Document:

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                                                                    EXHIBIT 10.2

                    PROPERTY MANAGEMENT AND LEASING AGREEMENT

                                     between

                           HINES REIT PROPERTIES, L.P.

                                       and

                       HINES INTERESTS LIMITED PARTNERSHIP

                               _____________, 20__

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                                TABLE OF CONTENTS

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ARTICLE 1 APPOINTMENT............................................................................................       2

         Section 1.1    Appointment..............................................................................       2

ARTICLE 2 TERM...................................................................................................       2

         Section 2.1    Term.....................................................................................       2

ARTICLE 3 RELATIONSHIP...........................................................................................       2

         Section 3.1    Relationship.............................................................................       2

ARTICLE 4 ASSIGNABILITY..........................................................................................       3

         Section 4.1    Assignability by Manager.................................................................       3

         Section 4.2    Assignment by Owner......................................................................       4

ARTICLE 5 SERVICES OF MANAGER....................................................................................       4

         Section 5.1    Management of the Premises...............................................................       4

         Section 5.2    Manager's Employees......................................................................       4

         Section 5.3    Budgets and Leasing Guidelines;  Annual Performance......................................       5

         Section 5.4    Collection of Rents......................................................................       7

         Section 5.5    Leasing Duties of Manager................................................................       8

         Section 5.6    Decorations and Repairs..................................................................       8

         Section 5.7    Operational Activities...................................................................       8

         Section 5.8    Taxes....................................................................................       9

         Section 5.9    Compliance with Agreements...............................................................       9

         Section 5.10   Payrolls.................................................................................       9

         Section 5.11   Banking Matters..........................................................................      10

         Section 5.12   Inspections of Premises..................................................................      10

         Section 5.13   Maintenance of Records...................................................................      10

         Section 5.14   Staffing for Emergencies.................................................................      10

         Section 5.15   Tenant Relations Program.................................................................      10

         Section 5.16   Communications with Owner................................................................      10

         Section 5.17   Books and Records........................................................................      10

         Section 5.18   Compliance with Laws.....................................................................      12
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         Section 5.19   Expenditures for Emergencies.............................................................      13

         Section 5.20   Establishment of Website.................................................................      13

         Section 5.21   Sarbanes-Oxley Compliance................................................................      13

         Section 5.22   Submission of Annual Reports.............................................................      13

ARTICLE 6 MANAGEMENT AUTHORITY...................................................................................      13

         Section 6.1    Limitation on Manager's Authority........................................................      13

         Section 6.2    Expenditure of Monies by Manager.........................................................      13

         Section 6.3    Capital Expenditures.....................................................................      14

         Section 6.4    Contracts with Affiliates of Manager.....................................................      15

         Section 6.5    Execution of Leases and Contracts........................................................      16

         Section 6.6    Structural Changes.......................................................................      16

ARTICLE 7 INSURANCE..............................................................................................      16

         Section 7.1    Owner's Insurance........................................................................      16

         Section 7.2    Manager's Insurance......................................................................      17

         Section 7.3    Contractor's and Subcontractor's Insurance...............................................      17

         Section 7.4    Insurance Requirements...................................................................      18

         Section 7.5    Waiver of Claims and Subrogation.........................................................      18

ARTICLE 8 OWNER'S RIGHT TO AUDIT.................................................................................      19

         Section 8.1    Audit Rights of Owner....................................................................      19

         Section 8.2    Correction of Internal Controls..........................................................      19

ARTICLE 9 BANK ACCOUNTS..........................................................................................      20

         Section 9.1    Deposits of Rents and Other Sums.........................................................      20

         Section 9.2    Security Deposit Records.................................................................      20

         Section 9.3    Owner to Have Access to Funds............................................................      20

         Section 9.4    Ownership of Bank Records................................................................      21

ARTICLE 10 PAYMENT OF EXPENSES...................................................................................      21

         Section 10.1   Payment by Manager of Expenses...........................................................      21

         Section 10.2   Expenses to be Borne by Manager..........................................................      24

         Section 10.3   Office for Manager.......................................................................      25
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ARTICLE 11 INSUFFICIENT INCOME...................................................................................      25

         Section 11.1   Insufficient Income......................................................................      25

ARTICLE 12 TERMINATION...........................................................................................      26

         Section 12.1   Termination by Owner or Manager..........................................................      26

         Section 12.2   Termination by Owner.....................................................................      26

         Section 12.3   Breach by Manager........................................................................      26

         Section 12.4   Breach by Owner..........................................................................      27

         Section 12.5   Final Accounting.........................................................................      27

         Section 12.6   Survival of Certain Rights and Obligations...............................................      28

ARTICLE 13 DEVELOPMENT AND CONSTRUCTION MANAGEMENT SERVICES......................................................      28

         Section 13.1   Construction Management Services.........................................................      28

         Section 13.2   Development Management Services..........................................................      29

ARTICLE 14 SALE OF THE PREMISES..................................................................................      29

         Section 14.1   Sale of Premises.........................................................................      29

ARTICLE 15 LEGAL PROCEEDINGS.....................................................................................      30

         Section 15.1   Legal Proceedings........................................................................      30

ARTICLE 16 MANAGER'S LIABILITY...................................................................................      30

         Section 16.1   Liability of Manager.....................................................................      30

         Section 16.2   Indemnity of Manager.....................................................................      30

         Section 16.3   Limitation on Making Certain Claims......................................................      31

         Section 16.4   Expenditures Made in Good Faith..........................................................      31

ARTICLE 17 REPRESENTATION AND WARRANTIES.........................................................................      32

         Section 17.1   No Reliance by Owner.....................................................................      32

         Section 17.2   Representations and Warranties...........................................................      32

ARTICLE 18 CONSENTS..............................................................................................      33

         Section 18.1   Granting of Consents.....................................................................      33

ARTICLE 19 SUBSIDIARIES AND AFFILIATES...........................................................................      33

         Section 19.1   Contracts with Manager's Affiliates......................................................      33
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ARTICLE 20 NOTICES...............................................................................................      34

         Section 20.1   Notices..................................................................................      34

ARTICLE 21 COMPENSATION .........................................................................................      35

         Section 21.1   Fees Payable to Manager..................................................................      35

         Section 21.2   Failure of Owner to Timely Pay...........................................................      40

ARTICLE 22 MISCELLANEOUS.........................................................................................      40

         Section 22.1   Pronouns.................................................................................      40

         Section 22.2   Amendments...............................................................................      41

         Section 22.3   Headings.................................................................................      41

         Section 22.4   Waiver...................................................................................      41

         Section 22.5   Successors and Assigns...................................................................      41

         Section 22.6   Governing Law............................................................................      41

         Section 22.7   Ownership of Premises....................................................................      41

         Section 22.8   Other Activities of Manager..............................................................      42

         Section 22.9   Compliance with Certain Laws.............................................................      42

         Section 22.10  Special Parties..........................................................................      42

         Section 22.11  Counterparts.............................................................................      42

         Section 22.12  Survival of Agreement....................................................................      43

         Section 22.13  Special Services.........................................................................      43
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                    PROPERTY MANAGEMENT AND LEASING AGREEMENT

                  THIS PROPERTY MANAGEMENT AND LEASING AGREEMENT ("Agreement")
is entered into effective as of the ____ day of ____________, 20__, by and
between Hines REIT Properties, L.P., a Delaware limited partnership (hereinafter
called "Owner"), and Hines Interests Limited Partnership, a Texas limited
partnership (hereinafter called "Manager"),

                               W I T N E S S E T H

                  WHEREAS, Owner is the owner of the land described in Schedule
A attached hereto together with the office building and other improvements
located thereon (the "Premises"); and

                  WHEREAS, Owner wishes to obtain the benefits of Manager's
expertise in the field of real estate management and leasing by relinquishing to
Manager control in the operation, direction, management, leasing and supervision
of the Premises, subject to the terms and provisions of this Agreement, and
Manager, for a fee and pursuant to the terms and provisions of this Agreement,
agrees to assume said control and discretion in the operation, direction,
management and supervision of the Premises on behalf of Owner.

                  NOW, THEREFORE, in consideration of the mutual covenants
herein contained and of other good and valuable consideration, the parties
hereto agree as follows:

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                                    ARTICLE 1

                                   APPOINTMENT

                  Section 1.1 Appointment. Owner contracts with Manager to
manage, lease, operate, direct and supervise the Premises on behalf of Owner and
to provide services as required under this Agreement.

                                   ARTICLE 2

                                      TERM

                  Section 2.1 Term. Subject to and upon the terms and conditions
set forth in this Agreement (including without limitation Article 12), the term
of this Agreement (the "Term") shall commence on the date hereof and shall
continue until the earlier of termination pursuant to Article 12 or ten (10)
years after the date of this Agreement. Thereafter, the Term shall continue from
year to year unless written notice is given by either party of its desire not to
continue this Agreement at least ninety days prior to any anniversary of the
commencement of this Agreement. Notwithstanding the foregoing, upon the taking
of possession of the Premises by a mortgagee through foreclosure or deed-in-lieu
of foreclosure, this Agreement may be terminated by such mortgagee upon ninety
(90) days prior written notice thereof.

                                   ARTICLE 3

                                  RELATIONSHIP

                  Section 3.1 Relationship. Manager shall at all times be the
independent contractor of Owner and not the employee or agent of Owner. Manager
shall have no right or power to contract with third parties for, on behalf of,
or in the name of Owner or otherwise to bind Owner. Except as expressly provided
herein to the contrary, Owner agrees to be

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responsible for and shall reimburse Manager for all costs, expenses and
disbursements reasonably and properly incurred by Manager in accordance with the
provisions of this Agreement in providing management, leasing and operational
services hereunder, such as, but not limited to, contracts for cleaning
services, contracts for landscaping or maintenance services and orders for
supplies and equipment, and Owner agrees to indemnify and hold Manager harmless
from and against the same.

                                   ARTICLE 4

                                  ASSIGNABILITY

                  Section 4.1 Assignability by Manager. Manager shall not
transfer or assign this Agreement or any part thereof or any of its rights or
obligations hereunder without the prior written consent of Owner, provided that
Owner's consent shall not be required for an assignment to a Hines Affiliate
(defined below). The foregoing shall not prevent Manager from pledging to any
person or entity Manager's right to receive fees under this Agreement. The
consent of Owner to one or more assignments of this Agreement shall not be
construed as, or result in, consent by Owner to any further or future assignment
or assignments. Any assignment or attempted assignment not made strictly in
accordance with the foregoing shall be void.

                  As used herein, "Hines Affiliate" shall mean any partnership,
limited liability company, corporation, trust or other entity as to which 50% or
more of the beneficial interests are held, directly or indirectly, by and
effective day to day Control resides in the Hines Family and/or any current or
former employees of Hines Interests Limited Partnership or its successors. For
the purposes of this Agreement, "Control" or "Controlled" shall mean with
respect to any person, the possession, directly or indirectly, of the power to
direct or cause the direction of the

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management and policies of such person, whether through the ownership of voting
securities, by contract or otherwise.

                  As used herein, "Hines Family" shall mean Jeffrey C. Hines
and/or Gerald D. Hines, their parents, brothers and sisters, their respective
spouses and children (natural and adopted) or grandchildren of any of the
foregoing and/or trusts for any of the foregoing.

                  Section 4.2 Assignment by Owner. If Owner conveys the Premises
or any part thereof to an Affiliate (defined below) of Owner, then Owner shall
assign this Agreement to such Affiliate. If Owner conveys the Premises to
someone who is not an Affiliate of Owner, then the provisions of Section 12.1
shall apply. "Affiliate" means, with reference to any entity or person, any
person or entity that directly or indirectly Controls, is Controlled by or is
under common Control with that person or entity.

                                   ARTICLE 5

                               SERVICES OF MANAGER

                  Section 5.1 Management of the Premises. Manager shall manage,
operate and maintain the Premises in a manner normally associated with the
management and operation of a high quality office building. Manager shall at all
times deal with third parties (whether or not affiliated with Manager) at arms'
length and in Owner's interest at all times. Manager shall act in a fiduciary
capacity with respect to the proper protection of and accounting for Owner's
assets.

                  Section 5.2 Manager's Employees. Manager shall have in its
employ at all times a sufficient number of capable employees to enable it to
properly, adequately, safely and economically manage, lease, operate and
maintain the Premises. All matters pertaining to the employment, supervision,
compensation, promotion and discharge of such employees are the

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responsibility of Manager. Manager is in all respects the employer of such
employees, but Owner may require that any particular employee or employees be
removed from duty with respect to the Premises if Owner reasonably deems such
employee or employees to be incompetent, careless, insubordinate or otherwise
objectionable. Manager shall fully comply with all applicable laws and
regulations having to do with workman's compensation, social security,
unemployment insurance, hours of labor, wages, working conditions, and other
employer-employee related subjects. All employees engaged by Manager shall be
the employees of Manager and not of Owner.

                  Section 5.3 Budgets and Leasing Guidelines; Annual
Performance. Manager shall prepare and submit to Owner a proposed operating
budget (the "Operating Budget"), capital budget (the "Capital Budget"),
marketing program and leasing guidelines (the "Marketing Program") for the
Premises for the management, leasing and operation of the Premises for the
forthcoming calendar year (or in the case of the first calendar year in which
the Term commences, the remainder of such year if it is not a full calendar
year) in a format approved by Owner. Manager shall also complete and deliver to
Owner a written review of its performance for the then current calendar year at
the same time (the "Performance Review") it delivers the budgets and programs as
contemplated in this Section 5.3. The scope and substance of the Performance
Review will be agreed to by the Manager and the Owner prior to the delivery of
the first review. The first such budgets, program and guidelines shall be
submitted to Owner within forty-five (45) days after the date of this Agreement
and in the future subsequent proposed budgets, program and guidelines shall be
delivered to Owner no later than October 15 of each calendar year. By October 15
of each calendar year, Manager will submit to Owner (i) a

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summary of the actual (through September 30) and projected (for the full year)
results of management and operation of the Premises for such calendar year and
(ii) a Performance Review for the then-current calendar year.

                  The leasing guidelines shall include the following:

                  (a) the minimum rental rate to be charged for office, and, if
         applicable, storage, antenna, retail and parking and the minimum and
         maximum term which may be provided in each category of space to be
         leased in the Premises;

                  (b) the maximum leasing concessions or inducements (on a per
         square foot basis) which may be provided with respect to the Premises;

                  (c) a list of currently vacant space in the Premises; and

                  (d) a list of space which will become available for lease in
         the Premises during the applicable calendar year.

                  Owner will consider the proposed budgets, program and
guidelines and then will consult with Manager within forty-five (45) days after
they are submitted in order to agree on an "Approved Operating Budget", an
"Approved Capital Budget", and "Approved Marketing Programs". Owner and Manager
will use good faith efforts to agree on the foregoing within such forty-five
(45) day period. Additionally, if Owner identifies any operating or performance
deficiencies that are within reasonable control of Manager after reviewing the
Performance Review, Owner shall give Manager written notice of such deficiencies
prior to the end of this forty-five (45) day period. Manager shall then have the
later of 30 days, or such time as is reasonably necessary, to cure the
deficiencies identified in such notice. If such deficiencies are not corrected
with this time period, Owner shall give Manager a second notice of its desire to

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terminate this Agreement pursuant to Section 12.2. If Manager does not cure such
deficiencies within thirty (30) days after this second notice, and provide Owner
written notice (and when applicable, evidence) that such deficiencies have been
cured, this Agreement may be terminated by Owner pursuant to Section 12.2.

                  No less frequently than quarterly, Manager shall during each
calendar year review the Approved Operating Budget, Approved Capital Budget, and
Approved Marketing Program, and compare the same to year-to-date activity to
determine whether revisions are needed. Any such needed revisions will be
submitted to Owner for its approval.

                  Manager agrees to use diligence and to employ all reasonable
efforts to ensure that the actual costs (net of amounts, if any, recovered from
third parties) of maintaining, leasing and operating the Premises shall not
exceed the approved budgets pertaining thereto.

                  Section 5.4 Collection of Rents. Manager shall use diligent
efforts to collect all rents (including, without limitation, billings resulting
from tenant participation in operating expenses, taxes and common area
maintenance charges) and other charges which may become due at any time from any
tenant or from others for services provided in connection with or for the use of
the Premises or any portion thereof. All monies so collected shall be deposited
in the Receipts Account (defined in Section 9.1). Manager cannot and may not
terminate any lease, lock out a tenant, institute a suit for rent or for use and
occupancy, or institute proceedings for recovery of possession of any premises,
without the prior written approval of Owner. In connection with such suits or
proceedings only legal counsel designated by Owner shall be retained. The
estimated costs of legal services to be incurred in bringing such approved suit
or proceeding shall be submitted to Owner for its approval. Manager shall not
write off any rental

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income of more than twenty percent (20%) of the gross monthly rent (up to a
maximum of $10,000) for any single tenant without the prior approval of Owner.

                  Section 5.5 Leasing Duties of Manager. Manager shall act as
leasing manager for the Premises and be responsible for the leasing activities
of the Premises. Manager may act without further approvals as long as Manager
acts in accordance with the approved marketing program and leasing guidelines.
It is understood that Owner is the only signatory authority for the execution of
all lease and related leasing documents and Manager shall not represent to the
contrary to prospective tenants and other parties.

                  Section 5.6 Decorations and Repairs. Manager shall institute
and supervise all ordinary and extraordinary repairs, decorations and
alterations, including the administration of a preventative maintenance program
for all mechanical, electrical and plumbing systems and equipment, provided that
such (unless the same relate to emergencies) are included in an Approved
Operating Budget or in an authorization by Owner pursuant to an Approved Capital
Budget.

                  Section 5.7 Operational Activities. Manager shall institute
and supervise all operational activities of the Premises, including but not
limited to:

                  A.       Supervision of the cleaning contractor;

                  B.       Supervision of the security contractor on behalf of
         Owner;

                  C.       Supervision of any landscaping contractor;

                  D.       Supervision of the window washing contractor;

                  E.       Responsibility for and supervision of the central
         plant and other H.V.A.C. equipment;

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                  F.       Responsibility for and supervision of a preventative
         maintenance program;

                  G.       Responsibility for and supervision for any necessary
         repairs to the Premises;

                  H.       Supervision for the maintenance of the elevators
         serving the Premises; and

                  I.       Responsibility for making arrangements for and
         administering account for utilities; and

                  J.       Any other activity reasonably required for the normal
         operation of any high quality office building.

                  As used herein, "supervise" and "supervision" shall also
include responsibility for the particular task to the extent the Owner so
directs and provides the funds therefor.

                  Section 5.8 Taxes. Manager shall obtain and verify bills for
real estate and personal property taxes, improvement assessments and other like
charges which are or may become liens against any portion of the Premises and
recommend payment or appeal as its best judgment may decide. Manager shall not
make any payments on account of any ground lease, mortgage, deed of trust or
other security instrument, if any, affecting any Premises unless such payments
are included in the Approved Operating Budget or otherwise approved by Owner.

                  Section 5.9 Compliance with Agreements. Manager shall operate
the Premises in compliance with any ground lease, space lease, mortgage, deed of
trust or other security instruments affecting the Premises and of which Manager
has knowledge, but Manager shall not be required to make any payment or incur
any liability on account thereof.

                  Section 5.10 Payrolls. Manager shall prepare or cause to be
prepared all payrolls and maintain comprehensive payroll records.

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                  Section 5.11 Banking Matters. Manager shall handle all banking
matters related to its contractual responsibility.

                  Section 5.12 Inspections of Premises. Manager shall conduct,
from time to time as Manager deems necessary or as Owner requests, inspections
of the Premises and provide Owner with a written report on its findings to the
extent requested by Owner.

                  Section 5.13 Maintenance of Records. Manager shall, on behalf
of Owner, maintain complete and identifiable records and files on all matters
pertaining to the Premises, including, without limitation, all revenues and
expenditures, service contracts and leases, all of which records and files shall
be the property of Owner.

                  Section 5.14 Staffing for Emergencies. Manager shall have
competent personnel available at all times for emergencies.

                  Section 5.15 Tenant Relations Program. Manager shall
administer a tenant relations program that maintains a high visibility of
management presence and service to tenants.

                  Section 5.16 Communications with Owner. Manager shall be
available for communications with Owner and will keep Owner advised of items
affecting the Premises.

                  Section 5.17 Books and Records.

                  (a) Manager, in the conduct of its responsibilities to Owner,
         shall maintain adequate and separate books and records for the Premises
         in accordance with generally accepted accounting principles ("GAAP"),
         which shall be supported by sufficient documentation to ascertain that
         said entries are properly and accurately recorded, which books and
         records shall be the property of Owner. However, any computer software
         or other systems of Manager which are used to generate or keep such
         books and records

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         shall remain the property of Manager. Such books and records shall
         include all information necessary to calculate and to audit amounts
         contained therein and shall otherwise comply with the requirements of
         the documents referred to in Section 5.9 hereof. Such books and
         records, as well as those records referred to in Section 5.13 hereof,
         shall be maintained by Manager at the Premises or at such other
         location as may be mutually agreed upon in writing, and at Manager's
         discretion in detail or summary form at the headquarters of Manager
         located in Houston, Texas. Manager shall utilize procedures to attempt
         to ensure such control over accounting and financial transactions as is
         reasonably required to protect Owner's assets from theft, error or
         fraudulent activity.

                  (b) Manager shall maintain records of, and furnish customary
         (or as requested) reports summarizing, all transactions occurring from
         the first day of the prior calendar quarter to the last day of the
         prior calendar quarter. These reports are to be received by Owner no
         later than thirty (30) calendar days after the end of the above
         described accounting period (or sooner if necessary for Owner or any
         partner of Owner's (direct or indirect) parent to comply with
         governmental requirements of which Manager is given reasonable advance
         notice) and must report financial details which Owner may request.
         Reports on vacancies and other matters pertaining to the management,
         leasing, operation, and maintenance of the Premises will be provided on
         a monthly basis in a format approved by Owner. The reports shall
         include a comparison of quarterly, year-to-date actual, and projected
         year-end income and expense with the Approved Operating Budget for the
         Premises in a format approved by Owner. In addition, Manager shall
         remit to Owner all unexpended funds (except for a reserve approved by
         Owner for contingencies

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         and operating working capital or such lesser amount as may be available
         after all proper disbursements from the Receipts Account) in the
         Receipts Account as of the end of the reporting quarter.

                  (c) All financial statements and reports required by Owner
         will be prepared on an accrual basis in accordance with GAAP, except
         for special financial reports which by their nature require a deviation
         from GAAP.

                  (d) Manager shall prepare such additional reports at such
         times and in such forms as may be reasonably requested from Owner from
         time to time. All reports of Manager to Owner shall be furnished in
         electronic form if Owner so requests.

                  (e) Manager shall maintain necessary liaison with Owner's
         accountant and shall provide such accountant with such reports and
         other information as Owner shall request.

                  Section 5.18 Compliance with Laws. Manager shall use its
reasonable efforts to assure full compliance with federal, state and municipal
laws, ordinances, regulations and orders relative to the use, operation, repair
and maintenance of the Premises and with the rules, regulations or orders of the
local Board of Fire Underwriters or other similar body. Manager shall promptly
remedy any violation of any such law, ordinance, rules, regulation or order
which comes to its attention, all at Owner's expense.

                  Expenses incurred in remedying violations may be paid from the
Disbursement Account (as defined in Section 9.1) provided such expenses do not
exceed $5,000 in any one instance. When more than such amount is required or if
the violation is one for which the Premises title holder might be subject to
penalty, Manager shall notify Owner by the end of the next business day to
assure that prompt arrangements may be made to remedy the violation.

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                  Section 5.19 Expenditures for Emergencies. Notwithstanding
anything contained herein to the contrary, in case of emergency, Manager may
make expenditures for repairs and other items which exceed approved budgets or
prior approvals from Owner without prior written approval if in the reasonable
judgment of Manager it is necessary to prevent damage or injury. Owner must be
informed of any such expenditures before the end of the next business day.

                  Section 5.20 Establishment of Website. Any and all reports
required of Manager under this Agreement shall be made available at a Website to
be established by Manager accessible through the Internet within one year after
Owner so requests.

                  Section 5.21 Sarbanes-Oxley Compliance. If requested by Owner,
all reporting, record keeping, internal controls and like matters by Manager
shall comply with the Sarbanes-Oxley Act.

                  Section 5.22 Submission of Annual Reports. All annual reports
to be furnished by Manager shall be furnished within thirty (30) days after the
end of the applicable calendar year.

                                   ARTICLE 6

                              MANAGEMENT AUTHORITY

                  Section 6.1 Limitation on Manager's Authority. Manager's
authority is expressly limited to the provisions provided herein or as may be
amended in writing from time to time by Owner and mutually agreed to and
accepted by Manager in writing.

                  Section 6.2 Expenditure of Monies by Manager. The Approved
Operating Budget shall constitute an authorization for Manager to expend money
to operate, lease and

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manage the Premises and Manager may do so without further approval as long as
Manager does not exceed the year-to-date budgeted amount for any line item
(after any allocation of any contingency that may be contained in the budget and
that can be applied to such line item). Whenever the year-to-date budgeted
amount for any line item is (or appears likely to be) exceeded, a year-to-date
budget variance and a revised operating budget for such line item shall be
presented to Owner for its consideration. Except as expressly permitted in this
Agreement, Manager may not act outside of the Approved Operating Budget until
the budget revision is approved in writing by Owner, which approval Owner will
endeavor to give in a timely manner. Once approved, Manager's authority with the
revised or any additionally revised budgets is the same as that authorized for
the original budget.

                  Section 6.3 Capital Expenditures. The Approved Capital Budget
shall not constitute an authorization for Manager to expend any money. Any
capital expenditures must be specifically authorized by Owner. With respect to
the purchase and installation of capital items, Manager shall recommend that
Owner purchase such items when Manager believes such purchase to be necessary or
desirable. Owner may arrange to purchase and install the same itself or may
authorize Manager to do so subject to prescribed supervision and specification
requirements and conditions. Unless Owner specifically waives such requirements,
either by memorandum or as an amendment to the contract, all new or replacement
capital items exceeding Twenty-five Thousand and No/100 Dollars ($25,000) shall
be awarded on the basis of competitive bidding, solicited in the following
manner:

                  (a) A minimum of three written bids will be obtained for each
         purchase in excess of $25,000.

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                  (b) Each bid will be solicited in a form prescribed by Owner
         so that uniformity will exist in the bid quotes.

                  (c) Manager shall provide Owner with all bid responses
         accompanied by Manager's recommendations as to the most acceptable bid.
         If Manager advises acceptance of other than the lowest bidder, Manager
         shall adequately support, in writing, its recommendations.

Owner shall be free to accept or reject any and all bids. Owner will communicate
to Manager in writing its acceptance or rejection of bids. Owner may pay for
capital expenses from its own resources or may authorize payment by Manager out
of the Disbursement Account.

                  Section 6.4 Contracts with Affiliates of Manager. Manager
shall not enter into any contract with Affiliate of Manager for cleaning,
maintaining, repairing or servicing the Premises or any of the constituent parts
of the Premises without the prior written consent of Owner. As a condition to
obtaining such consent, Manager shall supply Owner with a copy of the proposed
contract and shall state to Owner the affiliation between Manager (or other
person or persons in control of Manager) and the party proposed to supply such
goods or services, or both. Prior to entering into any such contract, whether or
not with an affiliated or related party, Manager shall submit a proposal to
Owner and Owner may veto the same if Owner reasonably deems it to be
unnecessary, wasteful or inappropriate. Further, any such contract must be on
market terms and Owner may require Manager to demonstrate the same through third
party bids or other means. In addition to Owner's veto right referenced above,
if required by the governance documents of the general partner of Owner, any
such contract must be approved by

                                       15
<PAGE>

the independent members of the board of directors of the Owner's general
partner. Any such contract will include prudent cancellation rights.

                  Section 6.5 Execution of Leases and Contracts. All leases and
related lease documents, all service contracts and all purchases, and all legal
documentation related thereto, are to be in the name of Owner in the form
prescribed by Owner and shall be executed by Owner, with the exception of
contracts permitted under Section 6.4 hereof and of purchase orders related to
the purchase of items within approved budgets, which may be executed by Manager.
Additionally, Manager shall execute on behalf of Owner such service agreements
as Owner may authorize from time to time.

                  Section 6.6 Structural Changes. Owner expressly withholds from
Manager any power or authority to make any structural change to the Premises or
to make any other major alterations or additions in or to the Premises or
equipment therein without the prior written direction of Owner.

                                   ARTICLE 7

                                   INSURANCE

                  Section 7.1 Owner's Insurance. Throughout the term of this
Agreement, Owner shall obtain and maintain the insurance described below (to the
extent the same is available at commercially reasonable rates):

                  (a)      All-risks property insurance (including comprehensive
                           boiler & machinery coverage) on a full replacement
                           cost basis covering the Premises.

                  (b)      Commercial general liability insurance on an
                           occurrence basis with Owner and Manager as insureds
                           with limits of not less than $5,000,000 each

                                       16
<PAGE>

                           occurrence combined single limit on bodily injury,
                           death or property damage. Owner's insurance shall be
                           primary and non-contributory to any insurance
                           otherwise carried by Manager.

                  Section 7.2 Manager's Insurance. Manager shall obtain and
maintain:

                  (a)      Comprehensive crime/fidelity coverage in the amount
                           of $1,000,000 and shall name Owner as loss payee.

                  (b)      All-risks property insurance on a full replacement
                           cost basis covering Manager's personal property on
                           the Premises.

                  (c)      Worker's Compensation insurance as required by
                           statute.

                  (d)      Employer's Liability insurance in the amount of
                           $1,000,000 each accident.

                  (e)      Automobile Liability insurance in the amount of
                           $1,000,000 each occurrence.

                  Section 7.3 Contractor's and Subcontractor's Insurance.
Manager shall require that all contractors and subcontractors brought onto the
Premises have insurance coverage at the contractor's or subcontractor's expense,
in the following minimum amounts, with Owner and Manager as additional insureds
on the commercial general liability insurance:

                  (a)      Worker's Compensation:         Statutory Amount

                  (b)      Employer's Liability:          $1,000,000 minimum

                  (c)      Commercial General Liability:  $1,000,000 combined
                                                          single limit for
                                                          bodily injury and
                                                          property damage

                                       17
<PAGE>

                  (d)      Comprehensive Automobile   $1,000,000 each occurrence
                           Liability Insurance        combined single limit for
                                                      bodily injury and
                                                      property damage

                  Section 7.4 Insurance Requirements. The insurance required of
all parties to this Agreement shall be written with insurers authorized to do
business in the State in which the Premises are located and shall be rated at
least A:IX by A.M. Best's Rating Service.

                  Section 7.5 Waiver of Claims and Subrogation. NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, OWNER AND MANAGER HEREBY
WAIVE ANY AND ALL RIGHTS OF RECOVERY, CLAIM, ACTION OR CAUSE OF ACTION AGAINST
THE OTHER, ITS AGENTS, EMPLOYEES, OFFICERS, DIRECTORS, PARTNERS, MEMBERS,
SERVANTS OR SHAREHOLDERS FOR ANY LOSS OR DAMAGE TO THE OTHER'S PROPERTY BY
REASON OF FIRE, THE ELEMENTS, OR ANY OTHER CAUSE WHICH IS COVERED OR COULD BE
COVERED BY STANDARD "ALL-RISKS" PROPERTY INSURANCE (INCLUDING COMPREHENSIVE
BOILER AND MACHINERY COVERAGE), REGARDLESS OF CAUSE OR ORIGIN, INCLUDING
NEGLIGENCE OF THE OTHER PARTY HERETO, ITS AGENTS, EMPLOYEES, OFFICERS,
DIRECTORS, PARTNERS, MEMBERS, SERVANTS OR SHAREHOLDERS. EACH PARTY'S PROPERTY
INSURANCE POLICIES SHALL CONTAIN PROVISIONS WHERE THE INSURER WAIVES THEIR RIGHT
OF SUBROGATION AGAINST SUCH OTHER PARTY.

                                       18
<PAGE>

                                   ARTICLE 8

                             OWNER'S RIGHT TO AUDIT

                  Section 8.1 Audit Rights of Owner. Owner reserves the right
for Owner's employees or others appointed by Owner to conduct examinations,
during normal business hours without notification, of the books and records
maintained for Owner by Manager no matter where the books and records are
located. Owner also reserves the right to perform any and all additional audit
tests relating to Manager's activities, either at the Premises or at any office
of Manager, provided such audit tests are related to those activities performed
by Manager for Owner.

                  Section 8.2 Correction of Internal Controls. Should Owner's
employees or appointees discover either weaknesses in internal control or errors
in record keeping, Manager shall correct such discrepancies either upon
discovery or within a reasonable period of time thereafter. Manager shall inform
Owner in writing of the action taken to correct such audit discrepancies. Any
and all such audits conducted either by Owner's employees or appointees will be
at the sole expense of Owner, unless such audit (i) indicates fraud or gross
neglect by Manager in its record keeping, or (ii) discloses an error on the part
of Manager which affects Owner adversely and is equal to or greater than 2% of
the greater of gross expenses or gross receipts of the Property for the period
audited, and in the case of (i) or (ii) above, Manager shall bear the reasonable
cost of the applicable audit.

                                       19
<PAGE>

                                   ARTICLE 9

                                 BANK ACCOUNTS

                  Section 9.1 Deposits of Rents and Other Sums. Manager shall
deposit all rents and other funds collected from the operation of the Premises,
including any and all advance funds, in a bank designated by Owner, in a special
account (the "Receipt Accounts") for the Premises in the name of Owner (so that
at all times the funds deposited therein shall be the sole and exclusive
property of Owner). The bank shall be informed in writing of the designated
representatives of Manager that Owner has approved as having access to such
accounts. Manager, with Owner's approval, shall establish a second account (the
"Disbursement Account"). Manager shall pay the operating expenses of the
Premises and any other payments relative to the Premises as required by the
terms of this Agreement (including Manager's fees under Article 21 hereof) out
of the Disbursement Account. Money shall be transferred from the Receipts
Account to the Disbursement Account as deemed necessary by Manager, and approved
by Owner. Owner shall have the right from time to time to change the number and
types of bank accounts used by Manager and the method of transferring funds
between those accounts.

                  Section 9.2 Security Deposit Records. Manager shall, on behalf
of Owner, maintain detailed records of all security deposits and such records
will be open for inspection by Owner's employees or appointees. Manager shall
maintain such security deposits as required by applicable law and the terms of
the leases, as approved by Owner.

                  Section 9.3 Owner to Have Access to Funds. Through the use of
signature cards, authorized representatives of Owner shall be permitted access
to any and all funds in the bank account described in Section 9.1. However,
Owner and Owner's representative may not

                                       20
<PAGE>

draw against said bank accounts without written communication to Manager.
Manager's authority, and the authority of any designated representative of
Manager, to draw against such accounts may be terminated at any time by Owner
upon written notice to Manager.

                  Section 9.4 Ownership of Bank Records. All bank records
pertaining to Owner's accounts shall be the property of Owner.

                                   ARTICLE 10

                               PAYMENT OF EXPENSES

                  Section 10.1 Payment by Manager of Expenses. The following
operating costs (except as excluded by Section 10.2), to the extent included in
approved budgets, are to be paid directly from the Disbursement Account
described in Section 9.1:

                  (a) Costs of the gross salary and compensation, to include
         payroll taxes, insurance, workmen's compensation and other benefits, of
         the on-site property management team and approved staff;

                  (b) To the extent recoverable from tenants, cost of gross
         salary and compensation, to include payroll taxes, insurance, workmen's
         compensation and other benefits, and related overhead of personnel (for
         example, accountants and bookkeepers) who may be located off-site (for
         cost saving, administration or other reasons) but who directly support
         the operations of the Premises, excluding any personnel located in
         Manager's regional offices or headquarters except as provided in
         Section 10.1(w);

                  (c) Cost of forms, papers, ledgers, and other supplies and
         equipment used in the on-site Manager's office;

                                       21
<PAGE>

                  (d) Cost of insurance permitted or required to be maintained
         by Manager pursuant to the provisions of this Agreement;

                  (e) Cost of all bonuses paid to on-site employees excluding,
         however, any incentive compensation;

                  (f) Costs to correct any violation of federal, state and
         municipal laws, ordinances, regulations and orders relative to the
         leasing, use, repair and maintenance of the Premises, or relative to
         the rules, regulations or orders of the local board of fire
         underwriters or other similar body, provided that such cost is not a
         result of the gross negligence or willful misconduct of Manager or its
         agents or employees;

                  (g) Actual costs of making all repairs, decorations and
         alterations to the Premises;

                  (h) Costs incurred by Manager in connection with all service
         contracts entered into by Manager and/or Owner in accordance with
         authorizations in this Agreement or approved by Owner;

                  (i) Costs of collection of delinquent rentals;

                  (j) Costs of printed forms and supplies required for use at
         the Premises;

                  (k) Costs of capital expenditures;

                  (l) Costs of printed checks for each bank account required by
         Owner;

                  (m) Costs of adding machines, personal computers and computer
         software, and other equipment of such type used for managing the
         Premises;

                  (n) Leasing commissions payable to third parties;

                  (o) Costs of Owner approved advertising, business expenses,
         professional dues, professional development, employee relocation
         expenses and travel;

                                       22
<PAGE>

                  (p) To the extent the same can be recovered from tenants under
         their leases, the cost of Manager's implementation of any new
         accounting or reporting systems including Web based systems or systems
         that utilize servers and other equipment that may be located off-site
         of the Property, as well as the cost of any new general ledger adopted
         by Manager;

                  (q) Legal fees of attorneys, provided such attorneys have been
         approved by Owner in writing in advance of retention;

                  (r) Costs of outside audits as required by leases and other
         outside audits as may be requested by Owner in writing;

                  (s) Property taxes, special assessments and costs of
         utilities;

                  (t) Costs of a management office, including necessary
         furnishings and equipment, as provided for in Section 10.3 hereof;

                  (u) All other costs and expenses for which Owner is obligated
         to pay or reimburse Manager as provided for in this Agreement;

                  (v) Any out-of-pocket costs Manager incurs in performing the
         leasing services described in Section 5.5, including the costs of
         printing leasing brochures and travel and entertainment costs; and

                  (w) To the extent the same relate to or support the
         performance of Manager's duties under this Agreement, the cost of
         personnel and overhead expenses related to such personnel who are
         located in Manager's headquarters and regional offices. Examples of
         such support include risk management, regional and central accounting,
         cash and systems management, human resources and payroll, technology
         and internal audit. The amount to

                                       23
<PAGE>

         be included under this Section 10.1(w) shall (1) be included only to
         the extent the same is recovered from tenants under their leases and
         (2) not exceed in any calendar year $.20 per rentable square foot
         within the Property; however, such amount shall be increased on January
         1 of each year by the increase in the Consumer Price Index from the
         preceding January 1 beginning in 2003, such adjusted amount to be
         rounded to the nearest $.005. "Consumer Price Index" or "CPI" means the
         United States Department of Labor, Bureau of Labor Statistics, Consumer
         Price Index for all Urban Consumers (U.S. city average; base 1982-84 =
         100), published by the Bureau of Labor statistics of the United States
         Department of Labor. If at any time during the Term the CPI is
         discontinued or published less frequently, Manager and Owner shall
         mutually and reasonably agree to substitute an official index published
         by the Bureau of Labor Statistics, or a successor governmental agency,
         which index is most nearly equivalent to the CPI or to a substitute
         procedure which reasonably reflects and monitors consumer prices.

                  (x) Any and all other costs necessary to the management,
         leasing, operation and maintenance of the Premises or reasonably
         incurred by Manager in performing its duties hereunder which are
         covered within approved budgetary guidelines, which may exceed approved
         budgetary guidelines but which result from emergencies or which are
         otherwise approved by Owner.

                  Section 10.2 Expenses to be Borne by Manager. The following
expenses or costs incurred by or on behalf of Manager shall be at the sole cost
and expense of Manager and shall be paid by Manager out of the sums payable to
Manager under Article 21:

                                       24
<PAGE>

                  (a) Costs of gross salary and wages, payroll taxes, insurance,
         worker's compensation, and other benefits of Manager's personnel not
         located on-site (except as provided in Section 10.1(b) and Section
         10.1(w) above).

                  (b) All costs incurred as a result of Manager's fraud, breach
         of this Agreement, gross negligence or willful misconduct.

                  (c) Except as provided in Section 10.1(w), the cost of any
         personnel located in Manager's home or regional offices, as well as any
         overhead costs related to those offices.

                  Section 10.3 Office for Manager. Owner shall also furnish to
Manager, at Owner's expense, an office located in the Premises of a sufficient
size (mutually agreed upon) to serve as the management and leasing office for
the Premises, including standard leasehold improvements and appropriate
furnishings and typical office equipment.

                                   ARTICLE 11

                               INSUFFICIENT INCOME

                  Section 11.1 Insufficient Income. If at any time the gross
income (or cash in the Receipts Account and the Disbursement Account) from the
Premises shall not be sufficient to pay the bills and charges which may be
incurred with respect to the Premises, or if such gross income is insufficient
to pay the combined sum of both bills and charges, Manager shall not be
obligated to pay said expenses and charges from its own account.

                  Manager shall notify Owner immediately upon first projection
or awareness of a cash shortage or pending cash shortage and Owner and Manager
shall jointly determine payment priority. After Manager has paid, to the extent
of available gross income, all bills and charges

                                       25
<PAGE>

based upon the ordered priorities set jointly by Owner and Manager, Manager
shall submit to Owner a statement of all remaining unpaid bills. Owner shall
thereafter and without undue delay provide sufficient monies to pay any unpaid
expenses properly payable by Owner.

                                   ARTICLE 12

                                   TERMINATION

                  Section 12.1 Termination by Owner or Manager. Either Owner or
Manager may terminate this Agreement upon thirty (30) days advance notice to the
other in the event (A) Owner sells the Premises to a third party which is
unaffiliated with Owner in a bona fide transaction, (B) the Property is
substantially destroyed or condemned and in the case of destruction cannot be
restored within one year after the casualty, or (C) an Affiliate of Manager is
no longer the advisor to the Owner and the Owner's general partner.

                  Section 12.2 Termination by Owner. The Owner may terminate
this agreement if the Owner has identified and communicated to the Manager any
operating or performance deficiencies and such deficiencies are not cured by the
Manager in accordance with the provisions set forth in Section 5.3.

                  Section 12.3 Breach by Manager. If Manager commits a material
breach of any obligations of Manager under this Agreement, and if such breach
shall continue for thirty (30) days after written notice from Owner (plus, with
respect to breaches which Manager commences diligent efforts to cure within such
period, but which cannot reasonably be cured within thirty (30) days, such
additional period not to exceed ninety (90) additional days as is reasonably
necessary to cure such breach), then Owner, in addition to the other remedies it
may have at law or in equity, shall have the right to terminate this Agreement.

                                       26
<PAGE>

                  Section 12.4 Breach by Owner. If Owner (A) fails to timely pay
any sum owed to Manager which remains unpaid for more than ten (10) days after
notice from Manager or (B) commits a material violation or breach of any other
obligation of Owner under this Agreement which remains uncured for more than
thirty (30) days after notice from Manager (plus, in the case of breaches which
cannot reasonably be cured within thirty (30) days, such additional time as is
reasonably required to cure such breach not to exceed ninety (90) days), then
Manager may, in addition to its other remedies at law or in equity, terminate
this Agreement by written notice to Owner.

                  Section 12.5 Final Accounting. Upon termination of this
Agreement for any reason, Manager shall deliver to Owner the following with
respect to the Premises:

                  (a) A final accounting, reflecting the balance of income and
         expenses, as of the date of termination, to be delivered within thirty
         (30) days after such termination.

                  (b) Any balance or monies of Owner or tenant security
         deposits, or both, including, without limitation, all funds in any bank
         accounts under Article 9 hereof, held by or thereafter received by
         Manager to be delivered immediately upon such termination or
         withdrawal.

                  (c) All records, contracts, leases, receipts for deposits,
         unpaid bills, other papers or documents, supplies, files, keys, and
         equipment, which pertain to the Premises to be delivered immediately to
         Owner at the Premises upon such termination.

                  (d) All service contracts in the name of Manager pertaining to
         the Premises shall be assigned to, and assumed by Owner.

                                       27
<PAGE>

                  Section 12.6 Survival of Certain Rights and Obligations. Upon
the expiration or earlier termination of this Agreement, neither party shall
have any further rights or obligations under this Agreement, except that
Articles 12, 16, 17, and 21 shall survive the termination of this Agreement.

                                   ARTICLE 13

                DEVELOPMENT AND CONSTRUCTION MANAGEMENT SERVICES

                  Section 13.1 Construction Management Services. Manager shall
act as construction manager with respect to the construction of any leasehold
improvements within the Premises if requested by either Owner or the applicable
tenant. With respect thereto Manager shall:

                  (a) Evaluate and report the existing conditions of the base
         building.

                  (b) Prepare preliminary budgets and schedules.

                  (c) Review and assist in the coordination of leasehold
         improvements design drawings.

                  (d) Conduct pre-bid meetings.

                  (e) Evaluate bids and make recommendations of the award of
         contracts.

                  (f) Conduct construction progress meetings. Evaluate ongoing
         schedules and the quality of workmanship and adherence of work to
         contract documents, specifications and drawings.

                  (g) Evaluate and verify accuracy of monthly construction draw
         requests.

                  (h) Assist architect in reviewing shop drawings.

                  (i) Direct architect/engineers to create punchlist.

                                       28
<PAGE>

                  (j) Coordinate with building management the use of the service
         elevator, the need for temporary utilities and loading docks.

                  Section 13.2 Development Management Services. Manager shall
act as development manager for any redevelopment of the Premises. As such,
Manager shall be responsible for coordinating and facilitating the planning and
performance of all construction related activities, including recommending the
retention of architects, engineers and other consultants, assisting in cost
estimating, advising Owner as to the selection of contractors to perform the
work, and coordinating on behalf of Owner the work of such consultants and
contractors.

                                   ARTICLE 14

                              SALE OF THE PREMISES

                  Section 14.1 Sale of Premises. If Owner executes a listing
agreement with a broker (other than Manager) for the sale of any portion of the
Premises, Manager shall cooperate with such broker to the end that the
respective activities of Manager and broker may be carried on without friction
and without interference with tenants and occupants. Manager will permit the
broker to exhibit the Premises during reasonable business hours to the extent
not prohibited by any tenant lease and provided the broker has secured Manager's
permission in advance. Manager shall be reimbursed for all reasonable costs
incurred by Manager in coordinating any activities regarding any sale of all or
any portion of the Premises.

                                       29
<PAGE>

                                   ARTICLE 15

                                LEGAL PROCEEDINGS

                  Section 15.1 Legal Proceedings. Should any claims, demands,
suits or other legal proceedings be made or instituted by any person against
Owner or title holder of the Premises which arise out of any of the matters
relating to this Agreement, Manager shall promptly give Owner all pertinent
information and reasonable assistance in the defense or other disposition
thereof, at the sole expense of Owner.

                                   ARTICLE 16

                               MANAGER'S LIABILITY

                  Section 16.1 Liability of Manager. Manager shall not, in the
performance of this Agreement, be liable to Owner or to any other person for any
act or omission (negligent, tortious or otherwise) of any officer, agent or
employee of Manager, unless the same results from negligence or misconduct of
the Manager or its officers, employees, or agents acting within the scope of
their office, employment or agency, or the breach of this Agreement by Manager.

                  Section 16.2 Indemnity of Manager. OWNER AGREES TO INDEMNIFY,
DEFEND AND HOLD HARMLESS MANAGER AND ITS OFFICERS, AGENTS AND EMPLOYEES
(INDIVIDUALLY AND COLLECTIVELY, THE "MANAGER INDEMNITEES") FROM AND AGAINST ANY
AND ALL CAUSES OF ACTION, CLAIMS, LOSSES, COSTS, EXPENSES, LIABILITIES, DAMAGES
OR INJURIES (INCLUDING LEGAL FEES AND DISBURSEMENTS) THAT MANAGER INDEMNITEES
MAY DIRECTLY OR INDIRECTLY SUSTAIN, SUFFER OR INCUR ARISING FROM OR IN
CONNECTION WITH THIS AGREEMENT OR THE PREMISES, UNLESS THE SAME

                                       30
<PAGE>

RESULTS FROM (A) NEGLIGENCE OR MISCONDUCT OF THE MANAGER INDEMNITEES ACTING
WITHIN THE SCOPE OF THEIR OFFICE, EMPLOYMENT OR AGENCY, OR (B) THE BREACH OF
THIS AGREEMENT BY MANAGER. OWNER SHALL ASSUME ON BEHALF OF THE MANAGER
INDEMNITEES THE DEFENSE OF ANY ACTION AT LAW OR IN EQUITY WHICH MAY BE BROUGHT
AGAINST THE MANAGER INDEMNITEES BASED UPON A CLAIM FOR WHICH INDEMNIFICATION IS
APPLICABLE HEREUNDER.

                  Section 16.3 Limitation on Making Certain Claims.
Notwithstanding any other provisions of this Agreement, in no event shall Owner
make any claim against Manager, or its Affiliates or subsidiaries, on account of
any good faith interpretation by Manager of the provisions of this Agreement
(even if such interpretation is later determined to be a breach of this
Agreement) or any alleged errors in judgment made in good faith and in
accordance with this Agreement in connection with the operation of the Premises
hereunder by Manager or the performance of any advisory or technical services
provided by or arranged by the Manager. The provisions of this Section 16.3
shall not be deemed to release Manager from liability for its gross negligence.

                  Section 16.4 Expenditures Made in Good Faith. Owner shall not
object to any expenditures made by Manager in good faith in the course of its
management of the Premises or in settlement of any claim arising out of the
operation of the Premises unless such expenditure is specifically prohibited by
this Agreement. The provisions of this Section 16.4 shall not be deemed to
release Manager from liability for its negligence.

                                       31
<PAGE>

                                   ARTICLE 17

                          REPRESENTATION AND WARRANTIES

                  Section 17.1 No Reliance by Owner. Owner hereby represents
that in entering into this Agreement Owner has not relied on any projection of
earnings, statements as to the possibility of future success or other similar
matter which may be prepared by Manager and understands that no guaranty is made
or implied by Manager as to the future financial success of the Premises.

                  Section 17.2 Representations and Warranties. Each party to
this Agreement represents and warrants the following:

                  (a) It is duly organized, validly existing and in good
         standing under the laws of its jurisdiction of formation with all
         requisite power and authority to enter into this Agreement and to
         conduct its respective business.

                  (b) This Agreement constitutes the legal, valid and binding
         obligation of the party and is enforceable in accordance with its
         terms.

                  (c) No consents or approvals are required from any
         governmental authority or other person or entity for the party to enter
         into and perform this Agreement. All corporate or partnership action on
         the part of the party necessary for the authorization, execution and
         delivery of this Agreement, and the consummation of the transactions
         contemplated hereby, have been duly taken.

                  (d) The execution and delivery of this Agreement by the party,
         and the consummation of the transactions contemplated hereby, does not
         conflict with or contravene the provisions of its organizational
         documents or any agreement or instrument

                                       32
<PAGE>

         by which it or its properties are bound or any law, rule, regulation,
         order or decree to which it or its properties are subject.

                  (e) The party has obtained or shall obtain all permits and
         licenses to the extent required by applicable law to perform its
         obligations hereunder, except with respect to permits and licenses, the
         lack of which do not and would not, individually or in the aggregate,
         have a material adverse effect on such party's ability to perform its
         obligations under this Agreement.

                                   ARTICLE 18

                                    CONSENTS

                  Section 18.1 Granting of Consents. Except as otherwise
expressly provided herein to the contrary, whenever in this Agreement the
consent or approval of Manager or Owner is required, such consent or approval
shall not be unreasonably withheld or unduly delayed. Such consent shall also be
in writing only and shall be duly executed by an authorized officer or agent for
the party granting such consent or approval.

                                   ARTICLE 19

                           SUBSIDIARIES AND AFFILIATES

                  Section 19.1 Contracts with Manager's Affiliates. Any contract
or lease with respect to the Premises between Manager and any Affiliate of
Manager shall be subject to the prior written approval of Owner, and at Owner's
sole discretion such approval may be withheld.

                                       33
<PAGE>
\
                                   ARTICLE 20

                                    NOTICES

                  Section 20.1 Notices. Any notice provided for in or permitted
under this Agreement shall be made in writing, and may be given or served by (i)
delivering the same in person or by facsimile transmission to the party to be
notified, or (ii) depositing the same in the United States mail, postage
prepaid, registered or certified with return receipt requested, and addressed to
the party to be notified at the address herein specified, or (iii) by depositing
same with a reputable overnight courier service. Any notice shall be effective
only if and when received by the party to be notified (or the date such receipt
is refused by the addressee) unless the day it is received is not a business
day, and then it shall be deemed received on the next business day. For the
purpose of notice, the address of the party shall be, until changed as
hereinafter provided for, as follows:

                If to the Owner:   _____________________________________________

                                   Attention: __________________________________
                                   Fax No.:   __________________________________

                With a copy to:    _____________________________________________

                                   Attention: __________________________________
                                   Fax No.:   __________________________________

                If to the Manager: _____________________________________________

                                   Attention: __________________________________
                                   Fax No.:   __________________________________

                                       34
<PAGE>

                With a copy to:    _____________________________________________

                                   Attention: __________________________________
                                   Fax No.:   __________________________________

or to such other address as the Owner may specify in a written notice to the
Manager or the Manager may specify in a written notice to the Owner in
accordance with this Section 20.1.

                  Each party shall have the right from time to time and at any
time to change its respective address and each shall have the right to specify
as its address any other address by at least fifteen (15) days' written notice
to the other party. Each party shall have the right from time to time to specify
additional parties to whom copies of notices must be given by delivering to the
other party fifteen (15) days' written notice thereof setting forth the address
of such additional party or parties; provided, however, that no party shall have
the right to designate more than three (3) such additional parties. Notice
required to be delivered hereunder to either party shall not be deemed to be
effective until the additional parties, if any, designated by such party have
been given notice in a manner deemed effective pursuant to the terms of this
Section 20.1.

                                   ARTICLE 21

                                  COMPENSATION

                  Section 21.1 Fees Payable to Manager. In addition to the sums
Owner is obligated to pay Manager as described in this Agreement, each calendar
year Manager shall receive remuneration for its services in managing and leasing
the Premises as follows:

                  (a) A management fee (the "Management Fee") equal to:

                           (1)      For single-tenant properties, the lesser of
                  (A) two and one-half percent (2.5%) of the Gross Revenues for
                  the Premises or (B) the amount of the

                                       35
<PAGE>

                  Management Fee that can be passed through to tenants of the
                  Premises under their leases, subject to a minimum fee of at
                  least one percent (1.0%) of Gross Revenues for the Premises.

                           (2)      For multi-tenant properties, the lesser of
                  (A) two and one-half percent (2.5%) of the Gross Revenues for
                  the Premises or (B) the amount of the Management Fee that can
                  be passed through to tenants of the Premises under their
                  leases.

                           (3)      "Gross Revenues" includes but is not limited
                  to revenues arising from rentals (which includes all tenant
                  recoveries for operating expenses, special or extra services
                  and the like, including, without limitation, real estate taxes
                  and assessments) for such year payable by tenants who lease
                  space in the Premises, parking revenues, revenues from the
                  leasing or licensing of antenna space and all other revenues
                  of whatever nature. The Management Fee shall be payable
                  monthly based on interim results and projections with annual
                  reconciliations.

                  (b) For the leasing services described in Section 5.5, the
         following sums (the "Leasing Fees"):

                           (1)      For any lease or amendment thereto pursuant
                  to which space is leased by a tenant which is executed or
                  negotiated during the Term, a fee equal to one and one-half
                  percent (1.5%) of the gross rentals which are payable pursuant
                  to or on account of the applicable document during the term of
                  the lease.

                           (2)      For any lease extension, renewal, expansion
                  or other similar right whereby a tenant extends its lease or
                  leases additional space which is exercised

                                       36
<PAGE>

                  during the Term, a fee equal to one and one-half percent
                  (1.5%) of the gross rentals which are payable pursuant to or
                  on account of the applicable document for the term of such
                  renewal, extension or expansion.

                           (3)      For purposes of subsections (1) and (2)
                  above, the following shall apply:

                                    (i)      Owner shall pay the Leasing Fees to
                           Manager regardless of whether an outside broker was
                           used in connection with any such lease, amendment,
                           renewal, extension or expansion. Owner shall be
                           responsible for any fees paid to outside brokers, and
                           such fees shall not count against, or be considered
                           part of, the Leasing Fees;

                                    (ii)     Owner's obligation to pay the
                           Leasing Fees shall survive the expiration or earlier
                           termination of this Agreement, it being agreed that
                           Manager shall be entitled to such Leasing Fee after
                           such expiration or termination to the extent provided
                           in this Section 21.1. "Executed or negotiated during
                           the Term" and "exercised during the Term" also
                           includes leases and other instruments executed and
                           options and other rights exercisable within ninety
                           (90) days after the Term, if the tenant under said
                           lease or other instruments had substantial
                           negotiations with Manager during the Term (and for
                           purposes hereof, "substantial negotiations" shall
                           mean that a written proposal and related
                           correspondence have been exchanged by Manager and the
                           prospective tenant or any agent thereof and
                           discussions regarding such proposal and

                                       37
<PAGE>

                           correspondence have occurred). Manager shall notify
                           Owner in a monthly report prior to the end of the
                           Term of its substantial negotiations with prospective
                           tenants;

                                    (iii)    gross rentals for triple net leases
                           will include an estimate of operating expenses to be
                           paid by tenants in the first (1st) lease year and
                           such expenses shall not be increased in determining
                           gross rentals in later years for purposes of
                           determining the Leasing Fees; and

                                    (iv)     rent increases based on changes in
                           the Consumer Price Index shall not be taken into
                           account in calculating gross rentals for purposes of
                           determining the Leasing Fees except to the extent
                           such lease includes a floor on the rent increases
                           based on the Consumer Price Index, in which event for
                           purposes of calculating gross rentals, rent shall be
                           deemed increased based on such floor.

         The Leasing Fees shall be payable as follows: (x) fifty percent (50%)
         upon the date the applicable document is executed or right is
         exercised, as applicable, and (y) the balance upon the date such tenant
         takes occupancy of the space subject to such lease or amendment, or in
         the case of a renewal, on the first (1st) day of the applicable renewal
         term. In the event the tenant has an early termination option under its
         lease, however, the portion of the Leasing Fees attributable to periods
         after the applicable termination date shall not be payable until the
         tenant has waived the termination option or the right to exercise such
         termination option has expired or terminated.

                                       38
<PAGE>

                  (c) For the construction management services described in
         Section 13.1, Manager shall be entitled to retain or be paid any
         construction management fee paid by any tenant directly to Manager or
         to the landlord under its lease. To the extent contained in the budget
         described below, Manager also shall be reimbursed for all third party
         costs reasonably incurred by Manager in performing construction
         management duties (e.g., consultants, legal, delivery and graphics) to
         the extent the same are approved and payable by the applicable tenant.
         Owner and Manger shall agree on the scope of such direct costs as well
         as a budget relating thereto before Manager begins performing such
         services. If the tenant does not agree in its lease to pay a
         construction management fee, then the following shall apply:

                           (x)      if Manager provides such construction
                  management services utilizing on-site employees, Owner shall
                  not be obligated to pay a construction management fee to
                  Manager; or

                           (y)      if Manager utilizes off-site employees to
                  provide such construction management services, Owner shall be
                  obligated to pay Manager the direct costs Manager incurs in
                  providing such services, including the salary, benefits and
                  burdens of any such employees to the extent of the time they
                  spend performing such services, to the extent contained in a
                  budget approved by Owner as described above.

                  (d) For the development management services described in
         Section 13.2, Manager shall be paid a fee equal to two and one-half
         percent (2.5%) of the total project costs relating to the
         redevelopment. To the extent contained in the budget described

                                       39
<PAGE>

         below, Manager also will be entitled to recover from Owner all direct
         costs incurred by Manager in performing such services, including but
         not limited to the salary, benefits and burdens of all employees
         directly involved in such project, the cost of any project office and
         overhead relating thereto (e.g., rent, telephones, computers) and all
         out-of-pocket costs incurred by Manager (for example, travel). Owner
         and Manager shall agree on the scope of such direct costs as well as a
         budget relating thereto before Manager begins performing such services.

                  (e) Upon submission of the financial statements as required by
         Article 5, Manager shall submit to Owner Manager's calculation of all
         fees, which fees shall be paid by Owner to Manager.

                  Section 21.2 Failure of Owner to Timely Pay. Any sums owed by
Owner to Manager which are not paid when due shall bear interest at the lesser
of (i) the prime rate plus 5 percentage points, or (ii) the maximum nonusurious
rate of interest permitted by applicable law.

                                   ARTICLE 22

                                  MISCELLANEOUS

                  Section 22.1 Pronouns. The pronouns used in this Agreement
referring to Manager or Owner shall be understood and construed to apply whether
Manager or Owner be an individual, co-partnership, corporation or an individual
or individuals doing business under a firm or trade name, and the masculine and
neuter pronouns shall each include the other and may be used interchangeably
with the same meaning.

                                       40
<PAGE>

                  Section 22.2 Amendments. Except as otherwise herein provided,
any and all amendments, additions or deletions of this Agreement shall be null
and void unless approved by the parties in writing.

                  Section 22.3 Headings. All headings herein are inserted only
for convenience and ease of reference and are not to be considered in the
construction or interpretation of any provision of this Agreement.

                  Section 22.4 Waiver. The waiver of any of the terms and
conditions of this Agreement on any occasion or occasions shall not be deemed as
waiver of such terms and conditions on any future occasion. No waiver shall be
implied by any isolated or repeated action or non-action. To be effective, any
waiver must be in writing executed by the party to be bound thereby.

                  Section 22.5 Successors and Assigns. Subject to Article 4 and
Section 12.1(A), this Agreement shall be binding upon and inure to the benefit
of Owner, its successors and/or assigns, and shall be binding upon and inure to
the benefit of Manager, and its successors.

                  Section 22.6 Governing Law. This Agreement shall be construed,
interpreted and applied in accordance with and shall be governed by, the laws
applicable to the state where the Premises are located.

                  Section 22.7 Ownership of Premises. Owner represents that it
is the fee owner of the Premises and of the improvements and appurtenances and
equipment installed therein, except such equipment as may be leased or acquired
by Owner on a hire-purchase basis or as may be owned, leased or installed by
tenants or other third parties.

                                       41
<PAGE>

                  Section 22.8 Other Activities of Manager. Nothing contained in
this Agreement shall be construed so as to prohibit Manager from owning,
operating, managing or investing in any real estate development. Additionally,
Manager may engage in or possess an interest in other ventures of any nature and
description independently or with others and Owner shall have no rights with
respect thereto by virtue of this Agreement.

                  Section 22.9 Compliance with Certain Laws. Pursuant to Section
5.03 of the Rehabilitation Act of 1973, as amended, as implemented by 41 C.F.R.
60-401, Section 4.02 of the Vietnam Era Adjustment Assistance Act of 1964, as
implemented by 41 C.F.R. 60-250, and Executive Order 11246, as amended by
Executive Order 11875, Manager agrees not to discriminate against any employee
or applicant for employment because of said individual's race, religion, sex,
national origin, physical or mental handicap or status as a disabled veteran of
the Vietnam Era, in regard to any position for which the employee or applicant
is otherwise qualified.

                  Section 22.10 Special Parties. Notwithstanding any provision
hereof to the contrary, in no circumstances shall a shareholder, limited
partner, director, officer, employee or agent ("Special Party") of a party
hereto or of a Special Party of a party hereto be personally liable for any of
the obligations of such party hereto under this Agreement except to the extent,
if any, provided in any separate agreement now or hereafter executed and
delivered by such Special Party.

                  Section 22.11 Counterparts. This Agreement may be executed in
several counterparts, each of which shall be an original of this Agreement but
all of which, taken together, shall constitute one and the same agreement.

                                       42
<PAGE>

                  Section 22.12 Survival of Agreement. The rights and
obligations of Manager and Owner shall survive a termination of this Agreement.

                  Section 22.13 Special Services. Notwithstanding anything in
this Agreement to the contrary, except as required by a tenant lease which has
been approved by Owner, Manager shall not furnish or render services to the
tenants of the Premises other than those services customarily furnished to
tenants of similar properties unless (a) Manager makes separate, adequate
charges to tenants for such services, (b) such charges are received and retained
by Manager, (c) Manager bears the cost of providing such services and (d)
Manager first obtains Owner's written consent. For purposes of this Section
22.13, it is agreed that maintenance, trash collection, janitorial services and
cleaning services, the furnishing of water, heat, light, air conditioning,
public entrances and exits, guard or security services and the provision of
parking facilities on an unreserved basis and without separate charge are
examples of services customarily furnished to the tenants of similar properties.

                                       43
<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.

                                           OWNER:

                                               _________________________________

                                               By: _____________________________
                                               Name: ___________________________
                                               Title: __________________________

                                           MANAGER:

                                               _________________________________

                                               By: _____________________________
                                               Name: ___________________________
                                               Title: __________________________

                                       44<PAGE>
                                                                    Exhibit 10.3

                               ADVISORY AGREEMENT

                                     Between

                          HINES REIT PROPERTIES, L.P.,

                                       and

                       HINES ADVISORS LIMITED PARTNERSHIP

                            __________________, 200__
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                    Page
<S>                                                                                 <C>
ARTICLE 1 DEFINITIONS ............................................................    1

ARTICLE 2 APPOINTMENT ............................................................    4

ARTICLE 3 DUTIES OF THE ADVISOR ..................................................    5

   3.01     Organizational and Offering Services .................................    5
   3.02     Acquisition Services .................................................    6
   3.03     Asset Management Services ............................................    7
   3.04     Shareholder Services .................................................   10

ARTICLE 4 AUTHORITY OF ADVISOR ...................................................   10

   4.01     General ..............................................................   10
   4.02     Powers of the Advisor ................................................   10
   4.03     Approval by Directors ................................................   11

ARTICLE 6 RECORDS AND FINANCIAL STATEMENTS .......................................   12

ARTICLE 7 LIMITATION ON ACTIVITIES ...............................................   12

ARTICLE 8 RELATIONSHIP WITH DIRECTORS AND OFFICERS ...............................   13

ARTICLE 9 FEES ...................................................................   13

   9.01     Acquisition Fees .....................................................   13
   9.02     Asset Management Fees ................................................   14

ARTICLE 10 EXPENSES ..............................................................   14

   10.01    General ..............................................................   14
   10.02    Reimbursement to Advisor .............................................   16
   10.03    Reimbursement to Company .............................................   16

ARTICLE 11 OTHER SERVICES ........................................................   17

ARTICLE 12 RELATIONSHIP OF ADVISOR AND COMPANY; OTHER ACTIVITIES OF THE ADVISOR ..   18

   12.01    Relationship .........................................................   18
   12.02    Time Commitment ......................................................   18
   12.03    Investment Opportunities and Allocation ..............................   19

ARTICLE 13 THE HINES NAME ........................................................   19

ARTICLE 14 TERM AND TERMINATION OF THE AGREEMENT .................................   20

   14.01    Term .................................................................   20
</TABLE>

                                       i
<PAGE>
<TABLE>
<S>                                                                                 <C>
   14.02    Termination by Either Party ..........................................   20
   14.03    Termination by the Company ...........................................   20
   14.04    Termination by the Advisor ...........................................   21
   14.05    Payments on Termination and Survival of Certain Rights and Obligations   21
   14.06    Redemption of OP Units ...............................................   22

ARTICLE 15 ASSIGNMENT ............................................................   22

ARTICLE 16 INDEMNIFICATION AND LIMITATION OF LIABILITY ...........................   23

   16.01    Indemnification by the Company .......................................   23
   16.02    Indemnification by the Advisor .......................................   23
   16.03    Advisor's Liability ..................................................   24

ARTICLE 17 COMPANY ADMINISTRATION ................................................   25

ARTICLE 18 MISCELLANEOUS .........................................................   25

   18.01    Notices ..............................................................   25
   18.02    Modification .........................................................   26
   18.03    Severability .........................................................   26
   18.04    Construction .........................................................   26
   18.05    Entire Agreement .....................................................   26
   18.06    Waiver ...............................................................   26
   18.07    Gender ...............................................................   27
   18.08    Titles Not to Affect Interpretation ..................................   27
   18.09    Counterparts .........................................................   27
</TABLE>

                                       ii
<PAGE>
                               ADVISORY AGREEMENT

      This Advisory Agreement, dated as of ___________, 200__, is between Hines
REIT Properties, L.P., a Delaware limited partnership, and Hines Advisors
Limited Partnership, a Texas limited partnership (the "Agreement").

                               W I T N E S S E T H

      WHEREAS, the Company (as hereinafter defined) desires to avail itself of
the knowledge, experience, sources of information, advice, assistance and
certain facilities available to the Advisor (hereinafter defined) and to have
the Advisor undertake the duties and responsibilities hereinafter set forth
herein on the terms set forth in this Agreement; and

      WHEREAS, the Advisor is willing to undertake to render such services on
the terms and conditions hereinafter set forth.

      NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements contained herein, the parties hereto agree as follows:

                                   ARTICLE 1

                                  DEFINITIONS

      The following defined terms used in this Advisory Agreement shall have the
meanings specified below:

      "Acquisition Expenses" has the meaning set forth in the Articles of
Incorporation.

      "Advisor" means (i) Hines Advisors Limited Partnership, a Texas limited
partnership, or (ii) any successor advisor to the Company.
<PAGE>
      "Affiliate" has the meaning set forth in the Articles of Incorporation.
For the purposes of this Agreement, the Advisor shall not be deemed to be an
Affiliate of the Company, and vice versa.

      "Articles of Incorporation" means the Articles of Incorporation of the
General Partner, as amended from time to time.

      "Asset" or "Assets" means any and all property (real, personal or
otherwise), tangible or intangible, including interests in any Person or in
joint ventures, which is owned or held by, or for the account of, the Company,
whether directly or indirectly through another entity.

      "Board of Directors" means the Board of Directors of the General Partner.

      "Bylaws" means the bylaws of the General Partner, as amended from time to
time.

      "Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor statute thereto. Reference to any provision of the Code
shall mean such provision as in effect from time to time, as the same may be
amended, and any successor provision thereto, as interpreted by any applicable
regulations as in effect from time to time.

      "Company" means Hines REIT Properties, L.P., a Delaware limited
partnership. Within the context of discussions of the operations, business and
administration of the Company, the term "Company" shall mean, collectively,
Hines REIT Properties, L. P. and the General Partner for the purposes of this
Agreement.

      "Director" means a member of the Board of Directors of the General
Partner.

      "General Partner" means Hines Real Estate Investment Trust, Inc., a
Maryland corporation and general partner of the Company.

      "Gross Proceeds" has the meaning set forth in the Articles of
Incorporation.

      "Hines" means Hines Interests Limited Partnership and its Affiliates.

                                       2
<PAGE>
      "Independent Director" has the meaning set forth in the Articles of
Incorporation.

      "Initial Asset Value" means (i) in the case of an Asset other than a
mortgage loan, the gross purchase price of real estate investments acquired
directly by the Company, including any debt attributable to such investments, or
the pro rata share of the gross asset value of real estate investments held by
entities in which we invest, and (ii) in the case of a mortgage loan, the total
amount of the funds advanced.

      "Managing Dealer" means Hines Real Estate Securities, Inc., a Delaware
corporation, or such other entity selected by the Board of Directors to act as
the managing dealer for the Offering.

      "Offering" means the public offering of Shares pursuant to the Prospectus.

      "Operating Expenses" has the meaning set forth in the Articles of
Incorporation.

      "Organizational and Offering Expenses" has the meaning set forth in the
Articles of Incorporation.

      "Person" means an individual, corporation, partnership, estate, trust, a
portion of a trust permanently set aside for or to be used exclusively for the
purposes described in Section 642(c) of the Code, association, private
foundation within the meaning of Section 509(a) of the Code, joint stock company
or other entity.

      "Property Manager" means Hines Interests Limited Partnership, a Texas
limited partnership.

      "Property Management and Leasing Agreement" means that certain Property
Management and Leasing Agreement between the Company and the Property Manager.

      "Prospectus" means the General Partner's final prospectus within the
meaning of Section 2(10) of the Securities Act of 1933, as amended.

                                       3
<PAGE>
      "REIT" means a "real estate investment trust" under Sections 856 through
860 of the Code.

      "Securities" means any class or series of units or shares of the Company
or the General Partner, including common shares or preferred units or shares and
any other evidences of equity or beneficial or other interests, voting trust
certificates, bonds, debentures, notes or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of interest,
shares or participations in, temporary or interim certificates for, receipts
for, guarantees of, or warrants, options or rights to subscribe to, purchase or
acquire, any of the foregoing.

      "Selling Commissions" has the meaning set forth in the Articles of
Incorporation.

      "Shares" means shares of common stock of the General Partner, par value
$.001 per share.

      "Shareholders" means the registered holders of the outstanding Shares.

      "Termination Date" means the date of termination of this Agreement.

      "2%/25% Guidelines" has the meaning set forth in the Articles of
Incorporation.

                                   ARTICLE 2

                                   APPOINTMENT

      The Company hereby appoints the Advisor to serve as its advisor on the
terms and conditions set forth in this Agreement, and the Advisor hereby accepts
such appointment.

                                       4
<PAGE>
                                    ARTICLE 3

                              DUTIES OF THE ADVISOR

      The Advisor is responsible for managing, operating, directing and
supervising the operations and administration of the Company and its Assets. The
Advisor shall, either directly or by engaging an Affiliate or third party,
perform the following duties:

      3.01 Organizational and Offering Services. The Advisor shall manage and
supervise:

                  (i) Development of the product offering, including the
      determination of the specific terms of the Securities to be offered by the
      General Partner and/or the Company;

                  (ii) Formation and organization of the Company, preparation of
      all offering and related documents, and obtaining of all required
      regulatory approvals of such documents;

                  (iii) Along with the Managing Dealer, approval of the
      participating broker dealers and negotiation of the related selling
      agreements;

                  (iv) Coordination of the due diligence process relating to
      participating broker dealers and their review of the Prospectus and other
      Offering and Company documents;

                  (v) Preparation and approval of all marketing materials
      contemplated to be used by the Managing Dealer or others in the Offering
      of the General Partner's Securities;

                  (vi) Along with the Managing Dealer, negotiation and
      coordination with the transfer agent for the receipt, collection and
      processing of subscription agreements, commissions, and other
      administrative support functions;

                                       5
<PAGE>
                  (vii) Creation and implementation of various technology and
      electronic communications related to the Offering of the General Partner's
      Securities; and

                  (viii) All other services related to organization of the
      Company or the Offering, whether performed and incurred by the Advisor or
      its Affiliates.

      3.02 Acquisition Services.

                  (i) Serve as the Company's investment and financial advisor
      and provide relevant market research and economic and statistical data in
      connection with the Company's assets and investment objectives and
      policies;

                  (ii) Subject to Section 4 hereof and the investment objectives
      and policies of the Company: (a) locate, analyze and select potential
      investments; (b) structure and negotiate the terms and conditions of
      transactions pursuant to which investments in Assets will be made; (c)
      acquire Assets on behalf of the Company; and (d) arrange for financing
      related to acquisitions of Assets;

                  (iii) Perform due diligence on prospective investments and
      create due diligence reports summarizing the results of such work;

                  (iv) Prepare reports regarding prospective investments which
      include recommendations and supporting documentation necessary for the
      Directors to evaluate the proposed investments;

                  (v) Obtain reports (which may be prepared by the Advisor or
      its Affiliates), where appropriate, concerning the value of contemplated
      investments of the Company; and

                  (vi) Negotiate and execute approved investments and other
      transactions.

                                       6
<PAGE>
      3.03 Asset Management Services.

                  (i) Real Estate Services:

                        (a) Investigate, select, and, on behalf of the Company,
            engage and conduct business with such Persons as the Advisor deems
            necessary to the proper performance of its obligations hereunder,
            including but not limited to consultants, accountants, lenders,
            technical advisors, attorneys, brokers, underwriters, corporate
            fiduciaries, escrow agents, depositaries, custodians, agents for
            collection, insurers, insurance agents, developers, construction
            companies and any and all Persons acting in any other capacity
            deemed by the Advisor necessary or desirable for the performance of
            any of the foregoing services;

                        (b) Negotiate and service the Company's debt facilities
            and other financings;

                        (c) Monitor applicable markets and obtain reports (which
            may be prepared by the Advisor or its Affiliates) where appropriate,
            concerning the value of investments of the Company;

                        (d) Monitor and evaluate the performance of investments
            of the Company; provide daily management services to the Company and
            perform and supervise the various management and operational
            functions related to the Company's investments;

                        (e) Coordinate with the Property Manager on its duties
            under the Property Management and Leasing Agreement and assist in
            obtaining all necessary approvals of major property transactions as
            governed by the Property Management and Leasing Agreement;

                                       7
<PAGE>
                        (f) Coordinate and manage relationships between the
            Company and any joint venture partners;

                        (g) Consult with the officers and Directors of the
            General Partner and provide assistance with the evaluation and
            approval of potential property dispositions, sales or refinancings;

                  (ii) Accounting and Other Administrative Services:

                        (a) Manage and perform the various administrative
            functions necessary for the management of the day-to-day operations
            of the Company;

                        (b) From time-to-time, or at any time reasonably
            requested by the Directors, make reports to the Directors on the
            Advisor's performance of services to the Company under this
            Agreement;

                        (c) Coordinate with the Company's independent
            accountants and auditors to prepare and deliver to the General
            Partner's audit committee an annual report covering the Advisor's
            compliance with certain material aspects of this Advisory Agreement;

                        (d) Provide or arrange for administrative services and
            items, legal and other services, office space, office furnishings,
            personnel and other overhead items necessary and incidental to the
            Company's business and operations;

                        (e) Provide financial and operational planning services
            and portfolio management functions;

                                       8
<PAGE>
                        (f) Maintain accounting data and any other information
            requested concerning the activities of the Company as shall be
            required to prepare and to file all periodic financial reports and
            returns required to be filed with the Securities and Exchange
            Commission and any other regulatory agency, including annual
            financial statements;

                        (g) Maintain all appropriate books and records of the
            Company;

                        (h) Provide tax and compliance services and coordinate
            with appropriate third parties, including independent accountants
            and other consultants, on related tax matters;

                        (i) Supervise the performance of such ministerial and
            administrative functions as may be necessary in connection with the
            daily operations of the Assets;

                        (j) Provide the Company with all necessary cash
            management services;

                        (k) Manage and coordinate with the transfer agent the
            quarterly dividend process and payments to shareholders;

                        (l) Consult with the officers and Directors of the
            General Partner and assist the Directors in evaluating and obtaining
            adequate insurance coverage based upon risk management
            determinations;

                        (m) Provide the officers and Directors of the General
            Partner with timely updates related to the overall regulatory
            environment affecting

                                       9
<PAGE>
            the Company, as well as managing compliance with such matters,
            including but not limited to compliance with the Sarbanes-Oxley Act
            of 2002;

                        (n) Consult with the officers and Directors of the
            General Partner and the Board of Directors relating to the corporate
            governance structure and appropriate policies and procedures related
            thereto; and

                        (o) Perform all reporting, record keeping, internal
            controls and similar matters in a manner to allow the General
            Partner to comply with applicable law including the Sarbanes-Oxley
            Act.

      3.04 Shareholder Services.

                  (i) Manage communications with shareholders, including
      answering phone calls, preparing and sending written and electronic
      reports and other communications; and

                  (ii) Establish technology infrastructure to assist in
      providing shareholder support and service.

                                    ARTICLE 4

                              AUTHORITY OF ADVISOR

      4.01 General. All rights and powers to manage and control the day-to-day
business and affairs of the Company shall be vested in the Advisor. The Advisor
shall have the power to delegate all or any part of its rights and powers to
manage and control the business and affairs of the Company to such officers,
employees, Affiliates, agents and representatives of the Advisor or the Company
as it may from time to time deem appropriate. Any authority delegated by the
Advisor to any other Person shall be subject to the limitations on the rights
and powers of the Advisor specifically set forth in this Agreement or the
Articles of Incorporation.

                                       10
<PAGE>
      4.02 Powers of the Advisor. Subject to the express limitations set forth
in this Agreement, the power to direct the management, operation and policies of
the Company shall be vested in the Advisor, which shall have the power by itself
and shall be authorized and empowered on behalf and in the name of the Company
to carry out any and all of the objectives and purposes of the Company and to
perform all acts and enter into and perform all contracts and other undertakings
that it may in its sole discretion deem necessary, advisable or incidental
thereto to perform its obligations under this Agreement.

      4.03 Approval by Directors.

                  (i) Notwithstanding the foregoing any investment in Assets,
      including any acquisition of an Asset by the Company or any investment by
      the Company in a joint venture, limited partnership or similar entity
      owning real properties, will require the prior approval of the Board of
      Directors. The Advisor will deliver to the Board of Directors all
      documents required by it to properly evaluate the proposed investment.

                  (ii) If the Articles of Incorporation require that a
      transaction be approved by the Independent Directors, the Advisor will
      deliver to the Independent Directors all documents required by them to
      properly evaluate the proposed investment in the Asset. The prior approval
      of a majority of the Independent Directors will be required for each
      transaction between the Company and the Advisor or its Affiliates.

                                   ARTICLE 5

                                  BANK ACCOUNTS

      The Advisor will maintain one or more bank accounts in the name of the
Company and will collect and deposit into any such account or accounts, and
disburse from any such account or

                                       11
<PAGE>
accounts, any money on behalf of the Company. Notwithstanding the foregoing, no
funds shall be commingled with the funds of the Advisor.

                                   ARTICLE 6

                        RECORDS AND FINANCIAL STATEMENTS

      Advisor, in the conduct of its responsibilities to the Company, shall
maintain adequate and separate books and records for the Company's operations in
accordance with United States generally accepted accounting principles ("GAAP"),
which shall be supported by sufficient documentation to ascertain that such
books and records are properly and accurately recorded. Such books and records
shall be the property of the Company. Such books and records shall include all
information necessary to calculate and audit the fees or reimbursements paid
under this Agreement. Advisor shall utilize procedures to attempt to ensure such
control over accounting and financial transactions as is reasonably required to
protect the Company's assets from theft, error or fraudulent activity. All
financial statements Advisor delivers to the Company shall be prepared on an
accrual basis in accordance with GAAP, except for special financial reports
which by their nature require a deviation from GAAP. Advisor shall maintain
necessary liaison with the Company's independent accountants and shall provide
such accountants with such reports and other information as the Company shall
request.

                                   ARTICLE 7

                            LIMITATION ON ACTIVITIES

      Notwithstanding any provision in this Agreement to the contrary, the
Advisor shall not take any action which, in its sole judgment made in good
faith, would (i) adversely affect the ability of the General Partner to qualify
or continue to qualify to be taxed as a REIT, (ii) subject the Company or the
General Partner to regulation under the Investment Company Act of 1940, as

                                       12
<PAGE>
amended, (iii) violate any law, rule or regulation of any governmental body or
agency having jurisdiction over the Company, the General Partner or their
Securities, or (iv) violate the Articles of Incorporation or Bylaws. In the
event an action that would violate (i) through (iv) of the preceding sentence
but such action has been ordered by the Board of Directors acting on behalf of
the General Partner, the Advisor shall notify the Board of Directors of the
Advisor's judgment of the potential impact of such action and shall refrain from
taking such action until it receives further clarification or instructions from
the Board of Directors. In such event the Advisor shall have no liability for
acting in accordance with the specific instructions of the Board of Directors so
given. Notwithstanding the foregoing, none of the Advisor, its Affiliates and
none of their directors, officers, employees and equityholders, shall be liable
to the Company, the General Partner, the Board of Directors or the Shareholders
for any act or omission by such Persons or individuals, except as provided in
this Agreement.

                                   ARTICLE 8

                    RELATIONSHIP WITH DIRECTORS AND OFFICERS

      Directors, officers and employees of the Advisor or any direct or indirect
Affiliate of the Advisor may serve as a Director and as officers of the General
Partner, except that no director, officer or employee of the Advisor or any of
its Affiliates who also is a Director or officer of the General Partner shall
receive any compensation from the Company or General Partner for serving as a
Director or officer other than reasonable reimbursement for travel and related
expenses incurred in attending meetings of the Board of Directors.

                                       13
<PAGE>
                                   ARTICLE 9

                                      FEES

      9.01 Acquisition Fees. The Company will pay the Advisor in cash as
compensation for services described in Section 3.02 an acquisition fee of 0.50%
of the Initial Asset Value of each Asset or loan acquired by the Advisor as well
as reimburse the Company for all out-of-pocket third-party expenses incurred by
the Advisor in connection with such services as required by Article 10. The
amount of such acquisition fees shall be subject to any limitations contained in
the Articles of Incorporation. The Advisor shall submit an invoice to the
Company following the closing or closings of each acquisition, accompanied by a
computation of the fee. The fee shall be payable within ten business days after
receipt of the invoice by the Company.

      9.02 Asset Management Fees. The Company will pay the Advisor in cash as
compensation for services described in Section 3.03 an asset management fee in
accordance with this Section 9.02 as well as reimburse the Advisor for all
out-of-pocket third-party expenses incurred by the Advisor in connection with
such services as required by Article 10. Subject to any limitations contained in
the Articles of Incorporation, this asset management fee shall be earned monthly
and the amount of this asset management fee payable by the Company to the
Advisor shall equal 0.0625% multiplied by the net equity invested in real estate
investments as of the end of the applicable month. The Advisor shall submit a
monthly invoice to the Company, accompanied by a computation of the asset
management fee for the applicable period. The asset management fee shall be
payable within ten business days after receipt of the invoice by the Company.

                                       14
<PAGE>
                                   ARTICLE 10

                                    EXPENSES

      10.01 General. In addition to the compensation paid to the Advisor
pursuant to Article 9 hereof, the Company shall pay directly or reimburse the
Advisor for all of the expenses paid or incurred by the Advisor or Affiliates in
connection with the services provided to the Company pursuant to this Agreement,
including, but not limited to:

            (i) all Organizational and Offering Expenses; provided, however,
      that the Company shall have no obligation to reimburse such expenses until
      the "minimum offering" (as such term is described in the Prospectus) has
      been reached and provided further that the Company shall at no time
      reimburse the Advisor for any Organizational and Offering Expenses
      reimbursements pursuant to this Article 10 to the extent that such
      reimbursement would exceed 3.0% of Gross Proceeds;

            (ii) Acquisition Expenses incurred in connection with the selection
      and acquisition of Assets including such expenses incurred related to
      assets pursued or considered but not ultimately acquired by the Company;

            (iii) the actual out-of-pocket cost of goods and services used by
      the Company or the General Partner and obtained from entities not
      Affiliated with the Advisor, including brokerage fees paid in connection
      with the purchase and sale of Securities;

            (iv) taxes and assessments on income or Assets and taxes as an
      expense of doing business and any other taxes otherwise imposed on the
      Company and its business or income;

                                       15
<PAGE>
            (v) out-of-pocket costs associated with insurance required in
      connection with the business of the Company or by our officers and
      Directors;

            (vi) all out-of-pocket expenses in connection with payments to the
      Board of Directors and meetings of the Board of Directors and
      Shareholders;

            (vii) personnel and related employment direct costs incurred by the
      Advisor or Affiliates in performing the services described in Sections
      3.01 and 3.04, including but not limited to salary, benefits, burdens and
      overhead of all employees directly involved in the performance of such
      services, plus all out-of-pocket costs incurred;

            (viii) out-of-pocket expenses of maintaining communications with
      Shareholders, including the cost of preparation, printing, and mailing
      annual reports and other Shareholder reports, proxy statements and other
      reports required by governmental entities;

            (ix) audit, accounting and legal fees, and other fees for
      professional services relating to the operations of the Company and all
      such fees incurred at the request, or on behalf of, the Independent
      Directors or any committee of the Board of Directors;

            (x) out-of-pocket costs for the Company to comply with all
      applicable laws, regulation and ordinances; and

            (xi) all other out-of-pocket costs necessary for the operation of
      the Company and its Assets incurred by the Advisor in performing its
      duties hereunder.

      Except as specifically provided for above in (i) and (vii) related to
Organization and Offering Expenses and shareholder services expenses, the
expenses and payments subject to reimbursement by the Company in this Section
10.01 do not include personnel and related direct employment or overhead costs
of the Advisor or Affiliates. The Company shall also reimburse

                                       16
<PAGE>
the Advisor or Affiliates of the Advisor for all expenses incurred on behalf of
the Company or the General Partner prior to the execution of this Agreement.

      10.02 Reimbursement to Advisor. Expenses incurred by the Advisor on behalf
of the Company and payable pursuant to this Section 10 shall be reimbursed to
the Advisor within 10 days after the Advisor provides the Company with an
invoice and supporting documentation relating to such reimbursement.

      10.03 Reimbursement to Company. The Company shall not reimburse the
Advisor during any fiscal quarter for Operating Expenses that, in the four
consecutive fiscal quarters then ended (the "Expense Year"), exceed the 2%/25%
Guidelines for such year (the "Excess Amount"), unless the Independent Directors
determine that such excess was justified, based on unusual and non-recurring
factors which they deem sufficient, in which case the Excess Amount may be
reimbursed. Any Excess Amount paid to the Advisor during a fiscal quarter
without the Independent Directors determining that such expenses were justified
shall be repaid to the Company. Within 60 days after the end of any fiscal
quarter of the Company for which total Operating Expenses for the Expense Year
exceed the 2%/25% Guidelines and the Independent Directors determined that such
expenses were justified, there shall be sent to the Shareholders a written
disclosure of such fact, together with an explanation of the factors the
Independent Directors considered in determining that such excess expenses were
justified. Such determination shall be reflected in the minutes of the meetings
of the Board of Directors. The Company will not reimburse the Advisor or its
Affiliates for services for which the Advisor or its Affiliates are entitled to
compensation in the form of a separate fee.

                                       17
<PAGE>
                                   ARTICLE 11

                                 OTHER SERVICES

      Should (i) the General Partner request that the Advisor or any director,
officer or employee thereof render services for the Company other than as set
forth in this Agreement or (ii) there are changes to the regulatory environment
in which the Advisor or Company operates that would increase significantly the
level of services performed such that the costs and expenses borne by the
Advisor for which the Advisor is not entitled to separate reimbursement for
personnel and related employment direct costs and overhead under Article 10 of
this Agreement would increase significantly, such services shall be separately
compensated at such rates and in such amounts as are agreed by the Advisor and
the Independent Directors, subject to the limitations contained in the Articles
of Incorporation, and shall not be deemed to be services pursuant to the terms
of this Agreement.

                                   ARTICLE 12

      RELATIONSHIP OF ADVISOR AND COMPANY; OTHER ACTIVITIES OF THE ADVISOR

      12.01 Relationship. The Company and the Advisor are not partners or joint
venturers with each other, and nothing in this Agreement shall be construed to
make them such partners or joint venturers. Nothing herein contained shall
prevent the Advisor from engaging in other activities, including, without
limitation, the rendering of advice to other Persons and the management of other
programs advised, sponsored or organized by the Advisor or its Affiliates. Nor
shall this Agreement limit or restrict the right of any director, officer,
employee, or equityholder of the Advisor or its Affiliates to engage in any
other business or to render services of any kind to any other Person. The
Advisor may, with respect to any investment in which the Company is a
participant, also render advice and service to each and every other participant

                                       18
<PAGE>
therein. The Advisor shall promptly disclose to the Board of Directors the
existence of any condition or circumstance, existing or anticipated, of which it
has knowledge, which creates or could create a conflict of interest between the
Advisor's obligations to the Company and its obligations to or its interest in
any other Person.

      12.02 Time Commitment. The Advisor shall, and shall cause its Affiliates
and their respective employees, officers and agents to, devote to the Company
such time as shall be reasonably necessary to conduct the business and affairs
of the Company in an appropriate manner consistent with the terms of this
Agreement. The Company acknowledges that the Advisor and other Affiliates of
Hines and their respective employees, officers and agents may also engage in
activities unrelated to the Company and may provide services to Persons other
than the Company or any of its Affiliates.

      12.03 Investment Opportunities and Allocation. The Advisor shall be
required to use commercially reasonable efforts to present a continuing and
suitable investment program to the Company which is consistent with the
investment policies and objectives of the Company, but neither the Advisor nor
any Affiliate of the Advisor shall be obligated generally to present any
particular investment opportunity to the Company even if the opportunity is of
character which, if presented to the Company, could be taken by the Company. In
the event an investment opportunity is located, the allocation procedure set
forth under the caption "Conflicts of Interest -- Competitive Activities of
Hines and its Affiliates" in the Prospectus shall govern the allocation of the
opportunity among the Company and Affiliates of the Advisor.

                                       19
<PAGE>
                                   ARTICLE 13

                                 THE HINES NAME

      The Advisor, Hines and their Affiliates have a proprietary interest in the
name "Hines". The Advisor hereby grants to the Company a non-transferable,
non-assignable, non-exclusive royalty-free right and license to use the name
"Hines" during the term of this Agreement. Accordingly, and in recognition of
this right, if at any time the Company ceases to retain Hines or an Affiliate
thereof to perform the services of Advisor, the Company (including the General
Partner) will, promptly after receipt of written request from Hines, cease to
conduct business under or use the name "Hines" or any derivative thereof and the
Company and the General Partner shall change the name of the Company and the
General Partner to a name that does not contain the name "Hines" or any other
word or words that might, in the reasonable discretion of the Advisor, be
susceptible of indication of some form of relationship between the Company and
the Advisor or any Affiliate thereof. At such time, the Company will also make
any changes to any trademarks, servicemarks or other marks necessary to remove
any references to the word "Hines". Consistent with the foregoing, it is
specifically recognized that the Advisor or one or more of its Affiliates has in
the past and may in the future organize, sponsor or otherwise permit to exist
other investment vehicles (including vehicles for investment in real estate) and
financial and service organizations having "Hines" as a part of their name, all
without the need for any consent (and without the right to object thereto) by
the Company or the General Partner.

                                   ARTICLE 14

                      TERM AND TERMINATION OF THE AGREEMENT

      14.01 Term. This Agreement shall have an initial term of one year from the
date of the Agreement. This Agreement may be renewed for an unlimited number of
successive one-year

                                       20
<PAGE>
terms upon mutual consent of the parties. Any such renewal must be approved by a
majority of the Independent Directors. The General Partner (through the
Independent Directors) will evaluate the performance of the Advisor annually
before renewing the Agreement, and each such renewal shall be for a term of no
more than one year.

      14.02 Termination by Either Party. This Agreement may be terminated upon
60 days' written notice without cause or penalty by either party.

      14.03 Termination by the Company. This Agreement may be terminated
immediately by the Company upon (i) any fraudulent conduct, criminal conduct,
willful misconduct or the negligent breach of fiduciary duty of or by the
Advisor, (ii) a material breach of this Agreement by the Advisor not cured
within 10 business days after the Advisor receives written notice of such
breach, or (iii) an event of the bankruptcy of the Advisor or commencement of
any bankruptcy or similar insolvency proceedings of the Advisor.

      14.04 Termination by the Advisor. This Agreement may be terminated
immediately by the Advisor in the event of (i) the bankruptcy of the Company or
commencement of any bankruptcy or similar insolvency proceedings of the Company,
or (ii) any material breach of this Agreement by the Company not cured by the
Company within 10 days after written notice thereof.

      14.05 Payments on Termination and Survival of Certain Rights and
Obligations. Payments to the Advisor pursuant to this Section 14.05 shall be
subject to the 2%/25% Guidelines to the extent applicable.

                  (i) After the Termination Date, the Advisor shall not be
      entitled to compensation for further services hereunder except it shall be
      entitled to receive from the Company within 30 days after the effective
      date of such termination all unpaid

                                       21
<PAGE>
      reimbursements of expenses and all earned but unpaid fees payable to the
      Advisor prior to termination of this Agreement.

                  (ii) The Advisor shall promptly upon termination:

                        (a) pay over to the Company all money collected pursuant
            to this Agreement, if any, after deducting any accrued compensation
            and reimbursement for its expenses to which it is then entitled;

                        (b) deliver to the Directors a full accounting,
            including a statement showing all payments collected by it and a
            statement of all money held by it, covering the period following the
            date of the last accounting furnished to the Directors;

                        (c) deliver to the Directors all assets and documents of
            the Company then in the custody of the Advisor; and

                        (d) cooperate with the Company to provide an orderly
            transition of advisory functions.

Upon the expiration or termination of this Agreement, neither party shall have
any further rights or obligations under this Agreement, except that Articles 13,
16 and 18 shall survive the termination or expiration of this Agreement.

      14.06 Redemption of OP Units. In the event this Agreement expires without
the consent of the Advisor, or is terminated for any reason other than by the
Advisor pursuant to Section 14.02, the Company shall, at the election of the
Advisor or its Affiliates (as applicable) and at any time after the effective
date of such expiration or termination, purchase all or a portion of the Units
(as such term is defined in the Agreement of Limited Partnership of the Company)
held by the Advisor and its Affiliates. The Company shall purchase such Units
for cash, which shall be

                                       22
<PAGE>
payable within 120 days after the Advisor or its Affiliates (as applicable)
gives the Company written notice of its desire to sell all or a portion of the
Units held by such Person to the Company. The purchase price shall be paid in
cash or, at the election of the selling Person, Shares. The purchase price of
each Unit shall be (i) in the event the seller elects to receive cash, the
then-existing "Market Value" of such Unit, as such term is defined in the
Agreement of Limited Partnership of the Company, or (ii) in the event the seller
elects to receive Shares, the then-existing "REIT Shares Amount" of such Unit,
as such term is defined in the Agreement of the Limited Partnership of the
Company.

                                   ARTICLE 15

                                   ASSIGNMENT

      This Agreement may be assigned by the Advisor to an Affiliate with the
consent of the General Partner by approval of a majority of the Independent
Directors. The Advisor may assign any rights to receive fees or other payments
under this Agreement without obtaining the approval of the Board of Directors.
This Agreement shall not be assigned by the Company without the consent of the
Advisor.

                                   ARTICLE 16

                   INDEMNIFICATION AND LIMITATION OF LIABILITY

      16.01 Indemnification by the Company. The Company shall indemnify and hold
harmless the Advisor and its Affiliates, including their respective officers,
directors, partners and employees, from all liability, claims, damages or losses
arising in the performance of their duties hereunder, and related expenses,
including reasonable attorneys' fees, to the extent such liability, claims,
damages or losses and related expenses are not fully reimbursed by insurance,
subject to any limitations imposed by the laws of the State of Texas, the
Articles of Incorporation or

                                       23
<PAGE>
Agreement of Limited Partnership of the Company, provided that: (i) the Advisor
and its Affiliates have determined that the course of conduct which caused the
loss or liability was in the best interests of the Company, (ii) the Advisor and
its Affiliates were acting on behalf of or performing services for the Company,
and (iii) the indemnified claim was not the result of negligence, misconduct, or
fraud of the indemnified person or resulted from a breach of the agreement by
the Advisor. Any indemnification of the Advisor may be made only out of the net
assets of the Company and not from the General Partner or the Shareholders.

      16.02 Indemnification by the Advisor. The Advisor shall indemnify and hold
harmless the Company from contract or other liability, claims, damages, taxes or
losses and related expenses, including attorneys' fees, to the extent that such
liability, claims, damages, taxes or losses and related expenses are not fully
reimbursed by insurance and are incurred by reason of the Advisor's bad faith,
fraud, willful misconduct or reckless disregard of its duties, but the Advisor
shall not be held responsible for any action of the Board of Directors in
following or declining to follow any of the Advisor's advice or recommendation.

      16.03 Advisor's Liability

            (i) Notwithstanding any other provisions of this Agreement, in no
      event shall the Company make any claim against Advisor, or its Affiliates,
      on account of any good faith interpretation by Advisor of the provisions
      of this Agreement (even if such interpretation is later determined to be a
      breach of this Agreement) or any alleged errors in judgment made in good
      faith and in accordance with this Agreement in connection with the
      operation of the operations of the Company hereunder by Advisor or the
      performance of any advisory or technical services provided by or arranged
      by the

                                       24
<PAGE>
      Advisor. The provisions of this Section 16.3(a) shall not be deemed to
      release Advisor from liability for its gross negligence.

            (ii) The Company shall not object to any expenditures made by the
      Advisor in good faith in the course of its performance of its obligations
      under this Agreement or in settlement of any claim arising out of the
      operation of the Company unless such expenditure is specifically
      prohibited by this Agreement. The provisions of this Section 16.03(b)
      shall not be deemed to release Advisor from liability for its gross
      negligence.

            (iii) IN NO EVENT WILL EITHER PARTY BE LIABLE FOR DAMAGES BASED ON
      LOSS OF INCOME, PROFIT OR SAVINGS OR INDIRECT, INCIDENTAL, CONSEQUENTIAL,
      EXEMPLARY, PUNITIVE OR SPECIAL DAMAGES OF THE OTHER PARTY OR PERSON,
      INCLUDING THIRD PARTIES, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
      POSSIBILITY OF SUCH DAMAGES IN ADVANCE, AND ALL SUCH DAMAGES ARE EXPRESSLY
      DISCLAIMED. IN NO EVENT WILL ADVISOR'S AGGREGATE LIABILITY UNDER THIS
      AGREEMENT EVER EXCEED THE TOTAL AMOUNT OF FEES IT ACTUALLY RECEIVES FROM
      THE COMPANY PURSUANT TO ARTICLE 9.

                                   ARTICLE 17

                             COMPANY ADMINISTRATION

      The Advisor shall keep or cause to be kept complete and appropriate
records and books of account for the Company. Except as otherwise expressly
provided herein, such books and records shall be maintained on a basis which
allows the proper preparation of the Company's

                                       25
<PAGE>
financial statements and tax returns. The books and records shall be maintained
at the principal office of the Company.

                                   ARTICLE 18

                                  MISCELLANEOUS

      18.01 Notices. Any notice, report or other communication required or
permitted to be given hereunder shall be in writing unless some other method of
giving such notice, report or other communication is required by the Articles of
Incorporation, the Bylaws, or accepted by the party to whom it is given, and
shall be given by being delivered by hand or by overnight mail or other
overnight delivery service to the addresses set forth herein:

             To the  Company, the General Partner or the Directors:

                      Hines REIT Properties, L.P.
                      c/o  Hines Real Estate Investment Trust, Inc.
                      2800 Post Oak Blvd., Suite 5000
                      Houston, Texas 77056

             To the Advisor:

                      Hines Advisors Limited Partnership
                      2800 Post Oak Blvd., Suite 5000
                      Houston, Texas 77056

      Either party may at any time give notice in writing to the other party of
a change in its address for the purposes of this Section 18.01.

      18.02 Modification. This Agreement shall not be changed, modified,
terminated, or discharged, in whole or in part, except by an instrument in
writing signed by both parties hereto, or their respective successors or
assignees.

      18.03 Severability. The provisions of this Agreement are independent of
and severable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue

                                       26
<PAGE>
of the fact that for any reason any other or others of them may be invalid or
unenforceable in whole or in part.

      18.04 Construction. The provisions of this Agreement shall be construed
and interpreted in accordance with the laws of the State of Texas.

      18.05 Entire Agreement. This Agreement contains the entire agreement and
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements, understandings,
inducements and conditions, express or implied, oral or written, of any nature
whatsoever with respect to the subject matter hereof. The express terms hereof
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof. This Agreement may not be modified or
amended other than by an agreement in writing.

      18.06 Waiver. Neither the failure nor any delay on the part of a party to
exercise any right, remedy, power or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, power or privilege preclude any other or further exercise of the
same or of any other right, remedy, power or privilege, nor shall any waiver of
any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence. No waiver shall be effective unless it is in writing and
is signed by the party asserted to have granted such waiver.

      18.07 Gender. Words used herein regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context requires.

                                       27
<PAGE>
      18.08 Titles Not to Affect Interpretation. The titles of Articles and
Sections contained in this Agreement are for convenience only, and they neither
form a part of this Agreement nor are they to be used in the construction or
interpretation hereof.

      18.09 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall become binding when
one or more counterparts hereof, individually or taken together, shall bear the
signatures of all of the parties reflected hereon as the signatories

            [The remainder of this page is intentionally left blank.
                            Signature page follows.]

                                       28
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.

                               Hines REIT Properties, L.P.

                               By:      Hines Real Estate Investment Trust, Inc.
                               Its:     General Partner

                               By:
                                   ---------------------------------------------
                               Name:
                                     -------------------------------------------
                               Title:
                                      ------------------------------------------

                               Hines Advisors Limited Partnership

                               By:      Hines Advisors GP LLC
                               Its:     General Partner

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                       29

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