
<PAGE>   1

                                                 Registration Statement No. 333-

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                      FORM S-3 REGISTRATION STATEMENT UNDER
                           THE SECURITIES ACT OF 1933

                      LEXINGTON CORPORATE PROPERTIES TRUST
             (Exact Name of Registrant as Specified in Its Charter)

           MARYLAND                                       13-3737318
(State or Other Jurisdiction of                  (I.R.S. Employer Identification
Incorporation or Organization)                              Number)             
                                                 

                              355 LEXINGTON AVENUE
                            NEW YORK, NEW YORK 10017
                                 (212) 692-7260

               (Address, Including Zip Code, and Telephone Number,
        Including Area Code, of Registrant's Principal Executive Offices)

T. WILSON EGLIN                         COPIES TO:                           
PRESIDENT AND CHIEF                     BARRY A. BROOKS, ESQ.                
OPERATING OFFICER                       PAUL, HASTINGS, JANOFSKY & WALKER LLP
355 LEXINGTON AVENUE                    399 PARK AVENUE                      
NEW YORK, NEW YORK 10017                NEW YORK, NEW YORK 10022             
(212) 692-7260                          (212) 318-6000                       

            (Name, Address, Including Zip Code, and Telephone Number,
                   Including Area Code, of Agent For Service)

      Approximate date of commencement of proposed sale to the public: From
      time to time after the effective date of this Registration Statement.

<PAGE>   2

      If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|

      If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. |X|

      If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|

      If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. |_|

      If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
<PAGE>   3

                         CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
                                        Proposed      Proposed     
                                        Maximum        Maximum     
Title of Each Class      Amount to      Offering      Aggregate      Amount of 
of Securities to Be          Be        Price Per      Offering     Registration
Registered               Registered       Unit          Price           Fee    
----------------------  ------------- -------------  ------------  --------------
<S>                     <C>               <C>        <C>            <C>
Debt Securities ......     (1)(3)         (2)         (1)(2)(3)         N/A
Preferred Shares
(par value $.0001
per share) ...........     (1)(4)         (2)         (1)(2)(4)         N/A
Common Shares (par
value $.0001 per
share) ...............     (1)(5)         (2)         (1)(2)(5)         N/A
   Total .............  $250,000,000      (2)        $250,000,000   $73,750 (6)
</TABLE>

----------

(1) In no event will the aggregate initial offering price of all securities
    issued, from time to time, pursuant to this Registration Statement exceed
    $250,000,000.

(2) The proposed maximum initial offering price per unit will be determined,
    from time to time, by the Registrant in connection with the issuance by
    the Registrant of the securities registered hereunder.

(3) There are being registered hereunder an indeterminate principal amount of
    Debt Securities.

(4) There are being registered hereunder an indeterminate number of Preferred
    Shares as may be sold, from time to time, by the Registrant.

(5) Subject to Rule 415(a)(4) of the Securities Act of 1933, as amended, there
    are being registered hereunder an indeterminate number of shares of Common
    Shares as may be sold, from time to time, by the Registrant. There are
    also being registered hereunder an indeterminate number of shares of
    Common Shares as shall be issuable upon conversion of the Preferred Shares
    or Debt Securities registered hereby.

(6) Calculated pursuant to Rule 457(o) under the Securities Act of 1993, as
    amended.

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

            THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
<PAGE>   4

PART I.     INFORMATION REQUIRED IN PROSPECTUS

<PAGE>   5

PROSPECTUS

                                  $250,000,000

                      Lexington Corporate Properties Trust

                                 Debt Securities
                                Preferred Shares
                                  Common Shares

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

            Lexington Corporate Properties Trust (the "Company"), may offer from
time to time in one or more series (i) its debt securities ("Debt Securities"),
which may be senior or subordinated debt securities, (ii) its preferred shares,
of beneficial interest, $.0001 par value per share ("Preferred Shares"), and
(iii) its common shares of beneficial interest, $.0001 par value per share
("Common Shares"), with an aggregate public offering price of up to $250,000,000
(or its equivalent based on the exchange rate at the time of sale) in amounts,
at prices and on terms to be determined at the time of offering. The Debt
Securities, Preferred Shares and Common Shares (collectively, the "Securities")
may be offered, separately or together, in separate classes or series, in
amounts, at prices and on terms to be set forth in one or more supplements to
this Prospectus (each, a "Prospectus Supplement").

            The specific terms of the Securities for which this Prospectus is
being delivered will be set forth in the applicable Prospectus Supplement and
will include, where applicable: (i) in the case of Debt Securities, the specific
title, aggregate principal amount, ranking, currency, form (which may be
registered or bearer, or certificated or global), authorized denominations,
maturity, rate (or manner of calculation thereof) and time of payment of
interest, terms for redemption at the option of the Company or repayment at the
option of the holder thereof, terms for sinking fund payments, terms for
conversion into Common Shares or Preferred Shares, covenants and any initial
public offering price; (ii) in the case of Preferred Shares, the specific
designation and stated value per share, any dividend, liquidation, redemption,
conversion, voting and other rights, and any initial public offering price; and
(iii) in the case of Common Shares, any initial public offering price. In
addition, such specific terms may include limitations on direct or beneficial
ownership and restrictions on transfer of the Securities, in each case as may be
consistent with the Company's Declaration of Trust (the "Declaration of Trust")
or otherwise appropriate to preserve the status of the Company as a real estate
investment trust for federal income tax purposes. See "Restrictions on Transfers
of Capital Shares and Anti-Takeover Provisions."

            The applicable Prospectus Supplement will also contain information,
where appropriate, about certain United States federal income tax considerations
relating to, and any listings on a securities exchange of, the Securities
covered by such Prospectus Supplement.

            The Securities may be offered by the Company directly, through
agents designated from time to time by the Company or to or through underwriters
or dealers. If any agents or underwriters are involved in the sale of any of the
securities, their names, and any applicable purchase price, fee, commission or
discount arrangement between or among them will be set forth or will be
calculable from the information set forth in the applicable Prospectus
Supplement. See "Plan of Distribution." No Securities may be sold without
delivery of a Prospectus Supplement describing the method and terms of the
offering of such Securities.

            Prospective investors should consider carefully matters discussed
under the caption "Risk Factors" appearing on pages 5 through 8 which are
relevant to an investment in the Securities.

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

    THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
         AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
            HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
               SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
                  ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTA-
                  TION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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

                 The date of this Prospectus is April 3, 1998.
<PAGE>   6

                              AVAILABLE INFORMATION

            The Company is subject to the informational reporting requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, is required to file reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information can be inspected and copied at
the public reference facilities maintained by the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional
offices located at 7 World Trade Center, 13th Floor, New York, New York 10048
and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of such material also can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates. In addition, such material may be electronically
accessed at the Commission's site on the World Wide Web located at
http://www.sec.gov.

            The Company's Common Shares are listed on the New York Stock
Exchange (the "NYSE") and reports, proxy and information statements, and other
information concerning the Company can be inspected at the offices of the NYSE
at 20 Broad Street, New York, New York 10005.

            The Company has filed with the Commission a Registration Statement
on Form S-3, of which this Prospectus forms a part (together with any amendments
thereto, the "Registration Statement"), under the Securities Act of 1933, as
amended (the "Securities Act"). As permitted by the rules and regulations of the
Commission, this Prospectus omits certain information, exhibits and undertakings
contained in the Registration Statement. Such additional information, exhibits
and undertakings may be inspected and obtained from the Commission's principal
office in Washington, D.C. upon payment of the fees prescribed by the
Commission. The summaries or descriptions of documents in this Prospectus are
not necessarily complete. Reference is made to the copies of such documents
attached hereto or otherwise filed as a part of the Registration Statement for a
full and complete statement of their provisions, and such summaries and
descriptions are, in each case, qualified in their entirety by such reference.

                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

            In December 1997, the Company was reorganized as a Maryland real
estate investment trust. See "The Company." References herein to the Company
include references to the Company's predecessor corporations. The following
documents or information have been filed by the Company with the Commission and
are incorporated herein by reference:

            1.    The Company's Annual Report on Form 10-K (Commission File No.
                  1-12386) for the year ended December 31, 1997, filed on March
                  31, 1998.

            2.    The Company's Current Report on Form 8-K (Commission File No.
                  1-12386), filed on January 16, 1998.

            3.    The Company's 1997 Proxy Statement on Schedule 14-A, filed on
                  May 6, 1997 (Commission File No. 1-12386).


                                       2
<PAGE>   7

            4.    The description of the Company's capital shares contained in
                  the Company's Registration Statement on Form 8-B under the
                  Exchange Act, filed on August 10, 1994 (Commission File No.
                  1-12386).

            All documents subsequently filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
of this Prospectus and prior to the termination of the offering of all
Securities covered by this Prospectus will be deemed incorporated by reference
into this Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.

            The Company hereby undertakes to provide without charge to each
person to whom a copy of this Prospectus has been delivered, upon the written or
oral request of such person to the Company at 355 Lexington Avenue, New York,
New York 10017. Attention: T. Wilson Eglin, President and Chief Operating
Officer, any or all of the documents referred to above (other than exhibits to
such documents) which have been incorporated by reference in this Prospectus.

                                   THE COMPANY

            Lexington Corporate Properties Trust is a self-managed and
self-administered real estate investment trust ("REIT") that acquires, owns and
manages a geographically diversified portfolio of high quality office,
industrial and retail properties. Substantially all of the Company's leases are
"Net Leases," under which the tenant is responsible for all costs of real estate
taxes, insurance, ordinary maintenance and structural repairs. Management
believes that owning acquiring and managing net lease properties results in
lower operating expenses for the Company than the Company otherwise would incur
through investments in properties which were not net leased.

            Management has diversified the Company's portfolio by geographical
location, tenant industry segment, lease term expiration and property type with
the intention of providing steady internal growth with low volatility.
Management believes that such diversification should help insulate the Company
from regional recession, industry specific downturns and price fluctuations by
property type.

            The Company's management team has demonstrated its ability to create
value and increase cash flow for the Company through active management of its
portfolio of Properties subject to Net Leases, including acquisitions,
expansions of existing Properties, attracting strong tenants, refinancings and
selective dispositions. Management has an active presence in and knowledge of
the real estate market in the United States, particularly with respect to the
market for single tenant properties subject to Net Leases. Management subjects
each prospective property acquisition candidate to a rigorous underwriting
process which analyzes the property's (i) design, construction quality,
efficiency and functionality; (ii) location with respect to the immediate
submarket, city and region; (iii) tenant financial strength, credit rating,
growth prospects and competitive position within its respective industry; (iv)
lease integrity with respect to term, rental rate increases, corporate
guarantees and property maintenance provisions; (v) economics with respect to
the current and future cash flow growth prospects and expected investment yield
sensitivity calculations; and (vi) fit within the existing Company portfolio of
Properties. 


                                       3
<PAGE>   8

            The Company commenced operations in 1993 as a REIT, with several
operating partnership subsidiaries. This operating partnership structure enables
the Company to acquire property by issuing to a seller, as a form of
consideration, interests ("OP Units") in the Company's subsidiary operating
partnerships. The OP Units are exchangeable, after certain dates, for Common
Shares of the Company. Management believes that this structure facilitates the
Company's ability to raise capital and to acquire portfolio and individual
properties by enabling the Company to structure transactions which may defer tax
gains for a contributor of property while preserving the Company's cash
available for other purposes, including the payment of distributions.

            The Company was originally incorporated under the laws of the State
of Delaware, and was reincorporated in the State of Maryland in June 1994. In
December 1997, the Company reorganized as a Maryland real estate investment
trust ("Maryland REIT"). The reorganization was effected by merging the Company
with and into a newly formed Maryland REIT. References herein to the Company
include references to the Company's Delaware and Maryland predecessor
corporations and the predecessor companies referenced above, unless the context
otherwise requires.

            The principal executive offices of the Company are located at 355
Lexington Avenue, New York, New York 10017, and its telephone number is (212)
692-7260.


                                       4
<PAGE>   9

                                  RISK FACTORS

            Risks Involved in Single Tenant Leases. The Company focuses its
acquisition activities in Net Leased real properties or interests therein.
Because the Company's Net Leased real properties are leased to single tenants,
the financial failure of or other default by a tenant resulting in the
termination of a lease is likely to cause a significant reduction in the
operating cash flow of the lessor and might decrease the value of the property
leased to such tenant.

            Dependence on Major Tenants. Revenues from several of the Company's
Properties constitute a significant percentage of the Company's consolidated
rental revenues. The default, financial distress or bankruptcy of any of the
tenants of such Properties could cause interruptions in the receipt of lease
revenues from such tenants and/or result in vacancies in the respective
Properties, which would reduce the revenues of the Company until the affected
property is relet, and could decrease the ultimate sale value of each such
Property. Upon the expiration of the leases that are currently in place with
respect to these Properties, the Company may not be able to re-lease the vacant
property at a comparable lease rate or without incurring additional expenditures
in connection with such re-leasing.

            Leverage. The Company has incurred, and may continue to incur,
indebtedness (secured and unsecured) in furtherance of its activities. Neither
the Declaration of Trust nor any policy statement formally adopted by the Board
limits either the total amount of indebtedness or the specified percentage of
indebtedness (based upon the total market capitalization of the Company) which
may be incurred. Accordingly, the Company could become more highly leveraged,
resulting in increased risk of default on obligations of the Company and in an
increase in debt service requirements which could adversely affect the financial
condition and results of operations of the Company and the Company's ability to
pay distributions. The Credit Facility (as defined below) limits the amount of
indebtedness the Company may incur to 60% of the Company's total market
capitalization.

            Possible Inability to Refinance Balloon Payments on Mortgage Debt. A
significant number of the Company's Properties are subject to mortgages with
balloon payments. Balloon payments, relating to three Properties, of
approximately $10.0 million and $5.6 million are due in 1998 and 1999,
respectively. The Company's secured revolving credit facility with Fleet
National Bank (the "Credit Facility") matures in 1999. Also, on May 19, 1995,
the Company, through its wholly owned subsidiary, LXP Funding Corp., completed a
$70 million secured debt offering, secured by fifteen of the Company's
Properties, by issuing commercial mortgage pass-through certificates, which
mature in 2005. See Note 5 of the Company's Consolidated Financial Statements
included in the Company's 1997 Annual Report on Form 10-K. The ability of the
Company to make such balloon payments will depend upon its ability either to
refinance the mortgage related thereto or to sell the related property. The
ability of the Company to accomplish such goals will be affected by various
factors existing at the relevant time, such as the state of the national and
regional economies, local real estate conditions, available mortgage rates, the
Company's equity in the mortgaged properties, the financial condition of the
Company, the operating history of the mortgaged properties, and tax laws.

            Uncertainties Relating to Lease Renewals and Re-letting of Space.
The Company will be subject to the risks that, upon expiration of leases for
space located in the Company's Properties, the premises may not be re-let or the
terms of re-letting (including the cost of concessions to tenants) may be less
favorable than current lease terms. If the Company were unable to re-let
promptly all or a substantial portion of its commercial units or if the rental
rates upon such re-letting were significantly 


                                       5
<PAGE>   10

lower than expected rates, the Company's net income and ability to make expected
distributions to shareholders would be adversely affected. There can be no
assurance that the Company will be able to retain tenants in any of the
Company's Properties upon the expiration of their leases.

            Defaults on Cross-Collateralized Properties. Although the Company
does not generally cross-collateralize any of its properties, management may
determine to do so from time to time. As of the date of this Prospectus, two of
the Company's Properties in Florida were cross-collateralized and fifteen of the
Company's Properties were the subject of a segregated pool of assets with
respect to which commercial mortgage pass-through certificates (as discussed
above) were issued. To the extent that any of the Company's Properties are
cross-collateralized, any default by the Company under the mortgage relating to
one such Property will result in a default under the financing arrangements
relating to any other Property which also provides security for such mortgage.

            Possible Liability Relating to Environmental Matters. Under various
federal, state and local environmental laws, statutes, ordinances, rules and
regulations, an owner of real property may be liable for the costs of removal or
remediation of certain hazardous or toxic substances at, on, in or under such
property, as well as certain other potential costs relating to hazardous or
toxic substances (including government fines and penalties and damages for
injuries to persons and adjacent property). Such laws often impose liability
without regard to whether the owner knew of, or was responsible for, the
presence or disposal of such substances. Such liability may be imposed on the
owner in connection with the activities of an operator of, or tenant at, the
property. The cost of any required remediation, removal, fines or personal or
property damages and the owner's liability therefor could exceed the value of
the property and/or the aggregate assets of the owner. In addition, the presence
of such substances, or the failure to properly dispose of or remove such
substances, may adversely affect the owner's ability to sell or rent such
property or to borrow using such property as collateral, which, in turn, would
reduce the Company's revenues and ability to make distributions. A property can
also be adversely affected either through physical contamination or by virtue of
an adverse effect upon value attributable to the migration of hazardous or toxic
substances, or other contaminants that have or may have emanated from other
properties. Although the Company's tenants are primarily responsible for any
environmental damages and claims related to the leased premises, in the event of
the bankruptcy or inability of the tenant of such premises to satisfy any
obligations with respect thereto, the Company may be required to satisfy such
obligations. In addition, under certain environmental laws, the Company, as the
owner of such properties, may be held directly liable for any such damages or
claims irrespective of the provisions of any lease.

            From time to time, in connection with the conduct of the Company's
business, and prior to the acquisition of any property from a third party or as
required by the Company's financing sources, the Company authorizes the
preparation of Phase I environmental reports and, when necessary, Phase Il
environmental reports, with respect to its Properties. Based upon such
environmental reports and management s ongoing review of its Properties, as of
the date of this Prospectus, management was not aware of any environmental
condition with respect to any of the Company's Properties which management
believed would be reasonably likely to have a material adverse effect on the
Company. There can be no assurance, however, that (i) the discovery of
environmental conditions, the existence or severity of which were previously
unknown, (ii) changes in law, (iii) the conduct of tenants, or (iv) activities
relating to properties in the vicinity of the Company's Properties will not
expose the Company to material liability in the future. Changes in laws
increasing the potential liability for environmental conditions existing on
properties or increasing the restrictions on discharges or other conditions may
result in significant unanticipated expenditures or may otherwise adversely
affect the 


                                       6
<PAGE>   11

operations of the Company's tenants, which could adversely affect the Company's
financial condition or results of operations.

            Risks Relating to Acquisitions. A significant element of the
Company's business strategy is the enhancement of its portfolio through
acquisitions of additional properties. The consummation of any future
acquisition will be subject to satisfactory completion of the Company's
extensive valuation analysis and due diligence review and to the negotiation of
definitive documentation. There can be no assurance that the Company will be
able to identify and acquire additional properties or that it will be able to
finance acquisitions in the future. In addition, there can be no assurance that
any such acquisition, if consummated, will be profitable for the Company. If the
Company is unable to consummate the acquisition of additional properties in the
future, there can be no assurance that the Company will be able to increase the
cash available for distribution to shareholders.

            Concentration of Ownership by Certain Investors. In three separate
closings in 1997, the Company sold 2,000,000 Class A Senior Cumulative
Convertible Preferred Shares of Beneficial Interest in the Company (the
"Convertible Preferred Shares") to Five Arrows Realty, L.L.C. ("Five Arrows").
The Convertible Preferred Shares are convertible to Common Shares on a
one-to-one basis at $12.50 per share. In March 1997, the Company sold to an
institutional investor in a private placement 8% Exchangeable Redeemable Secured
Notes (the "Exchangeable Notes") in the aggregate principal amount of $25
million. The Exchangeable Notes are exchangeable at $13 per share for the
Company's Common Shares beginning in the year 2000, subject to adjustment.
Significant concentrations of ownership by certain investors may allow such
investors to exert a greater influence over the management and affairs of the
Company.

            Uninsured Loss. The Company carries comprehensive liability, fire,
extended coverage and carries rent loss insurance on most of its Properties,
with policy specifications and insured limits customarily carried for similar
properties. However, with respect to certain of the Properties where the leases
do not provide for abatement of rent under any circumstances, the Company
generally does not maintain rent loss insurance. In addition, there are certain
types of losses (such as due to wars or acts of God) that generally are not
insured because they are either uninsurable or not economically insurable.
Should an uninsured loss or a loss in excess of insured limits occur, the
Company could lose capital invested in a Property, as well as the anticipated
future revenues from a Property, while remaining obligated for any mortgage
indebtedness or other financial obligations related to the Property. Any such
loss would adversely affect the financial condition of the Company. Management
believes that the Company's Properties are adequately insured in accordance with
industry standards.

            Adverse Effects of Changes in Market Interest Rates. The trading
prices of equity securities issued by REITs have historically been affected by
changes in broader market interest rates, with increases in interest rates
resulting in decreases in trading prices, and decreases in interest rates
resulting in increases in such trading prices. An increase in market interest
rates could therefore adversely affect the trading prices of any equity
Securities issued by the Company.

            Competition. The real estate industry is highly competitive. The
Company's principal competitors include national REITs, many of which are
substantially larger and have substantially greater financial resources than the
Company.


                                       7
<PAGE>   12

            Failure to Qualify as a REIT. Management believes that the Company
has met the requirements for qualification as a REIT for federal income tax
purposes beginning with its taxable year ended December 31, 1993 and intends to
continue to meet such requirements in the future. However, qualification as a
REIT involves the application of highly technical and complex provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), for which there are only
limited judicial or administrative interpretations. No assurance can be given
that the Company has qualified or will remain qualified as a REIT. The Code
provisions and income tax regulations applicable to REITs are more complex than
those applicable to corporations. The determination of various factual matters
and circumstances not entirely within the Company's control may affect its
ability to qualify as a REIT. In addition, no assurance can be given that
legislation, regulations, administrative interpretations or court decisions will
not significantly change the requirements for qualification as a REIT or the
federal income tax consequences of such qualification. If the Company does not
qualify as a REIT, the Company would not be allowed a deduction for
distributions to shareholders in computing its income subject to tax at the
regular corporate rates. The Company also could be disqualified from treatment
as a REIT for the four taxable years following the year during which
qualification was lost. Cash available for distribution to the Company's
shareholders would be significantly reduced for each year in which the Company
does not qualify as a REIT. Although the Company currently intends to continue
to qualify as a REIT, it is possible that future economic, market, legal, tax or
other considerations may cause the Company, without the consent of the
shareholders, to revoke the REIT election or to otherwise take action that would
result in disqualification.

                                 USE OF PROCEEDS

            Unless otherwise described in the applicable Prospectus Supplement,
the Company intends to use the net proceeds from the sale of Securities for
general corporate purposes, which may include the acquisition of additional
properties, the repayment of outstanding indebtedness or the improvement of
certain properties already in the Company's portfolio.

                       RATIO OF EARNINGS TO FIXED CHARGES

            The Company's ratio of earnings to fixed charges for each of the
years ended 1997, 1996, 1995, 1994 and 1993 was 1.49, 1.41, 1.78, 1.48, and
1.40, respectively. The ratios of earnings to fixed charges were computed by
dividing earnings by charges. For this purpose, earnings consist of pre-tax
income from continued operations plus fixed charges (excluding capitalized
interest). Fixed charges consist of interest expense and the amortization of
debt issuance costs.


                                       8
<PAGE>   13

                         DESCRIPTION OF DEBT SECURITIES

General

            The Debt Securities will be direct obligations of the Company, which
may be secured or unsecured and may be either senior Debt Securities ("Senior
Securities") or subordinated Debt Securities ("Subordinated Securities"). The
Debt Securities will be issued under one or more indentures in the form filed as
an exhibit to the Registration Statement of which this Prospectus is a part (the
"Form of Indenture"). As provided in the Form of Indenture, the specific terms
of any Debt Security issued pursuant to an indenture will be set forth in one or
more Supplemental Indentures, each dated as of a date of or prior to the
issuance of the Debt Securities to which it relates (the "Supplemental
Indentures" and each a "Supplemental Indenture"). Senior Securities and
Subordinated Securities may be issued pursuant to separate indentures
(respectively, a "Senior Indenture" and a "Subordinated Indenture"), in each
case between the Company and a trustee (an "Indenture Trustee"), which may be
the same Indenture Trustee, subject to such amendments or supplements as may be
adopted from time to time. The Senior Indenture and the Subordinated Indenture,
as amended or supplemented from time to time, are sometimes hereinafter referred
to collectively as the "Indentures." The Indentures will be subject to and
governed by the Trust Indenture Act of 1939, as amended. The statements made
under this heading relating to the Debt Securities and the Indentures are
summaries of the provisions thereof, do not purport to be complete and are
qualified in their entirety by reference to the Indentures and such Debt
Securities.

            Capitalized terms used herein and not defined shall have the
meanings assigned to them in the applicable Indenture.

Terms

            The indebtedness represented by the Senior Securities will rank
equally with all other unsecured and unsubordinated indebtedness of the Company.
The indebtedness represented by Subordinated Securities will be subordinated in
right of payment to the prior payment in full of the Senior Debt of the Company
as described under "--Subordination." The particular terms of the Debt
Securities offered by a Prospectus Supplement will be described in the
applicable Prospectus Supplement, along with any applicable federal income tax
considerations unique to such Debt Securities. Accordingly, for a description of
the terms of any series of Debt Securities, reference must be made to both the
Prospectus Supplement relating thereto and the description of the Debt
Securities set forth in this Prospectus.

            Except as set forth in any Prospectus Supplement, the Debt
Securities may be issued without limits as to aggregate principal amount, in one
or more series, in each case as established from time to time by the Company or
as set forth in the applicable Indenture or in one or more Supplemental
Indentures. All Debt Securities of one series need not be issued at the same
time and, unless otherwise provided, a series may be reopened, without the
consent of the holders of the Debt Securities of such series, for issuance of
additional Debt Securities of such series.

            The Form of Indenture provides that the Company may, but need not,
designate more than one Indenture Trustee thereunder, each with respect to one
or more series of Debt Securities. Any Indenture Trustee under an Indenture may
resign or be removed with respect to one or more series of Debt Securities and a
successor Indenture Trustee may be appointed to act with respect to such series.


                                       9
<PAGE>   14

If two or more persons are acting as Indenture Trustee with respect to different
series of Debt Securities, each such Indenture Trustee shall be an Indenture
Trustee of a trust under the applicable Indenture separate and apart from the
trust administered by any other Indenture Trustee, and, except as otherwise
indicated herein, any action described herein to be taken by each Indenture
Trustee may be taken by each such Indenture Trustee with respect to, and only
with respect to, the one or more series of Debt Securities for which it is
Indenture Trustee under the applicable Indenture.

            The following Summaries set forth certain general terms and
provisions of the Indentures and the Debt Securities. The Prospectus Supplement
relating to the series of Debt Securities being offered will contain further
terms of such Debt Securities, including the following specific terms:

            (1) The title of such Debt Securities and whether such Debt
      Securities are secured or unsecured or Senior Securities or Subordinated
      Securities;

            (2) The aggregate principal amount of such Debt Securities and any
      limit on such aggregate principal amount;

            (3) The price (expressed as a percentage of the principal amount
      thereof) at which such Debt Securities will be issued and, if other than
      the principal amount thereof, the portion of the principal amount thereof
      payable upon declaration of the maturity thereof, or (if applicable) the
      portion of the principal amount of such Debt Securities that is
      convertible into Common Shares or Preferred Shares, or the method by which
      any such portion shall be determined;

            (4) If convertible, the terms on which such Debt Securities are
      convertible, including the initial conversion price or rate and the
      conversion period and any applicable limitations on the ownership or
      transferability of the Common Shares or Preferred Shares receivable on
      conversion;

            (5) The date or dates, or the method for determining such date or
      dates, on which the principal of such Debt Securities will be payable;

            (6) The rate or rates (which may be fixed or variable), or the
      method by which such rate or rates shall be determined, at which such Debt
      Securities will bear interest, if any;

            (7) The date or dates, or the method for determining such date or
      dates, from which any such interest will accrue, the dates on which any
      such interest will be payable, the record dates for such interest payment
      dates, or the method by which such dates shall be determined, the persons
      to whom such interest shall be payable, and the basis upon which interest
      shall be calculated if other than that of a 360-day year of twelve 30-day
      months;

            (8) The place or places where the principal of (and premium, if any)
      and interest, if any, on such Debt Securities will be payable, where such
      Debt Securities may be surrendered for conversion or registration of
      transfer or exchange and where notices or demands to or upon the Company
      with respect to such Debt Securities and the applicable Indenture may be
      served;


                                       10
<PAGE>   15

            (9) The period or periods, if any, within which, the price or prices
      at which and the other terms and conditions upon which such Debt
      Securities may, pursuant to any optional or mandatory redemption
      provisions, be redeemed, as a whole or in part, at the option of the
      Company;

            (10) The obligation, if any, of the Company to redeem, repay or
      purchase such Debt Securities pursuant to any sinking fund or analogous
      provision or at the option of a holder thereof, and the period or periods
      within which, the price or prices at which and the other terms and
      conditions upon which such Debt Securities will be redeemed, repaid or
      purchased, as a whole or in part, pursuant to such obligation;

            (11) If other than U.S. dollars, the currency or currencies in which
      such Debt Securities are denominated and payable, which may be a foreign
      currency or units of two or more foreign currencies or a composite
      currency or currencies, and the terms and conditions relating thereto;

            (12) Whether the amount of payments of principal of (and premium, if
      any) or interest, if any, on such Debt Securities may be determined with
      reference to an index, formula or other method (which index, formula or
      method may, but need not, be based on a currency, currencies, currency
      unit or units, or composite currency or currencies) and the manner in
      which such amounts shall be determined;

            (13) Whether such Debt Securities will be issued in certificated or
      book-entry form and, if so, the identity of the depository for such Debt
      Securities;

            (14) Whether such Debt Securities will be in registered or bearer
      form or both and, if in registered form, the denominations thereof if
      other than $1,000 and any integral multiple thereof and, if in bearer
      form, the denominations thereof and terms and conditions relating thereto;

            (15) The applicability, if any, of the defeasance and covenant
      defeasance provisions described herein or set forth in the applicable
      Indenture, or any modification thereof;

            (16) Whether and under what circumstances the Company will pay any
      additional amounts on such Debt Securities in respect of any tax,
      assessment or governmental charge and, if so, whether the Company will
      have the option to redeem such Debt Securities in lieu of making such
      payment;

            (17) Any deletions from, modifications of or additions to the events
      of default or covenants of the Company, to the extent different from those
      described herein or set forth in the applicable Indenture with respect to
      such Debt Securities, and any change in the right of any Trustee or any of
      the holders to declare the principal amount of any of such Debt Securities
      due and payable;

            (18) The provisions, if any, relating to the security provided for
      such Debt Securities; and


                                       11
<PAGE>   16

            (19) Any other terms of such Debt Securities not inconsistent with
      the provisions of the applicable Indenture.

            If so provided in the applicable Prospectus Supplement, the Debt
Securities may be issued at a discount below their principal amount and provide
for less than the entire principal amount thereof to be payable upon declaration
of acceleration of the maturity thereof ("Original Issue Discount Securities").
In such cases, any special U.S. federal income tax, accounting and other
considerations applicable to Original Issue Discount Securities will be
described in the applicable Prospectus Supplement.

            Except as may be set forth in any Prospectus Supplement, neither the
Debt Securities nor the Indenture will contain any provisions that would limit
the ability of the Company to incur indebtedness or that would afford holders of
Debt Securities protection in the event of a highly leveraged or similar
transaction involving the Company or in the event of a change of control,
regardless of whether such indebtedness, transaction or change of control is
initiated or supported by the Company, any affiliate of the Company or any other
party. However, certain restrictions on ownership and transfers of the Common
Shares and Preferred Shares are designed to preserve the Company's status as a
REIT and, therefore, may act to prevent or hinder a change of control. See
"Restrictions on Transfers of Capital Shares and Anti-Takeover Provisions."
Reference is made to the applicable Prospectus Supplement for information with
respect to any deletions from, modifications of, or additions to, the events of
default or covenants of the Company that are described below, including any
addition of a covenant or other provision providing event risk or similar
protection.

Denomination, Interest, Registration and Transfer

            Unless otherwise described in the applicable Prospectus Supplement,
the Debt Securities of any series will be issuable in denominations of $1,000
and integral multiples thereof.

            Unless otherwise specified in the applicable Prospectus Supplement,
the principal of (and applicable premium, if any) and interest on any series of
Debt Securities will be payable at the corporate trust office of the applicable
Indenture Trustee, the address of which will be stated in the applicable
Prospectus Supplement; provided, however, that, at the option of the Company,
payment of interest may be made by check mailed to the address of the person
entitled thereto as it appears in the applicable register for such Debt
Securities or by wire transfer of funds to such person at an account maintained
within the United States.

            Subject to certain limitations imposed upon Debt Securities issued
in book-entry form, the Debt Securities of any series will be exchangeable for
any authorized denomination of other Debt Securities of the same series and of a
like aggregate principal amount and tenor upon surrender of such Debt Securities
at the corporate trust office of the applicable Indenture Trustee or at the
office of any transfer agent designated by the Company for such purpose. In
addition, subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series may be surrendered for
conversion or registration of transfer or exchange thereof at the corporate
trust office of the applicable Indenture Trustee or at the office of any
transfer agent designated by the Company for such purpose. Every Debt Security
surrendered for conversion, registration of transfer or exchange must be duly
endorsed or accompanied by a written instrument of transfer, and the person
requesting such action must provide evidence of title and identity satisfactory
to the applicable Indenture Trustee or transfer agent. No service charge will be
made for any registration of transfer or exchange of any 


                                       12
<PAGE>   17

Debt Securities, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith. If
the applicable Prospectus Supplement refers to any transfer agent (in addition
to the applicable Indenture Trustee) initially designated by the Company with
respect to any series of Debt Securities, the Company may at any time rescind
the designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, except that the Company will be
required to maintain a transfer agent in each place of payment for such series.
The Company may at any time designate additional transfer agents with respect to
any series of Debt Securities.

            Neither the Company nor any Indenture Trustee shall be required (i)
to issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days before the day of
mailing of a notice of redemption of any Debt Securities that may be selected
for redemption and ending at the close of business on the day of such mailing;
(ii) to register the transfer of or exchange any Debt Security, or portion
thereof, so selected for redemption, in whole or in part, except the unredeemed
portion of any Debt Security being redeemed in part; or (iii) to issue, register
the transfer of or exchange any Debt Security that has been surrendered for
repayment at the option of the holder, except the portion, if any, of such Debt
Security not to be so repaid.

Merger, Consolidation or Sale of Assets

            The Indentures will provide that the Company may, without the
consent of the holders of any outstanding Debt Securities, consolidate with, or
sell, lease or convey all or substantially all of its assets to, or merge with
or into, any other entity provided that (a) either the Company shall be the
continuing entity, or the successor entity (if other than the Company) formed by
or resulting from any such consolidation or merger or which shall have received
the transfer of such assets, is organized under the laws of any domestic
jurisdiction and assumes the Company's obligations to pay principal of (and
premium, if any) and interest on all of the Debt Securities and the due and
punctual performance and observance of all of the covenants and conditions
contained in each Indenture; (b) immediately after giving effect to such
transaction and treating any indebtedness that becomes an obligation of the
Company or any subsidiary as a result thereof as having been incurred by the
Company or such subsidiary at the time of such transaction, no event of default
under the Indentures, and no event which, after notice or the lapse of time, or
both, would become such an event of default, shall have occurred and be
continuing; and (c) an officers' certificate and legal opinion covering such
conditions shall be delivered to each Indenture Trustee.

Certain Covenants

            Existence. Except as permitted under "--Merger, Consolidation or
Sale of Assets," the Indentures will require the Company to do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence, rights (by declaration of trust, by-laws and statute) and
franchises; provided, however, that the Company will not be required to preserve
any right or franchise if its Board of Trustees determines that the preservation
thereof is no longer desirable in the conduct of its business by appropriate
proceedings.

            Maintenance of Properties. The Indentures will require the Company
to cause all of its material properties used or useful in the conduct of its
business or the business of any subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and 


                                       13
<PAGE>   18

improvements thereof, all as in the judgment of the Company may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that the Company and
its subsidiaries shall not be prevented from selling or otherwise disposing of
their properties for value in the ordinary course of business.

            Insurance. The Indentures will require the Company to cause each of
its and its subsidiaries' insurable properties to be insured against loss or
damage with insurers of recognized responsibility and, if described in the
applicable Prospectus Supplement, having a specified rating from a recognized
insurance rating service, in such amounts and covering all such risks as shall
be customary in the industry in accordance with prevailing market conditions and
availability.

            Payment of Taxes and Other Claims. The Indentures will require the
Company to pay or discharge or cause to be paid or discharged, before the same
shall become delinquent, (i) all taxes, assessments and governmental charges
levied or imposed upon it or any subsidiary or upon the income, profits or
property of the Company or any subsidiary and (ii) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any subsidiary; provided, however, that the Company
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith.

            Provision of Financial Information. Whether or not the Company is
subject to Section 13 or 15(d) of the Exchange Act, the Indentures will require
the Company, within 15 days of each of the respective dates by which the Company
would have been required to file annual reports, quarterly reports and other
documents with the Commission if the Company were so subject, (i) to transmit by
mail to all holders of Debt Securities, as their names and addresses appear in
the applicable register for such Debt Securities, without cost to such holders,
copies of the annual reports, quarterly reports and other documents that the
Company would have been required to file with the Commission pursuant to Section
13 or 15(d) of the Exchange Act if the Company were subject to such Sections,
(ii) to file with the applicable Indenture Trustee copies of the annual reports,
quarterly reports and other documents that the Company would have been required
to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
if the Company were subject to such Sections and (iii) to supply, promptly upon
written request and payment of the reasonable cost of duplication and delivery,
copies of such documents to any prospective holder.

            Additional Covenants. Any additional covenants of the Company with
respect to any series of Debt Securities will be set forth in the Prospectus
Supplement relating thereto.

Events of Default, Notice and Waiver

            Unless otherwise provided in the applicable Prospectus Supplement,
each Indenture will provide that the following events are "Events of Default"
with respect to any series of Debt Securities issued thereunder (i) default for
30 days in the payment of any installment of interest on any Debt Security of
such series; (ii) default in the payment of principal of (or premium, if any,
on) any Debt Security of such series at its maturity; (iii) default in making
any sinking fund payment as required for any Debt Security of such series; (iv)
default in the performance or breach of any other covenant or warranty of the
Company contained in the Indenture (other than a covenant added to the Indenture
solely for the benefit of a series of Debt Securities issued thereunder other
than such series), continued for 60 days after written notice as provided in the
applicable Indenture; (v) a default under 


                                       14
<PAGE>   19

any bond, debenture, note or other evidence of indebtedness for money borrowed
by the Company or any of its subsidiaries (including obligations under leases
required to be capitalized on the balance sheet of the lessee under generally
accepted accounting principles but not including any indebtedness or obligations
for which recourse is limited to property purchased) in an aggregate principal
amount in excess of $10,000,000 or under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any indebtedness for money borrowed by the Company or any its subsidiaries
(including such leases, but not including such indebtedness or obligations for
which recourse is limited to property purchased) in an aggregate principal
amount in excess of $10,000,000, whether such indebtedness exists on the date of
such Indenture or shall thereafter be created, with such obligations being
accelerated and not rescinded or annulled; (vi) certain events of bankruptcy,
insolvency or reorganization, or court appointment of a receiver, liquidator or
trustee of the Company or any Significant Subsidiary of the Company; and (vii)
any other event of default provided with respect to a particular series of Debt
Securities. The term "Significant Subsidiary" has the meaning ascribed to such
term in Regulation S-X promulgated under the Securities Act.

            If an event of default under any Indenture with respect to Debt
Securities of any series at the time outstanding occurs and is continuing, then
in every such case the applicable Indenture Trustee or the holders of not less
than 25% in principal amount of the Debt Securities of that series will have the
right to declare the principal amount (or, if the Debt Securities of that series
are Original Issue Discount Securities or indexed securities, such portion of
the principal amount as may be specified in the terms thereof) of all the Debt
Securities of that series to be due and payable immediately by written notice
thereof to the Company (and to the applicable Indenture Trustee if given by the
holders). However, at any time after such a declaration of acceleration with
respect to Debt Securities of such series (or of all Debt Securities then
outstanding under any Indenture, as the case may be) has been made, but before a
judgment or decree for payment of the money due has been obtained by the
applicable Indenture Trustee, the holders of not less than a majority in
principal amount of outstanding Debt Securities of such series (or of all Debt
Securities then outstanding under the applicable Indenture, as the case may be)
may rescind and annul such declaration and its consequences if (i) the Company
shall have deposited with the applicable Indenture Trustee all required payments
of the principal of (and premium, if any) and interest on the Debt Securities of
such series (or of all Debt Securities than outstanding under the applicable
Indenture, as the case may be), plus certain fees, expenses, disbursements and
advances of the applicable Indenture Trustee and (ii) all events of default,
other than the non-payment of accelerated principal (or specified portion
thereof), with respect to Debt Securities of such series (or of all Debt
Securities then outstanding under the applicable Indenture, as the case may be)
have been cured or waived as provided in such Indenture. The Indentures will
also provide that the holders of not less than a majority in principal amount of
the outstanding Debt Securities of any series (or of all Debt Securities then
outstanding under the applicable Indenture, as the case may be) may waive any
past default with respect to such series and its consequences, except a default
(x) in the payment of the principal of (or premium, if any) or interest on any
Debt Security of such series or (y) in respect of a covenant or provision
contained in the applicable Indenture that cannot be modified or amended without
the consent of the holder of each outstanding Debt Security affected thereby.

            The Indentures will require each Indenture Trustee to give notice to
the holders of Debt Securities within 90 days of a default under the applicable
Indenture unless such default shall have been cured or waived; provided,
however, that such Indenture Trustee may withhold notice to the holders of any
series of Debt Securities of any default with respect to such series (except a
default in 


                                       15
<PAGE>   20

the payment of the principal of (or premium, if any) or interest on any Debt
Security of such series or in the payment of any sinking fund installment in
respect to any Debt Security of such series) if specified responsible officers
of such Indenture Trustee consider such withholding to be in the interest of
such holders.

            The Indentures will provide that no holder of Debt Securities of any
series may institute any proceeding, judicial or otherwise, with respect to such
Indenture or for any remedy thereunder, except in the case of failure of the
applicable Indenture Trustee, for 60 days, to act after it has received a
written request to institute proceedings in respect of an event of default from
the holders of not less than 25% in principal amount of the outstanding Debt
Securities of such series, as well as an offer of indemnity reasonably
satisfactory to it. This provision will not prevent, however, any holder of Debt
Securities from instituting suit for the enforcement of payment of the principal
of (and premium, if any) and interest on such Debt Securities at the respective
due dates thereof.

            The Indentures will provide that, subject to provisions in each
Indenture relating to its duties in case of default, an Indenture Trustee will
be under no obligation to exercise any of its rights or powers under an
Indenture at the request or direction of any holders of any series of Debt
Securities then outstanding under such Indenture, unless such holders shall have
offered to the Indenture Trustee thereunder reasonable security or indemnity.
The holders of not less than a majority in principal amount of the outstanding
Debt Securities of any series (or of all Debt Securities then outstanding under
an Indenture, as the case may be) shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
applicable Indenture Trustee, or of exercising any trust or power conferred upon
such Indenture Trustee. However, an Indenture Trustee may refuse to follow any
direction which is in conflict with any law or the applicable Indenture, which
may involve such Indenture Trustee in personal liability or which may be unduly
prejudicial to the holders of Debt Securities of such series not joining
therein.

            Within 120 days after the close of each fiscal year, the Company
will be required to deliver to each Indenture Trustee a certificate, signed by
one of several specified officers of the Company, stating whether or not such
officer has knowledge of any default under the applicable Indenture and, if so,
specifying each such default and the nature and status thereof.

Modification of the Indentures

            Modifications and amendments of an Indenture will be permitted to be
made only with the consent of the holders of not less than a majority in
principal amount of all outstanding Debt Securities issued under such Indenture
affected by such modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the holder of each such
Debt Security affected thereby, (i) change the stated maturity of the principal
of, or any installment of interest (or premium, if any) on, any such Debt
Security; (ii) reduce the principal amount of, or the rate or amount of interest
on, or any premium payable on redemption of, any such Debt Security, or reduce
the amount of principal of an Original Issue Discount Security that would be due
and payable upon declaration of acceleration of the maturity thereof or would be
provable in bankruptcy, or adversely affect any right of repayment of the holder
of any such Debt Security; (iii) change the place of payment, or the coin or
currency, for payment of principal of, premium, if any, or interest on any such
Debt Security; (iv) impair the right to institute suit for the enforcement of
any payment on or with respect to any such Debt Security; (v) reduce the
above-stated percentage of outstanding Debt Securities of any series necessary
to modify or amend the applicable Indenture, to waive compliance 


                                       16
<PAGE>   21

with certain provisions thereof or certain defaults and consequences thereunder
or to reduce the quorum or voting requirements set forth in the applicable
Indenture; or (vi) modify any of the foregoing provisions or any of the
provisions relating to the waiver of certain past defaults or certain covenants,
except to increase the required percentage to effect such action or to provide
that certain other provisions may not be modified or waived without the consent
of the holder of such Debt Security.

            The holders of a majority in aggregate principal amount of the
outstanding Debt Securities of each series may, on behalf of all holders of Debt
Securities of that series, waive, insofar as that series is concerned,
compliance by the Company with certain restrictive covenants of the applicable
Indenture.

            Modifications and amendments of an Indenture will be permitted to be
made by the Company and the respective Indenture Trustee thereunder without the
consent of any holder of Debt Securities for any of the following purposes: (i)
to evidence the succession of another person to the Company as obligor under
such Indenture; (ii) to add to the covenants of the Company for the benefit of
the holders of all or any series of Debt Securities or to surrender any right or
power conferred upon the Company in such Indenture; (iii) to add events of
default for the benefit of the holders of all or any series of Debt Securities;
(iv) to add or change any provisions of an Indenture to facilitate the issuance
of, or to liberalize certain terms of, Debt Securities in bearer form, or to
permit or facilitate the issuance of Debt Securities in uncertificated form;
provided that such action shall not adversely affect the interest of the holders
of the Debt Securities of any series in any material respect; (v) to change or
eliminate any provisions of an Indenture; provided that any such change or
elimination shall be effective only when there are no Debt Securities
outstanding of any series created prior thereto which are entitled to the
benefit of such provision; (vi) to secure the Debt Securities; (vii) to
establish the form or terms of Debt Securities of any series, including the
provisions and procedures, if applicable, for the conversion of such Debt
Securities into Common Shares or Preferred Shares; (viii) to provide for the
acceptance of appointment by a successor Indenture Trustee or facilitate the
administration of the trusts under an Indenture by more than one Indenture
Trustee; (ix) to cure any ambiguity, defect or inconsistency in an Indenture;
provided that such action shall not adversely affect the interests of holders of
Debt Securities of any series issued under such Indenture; or (x) to supplement
any of the provisions of an Indenture to the extent necessary to permit or
facilitate defeasance and discharge of any series of such Debt Securities;
provided that such action shall not adversely affect the interests of the
holders of the outstanding Debt Securities of any series.

            The Indentures will provide that, in determining whether the holders
of the requisite principal amount of outstanding Debt Securities of a series
have given any request, demand, authorization, direction, notice, consent or
waiver thereunder or whether a quorum is present at a meeting of holders of Debt
Securities, (i) the principal amount of an Original Issue Discount Security that
shall be deemed to be outstanding shall be the amount of the principal thereof
that would be due and payable as of the date of such determination upon
declaration of acceleration of the maturity thereof (ii) the principal amount of
any Debt Security denominated in a foreign currency that shall be deemed
outstanding shall be the U.S. dollar equivalent, determined on the issue date
for such Debt Security, of the principal amount (or, in the case of an Original
Issue Discount Security, the U.S. dollar equivalent on the issue date of such
Debt Securities of the amount determined as provided in (i) above), (iii) the
principal amount of an indexed security that shall be deemed outstanding shall
be the principal face amount of such indexed security at original issuance,
unless otherwise provided with respect to such indexed security pursuant to such
Indenture, and (iv) Debt Securities owned by the 


                                       17
<PAGE>   22

Company or any other obligor upon the Debt Securities or an affiliate of the
Company or of such other obligor shall be disregarded.

            The Indentures will contain provisions for convening meetings of the
holders of Debt Securities of a series issued thereunder. A meeting may be
called at any time by the applicable Indenture Trustee, and also, upon request
by the Company or the holder of at least 25% in principal amount of the
outstanding Debt Securities of such series, in any such case upon notice given
as provided in such Indenture. Except for any consent that must be given by the
holder of each Debt Security affected by certain modifications and amendments of
an Indenture, any resolution presented at a meeting or adjourned meeting duly
reconvened at which a quorum is present may be adopted by the affirmative vote
of the holders of a majority in principal amount of the outstanding Debt
Securities of that series; provided, however, that, except as referred to above,
any resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that may be made, given or taken by the
holders of a specified percentage, which is less than a majority, in principal
amount of the outstanding Debt Securities of a series may be adopted at a
meeting or adjourned meeting duly reconvened at which a quorum is present by the
affirmative vote of the holders of such specified percentage in principal amount
of the outstanding Debt Securities of that series. Any resolution passed or
decision taken at any meeting of holders of Debt Securities of any series duly
held in accordance with an Indenture will be binding on all holders of Debt
Securities of that series. The quorum at any meeting called to adopt a
resolution, and at any reconvened meeting, will be persons holding or
representing a majority in principal amount of the outstanding Debt Securities
of a series; provided, however, that if any action is to be taken at such
meeting with respect to a consent or waiver which may be given by the holders of
not less than a specified percentage in principal amount of the outstanding Debt
Securities of a series, the persons holding or representing such specified
percentage in principal amount of the outstanding Debt Securities of such series
will constitute a quorum.

            Notwithstanding the foregoing provisions, the Indentures will
provide that if any action is to be taken at a meeting of holders of Debt
Securities of any series with respect to any request, demand, authorization,
direction, notice, consent, waiver and other action that such Indenture
expressly provides may be made, given or taken by the holders of a specified
percentage in principal amount of all outstanding Debt Securities affected
thereby, or of the holders of such series and one or more additional series; (i)
there shall be no minimum quorum requirement for such meeting, and (ii) the
principal amount of the outstanding Debt Securities of such series that vote in
favor of such request, demand, authorization, direction, notice, consent, waiver
or other action shall be taken into account in determining whether such request,
demand, authorization, direction, notice, consent, waiver or other action has
been made, given or taken under such Indenture.

Subordination

            Unless otherwise provided in the applicable Prospectus Supplement,
Subordinated Securities will be subject to the following subordination
provisions.

            Upon any distribution to creditors of the Company in a liquidation,
dissolution or reorganization, the payment of the principal of and interest on
any Subordinated Securities will be subordinated to the extent provided in the
applicable Indenture in right of payment to the prior payment in full of all
Senior Debt (as defined below), but the obligation of the Company to make
payments of the principal of and interest on such Subordinated Securities will
not otherwise be affected. No payment of principal or interest will be permitted
to be made on Subordinated Securities 


                                       18
<PAGE>   23

at any time if a default on Senior Debt exists that permits the holders of such
Senior Debt to accelerate its maturity and the default is the subject of
judicial proceedings or the Company receives notice of the default. After all
Senior Debt is paid in full and until the Subordinated Securities are paid in
full, holders will be subrogated to the rights of holders of Senior Debt to the
extent that distributions otherwise payable to holders have been applied to the
payment of Senior Debt. The Subordinated Indenture will not restrict the amount
of Senior Indebtedness or other indebtedness of the Company and its
subsidiaries. As a result of these subordination provisions in the event of a
distribution of assets upon insolvency, holders of Subordinated Indebtedness may
recover less, ratably, than senior creditors of the Company.

            Senior Debt will be defined in the applicable Indenture as the
principal of and interest on, or substantially similar payments to be made by
the Company in respect of, the following, whether outstanding at the date of
execution of the applicable Indenture or thereafter incurred, created or
assumed: (i) indebtedness of the Company for money borrowed or represented by
purchase-money obligations, (ii) indebtedness of the Company evidenced by notes,
debentures, or bonds, or other securities issued under the provisions of an
indenture, fiscal agency agreement or other agreement, (iii) obligations of the
Company as lessee under leases of property either made as part of any sale and
leaseback transaction to which the Company is a part or otherwise, (iv)
indebtedness of partnerships and joint ventures which is included in the
consolidated financial statements of the Company, (v) indebtedness obligations
and liabilities of others in respect of which the Company is liable contingently
or otherwise to pay or advance money or property or as guarantor, endorser or
otherwise or which the Company has agreed to purchase or otherwise acquire, and
(vi) any binding commitment of the real estate investment, in each case other
than (a) any such indebtedness, obligation or liability referred to in clauses
(i) through (vi) above as to which, in the instrument creating or evidencing the
same pursuant to which the same is outstanding, it is provided that such
indebtedness, obligation or liability is not superior in right of payment to the
Subordinated Securities or ranks pari passu with the Subordinated Securities,
(b) any such indebtedness obligation or liability which is subordinated to
indebtedness of the Company to substantially the same extent as or to a greater
extent than the Subordinated Securities are subordinated, and (c) the
Subordinated Securities. There will not be any restriction in any Indenture
relating to Subordinated Securities upon the creation of additional Senior Debt.

            If this Prospectus is being delivered in connection with a series of
Subordinated Securities, the accompanying Prospectus Supplement or the
information incorporated herein by reference will set forth the approximate
amount of Senior Debt outstanding as of the end of the Company's most recent
fiscal quarter.

Discharge, Defeasance and Covenant Defeasance

            Unless otherwise indicated in the applicable Prospectus Supplement,
the Company will be permitted, at its option, to discharge certain obligations
to holders of any series of Debt Securities issued under any Indenture that have
not already been delivered to the applicable Indenture Trustee for cancellation
and that either have become due and payable or will become due and payable
within one year (or scheduled for redemption within one year) by irrevocably
depositing with the applicable Indenture Trustee, in trust, funds in such
currency or currencies, currency unit or units or composite currency or
currencies in which such Debt Securities are payable in an amount sufficient to
pay the entire indebtedness on such Debt Securities with respect to principal
(and premium, if any) and interest 


                                       19
<PAGE>   24

to the date of such deposit (if such Debt Securities have become due and
payable) or to the stated maturity or redemption date, as the case may be.

            The Indentures will provide that, unless otherwise indicated in the
applicable Prospectus Supplement, the Company may elect either (i) to defease
and be discharged from any and all obligations (except for the obligation to pay
additional amounts, if any, upon the occurrence of certain events of tax
assessment or governmental charge with respect to payments on such Debt
Securities and the obligations to register the transfer or exchange of such Debt
Securities, to replace temporary or mutilated, destroyed, lost or stolen Debt
Securities, to maintain an office or agency in respect of such Debt Securities,
to hold moneys for payment in trust and, with respect to Subordinated Debt
Securities which are convertible or exchangeable, the right to convert or
exchange) with respect to such Debt Securities ("defeasance") or (ii) to be
released from its obligations with respect to such Debt Securities under the
applicable Indenture ( being the restrictions described under "--Certain
Covenants") or, if provided in the applicable Prospectus Supplement, its
obligations with respect to any other covenant, and any omission to comply with
such obligations shall not constitute an event of default with respect to such
Debt Securities ("covenant defeasance"), in either case upon the irrevocable
deposit by the Company with the applicable Indenture Trustee, in trust, of an
amount in such currency or currencies, currency unit or units or composite
currency or currencies in which such Debt Securities are payable at stated
maturity, or Government Obligations (as defined below), or both, applicable to
such Debt Securities, which through the scheduled payment of principal and
interest in accordance with their terms will provide money in an amount
sufficient to pay the principal of (and premium, if any) and interest on such
Debt Securities, and any mandatory sinking fund or analogous payments thereon,
on the scheduled due dates therefor.

            Such a trust will only be permitted to be established if, among
other things, the Company has delivered to the applicable Indenture Trustee an
opinion of counsel (as specified in the applicable Indenture) to the effect that
the holders of such Debt Securities will not recognize income, gain or loss for
U.S. federal income tax purposes as a result of such defeasance or covenant
defeasance and will be subject to U.S. federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
defeasance or covenant defeasance had not occurred, and such opinion of counsel,
in the case of defeasance, will be required to refer to and be based upon a
ruling received from or published by the Internal Revenue Service or a change in
applicable United States federal income tax law occurring after the date of the
Indenture. In the event of such defeasance, the holders of such Debt Securities
would thereafter be able to look only to such trust fund for payment of
principal (and premium, if any) and interest.

            "Government Obligations" means securities that are (i) direct
obligations of the United States of America or the government which issued the
foreign currency in which the Debt Securities of a particular series are
payable, for the payment of which its full faith and credit is pledged, or (ii)
obligations of a person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such government which issued
the foreign currency in which the Debt Securities of such series are payable,
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America or such other government, which, in
either case, are not callable or redeemable at the option of the issuer thereof,
and shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such Government Obligation or a specific payment
of interest on or principal of any such Government Obligation held by such
custodian for the account of the holder of a depository receipt; provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to 


                                       20
<PAGE>   25

the holder of such depository receipt from any amount received by the custodian
in respect of the Government Obligation or the specific payment of interest on
or principal of the Government Obligation evidenced by such depository receipt.

            Unless otherwise provided in the applicable Prospectus Supplement,
if after the Company has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any series,
(i) the holder of a Debt Security of such series is entitled to, and does, elect
pursuant to the applicable Indenture or the terms of such Debt Security to
receive payment in a currency, currency unit or composite currency other than
that in which such deposit has been made in respect of such Debt Security, or
(ii) a Conversion Event (as defined below) occurs in respect of the currency,
currency unit or composite currency in which such deposit has been made, the
indebtedness represented by such Debt Security will be deemed to have been, and
will be, fully discharged and satisfied through the payment of the principal of
(and premium, if any) and interest on such Debt Security as they become due out
of the proceeds yielded by converting the amount so deposited in respect of such
Debt Security into the currency, currency unit or composite currency in which
such Debt Security becomes payable as a result of such election or such
cessation of usage based on the applicable market exchange rate. "Conversion
Event" means the cessation of use of (a) a currency, currency unit or composite
currency both by the government of the country which issued such currency and
for the settlement of transactions by a central bank or other public
institutions of or within the international banking community, (b) the ECU both
within the European Monetary System and for the settlement of transactions by
public institutions of or within the European Communities, or (c) any currency
unit or composite currency other than the ECU for the purposes for which it was
established. Unless otherwise provided in the applicable Prospectus Supplement,
all payments of principal of (and premium, if any) and interest on any Debt
Security that is payable in a foreign currency that ceases to be used by its
government of issuance shall be made in U.S. dollars.

            If the Company effects covenant defeasance with respect to any Debt
Securities and such Debt Securities are declared due and payable because of the
occurrence of any event of default other than the event of default described in
clause (iv) under "--Events of Default, Notice and Waiver" with respect to
specified sections of an Indenture (which sections would no longer be applicable
to such Debt Securities) or described in clause (vii) under "--Events of
Default, Notice and Waiver" with respect to any other covenant as to which there
has been covenant defeasance, the amount in such currency, currency unit or
composite currency in which such Debt Securities are payable, and Government
Obligations on deposit with the applicable Indenture Trustee, will be sufficient
to pay amounts due on such Debt Securities at the time of their stated maturity
but may not be sufficient to pay amounts due on such Debt Securities at the time
of the acceleration resulting from such event of default. However, the Company
would remain liable to make payment of such amounts due at the time of
acceleration.

            The applicable Prospectus Supplement may further describe the
provisions, if any, permitting such defeasance or covenant defeasance, including
any modifications to the provisions described above, with respect to the Debt
Securities of or within a particular series.

Conversion Rights

            The terms and conditions, if any, upon which the Debt Securities are
convertible into Common Shares or Preferred Shares will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include
whether such Debt Securities are convertible into Common Shares or


                                       21
<PAGE>   26

Preferred Shares, the conversion price (or manner of calculation thereof), the
conversion period, provisions as to whether conversion will be at the option of
the holders or the Company, the events requiring an adjustment of the conversion
price and provisions affecting conversion in the event of the redemption of such
Debt Securities and any restrictions on conversion, including restrictions
directed at maintaining the Company's REIT status.

Payment

            Unless otherwise specified in the applicable Prospectus Supplement,
the principal of (and applicable premium, if any) and interest on any series of
Debt Securities will be payable at the corporate trust office of the Indenture
Trustee, the address of which will be stated in the applicable Prospectus
Supplement; provided that, at the option of the Company, payment of interest may
be made by check mailed to the address of the person entitled thereto as it
appears in the applicable register for such Debt Securities or by wire transfer
of funds to such person at an account maintained within the United States.

            All moneys paid by the Company to a paying agent or an Indenture
Trustee for the payment of the principal of or any premium or interest on any
Debt Security which remain unclaimed at the end of one year after such
principal, premium or interest has become due and payable will be repaid to the
Company, and the holder of such Debt Security thereafter may look only to the
Company for payment thereof.

Global Securities

            The Debt Securities of a series may be issued in whole or in part in
the form of one or more global securities (the "Global Securities") that will be
deposited with, or on behalf of, a depositary identified in the applicable
Prospectus Supplement relating to such series. Global Securities may be issued
in either registered or bearer form and in either temporary or permanent form.
The specific terms of the depositary arrangement with respect to a series of
Debt Securities will be described in the applicable Prospectus Supplement
relating to such series.


                                       22
<PAGE>   27

                         DESCRIPTION OF PREFERRED SHARES

            The description of the Company's preferred shares, par value $.0001
per share ("Preferred Shares"), set forth below does not purport to be complete
and is qualified in its entirety by reference to the Company's Declaration of
Trust and Bylaws (the "Bylaws").

General

            Under the Declaration of Trust, the Company has authority to issue
10,000,000 Preferred Shares from time to time, in one or more series, as
authorized by the Board of Trustees of the Company. Prior to issuance of shares
of each series, the Board of Trustees is required by the Maryland law of
Corporations and Associations and the Declaration of Trust to fix for each
series, subject to the provisions of the Declaration of Trust regarding excess
shares of beneficial interest, $.0001 par value per share ("Excess Shares"), the
terms, preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications and terms or
conditions of redemption, as are permitted by Maryland law. The Preferred Shares
will, when issued against payment therefor, be fully paid and nonassessable and
will not be subject to preemptive rights. The Board of Trustees could authorize
the issuance of Preferred Shares with terms and conditions that could have the
effect of discouraging a takeover or other transaction that holders of Common
Shares might believe to be in their best interests or in which holders of some,
or a majority, of the Common Shares might receive a premium for their shares
over the then market price of such Common Shares.

Terms

            The following description of the Preferred Shares sets forth certain
general terms and provisions of the Preferred Shares to which any Prospectus
Supplement may relate. The statements below describing the Preferred Shares are
in all respects subject to and qualified in their entirety by reference to the
applicable provisions of the Declaration of Trust and Bylaws and any applicable
amendment to the Declaration of Trust designating terms of a series of Preferred
Shares (a "Designating Amendment").

            Reference is made to the Prospectus Supplement relating to the
Preferred Shares offered thereby for specific terms, including:

            (1) The title and stated value of such Preferred Shares;

            (2) The number of such Preferred Shares offered, the liquidation
      preference per share and the offering price of such Preferred Shares;

            (3) The dividend rate(s), period(s) and/or payment date(s) or
      method(s) of calculation thereof applicable to such Preferred Shares;

            (4) The date from which dividends on such Preferred Shares shall
      accumulate, if applicable;

            (5) The provision for a sinking fund, if any, for such Preferred
      Shares;

            (6) The provision for redemption, if applicable, of such Preferred
      Shares; 


                                       23
<PAGE>   28

            (7) Any listing of such Preferred Shares on any securities exchange;

            (8) The terms and conditions, if applicable, upon which such
      Preferred Shares will be convertible into Common Shares, including the
      conversion price (or manner of calculation thereof);

            (9) Any other specific terms, preferences, rights, limitations or
      restrictions of such Preferred Shares;

            (10) A discussion of federal income tax considerations applicable to
      such Preferred Shares;

            (11) The relative ranking and preference of such Preferred Shares as
      to dividend rights and rights upon liquidation, dissolution or winding-up
      of the affairs of the Company;

            (12) Any limitations on issuance of an series of Preferred Shares
      ranking senior to or on a parity with such series of Preferred Shares as
      to dividend rights and rights upon liquidation, dissolution or winding-up
      of the affairs of the Company; and

            (13) Any limitations on direct or beneficial ownership and
      restrictions on transfer, in each case as may be appropriate to preserve
      the status of the Company as a REIT.

Rank

            Unless otherwise specified in the Prospectus Supplement, the
Preferred Shares will, with respect to dividend rights and rights upon
liquidation, dissolution or winding-up of the Company, rank (i) senior to all
classes or series of Common Shares of the Company, and to all equity securities
ranking junior to such Preferred Shares with respect to dividend rights or
rights upon liquidation, dissolution or winding-up of the Company, (ii) on a
parity with all equity securities issued by the Company the terms of which
specifically provide that such equity securities rank on a parity with the
Preferred Shares with respect to dividend rights or rights upon liquidation,
dissolution or winding-up of the Company; and (iii) junior to all equity
securities issued by the Company the terms of which specifically provide that
such equity securities rank senior to the Preferred Shares with respect to
dividend rights or rights upon liquidation, dissolution or winding-up of the
Company. The term "equity securities" does not include convertible debt
securities.

Dividends

            Holders of the Preferred Shares of each series will be entitled to
receive, when, as and if declared by the Board of Trustees of the Company, out
of assets of the Company legally available for payment, cash dividends at such
rates and on such dates as will be set forth in the applicable Prospectus
Supplement. Each such dividend shall be payable to holders of record as they
appear on the share transfer books of the Company on such record dates as shall
be fixed by the Board of Trustees of the Company.

            Dividends on any series of the Preferred Shares may be cumulative or
non-cumulative, as provided in the applicable Prospectus Supplement. Dividends,
if cumulative, will be cumulative from and after the date set forth in the
applicable Prospectus Supplement. If the Board of Trustees of 


                                       24
<PAGE>   29

the Company fails to declare a dividend payable on a dividend payment date on
any series of the Preferred Shares for which dividends are noncumulative, then
the holders of such series of the Preferred Shares will have no right to receive
a dividend in respect of the dividend period ending on such dividend payment
date, and the Company will have no obligation to pay the dividend accrued for
such period, whether or not dividends on such series are declared payable on any
future dividend payment date.

            If Preferred Shares of any series are outstanding, no dividends will
be declared or paid or set apart for payment on any capital shares of the
Company of any other series ranking, as to dividends, on a parity with or junior
to the Preferred Shares of such series for any period unless (i) if such series
of Preferred Shares has a cumulative dividend, full cumulative dividends have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof is set apart for such payment on the Preferred Shares of
such series for all past dividend periods and the then current dividend period
or (ii) if such series of Preferred Shares does not have a cumulative dividend,
full dividends for the then current dividend period have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof is set apart for such payment on the Preferred Shares of such
series. When dividends are not paid in full (or a sum sufficient for such full
payment is not so set apart) upon Preferred Shares of any series and the shares
of any other series of Preferred Shares ranking on a parity as to dividends with
the Preferred Shares of such series, all dividends declared upon Preferred
Shares of such series and any other series of Preferred Shares ranking on a
parity as to dividends with such Preferred Shares shall be declared pro rata so
that the amount of dividends declared per share of Preferred Shares of such
series and such other series of Preferred Shares shall in all cases bear to each
other the same ratio that accrued dividends per share on the Preferred Shares of
such series (which shall not include any accumulation in respect of unpaid
dividends for prior dividend periods if such Preferred Shares does not have a
cumulative dividend) and such other series of Preferred Shares bear to each
other. No interest, or sum or money in lieu of interest, shall be payable in
respect or any dividend payment or payments on Preferred Shares of such series
which may be in arrears.

            Except as provided in the immediately preceding paragraph, unless
(i) if such series of Preferred Shares has a cumulative dividend, full
cumulative dividends on the Preferred Shares of such series have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof is set apart for payment for all past dividend periods and the
then current dividend period, and (ii) if such series of Preferred Shares does
not have a cumulative dividend, full dividends on the Preferred Shares of such
series have been or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof is set apart for payment for the then
current dividend period, no dividends (other than in Common Shares or other
capital shares in the Company ranking junior to the Preferred Shares of such
series as to dividends and upon liquidation) shall be declared or paid or set
aside for payment nor shall any other distribution be declared or made upon the
Common Shares, or any other capital shares of the Company ranking junior to or
on a parity with the Preferred Shares of such series as to dividends or upon
liquidation, nor shall any Common Shares, or any other capital shares of the
Company ranking junior to or on a parity with the Preferred Shares of such
series as to dividends or upon liquidation be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available for a
sinking fund for the redemption of any such shares) by the Company (except by
conversion into or exchange for other capital shares of the Company ranking
junior to the Preferred Shares of such series as to dividends and upon
liquidation).


                                       25
<PAGE>   30

            Any dividend payment made on shares of a series of Preferred Shares
shall first be credited against the earliest accrued but unpaid dividend due
with respect to shares of such series which remains payable.

Redemption

      If so provided in the applicable Prospectus Supplement, the Preferred
Shares will be subject to mandatory redemption or redemption at the option of
the Company, as a whole or in part, in each case upon the terms, at the times
and at the redemption prices set forth in such Prospectus Supplement.

      The Prospectus Supplement relating to a series of Preferred Shares that is
subject to mandatory redemption will specify the number of such Preferred Shares
that shall be redeemed by the Company in each year commencing after a date to be
specified, at a redemption price per share to be specified, together with an
amount equal to all accrued and unpaid dividends thereon (which shall not, if
such Preferred Shares does not have a cumulative dividend, include any
accumulation in respect of unpaid dividends for prior dividend periods) to the
date of redemption. The redemption price may be payable in cash or other
property, as specified in the applicable Prospectus Supplement. If the
redemption price for Preferred Shares of any series is payable only from the net
proceeds of the issuance of capital shares of the Company, the terms of such
Preferred Shares may provide that, if no such capital shares shall have been
issued or to the extent the net proceeds from any issuance are insufficient to
pay in full the aggregate redemption price then due, such Preferred Shares shall
automatically and mandatorily be converted into the applicable capital shares of
the Company pursuant to conversion provisions specified in the applicable
Prospectus Supplement.

      Notwithstanding the foregoing, unless (i) if a series of Preferred Shares
has a cumulative dividend, full cumulative dividends on all shares of all such
series of Preferred Shares shall have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for
payment for all past dividend periods and the then current dividend period, and
(ii) if a series of Preferred Shares does not have a cumulative dividend, full
dividends on all Preferred Shares of such series have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
set apart for payment for the then current dividend period, no shares of such
series of Preferred Shares shall be redeemed unless all outstanding Preferred
Shares of such series are simultaneously redeemed; provided, however, that the
foregoing shall not prevent the purchase or acquisition of Preferred Shares of
such series to preserve the REIT status of the Company or pursuant to a purchase
or exchange offer made on the same terms to holders of all outstanding Preferred
Shares of such series. In addition, unless (a) if such series of Preferred
Shares has a cumulative dividend, full cumulative dividends on all outstanding
shares of such series of Preferred Shares have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof set
apart for payment for all past dividend periods and the then current dividend
period, and (b) if such series of Preferred Shares does not have a cumulative
dividend, full dividends on the Preferred Shares of such series have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for payment for the then current dividend period, the
Company shall not purchase or otherwise acquire directly or indirectly any
Preferred Shares of such series (except by conversion into or exchange for
capital shares of the Company ranking junior to the Preferred Shares of such
series as to dividends and upon liquidation); provided, however, that the
foregoing shall not prevent the purchase or acquisition of Preferred Shares 


                                       26
<PAGE>   31

of such series to preserve the REIT status of the Company or pursuant to a
purchase or exchange offer made on the same terms to holders of all outstanding
Preferred Shares of such series.

            If fewer than all of the outstanding Preferred Shares of any series
are to be redeemed, the number of shares to be redeemed will be determined by
the Company and such shares may be redeemed pro rata from the holders of record
of such shares in proportion to the number of such shares held or for which
redemption is requested by such holder (with adjustments to avoid redemption of
fractional shares) or by an other equitable manner determined by the Company.

            Notice of redemption will be mailed at least 15 days but not more
than 60 days before the redemption date to each holder of record of Preferred
Shares of any series to be redeemed at the address shown on the share transfer
books of the Company. Each notice shall state: (i) the redemption date; (ii) the
number of shares and series of the Preferred Shares to be redeemed; (iii) the
redemption price; (iv) the place or places where certificates for such Preferred
Shares are to be surrendered for payment of the redemption price; (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date; and (vi) the date upon which the holder's conversion rights, if any, as to
such shares shall terminate. If fewer than all the Preferred Shares of any
series are to be redeemed, the notice mailed to each such holder thereof shall
also specify the number of Preferred Shares to be redeemed from each such
holder. If notice of redemption of any Preferred Shares has been given and if
the funds necessary for such redemption have been set aside by the Company in
trust for the benefit of the holders of any Preferred Shares so called for
redemption, then from and after the redemption date dividends will cease to
accrue on such Preferred Shares, and all rights of the holders of such shares
will terminate, except the right to receive the redemption price.

Liquidation Preference

            Upon any voluntary or involuntary liquidation, dissolution or
winding-up of the affairs of the Company, then, before any distribution or
payment shall be made to the holders of any Common Shares or any other class or
series of capital shares of the Company ranking junior to the Preferred Shares
in the distribution of assets upon any liquidation, dissolution or winding-up of
the Company, the holders of each series of Preferred Shares shall be entitled to
receive out of assets of the Company legally available for distribution to
shareholders liquidating distributions in the amount of the liquidation
preference per share, if any, set forth in the applicable Prospectus Supplement,
plus an amount equal to all dividends accrued and unpaid thereon (which shall
not include any accumulation in respect of unpaid noncumulative dividends for
prior dividend periods). After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Preferred Shares will
have no right or claim to any of the remaining assets of the Company. In the
event that, upon any such voluntary or involuntary liquidation, dissolution or
winding-up, the available assets of the Company are insufficient to pay the
amount of the liquidating distributions on all outstanding Preferred Shares and
the corresponding amounts payable on all shares of other classes or series of
capital shares of the Company ranking on a parity with the Preferred Shares in
the distribution of assets, then the holders of the Preferred Shares and all
other such classes or series of capital shares shall share ratably in any such
distribution of assets in proportion to the full liquidating distributions to
which they would otherwise be respectively entitled.

            If liquidating distributions shall have been made in full to all
holders of Preferred Shares, the remaining assets of the Company shall be
distributed among the holders of any other classes or series of capital shares
ranking junior to the Preferred Shares upon liquidation, dissolution or


                                       27
<PAGE>   32

winding-up, according to their respective rights and preferences and in each
case according to their respective number of shares. For such purposes, the
consolidation or merger of the Company with or into any other corporation, trust
or entity, or the sale, lease or conveyance of all or substantially all of the
property or business of the Company, shall not be deemed to constitute a
liquidation, dissolution or winding-up of the Company.

Voting Rights

            Holders of the Preferred Shares will not have any voting rights,
except as set forth below or as otherwise from time to time required by law or
as indicated in the applicable Prospectus Supplement.

            Unless provided otherwise for any series of Preferred Shares, so
long as any Preferred Shares of a series remain outstanding, the Company will
not, without the affirmative vote or consent of the holders of a percentage to
be specified in the applicable Prospectus Supplement of the shares of such
series of Preferred Shares outstanding at the time, given in person or by proxy,
either in writing or at a meeting (such series voting separately as a class),
(i) authorize or create, or increase the authorized or issued amount of any
class or series of capital shares ranking prior to such series of Preferred
Shares with respect to payment of dividends or the distribution of assets upon
liquidation, dissolution or winding-up or reclassify any authorized capital
shares of the Company into such shares, or create, authorize or issue any
obligation or security convertible into or evidencing the right to purchase any
such shares; or (ii) amend, alter or repeal the provisions of the Declaration of
Trust or the Designating Amendment for such series of Preferred Shares, whether
by merger, consolidation or otherwise (an "Event"), so as to materially and
adversely affect any right, preference, privilege or voting power of such series
of Preferred Shares or the holders thereof; provided, however, with respect to
the occurrence of any of the Events set forth in (ii) above, so long as the
Preferred Shares remain outstanding with the terms thereof materially unchanged,
taking into account that upon the occurrence of an Event the Company may not be
the surviving entity, the occurrence of any such Event shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
power of holders of Preferred Shares, and provided further that (x) any increase
in the amount of the authorized Preferred Shares or the creation or issuance of
any other series of Preferred Shares, or (y) any increase in the amount of
authorized shares of such series or any other series of Preferred Shares, in
each case ranking on a parity with or junior to the Preferred Shares of such
series with respect to payment of dividends or the distribution of assets upon
liquidation, dissolution or winding-up, shall not be deemed to materially and
adversely affect such rights, preferences, privileges or voting powers.

            The foregoing voting provisions will not apply if, at or prior to
the time when the act with respect to which such vote would otherwise be
required shall be effected, all outstanding shares of such series of Preferred
Shares shall have been redeemed or called for redemption and sufficient funds
shall have been deposited in trust to effect such redemption.

Conversion Rights

            The terms and conditions, if any, upon which any series of Preferred
Shares is convertible into Common Shares will be set forth in the applicable
Prospectus Supplement relating thereto. Such terms will include the number of
Common Shares into which the Preferred Shares are convertible, the conversion
price (or manner of calculation thereof), the conversion period, provisions as
to whether conversion will be at the option of the holders of the Preferred
Shares or the Company, 


                                       28
<PAGE>   33

the events requiring an adjustment of the conversion price and provisions
affecting conversion in the event of the redemption of such series of Preferred
Shares.

Restrictions on Ownership

            For the Company to qualify as a REIT under the Code, not more than
50% in value of its outstanding capital shares may be owned, directly or
indirectly, by five or fewer individuals (as defined in the Code to include
certain entities) during the last half of a taxable year. To assist the Company
in meeting this requirement the Company may take certain actions to limit the
beneficial ownership, directly or indirectly, by a single person of the
Company's outstanding equity securities, including any Preferred Shares of the
Company. Therefore, the Designating Amendment for each series of Preferred
Shares may contain provisions restricting the ownership and transfer of the
Preferred Shares. The applicable Prospectus Supplement will specify any
additional ownership limitation relating to a series of Preferred Shares. See
"Restrictions on Transfers of Capital Shares and Anti-Takeover Provisions."

Transfer Agent

            The transfer agent and registrar for the Preferred Shares will be
set forth in the applicable Prospectus Supplement.

Terms of Class A Senior Cumulative Convertible Preferred Shares

            In December 1996, the Company entered into an agreement with Five
Arrow Realty Securities L.L.C. ("Five Arrows") providing for the sale of up to
2,000,000 of the Company's Class A Senior Cumulative Convertible Preferred
Shares ("Convertible Preferred Shares"). Under the terms of the agreement, the
Company sold all 2,000,000 Convertible Preferred Shares to Five Arrows at three
closings during 1997 for an aggregate price of $25 million. The Convertible
Preferred Shares, which are convertible into Common Shares on a one-for-one
basis at $ 12.50 per share, subject to adjustment, are entitled to quarterly
distributions equal to the greater of $.295 per share or the product of 1.05 and
the per share quarterly distribution on Common Shares. The Convertible Preferred
Shares may be redeemed by the Company after five years at a 6% premium over the
liquidation preference of $12.50 per share (plus accrued and unpaid dividends),
with such premium declining to zero on or after December 31, 2011. In certain
instances, including a change of control of the Company (as defined in the
agreement with Five Arrows), a holder of Convertible Preferred Shares may
require the Company to redeem its shares at a price equal to $13.75 per share
plus any accrued dividends. Each Convertible Preferred Share is entitled to one
vote per share and holders thereof are entitled to vote on all matters submitted
to a vote of holders of outstanding Common Shares. In connection with such sale,
the Company has entered into certain related agreements with Five Arrows,
providing, among other things for certain demand and piggyback registration
rights with respect to such shares and the right to designate a member or
members of the Board of Trustees of the Company. Five Arrows designee, John D.
McGurk, is currently serving as a member of the Board of Trustees of the
Company.


                                       29
<PAGE>   34

                          DESCRIPTION OF COMMON SHARES

            The description of the Company's Common Shares of beneficial
interest, par value $.0001 per share ("Common Shares"), set forth below does not
purport to be complete and is qualified in its entirety by reference to the
Company's Declaration of Trust and Bylaws.

General

            Under the Declaration of Trust, the Company has authority to issue
40,000,000 Common Shares, par value $.0001 per share. Under Maryland law,
shareholders generally are not responsible for a corporation's debts or
obligations.

Terms

            Subject to the preferential rights of any other shares or series of
equity securities and to the provisions of the Declaration of Trust regarding
Excess Shares, holders of Common Shares are entitled to receive dividends on
Common Shares if, as and when authorized and declared by the Board of Trustees
of the Company out of assets legally available therefor and to share ratably in
the assets of the Company legally available for distribution to its shareholders
in the event of its liquidation, dissolution or winding-up after payment of, or
adequate provision for, all known debts and liabilities of the Company and the
amount to which holders of any class of shares classified or reclassified or
having a preference on distributions in liquidation, dissolution or winding-up
of the Company have a right.

            Subject to the provisions of the Declaration of Trust regarding
Excess Shares, each outstanding Common Share entitles the holder to one vote on
all matters submitted to a vote of shareholders, including the election of
Trustees and, except as otherwise required by law or except as provided with
respect to any other class or series of shares, the holders of Common Shares
will possess the exclusive voting power. There is no cumulative voting in the
election of Trustees, which means that the holders of a majority of the
outstanding Common Shares can elect all of the Trustees then standing for
election, and the holders of the remaining Common Shares will not be able to
elect any Trustees.

            Holders of Common Shares have no conversion, sinking fund or
redemption rights, or preemptive rights to subscribe for any securities of the
Company.

            The Company furnishes its shareholders with annual reports
containing audited consolidated financial statements and an opinion thereon
expressed by an independent public accounting firm and quarterly reports for the
first three quarters of each fiscal year containing unaudited financial
information.

            Subject to the provisions of the Declaration of Trust regarding
Excess Shares, all Common Shares will have equal dividend, distribution,
liquidation and other rights and will have no preference, appraisal or exchange
rights.

            Pursuant to the Maryland Law of Corporations and Associations, a
real estate investment trust generally cannot amend its declaration of trust or
merge unless approved by the affirmative vote of shareholders holding at least
two-thirds of the shares entitled to vote on the matter 


                                       30
<PAGE>   35

unless a lesser percentage (but not less than a majority of all of the votes to
be cast on the matter) is set forth in the declaration of trust. However, the
Company's Declaration of Trust provides that such actions, with the exception of
certain amendments to the Declaration of Trust for which a higher vote
requirement has been set, shall be valid and effective if authorized by holders
of a majority of the total number of shares of all classes outstanding and
entitled to vote thereon.

Restrictions on Ownership

            For the Company to qualify as a REIT under the Code, not more than
50% in value of its outstanding capital shares may be owned, directly or
indirectly, by five or fewer individuals (as defined in the Code to include
certain entities) during the last half of a taxable year. To assist the Company
in meeting this requirement, the Company may take certain actions to limit the
beneficial ownership, directly or indirectly, by a single person of the
Company's outstanding equity securities. See "Restrictions on Transfers of
Capital Shares and Anti-Takeover Provisions."

Transfer Agent

            The transfer agent and registrar for the Common Shares is
ChemicalMellon Shareholder Services LLC.

                   RESTRICTIONS ON TRANSFERS OF CAPITAL SHARES
                          AND ANTI-TAKEOVER PROVISIONS

Restrictions Relating to REIT Status

            For the Company to qualify as a REIT under the Code, among other
things, not more than 50% in value of its outstanding capital shares may be
owned, directly or indirectly, by five or fewer individuals (defined in the Code
to include certain entities) during the last half of a taxable year, and such
capital shares must be beneficially owned by 100 or more persons during at least
335 days of a taxable year of 12 months or during a proportionate part of a
shorter taxable year (in each case, other than the first such year). To assist
the Company in continuing to remain a qualified REIT, the Declaration of Trust,
subject to certain exceptions, provides that no holder may own, or be deemed to
own by virtue of the attribution provisions of the Code, more than 9.8% (the
"Ownership Limit") of the Company's equity shares, defined as Common Shares or
Preferred Shares. The Board of Trustees may waive the Ownership Limit if
evidence satisfactory to the Board of Trustees and the Company's tax counsel is
presented that the changes in ownership will not then or in the future
jeopardize the Company's status as a REIT. Any transfer of equity shares or any
security convertible into equity shares that would create a direct or indirect
ownership of equity shares in excess of the Ownership Limit or that would result
in the disqualification of the Company as a REIT, including any transfer that
results in the equity shares being owned by fewer than 100 persons or results in
the Company being "closely held" within the meaning of Section 856(h) of the
Code, shall be null and void, and the intended transferee will acquire no rights
to the equity shares. The foregoing restrictions on transferability and
ownership will not apply if the Board of Trustees determines that it is no
longer in the best interests of the Company to attempt to qualify, or to
continue to qualify, as a REIT.

            Equity shares owned, or deemed to be owned, or transferred to a
shareholder in excess of the Ownership Limit, will automatically be exchanged
for Excess Shares that will be transferred, by operation of law, to the Company
as trustee of a trust for the exclusive benefit of the transferees to 


                                       31
<PAGE>   36

whom such capital shares may be ultimately transferred without violating the
Ownership Limit. While the Excess Shares are held in trust, they will not be
entitled to vote, they will not be considered for purposes of any shareholder
vote or the determination of a quorum for such vote and, except upon
liquidation, they will not be entitled to participate in dividends or other
distributions. Any dividend or distribution paid to a proposed transferee of
Excess Shares prior to the discovery by the Company that equity shares have been
transferred in violation of the provisions of the Declaration of Trust shall be
repaid to the Company upon demand. The Excess Shares are not treasury shares,
but rather constitute a separate class of issued and outstanding shares of the
Company. The original transferee-shareholder may, at any time the Excess Shares
are held by the Company in trust, transfer the interest in the trust
representing the Excess Shares to any individual whose ownership of the equity
shares exchanged into such Excess Shares would be permitted under the
Declaration of Trust, at a price not in excess of the price paid by the original
transferee-shareholder for the equity shares that were exchanged into Excess
Shares, or, if the transferee-shareholder did not give value for such shares, a
price not in excess of the market price (as determined in the manner set forth
in the Declaration of Trust) on the date of the purported transfer. Immediately
upon the transfer to the permitted transferee, the Excess Shares will
automatically be exchanged for equity shares of the class from which they were
converted. If the foregoing transfer restrictions are determined to be void or
invalid by virtue of any legal decision, statute, rule or regulation, then the
intended transferee of any Excess Shares may be deemed, at the option of the
Company, to have acted as an agent on behalf of the Company in acquiring the
Excess Shares and to hold the Excess Shares on behalf of the Company.

            In addition to the foregoing transfer restrictions, the Company will
have the right, for a period of 90 days during the time any Excess Shares are
held by the Company in trust, to purchase all or any portion of the Excess
Shares from the original transferee-shareholder for the lesser of the price paid
for the equity shares by the original transferee-shareholder or the market price
(as determined in the manner set forth in the Declaration of Trust) of the
equity shares on the date the Company exercises its option to purchase. The
90-day period begins on the date on which the Company receives written notice of
the transfer or other event resulting in the exchange of equity shares for
Excess Shares.

            Each shareholder shall upon demand be required to disclose to the
Company in writing any information with respect to the direct, indirect and
constructive ownership of beneficial interests as the Board of Trustees deems
necessary to comply with the provisions of the Code applicable to REITs, to
comply with the requirements of any taxing authority or governmental agency or
to determine any such compliance.

            This ownership limitation may have the effect of precluding
acquisition of control of the Company unless the Board of Trustees determines
that maintenance of REIT status is no longer in the best interests of the
Company.

      Authorized Capital

            The Company has an aggregate of 40,000,000 authorized Common Shares,
40,000,000 Excess Shares, 2,000,000 of which have been designated Excess Class A
Preferred Shares, par value $.0001 per share and 10,000,000 undesignated
Preferred Shares available for issuance in its Declaration of Trust, 2,000,000
of which have been designated Class A Senior Cumulative Convertible Preferred
Shares, $.0001 par value per share. Such shares (other than reserved shares) may
be issued from time to time by the Company in the discretion of the Board of
Trustees to raise additional capital, acquire 


                                       32
<PAGE>   37

assets, including additional real properties, redeem or retire debt or for any
other business purpose. In addition, the undesignated Preferred Shares may be
issued in one or more additional classes with such designations, preferences and
relative, participating, optional or other special rights including, without
limitation, preferential dividend or voting rights, and rights upon liquidation,
as shall be fixed by the Board of Trustees. Also, the Board of Trustees is
authorized to classify and reclassify any unissued capital shares by setting or
changing, in any one or more respects, the preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends, qualifications
or terms or conditions of redemption of such shares. Such authority includes,
without limitation, subject to the provisions of the Declaration of Trust,
authority to classify or reclassify any such unissued shares into a class or
classes of preferred shares, preference shares, special shares or other shares,
and to divide and reclassify shares of any class into one or more series of such
class. In certain circumstances, the issuance of Preferred Shares, or the
exercise by the Board of Trustees of such rights to classify or reclassify
shares, could have the effect of deterring individuals or entities from making
tender offers for the Common Shares or seeking to change incumbent management.

      Maryland Corporations and Associations Law

            The Law of Corporations and Associations of the State of Maryland
includes certain other provisions which may also discourage a change in control
of management of the Company. Maryland law provides that a Maryland real estate
investment trust may not engage in any "business combination" with any
"interested stockholder." An "interested stockholder" is defined, in essence, as
any person owning beneficially, directly or indirectly, 10% or more of the
outstanding voting shares of a Maryland real estate investment trust. Unless an
exemption applies, the Company may not engage in any business combination with
an interested stockholder for a period of five years after the interested
stockholder became an interested stockholder, and thereafter may not engage in a
business combination unless it is recommended by the Board of Trustees and
approved by the affirmative vote of at least (i) 80% of the votes entitled to be
cast by the holders of all outstanding voting shares of the Company, and (ii)
66y% of the votes entitled to be cast by all holders of outstanding shares of
voting shares other than voting shares held by the interested stockholder. The
voting requirements do not apply at any time to business combinations with an
interested stockholder or its affiliates if approved by the Board of Trustees
prior to the time the interested stockholder first became an interested
stockholder. Additionally, if the business combination involves the receipt of
consideration by the shareholders in exchange for the Company's shares, the
voting requirements do not apply if certain "fair price" conditions are met.

                        FEDERAL INCOME TAX CONSIDERATIONS

General

            The following discussion summarizes the material federal income tax
considerations to a prospective holder of Common Shares. The following
discussion is for general information purposes only, is not exhaustive of all
possible tax considerations and is not intended to be and should not be
construed as tax advice. For example, this summary does not give a detailed
discussion of any state, local or foreign tax considerations. In addition, this
discussion is intended to address only those federal income tax considerations
that are generally applicable for all security holders in the Company. It does
not discuss all of the aspects of federal income taxation that may be relevant
to a prospective security holder in light of his or her particular circumstances
or to certain types of security holders


                                       33
<PAGE>   38

who are subject to special treatment under the federal income tax laws
including, without limitation, insurance companies, tax-exempt entities,
financial institutions or broker-dealers, foreign corporations and persons who
are not citizens or residents of the United States. If the Company offers one or
more series of Preferred Shares or Debt Securities, then there may be tax
consequences for the holders of such Securities not discussed herein. For a
discussion of any such additional consequences, see the applicable Prospectus
Supplement.

            The information in this section is based on the Code (including the
provisions of the Taxpayer Relief Act of 1997 (the "1997 Act"), several of which
are described herein), current, temporary and proposed Treasury Regulations, the
legislative history of the Code, current administrative interpretations and
practices of the IRS (including its practices and policies as endorsed in
private letter rulings, which are not binding on the IRS except with respect to
the taxpayer that receives such a ruling), and court decisions, all as of the
date hereof. No assurance can be given that future legislation, Treasury
Regulations, administrative interpretations and court decisions will not
significantly change current law or adversely affect existing interpretations of
current law. Any such change could apply retroactively to transactions preceding
the date of the change. The Company has not received any rulings from the IRS
concerning the tax treatment of the Company. Thus no assurance can be provided
that the statements set forth herein (which do not bind the IRS or the courts)
will not be challenged by the IRS or will be sustained by a court if so
challenged.

            EACH PROSPECTIVE PURCHASER OF THE SECURITIES IS ADVISED TO CONSULT
WITH HIS OR HER OWN TAX ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES TO HIM
OR HER OF THE PURCHASE, OWNERSHIP AND SALE OF SECURITIES OF AN ENTITY ELECTING
TO BE TAXED AS A REIT, INCLUDING THE FEDERAL, STATE, LOCAL AND FOREIGN AND OTHER
TAX CONSEQUENCES OF SUCH PURCHASE, OWNERSHIP, SALE AND ELECTION AND OF POTENTIAL
CHANGES IN APPLICABLE TAX LAWS.

Taxation of the Company

            General. The Company elected to be taxed as a REIT under Sections
856 through 860 of the Code effective for its taxable year ended December 31,
1993. The Company believes that it was organized, and has operated, in such a
manner so as to qualify for taxation as a REIT under the Code and intends to
conduct its operations so as to continue to qualify for taxation as a REIT. No
assurance, however, can be given that the Company has operated in a manner so as
to qualify or will be able to operate in such a manner so as to remain qualified
as a REIT. Qualification and taxation as a REIT depends upon the Company's
ability to meet on a continuing basis, through actual annual operating results,
the required distribution levels, diversity of share ownership and the various
qualification tests imposed under the Code discussed below, the results of which
will not be reviewed by Counsel. Given the highly complex nature of the rules
governing REITs, the ongoing importance of factual determinations, and the
possibility of future changes in circumstances of the Company, no assurance can
be given that the actual results of the Company's operations for any one taxable
year have satisfied or will continue to satisfy such requirements.

            The following is a general summary of the Code provisions that
govern the federal income tax treatment of a REIT and its shareholders. These
provisions of the Code are highly technical and complex. This summary is
qualified in its entirety by the applicable Code provisions, 


                                       34
<PAGE>   39

Treasury Regulations and administrative and judicial interpretations thereof,
all of which are subject to change prospectively or retroactively.

            If the Company qualifies for taxation as a REIT, it generally will
not be subject to federal corporate income taxes on its net income that is
currently distributed to shareholders. This treatment substantially eliminates
the "double taxation" (at the corporate and shareholder levels) that generally
results from investment in a corporation. However, the Company will be subject
to federal income tax as follows: first, the Company will be taxed at regular
corporate rates on any undistributed REIT taxable income, including
undistributed net capital gains. Second, under certain circumstances, the
Company may be subject to the "alternative minimum tax" on its items of tax
preference. Third, if the Company has (i) net income from the sale or other
disposition of "foreclosure property" (which is, in general, property acquired
on foreclosure or otherwise on default on a loan secured by such real property
or a lease of such property) which is held primarily for sale to customers in
the ordinary course of business or (ii) other nonqualifying income from
foreclosure property, it will be subject to tax at the highest corporate rate on
such income. Fourth, if the Company has net income from prohibited transactions
(which are, in general, certain sales or other dispositions of property held
primarily for sale to customers in the ordinary course of business other than
foreclosure property), such income will be subject to a 100% tax. Fifth, if the
Company should fail to satisfy the 75% gross income test or the 95% gross income
test (as discussed below), but nonetheless has maintained its qualification as a
REIT because certain other requirements have been met, it will be subject to a
100% tax on an amount equal to (a) the gross income attributable to the greater
of the amount by which the Company fails the 75% or 95% test multiplied by (b) a
fraction intended to reflect the Company's profitability. Sixth, if the Company
should fail to distribute during each calendar year at least the sum of (i) 85%
of its REIT ordinary income for such year, (ii) 95% of its REIT capital gain net
income for such year, and (iii) any undistributed taxable income from prior
periods, the Company would be subject to a 4% excise tax on the excess of such
required distribution over the amounts actually distributed. Seventh, if the
Company acquires any asset from a C corporation (i.e., a corporation generally
subject to full corporate level tax) in a transaction in which the basis of the
asset in the Company's hands is determined by reference to the basis of the
asset (or any other property) in the hands of the C corporation, and the Company
recognizes gain on the disposition of such asset during the 10-year period
beginning on the date on which such asset was acquired by the Company, then, to
the extent of such property's "built-in gain" (the excess of the fair market
value of such property at the time of the acquisition by the Company over the
adjusted basis of such property at such time), such gain will be subject to tax
at the highest regular corporate rate applicable (as provided in Internal
Revenue Service regulations that have not yet been promulgated).

            Requirements for Qualification. A REIT is a corporation, trust or
association (i) which is managed by one or more trustees or directors, (ii) the
beneficial ownership of which is evidenced by transferable shares, or by
transferable certificates of beneficial interest, (iii) which would be taxable
as a domestic corporation, but for Sections 856 through 859 of the Code, (iv)
which is neither a financial institution nor an insurance company subject to
certain provisions of the Code, (v) the beneficial ownership of which is held by
100 or more persons, (vi) during the last half of each taxable year not more
than 50% in value of the outstanding stock of which is owned, directly or
indirectly, by five or fewer individuals (as defined in the Code to include
certain entities), and (vii) which meets certain other tests, described below,
regarding the nature of its income and assets. The Code provides that conditions
(i) through (iv), inclusive, must be met during the entire taxable year and that
condition (v) must be met during at least 335 days of a taxable year of 12
months, or during a proportionate part of a taxable year of less than 12 months.
The Company expects to meet the ownership test immediately 


                                       35
<PAGE>   40

after the transaction contemplated herein. The Company may redeem, at its
option, a sufficient number of shares or restrict the transfer thereof to bring
or maintain the ownership of the shares in conformity with the requirements of
the Code. In addition, the Company's Declaration of Trust includes restrictions
regarding the transfer of its stock that are intended to assist the Company in
continuing to satisfy requirements (v) and (vi). Moreover, for the Company's
taxable years commencing on or after January 1, 1998, if the Company complies
with regulatory rules pursuant to which it is required to send annual letters to
holders of its capital stock requesting information regarding the actual
ownership of its capital stock, and the Company does not know, or exercising
reasonable diligence would not have known, whether it failed to meet requirement
(vi) above, the Company will be treated as having met the requirement. See
"Description of Common Shares," "Description of Preferred Shares" and
"Restrictions on Transfers of Capital Shares and Anti-Takeover Provisions."

            In the case of a REIT which is a partner in a partnership, Treasury
Regulations provide that the REIT will be deemed to own its proportionate share
of each of the assets of the partnership and will be deemed to be entitled to
the income of the partnership attributable to such share. In addition, the
character of the assets and items of gross income of the partnership will retain
the same character in the hands of the REIT for purposes of Section 856 of the
Code, including satisfying the gross income tests and assets (as discussed
below). Thus, the Company's proportionate share of the assets, liabilities, and
items of gross income of the partnerships in which the Company owns an interest
are treated as assets, liabilities and items of the Company for purposes of
applying the requirements described herein.

            Income Tests. In order to maintain qualification as a REIT, the
Company annually must satisfy certain gross income requirements. First, at least
75% of the Company's gross income (excluding gross income from prohibited
transactions) for each taxable year must be derived directly or indirectly from
investments relating to real property or mortgages on real property (including
"rents from real property" and, in certain circumstances, interest) or from
certain types of qualified temporary investments. Second, at least 95% of the
Company's gross income (excluding gross income from prohibited transactions) for
each taxable year must be derived from such real property investments,
dividends, interest and gain from the sale or disposition of stock or
securities. For its tax years ending on or before December 31, 1997, the Company
was subject to a third gross income test which required that short-term gain
from the sale or other disposition of stock or securities, gain from prohibited
transactions and gain on the sale or other disposition of real property held for
less than four years (apart from involuntary conversions and sales of
foreclosure property) must have represented less than 30% of the Company's gross
income (including gross income from prohibited transactions) for each taxable
year.

            Rents received by the Company will qualify as "rents from real
property" in satisfying the gross income requirements for a REIT described above
only if several conditions are met. First, the amount of rent must not be based
in whole or in part on the income or profits of any person. However, an amount
received or accrued generally will not be excluded from the term "rents from
real property" solely by reason of being based on a fixed percentage or
percentages of receipts or sales. Second, the Code provides that rents received
from a tenant will not qualify as "rents from real property" in satisfying the
gross income tests if the REIT, or an owner of 10% or more of the REIT, actually
or constructively owns 10% or more of such tenant (a "Related Party Tenant").
Third, if rent attributable to personal property, leased in connection with a
lease of real property, is greater than 15% of the total rent received under the
lease, then the portion of rent attributable to such personal property 


                                       36
<PAGE>   41

will not qualify as "rents from real property." Finally, for rents received to
qualify as "rents from real property," the Company generally must not operate or
manage the property (subject to a de minimis exception applicable to the
Company's tax years commencing on and after January 1, 1998 as described below)
or furnish or render services to the tenants of such property, other than
through an independent contractor from whom the REIT derives no revenue. The
REIT may, however, directly perform certain services that are "usually or
customarily rendered" in connection with the rental of space for occupancy only
and are not otherwise considered "rendered to the occupant" of the property
("Permissible Services").

            For the Company's taxable years commencing on or after January 1,
1998, rents received generally will qualify as rents from real property
notwithstanding the fact that the Company provides services that are not
Permissible Services so long as the amount received for such services meets a de
minimis standard. The amount received for "impermissible services" with respect
to a property (or, if services are available only to certain tenants, possibly
with respect to such tenants) cannot exceed one percent of all amounts received,
directly or indirectly, by the Company with respect to such property (or, if
services are available only to certain tenants, possibly with respect to such
tenants). The amount that the Company will be deemed to have received for
performing "impermissible services" will be the greater of the actual amounts so
received or 150% of the direct cost to the Company of providing those services.

            If the Company fails to satisfy one or both of the 75% or 95% gross
income tests for any taxable year, it may nevertheless qualify as a REIT for
such year if such failure was due to reasonable cause and not willful neglect,
it disclosed the nature and amounts of its items of gross income in a schedule
attached to its return, and any incorrect information on the schedule was not
due to fraud with intent to evade tax. A 100% penalty tax would be imposed on
the amount by which the Company failed the 75% or 95% test (whichever amount is
greater), less an amount which generally reflects expenses attributable to
earning the nonqualified income. No analogous relief is available for failure to
satisfy the 30% income test.

            Subject to certain safe harbor exceptions, any gain realized by the
Company on the sale of any property held as inventory or other property held
primarily for sale to customers in the ordinary course of business will be
treated as income from a prohibited transaction that is subject to a 100%
penalty tax. Such prohibited transaction income may also have an adverse effect
upon the Company's ability to satisfy the income tests for qualification as a
REIT. Under existing law, whether property is held as inventory or primarily for
sale to customers in the ordinary course of a trade or business is a question of
fact that depends on all the facts and circumstances with respect to the
particular transaction.

            Asset Tests. The Company must also satisfy three tests relating to
the nature of its assets every quarter. First, at least 75% of the value of the
Company's total assets must be represented by real estate assets (including (i)
its allocable share of real estate assets held by partnerships in which the
Company owns an interest or held by "qualified REIT subsidiaries" (as defined in
the Code) of the Company and (ii) stock or debt instruments held for not more
than one year purchased with the proceeds of an offering of equity securities or
a long-term (at least five years) debt offering of the Company, cash, cash items
and government securities). Second, not more than 25% of the Company's total
assets may be represented by securities other than those in the 75% asset class.
Third, of the investments included in the 25% asset class, the value of any one
issuer's securities owned by the Company may not exceed 5% of the value of the
Company's total assets and the Company may not 


                                       37
<PAGE>   42

own more than 10% of any one issuer's outstanding voting securities. The Company
expects that substantially all of its assets will consist of (i) real
properties, (ii) stock or debt investments that earn qualified temporary
investment income, (iii) other qualified real estate assets, and (iv) cash, cash
items and government securities. The Company may also invest in securities of
other entities, provided that such investments will not prevent the Company from
satisfying the asset and income tests for REIT qualification set forth above.

            If the Company inadvertently fails one or more of the asset tests at
the end of a calendar quarter, such a failure would not cause it to lose its
REIT status, provided that (i) it satisfied all of the asset tests at the close
of a preceding calendar quarter, and (ii) the discrepancy between the values of
the Company's assets and the standards imposed by the asset test either did not
exist immediately after the acquisition of any particular acquisition or was not
wholly partly caused by such an acquisition. If the condition described in
clause (ii) of the preceding sentence were not satisfied, the Company could
still avoid disqualification by eliminating any discrepancy within 30 days after
the close of the calendar quarter in which it arose.

            Annual Distribution Requirement. With respect to each taxable year,
the Company must distribute to its shareholders dividends (other than capital
gain dividends) in an amount at least equal to the sum of (a) 95% of its "REIT
Taxable income" (determined without regard to the deduction for dividends paid
and by excluding any net capital gain), and (b) 95% of any after-tax net income
from foreclosure property, minus the sum of certain items of "excess noncash
income." REIT Taxable Income is generally computed in the same manner as taxable
income of ordinary corporations, with several adjustments, such as a deduction
allowed for dividends paid, but not for dividends received. "Excess noncash
income" is the amount, if any, by which the sum of certain items of noncash
income exceeds 5% of REIT Taxable Income for the taxable year (determined
without regard to the deduction for dividends paid and by excluding any net
capital gain). With respect to the Company's taxable years commencing prior to
January 1, 1998, these items of noncash income for which relief from the
distribution requirement is provided are (i) the excess of amounts includible in
gross income due to the operation of Section 467 of the Code (relating to
deferred rental agreements) over the amounts that would have been includible
without regard to such provision, (ii) income from certain like-kind exchanges
not eligible for tax-free treatment, and (iii) the amounts includible on gross
income with respect to the amount that original issue discount on purchase money
debt obligations (but not other kinds of original issue discount or market
discount) exceed the amount of money and fair market value of other property
received during the taxable year under such instruments. With respect to the
Company's tax years commencing on and after January 1, 1998, "excess noncash
income" described in clause (iii) above applies equally to REITs that use the
accrual method of accounting for United States federal income tax purposes.

            The Company will be subject to tax on amounts not distributed at
regular United States federal corporate income tax rates. With respect to its
taxable years beginning on and after January 1, 1998, the Company may elect to
retain rather than distribute, net long-term capital gain, and be subject to
regular United States federal income tax thereon. For the consequences of such
an election to the REIT's shareholders, see "Taxation of Taxable Shareholders."
In addition, a nondeductible 4% excise tax is imposed on the excess of (i) 85%
of the Company's ordinary income for the year plus 95% of capital gain net
income for the year and the undistributed portion of the required distribution
for the prior year over (ii) the actual distribution to shareholders during the
year (if any). Net operating losses generated by the Company may be carried
forward but not carried back and used by the Company for 15 years (or 20 years
in the case of net operating losses generated in the 


                                       38
<PAGE>   43

Company's tax years commencing on or after January 1, 1998) to reduce REIT
Taxable Income and the amount that the Company will be required to distribute in
order to remain qualified as a REIT. Net capital losses of the Company may be
carried forward for five years (but not carried back) and used to reduce capital
gains.

            In general, a distribution must be made during the taxable year to
which it relates to satisfy the distribution test and to be deducted in
computing REIT Taxable Income. However, the Company may elect to treat a
dividend declared and paid after the end of the year (a "subsequent declared
dividend") as paid during such year for purposes of complying with the
distribution test and computing REIT Taxable Income, if the dividend is (i)
declared before the regular or extended due date of the Company's tax return for
such year and (ii) paid not later than the date of the first regular dividend
payment made after the declaration (but in no case later than 12 months after
the end of the year). For purposes of computing the 4% excise tax, a subsequent
declared dividend is considered paid when actually distributed. Furthermore, any
dividend that is declared by the Company in October, November of December of a
calendar year, and payable to shareholders of record as of a specified date in
such month of such year will be deemed to have been paid by the Company (and
received by shareholders) on December 31 of such calendar year, but only if such
dividend is actually paid by the Company in January of the following calendar
year. For purposes of complying with the distribution test for a taxable year as
a result of an adjustment in certain of its items of income, gain or deduction
by the IRS, the Company may be permitted to remedy such failure by paying a
"deficiency dividend" in a later year together with interest and a penalty. Such
deficiency dividend may be included in the Company's deduction of dividends paid
for the earlier year for purposes of satisfying the distribution test. For
purposes of the 4% excise tax, the deficiency dividend is taken into account
when paid, and any income giving rise to the deficiency adjustment is treated as
arising when the deficiency dividend is paid.

            The Company believes that it has distributed and intends to continue
to distribute to its shareholders an amount at least equal to 95% of the sum of
(i) its REIT Taxable Income (determined without regard to the deduction for
dividends paid and by excluding any net capital gains) and (ii) any after-tax
net income from foreclosure properties less any "excess noncash income," as
those amounts are determined in good faith by the Company or its independent
accountants. However, it is possible that timing differences between the accrual
of income and its actual collection, and the need to make deductible
expenditures (such as capital improvements or principal payments on debt) may
cause the Company to recognize taxable income in excess of its net cash
receipts, thus increasing the difficulty of compliance with the distribution
requirement. In order to meet the 95% requirement, the Company might find it
necessary to arrange for short-term, or possibly long-term, borrowings.

            Failure to Qualify. If the Company fails to qualify as a REIT for
any taxable year, and if certain relief provisions of the Code do not apply, it
would be subject to federal income tax (including applicable alternative minimum
tax) on its taxable income at regular corporate rates. Distributions to
shareholders in any year in which the Company fails to qualify will not be
deductible by the Company nor will they be required to be made. As a result, the
Company's failure to qualify as a REIT would reduce the cash available for
distribution by the Company to its shareholders. In addition, if the Company
fails to qualify as a REIT, all distributions to shareholders will be taxable as
ordinary income, to the extent of the Company's current and accumulated earnings
and profits. Subject to certain limitations of the Code, corporate distributees
may be eligible for the dividends-received deduction.


                                       39
<PAGE>   44

            If the Company's failure to qualify as a REIT is not due to
reasonable cause but results from willful neglect, the Company would not be
permitted to elect REIT status for the four taxable years after the taxable year
for which such disqualification is effective. In the event the Company were to
fail to qualify as a REIT in one year and subsequently requalify in a later
year, the Company might be required to recognize taxable income based on the net
appreciation in value of its assets as a condition to requalification. In the
alternative, the Company may be taxed on the net appreciation in value of its
assets if it sells properties within ten years of the date the Company
requalifies as a REIT under federal income tax laws.

Taxation of Taxable Shareholders

            As used herein, the term "U.S. shareholder" means a holder of Common
or Preferred Shares who (for United States federal income tax purposes) (i) is a
citizen or resident of the United States, (ii) is a corporation, partnership, or
other entity treated as a corporation or partnership for federal income tax
purposes created or organized in or under the laws of the United States or of
any political subdivision thereof, (iii) is an estate the income of which is
subject to United States federal income taxation regardless of its source or
(iv) a trust whose administration is subject to the primary supervision of a
United States court and which has one or more United States persons who have the
authority to control all substantial decisions of the trust.

            As long as the Company qualifies as a REIT, distributions made to
the Company's U.S. shareholders out of current or accumulated earnings and
profits (and not designated as capital gain dividends) will be taken into
account by them as ordinary income and corporate shareholders will not be
eligible for the dividends-received deductions as to such amounts. For purposes
of computing the Company's earnings and profits, depreciation for depreciable
real estate will be computed on a straight-line basis over a 40-year period. For
purposes of determining whether distributions on the Common Shares are out of
current or accumulated earnings and profits, the earnings and profits of the
Company will be allocated first to the Preferred Shares and second to the Common
Shares. There can be no assurance that the Company will have sufficient earnings
and profits to cover distributions on any Preferred Shares.

            Distributions that are properly designated as capital gain dividends
will be taxed as gains from the sale or exchange of a capital asset held for
more than one year (to the extent they do not exceed the Company's actual net
capital gain for the taxable year) without regard to the period for which the
shareholder has held its shares. However, corporate shareholders may be required
to treat up to 20% of certain capital gain dividends as ordinary income pursuant
to Section 291 of the Code. As described below, the Taxpayer Relief Act of 1997
(the "1997 Act") changed significantly the taxation of capital gains by
taxpayers who are individuals, estates, or a trust. With respect to amounts
designated as capital gain distributions, the IRS has released Notice 97-64
describing temporary regulations that will be issued to permit REITs to further
designate such capital gain dividends as (i) a 20% rate gain distribution, (ii)
an unrecaptured Section 1250 gain distribution (taxed at a rate of 25%), or
(iii) a 28% rate gain distribution. Capital gain distributions that are not
specifically designated will be characterized as a 28% rate gain distribution.
Notice 97-64 provides that a REIT must determine the maximum amounts that it may
designate as 20% and 25% rate capital gain dividends by performing the
computation required by the Code as if the REIT were an individual whose
ordinary income were subject to a marginal tax rate of at least 28%. The Notice
further provides that designations made by the REIT will be effective only to
the extent that they comply with Revenue 


                                       40
<PAGE>   45

Ruling 89-81, which requires that distributions made to different classes of
shares not be composed disproportionately of dividends of a particular type.

            Distributions in excess of current and accumulated earnings and
profits will constitute a non-taxable return of capital to a shareholder to the
extent that such distributions do not exceed the adjusted basis of the
shareholder's shares, and will result in a corresponding reduction in the
shareholder's basis in the shares. Any reduction in a shareholder's tax basis
for its shares will increase the amount of taxable gain or decrease the
deductible loss that will be realized upon the eventual disposition of the
shares. The Company will notify shareholders at the end of each year as to the
portions of the distributions which constitute ordinary income, capital gain or
a return of capital. Any portion of such distributions that exceed the adjusted
basis of a U.S. shareholder's shares will be taxed as capital gain from the
disposition of shares, provided that the shares are held as capital assets in
the hands of the U.S. shareholder.

            Aside from the different income tax rates applicable to ordinary
income and capital gain dividends, regular and capital gain dividends from the
Company will be treated as dividend income for most other federal income tax
purposes. In particular, such dividends will be treated as "portfolio" income
for purposes of the passive activity loss limitation (including all individuals)
and generally will not be able to offset any "passive losses" against such
dividends. Dividends will be treated as investment income for purposes of the
investment interest limitation contained in Section 63(d) of the Code, which
limits the deductibility of interest expense incurred by noncorporate taxpayers
with respect to indebtedness attributable to certain investment assets.

            In general, dividends paid by the Company will be taxable to
shareholders in the year in which they are received, except in the case of
dividends declared at the end of the year, but paid in the following January, as
discussed above.

            In general, a domestic shareholder will realize capital gain or loss
on the disposition of shares equal to the difference between (i) the amount of
cash and the fair market value of any property received on such disposition and
(ii) the shareholder's adjusted basis of such shares. With respect to
dispositions occurring after July 28, 1997, in the case of a domestic
shareholder who is an individual or an estate or trust, such gain or loss will
be long-term capital gain or loss if such shares have been held for more than
one year but not more than 18 months and long-term capital gain or loss subject
to a 20% tax rate if such shares have been held for more than 18 months. In the
case of a taxable U.S. shareholder that is a corporation, such gain or loss will
be long-term capital gain or loss if such shares have been held for more than
one year. Loss upon the sale or exchange of shares by a shareholder who has held
such shares for six months or less (after applying certain holding period rules)
will be treated as long-term capital loss to the extent of distribution from the
Company required to be treated by such shareholder as long-term capital gain.

            Pursuant to the 1997 Act, for the Company's taxable years commencing
on or after January 1, 1998, the Company may elect to require the holders of
shares to include the Company's undistributed net long-term capital gains in
their income. If the Company makes such an election, the holders of shares will
(i) include in their income as long-term capital gains their proportionate share
of such undistributed capital gains and (ii) be deemed to have paid their
proportionate share of the tax paid by the Company on such undistributed capital
gains and thereby receive a credit or refund for such amount. A holder of shares
will increase the basis in its shares by the difference between the amount of
capital gain included in its income and the amount of tax it is deemed to have
paid. The 


                                       41
<PAGE>   46

earnings and profits of the Company will be adjusted appropriately. As described
below in "-- Recent Legislation," with respect to such long-term capital gain of
a taxable domestic shareholder that is an individual or an estate or a trust,
the IRS has authority to issue regulations that could apply the special tax rate
applicable to sales of depreciable real property by an individual or an estate
or trust to the portion of the long-term capital gains of an individual or an
estate or trust attributable to deductions for depreciation taken with respect
to depreciable real property.

Backup Withholding

            The Company will report to its domestic shareholders and the IRS the
amount of dividends paid during each calendar year, and the amount of tax
withheld, if any, with respect thereto. Under the backup withholding rules, a
shareholder may be subject to backup withholding at the rate of 31% with respect
to dividends paid unless such holder (a) is a corporation or comes within
certain other exempt categories and, when required, demonstrates this fact, or
(b) provides a taxpayer identification number and certifies as to no loss of
exemption from backup withholding. Amounts withheld as backup withholding will
be creditable against the shareholder's income tax liability. In addition, the
Company may be required to withhold a portion of capital gain distributions made
to any shareholders who fail to certify their non-foreign status to the Company.
See "--Taxation of Non-U.S. Shareholders" below. Additional issues may arise
pertaining to information reporting and backup withholding with respect to
Non-U.S. Shareholders (persons other than (i) citizens or residents of the
United States, (ii) corporations, partnerships or other entities created or
organized under the laws of the United States or any political subdivision
thereof, and (iii) estates or trusts the income of which is subject to United
States federal income taxation regardless of its source) and Non-U.S.
Shareholders should consult their tax advisors with respect to any such
information and backup withholding requirements.

            The Treasury Department has recently finalized regulations regarding
the withholding and information reporting rules discussed above. In general,
these regulations do not alter the substantive withholding and information
reporting requirements but unify current certification procedures and forms and
clarify and modify reliance standards. These regulations generally are effective
for payments made after December 31, 1998, subject to certain transition rules.
Valid withholding certificates that are held on December 31, 1998, will remain
valid until the earlier of December 31, 1999 or the date of expiration of the
certificate under rules currently in effect (unless otherwise invalidated due to
changes in the circumstances of the person whose name is on such certificate).

Taxation of Non-U.S. Shareholders

            The following discussion is only a summary of the rules governing
United States federal income taxation of nonresident alien individuals, foreign
corporations, foreign partnerships or other foreign estates or trusts
(collectively, "Non-U.S. Shareholders"). Prospective Non-U.S. Shareholders
should consult with their own tax advisors to determine the impact of federal,
state and local income tax laws with regard to an investment in shares,
including any reporting requirements.

            Distributions that are not attributable to gain from sales or
exchanges by the Company of United States real property interests and not
designated by the Company as capital gains dividends will be treated as
dividends of ordinary income to the extent that they are made out of current or
accumulated earnings and profits of the Company. Such distributions ordinarily
will be subject to a 


                                       42
<PAGE>   47

withholding tax equal to 30% of the gross amount of the distribution unless an
applicable tax treaty reduces or eliminates that tax. Certain tax treaties limit
the extent to which dividends paid by a REIT can qualify for a reduction of the
withholding tax on dividends. Distributions in excess of current and accumulated
earnings and profits of the Company will not be taxable to a Non-U.S.
Shareholder to the extent that they do not exceed the adjusted basis of the
Shareholder's shares, but rather will reduce the adjusted basis of such shares.
To the extent that such distributions exceed the adjusted basis of a Non-U.S.
Shareholder's shares, they will give rise to tax liability if the Non-U.S.
Shareholder would otherwise be subject to tax on any gain from the sale or
disposition of his shares in the Company, as described below.

            For withholding tax purposes, the Company currently is required to
treat all distributions as if made out of its current or accumulated earnings
and profits and thus intends to withhold at the rate of 30% (or a reduced treaty
rate if applicable) on the amount of any distribution (other than distributions
designated as capital gain dividends) made to a Non-U.S. Shareholder. Under the
final regulations (discussed above), generally effective for distributions on or
after January 1, 1999, the Company would be required to withhold at the 30% rate
on distributions it reasonably estimates to be in excess of the Company's
current and accumulated earnings and profits. If it cannot be determined at the
time a distribution is made whether such distribution will be in excess of
current and accumulated earnings and profits, the distribution will be subject
to withholding at the rate applicable to ordinary dividends. As a result of a
legislative change made by the Small Business Job Protection Act of 1996, it
appears that the Company will be required to withhold 10% of any distribution in
excess of the Company's current and accumulated earnings and profits.
Consequently, although the Company intends to withhold at a rate of 30% on the
entire amount of any distribution (or a lower applicable treaty rate), to the
extent that the Company does not do so, any portion of a distribution not
subject to withholding at a rate of 30% (or lower applicable treaty rate) will
be subject to withholding at a rate of 10%. However, the Non-U.S. Shareholder
may seek from the IRS a refund of such amounts from the IRS if it is
subsequently determined that such distribution was, in fact, in excess of
current or accumulated earnings and profits of the Company, and the amount
withheld exceeded the Non-U.S. Shareholder's United States tax liability, if
any.

            For any year in which the Company qualifies as a REIT, distributions
that are attributable to gain from sales or exchanges by the Company of United
States real property interests will be taxed to a Non-U.S. Shareholder under the
provisions of the Foreign Investment in Real Property Tax Act of 1980
("FIRPTA"). Under FIRPTA, a Non-U.S. Shareholder is taxed as if such gain were
effectively connected with a United States business. Non-U.S. Shareholders would
thus be taxed at the normal capital gain rates applicable to U.S. shareholders
(subject to applicable alternative minimum tax and a special alternative minimum
tax in the case of non-resident alien individuals). Also, distributions subject
to FIRPTA may be subject to a 30% branch profits tax in the hands of a corporate
Non-U.S. Shareholder not entitled to treaty relief. The Company is required by
applicable regulations to withhold 35% of any distribution that could be
designated by the Company as a capital gains dividend regardless of the amount
actually designated as a capital gain dividend. This amount is creditable
against the Non-U.S. Shareholder's FIRPTA tax liability.

            Although the law is not entirely clear on the matter, it appears
that amounts designated by the Company pursuant to the 1997 Act as undistributed
capital gains in respect of shares would be treated with respect to Non-U.S.
Shareholders in the manner outlined in the preceding paragraph for actual
distributions by the Company of capital gain dividends. See "Taxation of
Shareholders -- Taxation of Taxable Shareholders." Under that approach, Non-U.S.
Shareholders would be able to 


                                       43
<PAGE>   48

offset as a credit against their United States federal income tax liability
resulting therefrom their proportionate share of the tax paid by the Company on
such undistributed capital gains (and to receive from the IRS a refund to the
extent their proportionate share of such tax paid by the Company were to exceed
their actual United States federal income tax liability).

            Gain recognized by a Non-U.S. Shareholder upon a sale of shares
generally will not be taxed under FIRPTA if the Company is a "domestically
controlled REIT," defined generally as a REIT in which at all times during
specified testing period less than 50% in value of the share was held directly
or indirectly by foreign persons. It is anticipated that the Company will be a
"domestically controlled REIT." Therefore, the sale of shares will not be
subject to taxation under FIRPTA. However, gain not subject to FIRPTA will be
taxable to a Non-U.S. Shareholder if (i) investment in the shares is effectively
connected with the Non-U.S. Shareholder's United States trade or business, in
which case the Non-U.S. Shareholder will be subject to the same treatment as
U.S. Shareholders with respect to such gain, or (ii) the Non-U.S. Shareholder is
a nonresident alien individual who was present in the United States for 183 days
or more during the taxable year and such gain is attributable to an office or
fixed place of business in the United States or such nonresident alien
individual has a "tax home" in the United States and such gain is not
attributable to an office or fixed place of business located outside the United
States or, if such gain is attributable to an office or fixed place of business
located outside the United States, it is not subject to foreign income tax equal
to at least 10% of such gain. If the gain on the sale of shares were to be
subject to taxation under FIRPTA, the Non-U.S. Shareholder will be subject to
the same treatment as U.S. Shareholders with respect to such gain (subject to
applicable alternative minimum tax, special alternative minimum tax in the case
of nonresident alien individuals and possible application of the 30% branch
profits tax in the case of foreign corporations) and the purchaser would be
required to withhold and remit to the Internal Revenue Service 10% of the
purchase price.

Taxation of Tax-Exempt Shareholders

            Tax-exempt entities, including qualified employee pension and profit
sharing trusts and individual retirement accounts ("Exempt Organizations"),
generally are exempt from federal income taxation. However, they are subject to
taxation on their unrelated business taxable income ("UBTI"). While investments
in real estate may generate UBTI, the Service has issued a published ruling to
the effect that dividend distributions by a REIT to an exempt employee pension
trust do not constitute UBTI, provided that the shares of the REIT are not
otherwise used in an unrelated trade or business of the exempt employee pension
trust. Based on that ruling and on the intention of the Company to invest its
assets in a manner that will avoid the recognition of UBTI by the Company,
amounts distributed by the Company to Exempt Organizations generally should not
constitute UBTI. However, if an Exempt Organization finances its acquisition of
shares in the Company with debt, a portion of its income from the Company, if
any, will constitute UBTI pursuant to the "debt-financed property" rules.
Furthermore, social clubs, voluntary employee benefit associations, supplemental
unemployment benefit trusts, and qualified group legal services plans that are
exempt from taxation under paragraphs (7), (9), ( 17), and (20), respectively,
of Code Section 501(c) are subject to different UBTI rules, which generally will
require them to characterize distributions from the Company as UBTI.

            In addition, a pension trust that owns more than 10% of the Company
is required to treat a percentage of the dividends from the Company as UBTI (the
"UBTI Percentage") in certain circumstances. The UBTI Percentage is the gross
income derived from an unrelated trade or business (determined as if the Company
were a pension trust) divided by the gross income of the Company for 


                                       44
<PAGE>   49

the year in which the dividends are paid. The UBTI rule applies only if (i) the
UBTI Percentage is at least 5%, (ii) the Company qualifies as a REIT by reason
of the modification of the 5/50 Rule that allows the beneficiaries of the
pension trust to be treated as holding shares of the Company in proportion to
their actuarial interests in the pension trust, and (iii) either (A) one pension
trust owns more than 25% of the value of the Company's shares or (B) a group of
pension trusts individually holding more than 10% of the value of the Company's
capital shares collectively own more than 50% of the value of the Company's
capital shares.

            While an investment in the Company by an Exempt Organization
generally is not expected to result in UBTI except in the circumstances
described in the preceding paragraph, any gross UBTI that does arise from such
an investment will be combined with all other gross UBTI of the Exempt
Organization for a taxable year and reduced by all deductions attributable to
the UBTI plus $1,000. Any amount then remaining will constitute UBTI on which
the Exempt Organization will be subject to tax. If the gross income taken into
account in computing UBTI exceeds $1,000, the Exempt Organization is obligated
to file a tax return for such year on IRS Form 990-T. None of the Company, the
Board of Trustees, or any of their Affiliates expects to undertake the
preparation or filing of IRS Form 990-T for any Exempt Organization in
connection with an investment by such Exempt Organization in the Common Shares.
Generally, IRS Form 990-T must be filed with the Service by April 15 of the year
following the year in which it relates.

Recent Legislation

            As described above, the 1997 Act contains certain changes to the
REIT qualification requirements and to the taxation of REITs. The 1997 Act also
contains certain changes to the taxation of capital gains of individuals, trusts
and estates.

            Capital Gain Rates. Subject to certain exceptions, for individuals,
trusts and estates, the maximum rate of tax on the net capital gain from a sale
or exchange occurring after July 28, 1997 of a capital asset held for more than
18 months has been reduced from 28% to 20%. The maximum rate has been reduced to
18% for capital assets acquired after December 31, 2000 and held for more than
five years. The maximum rate for capital assets held for more than one year but
not more than 18 months remains at 28%. The maximum rate for net capital gains
attributable to the sale of depreciable real property held for more than 18
months is 25% to the extent of the prior deductions for "unrecaptured Section
1250 gain" (i.e., depreciation deductions not otherwise recaptured as ordinary
income under the existing depreciation recapture rules). Capital gain from the
sale of depreciable real property held for more than 18 months allocated by the
Company to a non-corporate shareholder will be subject to the 25% rate to the
extent that the capital gain on the real property sold by the Company does not
exceed prior depreciation deductions with respect to such property. The 1997 Act
provides the IRS with authority to issue regulations that could, among other
things, apply these rates on a look-through basis in the case of "pass-through"
entities such as the Company. The taxation of capital gains of corporations was
not changed by the 1997 Act.

            REIT Provisions. In addition to the provisions discussed above, the
1997 Act contains a number of technical provisions that either (i) reduce the
risk that the Company will inadvertently cease to qualify as a REIT, or (ii)
provide additional flexibility with which the Company can meet the REIT
qualification requirements. These provisions are effective for the Company's
taxable years commencing on or after January 1, 1998.


                                       45
<PAGE>   50

Taxation of Reinvested Dividends

            Those holders of Common Shares who elect to participate in the
Dividend Reinvestment Plan will be deemed to have received the gross amount of
dividends distributed on their behalf by the Plan Agent as agent for the
participants in such plan. Such deemed dividends will be treated as actual
dividends to such shareholders by the Company and will retain their character
and have the tax effects as described above. Participants that are subject to
federal income tax will thus be taxed as if they received such dividends despite
the fact that their distributions have been reinvested and, as a result, they
will not receive any cash with which to pay the resulting tax liability.

Other Tax Considerations

            Entity Classification. A significant number of the Company's
investments are held through partner-ships. If any such partnerships were
treated as an association, the entity would be taxable as a corporation and
therefore would be subject to an entity level tax on its income. In such a
situation, the character of the Company's assets and items of gross income would
change and might preclude the Company from qualifying as a REIT.

            Prior to January 1, 1997, an organization formed as a partnership or
a limited liability company was treated as a partnership for federal income tax
purposes rather than as a corporation only if it had no more than two of the
four corporate characteristics that the Treasury Regulations in effect at that
time used to distinguish a partnership from a corporation for tax purposes.
These four characteristics were (i) continuity of life, (ii) centralization of
management, (iii) limited liability, and (iv) free transferability of interests.
Under final Treasury Regulations which became effective January 1, 1997, the
four factor test has been eliminated and an entity formed as a partnership or as
a limited liability company will be taxed as a partnership for federal income
tax purposes, unless it specifically elects otherwise. The Regulations provide
that the IRS will not challenge the classification of an existing partnership or
limited liability company for tax periods prior to January 1, 1997 so long as
(1) the entity had a reasonable basis for its claimed classification, (2) the
entity and all its members recognized the federal income tax consequences of any
changes in the entity's classification within the 60 months prior to January 1,
1997, and (3) neither the entity nor any member of the entity had been notified
in writing on or before May 8, 1996, that the classification of the entity was
under examination by the IRS.

            The Company believes that each partnership in which it holds an
interest (either directly or indirectly) is properly treated as a partnership
for tax purposes (and not as an association taxable as a corporation).

            Tax Allocations with Respect to the Properties. When property is
contributed to a partnership in exchange for an interest in the partnership, the
partnership generally takes a carryover basis in that property for tax purposes
equal to the adjusted basis of the contributing partner in the property, rather
than a basis equal to the fair market value of the property at the time of
contribution (this difference is referred to as "Book-Tax Difference"). Special
rules under 704(c) of the Code and the regulations thereunder tend to eliminate
the Book-Tax Difference on an annual basis or with respect to a specific taxable
transaction such as a sale. Thus, the carryover basis of the contributed
properties in the hands of the partnership could cause the Company (i) to be
allocated lower amounts of depreciation and other deductions for tax purposes
than would be allocated to the Company if all properties were to have a tax
basis equal to their fair market value at the time the properties were


                                       46
<PAGE>   51

contributed to the partnership, and (ii) possibly to be allocated taxable gain
in the event of a sale of such contributed properties in excess of the economic
or book income allocated to the Company as a result of such sale.

                              PLAN OF DISTRIBUTION

            The Company may sell Securities through underwriters or dealers,
directly to one or more purchasers, through agents or through a combination of
any such methods of sale.

            The distribution of the Securities may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices, or at negotiated prices.

            In connection with the sale of Securities, underwriters or agents
may receive compensation from the Company or from purchasers of Securities, for
whom they may act as agents, in the form of discounts, concessions or
commissions. Underwriters may sell Securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agents. Underwriters, dealers, and agents that participate
in the distribution of Securities may be deemed to be underwriters under the
Securities Act, and any discounts or commissions they receive from the Company
and any profit on the resale of Securities they realize may be deemed to be
underwriting discounts and commissions under the Securities Act. Any such
underwriter or agent will be identified, and any such compensation received from
the Company will be described, in the applicable Prospectus Supplement.

            Unless otherwise specified in the related Prospectus Supplement,
each series of Securities will be a new issue with no established trading
market, other than the Common Shares which are listed on the NYSE. Any Common
Shares sold pursuant to a Prospectus Supplement will be listed on the NYSE,
subject to official notice of issuance. The Company may elect to list any series
of Debt Securities or Preferred Shares on an exchange, but is not obligated to
do so. It is possible that one or more underwriters may make a market in a
series of Securities, but will not be obligated to do so and may discontinue any
market making at any time without notice. Therefore, no assurance can be given
as to the liquidity of, or the trading market for, the Securities.

            Under agreements into which the Company may enter, underwriters,
dealers and agents who participate in the distribution of Securities may be
entitled to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act.

            Underwriters, dealers and agents may engage in transactions with, or
perform services for, or be tenants of, the Company in the ordinary course of
business.

            In order to comply with the securities laws of certain states, if
applicable, the Securities offered hereby will be sold in such jurisdictions
only through registered or licensed brokers or dealers. In addition, in certain
states Securities may not be sold unless they have been registered or qualified
for sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.


                                       47
<PAGE>   52

                                     EXPERTS

            The consolidated financial statements of the Company incorporated
into this Prospectus by reference to the Annual Report on Form 10-K for the year
ended December 31, 1997, have been so incorporated in reliance on the report of
KPMG Peat Marwick LLP, independent certified public accountants (incorporated by
reference) and upon the authority of said firm as experts in accounting and
auditing.

                                  LEGAL MATTERS

            Certain legal matters, including the validity of the Securities and
certain tax matters, will be passed upon for the Company by Paul, Hastings,
Janofsky & Walker LLP, 399 Park Avenue, New York, New York 10022. Seth M.
Zachary, a partner of Paul, Hastings, Janofsky & Walker LLP, is presently
serving as a member of the Board of Trustees of the Company and will continue to
serve as a member of the Board of Trustees until the Company's 1998 Annual
Meeting of Shareholders. In connection with certain matters related to the laws
of the State of Maryland, Paul, Hastings, Janofsky & Walker LLP will rely on the
opinion of Piper & Marbury L.L.P., 36 South Charles Street, Baltimore, Maryland
21201.


                                       48
<PAGE>   53

================================================================================

            No dealer, salesperson or other individual has been authorized to
give any information or to make any representations not contained in this
Prospectus in connection with the Offering covered by this Prospectus. If given
or made, such information or representations must not be relied upon as having
been authorized by the Company or the Underwriters. This Prospectus does not
constitute an offer to sell, or a solicitation of any offer to buy any
securities in any jurisdiction where, or to any person to whom, it is unlawful
to make such offer or solicitation. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of the Company since the date
hereof or that the information contained herein is correct as of any time
subsequent to the date hereof.

                                TABLE OF CONTENTS
                                                                            Page

                Prospectus

Available Information ..................................................   2
Incorporation of Certain Documents by Reference ........................   2
The Company ............................................................   3
Risk Factors ...........................................................   5
Use of Proceeds ........................................................   8
Ratio of Earnings to Fixed Charges .....................................   8
Description of Debt Securities .........................................   9
Description of Preferred Shares ........................................  23
Description of Common Shares ...........................................  30
Restrictions on Transfers of Capital Shares and
   Anti-Takeover Provisions ............................................  31
Federal Income Tax Considerations ......................................  32
Plan of Distribution ...................................................  47
Experts ................................................................  48
Legal Matters ..........................................................  48

================================================================================

================================================================================

                              LEXINGTON CORPORATE
                                PROPERTIES TRUST
                       
                       
                       
                                 Debt Securities
                                Preferred Shares
                                  Common Shares
                       
                       
                       
                       
                                 --------------
                       
                                   PROSPECTUS

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


                                 April 3, 1998

================================================================================
<PAGE>   54

PART II.    INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14.    OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

            The expenses in connection with the distribution of the securities
being registered are set forth in the following table (all amounts except the
registration fee are estimated):

<TABLE>
            <S>                                             <C>    
            Registration Fee ........................        $73,750
            Printing Expenses .......................       $100,000
            Legal fees and expenses .................       $200,000
            Accounting fees and expenses ............        $60,000
            Miscellaneous ...........................        $66,250
                                                            --------
            TOTAL ...................................       $500,000
                                                            ========
</TABLE>

            All expenses in connection with the issuance and distribution of the
securities being offered will be borne by the Registrant (other than selling
commissions).

ITEM 15.    INDEMNIFICATION OF TRUSTEES AND OFFICERS.

            The Declaration of Trust of the Registrant provides that any trustee
or officer of the Registrant shall be indemnified by the Registrant to the full
extent that trustees and officers are permitted to be indemnified by the laws of
the State of Maryland.

            Section 8-301 of the Maryland Law of Corporations and Associations
permits a real estate investment trust to indemnify trustees of the trust to the
same extent as is permitted for directors of Maryland corporations pursuant to
Section 2-418 of the Maryland General Corporation Law ("MGCL"). Section 2-418 of
the MGCL generally permits a corporation to indemnify any director made a party
to any proceeding by reason of service in that capacity unless it is established
that (i) the act or omission of the director was material to the matter giving
rise to the proceeding and (a) was committed in bad faith or (b) was the result
of active and deliberate dishonesty; or (ii) the director actually received an
improper personal benefit in money, property or services, or (iii) in the case
of any criminal proceeding, the director had reasonable cause to believe that
the act or omission was unlawful. Reasonable expenses incurred by a director who
is a party to a proceeding may be paid or reimbursed by the corporation in
advance of the final disposition of the proceeding subject to the satisfaction
of certain procedural criteria. Indemnification and advancement of expenses
authorized by statute are not deemed exclusive of any other rights, by
indemnification or otherwise, to which a director may be entitled under the
charter, bylaws, a resolution of stockholders or directors, an agreement or
otherwise, both as to action in an official capacity and as to 
<PAGE>   55

action in another capacity while holding such office. A real estate investment
trust may indemnify officers, employees and agents of the trust to the same
extent as is permitted for officers, employees and agents of Maryland
corporations under Section 2-418 of the MGCL. Section 2-418 permits a
corporation to indemnify an officer, employee or agent to the same extent that
it may indemnify directors.

            The foregoing reference is necessarily subject to the complete text
of the Declaration of Trust referred to above and is qualified in its entirety
by reference thereto.

            The Registrant has also entered into Indemnification Agreements with
certain officers and trustees for the purpose of indemnifying such persons from
certain claims and action in their capacities as such.

ITEM 16.    EXHIBITS.

            There are filed with the Registration Statement the following
exhibits:

          EXHIBIT NO.   DESCRIPTION

            3.1         Declaration of Trust (filed as Exhibit 3.1 to the
                        Company's Report on Form 10-K filed March 31, 1998 (the
                        "Form 10-K")).*

            3.2         Bylaws (filed as Exhibit 3.2 to the Form 10-K).*

            4.1         Form of Indenture.

            5.1         Opinion of Paul, Hastings, Janofsky & Walker LLP as to
                        the validity of the Securities being registered.

            5.2         Opinion of Piper & Marbury L.L.P. as to the validity of
                        the Securities being registered.

            23.1        Consent of KPMG Peat Marwick LLP.

            23.2        Consent of Paul, Hastings, Janofsky & Walker LLP
                        (included in Exhibit 5.1).

            23.3        Consent of Piper & Marbury L.L.P. (included in Exhibit
                        5.2).
<PAGE>   56

          EXHIBIT NO.   DESCRIPTION

            24.1        Power of Attorney (included in Part II of this
                        Registration Statement).

                              *Incorporated by reference.

ITEM 17.    UNDERTAKINGS.

            (a)   The undersigned Registrant hereby undertakes:

                  (1) To file, during any period in which offers or sales are
                  being made, a post-effective amendment to this registration
                  statement:

                        (i) To include any prospectus required by Section
                  10(a)(3) of the Securities Act of 1933;

                        (ii) To reflect in the prospectus any acts or events
                  arising after the effective date of the registration statement
                  (or the most recent post-effective amendment thereof) which,
                  individually or in the aggregate, represent a fundamental
                  change in the information set forth in the registration
                  statement. Notwithstanding the foregoing, any increase or
                  decrease in volume of securities offered (if the total dollar
                  value of securities offered would not exceed that which was
                  registered) and any deviation from the low or high end of the
                  estimated offering range may be reflected in the form of
                  prospectus filed with the Commission pursuant to Rule 424(b)
                  if, in the aggregate, the changes in volume and price
                  represent no more than a 20% change in the maximum aggregate
                  offering price set forth in the "Calculation of Registration
                  Fee" table in the effective registration statement; and

                        (iii) To include any material information with respect
                  to the plan of distribution not previously disclosed in the
                  registration statement or any material change to such
                  information in the registration statement;

                  provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
                  herein do not apply if the Registration Statement is on Form
                  S-3 or Form S-8, and if the information required to be
                  included in a post-effective amendment by those paragraphs is
                  contained in 
<PAGE>   57

                  periodic reports filed with or furnished to the Commission by
                  the Registrant pursuant to Section 13 or Section 15(d) of the
                  Securities Exchange Act of 1934 that are incorporated by
                  reference in this registration statement;

                        (2) That, for the purpose of determining any liability
                  under the Securities Act, each such post-effective amendment
                  shall be deemed to be a new registration statement relating to
                  the securities offered therein, and the offering of such
                  securities at that time shall be deemed to be the initial bona
                  fide offering thereof;

                        (3) To remove from registration by means of a
                  post-effective amendment any of the securities being
                  registered which remain unsold at the termination of the
                  offering.

            (b) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

            (c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

            (d) The undersigned Registrant hereby undertakes to file an
application for the purpose of determining eligibility of the trustee to act
under subsection (a) of Section 310 of the Trust Indenture Act in accordance
with the rules and regulations prescribed by the Commission under Section
305(b)(2) of such act. 

<PAGE>   58

                                   SIGNATURES

            Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York,
State of New York, on April 3, 1998.

                                       LEXINGTON CORPORATE PROPERTIES TRUST


                                       By: /s/ T. Wilson Eglin
                                           -------------------------------------
                                           T. Wilson Eglin
                                           President and Chief Operating Officer

            KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints T. Wilson Eglin and E. Robert Roskind,
jointly and severally, his attorneys-in-fact, each with power of substitution
for him in any and all capacities, to sign any amendments to this Registration
Statement, to file the same, with the exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof. Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated.

Signature                   Capacity                              Date
---------                   --------                              ----

                            Chairman of the Board,
                                    Co-Chief Executive
/s/ E. Robert Roskind               Officer and Trustee           April 3, 1998
-----------------------     (Principal Executive Officer)
E. Robert Roskind


/s/ Richard J. Rouse        Vice Chairman, Co-Chief               April 3, 1998
-----------------------             Executive Officer and
Richard J. Rouse                    Trustee
<PAGE>   59



/s/ T. Wilson Eglin         President, Chief Operating            April 3, 1998
-----------------------             Officer and Trustee
T. Wilson Eglin


/s/ Antonia G. Trigiani     Chief Financial Officer               April 3, 1998
-----------------------             and Treasurer
Antonia G. Trigiani


/s/ Paul R. Wood            Vice President, Chief                 April 3, 1998
-----------------------             Accounting Officer
Paul R. Wood                        and Secretary


/s/ Carl D. Glickman        Trustee                               April 3, 1998
-----------------------
Carl D. Glickman


/s/ John D. McGurk          Trustee                               April 3, 1998
-----------------------
John D. McGurk


/s/ Seth M. Zachary         Trustee                               April 3, 1998
-----------------------
Seth M. Zachary


/s/ Kevin W. Lynch          Trustee                               April 3, 1998
-----------------------
Kevin W. Lynch
<PAGE>   60
                                EXHIBIT INDEX
                                -------------


          EXHIBIT NO.   DESCRIPTION

            3.1         Declaration of Trust.*

            3.2         Bylaws*

            4.1         Form of Indenture.

            5.1         Opinion of Paul, Hastings, Janofsky & Walker LLP as to
                        the validity of the Securities being registered.

            5.2         Opinion of Piper & Marbury L.L.P. as to the validity of
                        the Securities being registered.

            23.1        Consent of KPMG Peat Marwick LLP.

            23.2        Consent of Paul, Hastings, Janofsky & Walker LLP
                        (included in Exhibit 5.1).

            23.3        Consent of Piper & Marbury L.L.P. (included in Exhibit
                        5.2).

            24.1        Power of Attorney (included in Part II of this
                        Registration Statement).

                              *Incorporated by reference.



