SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934

Filed by the Registrant |X|

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|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule
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|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Section 240.11(c) or Section 240.14a-12

BANYAN STRATEGIC REALTY TRUST
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|_| Fee computed on table below per Exchange Act Rules 14a-6(i) and 0-11.
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BANYAN STRATEGIC REALTY TRUST

NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
AND
PROXY STATEMENT

DATE: JANUARY 30, 2002
TIME: 10:00 A.M., CST
PLACE: 2625 BUTTERFIELD ROAD, SUITE
101N, OAK BROOK, IL 60523

BANYAN STRATEGIC REALTY TRUST
2625 BUTTERFIELD ROAD
SUITE 101N
OAK BROOK, ILLINOIS 60523

December 26, 2001

Dear Shareholder:

You are cordially invited to attend Banyan Strategic Realty Trust's annual
meeting of Shareholders.

We will hold the meeting on January 30, 2002 at 10:00 a.m., CST, at 2625
Butterfield Road, Suite 101N, Oak Brook, Illinois 60523. The enclosed packet
includes the Notice of Annual Meeting, Proxy Statement and Proxy. The Proxy
Statement describes the business that we will conduct at the meeting and
provides information about the Trust.

Your vote is important. Whether you plan to attend the meeting or not, please
complete, date, sign and return the enclosed proxy card promptly. If you attend
the meeting and prefer to vote in person, you may do so.

We look forward to seeing you at the meeting.

Sincerely,

/s/ L.G. Schafran
- ----------------------------------------------
L.G. Schafran
Interim President and Chief Executive Officer

BANYAN STRATEGIC REALTY TRUST
2625 BUTTERFIELD ROAD
SUITE 101N
OAK BROOK, ILLINOIS 60523

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

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

Date: January 30, 2002

Time: 10:00 a.m., CST

Place: 2625 Butterfield Road, Suite 101N, Oak
Brook, Illinois 60523
-------------------------------------------------------------

Dear Shareholders:

At our annual meeting, we will ask you to:

o elect four trustees;
o ratify the selection of Ernst & Young LLP as our independent
accountant for 2001; and
o transact any other business that may properly be presented at the
annual meeting.

If you were a shareholder of record at the close of business on December
14, 2001, you may vote in person at the annual meeting or submit the enclosed
proxy card.

By order of the Board of Trustees,

/s/ Robert G. Higgins
-----------------------------------
Robert G. Higgins
Vice President, General Counsel and
Assistant Secretary

December 26, 2001

INFORMATION ABOUT THE ANNUAL MEETING

Information About Attending the Annual Meeting

Our annual meeting will be held on January 30, 2002 at 10:00 a.m., CST, at
2625 Butterfield Road, Suite 101N, Oak Brook, Illinois 60523. If you would like
to attend, please contact us at (630) 218-7250 to make arrangements.

Information About this Proxy Statement

We sent you this proxy statement and the enclosed proxy card because our
board of trustees is soliciting your proxy to vote your shares at the meeting.
If you own shares of beneficial interest in Banyan in more than one account,
such as individually and also jointly with your spouse, you may receive more
than one set of these materials. Please make sure to vote all of your shares.
This proxy statement summarizes information we are required to provide to you
under the rules of the Securities and Exchange Commission which are designed to
assist you in voting your shares. On December 27, 2001, we began mailing the
proxy materials to all shareholders of record at the close of business on
December 14, 2001.

Information About Voting

You may vote your shares at the annual meeting only if you are a
shareholder of record at the close of business on December 14, 2001. Each share
is entitled to one vote. As of December 14, 2001, there were 15,496,806 shares
outstanding.

You may grant us proxy to vote on the proposals presented at the annual
meeting in one of three ways:

o By Proxy Card: You can vote your shares by signing, dating and
returning the enclosed proxy card. If you do this, the individuals
named on the card will vote your shares in the manner you indicate.
You may specify on your proxy card how you would like your shares
voted. If you do not indicate instructions on the card, your shares
will be voted for the election of the individuals nominated for
trustee and for the selection of Ernst & Young LLP as our principal
independent public accountant for 2001;

o By Telephone: You can vote your shares by granting us your proxy by
telephone. To do so, please call the toll free number 1-877-PRX-VOTE
(1-877-779-8683) and follow the recorded instructions; or

o Electronically: You can vote your shares by granting us your proxy
over the Internet. To do so, go to the Website
www.eproxyvote.com/bsrts and follow the instructions provided on our
Website.

Additionally, you may come to the annual meeting and cast your vote in
person. If you grant us a proxy, you may nevertheless revoke your proxy at any
time before it is exercised by: (1) sending written notice to our assistant
secretary, Robert G. Higgins; (2) providing us with a later-dated proxy,
electronically, by telephone or by mail; or (3) attending the annual meeting in
person and voting your shares. Merely attending the annual meeting, without
further action, will not revoke your proxy. Your proxy designation by telephone
or Internet authorizes the named proxies to vote your shares in the same manner
as if you marked, signed, dated and returned the proxy card. If you choose to
vote your shares by telephone or Internet, there is no need for you to mail back
your proxy card.

Information Regarding Tabulation of the Vote

Representatives of EquiServe Trust Company, N.A., will tabulate votes and
act as inspectors of election at the meeting.

Quorum Requirement

Shareholders owning a majority of our shares must be present in person or
by proxy in order for action to be taken at the meeting. For these purposes,
"abstentions" and "broker non-votes" will be counted as present for determining
whether a majority is present. A broker non-vote occurs when shares registered
in the name of a broker are not voted because the broker does not have the
authority to do so.

Information About Votes Necessary for Action to be Taken

The four individuals receiving the greatest number of votes will be
elected to serve as trustees; provided that a majority of these individuals must
be independent. A person is considered to be "independent" if he or she is not
an officer or employee of ours or does not have a relationship which, in our
board's opinion, would interfere with the exercise of independent judgment in
carrying out the responsibilities of a trustee. Ratification of Ernst & Young
LLP as our independent accountant requires a "yes" vote from a majority of the
votes actually cast on the matter.

Costs of Proxies

We will pay all the costs of soliciting proxies and holding the annual
meeting. We have retained ChaseMellon Shareholder Services, LLC to assist in the
solicitation of proxies. We anticipate that the fee for these services will not
exceed $6,500 plus reasonable out-of-pocket costs and expenses authorized by us.

Other Matters

We are not aware of any other matter which will be presented at the annual
meeting. Generally, no business, aside from the items discussed in this proxy
statement, may be transacted at the meeting. However, if any other matter
properly comes before the annual meeting as determined by the chairman of the
meeting, your proxies are authorized to act on the proposal at their discretion.

Available Information

We file reports, proxy materials and other information with the Securities
and Exchange Commission ("SEC"). These reports, proxy materials and other
information can be inspected and copied at the Public Reference Section
maintained by the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549; The Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511, and at 233 Broadway, New York, New York
10279. Copies can be obtained by mail from the SEC at prescribed rates from the
Public Reference Section of the SEC at its principal office in Washington, D.C.
The SEC also maintains a site on the World Wide Web (http://www.sec.gov) that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the SEC. Shares of
beneficial interest are included for quotation on Nasdaq.

PROPOSAL NUMBER ONE: ELECT FOUR TRUSTEES

Background

Our board has nominated Walter E. Auch, Sr., Daniel Levinson, Stephen M.
Peck and L.G. Schafran to serve as trustees for the upcoming year or until their
respective successors are elected and begin to serve. Further, the board has
concluded that Messrs. Auch, Levinson and Peck have been nominated to serve as
independent trustees.

We know of no reason why any nominee will be unable to serve as a trustee.
If any nominee is unable to serve, your proxy may vote for another nominee
proposed by the board, or the board may reduce the number of trustees to be
elected. If any trustee resigns, dies or is otherwise unable to serve out his
term, or if the board increases the number of trustees, the board may fill the
vacancy until the next annual meeting. You do not have the right to cumulate
your votes in electing trustees.

The nominees for election to the board are:

Walter E. Auch, Sr. Mr. Auch, age 79, has served as an independent trustee
since 1986. Mr. Auch served as the chairman and chief executive officer of the
Chicago Board of Options Exchange from 1979 to 1986. Prior to that time, Mr.
Auch was executive vice president, director and a member of the executive
committee of PaineWebber. Mr. Auch is a director of Pimco Advisors L.P., Smith
Barney Concert Series Funds, Smith Barney Trak Fund, The Brinson Partners Funds,
the Nicholas Applegate Funds, Semele Group, Inc., and Legend Properties, Inc.
and a trustee of Hillsdale College and the Arizona Heart Institute.

Daniel Levinson. Mr. Levinson, age 44, has served as an independent
trustee since 1999 and currently serves as Principal of Berchwood Partners, LLC.
From January 2000 until March 2001 Mr. Levinson served as chief financial
officer for the Oracle Investment Management Inc. From 1993 to 1999, Mr.
Levinson was employed by Morgens Waterfall, Vintadis and Company, Inc. as its
chief financial officer and specialized in the management and workout of real
estate and other investments in its investment funds. Before working at Morgens,
Mr. Levinson was a vice president at Sentinel Real Estate Corporation, an
institutional real estate investment manager. Prior to joining Sentinel in 1988,
Mr. Levinson was at KPMG Peat Marwick for over six years. Mr. Levinson received
a Bachelor of Science degree from Lehigh University. Mr. Levinson is a certified
public accountant and a member of the American Institute of Certified Public
Accountants.

Stephen M. Peck. Mr. Peck, age 66, has served as an independent trustee
since 1999 and is currently a Partner of Torrey Funds, LLC. Mr. Peck is a
director of Fresenius Medical Care, Canarc, Boston Life Sciences, Advance Auto
Parts and OFFIT Investment Funds. He is also a Chairman of the Advisory Board of
the Torrey Funds and a member of the Advisory Board of Brown Simpson Asset
Management. Mr. Peck serves as a member of the Board of Trustees of The Jewish
Theological Seminary and is Chairman of the Board of Trustees of Mount Sinai
Hospital and Mount Sinai School of Medicine.

L.G. Schafran. Mr. Schafran, age 63, has served as a trustee since 1999
and as our interim president and chief executive officer since August 14, 2000.
He is currently chairman of our board and has been a Managing General Partner at
L.G. Schafran & Associates since 1984. Mr. Schafran is a director of Tarragon
Realty Investors, Inc. (f/k/a National Income Realty Trust), PubliCARD, Inc.
(f/k/a Publicker Industries, Inc.), Vertex Interactive, Inc. and chairman of the
board of Delta-Omega Technologies, Inc. Mr. Schafran served as a director of
Capsure Holdings Inc. from 1986 to 1997, OXIGENE, Inc. from 1993 to 1996,
Glasstech, Inc. from 1995 to 1997, Dart Group Corporation from 1993 to 1997,
Kasper A.S.L., Ltd. from 1997 to 2000 and COMSAT Corporation from 1997 to 2000.

RECOMMENDATION OF THE BOARD: The board recommends that you vote "FOR" the
election of all four nominees.

PROPOSAL NUMBER TWO: RATIFY APPOINTMENT OF ERNST & YOUNG LLP

Our board, on the recommendation of the existing audit committee, has
engaged Ernst & Young LLP to serve as our independent accountant for the fiscal
year ending December 31, 2001. We traditionally ask our shareholders to ratify
the selection of an independent accountant, even though your approval is not
required. Further, even if you do not approve the selection of Ernst & Young
LLP, we will not replace them as the independent accountant for this fiscal year
due to the added expense and delay that would result from replacing them and
selecting a new accountant. Instead, our board will consider the negative vote
as a direction to consider a different accountant next year.

Ernst & Young LLP has been our independent accountant since 1989, and no
relationship exists other than the usual relationship between independent public
accountant and client. Representatives of Ernst & Young LLP are expected to be
available at the annual meeting to respond to questions.

Disclosure of Auditor Fees

The following is a description of the fees we incurred with respect to our
audit for the year ended December 31, 2000, and other fees billed to us by Ernst
& Young LLP during the year ended December 31, 2000:

Audit Fees: We paid audit fees to Ernst & Young LLP in connection with its
review and audit of our annual financial statement for the year ended December
31, 2000 and Ernst & Young LLP's review of our interim financial statements
included in our Quarterly Reports on Form 10-Q during the year ended December
31, 2000 totaling approximately $165,500.

Financial Information Systems Design and Implementation Fees: We did not engage
Ernst & Young LLP to provide advice to us regarding financial information
systems design and implementation during the year ended December 31, 2000.

All Other Fees: We paid Ernst & Young LLP approximately $60,500 related to the
year ended December 31, 2000 for all other non-audit services rendered to us by
Ernst & Young LLP; comprised primarily of preparation fees associated with
multiple tax returns and consulting fees related to our plan of Termination and
Liquidation.

RECOMMENDATION OF THE BOARD: The board recommends that you vote "FOR" the
appointment of Ernst & Young LLP as our independent accountant for the fiscal
year ending December 31, 2001.

COMPENSATION OF TRUSTEES AND EXECUTIVE OFFICERS

Independent Trustee Compensation

Each independent trustee is paid an annual fee of $20,000, payable
quarterly, plus $1,000 for each board or committee meeting attended in person
and $500 an hour for each board or committee meeting held by telephonic
conference call. We also reimburse each independent trustee for out-of-pocket
expenses incurred in attending board meetings. Each person serving as an
independent trustee is awarded an option to purchase 2,000 of our common shares
ten days after each annual meeting. All options granted to the independent
trustees vest and become exercisable in the following installments: (1) fifty
percent (50%) on the first anniversary of the grant; and (2) fifty percent (50%)
on the second anniversary of the grant.

Our board is required to meet at least four times per year, either in
person or by telephonic conference. During calendar year 2000, the board met 29
times. Our board also had three committees, a nominating committee, an audit
committee and a compensation committee. Messrs. Auch, Peck and Levinson,
comprise the members of each committee. During calendar year 2000, the audit
committee met three times, the compensation committee met one time, and the
nominating committee met twice. The nominating committee was disbanded on
December 21, 2000, following the annual meeting of shareholders on December 14,
2000.

In February 2000, our board formed a financial advisory committee to
evaluate and explore strategic alternatives designed to maximize shareholder
value. The financial advisory committee was comprised of Messrs. Auch, Peck,
Levinson and Schafran and met 24 times in 2000. The financial advisory committee
was disbanded on December 21, 2000, following the annual meeting of shareholders
on December 14, 2000. The financial advisory committee was deemed no longer
necessary because, as of December 14, 2000, the membership of the financial
advisory committee and the full board were identical.

Executive Officers

The board of trustees annually elects our executive officers and, subject
to each officer's employment agreement, if applicable, may remove these officers
at any time. Listed below is information about our executive officers, except
that information regarding L.G. Schafran, our interim president and chief
executive officer can be found under the description of the nominees for trustee
under Proposal Number One.

Robert G. Higgins. Mr. Higgins, age 49, has served as our vice president
and general counsel since 1992 and as secretary since 1995. Effective December
14, 2000, Mr. Higgins became our first vice president, general counsel, chief
operating officer and assistant secretary. Mr. Higgins received a B.A. degree in
government from the University of Notre Dame and a law degree from Loyola
University of Chicago. Mr. Higgins concentrates his practice in the areas of
real estate development, finance, acquisition, land use, sales, lending and
general corporate business practice. Mr. Higgins previously served as vice
president, general counsel and secretary of Legend Properties, Inc. (f/k/a
Banyan Mortgage Investment Fund), Banyan Short Term Income Trust and Semele
Group, Inc. (f/k/a Banyan Strategic Land Fund II) (collectively, the "Banyan
Funds")and is currently serving in the same position for BSRT Management Corp.
Mr. Higgins is admitted to the bar in the States of Illinois, Minnesota and
Texas and also practices law as a sole practitioner.

Joel L. Teglia. Mr. Teglia, age 39, has served as our vice president and
chief financial officer since 1994. Effective December 14, 2000, Mr. Teglia
became our executive vice president and chief financial officer. Previously he
served as vice president and chief financial officer of each of the Banyan Funds
and is currently serving in the same position for BSRT Management Corp. Prior to
his appointment, Mr. Teglia provided various services to us in his capacity as
controller for BSRT Management Corp. (f/k/a Banyan Management Corp.), a position
that he held from 1991 to 1994. Mr. Teglia received a B.A. degree in accounting
from the University of Notre Dame and is a certified public accountant.

Christopher J. Swieca. Mr. Swieca, age 42, has been our assistant
secretary since 1994. Effective December 14, 2000, Mr. Swieca became a vice
president and our chief governance and administrative officer and secretary. Mr.
Swieca received his B.A. degree in political science from Loyola University of
Chicago and currently serves as president of the American Society of Corporate
Secretaries ("ASCS"), Chicago Chapter and has previously served terms as vice
president; treasurer and has been an advisory committee member since 1998. Mr.
Swieca is an active member of the ASCS and has served on several national
committees including the NASDAQ-AMEX Advisory Committee and is a Corporate
Outreach Advisory Board Member, Loyola University Chicago, Center for Ethics and
Social Justice formally the Center for Business Ethics. Mr. Swieca is involved
in Mr. Higgins' practice and has served as assistant secretary of the Banyan
Funds and BSRT Management Corp.

Leonard G. Levine. Mr. Levine, age 53, has been our president and chief
executive officer since 1990. On August 14, 2000, we suspended Mr. Levine from
his duties as president and chief executive officer. Mr. Levine also served as a
trustee of ours from September, 1986 until February 1990 and again from 1998 to
2000. Mr. Levine received a bachelors of science/bachelors of arts degree in
accounting from Roosevelt University and a masters degree in taxation from
DePaul University. Mr. Levine previously served as president of the Banyan
Funds. Mr. Levine is a certified public accountant and a licensed real estate
broker.

Executive Compensation

This table shows compensation paid to our chief executive officer and our
next three most highly compensated executive officers during the last three
years ended December 31, 2000.

LONG-TERM COMPENSATION
----------------------

ANNUAL COMPENSATION AWARDS PAYOUTS
------------------- ------ -------

(a) (b) (c) (d) (e) (f) (g) (h) (i)

Securities
Restricted Under-lying
Other Annual Stock Options/ LTIP All Other
Name Year Salary(2) Bonus Compensation Award(s) SARS(#) Payouts Compensation (4)
---- ---- --------- ----- ------------ -------- ------- ------- ----------------

L.G. Schafran,
Interim President and
Chief Executive Officer.... 2000 $ 73,077 $ 0

Leonard G. Levine,
President and Chief
Executive Officer
(suspended August 14, 2000 $215,100 $ 0
2000) (1)(3)............... 1999 $212,217 $101,471
1998 $206,100 $146,382
Jay E. Schmidt
Vice President-
Investments ............... 2000 $145,957 $ 0 $280,807
1999 $183,053 $ 40,000
1998 $170,307 $ 41,908

Neil D. Hansen 2000 $131,525 $ 0 $342,679
First Vice President ...... 1999 $220,732 $ 50,000
1998 $205,860 $ 48,990

Joel L. Teglia
Executive Vice 2000 $152,942 $ 0 $204,765
President and Chief 1999 $143,208 $ 30,000
Financial Officer......... 1998 $126,825 $ 30,755

(1) As of the fiscal year ended December 31, 2000, Mr. Levine owned 862,504
shares of beneficial interest, 512,504 of which he is restricted from
transferring except in compliance with the registration requirements of
federal and state securities laws and 350,000 of which are pledged as
collateral for his employee stock loan. The value of these shares as of
December 31, 1999, without any discount for the transfer restrictions was
$4,743,772.
(2) Includes the lesser of 3% of base compensation or $4,800 which was
contributed by us to each employee's 401(k) plan. For 1999, due to timing
of our bi-weekly pay periods, salary paid includes 1999 salary plus 1/26th
of 1998's salary.
(3) On August 14, 2000, we exercised our rights under our employment agreement
with Mr. Levine, by suspending him and placing him on leave from his
position as president. To replace Mr. Levine, our board of trustees has
appointed L.G. Schafran to the position of interim president and chief
executive officer. Mr. Schafran was also elected to the position of
chairman of the board of trustees on October 13, 2000.
(4) Represents severance payments in settlement of Messrs. Hansen, Schmidt and
Teglia's employment agreements dated December 31, 1998. These amounts
include 2000 bonus payments of $30,903 for Mr. Schmidt, $38,725 for Mr.
Hansen and $26,765 for Mr. Teglia.

Employment Agreements.

Mr. Levine. We entered into an employment agreement with Mr. Levine on
March 11, 1998, although the agreement became effective retroactively as of
October 1, 1997. The term of this agreement expires on December 31, 2001. On
December 14, 1999 we entered into an agreement that would revise the Trust's
employment relationship with Mr. Levine upon a "triggering event" (see below)
and would provide for certain rights upon liquidation of the Trust and the
immediate vesting of all outstanding options. Under the 1997 agreement, we
agreed to pay Mr. Levine a base salary equal to $200,000 per year through
December 31, 1999 increasing to $210,000 per year during the last two years of
the agreement. The 1997 agreement also grants Mr. Levine the ability to earn
annual incentive compensation equal to 62.5% of the base salary each year,
provided that we achieve certain predetermined levels of "funds from operations"
increased by .03 for each one percentage point that our actual per share "funds
from operations" exceed the target and decreased (but not below zero) by .04 for
each one percentage point our actual per share "funds from operations" is below
the target amount.

The 1997 agreement also granted Mr. Levine options to purchase 350,000
shares at an exercise price equal to $5.50 per share. Mr. Levine exercised all
of the options on January 12, 2000. The 1997 agreement also requires us to
provide Mr. Levine with both life and disability insurance benefits during the
term of the agreement, as well as all non-wage benefits we provide generally to
our other salaried employees.

Mr. Levine's 1999 agreement contains provisions that require us to make
certain payments to him upon the occurrence of a "Triggering Event" which is
defined as:

o the date that a Plan of Liquidation of the Trust becomes effective;
o the date on which we sell all or substantially all of our assets;
o the date we merge or enter into a business combination with another entity
if, among other things, we are not the surviving entity; or
o the members of the existing board fail to constitute a majority of the
board.

The 1997 and 1999 agreements also give us the right to terminate or
suspend Mr. Levine under certain circumstances. On August 14, 2000, we suspended
Mr. Levine pursuant to our employment agreement with him and have filed a
lawsuit alleging that Mr. Levinebreached certain fiduciary duties owed to us and
that he committed intentional acts that caused material damage to our business
or properties. Pending a final ruling by a court, we will comply with the
employment agreements including the compensation provisions. To replace Mr.
Levine, our board of trustees appointed L.G. Schafran to the position of
interim president and chief executive officer.

Mr. Schafran. On August 14, 2000, following the suspension of Mr. Levine,
we engaged Mr. Schafran to become our interim president and chief executive
officer. On October 26, 2000, we entered into an employment agreement with Mr.
Schafran, the term of which extends until February 13, 2002, unless sooner
terminated for "cause," by death or disability, voluntarily by Mr. Schafran,
upon a "change in control" of the Trust, or upon Mr. Levine's reinstatement as
our president and chief executive officer.

Under the agreement we will pay Mr. Schafran an annual base salary of
$200,000 and an incentive bonus based on the present value of aggregate
distributions we make to shareholders during the term of the agreement. We will
pay the incentive bonus once our shareholders receive distributions whose
aggregate present value is at least $6.25 per share discounted to October 26,
2000 at 12%. The amount of incentive bonus starts at $300,000 and increases as
the present value of distributions to our shareholders increases. Additionally,
in lieu of the incentive bonus, Mr. Schafran could have received an early
completion bonus equal to $300,000 if our shareholders received distributions
greater than $6.00 per share on or before December 31, 2000. The early
completion bonus would have been reduced to $225,000 had our shareholders
received distributions greater than $6.00 per share after December 31, 2000 but
on or before March 31, 2001. Neither of the early completion bonuses was
achieved.

incentive compensation equal to the amount of incentive compensation he would
have earned had we not terminated his employment, multiplied by a fraction, the
numerator of which is the number of days he had served as our interim president
and chief executive officer and the denominator of which is 548. Finally, if we
terminate the agreement upon our final dissolution and liquidation, we are
obligated to pay Mr. Schafran the amount of base salary he would have earned
through February 13, 2002 and any earned but unpaid incentive bonus based on the
present value of the amount distributed to our shareholders under the plan of
liquidation.

Mr. Higgins. Effective on September 1, 2000, we entered into an employment
agreement with Mr. Higgins whereby he became our first vice president, general
counsel and chief operating officer until October 31, 2002. Mr. Higgins'
employment agreement may be terminated prior to its expiration as follows: (1)
by us for "cause"; (2) by us upon 60 days prior written notice; (3) by our
complete dissolution and liquidation; (4) by Mr. Higgins' death or disability;
or (5) voluntarily by Mr. Higgins. Under the agreement, Mr. Higgins becomes our
full-time employee, however, he is allowed to perform legal services for
clients. Mr. Higgins' initial base salary is $260,000 with automatic 5%
increases on January 1, 2001 and 2002. Unless we terminate Mr. Higgins'
employment for "cause" or Mr. Higgins terminates it voluntarily, upon expiration
of the term of the agreement, we will pay Mr. Higgins a severance payment of one
year's salary and a bonus equal to 50% of the aggregate amount of base salary
Mr. Higgins earned from November 1, 2000 to the end of the agreement. "Cause" is
defined in the agreement as: (1) conduct amounting to fraud or wilful
misconduct, (2) any material act of dishonesty, (3) the conviction of Mr.
Higgins of a felony crime, and (4) a material breach of the agreement by Mr.
Higgins which remains uncured for a period of five business days following
notice of such breach. Additionally, Mr. Higgins may terminate the agreement if:
(A) the members of our board as of the date of the agreement fail to constitute
a majority of the board; (B) our shareholders adopt a plan of liquidation
without our board's approval or recommendation; (C) we sell all of our real
estate properties or business; (D) we combine with another entity and our
shareholders immediately prior to the combination fail to retain a majority of
the voting securities of the surviving entity; (E) any person or entity becomes
the beneficial owner of a majority of our voting shares; (F) we relocate our
executive offices to a location in excess of 100 miles outside of the Chicago
Loop area; (G) we breach the agreement in a material respect which we fail to
cure within five business days of notice of such breach; and (H) a material
diminution of Higgins' duties, responsibilities or authority occurs.

Messrs. Hansen, Schmidt and Teglia. We also had employment agreements with
each of Messrs. Hansen, Schmidt and Teglia. Pursuant to these agreements, we
were obligated to pay Messrs. Hansen, Schmidt and Teglia annual base salaries
equal to $213,040, $176,680 and $138,240 respectively. On October 1, 2000 we
entered into agreements with Messrs. Schmidt and Hansen terminating their
employment and settling all claims for severance pay. On November 1, 2000 we
entered into a new employment agreement with Mr. Teglia.

Mr. Teglia. On November 1, 2000, we entered into a new agreement with Mr.
Teglia whereby he became our executive vice president and chief financial
officer following the annual meeting until October 31, 2002. Mr. Teglia's
agreement may be terminated for the same reasons enumerated in Mr. Higgins'
agreement. Upon execution of the agreement, we paid to Mr. Teglia a severance
payment of $204,765 in settlement of our obligations to him under his prior
employment agreement. Under the new agreement, Mr. Teglia's initial annual base
salary is $181,120, which is increased to $200,000 on January 1, 2001 and
$210,000 on January 1, 2002. Additionally, unless we terminate Mr. Teglia's
employment for "cause" or Mr. Teglia terminates it voluntarily, upon expiration
of the term of the agreement, we will pay Mr. Teglia a bonus equal to 50% of the
aggregate amount of base salary Mr. Teglia earned during the term of the
agreement. The definition of "cause" in Mr. Teglia's agreement is identical to
the definition set forth in Mr. Higgins' agreement.

Stock Option Grants

We did not grant any options to purchase shares of beneficial interest
during the year ended December 31, 2000 to any of our executive officers. On
December 26, 2000 we granted options to purchase shares of beneficial interest
to each of our independent trustees in accordance with our Executive and
Director Stock Option Plan. The table below sets forth the aggregated option
exercises and year-end option value for 2000.

AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE

(a) (b) (c) (d) (e)

Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARS at Options/SARS at
FY-End (#) FY-End ($)

Shares Acquired on Exercisable/ Exercisable/
Name Exercise Value Realized Unexercisable Unexercisable
---- -------- -------------- ------------- -------------

Leonard G. Levine 350,000(1) $65,800 0 / 0 $0 / $0

L.G. Schafran -- --

Jay E. Schmidt 3,334 $ 4,528
36,000(1) $ 0 0 / 0 $0 / $0

Neil D. Hansen 3,334 $ 4,318
36,000(1) $ 0 0 / 0 $0 / $0

Joel L. Teglia 29,000(1) $ 0 3,335 / 0 $4,736 / $0

Note 1. Represents options exercised with the proceeds from a non-recourse loan
offered by us to our employees as of December 31, 1999 at an annual rate of
interest of 6.5%.

All of the options granted vested on December 13, 1999 because there
occurred a "change in control" as that term was defined in our Executive and
Director Omnibus Stock Option Plan. The "change in control" occurred because on
that date, the members of our board as of the effective date of the Plan failed
to constitute a majority of the members of our board. In addition, in December
1999, we offered all of our current employees and advisors who held options the
opportunity to exercise all of the vested but unexercised options with the
proceeds of a loan from us. Each loan is non-recourse and bears interest at an
annual rate of 6.5%. Each person is required to pledge all shares purchased with
the proceeds of the loan to secure the payment of principal and interest on the
loan. We loaned approximately $3.2 million to these persons. All loans will
mature in five years; provided that any person who terminates his or her
employment or whom we terminate is required to repay the loan and all accrued
interest by surrendering the shares securing the loan or by tendering sufficient
funds to pay all amounts owing within one month of terminating employment.
Pursuant to our Severance and Retention Program for non-contract employees, we
have extended the term of any note made by a terminated employee or will extend
the term of any note made by any other employee we choose to terminate, to the
date upon which the last of these notes comes due.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our officers
and trustees, and persons who own more than ten percent of our shares of
beneficial interest, to file reports of ownership and changes in ownership with
the SEC and the Nasdaq, and to furnish us with copies of the form. Based solely
on our review these forms or written representations from the reporting person,
we believe that each trustee, officer and beneficial owner of more than ten
percent of our outstanding common shares complied with these filing requirements
during the fiscal year ended December 31, 2000

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information as of December 14, 2001
regarding the number and percentage of our outstanding common shares
beneficially owned by: (1) each trustee; (2) each executive officer; and (3) all
trustees

and executive officers as a group. The table also sets forth information as of
December 14, 2001 with respect to any person known to us to be the beneficial
owner of more than five percent of our outstanding common shares. Information
with respect to Morgens Waterfall Income Partners, L.P., Kensington Investment
Group, Inc., and Magten Asset Management Corp. listed in the table below,
including the notes, is based on copies of statements filed under Section 13(d)
or 13(g) of the Exchange Act updated as of December 14, 2001 based on
information obtained on NASDAQ On-Line's institutional listing, and we have not
independently confirmed this information. Share amounts and percentages shown
for each person or entity are adjusted to give effect to common shares that are
not outstanding but may be acquired by a person or entity upon exercise of all
options exercisable by such entity or person within sixty days of the date of
the date hereof. However, those common shares are not deemed to be outstanding
for the purpose of computing the percentage of outstanding common shares
beneficially owned by any other person.

- ------------------------------------------------------------------------------------------------------
Amount and Nature of
Name and Address of Beneficial Owner Beneficial Ownership Percent of Class
- ------------------------------------------------------------------------------------------------------

Morgens Waterfall Income Partners, L.P.(1) 3,388,075 21.9%
Restart Partners, L.P.
Restart Partners II, L.P.
Restart Partners III, L.P.
Restart Partners IV, L.P.
Restart Partners V, L.P.
Endowment Restart, L.L.C.
10 East 50th Street
New York, NY 10022

Kensington Investment Group, Inc.(2) 2,045,456 13.2%
Mellon Bank, N.A. as Trustee for the General
Motors Employees Domestic Group Pension
Trust
350 East 21st Street
New York, NY 10010

Magten Asset Management Corp.(3) 580,450 3.7%
Four Orinda Way
Suite 220D
Orinda, CA 94563

Daniel Levinson (4) 3,000 *

Leonard G. Levine 862,504 5.6%
President(5)

Stephen M. Peck (4) 3,000 *

L.G. Schafran 1,000 *
Interim President and CEO(4)

Robert G. Higgins (4)(5) 41,229 *
First Vice President,
General Counsel,
Chief Operating Officer and
Assistant Secretary

Joel L. Teglia 37,037 *
Executive Vice President and
Chief Financial Officer(4)(5)

Walter E. Auch, Sr.(4) 7,000 *

Christopher J. Swieca(6) 17,000 *
Vice President,
Chief Governance and Administrative
Officer, and Secretary

All Trustees and Named Executive Officers of the
Trust, as a group (eight persons) 971,770 6.3%

* less than 1%

(1) Certain affiliates of Morgens Waterfall Income Partners, L.P. have filed
reports with the SEC pursuant to Section 13(d) of the Securities Exchange
Act of 1934, as amended, (the "Exchange Act") indicating combined
ownership of five percent (5%) or more of the outstanding common shares.
As of December 31, 2000, (i)

Morgens Waterfall Income Partners, L.P. owns 83,315 common shares; (ii)
Restart Partners, L.P. owns 418,768 common shares; (iii) Restart Partners
II, L.P. owns 692,830 common shares; (iv) Restart Partners III, L.P. owns
482,350 common shares; (v) Restart Partners IV, L.P. owns 304,758 common
shares; (vi) Restart Partners V, L.P. owns 100,855 common shares; (vii)
Endowment Restart, L.L.C. owns 109,625 common shares. Although John C.
Waterfall and Edwin H. Morgens do not directly own any common shares, each
of them may be deemed an indirect beneficial owner of 2,192,501 common
shares by virtue of their effective control over the operation of each of
the affiliated entities listed above. Furthermore, Morgens Waterfall
Capital, L.L.C. may be deemed an owner of 83,315 common shares by virtue
of its position as general partner of Morgens Waterfall Income Partners,
L.P.

(2) According to filings made with the SEC, Kensington Investment Group, Inc.
("Kensington") is an investment advisor registered under the Investment
Advisors Act of 1940. Kensington has filed reports with the SEC pursuant
to Section 13(d) of the Exchange Act, indicating ownership of five percent
(5%) or more of the outstanding common shares. As of December 31, 2000,
Kensington had sole dispositive power over 2,471,056 common shares, and
sole voting power over 2,471,056 common shares. As of December 14, 2001,
NASDAQ On-Line reported Kensington's ownership portion as 2,045,456
shares.

(3) According to filings made with the SEC, Magten Asset Management Corp.
("Magten") is an investment advisor registered under the Investment
Advisors Act of 1940. Magten has filed reports with the SEC pursuant to
Section 13(d) of the Exchange Act, indicating ownership of five percent
(5%) or more of the outstanding common shares. As of December 31, 2000,
Magten had shared dispositive power over 743,750 common shares, and shared
voting power over 210,150 common shares. As of December 14, 2001, NASDAQ
On-Line reported Magten's ownership portion as 580,450 shares.

(4) Includes options to purchase 7,000 shares for Mr. Auch and 3,000 shares
for each of Messrs. Levinson and Peck and 1,000 shares for Mr. Schafran.

(5) Includes shares purchased on January 12, 2000 pursuant to the
aforementioned employee stock loan program as follows: Mr. Levine, 350,000
shares; Mr. Higgins, 30,335 shares; and Mr. Teglia, 29,000 shares.

(6) Includes 1,000 shares beneficially owned by each of Mr. Swieca's children
- Megan Swieca, Kelsey Swieca and Sadie Swieca.

Legal Proceedings

On August 14, 2000, we exercised our rights under our 1997 employment
agreement with Mr. Levine by suspending him and placing him on leave from his
position as president. Simultaneously, we initiated an arbitration proceeding as
required under the 1997 employment agreement. On October 5, 2000, Mr. Levine
brought an action in the Circuit Court of Cook County, Illinois to halt the
arbitration proceedings by reason of improper forum. On October 18, 2000, we
filed a lawsuit against Mr. Levine in the Circuit Court of Cook County,
Illinois. Our complaint alleged violations of Mr. Levine's duty of loyalty owed
to us.

On December 6, 2000, we and Mr. Levine, through our respective attorneys,
agreed to dismiss the arbitration action and Mr. Levine's lawsuit challenging
the arbitration, and further agreed to resolve all issues under Mr. Levine's
employment contract within the lawsuit we had filed against Mr. Levine in the
Circuit Court of Cook County.

On January 19, 2001, Mr. Levine filed an answer, affirmative defenses and
counterclaim in the litigation. The pleading generally denies that Mr. Levine
breached his fiduciary duties, raises various defenses and seeks a judgment in
favor of Mr. Levine and against us on the counterclaim, for money damages and
also seeks a reinstatement to active employment status. Discovery in this case
has commenced and is continuing.

On May 2, 2001, Mr. Levine presented a motion for partial judgment on the
pleadings, which was denied at a hearing on July 19, 2001. We filed a Third
Amended Complaint on September 6, 2001, seeking, among other things, $300,000 in
compensatory damages and $3 million in punitive damages against Mr. Levine in
connection with various alleged breaches of fiduciary duty. The factual bases
underlying the Third Amended Complaint include allegations that

(i) Mr. Levine caused us to pay on his account or reimburse him for expenses
that were not reasonable, ordinary and necessary business expenses and that were
not non-wage benefits that we provide generally to our other salaried employees;
(ii) during negotiations between us and the Oak Realty Group, Inc. (an entity
solely owned by Mr. Levine) Mr. Levine attempted to pressure us into accepting
Oak's offer to acquire us by revealing to one of the trustees that Oak had
entered into certain confidentiality and exclusivity agreements which had the
effect of excluding potential purchasers and/or capital providers from
purchasing or providing financing to a potential purchaser, except through Oak;
(iii) Mr. Levine's failure to disclose to our board a prior pattern and practice
of obtaining unauthorized expense reimbursements allows the board to rescind Mr.
Levine's 1999 Employment Contract and legally estops Mr. Levine from obtaining
any benefits under that contract; and (iv) Mr. Levine's prosecution of a
shareholder derivative action from January to April of 2001, which action was
resolved by summary judgment in favor of the Trust, amounts to a separate breach
of fiduciary duty by Mr. Levine. On November 1, 2001, Mr. Levine moved to
dismiss three of the counts of our Third Amended Complaint. He subsequently
withdrew the motion as to two counts and sought dismissal only of the count
seeking rescission of the 1999 employment contract. On November 28, 2001, the
court denied the motion to dismiss and ordered Mr. Levine to answer. Mr. Levine
answered the Third Amended Complaint in its entirety on December 12, 2001. On
December 17, 2001, we moved for partial summary judgment on Count I, seeking a
determination by the Court that we have just cause under the 1997 contract to
terminate Mr. Levine's employment. A briefing schedule has been established and
the motion is set for oral argument on April 4, 2002.

On December 13, 2001, we filed a motion seeking a determination from the
Court that we would not waive any defenses under either the 1997 or 1999
contracts by electing to pay Mr. Levine either the $210,000 severance payment
that is due if the 1997 contract expires and Mr. Levine is not employed pursuant
to a written agreement or Mr. Levine's salary under the 1999 contract. Mr.
Levine refused our offer that the parties stipulate that he could elect which of
the payments to receive without prejudicing either his or our rights concerning
the validity or enforceability of the contracts. On December 18, 2001, the court
entered an order which allows us to elect which of the two payment arrangements
we choose to make, without prejudice to the rights of the parties.

On May 7, 2001, we amended our answer to Mr. Levine's counterclaim in the
employment litigation to add several affirmative defenses based upon Mr.
Levine's breaches of his fiduciary duty of loyalty. The maximum potential
liability in connection with Mr. Levine's contract (inclusive of incentives but
exclusive of base salary) is estimated to be approximately $1.8 million.

A case management conference in the employment litigation was held on
October 18, 2001. Judge Siebel of the Circuit Court of Cook County ordered: (i)
all written fact discovery must be concluded by January 31, 2002; (ii) all
non-expert depositions must be concluded by April 30, 2002; and (iii) a further
status hearing for the purpose of setting a date for the close of discovery will
be held on May 17, 2002.

Board of Trustees Report on Executive Compensation

General

Our board of trustees has formed a separate committee to evaluate and make
recommendations regarding executive compensation. This committee is comprised of
Messrs. Auch, Peck and Levinson.

In setting compensation for our executive officers, the committee
considers a number of factors such as the amounts paid to executives who are
employed in similar positions in companies primarily in the real estate industry
with asset size and other characteristics comparable to ours and our overall
business plan. We do not, however, rely on a specific list of entities to make
this comparison.

On August 14, 2000, we suspended Mr. Levine and filed an arbitration
action alleging that he committed intentional acts that caused material damage
to our business or properties. We have also filed suit in the Circuit Court of
Cook County, Illinois, alleging that Mr. Levine breached his duty of loyalty to
us. Pending a final ruling by an arbitrator and the court, we are required to
continue paying Mr. Levine his base salary. In the interim, our board of
trustees appointed Mr. Schafran to the position of interim president and chief
executive officer.

We have determined that it is in the best interests of our shareholders
for us to pursue strategic alternatives designed to enhance shareholder value
and to obtain increased liquidity. As part of this determination, we: (1)
elected not to renew the employment contracts of Messrs. Schmidt and Hansen and
entered into separation agreements with each of them, (2) terminated Mr.
Teglia's former employment agreement and entered into a new one with him, and
(3) entered into employment agreements with Messrs. Higgins and Schafran.

On August 14, 2000, following the suspension of Mr. Levine, we engaged Mr.
Schafran to become our interim president and chief executive officer. The term
of Mr. Schafran's agreement extends until February 13, 2002, unless sooner
terminated for "cause," by death or disability, voluntarily by Mr. Schafran,
upon a "change in control" of the Trust, or upon Mr. Levine's reinstatement as
our president and chief executive officer. A "change in control" occurs if our
current board members fail to constitute a majority of our board (not including
those individuals nominated by our board) or when our shareholders adopt a plan
of liquidation which our board does not approve.

If we terminate Mr. Schafran's employment because Mr. Levine is reinstated
to his former position, we are obligated to pay Mr. Schafran his entire
incentive bonus, based on the present value of the aggregate distributions made
to our shareholders, as though his employment had not been terminated.
Additionally, if we terminate Mr. Schafran's employment due to his death,
disability or a "change in control," we are obligated to pay Mr. Schafran a
portion of the incentive compensation equal to the amount of incentive
compensation he would have earned had we not terminated his employment,
multiplied by a fraction, the numerator of which is the number of days he had
served as our interim president and chief executive officer and the denominator
of which is 548. Finally, if we terminate the agreement upon our final
dissolution and liquidation, we are obligated to pay Mr. Schafran the amount of
base salary he would have earned through February 13, 2002 and any earned but
unpaid incentive bonus based on the present value of the amount distributed to
our shareholders under the plan of liquidation.

Mr. Schmidt was principally involved in acquisition activity, which we no
longer pursue. Mr. Hansen, whose duties included due diligence activities in
connection with acquisitions, is no longer able to fully perform his job duties
due to health reasons. As a result, we believe that we no longer require the
services of either Messrs. Hansen or Schmidt. Additionally, there were certain
ambiguities under each of Messrs. Schmidt and Hansen's former contracts with
respect

to the amount of severance pay we would owe each of them if we decided not to
renew their respective contracts, and it was in our best interests to mutually
resolve the issue by negotiating separation agreements. During 2000, we notified
each of Messrs. Schmidt and Hansen of our intention not to renew their
employment agreements. On October 1, 2000, we entered into separation agreements
with each of them, pursuant to which they each resigned their positions with us
and released any claims they may have against us, in return for a severance
payment of $280,804 to Mr. Schmidt and $342,679 to Mr. Hansen.

We also determined that during this transitional time period, we have a
strong need for stability amongst our remaining executive officers. As such, our
compensation committee negotiated employment agreements with each of Messrs.
Higgins and Teglia. Mr. Higgins has served as our vice president and general
counsel since 1992 and our secretary since 1995. However, since 1997, he has not
been our employee. Instead, we have purchased legal services from Mr. Higgins on
a discounted basis from his normal charges and provided him with office space
and equipment. We believe that Mr. Higgins' salary and bonus under his
employment agreement is less than what we would have had to pay to purchase his
legal services in accordance with our prior arrangement. (See "Employment
Agreements - Mr. Higgins", for a summary of the terms of Mr. Higgins' Employment
Agreement.)

Our compensation committee also decided that it was in our best interests
to enter into a new employment agreement with Mr. Teglia. We believe that Mr.
Teglia is essential to our success in pursuing strategic alternatives and it was
important to increase his salary to be commensurate with the increase in the
amount of time and effort he is required to expend to assist us in this process.
Additionally, there were certain ambiguities under Mr. Teglia's former contract
with respect to the amount of severance pay we would owe him if we decided not
to renew that contract, and it was in our best interests to mutually resolve the
issue by negotiating a severance payment for the former contract and entering
into a new contract. As such, in September 2000, we notified Mr. Teglia that we
were not going to renew his original employment agreement and instead, our
compensation committee authorized Mr. Schafran to negotiate a new employment
agreement with him. (See "Employment Agreements - Mr. Teglia", for a summary of
the terms of Mr. Teglia's Employment Agreement.)

Walter E. Auch, Sr.
Stephen M. Peck
Daniel Levinson

Audit Committee Report

In accordance with its written charter, the Audit Committee assists the
board in oversight of the quality and integrity of our accounting, auditing and
financial reporting practices. A copy of the Audit Committee charter is attached
to this proxy statement as Appendix A.

The Audit Committee consists of three independent members (as independence
is defined by the rules of the NASDAQ) of our board of trustees.

In performing its oversight function, the Audit Committee reviewed and
discussed our audited consolidated financial statement as of and for the year
ended December 31, 2000 with management and Ernst & Young LLP, our independent
auditors. The Audit Committee also discussed with the independent auditors all
matters required by generally accepted auditing standards, including those
described in Statement on Auditing Standards No. 61, as amended, "Communication
with Audit Committees" and, with and without management present, discussed and
reviewed the results of the independent auditors' examination of the financial
statements.

The Audit Committee obtained from the independent auditors a formal
written statement describing all relationships between the auditors and us that
might bear on the auditors' independence consistent with Independence Standards
Board Standard No. 1, "Independence Discussions with Audit Committees." The
Audit Committee discussed with the auditors any relationships that may have an
impact on their objectivity and independence and satisfied itself as to the
auditors' independence. The Audit Committee also inquired into whether Ernst &
Young LLP provides information technology services and other non-audit services
to us and was advised that Ernst & Young LLP does not provide any such services.

Based on the above-mentioned review and discussions with management and
the independent auditors, the Audit Committee recommended to our board that our
audited consolidated financial statements be included in its Annual Report on
Form 10-K for the fiscal year ended December 31, 2000, for filing with the
Securities and Exchange Commission.

The Audit Committee:

Walter E. Auch, Sr.
Stephen M. Peck
Daniel Levinson

Performance Graph

The graph below compares the cumulative total return on our common shares
for the last five fiscal years, with the cumulative total return on the Standard
& Poor's 500 Index and with the National Association of Real Estate Investment
Trusts, Inc. ("NAREIT"), Equity REIT Total Return Index for all equity REITs
over the same period (assuming the investment of $100 in our common shares, the
S&P 500 Total Return Index and the NAREIT Equity REIT Total Return Index on
December 31, 1995, and the reinvestment of all dividends).

Comparison of Five Year Cumulative Total Return
Among the Company, the S&P 500 Total Return Index
and the NAREIT Equity REIT Total Return Index

Year-End Data 1995 1996 1997 1998 1999 2000
------------- -------- -------- -------- -------- -------- --------

BSRT 100.00 103.44 152.62 175.94 205.08 204.85

S&P 500 Index 100.00 122.96 163.99 210.86 255.20 231.96

NAREIT Equity Index 100.00 135.27 162.67 134.20 128.00 161.75
(without Health Care)

Certain Relationships and Related Transactions

During the first eight months of 2000, we paid no salary to, but purchased
legal services from, Robert G. Higgins, our vice president, secretary and
general counsel. We paid Mr. Higgins, in the aggregate, $246,405 for these
services. We also provided Mr. Higgins with office space and equipment. Mr.
Higgins did not pay any rent for the use of office space and equipment. Instead,
Mr. Higgins billed us at a discounted rate. Mr. Higgins also reimbursed us for
the cost of two full-time and certain part-time employees. For the first eight
months of 2000, Mr. Higgins reimbursed us for a total of $136,815. On September
1, 2000, Mr. Higgins became our full time employee, as did the employees whose
salaries were reimbursed to us by Mr. Higgins. During the fiscal year ended
December 31, 2000, we paid Adam Levine, the son of Mr. Levine, $125,916 for
services rendered to us as an employee. We also provided Adam Levine with
benefits customarily provided to our other employees. On October 31, 2000, we
terminated the employment of Adam Levine as part of our Retention and Severance
Program and paid him a severance payment in accordance with that program equal
to $90,762.

On January 12, 2000, our employees exercised their vested options to
purchase 575,337 of our common shares with the proceeds of loans from us. See
"Compensation of Trustees and Executive Officers" for details of the loan
program. The table below shows the original amounts outstanding and the loan
balances on December 31, 2000 due from our executive officers and Adam Levine.

Original Balance at
Name Amount December 31, 2000
---- ------ -----------------

Leonard G. Levine ..... $1,925,000 $1,864,921

Jay E. Schmidt ........ $ 213,500 $ 208,223

Neil D. Hansen ........ $ 213,500 $ 208,223

Joel L. Teglia ........ $ 170,875 $ 166,560

Robert G. Higgins ..... $ 173,735 $ 168,930

Adam Levine ........... $ 95,493 $ 92,691

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

We incorporate by reference herein the following documents filed pursuant to the
Exchange Act under the Exchange Act File No. 0-15465: (1) our annual report on
Form 10-K for the fiscal year ended December 31, 2000; and (2) quarterly reports
on Form 10-Q for the quarters ending March 30, 2001, June 30, 2001 and September
30, 2001. All reports and other documents we file pursuant to Section 13(a)(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Proxy Statement
also shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of filing these reports and documents. Any statement
incorporated or deemed to be incorporated herein shall be deemed to be modified
or superseded for purposes of this Proxy Statement to the extent that any
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes this statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this Proxy
Statement. We will not update this Proxy Statement for events occurring
subsequent to the date of this Proxy Statement.

We hereby undertake to provide without charge to each person to whom a
copy of this Proxy Statement has been delivered, upon written or oral request of
the person, a copy of any or all of the foregoing documents incorporated herein
by reference (other than exhibits to documents, unless these exhibits are
specifically incorporated by reference into the document). Requests for these
documents should be made to the Investor Relations Department at our principal
executive offices located at 2625 Butterfield Road, Suite 101N, Oak Brook,
Illinois 60523; telephone number (630) 218-7250.

SHAREHOLDER PROPOSALS

We have not received any shareholder proposals for inclusion in this
year's proxy statement. If a shareholder wishes to present a proposal to be
included in the proxy statement for the next annual meeting, the proposal must
be submitted in writing and received by our secretary at our offices no later
than August 25, 2002 addressed as follows: Robert G. Higgins or Corporate
Secretary, Banyan Strategic Realty Trust, 2625 Butterfield Road, Suite 101N, Oak
Brook, Illinois 60523.

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

YOUR VOTE IS IMPORTANT. THE PROMPT RETURN OF
PROXIES WILL SAVE US THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES. PLEASE
PROMPTLY MARK, SIGN, DATE AND RETURN THE
ENCLOSED PROXY IN THE ENCLOSED ENVELOPE.

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

APPENDIX A

BANYAN STRATEGIC REALTY TRUST

AUDIT COMMITTEE RESPONSIBILITIES

Organization

The audit committee shall be composed of board members who are independent
of the management of Banyan Strategic Realty Trust (the "Company") and are free
of any relationship that would interfere with their exercise of independent
judgment as a committee member.

Statement of Policy

Senior operating management of the Company, as overseen by the board of
directors, is responsible for the Company's internal controls. The audit
committee shall assist the Company's board members in fulfilling their
responsibility to the shareholders, potential shareholders and investment
community relating to the reliability of financial reporting, the effectiveness
and efficiency of operations, and compliance with applicable laws and
regulations. In so doing, the audit committee shall be responsible for
maintaining open communication among board members, the independent auditors and
the management of the Company.

Responsibilities

In carrying out its responsibility, the audit committee will:

o Review and recommend to the board the independent auditors to be
selected to audit the financial statements of the Company. In
addition, the committee will review the auditors' fees to determine
whether they are appropriate for the services they render.

o Meet with the independent auditors and management of the Company to
review the scope of the proposed audit for the current year and the
audit procedures to be performed.

o Meet with the independent auditors and management of the Company at
the conclusion of the audit to review the results of the audit,
including any comments or recommendations of the independent
auditors.

o Confirm and assure the independence of the independent auditors and
review any management consulting services provided by the
independent auditors and the related fees.

o Review with the independent auditors and with the financial and
accounting personnel the adequacy and effectiveness of the Company's
internal controls and elicit any recommendations for improving the
internal controls or particular areas where new or more detailed
controls or procedures are desirable.

o Review legal and regulatory matters that may have a material effect
on the financial statements.

o Inquire of management and the independent auditors regarding
significant risks or exposures, and assess the steps management has
taken to minimize such risks and exposures to the Company.

o Review the financial statements contained in the annual report to
shareholders with management and the independent auditors.

o Inquire of the independent auditors regarding their qualitative
judgments about the appropriateness, not just the acceptability, of
the accounting principles and the clarity of the financial
disclosures. Also inquire of the auditors regarding their reasoning
in accepting or questioning management's significant estimates,
changes or proposed changes in accounting principles, and disclosure
practices management employs for new transactions or events.

o Provide sufficient opportunity at all meetings of the audit
committee for the independent auditors to meet with the members of
the audit committee without members of management present. Among the
items to be discussed in these meetings are the independent
auditors' evaluation of the Company's financial personnel and the
cooperation which the independent auditors received during the
course of the audit.

o Consider whether audit committee members are provided with
appropriate background information and training and, when necessary,
seek such information and training from management or the
independent auditors.

o Submit the minutes of all meetings of the audit committee to the
board.

o Investigate any matter brought to its attention within the scope of
its duties, with the power to retain outside counsel for this
purpose if, in its judgment, that is appropriate.

Please mark your | 4201
|X| votes as |
in this example. ---

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR EACH PROPOSAL.

- --------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR eachod the proposals below
- --------------------------------------------------------------------------------

FOR WITHHOLD FOR AGAINST ABSTAIN
1. ELECTION OF NOMINEES: 2. Ratify the selection of Ernst &
TRUSTEES |_| |_| 01 Walter E. Auch, Sr. Young LLP as our independent |_| |_| |_|
02 Stephen M. Peck public accountant for the fiscal
03 Daniel M. Levinson year ending December 31, 2001.
04 L.G. Schafran

For, except vote withheld from the following nominees:

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

NOTE: Sign exactly as name appears at left. If joint
tenant, both should sign. If attorney, executor,
administrator, trustee or guardian, give full
title as such. If a corporation, please sign
corporate name by President or authorized officer.
If partnership or limited liability company, sign
in full entity name by authorized person

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

---------------------------------------------------------
SIGNATURE(S) DATE

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^ FOLD AND DETACH HERE ^

BANYAN STRATEGIC REALTY TRUST

Dear Stockholder:

We encourage you to vote your shares electronically this year either by
telephone or via the Internet. This will eliminate the need to return your proxy
card. You will need your proxy card and Social Security number (where
applicable) when voting your shares electronically. The Voter Control Number
that appears in the box above, just below the perforation, must be used in order
to vote by telephone or via the Internet.

The EquiServe Vote by Telephone and Vote by Internet systems can be accessed
24-hours a day, seven days a week up until the day prior to the meeting.

To Vote by Telephone:

Using a touch-tone phone call Toll-free: 1-877-PRX-VOTE(1-877-779-8683)

To Vote by Internet:

Log on to the Internet and go to the website: http://www.eproxyvote.com/BSRTS

Note: If you vote over the Internet, you may incur costs such as
telecommunication and Internet access charges for which you will be responsible.

THANK YOU FOR VOTING YOUR SHARES.
YOUR VOTE IS IMPORTANT!

Do Not Return this Proxy Card if you are Voting by Telephone or the Internet.

BANYAN STRATEGIC REALTY TRUST
2625 Butterfield Rd.
Suite 101N
Oak Brook, Illinois 60523

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Robert G. Higgins and L.G. Schafran, and each of
them, as Proxies, with the power to appoint their substitutes, and hereby
authorizes them to represent and to vote, as designated on the reverse side, all
the Common Shares of Beneficial Interest of Banyan Strategic Realty Trust held
of record by the undersigned on December 14, 2001, at the Annual Meeting of
Shareholders when convened on January 30, 2002, or any adjournment thereof.

This Proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. If no direction is made, this Proxy will be
voted for each of the proposals set forth herein. In the event that any other
matter may properly come before the Annual Meeting, or any adjournment thereof,
the Proxies are authorized, in their discretion, to vote on the matter.

[Continued on the reverse side.]

- --------------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^