgetown, TX
Henderson, TX
Clifton, TX


State of Texas Leased Buildings (6)
--------------------------------
Arlington, Paris, Marshall,               14           1998           236,981            94.3             $8.12
Amarillo, El Paso[2 bldgs],
Belleville, Mission, Odessa,
Clint, Lubbock, Temple, Hempstead
and Columbus

Totals                                    28                          775,812            94.4            $14.34
                                                                      =======


-----------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Includes office space but excludes storage, telecommunications and garage
     space.
(2)  Annualized base rent divided by net rentable area leased. Annualized base
     rent is original base rent plus contractual increases but excludes
     percentage rent, additional rent for common area maintenance, taxes and
     expense reimbursements and parking.
(3)  AmeriVest owns a 9.639% interest in this project and has entered into an
     agreement to purchase the remaining 90.361% interest.
(4)  Includes approximately $7.00 per square foot of estimated expenses.
(5)  Buildings leased approximately 63% to Bank of America. See description
     below.
(6)  Buildings leased primarily to various departments of the State of Texas.

Description of Specific Properties

     The Sheridan Center buildings (Denver, CO), the Keystone Office Buildings
(Indianapolis, IN) and the Panorama Falls Building (Englewood, CO) are our only
properties that have a book value in excess of ten percent of the total book
value of our assets. The following is a description of these properties,
together with a description of Sheridan Plaza at Inverness.

     Sheridan Center. We acquired these office buildings, formerly known as The
Writer Buildings, on August 31, 2000. They are now known as "Sheridan Center"
The project consists of one four-story, one five-story and one eight-story
office building on 3.74 acres of land. The buildings total 143,210 square feet
and site improvements include parking for approximately 400 cars, including 129
spaces in a separate surface lot. The buildings were built in 1966, 1968 and
1971 and, prior to our renovation, would be considered "C" class buildings.

                                       12
<PAGE>


     The total purchase price of $9.6 million was paid by using approximately
$1.8 million in proceeds from the August 2000 sale of the self-storage
facilities, approximately $7.5 million from the proceeds of a mortgage loan from
US Bank and the balance from the cash proceeds of our 2000 public offering. The
acquisition was structured as a tax-deferred exchange of our self-storage
properties under Section 1031 of the Internal Revenue Code.

     The Sheridan Center buildings were purchased from WCD Associates, LLC and
EBD Associates, LLC. The purchase price was determined through negotiations
between the sellers and us.

     Sheridan Center is leased to approximately 115 tenants at base rental rates
ranging from $8.22 to $17.50 per rentable square foot. Lease terms range from
one year to five years. Sheridan Realty Advisors, LLC, our property manager and
advisor, leases 2,849 square feet at a base rent of $17.50 per square foot,
which increases to $18.00 per square foot in February 2002, through January 31,
2003. We believe that this lease is at current market rates for the property.

     We are substantially renovating the buildings at a cost of up to $4.5
million. Funds for the renovation expenses are expected to come from working
capital and additional proceeds under the US Bank loan or a refinancing of the
property. Exterior improvements include a new exterior facade for each building
which tie the buildings together visually, a new entry and handicap access ramp,
resurfaced parking lots with new landscape and lighting, new fixed and operable
thermal windows, improved HVAC systems and new fire safety sprinklers and
systems. Interior improvements include refurbished lobbies and hallways with new
carpet and lighting, new oak suite entry doors and sidelights, new building and
suite signage, computerized touch-screen building directories, keyless entry
systems to the building and each suite monitored by computer, refurbished
bathrooms with new tile, lighting, paint and ADA fixtures and a new selection of
interior tenant finish packages.

     Work has commenced on two buildings and is expected to be completed by the
third quarter of 2001. When the renovations are completed, we expect that the
buildings will be reclassified as "B" buildings and command significantly higher
rental rates.

     The US Bank loan of up to $9.3 million bears interest at a rate tied to
LIBOR and is due on August 31, 2003. The maturity may be extended under certain
conditions to August 31, 2004. The US Bank Loan is secured by a first mortgage
on the Sheridan Center buildings. As of December 31, 2000, approximately
$1,605,000 was available for renovation advances under the terms of the loan
agreement. We expect to draw down the full amount of the US Bank loan and may
need to refinance or increase the amount of the US Bank loan in order to
complete the planned renovations.

     The property is located in a central location between downtown Denver and
the southeast suburbs along Interstate 25 at Colorado Boulevard. There is
substantial competition from existing buildings, many of which are newer than
Sheridan Center.

     The occupancy rate for Sheridan Center at December 31, 2000 was 90.0%.
There are no tenants occupying 10% or more of the rentable space. The following
is a schedule as of January 1, 2001 of lease expirations for Sheridan Center for
the next ten years:

                                       13
<PAGE>
<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------
                       Number of                                          Percentage of Gross
                      Leases That     Total Area of    Annual Revenue of   Rents On Expiring
                      Will Expire    Expiring Leases    Expiring Leases         Leases
---------------------------------------------------------------------------------------------
<S>                       <C>           <C>                <C>                  <C>
2001                       30            26,167             $351,734             19.3%
2002                       36            37,994             $511,490             28.0%
2003                       35            37,324             $531,944             29.1%
2004                       6              9,237             $165,797             9.1%
2005                       3              7,940             $110,965             6.1%
2006 and after             5             10,218             $154,324             8.5%
---------------------------------------------------------------------------------------------

     Keystone Office Buildings. We acquired the Keystone Office Buildings in
Indianapolis, Indiana (the "Keystone Buildings") from an affiliate of our
Advisor effective July 1, 1999. The total purchase price was $7,944,000, which
we paid by assuming approximately $5,255,000 of existing debt and $116,400 of
related escrow balances and issuing 541,593 shares of our common stock at a
price of $4.75 per share. The Keystone Buildings consist of three two-story
multi-tenant office buildings located at 3021, 3077 and 3091 East 98th Street at
the intersection of 98th Street and North Keystone Avenue (US 431) in north
central Indianapolis, Indiana. These buildings comprise approximately 95,862
total rentable square feet on approximately 9.041 acres of land with 336 surface
parking spaces, plus a 1,596 square foot freestanding maintenance building. The
Keystone Buildings were constructed and completed from 1984 to 1986.

     The Keystone Buildings are leased to various business entities for general
office space purposes. We recently completed major capital improvements to the
Keystone Buildings, including new common area carpets and lighting, an
electronic directory system, telecommunications wiring and exterior cleaning and
refurbishing. We intend to continue to operate and hold the Keystone Buildings
for income purposes. The Keystone Buildings compete with several mid-rise office
buildings in the area, including buildings owned by Duke-Weeks Realty Corp., a
dominant owner in the Indianapolis market.

     The occupancy rate for the Keystone Buildings at December 31, 2000 was
93.7%. There is one tenant occupying 10% or more of the rentable space of the
Keystone Buildings. The principal businesses of this tenant are insurance and
financial services. The following is a schedule as of January 1, 2001 of lease
expirations for the Keystone Buildings for the next ten years:

---------------------------------------------------------------------------------------------
                  Number of                                              Percentage of Gross
                 Leases That     Total Area of     Annual Revenue of      Rents On Expiring
                 Will Expire    Expiring Leases     Expiring Leases            Leases
---------------------------------------------------------------------------------------------
2001                  8              19,409             $289,361                 20.2%
2002                  9              16,443             $261,790                 18.2%
2003                  6               9,689             $158,096                 11.0%
2004                  3              18,966             $303,756                 21.2%
2005                  5              10,138             $166,602                 11.6%
2006 and after        3              15,153             $254,825                 17.8%
---------------------------------------------------------------------------------------------
</TABLE>

     Panorama Falls Building. The Panorama Falls Building is located at 9085
East Mineral Circle in Englewood, Colorado and was acquired in May 2000. The
total purchase price was $5,900,000, which we paid by using approximately
$514,000 in proceeds from the sale of our industrial and showroom building in
Denver, $300,000 from our line of credit with Wells Fargo Bank West, N.A.,
approximately $200,000 from the proceeds of a temporary loan from the Alexander
S. Hewitt Trust and the balance of approximately $4,919,800 from the proceeds of
a loan from Key Bank National Association. The Panorama Falls Building consists
of a three-story office building with 61,963 square feet on approximately six
acres of land. The site improvements include parking for approximately 400 cars,
exterior lighting and landscaping and a small waterfall and pond at the main
entrance. The building was constructed in 1983 and contains fully built-out
office space, common areas with a building conference room and a mechanical
basement area, which contains the air conditioning, electrical and heating
systems for the building.

                                       14
<PAGE>


     We acquired the Panorama Falls Building with the intention to refurbish the
building for small tenants, construct an additional building of approximately
40,000 square feet on an adjacent vacant building pad on the property and market
the building to our target market. During the acquisition, we received an offer
from Rhythms NetConnections, a national telecommunications company, which had
substantially better economics than our proposed renovation plan. Although we
had concerns about the profitability and long-term viability of the tenant, we
determined that it was in the best interests of the stockholders to lease the
building to this tenant and defer the renovation plans to a later date.

     In February 2001, Rhythms announced that it had cash, investments and
restricted cash of $569 million at December 31, 2000 and that these monies,
along with available vendor equipment financing were expected to finance
Rhythms' operational needs into the first quarter of 2002.


     The Panorama Falls Building is located in a suburban business park where
there is substantial competition from existing buildings, many of which are
newer than Panorama Falls. CarrAmerica, a large office building owner, owns
several properties nearby and will compete directly with the subject property.
Sheridan Plaza at Inverness, LLC, an affiliate of Sheridan Realty Advisors, our
advisor, in which we have a 9.639% indirect interest, owns two Class A office
buildings aggregating 119,000 square feet that are located within three miles of
Panorama Falls. One of these buildings, Sheridan Plaza, is 100% leased, so we do
not believe it is presently competitive with the Panorama Falls Building. In
April 2001, we entered into an agreement to purchase 100% of Sheridan Plaza at
Inverness, LLC. We will seek shareholder approval for this transaction at a
meeting anticipated to occur in June 2001 and will provide proxy materials for
that meeting in accordance with SEC requirements. See, "Item 12. Certain
Relationships And Related Transactions".


     The Panorama Building is 100% leased to two tenants: Comcast Corporation, a
cable television company, which leases 10,080 square feet through May 24, 2002
and Rhythms NetConnections, Inc., a telecommunications company, which leases
51,883 through May 24, 2002 and the entire building (61,963 SF) from May 25,
2002 through September 30, 2008. The following is a schedule as of January 1,
2001 of lease expirations for the Panorama Falls Building for the next ten
years:

<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------
                  Number of                                            Percentage of Gross
                 Leases That    Total Area of     Annual Revenue of     Rents On Expiring
                 Will Expire   Expiring Leases     Expiring Leases            Leases
------------------------------------------------------------------------------------------
<S>                  <C>             <C>                  <C>                  <C>
2001                  0               0                    0                    0%
2002                  1            10,080              $206,640               21.0%
2003                  0               0                    0                    0%
2004                  0               0                    0                    0%
2005                  0               0                    0                    0%
2006 and after        1            51,883            $778,245 (1)             79.0%
------------------------------------------------------------------------------------------
</TABLE>

(1)  Net of all building operating expenses, which are paid by tenant.

Leases with Credit Tenants

     Approximately 42% of our rental income in 2000 came from tenants that we
consider to be better than average "credit tenants", including the State of
Texas, Bank of America, Ameritech and Comcast Corporation.

     State of Texas Office Building Leases. Fourteen office buildings
consolidated in the above table under "Properties" are leased to the State of
Texas with primary lease periods ranging from six months to eight years. Most of
the leases grant five multiple renewal option periods of three years to five
years at the election of the tenant. The Clint, Paris and Amarillo leases are
the only leases that expire without additional option periods, in November 2001,
August 2002, and August 2003, respectively.

                                       15
<PAGE>


     Although the leases with the State of Texas regarding the State of Texas
Office Buildings each include a specific termination date, the State of Texas
may terminate a lease at any time that the legislature of the State of Texas
fails to appropriate funds necessary to pay required rents, or federally-funded
programs housed in a State of Texas Office Building are discontinued. Prior to
terminating the lease, the State of Texas may assign another agency to fill or
partially fill the rented space, and the lease would be adjusted accordingly.
Despite this risk, we have no information that would lead us to believe that the
State of Texas is considering any such terminations. Should the State of Texas
terminate or fail to renew a lease, however, it may be difficult to locate
another tenant for certain buildings in smaller cities or remote locations.

     Bank Building Leases. Approximately 63% of four buildings in the above
table consolidated as "Bank of America Buildings" are leased to Bank of America
on a long-term basis, with the primary lease through June 2012. The leases with
the Bank of America provide for automatic rent increases every three years at a
predetermined rate. They also provide for multiple renewal option periods for
Bank of America. The other leases in the Bank Buildings are with smaller tenants
and range from one year to three years in length.

Property Improvements

     We currently intend to spend up to $5 million for capital improvements
(including tenant finish) on our properties during 2001. This amount is expected
to be funded from working capital and additional borrowing and is in addition to
amounts that will be expended for routine maintenance and repairs.

Mortgages and Promissory Notes

     Substantially all of our properties are secured by mortgages. The following
is a summary of our indebtedness, including mortgage debt:


                                                                 Outstanding
                                                                  Balance At
              Description of Indebtedness                      December 31, 2000
              ---------------------------                      -----------------

Note payable to Anchor Bank. Fixed interest at 7.75%, due in
monthly installments of $22,925 based on a 30-year amortization
through June 1, 2008, at which time a balloon payment of
$2,797,181 is due. This note is secured by a mortgage on the
Giltedge Office Building.                                         $ 3,125,484

Note payable to ORIX Real Estate Capital Markets. Fixed interest
at 7.66%, due in monthly installments of $42,612 through July 1,
2028. This note is secured by a mortgage on the State Of Texas
Buildings.                                                          5,868,255


                                      16
<PAGE>

                                                                 Outstanding
                                                                  Balance At
              Description of Indebtedness                      December 31, 2000
              ---------------------------                      -----------------

Note payable to Jefferson Pilot. Fixed interest at 9.0%, due in
monthly installments of $17,095 through May 1, 2013. This note is
secured by a mortgage on 4 office buildings leased to a financial
institution in Texas.                                               1,530,945

Note payable to Security Life of Denver Insurance Company.
Interest at 8%, due in monthly installments of $37,626 through
May 1, 2022. Lender can call the outstanding balance due on June
1, 2007, June 1, 2012 or June 1, 2017. This note is secured by a
mortgage on the Keystone Buildings.                                 4,620,712

Note payable to Security Life of Denver Insurance Company.
Interest at 8.63% due in monthly installments of $4,403 through
May 1, 2022. Lender can call the outstanding balance due on June
1, 2007, June 1, 2012 or June 1, 2017. This note is secured by a
mortgage on the Keystone Buildings.                                   515,108

Note payable to Key Bank National Association. Interest at the
LIBOR rate plus 2.20% is due monthly. Beginning July 1, 2001,
monthly payments of principal of $5,585 and interest based on a
25-year amortization are due through June 1, 2002, at which time
the remaining principal and accrued interest are due. The note is
secured by a mortgage on the Panorama Falls Building.               5,119,830

Note payable to US Bank National Association. Interest at the
LIBOR rate plus 2.25% is due monthly, with the principal balance
and any accrued interest due on August 31, 2003. The note is
secured by a mortgage on Sheridan Center.                           7,342,522
                                                                  -----------

          TOTAL                                                   $28,122,856
                                                                  ===========


Insurance

     We believe that each of our properties is adequately covered by insurance
under a blanket policy.

Depreciation

     For a discussion of the treatment of the depreciation of the properties in
the financial statements, see "Item 7. Financial Statements--Notes To Financial
Statements".

Competition

     The business of managing, leasing and operating office buildings is very
competitive and we compete for tenants with other office buildings, including
buildings owned by larger companies with more financial and other resources
available to them. We believe that our niche focus on multi-tenant office
buildings with smaller average tenant sizes will improve our ability to compete.
Competitive conditions relating specifically to the Sheridan Center, Keystone
and Giltedge Office Buildings are described above under "Properties".

                                       17
<PAGE>


Employees

     At December 31, 2000, Sheridan Realty Advisors, LLC had 28 employees that
spent the majority of their time on our business. This includes five senior
executives as well as 23 administrative, support, and property management
personnel. As of December 31, 2000, we had no direct employees.

Environmental Matters

     Under various federal, state and local laws and regulations, an owner or
operator of real property may be liable for the costs of removal or remediation
of certain hazardous or toxic substances on that property. These laws often
impose such liability regardless of whether the owner caused or knew of the
presence of hazardous or toxic substances and regardless of whether the storage
of those substances was in violation of a tenant's lease. Furthermore, the costs
of remediation or removal of those substances may be substantial, and the
presence of hazardous or toxic substances, or the failure to promptly remediate
those substances, may adversely affect the owner's ability to sell the property
or to borrow money using the property as collateral. In connection with the
ownership and operation of the properties, we may be potentially liable for such
costs.

     We have obtained an environmental assessment of each of our properties.
Based on those assessments, management believes that the properties are in
compliance in all material respects with all applicable federal, state and local
ordinances and regulations regarding hazardous or toxic substances and other
environmental matters or that, to the extent that a property is not in
compliance, we will not be subject to material liability. In addition, we have
not been, nor do we have knowledge that any of the previous owners of the
properties have been, notified by any governmental authority of any material
noncompliance, liability or claim relating to hazardous or toxic substances or
other environmental substances in connection with any of the properties.
Although we have obtained environmental assessments of the properties, and
although we are not aware of any notifications by any governmental authority of
any material noncompliance, it is possible that our assessments do not reveal
all environmental liabilities or that there are material environmental
liabilities of which we are unaware.

     After acquisition of the Sheridan Center buildings, we embarked on an
asbestos remediation program to remove, wherever practicable, asbestos
containing materials in the buildings, including ceiling tiles, drywall joint
compound, wood and metal fire doors, wall texture, mudded pipe elbows and
valves, thermal systems insulation, floor tile and mastic and boiler insulation.
Most of the remediation has been completed except for one building, which is
expected to be completed over the next few years as tenants vacate spaces,
allowing access to the asbestos materials. The cost of the asbestos remediation
will be included in the capital improvement budget for Sheridan Center.

Policies and Objectives With Respect to Certain Activities

     The following is a discussion of our policies with respect to investment,
financing and certain other activities. The policies with respect to these
activities have been determined by our Board Of Directors and, although the
Board currently does not contemplate any changes to these policies, the Board
may change these policies without a vote or other approval of stockholders.

     Acquisition, Development And Investment Policies.

     Our business and growth strategies are designed to maximize total return to
stockholders over the medium and long term with a niche property-type and
geographic focus. Our current policies contemplate the possibility of (1) direct
ownership of real estate properties, including ownership through wholly-owned

                                       18
<PAGE>


subsidiaries, focusing on office properties with average tenant sizes of between
2,500 and 3,000 square feet, (2) indirect participation in those types of
properties through investments in corporations, business trusts, general
partnerships, limited partnerships, joint ventures and other legal entities, and
(3) development and acquisition of unimproved property or the acquisition and
conversion of existing structures. At the present time, all of our existing and
contemplated investments in real estate properties are held through direct
ownership and a minority interest in a limited liability company. Generally, we
intend to hold our properties for the long term. However, we may sell properties
when we believe the economic benefits, including the income tax consequences, to
the stockholders warrant such action. In the case of the Giltedge Office
Building, there are special income tax considerations that may require us to
hold it for 10 years from the date of its purchase, unless we are able to
structure a tax-deferred exchange. Our long-term view is to focus on
multi-tenant office buildings in select cities and dispose of non-core assets
and property types when economically and operationally feasible. See "Risk
Factors - Some of our buildings are subject to special income tax
considerations."

     Although we have no formal policy as to the allocation of assets among our
investments, we generally intend to limit investment in a single property to a
maximum of 25% of our total assets. We expect to fund future development and
acquisitions utilizing funds from additional indebtedness, future offerings of
our securities, sale or exchange of existing properties and retained cash flow.
We believe our capital structure is advantageous because it permits us to
acquire additional properties by issuing equity securities in whole or in part
as consideration for the acquired properties. In order to maintain our
qualification as a REIT, we must make annual distributions to our stockholders
of at least 90% of our REIT taxable income (which does not include net capital
gains). This requirement may impair our ability to use retained cash flow for
future acquisitions.

     Financing Policies.

     We intend to make additional investments in properties and may incur
indebtedness to make those investments or to meet the distribution requirements
imposed by the REIT provisions of the Code, to the extent that cash flow from
our operations, investments and working capital is insufficient. Additional
indebtedness incurred by us may be secured by part or all of our real estate
properties. We have no limitation on the number or amount of secured
indebtedness or mortgages that may be placed on any one of our properties.

     Secured indebtedness incurred by us may be in the form of purchase money
obligations to the sellers of properties, publicly or privately placed debt
instruments or financing from banks, institutional investors or other lenders.
This indebtedness may be recourse to all or any part of our assets, or may be
limited to the particular property to which the indebtedness relates. The
proceeds from any borrowings by us may be used for refinancing existing
indebtedness, for financing development and acquisition of properties, for the
payment of dividends and for working capital.

     If the Board determines to raise additional equity capital, the Board has
the authority, generally without stockholder approval, to issue additional
common stock, preferred stock or other of our capital stock in any manner (and
on such terms and for such consideration) as it deems appropriate, including in
exchange for property. Existing stockholders have no preemptive right to
purchase shares issued in any offering, and any such offering might cause a
dilution of a stockholder's investment in us.

ITEM 3. LEGAL PROCEEDINGS

     We are not a party to any pending legal proceeding (nor is our property the
subject of a pending legal proceeding) that we believe would have a material
adverse effect on us.

                                       19
<PAGE>


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Not applicable.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Our common stock has traded on the American Stock Exchange under the symbol
"AMV" since January 27, 2000. Prior to that time, the common stock traded on the
Nasdaq SmallCap Stock Market under the symbol "AMVP". Warrants issued in our
initial public offering were traded on the Nasdaq SmallCap Stock Market under
the symbol "AMVPW" until November 20, 2000 when they expired without being
exercised.

     The table below presents the range of high and low sales prices for our
common stock and high and low sales prices for our initial public offering
warrants during each of the quarters indicated, as reported by the American
Stock Exchange and Nasdaq SmallCap Stock Market:

                                Common Stock                   Warrants
                                ------------                   --------
                              High         Low             High         Low
                              ----         ---             ----         ---

March 31, 1999               4.375        3.500            .094          .031

June 30, 1999                4.750        3.969            .094          .063

September 30, 1999           5.438        4.000            .188          .063

December 31, 1999            4.938        3.750            .094          .031

March 31, 2000               4.750        3.313            .563          .063

June 30, 2000                4.750        3.875            .188          .031

September 30, 2000           5.125        4.250            .375          .016

December 31, 2000            4.875        4.250            .219          .016


     On March 29, 2001, the closing sale price for our common stock was $5.75
per share, as reported by the American Stock Exchange.

     Holders. On March 30 2001, there were approximately 248 holders of record
of our common stock. Based on information provided by brokers and depositories
who hold shares in their names on behalf of others (in "street name"), there
were approximately 523 beneficial owners of common stock, as of February 22,
2001.

     Dividend Policy. We paid a dividend of $.125 per share in the third and
fourth quarters of 2000 and a dividend of $.12 per share in the first and second
quarters of 2000. This represents an annualized rate of $.49 per share. We also
declared a dividend of $.125 per share payable in April 2001. We anticipate
paying regularly quarterly dividends in the future.

                                       20
<PAGE>


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATION

     The following is a discussion and comparison of the financial condition and
results of operations of the Company as of and for the years ended December 31,
2000 and 1999. These discussions should be read in conjunction with our
financial statements, the notes to the financial statements, and the other
financial data included elsewhere in this Annual Report on Form 10-KSB.

Results of Operations

Comparison of year ended December 31, 2000 with year ended December 31, 1999
----------------------------------------------------------------------------

Revenues for the year ended December 31, 2000 increased approximately
$1,246,000, and operating expenses, real estate taxes, interest, and
depreciation and amortization increased approximately $310,000, $71,000,
$472,000 and $172,000, respectively, for a total increase of $1,025,000 as
compared with the year ended December 31, 1999. Such increases resulted
primarily from inclusion of the operations of the Keystone Office Park for a
full year, together with the operations of Sheridan Center beginning September
1, 2000 and the operations of Panorama Falls beginning May 25, 2000, offset by
the elimination of income and expenses from the operations of the Broadway
property which was sold on December 13, 1999, and from the operations of the
self-storage facilities which were sold on August 25, 2000. Revenues for the
year ended December 31, 2000 were increased by approximately $525,000 of
straight-line rents, primarily from Panorama Falls. Management fees increased by
approximately $221,000 and general and administrative expenses decreased
approximately $140,000, both of which were due primarily to the acquisitions of
Keystone Office Park, Panorama Falls and Sheridan Center, and the management
agreement with Sheridan Realty Advisors, LLC in 2000 versus internal management
in 1999. The Company also had interest income of $55,874 for 2000, as compared
with $15,506 for the 1999 period, primarily as a result of funds being held in
escrow from the sale of the Broadway property for an IRS Section 1031 exchange
and the investment of funds from the stock and warrants offering.

     Net income for the year ended December 31, 2000 was $2,676,724, or $1.07
per share (basic and diluted), as compared to $968,748, or $.51 per share (basic
and diluted), for the year ended December 31, 1999.

Comparison of year ended December 31, 1999 with year ended December 31, 1998
----------------------------------------------------------------------------

     The Company acquired the Keystone Buildings effective July 1, 1999 and sold
the Broadway industrial property on December 13, 1999. At December 31, 1999, the
Company owned 24 properties. Revenues increased $2,160,588, or 57%, to
$5,976,757 for 1999 as compared to $3,816,169 for 1998. The increase in revenues
was due primarily to the revenues of the Keystone Buildings being included
subsequent to their acquisition in the amount of $710,000 and the revenues for
the 15 office buildings acquired in 1998 being included for the entire year,
which resulted in an increase of approximately $1,360,000 over 1998. The net
gain on the sale of the Broadway Building and the Bank Building vacant land was
approximately $720,700.

     Property operations, real estate taxes, general and administrative,
interest, depreciation and amortization increased by $680,509, $163,927,
$199,126, $610,838 and $330,855, respectively. All of the increases primarily
resulted from inclusion of the expenses attributable to the purchase of the
Keystone Buildings, subsequent to their purchase, the inclusion of the 15 office
buildings acquired during 1998 for a full year in 1999, and additional personnel
costs as a result of handling property management and accounting on an in-house
basis during 1999. Management fees decreased by $57,538. This was due to a
savings of $93,000 by bringing the property management and accounting functions
in-house and offset by management fees paid for the Keystone Buildings of
$35,500. Interest income increased in 1999 by $11,393 to $15,506 as compared to
$4,113 for 1998.

                                       21
<PAGE>


     As a result of the above factors, the Company had a net income of $968,748,
or $.51 per share, in 1999 as compared with a net loss of $317,406, or $.21 per
share, in 1998. Of the $968,748 net income for the year ended December 31, 1999,
$720,712, or $.38 per share, relates to a gain on the sale of real estate.

Liquidity and Capital Resources

     From December 31, 1999 to December 31, 2000, net investment in real estate
increased approximately $10,800,000. This increase was primarily due to the
acquisition of the Panorama Falls and Sheridan Center buildings offset by the
sale of the self-storage facilities and normal depreciation. Investment in
affiliate increased by approximately $585,000 due to the purchase of the limited
liability company membership interest in Sheridan Investments, LLC offset by
distributions received and equity in loss of affiliate. Escrow deposit decreased
by $509,556 due to the acquisition of the Panorama Falls office building.

     Accounts receivable decreased approximately $10,000 due to normal
fluctuations in the collections cycle. Deferred rents receivable increased
approximately $525,000 due primarily to the addition of the Panorama Falls
office building. Deferred financing costs decreased approximately $136,000 due
to the retirement of debt related to the sale of the self-storage facilities and
net of new costs related to the acquisitions of Panorama Falls and the Writer
Buildings, plus normal amortization. Prepaid expenses and other assets increased
by approximately $164,000 due primarily to the acquisition of a key man life
insurance policy for one of the Company's officers and directors.

     Mortgage loans payable increased by approximately $5,655,000 due to the
addition of the mortgages on Panorama Falls and the Sheridan Center buildings,
offset by the elimination of the mortgages on the self-storage facilities and
scheduled principal payments. Accounts payable and accrued expenses increased by
approximately $720,000 due primarily to renovation work in progress at the
Sheridan Center and Keystone buildings and the accrual of severance payments due
to a former officer. Prepaid rents and security deposits increased by
approximately $371,000 due primarily to a $335,000 security deposit from a
Panorama Falls tenant. Dividends payable increased by approximately $105,000 due
to the increased number of shares outstanding from the stock offering, the
acquisition of the limited liability company interest and the acquisition of the
key man life insurance policy. Accrued real estate taxes increased by
approximately $123,000 due to normal accruals of current taxes on a larger real
estate base. The Company's common stock and capital in excess of par value
increased by approximately $3,700,000 as a result of the public stock offering
and the issuance of stock for the acquisition of the limited liability company
interest and the key man life insurance policy. Costs related to the stock
offering were approximately $69,000 and were comprised of legal fees, filing
fees, listing fees and printing costs.

     At December 31, 2000, we had approximately $1,047,000 of cash and cash
equivalents, including approximately $372,000 of cash to be utilized for a
stockholder dividend distribution, which was paid on January 17, 2001. In March
2001, we received approximately $960,000 of cash proceeds from the exercise of
warrants issued in our 2000 public offering and employee stock options. We
intend to meet our near-term working capital liquidity requirements through the
funds provided by the warrant and option exercises and through cash flow
provided from operations and advances on loans already in place.

     The Company desires to acquire additional properties and, in order to do
so, it will need to raise additional debt or equity capital. The Company also
intends to obtain credit facilities for short and long-term borrowing with
commercial banks or other financial institutions.

                                       22
<PAGE>


New Technical Pronouncements

     In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133"). The Company is required to
adopt SFAS No. 133 as of January 1, 2001. SFAS No. 133 establishes methods of
accounting for derivative financial instruments and hedging activities related
to those instruments as well as other hedging activities. To date, the Company
has not entered into any derivative financial instruments or hedging activities.

     In March 2000, the FASB issued FASB Interpretation ("FIN") No. 44,
"Accounting for Certain Transactions Involving Stock Compensation." FIN No. 44
provides clarification and guidance on applying APB No. 25. FIN No. 44 generally
provides for prospective application for grants or modifications to existing
stock options or awards made after June 30, 2000. The Company's adoption of FIN
No. 44 did not have a material impact on its financial statements.


                                       23
<PAGE>


ITEM 7. FINANCIAL STATEMENTS

                          INDEX TO FINANCIAL STATEMENTS

AmeriVest Properties Inc. and Subsidiaries

     Independent Auditor's Report                                        F-1-2
     Consolidated Balance Sheet as of December 31, 2000                    F-3
     Consolidated Statements of Operations for the
        years ended December 31, 2000 and 1999                             F-4
     Consolidated Statements of Stockholders' Equity
        for the years ended December 31, 2000 and 1999                     F-5
     Consolidated Statements of Cash Flows for the years
        ended December 31, 2000 and 1999                                 F-6-7
     Notes to Consolidated Financial Statements                         F-8-21



                                       24
<PAGE>





                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To AmeriVest Properties Inc.:

We have audited the accompanying consolidated balance sheet of AMERIVEST
PROPERTIES INC. (a Maryland corporation) and subsidiaries as of December 31,
2000, and the related consolidated statements of operations, stockholders'
equity and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit. The consolidated
financial statements of the Company as of December 31, 1999, were audited by
other auditors whose report dated February 7, 2000, expressed an unqualified
opinion on those statements.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
AMERIVEST PROPERTIES INC. and subsidiaries as of December 31, 2000, and the
results of its operations and its cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States.



                                            /s/ Arthur Andersen, LLP
                                            ------------------------
                                            Arthur Andersen, LLP

Denver, Colorado
March 23, 2001


                                      F-1
<PAGE>





                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To AmeriVest Properties Inc.:

We have audited the consolidated balance sheet of AmeriVest Properties Inc. and
Subsidiaries as of December 31, 1999, and the related consolidated statements of
operations, stockholders' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform our audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of AmeriVest Properties
Inc. and Subsidiaries as of December 31, 1999, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.


                                            /s/ Wheeler Wasoff, P.C.
                                            ------------------------
                                            Wheeler Wasoff, P.C.


Denver, Colorado
February 7, 2000


                                      F-2
<PAGE>
<TABLE>
<CAPTION>

                     AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
                             CONSOLIDATED BALANCE SHEET
                               AS OF DECEMBER 31, 2000


ASSETS
<S>                                                                       <C>
   Investment in real estate
        Land                                                              $  8,761,566
        Buildings and improvements                                          32,210,274
        Furniture, fixtures and equipment                                       68,793
        Tenant improvements                                                    645,429
        Tenant leasing commissions                                             585,887
        Less accumulated depreciation and amortization                      (3,349,569)
                                                                          ------------

           Net Investment in Real Estate                                    38,922,380

   Cash and cash equivalents                                                 1,046,976
   Investment in unconsolidated affiliate, net                                 584,640
   Accounts receivable                                                          52,328
   Deferred rents receivable                                                   524,581
   Deferred financing costs, net of accumulated amortization of $75,818        411,634
   Prepaid expenses, escrows and other assets                                  821,258
                                                                          ------------

           Total Assets                                                   $ 42,363,797
                                                                          ============


LIABILITIES
   Mortgage loans and notes payable                                       $ 28,122,856
   Accounts payable and accrued expenses                                       906,902
   Accrued interest                                                            118,564
   Accrued real estate taxes                                                   747,647
   Prepaid rents and security deposits                                         737,207
   Dividends payable                                                           372,118
                                                                          ------------

           Total Liabilities                                                31,005,294
                                                                          ------------

COMMITMENTS AND CONTINGENCIES (Note 8)

STOCKHOLDERS' EQUITY
   Preferred stock, $.001 par value
        Authorized - 5,000,000 shares
        Issued and outstanding - none                                             --
   Common stock, $.001 par value
        Authorized - 15,000,000 shares
        Issued and outstanding - 2,976,939 shares                                2,977
   Capital in excess of par value                                           11,879,099
   Distributions in excess of accumulated earnings                            (523,573)
                                                                          ------------

           Total Stockholders' Equity                                       11,358,503
                                                                          ------------

           Total Liabilities and Stockholders' Equity                     $ 42,363,797
                                                                          ============


   The accompanying notes are an integral part of this consolidated balance sheet.

                                         F-3
</TABLE>
<PAGE>

                   AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

                                                         2000            1999
                                                     -----------     -----------
REAL ESTATE OPERATING REVENUE
   Rental revenue
        Commercial properties                        $ 6,360,902     $ 4,561,479
        Storage properties                               861,535       1,415,278
                                                     -----------     -----------

                                                       7,222,437       5,976,757
                                                     -----------     -----------

REAL ESTATE OPERATING EXPENSES
   Property operating expenses
        Operating expenses                             1,946,633       1,636,305
        Real estate taxes                                668,224         596,790
        Management fees                                  344,636         124,111
   General and administrative                            517,019         657,349
   Severance expense                                     255,442            --
   Interest                                            2,167,869       1,696,222
   Depreciation and amortization                       1,205,795       1,033,450
                                                     -----------     -----------

                                                       7,105,618       5,744,227
                                                     -----------     -----------

OTHER INCOME
   Interest income                                        55,874          15,506
   Equity in loss of unconsolidated affiliate            (52,808)           --
                                                     -----------     -----------

                                                           3,066          15,506
                                                     -----------     -----------

INCOME BEFORE GAIN ON SALE OF REAL ESTATE                119,885         248,036
                                                     -----------     -----------

GAIN ON SALE OF REAL ESTATE                            2,556,839         720,712
                                                     -----------     -----------

NET INCOME                                           $ 2,676,724     $   968,748
                                                     ===========     ===========

NET INCOME PER COMMON SHARE
    Basic                                            $      1.07     $       .51
                                                     ===========     ===========

    Diluted                                          $      1.07     $       .51
                                                     ===========     ===========

WEIGHTED AVERAGE NUMBER OF COMMON
   SHARES OUTSTANDING
    Basic                                              2,492,584       1,881,075
                                                     ===========     ===========

    Diluted                                            2,495,919       1,882,232
                                                     ===========     ===========


              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       F-4
<PAGE>
<TABLE>
<CAPTION>


                          AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                        FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

                                                                                 Distributions
                                              Common Stock          Capital in    in Excess of
                                        -------------------------    Excess of    Accumulated
                                           Shares        Amount      Par Value      Earnings
                                        -----------   -----------   -----------   -----------
<S>                                     <C>         <C>           <C>           <C>
Balances, December 31, 1998               1,658,770   $     1,659   $ 5,607,725   $(1,958,895)
Issuance of common stock                    570,080           570     2,571,998          --
Dividends declared                             --            --            --        (933,029)
Net income                                     --            --            --         968,748
                                        -----------   -----------   -----------   -----------
Balances, December 31, 1999               2,228,850         2,229     8,179,723    (1,923,176)
Issuance of common stock and warrants       748,089           748     3,699,376          --
Dividends declared                             --            --            --      (1,277,121)
Net income                                     --            --            --       2,676,724
                                        -----------   -----------   -----------   -----------
Balances, December 31, 2000               2,976,939   $     2,977   $11,879,099   $  (523,573)
                                        ===========   ===========   ===========   ===========


                     The accompanying notes are an integral part of these
                              consolidated financial statements.

                                              F-5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                         AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                       FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


                                                                    2000            1999
                                                                ------------    ------------
<S>                                                             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income                                                   $  2,676,724    $    968,748
   Adjustments to reconcile net income to net cash
       provided by operating activities-
   Gain on sale of real estate                                    (2,556,839)       (720,712)
   Depreciation and amortization                                   1,205,795       1,033,450
   Amortization of deferred financing costs                           64,624          48,997
   Amortization of warrants                                           10,743            --
   Equity in loss of unconsolidated affiliate                         52,808            --
   Accrued interest added to mortgage payable                        422,052            --
   Changes in assets and liabilities-
       Decrease (increase) in accounts receivable                      9,558         (13,271)
       Increase in deferred rents receivable                        (524,581)           --
       Increase in prepaid expenses, escrows and other assets       (215,639)        (42,856)
       Increase in accounts payable and accrued expenses             720,100          65,475
       Increase in other accrued liabilities                         574,571         217,912
                                                                ------------    ------------

   Net cash from operating activities                              2,439,916       1,557,743
                                                                ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Acquisitions and improvements of real estate                  (16,861,713)       (391,002)
   Net proceeds from the sale of real estate                       1,818,161         569,699
   Leasing commissions paid                                         (531,793)        (54,094)
   Distributions from unconsolidated affiliate                        60,000            --
   Release of escrow deposit                                         509,556            --
   Escrow deposit                                                       --          (509,556)
                                                                ------------    ------------

   Net cash from investing activities                            (15,005,789)       (384,953)
                                                                ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Additions to mortgage loans and notes payable                  12,565,301            --
   Payments on mortgage loans                                     (1,023,165)       (291,152)
   Payment of deferred financing costs                              (146,299)           --
   Net proceeds from common stock and warrants offering            2,931,141            --
   Dividends paid                                                 (1,172,465)       (864,618)
                                                                ------------    ------------

   Net cash from financing activities                             13,154,513      (1,155,770)
                                                                ------------    ------------

NET INCREASE IN CASH AND
   CASH EQUIVALENTS                                                  588,640          17,020

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                         458,336         441,316
                                                                ------------    ------------

CASH AND CASH EQUIVALENTS, END OF YEAR                          $  1,046,976    $    458,336
                                                                ============    ============


                   The accompanying notes are an integral part of these
                            consolidated financial statements.

                                            F-6
</TABLE>
<PAGE>


                   AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

During the years ended December 31, 2000 and 1999, the Company made cash
payments for interest on indebtedness of $2,127,231 and $1,612,768,
respectively.


SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

In 1999, the Company acquired an office building complex in Indiana. The
purchase price of $7,944,000, consisted of cash, the assumption of mortgage debt
of approximately $5,255,000 and 541,593 shares of the Company's common stock
valued at $2,572,568 ($4.75 per share).

On September 29, 2000, the Company purchased a 9.639% preferred limited
liability company membership interest in an affiliate. The aggregate purchase
price for this investment consisted of $658,918, which the Company paid by
issuing 65,892 units, with each unit consisting of two shares of common stock
and one redeemable common stock purchase warrant.




              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       F-7
<PAGE>


                   AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     ORGANIZATION

     AmeriVest Properties Inc. (the "Company") was incorporated under the laws
     of the State of Delaware on August 25, 1993 and was reincorporated in the
     State of Maryland in 1999. Effective January 1, 1996, the Company commenced
     operating as a self-administered and self-managed real estate investment
     trust ("REIT"). The Company owns and operates, through its wholly owned
     subsidiaries, an office building in Appleton, Wisconsin, an office building
     complex in Indianapolis, Indiana, eighteen commercial office properties in
     the State of Texas, and an office building and a three-building office
     complex in Denver, Colorado.

     BASIS OF PRESENTATION

     The accompanying consolidated financial statements include the consolidated
     operations of the Company and its wholly owned subsidiaries. All
     significant intercompany accounts and transactions have been eliminated in
     consolidation.

     INVESTMENT IN REAL ESTATE

     Real estate, property, and equipment are stated at cost. Depreciation and
     amortization are computed on a straight-line basis over the estimated
     useful lives as follows:

                   Description                         Estimated Useful Lives
                   -----------                         ----------------------

     Land                                                  Not Depreciated
     Buildings                                              15 to 40 years
     Equipment                                               5 to 7 years
     Tenant improvements and lease commissions              Term of lease

     Depreciation and amortization expense related to investment in real estate
     was $1,201,840 and $1,031,965 for the years ended December 31, 2000 and
     1999, respectively.

     Maintenance and repairs are expensed as incurred and improvements are
     capitalized. The cost of assets sold or retired and the related accumulated
     depreciation and/or amortization are removed from the accounts and the
     resulting gain or loss is reflected in operations in the period in which
     such sale or retirement occurs.

     LONG-LIVED ASSETS

     Long-lived assets to be held and used by the Company are reviewed for
     impairment whenever events or changes in circumstances indicate that the
     carrying amount of an asset may not be recoverable. The Company continually
     evaluates the recoverability of its long-lived assets based on estimated
     future cash flows from and the estimated liquidation value of such
     long-lived assets, and provides for impairment if such undiscounted cash
     flows are insufficient to recover the carrying amount of the long-lived
     asset. If impaired, the long-lived asset is written down to its estimated
     fair value.

                                      F-8
<PAGE>


                   AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     REVENUE RECOGNITION

     Certain leases provide for tenant occupancy during periods for which no
     rent is due or where minimum rent payments increase during the term of the
     lease. The Company records rental revenue for the full term of each lease
     on a straight-line basis. Accordingly, the Company records a receivable
     from tenants that the Company expects to collect over the remaining lease
     term rather than currently, which is recorded as deferred rents receivable
     in the accompanying balance sheet. When the Company acquires a property,
     the term of existing leases is considered to commence as of the acquisition
     date for the purposes of this calculation. The amount included in rental
     revenue for the year ended December 31, 2000 that is not currently due from
     tenants is $524,581.

     INCOME TAXES

     Effective January 1, 1996, the Company elected to be taxed as a REIT under
     Sections 856 through 860 of the Internal Revenue Code (the "Code"), as
     amended. As a REIT, the Company generally would not be subject to federal
     income taxation at the corporate level to the extent it distributes
     annually at least 95% of its REIT taxable income, as defined in the Code,
     to its stockholders and satisfies certain other requirements. Accordingly,
     no provision has been made for federal income taxes in the accompanying
     consolidated financial statements. As of December 31, 2000, the Company has
     satisfied the requirements as defined in the Code.

     Certain of the Company's subsidiaries are subject to certain state excise
     and franchise taxes. The provision for such state taxes has been reflected
     in general and administrative expense in the accompanying consolidated
     statement of operations and has not been separately stated due to its
     insignificance.

     For federal income tax purposes, the cash dividends paid to stockholders
     may be characterized as ordinary income, return of capital (generally
     non-taxable) or capital gains. Dividends declared for the year ended
     December 31, 2000 totaled $1,277,121, of which $905,003 are characterized
     100% as return of capital. The remaining dividends of $372,118 ($.125 per
     share), which were declared in the fourth quarter and paid January 17,
     2001, will be treated as a 2001 dividend for federal income tax purposes.
     Dividends for the year ended December 31, 1999 totaling $933,029 are
     characterized 46% as return of capital and 54% ordinary income and include
     the dividend declared in the fourth quarter of 1999 of $267,462 ($.12 per
     share), which was paid January 14, 2000.

     STOCK BASED COMPENSATION

     The Company applies Accounting Principles Board ("APB") Opinion No. 25 and
     related interpretations in accounting for its stock option plan.
     Accordingly, the Company does not recognize compensation cost for options
     granted to employees whose exercise price is equal to or exceeds the fair
     value of the underlying stock as of the grant date and which qualify for
     fixed plan treatment.

     Options and warrants issued to non-employees in which goods or services are
     the consideration received are accounted for based on the fair value of the
     equity instruments issued. The measurement date is considered to be the
     issuance date, or if there are performance vesting provisions, when earned.

                                      F-9
<PAGE>


                   AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     FAIR VALUE

     The Company's financial instruments include accounts receivable, deferred
     rents receivable, accounts payable and accrued expenses, mortgage loans and
     notes payable. The fair values of these financial instruments were not
     materially different from their carrying or contract values.

     CONCENTRATIONS OF CREDIT RISK

     The Company leases office space to commercial businesses in Colorado,
     Indiana, Wisconsin and Texas. The Company also leases office space to State
     of Texas governmental agencies. The terms of the leases generally require
     basic rent payments at the beginning of each month. Credit risk associated
     with the lease agreements is limited to the amount of rents receivable from
     tenants less any related security deposits. Leases with the State of Texas
     governmental agencies may be canceled by the lessee should funding for the
     specific governmental agency on a complete agency basis be decreased or
     discontinued.

     Financial instruments, which potentially subject the Company to
     concentrations of credit risk, consist principally of cash and cash
     equivalents. The Company maintains cash accounts at two financial
     institutions. The Company periodically evaluates the credit worthiness of
     these financial institutions, and maintains cash accounts only in large
     high quality financial institutions, thereby minimizing exposure for
     deposits in excess of federally insured amounts. On occasion, cash on
     deposit may exceed federally insured amounts.

     DEFERRED FINANCING COSTS

     Deferred financing costs include fees and costs incurred to obtain
     long-term financing. These costs are amortized over the terms of the
     respective loans and are included as a component of interest expense in the
     accompanying consolidated statements of operations.

     CASH EQUIVALENTS

     For purposes of reporting cash flows, the Company considers as cash
     equivalents all highly liquid investments with a maturity of three months
     or less at the time of purchase.

     USE OF ESTIMATES

     The preparation of financial statements in conformity with accounting
     principles generally accepted in the United States requires management to
     make estimates and assumptions that affect the reported amounts of assets
     and liabilities and disclosure of contingent assets and liabilities at the
     date of the financial statements and reported amounts of revenues and
     expenses during the reporting period. Actual results could differ from
     those estimates.

                                      F-10
<PAGE>


                   AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     BASIC AND DILUTED NET INCOME PER COMMON SHARE

     Basic net income per common share is determined by dividing net income
     attributable to common stockholders by the weighted average number of
     common shares outstanding during each period. Diluted net income per common
     share includes the effects of potentially issuable common stock, but only
     if dilutive.

     NEW TECHNICAL PRONOUNCEMENTS

     In June 1998, the Financial Accounting Standards Board ("FASB") issued
     Statement of Financial Accounting Standard No. 133, "Accounting for
     Derivative Instruments and Hedging Activities" ("SFAS No. 133"). The
     Company is required to adopt SFAS No. 133 as of January 1, 2001. SFAS No.
     133 establishes methods of accounting for derivative financial instruments
     and hedging activities related to those instruments as well as other
     hedging activities. To date, the Company's adoption of SFAS No. 133 has not
     had a material impact on its financial statements, as it has not entered
     into any derivative financial instruments or hedging activities.

     In March 2000, the FASB issued FASB Interpretation ("FIN") No. 44,
     "Accounting for Certain Transactions Involving Stock Compensation." FIN No.
     44 provides clarification and guidance on applying APB No. 25. FIN No. 44
     generally provides for prospective application for grants or modifications
     to existing stock options or awards made after June 30, 2000. The Company's
     adoption of FIN No. 44 did not have a material impact on its financial
     statements.

     RECLASSIFICATIONS

     Certain prior period balances have been reclassified to conform to current
     period presentation.

NOTE 2 - STOCK OFFERING

     On March 29, 2000, The company's Registration Statement became effective
     with the Securities and Exchange Commission for an offering of units
     consisting of common stock and warrants. As modified in June 2000, the
     offering was for a maximum of 300,000 units offered at a price of $10.00
     per unit. Each unit consisted of two shares of common stock and one
     redeemable common stock purchase warrant. The warrants are exercisable at
     $5.00 per share, expiring on July 10, 2005. The offering period was
     extended to August 31, 2000, whereupon it terminated after raising the
     maximum amount of $3,000,000. The amount of net proceeds which was
     allocated to the warrants was approximately $148,000. Proceeds from the
     sale of these units, after payment of expenses of $68,859, have been used
     to acquire and improve real estate properties, to repay debt and to
     increase working capital.

                                      F-11
<PAGE>


                   AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 3 - ACQUISITIONS AND DISPOSITIONS

     In 1999, the Company, through its wholly owned subsidiary, acquired a
     three-building office complex in Indianapolis, Indiana (the "Keystone
     Buildings"). These buildings are part of an office park and are
     multi-tenanted with small- to medium-sized tenants. The purchase price was
     $7,944,000. In conjunction with the purchase, the Company assumed
     approximately $5,255,000 of existing debt and issued 541,593 shares of its
     common stock valued at $2,572,568 ($4.75 per share).

     In August and September 1999, the Company sold two vacant lots adjacent to
     its bank buildings in Texas for aggregate cash proceeds of approximately
     $60,000.

     In December 1999, the Company sold its industrial office and showroom
     building in Denver, Colorado (the "Broadway Property") for $2,100,000
     resulting in a gain of approximately $737,000. The net proceeds of
     approximately $510,000 were used to complete a tax-deferred exchange under
     Section 1031 of the Code ("1031 Exchange") in May 2000.

     On February 24, 2000, the Company entered into an Agreement of Sale to
     purchase for $5,900,000 a three-story office building (the "Panorama Falls
     Building") containing approximately 62,000 square feet on approximately six
     acres of land in southeast Denver, Colorado. The transaction closed on May
     25, 2000. Funds for closing included approximately $514,000 being held in
     escrow and on deposit as part of the 1031 Exchange from the sale of the
     Broadway Property, together with mortgage financing and short-term
     financing, which was partially repaid in August 2000 with proceeds from the
     stock and warrant offering (Note 2).

     On June 6, 2000, the Company entered into a contract to sell its four
     self-storage facilities in the metropolitan Denver, Colorado area for
     $8,400,000. This sale closed on August 25, 2000, resulting in a gain on
     sale of approximately $2,557,000. The net proceeds of approximately
     $1,818,000 were used to complete a 1031 Exchange for office building
     assets.

     On June 2, 2000, the Company entered into a contract to purchase three
     office buildings ("Sheridan Center") in southeast Denver, Colorado for
     $9,600,000. The buildings contain approximately 143,000 square feet and are
     located on approximately 3.74 acres of land. The transaction closed on
     August 31, 2000. Funds for closing included approximately $1,818,000 held
     in escrow and on deposit as part of the 1031 Exchange from the sale of the
     self-storage facilities, together with mortgage financing and a portion of
     the proceeds from the stock offering.

                                      F-12
<PAGE>


                   AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     The following unaudited pro forma condensed operating results give effect
     to the sale of the four self-storage facilities and the related purchase of
     Sheridan Center as if the transactions had occurred at the beginning of the
     periods presented, and are included for informational purposes only. This
     pro forma information may not be indicative of what actual results of
     operations would have been if such transactions had in fact occurred on
     such dates, nor does it purport to represent the results of future
     operations. The pro forma adjustments are based upon currently available
     information and upon certain assumptions that management believes are
     reasonable.

                                                       Year Ended
                                                      December 31,
                                                 2000             1999
                                                 ----             ----

       Revenues from rental property          $ 7,398,747     $ 6,025,485
       Net operating income                   $ 3,656,530     $ 2,878,197
       Net income (loss)                      $  (103,100)    $   837,896
       Net income (loss) per common share:
           Basic                              $      (.04)    $       .45
           Diluted                            $      (.04)    $       .45


NOTE 4 - INVESTMENT IN UNCONSOLIDATED AFFILIATE, NET

     In September 2000, the Company entered into a contract to purchase a 9.639%
     preferred limited liability company membership interest in Sheridan
     Investments, LLC, a related party. Sheridan Investments, LLC is the sole
     owner of Sheridan Plaza at Inverness, LLC, which owns two office buildings
     in Englewood, Colorado, containing approximately 119,000 square feet and
     located on approximately 6.7 acres of land. The transaction closed on
     September 29, 2000. The aggregate purchase price for the limited liability
     company interest was $658,918, which the Company paid by issuing 65,892
     units, with each unit consisting of two shares of common stock and one
     redeemable common stock purchase warrant. In connection with this
     investment, the Company had a difference related to the excess of its cost
     over its proportionate interest in the net tangible assets of the
     unconsolidated affiliate. The difference of approximately $261,000 is being
     amortized over the estimated useful life of the underlying assets (40
     years). The acquired interest is being accounted for under the equity
     method of accounting and is included in investment in unconsolidated
     affiliate in the accompanying consolidated balance sheet.


                                      F-13
<PAGE>


                   AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5 - MORTGAGE LOANS AND NOTES PAYABLE

     Mortgages payable are collateralized by substantially all properties and
     require monthly principal and interest payments. Following is a summary of
     the Company's mortgages and notes payable at December 31, 2000:

     Note payable to Anchor Bank. Interest at 7.75%, due in
     monthly installments of $22,925 based on a 30-year
     amortization through June 1, 2008, at which time a balloon
     payment of $2,797,181 is due. This note is secured by a
     mortgage on the Giltedge Office Building in Appleton,
     Wisconsin.                                                    $ 3,125,484

     Note payable to ORIX Real Estate Capital Markets. Interest
     at 7.66%, due in monthly installments of $42,612 through
     July 1, 2028. This note is secured by a mortgage on 13
     office buildings leased to the State Of Texas.                  5,868,255

     Note payable to Jefferson Pilot. Interest at 9.0%, due in
     monthly installments of $17,095, through May 1, 2013. This
     note is secured by a mortgage on four office buildings
     leased primarily to a financial institution in Texas.           1,530,945

     Note payable to Security Life of Denver Insurance Company.
     Interest at 8%, due in monthly installments of $37,626
     through May 1, 2022. Lender can call the outstanding balance
     due on June 1, 2007, June 1, 2012 or June 1, 2017. This note
     is secured by a mortgage on the Keystone Buildings.             4,620,712

     Note payable to Security Life of Denver Insurance Company.
     Interest at 8.63%, due in monthly installments of $4,403
     through May 1, 2022. Lender can call the outstanding balance
     due on June 1, 2007, June 1, 2012 or June 1, 2017. This note
     is secured by a mortgage on the Keystone Buildings.               515,108

     Note payable to Key Bank National Association. Interest at
     the LIBOR rate plus 2.20% is due monthly. Beginning July 1,
     2001, monthly payments of principal of $5,585 and interest
     based on a 25-year amortization are due through June 1,
     2002, at which time the remaining principal and accrued
     interest are due. The note is secured by a mortgage on the
     Panorama Falls Building.                                        5,119,830

     Note payable to US Bank National Association. Interest at
     the LIBOR rate plus 2.25% is due monthly, with the principal
     balance and any accrued interest due on August 31, 2003. The
     note is secured by a mortgage on Sheridan Center.               7,342,522
                                                                   -----------

                 TOTAL                                             $28,122,856
                                                                   ===========


                                      F-14
<PAGE>


                   AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     As of December 31, 2000, the scheduled maturities of mortgages is as
     follows:

                        2001                 $   295,482
                        2002                   5,368,822
                        2003                   7,648,995
                        2004                     332,489
                        2005                     360,723
                        Thereafter            14,116,345
                                             -----------

                        Total                $28,122,856
                                             ===========

     The Company is required by certain of its mortgage debt lenders to restrict
     funds to be used for the payment of insurance, real estate taxes and
     certain other expenditures. As of December 31, 2000, these amounts totaled
     approximately $587,000, and are included in prepaid expenses, escrows and
     other assets in the accompanying consolidated balance sheet.

NOTE 6 - STOCKHOLDERS' EQUITY

     COMMON STOCK

     In 1999, the Company issued shares of its common stock as follows:

     o    28,487 shares as a purchase price adjustment to the 1998 purchase of
          the office buildings in Texas.

     o    541,593 shares valued at $2,572,568 ($4.75 per share) as partial
          consideration for the acquisition of the Keystone Buildings.

     In 2000, the Company issued shares of its common stock as follows:

     o    600,000 shares and 300,000 warrants as part of an equity offering.

     o    131,784 shares and 65,892 warrants valued at $658,918 as consideration
          for the 9.639% limited liability company interest in Sheridan
          Investments, LLC.

     o    16,305 shares valued at $79,376 ($4.87 per share) as consideration for
          the acquisition of a life insurance policy on one of the Company's
          directors and officers.

     WARRANTS

     At December 31, 2000 the status of exercisable warrants is as follows:

       Issue Date     Shares Exercisable    Exercise Price    Expiration Date
       ----------     ------------------    --------------    ---------------
       July 2000           300,000              $5.00            July 2005
     September 2000         65,892              $5.00         September 2005


                                      F-15
<PAGE>


                   AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 7 - STOCK OPTION PLAN

     In March 1998, the Board of Directors approved the 1998 Stock Option Plan
     (the "1998 Option Plan"). Pursuant to the Option Plan, the Company may
     grant options to purchase an aggregate of 200,000 shares of the Company's
     common stock to key employees, directors, and other persons who have or are
     contributing to the success of the Company. The options granted pursuant to
     the Option Plan may be either incentive options qualifying for beneficial
     tax treatment for the recipient or non-qualified options. Directors who are
     not also employees of the Company ("Outside Directors") automatically
     receive options to purchase 12,000 shares pursuant to the Option Plan at
     the time of their election as an Outside Director. None of these options
     are exercisable at the time of grant. Options to purchase 4,000 shares
     become exercisable for each Outside Director on December 31 of each of the
     first three years immediately following the date of grant of the options to
     that Outside Director. The exercise price for options granted to Outside
     Directors is the fair market value of the common stock on the date of
     grant, and all options granted to Outside Directors expire five years from
     the date of grant. On the date that all of an Outside Director's options
     have expired, options to purchase an additional 12,000 shares, none of
     which is exercisable at that time, shall be granted to that Outside
     Director. The 1998 option plan was adopted as the Company had issued
     substantially all options available pursuant to the 1995 Stock Option Plan.

     The status of outstanding options granted pursuant to the Company's Stock
     Option Plans was as follows:

     <TABLE>
     <CAPTION>
                                                             Weighted
                                                             Average    Weighted
                                                 Number of   Exercise    Average
                                                  Shares      Price     Fair Value   Exercise Price
                                                  ------      -----     ----------   --------------
     <S>                                         <C>          <C>       <C>           <C>
     Options Outstanding - December 31, 1998      137,000     $4.66                   $3.97 - 5.00
               (83,750 exercisable)
     Granted                                      104,500     $4.58        $.48       $4.00 - 4.81
     Forfeited                                     (3,500)    $4.00
     Reissued                                     (66,000)    $5.00
                                                 --------
     Options Outstanding - December 31, 1999      172,000     $4.66                   $3.97 - 5.00
               (122,000 exercisable)
     Granted at fair value                         24,000     $4.44        $.47       $4.13 - 4.75
     Granted above fair value                      10,000     $5.00        $.44           $5.00
     Forfeited                                     (3,000)    $4.19                   $4.00 - 4.38
                                                  -------
     Options Outstanding - December 31, 2000      203,000     $4.65                   $3.97 - 5.00
               (173,750 exercisable)              =======
     </TABLE>


     In October 1999 the expiration date on the outstanding Directors options
     granted in 1995, and the options granted to the Company's former President
     in May 1995 and December 1996 were extended to December 31, 2004. The
     exercise price of the options remained at $5.00 per share and the fair
     value as of the October 1999 grant date was $.43 per share.

     The weighted average remaining contractual life of options outstanding at
     December 31, 2000 was approximately 3 years.

                                      F-16
<PAGE>


                   AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     At December 31, 2000, the number of options exercisable was 173,750, the
     weighted average exercise price of these options was $4.67, the weighted
     average remaining contractual life of the options was approximately 3 years
     and the range of exercise prices was $3.97 to $5.00 per share.

     At December 31, 2000 and 1999, options to purchase 127,000 shares and
     158,000 shares, respectively, were available to be granted pursuant to the
     Company's 1995 and 1998 option plans.

     The Company has adopted the disclosure-only provisions of SFAS No. 123. Had
     compensation cost for the Company's stock option plan been determined based
     on the fair value at the grant date consistent with the provisions of SFAS
     No. 123, the Company's net income and net income per share for the years
     ended December 31, 2000 and 1999 would have been changed to the pro forma
     amounts indicated below:

                                                          2000          1999
                                                          ----          ----
      Net income applicable to common stockholders -
       as reported                                    $ 2,676,724   $   968,748
                                                      ===========   ===========
      Net income applicable to common stockholders -
       pro forma                                      $ 2,651,953   $   936,489
                                                      ===========   ===========
      Basic Income per share - as reported            $      1.07   $       .51
                                                      ===========   ===========
      Diluted Income per share - as reported          $      1.07   $       .51
                                                      ===========   ===========
      Basic Income per share - pro forma              $      1.06   $       .50
                                                      ===========   ===========
      Diluted Income per share - pro forma            $      1.06   $       .50
                                                      ===========   ===========


     The fair value of each option grant is estimated on the date of grant using
     the Black-Scholes option-pricing model with the following weighted-average
     assumptions used for grants: dividend yield of 10.41% to 11.3%; expected
     volatility of 21.5% to 43.48%; discount rate of 4.55% to 6.36%; and
     expected lives of 5 years.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

     The following table summarizes future minimum base rent to be received
     under noncancelable tenant leases for the Company's commercial properties
     expiring each year, as of December 31, 2000:

                     2001                             $ 7,111,454
                     2002                               5,672,155
                     2003                               4,641,617
                     2004                               3,733,722
                     2005                               3,222,342
                     Thereafter                        10,997,985
                                                      -----------

                     Total                            $35,379,275
                                                      ===========

     Some leases also provide for additional rent based on increases in
     operating expenses. These increases are generally payable annually in the
     succeeding year.

     One tenant, a financial institution, accounted for approximately 11% and
     14% of revenues for the years ended December 31, 2000 and 1999,
     respectively.

                                      F-17
<PAGE>


                   AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     From time to time, the Company and/or its subsidiaries may become involved
     in litigation relating to claims arising out of its operations in the
     normal course of business. The Company is not currently a party to any
     material litigation, nor is it aware of any material threatened legal
     proceedings.

NOTE 9 - RELATED PARTY TRANSACTIONS

     As required pursuant to the Company's acquisition of the Keystone Buildings
     from Sheridan Realty Partners L.P. ("SRP"), certain principals of SRP were
     appointed to the Company's Board of Directors and received shares of the
     Company's common stock issued in conjunction with the acquisition. Sheridan
     Development, LLC, an affiliate of SRP by virtue of interlocking ownership
     and management, managed the Keystone Buildings through December 1999 under
     a management agreement. The Company was charged a fee of 5% of gross
     revenues, which amounted to approximately $35,500 during 1999.

     Effective January 1, 2000 all of the Company's properties are managed under
     an agreement (the "Agreement") with Sheridan Realty Advisors, LLC ("SRA"),
     which also manages day-to-day operations of the Company and assists and
     advises the Board of Directors on real estate acquisitions and investment
     opportunities. Certain senior members of SRA are members of the Company's
     management team and of the Company's Board of Directors. SRA receives an
     administrative fee and a property management and accounting fee for these
     services. The Agreement provides that the costs paid for these services in
     fiscal year 2000 will be no greater than the costs incurred by the Company
     for the same services in fiscal year 1999. For the year ended December 31,
     2000, the administrative fee totaled $189,600 and the property management
     and accounting fee, calculated as 5% of gross collected rents, amounted to
     $234,862. SRA also earns an advisory fee, calculated as 5% of capital
     deployed for real property acquisitions, which totaled $141,180 in 2000. In
     addition, SRA received incentive compensation in the form of five-year
     warrants to purchase up to 750,000 shares of common stock at $5 per share.
     Issuance of the warrants was approved by the shareholders at the annual
     meeting on June 6, 2000. According to the Agreement, 225,000 of these
     warrants were granted and vested on the approval date. These vested
     warrants have an estimated fair value of $73,668, which is being amortized
     over the life of the Agreement. The remaining 525,000 warrants vest in an
     amount equal to 2.1% of capital deployed for real property acquisitions.
     During 2000, 48,795 of the remaining warrants vested and have an estimated
     fair value of $19,947, which has been capitalized with the related
     acquisition costs on the accompanying consolidated balance sheet.

NOTE 10 - COMPREHENSIVE INCOME

     There are no adjustments necessary to net income as presented in the
     accompanying consolidated statements of operations to derive comprehensive
     income in accordance with SFAS No. 130, "Reporting Comprehensive Income".

                                      F-18
<PAGE>


                   AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 11 - SEGMENT REPORTING

     In June 1997, SFAS No. 131, "Disclosure about Segments of an Enterprise and
     Related Information" was issued, which amends the requirements for a public
     enterprise to report financial and descriptive information about its
     reportable operating segments. Operating segments, as defined in the
     pronouncement, are components of an enterprise about which separate
     financial information is available that is evaluated regularly by the
     Company in deciding how to allocate resources and in assessing performance.
     The financial information is required to be reported on the basis that is
     used internally for evaluating segment performance and deciding how to
     allocate resources to segments.

     The Company has reportable segments organized by the region in which they
     operate as follows: Wisconsin, Indiana, Texas and Colorado.

     The accounting policies of the segments are the same as those described in
     the summary of significant accounting policies. The Company evaluates
     performance based upon income from real estate from the combined properties
     in each segment.



                                      F-19
<PAGE>
<TABLE>
<CAPTION>
                                           AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
                                           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                        Wisconsin         Indiana          Texas         Colorado       Corporate      Consolidated
                                       ------------    ------------    ------------    ------------    ------------    ------------
<S>                                    <C>             <C>             <C>             <C>             <C>             <C>
2000
Rental income                          $    842,855    $  1,519,941    $  2,779,775    $  2,079,866    $       --      $  7,222,437
Operating expenses                          369,176         608,767       1,340,884         629,923          10,743       2,959,493
Depreciation and amortization               138,909         208,384         407,066         439,834          11,602       1,205,795
                                       ------------    ------------    ------------    ------------    ------------    ------------

Income (loss) from property
operations                                  334,770         702,790       1,031,825       1,010,109         (22,345)      3,057,149

Percent of income from property
operations                                     10.9%           23.0%           33.8%           33.0%           (0.7)%         100.0%

Interest income                                --              --            14,389          13,739          27,746          55,874
Gain on sale of real estate                    --              --              --         2,556,839            --         2,556,839
Equity in loss of unconsolidated
affiliate                                      --              --              --           (52,808)           --           (52,808)
Interest expense                            252,649         417,929         610,379         880,962           5,950       2,167,869
General and administration                    3,664          19,225           6,780          62,849         679,943         772,461
                                       ------------    ------------    ------------    ------------    ------------    ------------

Net Income (Loss)                      $     78,457    $    265,636    $    429,055    $  2,584,068    $   (680,492)   $  2,676,724
                                       ============    ============    ============    ============    ============    ============

Real estate investments, net           $  2,404,957    $  8,227,058    $ 11,649,246    $ 16,601,509    $     39,610    $ 38,922,380
                                       ============    ============    ============    ============    ============    ============

Additions to real estate investments   $     51,528    $    465,497    $     50,744    $  6,954,495    $      5,695    $  7,527,959
                                       ============    ============    ============    ============    ============    ============

Total Assets                           $  2,483,493    $  8,321,881    $ 12,438,843    $ 17,763,388    $  1,356,192    $ 42,363,797
                                       ============    ============    ============    ============    ============    ============


1999
Rental income                          $    852,313    $    710,733    $  2,706,982    $  1,706,729    $       --      $  5,976,757
Operating expenses                          332,900         292,164       1,247,258         484,884            --         2,357,206
Depreciation and amortization               123,017          79,595         401,657         419,112          10,069       1,033,450
                                       ------------    ------------    ------------    ------------    ------------    ------------

Income (loss) from property
operations                                  396,396         338,974       1,058,067         802,733         (10,069)      2,586,101

Percent of income from property
operations                                     15.3%           13.1%           40.9%           31.0%           (0.3)%         100.0%

Interest income                                --              --              --              --            15,506          15,506
Gain (loss) on sale of real estate             --              --           (16,203)        736,915            --           720,712
Interest expense                            254,892         206,177         628,602         606,551            --         1,696,222
General and administration                    3,630           9,667           1,951          28,295         613,806         657,349
                                       ------------    ------------    ------------    ------------    ------------    ------------

Net Income (Loss)                      $    137,874    $    123,130    $    411,311    $    904,802    $   (608,369)   $    968,748
                                       ============    ============    ============    ============    ============    ============

Real estate investments, net           $  2,482,232    $  7,925,552    $ 12,001,728    $  5,624,711    $     45,223    $ 28,079,446
                                       ============    ============    ============    ============    ============    ============

Additions to real estate investments   $    (64,932)   $  7,925,552    $   (421,111)   $ (1,477,132)   $     18,872    $  5,981,249
                                       ============    ============    ============    ============    ============    ============

Total Assets                           $  2,566,012    $  8,028,019    $ 12,688,698    $  6,552,539    $    479,190    $ 30,314,458
                                       ============    ============    ============    ============    ============    ============

                                                              F-20
</TABLE>
<PAGE>


                   AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 12 - NET INCOME PER SHARE

     The following represents a reconciliation from basic income per share to
     diluted income per share:

                                                          2000         1999
                                                          ----         ----
       Determination of shares
           Weighted average common shares outstanding   2,492,584   1,881,075
           Assumed conversion of stock options              3,335       1,157
                                                        ---------   ---------
           Diluted shares outstanding                   2,495,919   1,882,232
                                                        =========   =========

       Basic income per common share                    $    1.07   $     .51
                                                        =========   =========
       Diluted income per common share                  $    1.07   $     .51
                                                        =========   =========


                                      F-21
<PAGE>


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

     On April 5, 2000, we dismissed Wheeler Wasoff, P.C. as our principal
accountant. On April 5, 2000, we engaged Arthur Andersen LLP as the principal
accountant to audit our financial statements. Our Board Of Directors has
recommended and approved these actions.

     The accountant's reports of Wheeler Wasoff, P.C. on our consolidated
financial statements as of and for the year ended December 31, 1999 did not
contain any adverse opinion or disclaimer of opinion, and was not qualified or
modified as to uncertainty, audit scope or accounting principles. There have
been no disagreements between management and Wheeler Wasoff, P.C. during our two
most recent fiscal years or during any subsequent period preceding Arthur
Andersen's engagement on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure of a nature which
if not resolved to the satisfaction of Wheeler Wasoff, P.C. would have caused it
to make reference in connection with its report to the subject matter of the
disagreements.

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT

Directors And Executive Officers

     Set forth in the following table are the names of our directors and
executive officers (including executive officers of our Advisor), their
respective positions and ages, and the year in which each director was first
elected. Each director has been elected for a three-year term until the
corresponding Annual Meeting of Stockholders and thereafter until his successor
is elected and has qualified. Approximately one-third of the director positions
are elected at each Annual Meeting of Stockholders. Additional information
concerning each of these individuals follows the table.

<TABLE>
<CAPTION>
                                    Position with AmeriVest/Position             Director
Name                       Age      with Sheridan Realty Advisors, LLC             Since
----                       ---      ----------------------------------             -----
<S>                         <C>     <C>                                            <C>
William T. Atkins           51      Chief Executive Officer and Chairman of the    1999
                                    Board/Chairman of the Advisor

Charles K. Knight           43      President and Director/ President of the       1999
                                    Advisor

James F. Etter              58      Director                                       1995

Harry P. Gelles*            67      Director                                       2000

Robert W. Holman, Jr.       57      Director                                       2001

D. Scott Ikenberry          50      Chief Financial Officer/                        N/A
                                    Chief Financial Officer of the
                                    Advisor

John A. Labate*             52      Director                                       1995


Robert J. McFann            85      Director                                       1994

Jerry J. Tepper*            64      Director                                       2000


Alexander S. Hewitt         43      Vice President and Secretary/                   N/A
                                    Vice Chairman of the Advisor

John B. Greenman            47      Vice President/                                 N/A
                                    Senior Vice President of the Advisor
</TABLE>

----------
* Member of the Audit Committee of the Board Of Directors (the "Board").

                                       25
<PAGE>


     William T. Atkins has served as a director of AmeriVest since August 1999,
since December 1999, as our Chief Executive Officer and, since December 2000 as
Chairman of the Board. He is also Chairman and a managing member of Sheridan
Realty Advisors, LLC. Since 1990, he has served as President of Sheridan Realty
Corp., of which he is a principal stockholder and co-founder. Sheridan Realty
Corp. is involved in the commercial real estate business and serves as the
general partner of Sheridan Realty Partners, L.P, the former owner of the
Keystone Buildings. Since 1996, Mr. Atkins has also served as general partner of
Atkins Ltd. Partnership, an investment company. Since 1996, Mr. Atkins has
served as a director of Rock River Trust Company, which is involved in trust
administration, and from 1996 through 1998 he served as President of Rock River
Trust Company. Mr. Atkins earned a Bachelor of Arts degree in economics from
Stanford University in 1971.

     Charles K. Knight has served as our President since October 2000, as a
director of AmeriVest since August 1999 and, from December 1999 to October 2000,
as a Vice President and our corporate Secretary. He is also the President and a
managing member of Sheridan Realty Advisors, LLC. Since 1998, Mr. Knight has
served as Vice President and a member of Sheridan Development, LLC. From 1996
through 1998, Mr. Knight was the owner and served as the President of Abaco
Investment Group, a real estate investment company. From 1993 through 1996, Mr.
Knight served as Vice President - Sales and Marketing of Menda Scientific
Products, Inc. Mr. Knight received his Bachelor of Administration degree in
Experimental Psychology from the University of California at Santa Barbara in
1977, and his Juris Doctor and Master of Business Administration degrees from
the University of California at Los Angeles in 1982. Mr. Knight is licensed to
practice law in the States of Colorado and New York and maintains an inactive
license in California.

     James F. Etter served as our President from May 1995 until October 2000, as
our Chief Financial Officer from July 1996 until December 1999 and as our Chief
Executive Officer from January 1997 until December 1999. From 1994 until May
1995, Mr. Etter acted as a consultant with respect to real estate acquisitions
not related to us. Mr. Etter received his Masters of Business Administration and
his Bachelors of Business Administration degrees from the University of
Cincinnati. He is a member of the Financial Executives Institute and the
National Investors Relations Institute.

     Robert W. Holman, Jr. has served as a director of AmeriVest since March
2001. Mr. Holman is also a director of I-Star Financial, a publicly-traded
finance company. He is the co-founder of TriNet Corporate Realty Trust and
served ten years as Chief Executive Officer and Chairman of the Board of TriNet
and its predecessor, Holman/Shidler Capital, Inc., until the 1999 merger of
TriNet and Starwood Financial. Starwood Financial changed its name to I-Star
Financial in April 2000. Mr. Holman graduated from the University of California
at Berkeley with a degree in economics, earned a Master's degree in economics
from Lancaster University, England, where he was a British Council Fellow, and
is a former Harvard University Loeb Fellow. He has served as a board member,
director or senior executive for a number of companies in the U.S., Britain and
Mexico in the building materials, construction, finance Internet commerce, real
estate and travel industries.

                                       26
<PAGE>


     Harry P. Gelles has served as a director of AmeriVest since June 2000. Mr.
Gelles has been a private investor since 1985. During 1998, Mr. Gelles briefly
served as a Managing Director of Cruttenden Roth, Inc., an investment banking
firm. Mr. Gelles has fifteen years experience in investment banking, serving as
a senior executive with White Weld & Co., Dean Witter, Goldman Sachs & Company
and Chelsea Management Company. Mr. Gelles also has extensive experience in real
estate with Del Webb Corporation for eight years and as a private investor in
several real estate development projects in Colorado Springs, Phoenix and
Sacramento. Mr. Gelles serves on the Board of Directors of Investors Research
Fund, Inc., a public mutual fund company, and on numerous private and charitable
boards. Mr. Gelles received his Bachelor of Arts and Master of Business
Administration degrees from Harvard University.

     D. Scott Ikenberry has served as our Chief Financial Officer and as a
member of the Advisor since December 1999. Mr. Ikenberry has been Chief
Financial Officer of Sheridan Realty Corp. and other Sheridan Group companies
since August 1993. Mr. Ikenberry received his Bachelor of Science degree in
Accounting from the University of Denver in 1972 and his Master in Professional
Accounting (Taxation) degree from the University of Texas at Austin in 1976. He
is a member of the American Institute of Certified Public Accountants and the
Colorado Society of Certified Accountants and is a licensed real estate broker
in Colorado.

     John A. Labate has served as a director of AmeriVest since May 1995 and as
a member of both the Audit Committee and the Acquisitions Committee of the Board
since July 1995. Since September 1999, Mr. Labate has been Vice President and
Chief Financial Officer of Optical Security Group, Inc. From 1997 to August
1999, Mr. Labate was Vice President and Chief Financial Officer of GeoBiotics,
Inc., a Denver based mineral technology company. Prior to 1997, Mr. Labate
served as the Chief Financial Officer, Secretary, and Treasurer of Crown
Resources Corporation, a publicly traded, Denver, Colorado based international
gold mining and exploration company. Mr. Labate received his Bachelor of Science
degree in accounting from San Diego State University.

     Robert J. McFann has served as a director of AmeriVest since August 1994.
He also served as our corporate Secretary from May 1995 until December 1999. Mr.
McFann has been a member of the Acquisitions Committee of our Board since July
1995. Prior to his retirement in 1996, Mr. McFann was the principal owner and
President of Hy Grade Meat Company, a private company that grew to a mid-sized
hotel and restaurant supply house under his direction. Prior to 1996, he also
was a member of the Board Of Directors of the Bank Of Aurora.

     Jerry J. Tepper has served as a director of AmeriVest since 2000. Mr.
Tepper has been president of Tepco, Inc., a privately-held real estate
investment company, since 1997, president of CF Group Ltd., a privately-held
investment company in the retail food business, since 1964, and president of
Schoenberg Farms, Inc., a dairy product company, since 1987. Through Schoenberg
Farms, Inc., Mr. Tepper is the company's largest stockholder, owning more than
12 percent of the company's outstanding common stock. Prior to forming Tepco,
Mr. Tepper was also a director of Citizens Bank in Westminster, Colorado, when
it was purchased by Vectra Bank in 1999. From 1975 through 1980, Mr. Tepper was
a director of Regal Petroleum, and from 1979 to 1983 he was a member of the
United States Chamber of Commerce Food and Agriculture Committee.

     Alexander S. Hewitt has served as a Vice President of AmeriVest since
January 2000, as corporate Secretary since October 2000 and as Vice Chairman of
the Advisor since December 1999. Since 1990, Mr. Hewitt has also served as Vice
President of Sheridan Realty Corp., of which he is a principal stockholder and
co-founder and has held senior positions with other Sheridan Group companies.
Since 1996, Mr. Hewitt has served as a director of Rock River Trust Company,
which is involved in trust administration. Mr. Hewitt earned a Bachelor of Arts
degree in economics and a Bachelor of Science degree in Physics from Knox
College in Galesburg, Illinois in 1982.

                                       27
<PAGE>


     John B. Greenman has served as a Vice President of AmeriVest since January
2000, and as a Senior Vice President of the Advisor since December 1999. Since
1994, he has served as Vice President of Sheridan Realty Corp. and as a senior
officer of other Sheridan Group companies. Mr. Greenman is a member of the Urban
Land Institute. He graduated from Amherst College in 1976 and in 1979 received
his Master of Arts degree from the School of Advanced International Studies at
Johns Hopkins University.

Board and Committee Meetings

     The Board maintains an Audit Committee which was formed to perform the
following functions: recommend to the Board the independent auditors to be
employed; discuss the scope of the independent auditors' examination; review the
financial statements and the independent auditors' report; solicit
recommendations from the independent auditors regarding internal controls and
other matters; review all related party transactions for potential conflicts of
interest; make recommendations to the Board; and perform other related tasks as
requested by the Board. During the year ended December 31, 2000, the Audit
Committee, currently consisting of Messrs. Gelles, Labate and Tepper, met one
time.

     The Board Of Directors met ten times during 2000 and each director
participated in at least 90 percent of those meetings.

Section 16(a) Beneficial Ownership Reporting Compliance

     Section 16(a) of the Exchange Act of 1934 requires our directors, executive
officers and holders of more than 10 percent of our common stock to file with
the SEC initial reports of ownership and reports of changes in ownership of
common stock and other of our equity securities. We believe that during the year
ended December 31, 2000, our officers, directors and holders of more than 10
percent of our common stock complied with all Section 16(a) filing requirements,
except that Alexander Hewitt was late in filing a Form 4, Statement Of Changes
Of Beneficial Ownership Of Securities, concerning one transaction and Jerry
Tepper and Harry Gelles were late in filing a Form 3, Initial Statement Of
Beneficial Ownership Of Securities. In making these statements, we have relied
upon the written representations of our directors and officers and our review of
the monthly statements of changes filed with us by our officers and directors.

ITEM 10. EXECUTIVE COMPENSATION


Summary Compensation Table

     The following table sets forth in summary form the compensation received
during each of the last three successive completed fiscal years ended December
31, 2000 by William T. Atkins, our Chief Executive Officer, James F. Etter, our
former President, and Mr. Charles K. Knight, our President. No other employees
received total salary and bonus exceeding $100,000 during any of the last three
fiscal years.

<TABLE>
<CAPTION>
                                               Summary Compensation Table
                                               --------------------------
                                                                                  Long Term Compensation
                                                                                  ----------------------
                                          Annual Compensation                   Awards             Payouts
                                          -------------------                   ------             -------

                                                                Other Annual  Restricted          All other
Name and                  Fiscal      Salary        Bonus       Compensation    Stock     Options  Payouts   Compensation
Principal Position         Year       ($)(1)       ($)(2)          ($)(3)      Awards(#)    (#)     ($)(3)      ($)(4)
-------------------------------------------------------------------------------------------------------------------------
<S>                        <C>       <C>   <C>          <C>           <C>         <C>         <C>      <C>         <C>
William T. Atkins          2000      $    -0-          -0-           -0-         -0-         -0-      -0-         -0-
Chief Executive Officer    1999 (5)  $    -0-          -0-           -0-         -0-      12,000      -0-         -0-

Charles K. Knight          2000 (6)  $    -0-          -0-           -0-         -0-         -0-      -0-         -0-
President

James F. Etter             2000      $126,788 (9)      -0-       $15,000 (8)(9)  -0-      10,000      -0-         -0-
Former President           1999      $120,750      $15,326 (7)   $15,000 (8)     -0-         -0-      -0-         -0-
                           1998      $115,000      $20,000       $15,000 (8)     -0-      10,000      -0-         -0-
----------
</TABLE>

                                       28
<PAGE>


(1)  The dollar value of base salary (cash and non-cash) received.

(2)  The dollar value of bonus (cash and non-cash) received during the year
     indicated.

(3)  AmeriVest does not have in effect any plan that is intended to serve as
     incentive for performance to occur over a period longer than one fiscal
     year except for our 1995 Stock Option Plan and 1998 Stock Option Plan.
     AmeriVest has entered into an agreement with Sheridan Realty Advisors, LLC
     that provides for performance-based incentives.

(4)  All other compensation received that AmeriVest could not properly report in
     any other column of the Summary Compensation Table including annual
     AmeriVest's contributions or other allocations to vested and unvested
     defined contribution plans, and the dollar value of any insurance premiums
     paid by, or on behalf of, AmeriVest with respect to term life insurance for
     the benefit of the named executive officer, and, the full dollar value of
     the remainder of the premiums paid by, or on behalf of, AmeriVest.

(5)  Mr. Atkins became Chief Executive Officer of AmeriVest on December 22,
     1999.

(6)  Mr. Knight became President of AmeriVest on October 2, 2000.

(7)  Consists of $15,326 for accrued vacation time from 1997 through December
     31, 1999.

(8)  Consists of $12,000 to reimburse for medical and life insurance coverage
     and a $3,000 contribution to SIMPLE IRA Plan for 2000, 1999 and 1998.

(9)  Consists of compensation paid under the employment agreement and the
     severance agreement described below.


Option Grants Table

     The following table sets forth information concerning individual grants of
stock options made during the fiscal year ended December 31, 2000 to each named
executive officer.

              Option Grants For Fiscal Year Ended December 31, 2000
              -----------------------------------------------------

                              % of Total Options
                  Options    Granted to Employees   Exercise or Base  Expiration
     Name       Granted (#)     in Fiscal Year      Price ($/Share)      Date
     ----       -----------     --------------      ---------------      ----
James F. Etter    10,000              29%             $5.00/Share      12/31/04


Employment Contracts And Termination Of Employment And Change-In-Control
Arrangements

     Advisory Agreement With Sheridan Realty Advisors

     Under the advisory agreement that we entered into with Sheridan Realty
Advisors, LLC effective January 1, 2000, Sheridan Realty Advisors received
incentive compensation in the form of five-year warrants to purchase up to
750,000 shares of common stock at $5 per share (the "Advisor Warrants") as an
advisory fee based on new real property acquisitions. For additional information
concerning the Advisors Warrants, see below, "Sheridan Realty Advisors'
Warrants". William T. Atkins, our Chief Executive Officer and Chairman of our
Board, is the co-manager, chairman and a 20 percent owner of Sheridan Realty
Advisors. Charles K. Knight, President and a director of AmeriVest, is the
co-manager, president and a 20 percent owner of Sheridan Realty Advisors. D.
Scott Ikenberry, our Chief Financial Officer, is the chief financial officer and
a 20 percent owner of Sheridan Realty Advisors. Messrs. Alexander S. Hewitt and
John B. Greenman, each of whom is a Vice President, are the Vice-Chairman and
Vice President, respectively, and 20 percent owners of Sheridan Realty Advisors.

                                       29
<PAGE>


     Employment Agreement With James F. Etter

     We entered into an employment agreement (the "Etter Agreement") with James
F. Etter, our former President, for the period from January 1, 1998 until
December 31, 2000, which replaced a previous agreement effective as of January
1, 1996. For the 1999 fiscal year, the Etter Agreement provided for the payment
of salary at the rate of $10,062.50 per month. For the 2000 fiscal year, the
Etter Agreement provided for salary at the rate of $10,565.63 per month. The
Etter Agreement also provided that we would reimburse Mr. Etter for up to
$12,000 annually for medical and insurance expenses paid by Mr. Etter until we
adopted health care plans covering these matters. Effective January 1, 2000, Mr.
Etter was covered under the medical insurance plan maintained by Sheridan Realty
Advisors on behalf of all AmeriVest employees.

     On December 9, 1998, the Board granted to Mr. Etter a bonus of $20,000 for
1998 and options to purchase 10,000 shares of common stock. On December 23,
1999, the Board authorized a payment to Mr. Etter of $15,326 for unused accrued
vacation.

     The Etter Agreement also provided that if we were acquired by another
company, and if the acquiring company did not offer Mr. Etter a position in the
Denver area at a salary level equal to or greater than his then current salary,
then all unexercised stock options held by Mr. Etter would immediately become
exercisable, and we would pay Mr. Etter an amount equal to one year's salary.

     Effective January 1, 2000, we entered into a Severance Protection Agreement
(the "Severance Agreement") with Mr. Etter that is separate from the Etter
Agreement. We agreed with Mr. Etter to continue paying him salary and benefits
for 18 months if he is terminated by AmeriVest other than for cause. These
payments would be reduced by the amount of any severance payments made to Mr.
Etter pursuant to the Etter Agreement.

     Effective September 30, 2000 (the "Termination Date"), we entered into a
Separation Agreement And Release with Mr. Etter under which it was mutually
agreed to terminate Mr. Etter's employment. Mr. Etter agreed to resign from his
positions as an officer of AmeriVest and, as applicable, as an officer and
director of each of AmeriVest's subsidiaries and affiliates and AmeriVest agreed
to pay Mr. Etter the following compensation, benefits and options:

     o    During the period of October 1, 2000 through and including June 30,
          2002 (the "Severance Period"), AmeriVest will pay Mr. Etter $10,565.63
          per month, with payments being made on AmeriVest's usual payroll
          dates. No additional compensation for vacation and sick days will
          accrue or be payable to Mr. Etter after the Termination Date.

     o    During the Severance Period, AmeriVest will pay Mr. Etter an
          additional $1,000 per month to be used by Mr. Etter to reimburse
          AmeriVest for medical, dental and vision insurance premiums on behalf
          of Mr. Etter and Mr. Etter's dependents and beneficiaries, or to pay
          such premiums directly, including payment of premiums for life
          insurance in effect on the Termination Date.

     o    As of the Termination Date, Mr. Etter received 15,000 of the Advisor
          Warrants issued by AmeriVest to Sheridan Realty Advisors, LLC and
          10,000 additional stock options from AmeriVest with the same terms and
          conditions concerning vesting, term and exercise price as the Advisor
          Warrants. The exercisability of the 15,000 Advisor Warrants allocated
          to the benefit of Mr. Etter is governed by the terms of the Advisory
          Agreement between AmeriVest and the Advisor. See below, "--Sheridan
          Realty Advisors' Warrants."

1995 Stock Option Plan

     Pursuant to our 1995 Stock Option Plan (the "1995 Plan"), we may grant
options to purchase an aggregate of 130,000 shares of our common stock to key
employees, directors and other persons who have contributed or are contributing
to our success. The options granted pursuant to the 1995 Plan may be incentive
options qualifying for beneficial tax treatment for the recipient or they may be
non-qualified options. With respect to options granted to persons other than our
directors who are not also our employees, the 1995 Plan is administered by an
option committee that determines the terms of the options subject to the
requirements of the 1995 Plan. Under the terms of the 1995 Plan, the Board Of
Directors is permitted to serve, and has served, as the option committee. In May
1995, four outside directors were granted an aggregate of 48,000 options with an

                                       30
<PAGE>


exercise price of $5.00 per share pursuant to the 1995 Plan, one-third of the
options granted becoming exercisable on each December 30 for three years
thereafter, provided that the recipient was still a director on that date.
12,000 of these options expired without being exercised. In December 1997, three
outside directors were granted an aggregate of 36,000 options with an exercise
price of $4.4375 per share pursuant to the 1995 Plan, and with one-third of the
options granted becoming exercisable on each December 30 for three years
thereafter, provided that the recipient was still a director on that date. At
December 31, 2000, options to purchase an aggregate of 123,500 shares of common
stock were outstanding under the 1995 Plan. The option committee or the Board
may grant additional options to purchase 6,500 shares pursuant to the 1995 Plan.

1998 Stock Option Plan

     Pursuant to our 1998 Stock Option Plan (the "1998 Plan"), we may grant
options to purchase an aggregate of 200,000 shares of common stock to key
employees, directors and other persons who have or are contributing to our
success. The options granted pursuant to the 1998 Plan may be incentive options
qualifying for beneficial tax treatment for the recipient, non-qualified
options, or non-qualified non-discretionary options. The terms of the 1998 Plan
concerning incentive options and non-qualified options are substantially the
same except that only our employees or employees of subsidiaries are eligible
for incentive options, and employees and other persons who have contributed or
are contributing to our success are eligible for non-qualified options.
Non-qualified non-discretionary options may be granted only to outside
directors. With respect to options granted to persons other than outside
directors, the 1998 Plan also is administered by an option committee that
determines the terms of the options subject to the requirements of the 1998
Plan. Under the terms of the 1998 Plan, the Board Of Directors is permitted to
serve, and has served, as the option committee. The portion of the 1998 Plan
concerning non-qualified, non-discretionary options provides that outside
directors automatically receive options to purchase 12,000 shares pursuant to
the 1998 Plan at the time of their initial election as an outside director. The
options held by outside directors are not exercisable at the time of grant, but
options to purchase 4,000 shares become exercisable for each outside director on
December 30 of each of the first three years immediately following the date of
grant of these options to the outside director. The exercise price for the
non-qualified non-discretionary options is the fair market value of the common
stock on the date these options are granted. Shares acquired upon exercise of
these options cannot be sold for six months following the date of grant. If not
previously exercised, non-qualified non-discretionary options that have been
granted expire upon the later to occur of five years after the date of grant and
two years after the date these options first became exercisable. The
non-qualified non-discretionary options also expire 90 days after the
optionholder ceases to be our director. At any time all of an outside director's
options have become exercisable, non-qualified non-discretionary options to
purchase an additional 12,000 shares, which are not exercisable at the time of
grant, shall be granted automatically to that outside director.

     All options granted under the 1998 Plan will become fully exercisable upon
the occurrence of a change in control of AmeriVest or of certain mergers or
other reorganizations or asset sales described in the 1998 Plan. Options granted
pursuant to the 1998 Plan are not transferable during the optionee's lifetime.
Subject to the other terms of the 1998 Plan, the option committee has discretion
to provide vesting requirements and specific expiration provisions with respect
to the incentive options and non-qualified options granted. At December 31,
2000, options to purchase 79,500 shares of common stock were outstanding under
the 1998 Plan and options to purchase 120,500 were available to be granted
pursuant to the 1998 Plan.

Sheridan Realty Advisors' Warrants

     Under the advisory agreement that we entered into with Sheridan Realty
Advisors effective January 1, 2000, Sheridan Realty Advisors received
compensation designed to provide an incentive for its performance in the form of
an advisory fee based on new real property acquisitions and the Advisor Warrants
to purchase up to 750,000 shares of our common stock at $5 per share until
January 1, 2005. Exercise of the warrants can occur after January 1, 2003 only
if another vesting event has occurred. The warrants were issued as of January 1,
2000 and 225,000 warrants vested immediately. The balance of up to 525,000
warrants vest only upon completion of an acquisition, purchase or long-term
lease of real property by us in an aggregate exercise price equal to 2.1 percent
of the Equity Value of the property acquired. "Equity Value" is equal to the
acquisition price of the property (before expenses of purchase) less any
mortgage debt assumed or incurred in connection with the acquisition plus any
capital expenditures and lease-up costs incurred in connection with the property
during the first 12 months of ownership. The total amount of Equity Value of
real property subject to the incentive compensation provision shall not exceed
$25 million.

                                       31
<PAGE>


Compensation Of Outside Directors

     We compensate outside directors $250 per month plus $300 for each meeting
of the Board that they attend. We also reimburse directors for expenses incurred
in attending meetings and for other expenses incurred on our behalf. In
addition, each director who is not our employee or an employee of Sheridan
Realty Advisors automatically receives non-qualified non-discretionary options
to purchase shares of common stock.



ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


     As of March 31, 2001, there were 3,171,381 shares of our common stock
outstanding. The following table sets forth certain information as of that date
with respect to the beneficial ownership of our common stock by each director
and nominee for director, by all executive officers and directors as a group,
and by each other person known by us to be the beneficial owner of more than
five percent of our common stock:

Name and Address of                     Number of Shares         Percentage of
Beneficial Owner                     Beneficially Owned (1)   Shares Outstanding
----------------                     ----------------------   ------------------

William T. Atkins                          343,288 (2)               10.8%
1780 South Bellaire Street, Suite 515
Denver, Colorado 80222

James F. Etter                              71,000 (3)                2.2%
1780 South Bellaire Street, Suite 515
Denver, Colorado 80222

Harry P. Gelles                             10,094 (4)                 *
1114 State Street, Suite 236
Santa Barbara, California 93101

Alexander S. Hewitt                        360,772 (5)               11.37%
1780 South Bellaire Street, Suite 515
Denver, CO 80222

Robert W. Holman, Jr.                       13,501 (6)                 *
P.O. Box 8
Pebble Beach, CA 93921

Charles K. Knight                           22,937 (7)                 *
1780 South Bellaire Street, Suite 515
Denver, Colorado 80222

John A. Labate                              12,000 (8)                 *
5260 South Beeler Court
Englewood, Colorado  80111

Robert J. McFann                            62,190 (8)(9)             1.9%
3260 Zephyr Court
Wheat Ridge, Colorado 80033

Jerry J. Tepper                            464,000 (10)              14.4%
7255 North Sheridan Street
Arvada, CO 80033

All Officers And Directors As A Group    1,359,783 (2-10)            40.65%
   (11 Persons)

Schoenberg Farms, Inc.                     350,000 (11)              10.9%
7255 North Sheridan Street
Arvada, CO 80002

Sheridan Realty Partners, L.P.             200,788                    6.3%
1780 South Bellaire Street, Suite 515
Denver, CO 80222

----------
*Less than one percent

                                       32
<PAGE>


(1)  "Beneficial ownership" is defined in the regulations promulgated by the SEC
     as having or sharing, directly or indirectly (1) voting power, which
     includes the power to vote or to direct the voting, or (2) investment
     power, which includes the power to dispose or to direct the disposition, of
     shares of the common stock of an issuer. Unless otherwise indicated, the
     beneficial owner has sole voting and investment power.

(2)  Includes 32,746 shares of common stock owned directly by Mr. Atkins;
     217,093 shares in which Mr. Atkins has an indirect pecuniary interest,
     194,801 shares of which he disclaims beneficial ownership; 8,000 shares of
     common stock underlying currently exercisable options; 200 shares of common
     stock held by his minor children and 100 shares of common stock underlying
     currently exerciseable warrants held by his minor children.

(3)  Includes 1,000 shares of common stock owned directly by Mr. Etter; 70,000
     shares of common stock underlying currently exercisable options held by Mr.
     Etter. See "Executive Compensation--Employment Contracts And Termination Of
     Employment And Change-In-Control Arrangements--Option Grants" for
     additional information concerning Mr. Etter's options.

(4)  Includes 4,000 shares of common stock owned directly by Mr. Gelles and
     6,000 shares of common stock underlying currently exercisable options and
     warrants held by Mr. Gelles.

(5)  Includes 217,093 shares owned by entities in which Mr. Hewitt has an
     indirect pecuniary interest. Mr. Hewitt disclaims beneficial ownership over
     an aggregate of 174,448 shares of common stock.

(6)  Includes 10,000 shares of common stock owned directly by Mr. Holman; 2,334
     shares in which Mr. Holman has an indirect pecuniary interest; and 1,167
     shares of common stock underlying currently exercisable warrants in which
     Mr. Holman has an indirect pecuniary interest.

(7)  Includes 13,364 shares of common stock owned directly by Mr. Knight; 9,500
     shares of common stock underlying currently exercisable options and
     warrants held by Mr. Knight; 200 shares of common stock held by his minor
     children; and 100 shares of common stock underlying currently exercisable
     warrants held by his minor children.

(8)  Includes the following numbers of shares underlying options to purchase
     shares of common stock that currently are exercisable that were granted to
     each outside director pursuant to our 1995 and 1998 Stock Option Plans:
     John Labate, 12,000; and Robert McFann, 12,000.

(9)  Includes 50,190 shares of common stock directly owned by Mr. McFann.

(10) Includes 50,000 shares of common stock directly owned by Mr. Tepper;
     360,000 shares of common stock in which Mr. Tepper has an indirect
     pecuniary interest; 4,000 shares of common stock underlying currently
     exercisable options held by Mr. Tepper; and 50,000 shares of common stock
     underlying currently exercisable warrants in which Mr. Tepper has an
     indirect pecuniary interest and in which he disclaims beneficial ownership
     over a portion of interest.

(11) Includes 300,000 shares of common stock directly owned by Schoenberg Farms,
     Inc. and 50,000 shares of common stock underlying currently exercisable
     warrants.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


     We have been involved in the following transactions with our current and
past directors and officers and by persons known by us to be the beneficial
owners of five percent or more of our common stock since January 1, 1999.

                                       33
<PAGE>


Asset Purchases

     Purchase Of Keystone Buildings

     Effective July 1, 1999, we completed the acquisition of three office
buildings, known as the Keystone Buildings, located in suburban Indianapolis,
Indiana from Sheridan Realty Partners, L.P., an affiliate of Sheridan Realty
Advisors, LLC, our advisor, and an affiliate of Messrs. Atkins, Ikenberry,
Knight, Hewitt and Greenman, senior members of our management team. See below,
"--Relationships Among AmeriVest And Various Sheridan Group Entities". The
Keystone Buildings contain a total of 95,836 square feet of rentable space. The
total purchase price for the Keystone Buildings was $7,944,000, which we paid by
assuming approximately $5,255,000 of existing debt and $116,400 of related
escrow balances on the properties and issuing 541,593 shares of our common stock
at the rate of $4.75 per share. In conjunction with the assumption of the debt,
we also agreed to indemnify the original guarantors of this debt if we fail to
repay it.

     As required pursuant to the Purchase And Sale Agreement with Sheridan
Realty Partners, L.P. regarding our acquisition of the Keystone Buildings, we
appointed William T. Atkins and Charles K. Knight to our Board. In December
1999, Mr. Atkins was elected as our Chief Executive Officer and Mr. Knight was
elected as our Secretary. Mr. Atkins is the President and a 16.5 percent owner
of Sheridan Realty Corp., which is the general partner of Sheridan Realty
Partners. Sheridan Realty Corp. holds a one percent interest in Sheridan Realty
Partners as the general partner and an additional 3.1335 percent interest as a
limited partner. In connection with the acquisition of the Keystone Buildings,
Mr. Atkins received approximately 30,196 of the shares of our common stock paid
by us as a portion of the purchase price. A trust company for which Mr. Atkins
serves as a director serves as trustee for trusts that also received 83,185
shares of our common stock. Mr. Atkins has no beneficial interest in any shares
held by the trust company. Mr. Atkins is also the Chairman and a 20 percent
owner of Sheridan Realty Advisors, LLC.

     We hired Sheridan Development, LLC to manage the Keystone Buildings for a
one-year term commencing on July 1, 1999. During that term, Sheridan Development
was responsible for all aspects of the management and operation of the Keystone
Buildings and coordinating the leasing of the Keystone Buildings. As
compensation, we pay a management fee equal to five percent of the gross monthly
rental income received from the Keystone Buildings. This management agreement
was terminated as of January 1, 2000 when Sheridan Realty Advisors became the
property manager for all of our properties other than the Texas properties. See
below, "--Agreement With Sheridan Realty Advisors, LLC".

     After we purchased the Keystone Buildings, Charles K. Knight purchased from
the Crawford, Wilson, Ryan & Agulnick, P.C. Profit Sharing Plan (the "Plan"), a
partner in Sheridan Realty Partners, L.P., the 5,343 shares to be received by
the Plan as a portion of the purchase price. Mr. Knight paid the Plan $4.40 per
share.

     Also after our purchase of the Keystone Buildings, William T. Atkins and
the Alexander S. Hewitt Trust purchased 3,589 shares of common stock from John
B. Greenman at a price of $4.75 per share. John Greenman is an employee of
Sheridan Realty Advisors, LLC. Alexander S. Hewitt also received 53,079 of the
shares of common stock paid by us as a portion of the purchase price for the
Keystone Buildings. The Alexander S. Hewitt Revocable Trust is a 17.50 percent
owner of Sheridan Realty Corp. A trust company for which Mr. Hewitt serves as a
director serves as trustee for trusts that received an aggregate of 83,185
additional shares of common stock. Mr. Hewitt is also a beneficiary of some of
these trusts. For additional information concerning the relationships of Messrs.
Greenman, Hewitt and Ikenberry with AmeriVest and various Sheridan entities, see
below, "--Relationships Among AmeriVest And Various Sheridan Group Entities".

     In order to pay a portion of the purchase price for the Panorama Falls
Property, on May 25, 2000, we borrowed $225,000 from the Alexander S. Hewitt
Trust, using $200,000 in connection with the purchase. This loan accrued
interest at the prime rate, was due on demand after one year or five days after
closing of our August 2000 public offering of Units of Common Stock and Warrants
with proceeds to us of at least $2 million, and was unsecured. We had the right
to prepay this loan at any time without penalty and did so in August, 2000 with
the proceeds of our public offering. Alexander S. Hewitt is a shareholder and
officer of AmeriVest, an owner and officer of Sheridan and a trustee and
beneficiary of the Alexander S. Hewitt Trust.

                                       34
<PAGE>


     Purchase Of Sheridan Investments, LLC Interest

     Effective July 1, 2000, we purchased through our wholly owned subsidiary
AmeriVest Inverness Inc., from Sheridan Realty Partners, LP sold a 9.639 percent
preferred limited liability company membership interest in Sheridan Investments,
LLC to us. Sheridan Investments owns all the ownership interests of Sheridan
Plaza at Inverness LLC, whose sole asset is a fee simple interest in two
multi-tenant office buildings located at 383 and 385 Inverness Drive South in
Denver, Colorado. The purchase price of the Sheridan Investments interest was
$658,918 payable in the form of 65,892 units, with each unit consisting of two
shares of our common stock and one redeemable common stock purchase warrant to
purchase one share of our common stock for $5.00 per share until July 12, 2005.
The agreement also provided for a reduction to the purchase price if, on or
before October 31, 2000, a member of Sheridan Investments sells a preferred
limited liability company membership interest at a price less than the purchase
price paid by us or Sheridan Investments issues additional preferred limited
liability company membership interests with substantially the same terms as the
Sheridan Investments interest at a price less than the purchase price paid by
us. No such transaction occurred and no reduction in the purchase price took
place. For information on our agreement to purchase 100 percent of Sheridan
Plaza at Inverness LLC, see below "--Purchase Of Sheridan Plaza At Inverness
LLC". For additional information on relationships of AmeriVest and Sheridan
Investments, LLC and Sheridan Plaza at Inverness LLC, see below,
"--Relationships Among AmeriVest And Various Sheridan Group Entities".

     Purchase of Sheridan Plaza at Inverness LLC

     In April 2001, we entered into an agreement with Sheridan Investments, LLC
for our AmeriVest Inverness Inc. subsidiary to purchase all the ownership
interests of Sheridan Plaza at Inverness LLC. The purchase price of $6,928,646
is to be paid by having Sheridan Investments, LLC redeem our 9.639 percent
preferred limited liability company membership interest in Sheridan Investments,
LLC and by our issuing 1,121,209 shares of common stock at the rate of $5.55 per
share. We are seeking shareholder approval for this transaction, which approval
will be solicited pursuant to a proxy statement meeting the requirements of the
SEC. For additional information on relationships of AmeriVest and Sheridan
Investments, LLC and Sheridan Plaza at Inverness LLC, see below,
"--Relationships Among AmeriVest And Various Sheridan Group Entities".

     Purchase of Key Man Life Insurance Policy

     On December 18, 2000, we authorized the purchase from Sheridan Investments,
LLC of the key man life insurance policy maintained on the life of William T.
Atkins, our Chairman and Chief Executive Officer. We agreed to pay $79,375.99
for this policy, which is the excess of the cash value of the policy over the
total loan outstanding on the policy. We agreed to pay this purchase price by
issuing shares of our restricted common stock valued at a price equal to the
volume-weighted average trading price of the Company's common stock for the five
most recent trading days preceding December 18, 2000. This resulted in a
purchase price of $4.868 per share and a total purchase price of 16,305 shares.
For additional information on relationships of AmeriVest and Sheridan
Investments, LLC, see below, "--Relationships Among AmeriVest And Various
Sheridan Group Entities".


Agreement With Sheridan Realty Advisors, LLC

Effective January 1, 2000, we entered into an agreement with Sheridan Realty
Advisors, LLC for it to assume responsibility for our day-to-day operations.
Sheridan Realty Advisors manages our assets and assists and advises our Board on
real estate acquisitions and investment opportunities. We pay Sheridan Realty
Advisors an administrative fee and a property management and accounting fee for
these services. Our agreement with Sheridan Realty Advisors provided that the
costs for these services in fiscal 2000 would be no greater than the costs
incurred by us for providing these services ourselves or in obtaining them from
outside sources in fiscal year 1999. In addition, Sheridan received incentive
compensation in the form of five-year warrants to purchase up to 750,000 shares
of our common stock at $5 per share and an advisory fee based on new real
property acquisitions. Issuance of the warrants was approved by our shareholders
in the June 6, 2000 annual meeting of shareholders. Sheridan Realty Advisors,
LLC plans to utilize the warrants as incentive compensation to its employees and
employees of AmeriVest in amounts and subject to vesting requirements to be
determined. William T. Atkins, Charles K. Knight, James F. Etter, John B.
Greenman and Alexander S. Hewitt received portions of the warrants. For
additional information on relationships of AmeriVest and Sheridan Realty
Advisors, LLC, see below, "--Relationships Among AmeriVest And Various Sheridan
Group Entities".

                                       35
<PAGE>


Relationships Among AmeriVest And Various Sheridan Group Entities

All of our executive officers and three of our directors have been officers,
directors or investors in various real estate investment companies, which are
related to our advisor. These partnerships, corporations and limited liability
companies have collectively been known as The Sheridan Group of companies. The
following table describes our officers and directors who have relationships with
The Sheridan Group of companies:

      Name                                  Positions With AmeriVest
      ----                                  ------------------------

William T. Atkins              Chief Executive Officer, Director and Chairman of
                               the Board

Charles K. Knight              President and Director

John Greenman                  Vice President

Alexander Hewitt               Vice President and Secretary

D. Scott Ikenberry             Chief Financial Officer

The following table describes the various Sheridan Group entities which have
previously had or currently have a relationship with AmeriVest as described
elsewhere in this section, the nature of that relationship and the ownership of
officers, directors and principal shareholders in each entity.

<TABLE>
<CAPTION>
                            Direct Relationship to
Sheridan Group Entity       AmeriVest                   Ownership of Sheridan Group Entity          Management of Sheridan Entity
---------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>                         <C>                                         <C>
Sheridan Realty             Advisor (1)                 William Atkins - 20%                        Mr. Atkins - Chairman
Advisors, LLC                                           Charles Knight - 20%                        Mr. Hewitt - Vice
                                                        John Greenman - 20%                         Chairman
                                                        Alexander Hewitt - 20%                      Mr. Knight - President
                                                        D. Scott Ikenberry - 20%                    Mr. Greenman - Senior
                                                                                                    Vice President
                                                                                                    Mr. Ikenberry - Chief
                                                                                                    Financial Officer

Sheridan Realty             6.3% shareholder (2)        Sheridan Realty Corp. - 3.10% owner         Sheridan Realty Corp. -
Partners, L.P.                                          Alexander Hewitt - beneficiary of two       General Partner
                                                        trusts which own 20.15%

Sheridan Realty Corp.       None                        William Atkins - 16.5%                      Mr. Hewitt - Executive
                                                        Alexander Hewitt - 20.0%                    Vice President

Sheridan Investments,       0.51% shareholder (3)       Atkins Ltd. Partnership - 14.056%
LLC                                                     Alexander Hewitt - 16.064%
                                                        Sheridan Management Corp. - 8.835%
                                                        Sheridan Development, LLC - incentive
                                                        interest (4)

Sheridan Management         None                        William Atkins - 50%
Corp.                                                   Alexander Hewitt - 50%

Sheridan Development,       None                        William Atkins - 25.05%                     Mr. Atkins - Co-Manager
LLC                                                     Alexander Hewitt - 25.05%                   and President
                                                        John Greenman - 20.00%                      Mr. Knight - Vice
                                                        D. Scott Ikenberry - 15.00%                 President
                                                        Charles K. Knight - 14.90%

Sheridan Plaza at           None (5)                    Sheridan Investments, LLC - 100%
Inverness, LLC
</TABLE>

Notes:

     (1)  Sheridan Realty Advisors receives an administrative fee, a property
          management and accounting fee and incentive compensation in the form
          of warrants to purchase up to 750,000 shares of AmeriVest common stock
          at $5 per share through December 2005. See, "--Agreement With Sheridan
          Realty Advisors, LLC".

                                       36
<PAGE>


     (2)  Includes 197,676 shares issued in connection with the acquisition of a
          9.639% limited liability company interest in Sheridan Investments, LLC
          and additional shares from reinvestment of dividends through our
          dividend reinvestment plan (DRIP). This interest will be redeemed as
          part of the purchase price for our acquisition of Sheridan Plaza at
          Inverness, LLC. See, "--Asset Purchases--Purchase Of Sheridan
          Investments, LLC Interest" and "--Asset Purchases--Purchase Of
          Sheridan Plaza At Inverness, LLC".

     (3)  Includes 16,305 shares issued in connection with the acquisition of a
          key man life insurance policy on our Chairman and CEO. See, "--Asset
          Purchases--Purchase Of Key Man Life Insurance Policy". Does not
          reflect the acquisition of Sheridan Plaza at Inverness by AmeriVest
          for 1,121,209 shares of AmeriVest common stock. See, "--Asset
          Purchases--Purchase Of Sheridan Plaza At Inverness, LLC." After the
          acquisition, assuming no additional common shares outstanding other
          than the shares issued to Sheridan Investments, Sheridan Investments
          will beneficially own 26.5% of AmeriVest for purposes of SEC
          regulations. Because of Internal Revenue Rules concerning the
          determination of ownership for purposes of qualifying as a REIT differ
          from the SEC beneficial ownership rules, this beneficial ownership
          will not cause a violation of IRS rules concerning REIT share
          ownership.

     (4)  Sheridan Development receives a preferred distribution equal to 33
          1/3% of distributions once other members have received a return of
          their original capital contribution plus their preferred return.

     (5)  After the transaction described in note (3) above, this entity will be
          100% owned by AmeriVest. See, "--Asset Purchases--Purchase Of Sheridan
          Plaza At Inverness, LLC".

For a description of the beneficial ownership of our shares by each of Messrs.
Atkins, Hewitt and Knight and Sheridan Realty Partners, L.P., see above,
"Beneficial Owners Of Securities".


Conflicts Of Interest Policies

     The Board and our officers are subject to certain provisions of Maryland
law which are designed to eliminate or minimize the effects of certain potential
conflicts of interest. In addition, the bylaws provide that any transaction
between us and an interested party must be fully disclosed to the Board, and
that a majority of the directors not otherwise interested in the transaction
(including a majority of independent directors) must make a determination that
the transaction is fair, competitive and commercially reasonable and on terms
and conditions not less favorable to us than those available from unaffiliated
third parties.

     All future transaction between us and our officers, directors and five
percent shareholders will be on terms no less favorable than could be obtained
from independent third parties and will be approved by a majority of
independent, disinterested directors of AmeriVest. We believe that by following
these procedures, AmeriVest will be able to mitigate the possible effects of
these conflicts of interest.

     Other than as described in this section, there are no material
relationships between us and our directors, executive officers or known holders
of more than five percent of our common stock.


                                       37
<PAGE>


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits.
          ---------

     Exhibit Index

          Number        Description
          ------        -----------

            2           Form Of Agreement And Plan Of Merger Of AmeriVest And
                        AMVP Inc. (to reincorporate in Maryland) (1)

            3.1         Articles Of Incorporation (2)

            3.2         Bylaws (3)

            4.1         Specimen Common Stock Certificate (4)

            10.1        Purchase And Sale Agreement dated April 26, 1999
                        (Sheridan Realty Partners, L.P.) (5)

            10.2        Advisory Agreement with Sheridan Realty Advisors, LLC
                        dated January 1, 2000 (6)

            10.3        1995 Stock Option Plan (7)

            10.4        1998 Stock Option Plan (8)

            10.5        Dividend Reinvestment Plan (9)

            10.6        Form of Commercial Contract To Buy And Sell Real Estate
                        (10)

            10.7        Schedule Of Material Terms Of Commercial Contracts To
                        Buy And Sell Real Estate (10)

            10.8        Agreement Of Sale dated February 24, 2000 between
                        AmeriVest Broadway Properties Inc. and Jones Panorama
                        Property, Inc. (11)

            10.9        Form of Subscription Agreement (11)

            10.10       Form of Escrow Agreement between AmeriVest and U.S. Bank
                        (11)


            10.11       Purchase And Sale Agreement effective July 1, 2000
                        (Sheridan Realty Partners, L.P.)*

            10.12       Purchase And Sale Agreement dated August 31, 2000
                        (Sheridan Center at I-25 and Colorado Boulevard)*

            21          Subsidiaries of AmeriVest*


            23.1        Consent of Arthur Andersen LLP

            23.2        Consent of Wheeler Wasoff, P.C.

---------------------------


          *    Previously filed.


                                       38
<PAGE>


          (1)  Incorporated by reference from Exhibit A of AmeriVest's Proxy
               Statement concerning AmeriVest's June 29, 1999 Annual Meeting Of
               Stockholders.

          (2)  Incorporated by reference from Exhibit B of AmeriVest's Proxy
               Statement concerning AmeriVest's June 29, 1999 Annual Meeting Of
               Stockholders.

          (3)  Incorporated by reference from Exhibit C of AmeriVest's Proxy
               Statement concerning AmeriVest's June 29, 1999 Annual Meeting Of
               Stockholders.

          (4)  Incorporated by reference from Exhibit 4.1(a) of AmeriVest's
               Registration Statement on Form SB-2 filed with the SEC on June
               21, 1996 (Registration No. 333-5114-D).

          (5)  Incorporated by reference from Exhibit 10.1 of AmeriVest's Proxy
               Statement concerning AmeriVest's June 29, 1999 Annual Meeting Of
               Stockholders.

          (6)  Incorporated by reference from Exhibit 10.1 of AmeriVest's
               Current Report on Form 8-K filed on January 18, 2000.

          (7)  Incorporated by reference from AmeriVest's Annual Report on Form
               10-KSB for the year ended December 31, 1997.

          (8)  Incorporated by reference from AmeriVest's Proxy Statement
               concerning AmeriVest's May 21, 1998 Annual Meeting Of
               Stockholders filed with the SEC on March 30, 1998.

          (9)  Incorporated by reference from AmeriVest's Registration Statement
               on Form S-3 filed with the SEC on August 21, 2000 (File No.
               333-44210).

          (10) Incorporated by reference from AmeriVest's Current Report on Form
               8-K dated July 13, 1998.

          (11) Incorporated by reference from AmeriVest's Registration Statement
               on Form SB-2 filed with the SEC on March 3, 2000.

     (b) Reports On Form 8-K. During the fourth quarter of the fiscal year ended
December 31, 2000, we filed Current Reports on Form 8-K/A and Form 8-K dated
November 13, 2000 and November 16, 2000, respectively. The November 13, 2000
Current Report was an amendment to Form 8-K filed on September 8, 2000 to
include financial statements. The November 16, 2000 Current Report consisted of
Regulation FD disclosure reported under "Item 9. Regulation FD Disclosure".
Subsequent to December 31, 2000 and prior to filing this Annual Report on Form
10-KSB, we filed two Current Reports on Form 8-K and Form 8-K/A dated February
6, 2001 and February 9, 2001, respectively. These events consisted of Regulation
FD disclosure reported under "Item 9. Regulation FD Disclosure".

                                       39
<PAGE>



                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                      AMERIVEST PROPERTIES INC.



Date:  April 30, 2001                 By:  /s/ William T. Atkins
                                      ------------------------------------------
                                      William T. Atkins, Chief Executive Officer



     In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.

         Signatures                     Title                          Date
         ----------                     -----                          ----


/s/ William T. Atkins          Chief Executive Officer            April 30, 2001
----------------------------   (Principal Executive Officer)
William T. Atkins              and Chairman of the Board


/s/ Charles K. Knight          President and Director             April 30, 2001
----------------------------
Charles K. Knight


/s/ D. Scott Ikenberry         Chief Financial Officer            April 30, 2001
----------------------------   (Principal Financial Officer)
D. Scott Ikenberry

                               Director                           April __, 2001
----------------------------
James F. Etter


/s/ Harry P. Gelles            Director                           April 30, 2001
-------------------------
Harry P. Gelles


/s/ Robert W. Holman, Jr.      Director                           April 30, 2001
-------------------------
Robert W. Holman, Jr.


/s/ John A. Labate             Director                           April 30, 2001
-------------------------
John A. Labate


/s/ Robert J. McFann           Director                           April 30, 2001
-------------------------
Robert J. McFann


/s/ Jerry Tepper               Director                           April 30, 2001
-------------------------
Jerry Tepper


                                       40
<PAGE>


Exhibit Index

     Number        Description
     ------        -----------

       2           Form Of Agreement And Plan Of Merger Of AmeriVest And
                   AMVP Inc. (to reincorporate in Maryland) (1)

       3.1         Articles Of Incorporation (2)

       3.2         Bylaws (3)

       4.1         Specimen Common Stock Certificate (4)

       10.1        Purchase And Sale Agreement dated April 26, 1999
                   (Sheridan Realty Partners, L.P.) (5)

       10.2        Advisory Agreement with Sheridan Realty Advisors, LLC
                   dated January 1, 2000 (6)

       10.3        1995 Stock Option Plan (7)

       10.4        1998 Stock Option Plan (8)

       10.5        Dividend Reinvestment Plan (9)

       10.6        Form of Commercial Contract To Buy And Sell Real Estate
                   (10)

       10.7        Schedule Of Material Terms Of Commercial Contracts To
                   Buy And Sell Real Estate (10)

       10.8        Agreement Of Sale dated February 24, 2000 between
                   AmeriVest Broadway Properties Inc. and Jones Panorama
                   Property, Inc. (11)

       10.9        Form of Subscription Agreement (11)

       10.10       Form of Escrow Agreement between AmeriVest and U.S. Bank
                   (11)


       10.11       Purchase And Sale Agreement effective July 1, 2000
                   (Sheridan Realty Partners, L.P.)*

       10.12       Purchase And Sale Agreement dated August 31, 2000
                   (Sheridan Center at I-25 and Colorado Boulevard)*

       21          Subsidiaries of AmeriVest*


       23.1        Consent of Arthur Andersen LLP

       23.2        Consent of Wheeler Wasoff, P.C.

----------------------


     *    Previously filed


      (1)  Incorporated by reference from Exhibit A of AmeriVest's Proxy
           Statement concerning AmeriVest's June 29, 1999 Annual Meeting Of
           Stockholders.

      (2)  Incorporated by reference from Exhibit B of AmeriVest's Proxy
           Statement concerning AmeriVest's June 29, 1999 Annual Meeting Of
           Stockholders.

<PAGE>


      (3)  Incorporated by reference from Exhibit C of AmeriVest's Proxy
           Statement concerning AmeriVest's June 29, 1999 Annual Meeting Of
           Stockholders.

      (4)  Incorporated by reference from Exhibit 4.1(a) of AmeriVest's
           Registration Statement on Form SB-2 filed with the SEC on June
           21, 1996 (Registration No. 333-5114-D).

      (5)  Incorporated by reference from Exhibit 10.1 of AmeriVest's Proxy
           Statement concerning AmeriVest's June 29, 1999 Annual Meeting Of
           Stockholders.

      (6)  Incorporated by reference from Exhibit 10.1 of AmeriVest's
           Current Report on Form 8-K filed on January 18, 2000.

      (7)  Incorporated by reference from AmeriVest's Annual Report on Form
           10-KSB for the year ended December 31, 1997.

      (8)  Incorporated by reference from AmeriVest's Proxy Statement
           concerning AmeriVest's May 21, 1998 Annual Meeting Of
           Stockholders filed with the SEC on March 30, 1998.

      (9)  Incorporated by reference from AmeriVest's Registration Statement
           on Form S-3 filed with the SEC on August 21, 2000 (File No.
           333-44210).

      (10) Incorporated by reference from AmeriVest's Current Report on Form
           8-K dated July 13, 1998.

      (11) Incorporated by reference from AmeriVest's Registration Statement
           on Form SB-2 filed with the SEC on March 3, 2000.