UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K

(MARK ONE)

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
(FEE REQUIRED)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998 OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

FOR THE TRANSITION PERIOD FROM ________________ TO
________________

COMMISSION FILE NUMBER 1-12630
CENTERPOINT PROPERTIES TRUST

(Exact Name of Registrant as Specified in its Charter)

MARYLAND 36-3910279
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) No.)

1808 SWIFT DRIVE, OAK BROOK, ILLINOIS 60523
(Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code:
(630) 586-8000

Securities registered pursuant to Section 12(b) of the
Act:

NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
- ------------------------------------------- ---------------------------

Common Shares, par value $.001 New York Stock Exchange
8.22% Convertible Subordinated Debentures
due 2004 New York Stock Exchange
8.48% Preferred Shares, par value $.001 New York Stock Exchange
Preferred Share Purchase Rights, with
respect to common shares, par $.001 New York Stock Exchange

FORM 10-K

Securities registered pursuant to Section 12(g) of the
Act:

NONE
(Title of Class)

Indicate by check mark whether the registrant (1)
has filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter
period that the registrant was required to file such
reports), and (2) has been subject to such filing
requirements for the past 90 days. /X/ Yes / / No

Indicate by check mark if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K
(Section229.405 of this chapter) is not contained
herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or
information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this
Form 10-K. / /

As of March 11, 1999, the aggregate market value of
the voting stock held by non-affiliates of the
registrant was $626,643,360 (based on 19,582,605 shares
held by non-affiliates and computed by reference to the
reported closing price).

The registrant had 20,164,250 shares of its common
stock, $.001 par value, outstanding as of March 11,
1999.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of Common Stock and Debenture Prospectuses
of the registrant, dated December 3, 1993, and a Common
Stock Prospectus of the registrant, dated January 19,
1995, each filed pursuant to Rule 424 under the
Securities Act of 1933, as amended, portions of the
Registration Statement on Form S-3 dated January 6,
1997, portions of the registrant's Form 10-Q for the
quarter ended September 30, 1995, portions of the 10-K
for the year ended December 31, 1995 and portions of
the 10-Q for quarter ended September 30, 1996 are
incorporated by reference into Part IV of this Annual
Report on Form 10-K. A portion of the registrant's
definitive proxy statement is incorporated by reference
into Part III of this Annual Report on Form 10-K.

TABLE OF CONTENTS

PAGE
-----

PART I
- ------------------------------------------------------------------------------------------------------------------------

Item 1. Business....................................................................................... 1

Item 2. Properties..................................................................................... 10

Item 3. Legal Proceedings.............................................................................. 18

Item 4. Submission of Certain Items to a Vote of Security Holders...................................... 18

PART II
- ------------------------------------------------------------------------------------------------------------------------

Item 5. Market for Registrant's Common Equity and Related Matters...................................... 19

Item 6. Selected Historical Financial Data............................................................. 19

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.......... 22

Item 7A. Quantitative and Qualitative Disclosures about Market Risk..................................... 27

Item 8. Financial Statements and Supplementary Data.................................................... 28

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure........... 28

PART III
- ------------------------------------------------------------------------------------------------------------------------

Item 10. Directors and Executive Officers of the Registrant............................................. 29

Item 11. Executive Compensation......................................................................... 29

Item 12. Security Ownership of Certain Beneficial Owners and Management................................. 29

Item 13. Certain Relationships and Related Transactions................................................. 29

PART IV
- ------------------------------------------------------------------------------------------------------------------------

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K................................ 30

PART I

ITEM 1. BUSINESS.

THE COMPANY

CenterPoint Properties Trust ("CenterPoint" or the "Company"), a publicly
traded real estate investment trust (REIT), is the first major REIT to focus on
the industrial sector. CenterPoint is focused on providing unsurpassed tenant
satisfaction, and adds value to its shareholders through customer-driven
management, investment, development, and redevelopment of warehouse, light
manufacturing, and industrial facilities. The Company believes it is the largest
owner and operator of warehouse/industrial property in the 1.25 billion
square-foot Greater Chicago Region, the largest and most diverse industrial
market in the United States. The Company is a Maryland business trust and is
listed on the New York Stock Exchange.

A predecessor of CenterPoint began operations in 1984 as the principal
division and U.S. subsidiary of United Kingdom-based Capital and Regional
Properties. The stock of Capital and Regional was publicly traded on the London
Exchange in 1986, providing the Company with the longest public market history
of any industrial REIT. CenterPoint completed its initial U.S. public offering
after consolidating its operations with, and acquiring the properties controlled
by, FCLS Investors Group, a Chicago-based industrial development company with 30
years local experience.

In July 1998, the Company consolidated its three regional offices into
redeveloped warehouse space in suburban Oak Brook, Illinois, centrally located
in the Chicago region. Intentionally, all of CenterPoint's assets are located
within a two-hour drive of its headquarters. The Company believes that its
geographic focus has enabled rapid and entrepreneurial response to market
opportunities and has fostered constant interaction among tenants and management
in furtherance of the Company's focus on customer satisfaction, which anchors
CenterPoint's strategy.

BUSINESS OBJECTIVES AND GROWTH PLANS

The Company's fundamental business objective is to maximize total return to
shareholders through increases in per share distributions and increases in the
value of the Company's franchise. The Company's goal is to sustain strong growth
in per share funds from operations ("FFO"), with accompanying growth in per
share distributions and share value. To achieve this objective, the Company
pursues complementary operating, investment, disposition and financial
strategies:

- PORTFOLIO OPERATIONS. The Company seeks to grow its results from
operations by increasing revenues through lease renewals or replacements
at increased rental rates and by increasing occupancy where vacancies
exist. The Company believes above average rental growth is primarily
achievable because the Company's focus on tenant service generates higher
renewal and occupancy rates. Moreover, the Company's size, Chicago focus
and market penetration provide superior access to favorable leasing
transactions and investments offering below market rents and growth
opportunities. The Company's property investments as of December 31, 1998
was leased at an average net rental rate of $3.57 per square foot,
approximately 25% below the average market rental rate (published by CB
Richard Ellis)of $4.67 per square foot.

- INVESTMENT. The Company believes that per share growth is maximized
through investment activity concentrating on properties offering immediate
cash yields above its long term cost of capital, with the potential for
rapid yield growth. The Company seeks to invest exclusively in warehouse/
industrial properties that satisfy its yield and growth objectives through
the lease up of vacancy, property expansion, redevelopment, or the
development or disposition of surplus land. The Company strictly limits
speculative investment.

- DISPOSITIONS. Management undertakes to maximize the yield on invested
capital by aggressively selling properties where growth has been achieved
and where future prospects for growth are limited. As an allied strategy,
the Company undertakes the development of buildings for immediate sale to
users or investors. These "merchant" transactions provide attractive fees
and profits for reinvestment in the Company's "core" value added business.

- FINANCIAL. The Company maintains conservative financial and leverage
policies to provide financial capacity and flexibility. This strategy
facilitates opportunistic investment by helping assure substantial in
place liquidity. The Company and its affiliates maintain lines of credit
of $300 million. The Company's financial strategy also allows it to secure
capital in the most favorable markets. CenterPoint benefits from
investment grade ratings on its senior unsecured debt and preferred
securities, providing substantial execution efficiency and a lower overall
cost of capital.

- MANAGEMENT CONTROLS AND SYSTEMS. The Company's strategy also seeks growth
by controlling expenses through the implementation of efficient
information and governance systems. The Company has invested in state of
the art systems, which it seeks to continually improve. The Company also
believes that it enjoys operating efficiencies attributable to the scale
of its operations and Chicago market focus, generating greater rates of
cash flow growth and retention.

BUSINESS FOCUS

As CenterPoint continues to grow, its mission remains to become the
industrial landlord of choice in the Greater Chicago region. CenterPoint
endeavors to achieve this goal by cultivating and maintaining long-term
relationships with its tenants. The Company, highly responsive to the changing
needs of its tenants, is always prepared to meet any challenge, and is
continually innovating processes and procedures to enhance mutual growth.
CenterPoint seeks to provide high-quality, attractive space at competitive
rates; unwavering attention to the care and maintenance of its properties;
operating charges that reflect economic responsibility; and rapid response to
expansion, relocation and other space requirements. CenterPoint maintains a 93%
tenant retention rate, confirming its commitment to tenant satisfaction, and in
turn, increasing both cash flow and the value of the portfolio.

Underpinning the value of CenterPoint's portfolio is the strength of its
internal resources. Key among these is management experience. CenterPoint's
management staff averages 20 years of experience in the industry. Enabled by
strong ties to the real estate development community, an in-depth knowledge of
the market sector, and the ability to gauge and anticipate market trends,
management can creatively and flexibly accommodate tenant requirements in a
manner that is mutually beneficial.

In order to successfully execute its business strategies, CenterPoint
adheres to the five following disciplines:

FOCUS ON INDUSTRIAL REAL ESTATE. The Company focuses on
warehouse/industrial properties, because management believes this property type,
for the following reasons, offers consistently attractive returns and stable
cash flow:

- LOW CAPITAL REQUIREMENTS. The cost per square foot of developing
warehouse/industrial properties typically ranges between $40-45 per square
foot, which is lower than the cost of developing other types of property.
From the Company's perspective, this results in less capital committed to
any particular property, permitting greater diversification of the
Company's risk. In addition, relative to other property types, fewer
tenant improvements are required to renew or lease warehouse industrial
space, minimizing the level of recurring capital expenditures necessary to
sustain rental income.

- HIGH LEVEL OF TENANT INVESTMENT. Unlike office, retail and multi-family
buildings, most warehouse/ industrial buildings are occupied by a single
tenant. Relocation tends to be costly for tenants of warehouse/industrial
properties because of high tenant investment in production set up
expenses,

machinery and other site specific improvements (in many cases higher than
the landlord's investment). To avoid these costs, tenants typically lease
space that exceeds their immediate needs or space in buildings that are
readily expandable. Tenant retention and expansion therefore tend to be
higher than for other property types.

- FAVORABLE LEASE TERMS. Warehouse/industrial buildings generally are leased
on a "triple net" basis, under which tenants are contractually obligated
to pay directly, or reimburse the landlord, for virtually all costs of
occupancy, including property taxes, utilities, insurance and maintenance.
In addition, the leases generally provide for rent growth through
contractual rent increases or increases tied to certain indices such as
the Consumer Price Index.

- SUPPLY BUILT ON DEMAND. The comparatively short development period for
industrial buildings (typically six to nine months) relative to other
property types has resulted in less speculative building and, therefore, a
supply of industrial property that more closely corresponds to tenant
demand. This has kept vacancy levels on average lower than for other
property types and has produced greater rental rate stability.

- LIMITED COMPETITION. Higher overall investment returns are more achievable
for warehouse/industrial property than other property types because such
assets, typically $3 million to $6 million in purchase price, are too
small to justify institutional attention. The Company's typical competitor
for assets of this size is a sponsor of a single asset partnership that
typically has a higher cost of capital and less financial flexibility than
the Company.

FOCUS IN GREATER CHICAGO. CenterPoint's target market, Greater Chicago, is
comprised of the region within a 150-mile radius of the City of Chicago,
including Milwaukee, Wisconsin and South Bend, Indiana. It lies at the center of
one of the nation's principal population and production regions.

With over 1.5 billion square-feet of industrial/warehouse space (according
to a ranking of markets published by Torto Wheaton Research and CB Richard
Ellis), Greater Chicago has become the largest and most diverse
warehouse/industrial market. In addition to its size and geographic location,
the Midwest possesses certain critical components such as transportation
advantages, business diversity, favorable economic trends, and thriving real
estate market conditions. These factors have supported the Company's continued
strong leasing, acquisition, and development activity. As a result, Greater
Chicago offers significant opportunities for investment in, and ownership of,
warehouse/industrial property.

- TRANSPORTATION ADVANTAGES. The Midwest's transportation network is
integral to its status as a manufacturing and distribution center. The
area has achieved its prominence as a result of its central continental
location, as well as its extensive roadway, rail, air, and water
transportation infrastructure. This infrastructure connects Greater
Chicago with a contiguous 13-state region consisting of Illinois,
Wisconsin, Michigan, Ohio, Pennsylvania, West Virginia, Tennessee,
Kentucky, Indiana, Missouri, Iowa, Nebraska and Minnesota.

Seven major east-west or north-south interstate highways either terminate
or pass through the Greater Chicago region, making it the nation's largest
trucking market. This infrastructure accommodates approximately 418,000
truck movements per day. In Chicago alone, approximately 220,000 cross-town
truck trips are made to move containers between rail terminals annually.
CenterPoint expects Greater Chicago will soon see further growth as the new
administration of Governor George Ryan accelerates the expansion and
improvement of metro Chicago's expressway and other infrastructures.

Intermodal, which involves the movement of goods by two or more modes of
transportation, is re-emerging as a very attractive distribution channel.
Rail service and marshalling yards in the Midwest handle approximately 75%
of nation's rail freight, making Chicago a major hub for intermodal freight
transportation. Nearly half of all intermodal rail shipments originate,
terminate, or connect there. Currently, it is the fastest growing part of
the rail industry, and most rail yards

have already been converted to handle intermodal traffic. On a daily basis,
Chicago alone handles nearly 23,000 freight cars and 13,500 intermodal
freight containers and truck trailers, far more than any other city.

O'Hare International Airport, located within Chicago's city limits, is one
of the country's fastest growing airfreight hubs, and has spurred the
expansion of this industry in the region. The efficiency and quick
turn-around time of airfreight has made it the delivery method of choice
for many shippers. By handling 3,722 tons of airfreight per day, in
addition to the 70 million commercial passengers it serves annually, O'Hare
has earned its moniker of "the world's busiest airport".

Lastly, Chicago is also a major gateway for waterborne freight. The Port of
Chicago estimates that it ships in excess of 25 million tons of freight
annually.

- DIVERSITY OF BUSINESSES. Published census data indicate that Greater
Chicago is the dominant economic, work, and population center of this
region. Not only does the Chicago region contain the nation's largest job
market, but one-third of the nation's Gross Domestic Product is created
and consumed within 8 hours of Chicago, making it one of the most
important export hubs in the nation. Many of the exports are of
manufactured goods made in the state of Illinois. In 1997, total exports
grew by 5.4% to $23,210 million, a greater increase than during the
previous year. Home to over 59,000 industrial and commercial firms,
Chicago is second only to New York in the number of Fortune 500 corporate
headquarters. Virtually all of the "Global 1000""maintain facilities in
the Chicago metro area.

The diversity of businesses in the Midwest provides the Company with the
opportunity to capitalize on different trends affecting real estate demand
and usage in a wide range of industries. An assorted tenant base also
lessens the Company's cyclical risk, reducing its exposure to changes in
the fortunes of any single type of business.

For example, manufacturing companies are one component of the Company's
tenant mix. Greater Chicago's manufacturing base is extremely diverse, with
nearly equal shares of durable and non-durable industries in a broad mix of
old-line and high-tech manufacturing. In recent years, Chicago has had
great success in attracting manufacturing expansions because manufacturers
benefit from Chicago's well-developed transportation systems and
distribution network. Zoning initiatives have further encouraged
manufacturing activity by producing Planned Manufacturing Districts (PMDs)
in the city proper.

However, as in other large industrial metropolitan areas, Greater Chicago's
diversity has been increasing with the transformation from a manufacturing
to a service-based economy. The diversification has accelerated during the
current expansion as growth has been driven by service industries.

- FAVORABLE ECONOMIC TRENDS/CHARACTERISTICS. Manufacturing, productivity,
business investment, capacity utilization, and employment trends in the
Midwest region of the U.S. and in Greater Chicago are positive. The
Midwest has also recorded increases in industrial employment
opportunities, and has exceeded the rates of growth of the United States
as a whole. These trends are favorable indicators of continuing growth in
the warehouse/industrial property market.

In recent months, the unemployment rate in Chicago has averaged only 4.3%,
about equal to the national rate. Job creation has helped to keep the
jobless rate this low.

Business services in particular have expanded strongly due to the
concentration of headquarters operations in the metro area, as well as the
growth of the computer software industry. Business services account for 40%
of the new jobs created in the Chicago economy during the past year.

The concentration of high technology employment ranks Chicago third in the
nation. Of all the metro areas in the Midwest, the Chicago economy has been
most successful in developing its

high-technology industries. The Chicago metro area, in particular, has a
concentration of information technology businesses involved in every aspect
of digitally based products and services such as software, electronic
commerce, computer hardware, and telecom services. The number of Chicago-
based information technology companies has increased by one-third since
1992 and employment has increased by more than 20%. Growth in high tech
services is expected to remain strong.

Chicago is also the largest financial center for commodities in the United
States. The Chicago Board of Trade (CBOT) is the world's largest
commodities exchange and the Chicago Mercantile Exchange (CME) is the third
largest.

- REAL ESTATE MARKET CONDITIONS/WAREHOUSE SUPPLY & DEMAND.Favorable trends
in growth, business investment, utilization, and employment in the Midwest
have resulted in increased space demand and increasing rents. Although the
Company believes it is the largest owner and operator of
warehouse/industrial property in Greater Chicago, its portfolio
represented less than 2% of the market (based on square footage) as of
December 31, 1998. In a 1.25 billion square-foot industrial market, this
allows substantial opportunities for future growth.

Geographic concentration provides significant business efficiencies for the
Company. As a primary owner of warehouse/industrial property located in
most major Greater Chicago submarkets, the Company is able to market
multiple locations and buildings, and consequently has a competitive
advantage in securing leasing opportunities. Operating economies of scale
resulting from geographic concentration enhances the Company's ability to
offer lower occupancy costs to its tenants. The Company's focus on
warehouse/industrial properties in Greater Chicago also enables the
expansion of its portfolio without a corresponding increase in general and
administrative expense.

According to CB Richard Ellis, during 1998 Chicago's industrial property
market added 33.5 million square feet, the fifth consecutive year of 30.0
million square feet or greater gross absorption. Gross regional absorption
was approximately 38.0 million square feet and 75% of the transactions were
from new leases. In the fourth quarter of 1998 the overall nominal
industrial vacancy rate in Chicago was 6.9%, a decrease of 100 basis points
from the fourth quarter of 1997. However, the effective vacancy rate (net
of obsolete and environmentally tainted properties) remained less than 4%
overall.

FOCUS ON TENANT SATISFACTION. To become the landlord of choice in the
Greater Chicago Region, the Company strives to provide the highest possible
service to its tenants by addressing its tenants' occupancy needs and meeting
their evolving space requirements. Management believes tenant satisfaction,
resulting from the Company's "hands on" management approach, fuels rental
revenues by increasing tenant retention, minimizing re-letting expense and
facilitating rental increases. Management also believes that tenant satisfaction
creates profitable expansion and build-to-suit opportunities from existing
tenants.

The Company views tenant service as a key factor in its business and has
established tenant satisfaction as one of its primary corporate goals. To
develop its tenant franchise, the Company provides a variety of tenant services:
high quality, attractive space; promptly and fairly attending to tenant building
or billing concerns; obtaining the lowest possible utility, insurance and real
estate tax charges; and responding rapidly to expansion or space reconfiguration
requests.

The Company's tenant service strategy benefits from the size and
concentration of the Company's real estate holdings in Greater Chicago. As a
large owner of warehouse/industrial properties in a single geographic market,
the Company believes it can obtain for its tenants the benefits of bulk purchase
of goods and services. Management believes that minimizing tenants' occupancy
costs builds tenant loyalty and provides the Company with a significant
marketing advantage.

To motivate employees to provide the highest level of tenant service, the
Company has established a pay-for-performance compensation plan under which the
incentive pay of each participating employee depends in part on the results of
an annual tenant satisfaction survey, independently administered by

CEL & Associates and the Company's independent trustees. Employee incentive pay
is also dependent on the achievement of targeted per share funds from operations
and the results of a company-wide audit pertaining to the implementation of
internal processes and procedures, all of which the Company believes is enhanced
by tenant service.

FOCUS ON VALUE-ADDED INVESTMENTS. The Company seeks to acquire
warehouse/industrial properties that have an initial cash yield greater than the
Company's long term cost of capital (currently estimated to be 9.5% to 10.5%),
that offer the best opportunity for cash flow growth, and that meet the
Company's investment criteria. Management has established strategies for
responding to every stage of the economic cycle, altering its investment
emphasis through the recovery, strong economy, and recession phases. This
ensures that when conditions change, the Company is well prepared to meet the
needs of its clients with minimal reaction time. All investment activities are
focused on creating value for its tenants by providing high quality and
efficient facilities at attractive rental rates

- RECOVERY . ACQUISITIONS. During a recovering economy, CenterPoint acquires
existing leased generic industrial buildings that are suitable for a wide
variety of tenant uses. Traditionally, the seller is a company that is
growing rapidly and can better invest its capital in its own business
rather than in owning bricks and mortar. CenterPoint takes on that
responsibility and enhances the facility through professional management.

- STRONG ECONOMY . BUILD-TO-SUITS. During a strong economy, many tenants
want to expand their space. As a result of the comfort level achieved
through CenterPoint's long-term relationships with their tenants, as well
as constant communication, the Company can ascertain the specific
requirements of the tenant's future home. It can then be designed and
built in the right location, on time, and within budget.

- RECESSION . RE-DEVELOPMENTS. During a weaker economy, companies, on
average, want to shrink capacity. Therefore, CenterPoint has developed a
number of refinements within older, economically viable properties,
completely rebuilding an existing facility within a tenant's time frame.
By understanding their tenant's business needs, the Company can envision
the potential of a building and match it to the market.

In September 1998, the Company developed an Airport Properties division to
facilitate the expansion of its portfolio of air cargo facilities and other area
airport related investments. CenterPoint believes it is the pre-eminent private
sector provider, owner, and manager of airfreight and airport-related facilities
in the Chicago region.

CenterPoint's land inventory consists of approximately 300 acres in various
submarkets throughout the Chicago Market upon which 5 million square feet could
be developed. In addition, 1,800 acres of land at the former Joliet Arsenal is
under contract. Currently, this project is undergoing extensive economic,
environmental and property due diligence, including a determination of whether
government agencies will provide the necessary infrastructure to support the
industrial development of the property.

In addition to revenues from value-added investments, the Company earns fees
from the development of assets for purchase by tenants and institutions.
Typically, these transactions have yields below the Company's investment return
hurdle, but offer substantial profit opportunities relative to the level of
required capital and management time. The Company believes it is afforded these
opportunities as a consequence of the size of its existing portfolio and its
market penetration. The Company's fee development business has been, and is
expected to continue to be, a recurring source of revenue.

FOCUS ON OPERATIONS. The Company is a full service real estate company with
an entire staff responsible for managing its entire real estate portfolio. Six
regions, each serving a particular segment of Greater Chicago, are operated by a
team consisting of a regional manager, a property manager, administrative
assistant and accounting support personnel who are required to visit each
tenant, on site, at least once every 90 days.

The Company believes it derives its competitive advantage from its market
penetration, local expertise, tenant relationships and quality reputation with
the Greater Chicago area. Another competitive advantage is its "state of the
art" information system which fully integrates corporate, property management
and accounting systems, enabling the Company to monitor and project each asset
and its financial performance. The Company believes this long-term platform is
capable of supporting its operating and financial objectives as well as its
continued strong growth.

The Company's believes its dedication to efficient internal processes and
"back of the house" practices has resulted in significant improvement to
operating margins. As of December 31, 1998, Net Revenue margin increased to
88.5% from 87.9%; EBITDA margin increased to 64.9% from 62.6%; and Net Operating
Income ("NOI") margin increased to 65.8% from 63.8%.

FOCUS ON CONSERVING CAPITAL. The Company seeks to create and maintain
substantial balance sheet capacity, which provides the Company flexibility to
opportunistically tap favorably priced capital to support accretive investments.
The Company believes it can maximize internal capital formation by (i) investing
at yields above its long term cost of capital; (ii) pursuing current and future
long-term debt financings and refinancings on an unsecured basis; and (iii)
redeploying its capital through asset sales. The Company will seek, where
possible, to sell properties in transactions intended to qualify as tax-free
exchanges under applicable provisions of the Internal Revenue Code and re-deploy
the proceeds of such sales in properties with higher yielding opportunities
where the Company believes significant value can be added.

The Company targets a ratio of long-term debt to total market capitalization
of 25% to 40%, and a ratio of earnings before interest, taxes, depreciation and
amortization ("EBITDA") to debt service and fixed charges of 3.0 and 2.5 times
or higher, respectively. For the year ended December 31, 1998, the Company's
ratio of EBITDA to debt service was 5.7 and the ratio of EBITDA to fixed charges
was 3.8.

TRANSACTIONS DURING 1998

During 1998, the Company accomplished the following:

1998 ACQUISITIONS AND DISPOSITIONS. During 1998, the Company acquired or
completed development of 31 warehouse/industrial properties totaling 3.2 million
square feet and approximately $92.8 million in total investment. Also in 1998,
the Company disposed of 5 warehouse/industrial properties totaling approximately
726,000 square feet for approximately $31.4 million. In addition, during 1998
the Company sold approximately 32 acres of undeveloped land for approximately
$21 million.

1998 SECURITIES ACTIVITIES:

- On March 25, 1998, the Company completed a public offering of 370,371
common shares of beneficial interest at $32.0625 per share in an
underwritten offering to a unit investment trust. Net proceeds from the
offering after the underwriting discounts were approximately $11.8
million. The proceeds were used to repay a portion of amounts outstanding
under the Company's line of credit co-led by The First National Bank of
Chicago and Lehman Brothers Holdings Inc.

- On April 8, 1998 the Company completed a private placement to an
institutional investor of 370,000 common shares of beneficial interest at
$33.375 per share. The net proceeds of the offering of approximately $12.1
million were used to fund working capital requirements.

- In July, 1998, the Board of Trustees approved a shareholder protection
plan (the "plan"), declaring a dividend of one right for each share of the
Company's common shares outstanding on or after August 11, 1998.
Exercisable 10 days after any person or group acquires 15 percent or more
or commences a tender offer for 15 percent or more of the Company's common
shares, each right entitles the holder to purchase from the Company one
one-thousandth of a Junior Preferred Share of Beneficial Interest, Series
A (a "Rights Preferred Share"), at a price of $120, subject to adjustment.
The Rights Preferred Shares (1) are non-redeemable, (2) are entitled to a
minimum

preferential quarterly dividend payment equal to the greater of $25 per
share or 1,000 times the Company's common share dividend, (3) have a
minimum liquidation preference equal to the greater of $100 per share or
1,000 times the liquidation payment made per common share and (4) are
entitled to vote with the common shares with each Rights Preferred Share
having 1,000 votes. 50,000 of the Company's authorized preferred shares
have been designated for the Plan.

1998 FINANCINGS. On April 5, 1998 the Company issued $100 million of 6.75%
senior unsecured notes due April 1, 2005. The net proceeds of $99 million were
used to repay substantially all amounts outstanding under the Company's line of
credit co-led by The First National Bank of Chicago and Lehman Brothers Holdings
Inc. In November 1998, the Company increased its unsecured credit facility to
$250 million.

SUBSEQUENT TRANSACTIONS

On March 15, 1999, the Company issued $100 million in senior unsecured
notes, due March 15, 2004 and bearing interest at 7.142%. The notes are co-lead
by Lehman Brothers Holdings, NationsBanc Montgomery Securities LLC, First
Chicago Capital Markets and First Union Capital Markets. The net proceeds of the
issuance of approximately $99.3 million were used to pay down the Company's line
of credit.

Since December 31, 1998, 1,321,286 non-voting Class B Shares converted to
voting shares.

EMPLOYEES

At February 12, 1999, the Company had 123 full-time and 25 part-time
employees. Of the full-time employees, 107 are involved with property
management, operations, leasing and acquisition activities, 8 are involved with
general financial administration, financing activities, reporting and
acquisition analysis, and 8 are clerical workers. Currently, the Company's
employees provide all property management activities. The Company does not
intend to enter into any agreement with any entity or person relating to such
services. However, the Company's Declaration of Trust does not contain any
prohibition on the use of third parties to perform such services, and such
services may therefore be performed by third parties in the future.

ENVIRONMENTAL MATTERS

Under the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA"), as well as similar state and local laws,
owners and operators of property, both past and present, may be held financially
responsible for the investigation and, if appropriate, the remediation of
releases or threatened releases of hazardous substances into the environment.
Other parties who arranged for the disposal of hazardous substances or
transported hazardous substances for disposal at a property also may be held
liable. Liability under CERCLA and similar laws is strict, joint and several
unless a legally and factually sufficient basis for apportionment is
demonstrated and in most instances, liability may be imposed without regard to
the party's culpability concerning the presence of hazardous substances at the
property. Potentially responsible parties may be liable to one another, the
government and under some circumstances, third parties.

To the extent the Company in the future may incur hazardous substance
response costs in connection with any of its properties, the Company may seek to
recover such costs from responsible parties under CERCLA. Costs recoverable
under CERCLA must be incurred in a manner consistent with the National
Contingency Plan. The National Contingency Plan establishes a procedure whereby
contaminated properties may be identified and, if necessary, remediated. If
conducted in the appropriate manner, the costs that may be recovered will
include but may not be limited to funds expended to investigate and to remediate
hazardous substance releases. Costs associated with any such environmental
activity may be substantial.

All of the Company's existing properties have been, and all properties the
Company may acquire in the future will be, subjected to a Phase I and or similar
environmental assessments. The purpose of a Phase I environmental assessment is
to determine if past and present uses of a property indicate the potential for
soil or groundwater contamination or if other environmental conditions might
affect the value of or future uses of the property. Phase I environmental
assessments generally include the following: visual inspection of environmental
conditions at and around the property; review of available land use records;
interviews with the property representatives; examination of information from
environmental agencies; and a walk through survey for suspected asbestos
containing or other toxic materials.

Apart from certain conditions currently being remedied, as described below,
the Phase I and Phase II environmental assessment reports have not revealed any
environmental condition affecting any of the Company's existing properties or
any properties under binding contract that the Company believes requires
remediation that would have a material adverse effect on the Company's business
or assets, nor is the Company aware of any such environmental condition. The
Company believes that either the properties are in compliance or the remediation
activities are in compliance in all material respects with applicable Federal,
state and local laws, ordinances and regulations concerning the presence of
hazardous substances. The Company has not been notified by any governmental
authority, and is not otherwise aware, of any material noncompliance, liability
or claim relating to hazardous substances in connection with any of its
properties. Based on its current knowledge and currently applicable laws and
regulations, the Company is aware of the following environmental issues, none of
which the Company believes are material to its financial condition:

1. Certain remediation activities are currently being conducted at Great
Lakes Industrial Center by Neo Industries, a previous tenant, which is
investigating chromium releases from its plating operations and is currently
remediating the chromium contamination in the soil and the groundwater. The
Company does not expect to incur any remediation costs with respect to this
property.

2. The former owner/operator of one property, 1700 West Hawthorne Lane,
West Chicago, Illinois, has removed various underground and above-ground
storage tanks and performed remediation of releases from these tanks where
necessary. Closure reports have been or are being submitted by the former
owner/operator for each tank removal. The Company expects to receive
Illinois Environmental Protection Agency closure certification for each tank
from the former owner/operator in due course.

3. Certain of the properties are in the vicinity of properties that
contain or have contained storage tanks or on which hazardous substances or
petroleum products have been or may in the future be used or stored. Based
on the Phase I and, in some cases, additional environmental assessments
conducted with respect to its properties, the Company is not aware that
these conditions have had, and believes it unlikely that these conditions
will have, any adverse effect on its properties. Should there be any adverse
effect requiring response by the Company, the Company believes that it may
be able to recover its response costs from the responsible parties.

4. Limited quantities of asbestos containing materials ("ACM") are
present in various building materials at many of the Company's properties.
The ACM present at the properties generally is in good condition and for the
most part is non-friable. The Company has implemented an operation and
maintenance plan for ACM, including periodic inspections. This plan includes
removal and abatement activity whenever damaged ACM is discovered in areas
where human exposure may occur. It also includes an annual ACM abatement
program and ACM abatement during property renovation or reconstruction.

It is possible, however, that the environmental assessments of the Company's
properties do not reveal all environmental liability concerns or that there are
material environmental liabilities of which the Company is unaware. Given the
nature of the properties that are now owned by the Company or that may be
acquired in the future, no assurances can be given that (i) future laws,
ordinances or regulations will not

require or impose any material expenditures or liabilities in connection with
environmental conditions by or on the Company or its properties; (ii) the
current environmental condition of the Company's properties will not be affected
by tenants and occupants of such properties, by the condition of properties in
the vicinity of such properties or by third parties unrelated to the Company;
and (iii) prior owners of any of the Company's properties did not create
environmental problems of which the Company is not aware.

COMPETITION

All of the Company's existing properties are, and all of the properties that
it may acquire in the future are expected to be, located in areas that include
numerous other warehouse/industrial properties, many of which may be deemed to
be more suitable to a potential tenant than the Company's properties. The
resulting competition could have a material adverse effect on the Company's
ability to lease its properties and to increase the rentals charged on existing
leases.

INVESTMENT IN AND ADVANCES TO AFFILIATE

The Company holds approximately 99% of the economic interest in CenterPoint
Realty Services Corporation, an Illinois corporation ("CRS"). To maintain
compliance with limitations on income from business activities received by REITs
and their qualified REIT subsidiaries, the Company holds its interest in CRS in
the form of non-voting equity ownership, which qualifies CRS as an
unconsolidated taxable subsidiary.

As of December 31, 1998, the Company had advanced to CRS approximately $41.4
million under a demand loan with interest rates ranging from 8% to 11.1%. The
proceeds of the loan were required for development projects. Principal and
interest are due upon demand.

ITEM 2. PROPERTIES.

THE COMPANY'S WAREHOUSE/INDUSTRIAL PROPERTIES

The Company's investment portfolio of warehouse/industrial properties
consists of 120 properties totaling approximately 23.6 million square feet.
During 1998, the Company acquired 30 fully-leased warehouse/industrial
properties, completed the construction of one fully leased warehouse/industrial
build-to-suit property with a total area of approximately 3.2 million square
feet, disposed of 5 warehouse/ industrial properties with a total area of
approximately 726,000 square feet, and a 910.8 thousand square foot warehouse
property was demolished with part of the land sold and the remaining land
retained for development of a build-to-suit.

LOCATION. The Company's current properties are well located, with
convenient access to area interstate highway, rail, and air transportation. The
properties are in good physical condition, most of them having been built or
substantially renovated within the last 10 years.

BUILDING CHARACTERISTICS. Most of the space in the warehouse/industrial
properties currently owned by the Company or under contract has been designed
for warehousing and distribution. The remainder of the space is comprised of
light manufacturing space. A number of the industrial properties include both
distribution and light manufacturing space so as to provide tenants with
increased flexibility. The Company's largest industrial property contains
approximately 1,700,000 rentable square feet in a multi-tenant warehousing and
manufacturing property, available for redevelopment into a multi-tenant
warehouse/industrial complex. The Company's present warehouse/industrial
properties have an average project size of 196,959 square feet, and, on average,
a tenant at an industrial property occupies 112,015 rentable square feet.
Although a number of the industrial properties are single-tenant build-to-suit
facilities, all are designed to be divisible and to be leased by multiple
tenants. The Company has had substantial experience in subdividing older space
for new tenants.

The Company's present warehousing and distribution properties, as well as
warehousing and distribution properties under contract, are designed for bulk
storage of materials and manufactured goods in buildings with interior heights
typically of 22 feet or more. All of the warehousing and distribution properties
have dock facilities for trucks as well as grade level loading for lighter
vehicles and vans. Typically, the distribution buildings are used for storage
and contain a minimal amount of office space.

LEASE CHARACTERISTICS. The Company believes that the lease agreements for
its warehouse/industrial properties, which in most cases provide for scheduled
or indexed increases in rent, as well as the strengthening economy, will provide
opportunities for rental growth. The Company, in substantially all cases, passes
operating expenses and real estate tax increases on to tenants. The leases for
the warehouse/ industrial properties currently owned by the Company have terms
between one and 15 years, with a weighted average remaining term, based on
square footage, of approximately 4.0 years as of December 31, 1998.

TENANT DIVERSITY. The composition of tenants in the warehouse/industrial
properties currently owned by the Company reflects the commercial diversity of
businesses operating in Greater Chicago. At December 31, 1998 no single
industry, other than Wholesale Trade-Durable Goods and Trucking/Warehousing,
accounted for more than 5.8% of the leased space in the warehouse/industrial
properties currently owned by the Company. Wholesale Trade-Durable Goods and
Trucking/Warehousing, which encompasses a wide variety of industries, accounted
for 25.9% of the leased space in the warehouse/ industrial properties currently
owned by the Company at December 31, 1998, and the six largest industries, other
than Wholesale Trade-Durable Goods and Trucking/Warehousing, represented by
tenants accounted collectively for only 30.8% of such space. In addition, rent
from no single tenant comprised more than 3% of the Company's total revenues as
of December 31, 1998.

OTHER INFORMATION REGARDING WAREHOUSE/INDUSTRIAL PROPERTIES. The following
table sets forth certain information regarding the Company's portfolio of
warehouse/industrial properties, separately identifying 1998 investments of the
Company:

CENTERPOINT PROPERTIES TRUST
PROPERTY SUMMARY
AS OF DECEMBER 31, 1998

YEAR OF
ORIGINAL
CONSTRUCTION/
LAST
REDEVELOPMENT ANNUALIZED AVERAGE PERCENT OF
AND/OR BASE RENT RENT PER GLA SQ. TOTAL GLA
PROPERTY ADDRESS CITY STATE EXPANSION (1) REVENUES SQ. FT. (2) FT. (3) (4)
- ---------------------- ---------------- ----- -------------- ---------- ----------- --------- -----------

1998 INVESTMENTS
LAKE COUNTY
28160 N. Keith........ Lake Forest IL 1989 $ 307,800 $ 3.95 77,924 0.33%
28618 N. Ballard...... Lake Forest IL 1984 284,755 4.77 59,688 0.25%
28167 N Keith......... Lake Forest IL 1986 177,066 6.79 26,082 0.11%

N. KANE COUNTY
1575 Executive
Drive............... Elgin IL 1980 156,804 5.05 31,050 0.13%
1925 Holmes Rd. (6)... Elgin IL 1989 503,622 4.28 117,600 0.50%

CHICAGO O'HARE AREA
2121 Touhy Avenue
(7)................. Elk Grove IL 1962 450,100 3.50 128,600 0.54%
2021 Lunt Avenue
(7)................. Elk Grove IL 1972 243,084 3.80 64,000 0.27%
2001 S. Mt. Prospect
Road (7)............ Des Plaines IL 1980 566,810 3.41 166,220 0.70%
755 Dillon Drive...... Wood Dale IL 1986 317,280 6.62 47,928 0.20%
201 Oakton............ Des Plaines IL 1984 719,196 4.49 160,102 0.68%
543 W. Algonquin Rd. Arlington
(6)................. Heights IL 1970 167,629 4.90 34,210 0.14%

CITY NORTH
860 W. Evergreen...... Chicago IL 1890/1995 648,204 4.63 140,000 0.59%
5730 North Tripp
(6)................. Chicago IL 1975 405,264 3.48 116,584 0.49%
1381 N. Northbranch
(6)................. Chicago IL 1900 117,000 3.34 35,000 0.15%

NEAR WEST SUBURBS
3601 N. Runge......... Franklin Park IL 1962/1968 412,407 3.61 114,266 0.48%
3400 N. Powell........ Franklin Park IL 1961/1980 415,260 3.61 115,097 0.49%
11100 W. Addison...... Franklin Park IL 1967 189,636 5.20 36,469 0.15%
11140 W. Addison...... Franklin Park IL 1961/1965 345,330 3.09 111,588 0.47%
3434 N. Powell........ Franklin Park IL 1960/1966 327,000 3.60 90,760 0.38%
1999 N. Ruby.......... Melrose Park IL 1952/1962 213,906 1.98 107,852 0.46%
11550 W. King......... Franklin Park IL 1963 192,252 2.80 68,663 0.29%
200 Champion Drive.... Northlake IL 1998 665,640 4.02 165,612 0.70%

CENTRAL KANE/N. DUPAGE
1030 Fabyan Parkway... Batavia IL 1978 684,700 3.22 212,728 0.90%

SOUTHWEST SUBURBS
7633 S. Sayre......... Bedford Park IL 1968 91,200 6.50 14,039 0.06%
7201 S. Lemington..... Bedford Park IL 1958 360,000 3.37 106,800 0.45%
7200 S. Mason......... Bedford Park IL 1974 606,420 2.92 207,345 0.88%
6000 W. 73rd.......... Bedford Park IL 1974 397,391 2.68 148,091 0.63%

SOUTH SUBURBS
2601 Bond Street...... University Park IL 1975 224,000 3.50 64,000 0.27%
11801 S. Central...... Alsip IL 1985 853,158 3.00 284,386 1.20%

MILWAUKEE COUNTY
4700 Ironwood Drive... Franklin WI 1998 412,720 3.35 123,200 0.52%
5521 Mill Road........ Milwaukee WI 1960 103,700 2.33 44,435 0.19%

SUBTOTAL.............. $11,455,634 3,220,319 13.60%
---------- --------- -----------
AVERAGE............... $ 3.56 103,881 0.45%
----------- --------- -----------
PREVIOUSLY OWNED
PROPERTIES

LAKE COUNTY
3145 Central
Avenue(6)........... Waukegan IL 1958 $ 788,500 $ 2.63 300,000 1.27%
1810-1820 Industrial
Drive............... Libertyville IL 1977 267,756 3.15 85,000 0.36%
1 Wildlife Way........ Long Grove IL 1994 684,852 12.66 54,100 0.23%
620-630 Butterfield
Road................ Mundelein IL 1990 254,484 10.50 24,237 0.10%

PERCENT OF
GLA LEASED AS NO. OF PROPERTY
PROPERTY ADDRESS OF 12/31/98 TENANTS TYPE (5)
- ---------------------- ------------- ----------- ----------

1998 INVESTMENTS
LAKE COUNTY
28160 N. Keith........ 100% 1 ACQ
28618 N. Ballard...... 100% 1 ACQ
28167 N Keith......... 100% 1 ACQ
N. KANE COUNTY
1575 Executive
Drive............... 100% 1 ACQ
1925 Holmes Rd. (6)... 100% 1 ACQ
CHICAGO O'HARE AREA
2121 Touhy Avenue
(7)................. 100% 1 ACQ
2021 Lunt Avenue
(7)................. 100% 1 ACQ
2001 S. Mt. Prospect
Road (7)............ 100% 1 ACQ
755 Dillon Drive...... 100% 1 ACQ
201 Oakton............ 75% 2 ACQ
543 W. Algonquin Rd.
(6)................. 100% 1 ACQ
CITY NORTH
860 W. Evergreen...... 100% 1 ACQ
5730 North Tripp
(6)................. 100% 1 ACQ
1381 N. Northbranch
(6)................. 100% 1 ACQ
NEAR WEST SUBURBS
3601 N. Runge......... 100% 1 ACQ
3400 N. Powell........ 100% 1 ACQ
11100 W. Addison...... 100% 1 ACQ
11140 W. Addison...... 100% 1 ACQ
3434 N. Powell........ 100% 1 ACQ
1999 N. Ruby.......... 100% 1 ACQ
11550 W. King......... 100% 1 ACQ
200 Champion Drive.... 100% 1 BTS
CENTRAL KANE/N. DUPAGE
1030 Fabyan Parkway... 100% 1 ACQ
SOUTHWEST SUBURBS
7633 S. Sayre......... 100% 1 ACQ
7201 S. Lemington..... 100% 1 ACQ
7200 S. Mason......... 100% 1 ACQ
6000 W. 73rd.......... 100% 2 ACQ
SOUTH SUBURBS
2601 Bond Street...... 100% 1 ACQ
11801 S. Central...... 100% 1 ACQ
MILWAUKEE COUNTY
4700 Ironwood Drive... 100% 1 BTS
5521 Mill Road........ 100% 1 ACQ
SUBTOTAL..............

AVERAGE...............

PREVIOUSLY OWNED
PROPERTIES
LAKE COUNTY
3145 Central
Avenue(6)........... 100% 2 ACQ
1810-1820 Industrial
Drive............... 100% 1 ACQ
1 Wildlife Way........ 100% 1 RDV
620-630 Butterfield
Road................ 0% 0 BTS

1700 Butterfield
Road................ Mundelein IL 1976 $ 232,500 $ 3.88 60,000 0.25%
950-970 Tower Road.... Mundelein IL 1979/1990 154,805 4.04 38,359 0.16%
2339-41 Ernie Krueger
Court............... Waukegan IL 1990/1993 219,615 4.03 54,450 0.23%
1300 Northpoint Road.. Waukegan IL 1994 338,351 5.21 65,000 0.28%

N.W. COOK COUNTY
1500 West Dundee Road Arlington
(6)................. Heights IL 1969 2,107,009 4.21 500,000 2.12%
900 W. University Arlington
Drive............... Heights IL 1974 586,000 6.79 86,254 0.36%

N. KANE COUNTY
825 Tollgate Road..... Elgin IL 1989 389,490 4.69 83,122 0.35%
Chicago O'Hare Area
O'Hare Express-Phase
A-2................. Chicago IL 1997 1,080,616 8.93 120,971 0.51%
O'Hare Express-Phase
B-1................. Chicago IL 1997 2,125,388 12.38 171,685 0.73%
110-190 Old Higgins
Road................ Des Plaines IL 1980 1,246,757 10.36 120,292 0.51%
1796 Sherwin.......... Des Plaines IL 1964 617,252 6.48 95,220 0.40%
Elk Grove
2525 Busse Road....... Village IL 1975 3,314,136 3.73 888,335 3.76%
Elk Grove
2701-2781 Busse Road.. Village IL 1997 1,222,932 4.87 251,076 1.06%
Elk Grove
2801-2881 Busse Road.. Village IL 1997 1,112,802 4.43 251,076 1.06%
Elk Grove
1951 Landmeier........ Village IL 1967 237,384 5.66 41,976 0.18%
745 Birginal Road..... Bensenville IL 1974 505,166 4.46 113,266 0.48%
2743 Armstrong Court.. Des Plaines IL 1989 300,843 5.64 53,325 0.23%
850 Arthur Avenue Elk Grove
(8)................. Village IL 1971/1973 181,941 4.28 42,490 0.18%
Elk Grove
1400 Busse Road....... Village IL 1975 442,421 2.98 148,436 0.63%
1100 Chase Avenue Elk Grove
(7)................. Village IL 1980/1996 150,778 3.62 41,651 0.18%
Elk Grove
2600 Elmhurst Road.... Village IL 1995 531,917 5.07 105,000 0.44%
Elk Grove
875 Fargo Avenue...... Village IL 1980 424,596 5.15 82,368 0.35%
Elk Grove
1850 Greenleaf........ Village IL 1965 255,024 4.35 58,627 0.25%
Elk Grove
1201 Lunt Avenue...... Village IL 1971 45,118 6.11 7,380 0.03%
Elk Grove
1501 Pratt Avenue..... Village IL 1973 589,132 3.88 151,900 0.64%
Elk Grove
1520 Pratt Avenue..... Village IL 1968 243,551 3.89 62,546 0.26%
10601 Seymour Avenue
(6)................. Franklin Park IL 1963/1970 2,755,299 4.07 677,000 2.86%
2553 North
Edgington........... Franklin Park IL 1967/1995 1,176,222 4.29 274,303 1.16%
10740 West Grand
Avenue (7).......... Franklin Park IL 1965/1971 189,052 2.86 66,000 0.28%
1800 Bruning Drive.... Itasca IL 1975/1978 1,169,203 5.79 202,000 0.85%
245 Beinoris Drive.... Wood Dale IL 1988/1993 93,741 7.82 11,989 0.05%
4501 West Augusta
Boulevard........... Chicago IL 1942/1989 792,975 1.83 432,661 1.83%

N.W. SUBURBS
400 North Wolf Road... Northlake IL 1956/1997 5,128,034 3.36 1,527,593 6.48%

CENTRAL KANE/N. DUPAGE
425 South 37th Avenue
(7)................. St. Charles IL 1975 393,581 3.82 103,106 0.44%
1250 Carolina Drive... West Chicago IL 1988 514,500 3.43 150,000 0.63%
1645 Downs Drive...... West Chicago IL 1975 414,048 3.20 129,390 0.55%
1733 Downs Drive...... West Chicago IL 1975 363,816 2.50 145,528 0.62%
825-845 Hawthorne Lane
(6)................. West Chicago IL 1974 527,700 3.32 158,772 0.67%
1700 West Hawthorne
(6)................. West Chicago IL 1959/1969 1,381,800 1.88 735,196 3.11%

WEST SUBURBS
2901 Centre Circle
(7)................. Downers Grove IL 1979 153,238 7.28 21,056 0.09%

FAR WEST SUBURBS
1 Allsteel Drive
(7)................. Aurora IL 1960 2,387,565 2.37 1,008,120 4.27%
2727 West Diehl Road.. Naperville IL 1997 2,047,896 4.65 440,343 1.86%
2885 West Diehl Road.. Naperville IL 1997 1,145,928 3.80 301,560 1.28%

SOUTHWEST SUBURBS
7447 South Central
Avenue.............. Bedford Park IL 1975 283,723 2.40 118,218 0.50%

PERCENT OF
GLA LEASED AS NO. OF PROPERTY
PROPERTY ADDRESS OF 12/31/98 TENANTS TYPE (5)
- ---------------------- ------------- ----------- ----------

1700 Butterfield
Road................ 100% 1 ACQ
950-970 Tower Road.... 100% 3 BTS
2339-41 Ernie Krueger
Court............... 100% 1 BTS
1300 Northpoint Road.. 100% 1 ACQ
N.W. COOK COUNTY
1500 West Dundee Road
(6)................. 49% 2 ACQ
900 W. University
Drive............... 100% 1 ACQ
N. KANE COUNTY
825 Tollgate Road..... 100% 2 ACQ
Chicago O'Hare Area
O'Hare Express-Phase
A-2................. 100% 2 BTS
O'Hare Express-Phase
B-1................. 100% 1 BTS
110-190 Old Higgins
Road................ 99% 7 ACQ
1796 Sherwin.......... 100% 2 ACQ

2525 Busse Road....... 85% 9 ACQ

2701-2781 Busse Road.. 100% 2 BTS

2801-2881 Busse Road.. 100% 2 BTS

1951 Landmeier........ 100% 2 ACQ
745 Birginal Road..... 100% 1 ACQ
2743 Armstrong Court.. 100% 1 BTS
850 Arthur Avenue
(8)................. 100% 1 ACQ

1400 Busse Road....... 39% 12 ACQ
1100 Chase Avenue
(7)................. 100% 1 ACQ

2600 Elmhurst Road.... 100% 1 BTS

875 Fargo Avenue...... 100% 1 ACQ

1850 Greenleaf........ 100% 1 ACQ

1201 Lunt Avenue...... 100% 1 ACQ

1501 Pratt Avenue..... 100% 2 ACQ

1520 Pratt Avenue..... 100% 1 ACQ
10601 Seymour Avenue
(6)................. 74% 2 ACQ/RDV
2553 North
Edgington........... 100% 4 ACQ
10740 West Grand
Avenue (7).......... 100% 1 ACQ
1800 Bruning Drive.... 100% 1 ACQ
245 Beinoris Drive.... 100% 1 BTS/RDV
4501 West Augusta
Boulevard........... 97% 8 RDV
N.W. SUBURBS
400 North Wolf Road... 100% 4 ACQ
CENTRAL KANE/N. DUPAGE
425 South 37th Avenue
(7)................. 100% 1 ACQ
1250 Carolina Drive... 100% 1 BTS
1645 Downs Drive...... 100% 1 ACQ
1733 Downs Drive...... 100% 1 ACQ
825-845 Hawthorne Lane
(6)................. 83% 5 ACQ
1700 West Hawthorne
(6)................. 100% 1 ACQ
WEST SUBURBS
2901 Centre Circle
(7)................. 100% 1 ACQ
FAR WEST SUBURBS
1 Allsteel Drive
(7)................. 99% 3 ACQ
2727 West Diehl Road.. 100% 1 BTS
2885 West Diehl Road.. 100% 1 BTS
SOUTHWEST SUBURBS
7447 South Central
Avenue.............. 100% 1 ACQ

7400 S. Narragansett
Ave (6)............. Bedford Park IL 1976 $ 515,424 $ 2.95 174,720 0.74%
6751-55 South Sayre
Avenue.............. Bedford Park IL 1974 695,352 2.87 242,690 1.03%
7525 South Sayre...... Bedford Park IL 1981 411,261 3.34 123,178 0.52%
6464 West 51st
Street.............. Forest View IL 1973 730,326 3.50 208,713 0.88%
6500 West 51st
Street.............. Forest View IL 1975 500,292 2.70 185,295 0.78%
9301 W. 55th Street
(6)................. McCook IL 1979 1,620,000 0.95 1,700,000 7.19%
800 Enterprise
Court............... Naperville IL 1985 183,660 5.25 34,984 0.15%
720 Frontenac......... Naperville IL 1991 524,308 3.05 171,935 0.73%
820 Frontenac......... Naperville IL 1988 500,045 3.26 153,604 0.65%
920 Frontenac......... Naperville IL 1987 413,900 3.42 121,200 0.51%
1020 Frontenac........ Naperville IL 1980 441,750 4.43 99,684 0.42%
1120 Frontenac........ Naperville IL 1980/1994 578,915 3.76 153,902 0.65%
1510 Frontenac........ Naperville IL 1986 359,287 3.43 104,886 0.44%
1560 Frontenac........ Naperville IL 1987 305,278 3.57 85,608 0.36%
1651 Frontenac........ Naperville IL 1978 123,139 4.05 30,414 0.13%
2764 Golfview......... Naperville IL 1985 102,284 5.11 20,022 0.08%
1500 Shore Drive...... Naperville IL 1985 144,150 3.33 43,230 0.18%
1150 Shore Road....... Naperville IL 1985 126,773 4.20 30,184 0.13%
2301 North Route 30... Plainfield IL 1972 777,367 2.75 282,679 1.20%
1355 Enterprise Drive
(6)................. Romeoville IL 1980 341,880 2.80 122,100 0.52%

SOUTHWEST SUBURBS
6600 River Road....... Hodgkins IL 1968 1,438,178 2.28 630,410 2.67%

FAR S.W. SUBURBS
16400 West 103(rd)
Street (7).......... Lemont IL 1983/1995 299,616 4.71 63,612 0.27%
1319 Marquette
Drive............... Romeoville IL 1990 218,094 6.00 36,349 0.15%
7001 Adams Street..... Willowbrook IL 1994 192,720 7.61 25,324 0.11%

CHICAGO SOUTH
3133 East 106th (6)... Chicago IL 1971 300,285 3.75 80,076 0.34%
4400 South Kolmar
(6)................. Chicago IL 1966 290,182 3.15 92,000 0.39%
900 East 103rd
Street.............. Chicago IL 1910/1990 1,853,141 3.22 575,462 2.43%
11701 South Central
Avenue.............. Alsip IL 1970 951,136 3.20 297,207 1.26%
5619-25 West 115th
Street.............. Alsip IL 1974 1,805,830 4.55 396,979 1.68%
21399 Torrence
Avenue.............. Sauk Village IL 1987 745,164 2.00 372,835 1.58%

N.W. INDIANA
425 West 151st
Street.............. East Chicago IN 1913/1991 1,310,418 3.75 349,236 1.48%
201 Mississippi
Street.............. Gary IN 1945/1988 3,782,586 3.60 1,052,173 4.45%
1827 North Bendix
Drive (6)........... South Bend IN 1964/1990 583,212 2.92 199,730 0.85%

MILWAUKEE COUNTY
7501 North 81st
Street.............. Milwaukee WI 1987 576,000 3.13 183,958 0.78%
1475 S. 101st......... West Allis WI 1969 194,013 4.13 46,973 0.20%
2003-2201 S. 114th
Street.............. West Allis WI 1965 642,540 2.64 243,350 1.03%

KENOSHA COUNTY
8200 100th Street..... Pleasant Prairie WI 1990 568,361 3.83 148,472 0.63%
8901 102nd Street..... Pleasant Prairie WI 1990 649,532 6.15 105,637 0.45%

PERCENT OF
GLA LEASED AS NO. OF PROPERTY
PROPERTY ADDRESS OF 12/31/98 TENANTS TYPE (5)
- ---------------------- ------------- ----------- ----------

7400 S. Narragansett
Ave (6)............. 100% 1 ACQ
6751-55 South Sayre
Avenue.............. 100% 2 ACQ
7525 South Sayre...... 63% 2 ACQ
6464 West 51st
Street.............. 100% 4 ACQ
6500 West 51st
Street.............. 100% 1 ACQ
9301 W. 55th Street
(6)................. 100% 1 RDV
800 Enterprise
Court............... 100% 1 ACQ
720 Frontenac......... 100% 2 ACQ
820 Frontenac......... 100% 1 ACQ
920 Frontenac......... 100% 1 ACQ
1020 Frontenac........ 100% 1 ACQ
1120 Frontenac........ 100% 1 ACQ
1510 Frontenac........ 100% 1 ACQ
1560 Frontenac........ 100% 2 ACQ
1651 Frontenac........ 100% 1 ACQ
2764 Golfview......... 100% 1 ACQ
1500 Shore Drive...... 100% 2 ACQ
1150 Shore Road....... 100% 1 ACQ
2301 North Route 30... 100% 1 ACQ
1355 Enterprise Drive
(6)................. 25% 1 ACQ
SOUTHWEST SUBURBS
6600 River Road....... 100% 1 ACQ
FAR S.W. SUBURBS
16400 West 103(rd)
Street (7).......... 100% 1 ACQ
1319 Marquette
Drive............... 0% 0 BTS
7001 Adams Street..... 100% 1 BTS
CHICAGO SOUTH
3133 East 106th (6)... 100% 1 ACQ
4400 South Kolmar
(6)................. 100% 1 ACQ
900 East 103rd
Street.............. 24% 1 RDV
11701 South Central
Avenue.............. 100% 1 ACQ
5619-25 West 115th
Street.............. 100% 4 RDV
21399 Torrence
Avenue.............. 100% 1 ACQ
N.W. INDIANA
425 West 151st
Street.............. 96% 9 RDV
201 Mississippi
Street.............. 95% 14 RDV
1827 North Bendix
Drive (6)........... 100% 1 ACQ
MILWAUKEE COUNTY
7501 North 81st
Street.............. 100% 1 ACQ
1475 S. 101st......... 100% 1 ACQ
2003-2201 S. 114th
Street.............. 100% 2 ACQ
KENOSHA COUNTY
8200 100th Street..... 100% 1 ACQ
8901 102nd Street..... 100% 1 ACQ

RACINE COUNTY
1333 Grandview Drive.. Yorkville WI . $ 796,572 $ 3.79 210,000 0.89%

SUBTOTAL.............. $70,631,809 20,414,752 86.40%
---------

AVERAGE............... $ 3.46 229,379 0.97%
---------
GRAND TOTAL ALL WAREHOUSE/INDUSTRIAL PROPERTIES...................... $82,087,443 23,635,071 100.00%
---------
AVERAGE ALL WAREHOUSE/INDUSTRIAL PROPERTIES (9)...................... $ 3.47 196,959
---------
GRAND TOTAL ALL WAREHOUSE/INDUSTRIAL PROPERTIES EXCLUDING
REDEVELOPMENTS AT 12/31/98......................................... $82,087,443 23,059,609
---------
AVERAGE ALL WAREHOUSE/INDUSTRIAL PROPERTIES EXCLUDING REDEVELOPMENTS
AT 12/31/98 (9).................................................... $ 3.56 168,568
---------

PERCENT OF
GLA LEASED AS NO. OF PROPERTY
PROPERTY ADDRESS OF 12/31/98 TENANTS TYPE (5)
- ---------------------- ------------- ----------- ----------

RACINE COUNTY
1333 Grandview Drive.. 100% 1 ACQ
SUBTOTAL..............
AVERAGE...............
GRAND TOTAL ALL WAREHO 211
AVERAGE ALL WAREHOUSE/ 95%
GRAND TOTAL ALL WAREHO
REDEVELOPMENTS AT 12 96%
AVERAGE ALL WAREHOUSE/
AT 12/31/98 (9).....

- ------------------------------
(1) First date of original construction; second date is year of last
redevelopment and/or expansion. If only one date appears, it is the
acquisition date; the property has not been redeveloped or expanded.

(2) Determined by dividing annualized base rent revenue by GLA.

(3) "GLA" means gross leasable area.

(4) Determined as a percent of the total GLA for the warehouse/industrial
properties.

(5) ACQ refers to an existing leased property acquired by the Company, BTS
refers to a build-to-suit property and RDV refers to a redevelopment
property. One of the redevelopment properties, 900 East 103(rd) Street,
Chicago Illinois, has been taken out of operations as of December 31, 1998
to complete rehab construction.

(6) Properties purchased through a sale-leaseback to the previous owner have no
operating history relevant to third party usage.

(7) Properties purchased from an owner occupant have no prior operating history
relevant to third party usage.

(8) The seller of this property holds a note payable by the Company in the
principal amount of $575,000 and secured by this property.

(9) Average size equals total GLA divided by the number of warehouse/industrial
properties.

LEASE EXPIRATIONS

The following table shows as of December 31, 1998 scheduled lease
expirations for the Company's warehouse/industrial properties commencing January
1, 1999 and for the next ten years, assuming that no tenants exercise renewal
options:

AVERAGE % OF TOTAL
BASE RENT PROPERTIES % OF 1998
GLA OF ANNUALIZED PER SQ. FT. GLA BASE RENT
NO. OF EXPIRING BASE RENT UNDER REPRESENTED REPRESENTED
LEASES LEASES EXPIRING EXPIRING BY EXPIRING BY EXPIRING
YEAR ENDING DECEMBER 31 EXPIRING (SQ. FT.) LEASES LEASES LEASES LEASES
- ---------------------------------------- ------------- --------- ---------- ------------- --------------- ---------------

1999.................................... 51 3,966,037 $12,402,962 $ 3.13 19.92% 16.37%
2000.................................... 45 2,668,046 9,203,895 3.45 13.40% 12.15%
2001.................................... 21 1,563,859 6,132,702 3.92 7.86% 8.09%
2002.................................... 28 3,432,979 10,088,978 2.94 17.25% 13.32%
2003.................................... 24 1,359,065 6,163,898 4.54 6.83% 8.14%
2004.................................... 10 1,650,214 6,054,731 3.67 8.29% 7.99%
2005.................................... 11 1,526,940 4,716,660 3.09 7.67% 6.23%
2006.................................... 9 1,604,063 5,451,730 3.40 8.06% 7.20%
2007.................................... 7 704,764 4,687,687 6.65 3.54% 6.19%
2008.................................... 8 1,429,729 6,684,065 4.68 7.18% 8.82%

OPTIONS TO PURCHASE GRANTED TO CERTAIN TENANTS

The following warehouse/industrial properties of the Company are subject to
purchase options granted to certain tenants as follows:

- A purchase option which was outstanding at December 31, 1998 for One
Wildlife Way, Long Grove, Illinois expired as of February 1, 1999.

- 8901 102nd Street, Pleasant Prairie, Wisconsin is subject to an option to
purchase exercisable on February 28, 2006 at a purchase price equal to 95%
of "fair market value," determined by the average of three independent
appraisals.

- 1700 West Hawthorne, West Chicago, Illinois is subject to a purchase
option exercisable between December 1, 2002, and December 1, 2003 (with
the closing to occur during December, 2004 regardless of when the option
is exercised) at a price of $15,033,636. If the property is expanded, at
tenant's option, the purchase price will be $15,233,636, plus the cost of
construction.

- 2600 Elmhurst Road, Elk Grove Village, Illinois is subject to an option
exercisable on or before July 31, 2000 to purchase the premises during
January of 2001 for a purchase price of $5,265,000.

- 21399 Torrence Avenue, Sauk Village, Illinois is subject to an option
exercisable on or between December 1, 1998 and May 31, 2000 and again
between December 31, 2000 and May 31, 2002 to purchase the property on
November 30, 2000 for $8,941,920 or November 30, 2002 for $9,314,500.

- 11440 W. Addison, Franklin Park, Illinois is subject to a purchase option
any time after May 1, 1999, but not later than June 30, 1999 (with closing
to occur on November 1, 1999) for a purchase price of $3,000,000.

In each case, the option price exceeds the Company's current net book value
for each such property. The Company believes that even if all of the purchase
options are exercised, such exercise will not have an adverse effect upon the
operations of the Company or its ability to maintain its distribution policy. In
addition, if any purchase option is exercised, the Company intends to either
distribute the cash proceeds to stockholders or reinvest the cash proceeds in
additional properties. However, no assurance can be given that such distribution
or reinvestment will occur.

In addition to purchase options, the Company has granted to tenants of
certain properties a right of first refusal (in the event the Company has
received an unsolicited offer from a third party to purchase the property which
the Company desires to accept) or a right of first offer (in the event the
Company has not received an unsolicited third party offer for the property but
desires to entertain an offer). The properties subject to one or both of these
rights include One Wildlife Way, Long Grove, Illinois, 8901 102nd Street,
Pleasant Prairie, Wisconsin, 825 Tollgate Road, Elgin, Illinois, 1651 Frontenac
Road, Naperville, Illinois 7001 Adams Street, Willowbrook, Illinois, 950 Tower
Road, Mundelein, Illinois, 6312 W. 74th Street, Bedford Park, Illinois, 11440 W.
Addison, Franklin Park, Illinois and 7633 S. Sayre, Bedford Park, Illinois. The
existence of those rights will not compel the Company to sell a property for a
price less than the price the Company desires to accept.

THE COMPANY'S OTHER PROPERTIES AND INVESTMENTS

In addition to its warehouse/industrial properties, the Company owns three
retail properties having approximately 61,000 square feet of GLA, one office
building having approximately 94,000 square feet of GLA in which the offices of
the management company use approximately 48,000 square feet and the remaining
portion is under redevelopment, one 682-unit apartment complex located at 440
North Lake Street, Miller, Indiana and known as Lakeshore Dunes Apartments, and
a fully leased parking lot. The Company does not intend to acquire properties
other than warehouse/industrial properties in the future. The Company believes,
however, that these properties are favorable investments for the Company, adding
to distributable cash flow per share. Furthermore, the Lakeshore Dunes
Apartments were financed

through the issuance of tax-exempt revenue bonds on favorable terms, benefiting
the Company by reducing its overall borrowing costs. The Company has no present
plans to sell those properties but would entertain a sale if the price were
sufficiently high, given other investment opportunities that would be available
to the Company, and the enhanced operating performance expected to result, from
redeployment of the sales proceeds. The Company also has investments in 9
uncompleted build-to-suit properties totaling approximately 1.6 million square
feet, and has two mortgage receivables on properties totaling 824,000 square
feet.

The following table sets forth certain information regarding the Company's
retail properties:

PERCENT
YEAR OF OF
ACQUISITION/ PERCENT GLA AVERAGE
LAST YEAR OF TOTAL OF LEASED RENT
REDEVELOPMENT ORIGINAL GLA TOTAL AS OF ANNUALIZED PER
OF CONSTRUCTION/ (SQ. FT.) GLA DECEMBER BASE RENT SQ. FT.
EXPANSION (1) EXPANSION (2) (3) 31, 1998 REVENUE (4)
-------------- --------------- ----------- ----------- ------------- ----------- -----------

4-48 Barring Rd................ 1994 1991 38,633 63.1% 76.9% $ 315,565 $ 8.17
Streamwood, IL
84-120 McHenry Rd.............. 1990/1993 1989 20,535 33.6% 80.0% 307,774 14.99
Wheeling, IL
351 North Rohlwing Rd.......... 1993 1989 2,015 3.3% 100.0% 61,440 30.49
Itasca, IL
----------- ----- ----------- -----------
TOTAL.......................... 61,183 100.0% $ 684,779 $ 11.19
----------- ----- ----------- -----------
----------- ----- ----------- -----------

NUMBER
OF
TENANTS
-------------

4-48 Barring Rd................ 8
Streamwood, IL
84-120 McHenry Rd.............. 8
Wheeling, IL
351 North Rohlwing Rd.......... 1
Itasca, IL
--
TOTAL.......................... 17
--
--

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

(1) First date is year of acquisition; second date is year of most recent
redevelopment or expansion. If only one date appears, it is the acquisition
date; the property has not been redeveloped or expanded.

(2) "GLA" means gross leasable area.

(3) Determined as a percent of the total GLA for the retail properties.

(4) Determined by dividing annualized base rent revenue by GLA.

The tenants of the Company's retail properties are typical of tenants in
smaller retail centers in Greater Chicago. Generally, the leases require tenants
to pay a fixed base, or "minimum" rent, subject to scheduled increases. Tenants
generally are required to pay their proportionate share of common area
maintenance charges, insurance expenses, operating expenses and real estate
taxes or their portion of these expenses is included in their base rent.

The following table shows as of December 31, 1998 scheduled lease
expirations for the retail properties commencing January 1, 1999, and for the
next ten years, assuming no tenants exercise renewal options.

GLA OF ANNUALIZED % OF TOTAL RETAIL % OF 1998 RETAIL
NO. OF EXPIRING BASE RENT AVERAGE BASE RENT PROPERTIES GLA BASE RENT
YEAR ENDING LEASES LEASES EXPIRING PER SQ. FT. UNDER REPRESENTED BY REPRESENTED BY
DECEMBER 31 EXPIRING (SQ. FT.) LEASES EXPIRING LEASES EXPIRING LEASES EXPIRING LEASES
- --------------- --------------- ----------- ----------- ------------------- ------------------- -----------------

1999........ 2 3,918 $ 57,468 $ 14.67 9.14% 9.48%
2000........ 5 10,334 113,100 10.94 24.11% 18.66%
2001........ 5 14,120 150,084 10.63 32.94% 24.77%
2002........ 0 0 0 0 0% 0%
2003........ 1 3,080 31,596 10.26 7.19% 5.21%
2004........ 2 5,274 125,976 23.89 12.30% 20.79%
2005........ 0 0 0 0 0% 0%
2006........ 1 6,140 127,788 20.81 14.32% 21.09%
2007........ 0 0 0 0 0% 0%
2008........ 0 0 0 0 0% 0%

Lakeshore Dunes Apartments, which was completed in 1971 and renovated
between 1991 and September, 1993 is comprised of 682 units in 15 contiguous
buildings located on an approximately 20.12 acre site in Miller, Indiana, a
suburb of Gary, Indiana, located on Lake Michigan. The property is bordered

by the Indiana Dunes National Park and by the Calumet Lagoon and is less than
one-half mile from public beaches. Amenities of the complex include redesigned
units with updated kitchens and appliances, carpeting, lighting, windows and
mini-blinds, bathrooms and fixtures, elevators, laundry rooms, play lots, tennis
courts, picnic areas, a new outdoor pool, roads, parking areas, landscaping and
a 24-hour safety patrol and card access system. The community center also serves
as the management and leasing office. The Company maintains a complete
management, leasing and maintenance team at the property.

As of December 31, 1998, 621 of the units, or 91%, were leased, providing
for a monthly base rent of approximately $270,000 or $7.34 per square foot
(determined by dividing annualized base rent by total leased square footage of
the apartment units), or an annualized base rent of $3,240,000. Current leases
provide for customary one year terms and require that tenants pay a fixed rent
based on the type of apartment and square footage. Tenants are responsible for
utilities. The following table sets forth the apartment mix at this property as
of December 31, 1998:

NUMBER OF UNITS TOTAL GLA AVERAGE GLA PER AVERAGE MONTHLY
TYPE OF APARTMENT IN COMPLEX (SQ. FT.) APARTMENT (SQ. FT.) RENT PER UNIT
- ---------------------------------------------- ------------------- ----------- --------------------- -----------------

Studio........................................ 48 20,208 421 $ 374
One Bedroom................................... 171 99,009 579 459
Deluxe One Bedroom............................ 43 29,283 681 467
Two Bedroom................................... 390 308,100 790 533
Three Bedroom................................. 30 28,500 950 656
--- -----------
TOTALS:....................................... 682 485,100
--- -----------
--- -----------

In 1996, the Company purchased a parking lot within an industrial park. The
parking lot is leased for ten years through January 2006 for an annual minimum
rent of $26,400.

ITEM 3. LEGAL PROCEEDINGS.

The Company is not subject to or involved in, nor is the Company aware of,
any pending or threatened litigation which could be material to the financial
position or results of operations of the Company. For a description of
remediation activities currently underway at certain of the Company's
properties, see "Environmental Matters" under Item 1 above.

ITEM 4. SUBMISSION OF CERTAIN ITEMS TO A VOTE OF SECURITY HOLDERS.

None.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED MATTERS.

(a) Prior to June 12, 1996, the Company's Common Stock was listed and traded
on the American Stock Exchange under the symbol "CNT." Effective on June 12,
1996, the Company's Common Stock is listed and traded on the New York Stock
Exchange under the symbol "CNT." The following table sets forth, for the periods
indicated, the high and low sale prices of the Common Stock (as reported by the
AMEX prior to June 12, 1996 and as reported by the NYSE on and after June 12,
1996) and the cash distributions paid in such periods.

CASH
QUARTERLY PERIOD ENDING HIGH LOW DISTRIBUTION/SHARE
- ---------------------------------------------------------------------------- ----------- ------------ -----------------

December 31, 1995........................................................... $ 233/8 $ 215/8 $ 0.390
March 31, 1996.............................................................. 241/8 22 0.405
June 30, 1996............................................................... 27 261/8 0.405
September 30, 1996.......................................................... 267/8 263/4 0.405
December 31, 1996........................................................... 323/4 307/8 0.405
March 31, 1997.............................................................. 327/8 301/4 0.420
June 30, 1997............................................................... 317/8 281/2 0.420
September 30, 1997.......................................................... 365/16 317/8 0.420
December 31, 1997........................................................... 371/16 311/4 0.420
March 31, 1998.............................................................. 361/16 323/4 0.438
June 30, 1998............................................................... 355/8 317/16 0.438
September 30, 1998.......................................................... 367/16 3011/16 0.438
December 31, 1998........................................................... 367/8 321/4 0.438

(b) As of March 11, 1999, there were approximately 163 holders of record of
the Company's Common Stock.

(c) During 1998, the Company paid distributions on common shares of $31.2
million or $1.75 per share and on class B common shares of $3.7 million or $1.80
per share. Also, in January of 1998, the Company paid dividends on preferred
shares of $1.4 million or $0.477 per share, and in April, July and October of
1998, paid dividends of $1.6 million or $0.53 per share each time. As of the end
of 1998, the Company declared preferred dividends of $1.6 million or $0.53 per
share to be paid in January, 1999. During 1997, the Company declared and paid
distributions on common shares of $27.2 million or $1.68 per share and on class
B common shares of $3.9 million or $1.73 per share. The Company's Consolidated
Statements of Operations and Shareholders' Equity for 1997 included $901
thousand or $0.30 per share of preferred dividends attributable to 1997.

The following factors, among others, will affect the future availability of
funds for distribution: (i) scheduled increases in base rents under existing
leases, (ii) changes in minimum base rents attributable to replacement of
existing leases with new or replacement leases and (iii) restrictions under
certain covenants of the Company's unsecured credit facility co-led by The First
National Bank of Chicago and Lehman Brothers Holdings, Inc.

ITEM 6. SELECTED HISTORICAL FINANCIAL DATA

The following tables set forth, on a historical basis, Selected Financial
Data for the Company. The following table should be read in conjunction with the
historical financial statements of the Company and "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION," both included
elsewhere in this Form 10-K.

The Selected Financial Data for the Company is not necessarily indicative of
the actual financial position of the Company or results of operations at any
future date or for a future period.

CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
SELECTED HISTORICAL FINANCIAL DATA
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA, RATIOS AND NUMBER OF PROPERTIES)

YEAR ENDED DECEMBER 31,
----------------------------------------------------------

1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ----------
Operating Data:
Revenues........................................... $ 113,108 $ 85,958 $ 63,330 $ 46,952 $ 33,633
Expenses:
Operating expenses excluding depreciation and
amortization (1)................................. (35,700) (29,182) (20,751) (14,774) (11,442)
Depreciation and other amortization................ (21,418) (15,278) (10,648) (8,456) (6,176)
General and administrative......................... (4,041) (3,105) (2,567) (2,150) (1,573)
Interest expense:
Interest incurred, net........................... (13,659) (10,071) (9,865) (11,562) (11,073)
Amortization of deferred financing costs......... (1,817) (800) (1,127) (1,150) (976)
---------- ---------- ---------- ---------- ----------
Operating income..................................... 36,473 27,522 18,372 8,860 2,393
Other income (expense) (2)......................... (15) 108 (100) (16) (34)
---------- ---------- ---------- ---------- ----------
Income before extraordinary item..................... 36,458 27,630 18,272 8,844 2,359
Extraordinary item................................. (3,331) (632)
---------- ---------- ---------- ---------- ----------
Net income........................................... 36,458 27,630 14,941 8,212 2,359
Preferred dividend................................... (6,360) (901) (947) (1,002)
---------- ---------- ---------- ---------- ----------
Net income available to common shareholders.......... 30,098 26,729 13,994 7,210 2,359
Per share net income available to common shareholders
before extraordinary item:
Basic............................................ 1.51 1.43 1.25 0.85 0.41
Diluted.......................................... 1.50 1.41 1.22 0.84 0.41
Per share net income available to common
shareholders:
Basic............................................ 1.51 1.43 1.01 0.78 0.41
Diluted.......................................... 1.50 1.41 0.99 0.77 0.41
Balance Sheet Data (End of Period):
Investment in real estate (before accumulated
depreciation).................................... $ 747,733 $ 641,646 $ 429,034 $ 317,460 $ 248,281
Net investment in real estate...................... 685,476 597,294 398,828 295,884 234,825
Total assets....................................... 821,936 699,275 451,206 334,866 254,073
Total debt......................................... 364,718 270,768 177,349 145,271 179,492
Shareholders' equity............................... 412,039 388,126 248,114 168,320 59,016
Other Data:
Funds from Operations (3).......................... $ 52,337 $ 42,968 $ 30,445 $ 20,492 $ 13,138
EBITDA (4)......................................... 73,352 53,779 39,912 30,013 20,584
Net cash flow:
Operating activities............................. 61,444 39,411 29,552 16,473 8,976
Investing activities............................. (122,346) (245,336) (111,554) (82,556) (65,311)
Financing activities............................. 59,725 206,507 80,194 68,541 52,837
Distributions...................................... 41,233 32,046 24,065 15,953 8,775
Return of capital portion of distribution.......... 3,711 3,916 12,280 8,554 4,320
Number of properties included in operating results
(5).............................................. 125 100 76 69 53
Ratio of earnings to fixed charges................. 2.94 3.27 2.33 1.63 1.19
Ratio of earnings to combined fixed charges and
preferred dividends.............................. 2.16 3.04 2.15 1.51 1.19

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

(1) Operating expenses include real estate taxes, repairs and maintenance,
insurance and utilities and exclude interest, depreciation and amortization
and general and administrative expenses.

(2) Other income (expense) includes gains and losses on property dispositions in
1997 and 1996, and other miscellaneous operating and non-operating items.

(3) Funds from Operations represents net income available to common
shareholders, excluding extraordinary items, sales of (or adjustments to
basis of) properties plus depreciation and amortization, convertible
subordinated debenture interest and amortization of deferred financing costs
on convertible subordinated debentures. Dividends on Convertible Preferred
Shares for 1996 and 1995 are not excluded from net income as such shares
were automatically converted to common shares in 1996. Funds from operations
is computed as follows:

1998 1997 1996 1995 1994
--------- --------- --------- --------- ---------

Net income available to common Shareholders........... $ 30,098 $ 26,729 $ 14,941 $ 8,212 $ 2,359
Extraordinary item.................................... 3,331 632 --
Depreciation and amortization......................... 21,418 15,278 10,648 8,456 6,176
Amortization of deferred financing costs,
Debentures.......................................... 38 48 67 135 267
Convertible subordinated debenture interest........... 783 999 1,385 3,057 4,336
(Gain) Loss on disposition of properties.............. -- (86) 73 -- --
--------- --------- --------- --------- ---------
Funds from Operations................................. $ 52,337 $ 42,968 $ 30,445 $ 20,492 $ 13,138
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------

Management of the Company believes that Funds from Operations is helpful to
investors as a measure of the performance of equity REIT shares because,
along with cash flows from operating activities, financing activities and
investing activities, it provides investors an understanding of the ability
of the Company to incur and service debt and to make capital expenditures.
Funds from Operations does not represent cash flow from operations as
defined by generally accepted accounting principles ("GAAP"), should not be
considered by the reader as an alternative to net income as an indicator of
the Company's operating performance or to cash flows as a measure of
liquidity, and is not indicative of cash available to fund all cash flow
needs. Investors are cautioned that Funds from Operations, as calculated by
the Company, may not be comparable to similarly titled but differently
calculated measurers for other REITs.

The National Association of Real Estate Investment Trusts (NAREIT) defines
funds from operations as net income before extraordinary items plus
depreciation and amortization less the amortization of deferred financing
costs.

(4) Earnings before interest, income taxes, depreciation and amortization.
Management believes that EBITDA is helpful to investors as an indication of
property operations, because it excludes costs of financing and non-cash
depreciation and amortization amounts. EBITDA does not represent cash flows
from operations as defined by GAAP, should not be considered by the reader
as an alternative to net income as an indicator of the Company's operating
performance, and is not indicative of cash available to fund all cash flow
needs.

(5) Increase in number of properties in 1994 reflects the acquisition of 15
properties throughout 1994. Increase in number of properties reflects
acquisition of 16 properties throughout 1995. Increase in number of
properties in 1996 reflects acquisition of 15 properties and the disposition
of 8 properties throughout 1996. Increase in number of properties in 1997
reflects the acquisition of 21 properties, the completion of 6 developments,
and the disposition of 3 properties throughout 1997. Increase in number of
properties in 1998 reflects the acquisition of 30 properties, the completion
of 1 development, and the disposition of 5 properties throughout 1998. See
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS."

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

GENERAL BACKGROUND

The following is a discussion of the historical operating results of the
Company. This discussion should be read in conjunction with the Financial
Statements and the information set forth under "SELECTED HISTORICAL FINANCIAL
DATA."

The results of the Company reflect cumulative significant acquisition,
build-to-suit and redevelopment activities. Since 1989, the Company has grown
its portfolio of owned properties from 6 properties, with approximately 1.9
million square feet, to 125 properties with approximately 24.2 million square
feet as of December 31, 1998. This total excludes properties under development
and mortgage investments. Through the issuance of mortgages on properties and
build-to-suit projects under development, the Company has a total of 136
property investments, excluding the parking lot, representing approximately 26.6
million square feet.

The Company grew its total property investments by 6% in 1998, which
includes build-to-suits in progress and mortgage investments. In addition, the
Company grew its portfolio of owned properties by 7% during the year by
concluding thirty warehouse/industrial property acquisitions and one warehouse/
industrial build-to-suit property, net of the disposition of five
warehouse/industrial properties. The Company's total increase in owned
warehouse/industrial area, net of disposals, was 2.6 million square feet or
12.7%.

The Company's Consolidated Financial Statements for the years ended December
31, 1998, 1997 and 1996 reflect partial period results for acquisitions,
dispositions and expansions made during each respective year. These statements
also include the lease-up of previously vacant space, related to the properties
owned by the Company as of January 1, 1998, 1997 and 1996, respectively. Certain
executive officers of the Company had an interest in entities which were
purchased by the Company (one property in 1998, one property in 1997 and three
properties in 1996). These transactions satisfied the Company's investment
criteria and were approved by the Company's independent trustees.

Finally, the historical results of the Company reflect the Company's
significant property development and redevelopment activities in which
substantial capital costs and related expenses were incurred in advance of
receipt of rental income. At December 31, 1998, the Company and its subsidiaries
had $18.4 million invested in build-to-suit projects under development which
were not producing income as of the end of the year. As of December 31, 1998,
the Company owns 11 properties totaling 6.0 million square feet that the Company
has redeveloped or is currently holding to redevelop. Redevelopments are
typically larger properties that are acquired, subdivided and released. During
construction, certain costs are capitalized; however, in certain circumstances,
such costs are expended after completion but prior to leasing, resulting in a
decline in net income.

RESULTS OF OPERATIONS

COMPARISON OF YEAR ENDED DECEMBER 31, 1998 TO YEAR ENDED DECEMBER 31, 1997

Revenues

Total revenues increased by $27.2 million or 31.6% over the same period last
year.

In the twelve months of 1998, 92.2% of total revenues of the Company were
derived primarily from base rents, straight-line rents, expense reimbursements
and mortgage income (operating and investment revenue), pursuant to the terms of
tenant leases and mortgages for occupied space at the warehouse/ industrial
properties.

Operating and investment revenues increased by $23.7 million in 1998. A
portion of the increase from the prior year is due to income from thirty
properties acquired in 1998 and one build-to-suit property

coming on line totaling 3.2 million square feet, net of five dispositions as of
the end of the year. The remainder of the increase was attributable to a full
period of income from the 1997 acquisition of twenty-one properties, totaling
7.1 million square feet and six build-to-suit properties totaling 1.5 million
square feet coming on-line in 1997, net of three property dispositions.

Other revenues increased $3.5 million due to increased fees earned and
profits realized by the Company and the Company's unconsolidated affiliate in
connection with increased build-to-suit, development and leasing activities.

Operating and Nonoperating Expenses

Real estate tax expense and property operating and leasing expense increased
by $6.5 million from year to year. The majority of the increase, $5.1 million,
resulted from a full period of real estate taxes on 1997 acquisitions and a
partial period of real estate taxes on 1998 acquisitions, net of dispositions.
The balance of the increase was due to increased leasing expenses, insurance,
utilities, repairs and maintenance and property management costs, which
increased proportionate to the level of acquisitions. However, property
operating and leasing costs as a percentage of total revenues decreased from
14.1% to 11.9% when comparing 1997 to 1998 due to efficiencies realized by the
Company.

General and administrative expenses increased by $0.9 million for the period
due primarily to the growth of the Company, but as a percentage of total
revenues remained relatively constant at 3.6% when comparing years.

Depreciation and amortization increased by $6.1 million due to a full period
of depreciation on 1997 acquisitions and depreciation on 1998 acquisitions.

Interest incurred increased by approximately $3.6 million over the same
period last year due to the Company holding higher average balances outstanding
in the second quarter of 1998 compared to 1997.

Other income (expenses) decreased due to the non-recurring disposal of fixed
assets for a gain which occurred in 1997.

Net Income and Other Measures of Operations

Net income increased $8.8 million or 32.0% due to the growth of the Company
through the net acquisition of Warehouse/Industrial real estate and merchant
income.

Funds from operations ("FFO") increased 21.6% from $43.0 million to $52.3
million. The National Association of Real Estate Investment Trusts ("NAREIT")
defines funds from operations as net income before extraordinary items plus
depreciation and amortization less the amortization of deferred financing costs.
The Company considers FFO and FFO growth to be one relevant measure of financial
performance of equity REITs that provides a relevant basis for comparison among
REITs, and it is presented to assist investors in analyzing the performance of
the Company.

On a cash basis, when comparing the 1997 results of operations of properties
owned January 1, 1997 with the results of operations of the same properties for
1998 (the "same property" portfolio), the Company recognized an increase of
approximately 2.0% in net operating income. This same property increase was due
to the timely lease up of vacant space, rental increases on renewed leases and
contractual increases in minimum rent under leases in place.

The Company assesses its operating results, in part, by comparing the Net
Revenue Margin between periods. Net Revenue Margin is calculated for the "in
service" portfolio by dividing net revenue (total operating and investment
revenue less real estate taxes and property operating and leasing expense) by
adjusted operating and investment revenue (operating and investment revenue less
expense reimbursements, adjusted for leases containing expense stops). This
margin indicates the percentage of revenue

actually retained by the Company or, alternatively, the amount of property
related expenses not recovered by tenant reimbursements. The margin for 1998 was
88.5% compared with 87.5% for 1997.

COMPARISON OF YEAR ENDED DECEMBER 31, 1997 TO YEAR ENDED DECEMBER 31, 1996

Revenues

Total revenues increased by $22.6 million or 35.7% over 1996.

In the twelve months of 1997, 93.8% of total revenues of the Company were
derived primarily from base rents, straight-line rents, expense reimbursements
and mortgage income (operating and investment revenue), pursuant to the terms of
tenant leases and mortgages for occupied space at the warehouse/ industrial
properties.

Operating and investment revenues increased by $23.5 million in 1997. A
portion of the increase from the prior year is due to income from twenty-one
properties acquired in 1997 and six build-to-suit properties coming on line
totaling 8.6 million square feet, net of three dispositions as of the end of the
year. The remainder of the increase was attributable to a full period of income
from the 1996 acquisition of thirteen properties, totaling 3.3 million square
feet, net of seven property dispositions.

Other revenues decreased $0.9 million due to decreased fees earned and
profits realized by the Company and the Company's unconsolidated affiliate in
connection with decreased build-to-suit, development and leasing activities.

Operating and Nonoperating Expenses

Real estate tax expense and property operating and leasing expense increased
by $8.4 million from year to year. The majority of the increase, $5.2 million,
resulted from a full period of real estate taxes on 1996 acquisitions and a
partial period of real estate taxes on 1997 acquisitions, net of dispositions.
The balance of the increase was due to increased leasing expenses, insurance,
utilities, repairs and maintenance and property management costs, which
increased proportionate to the level of acquisitions. However, property
operating and leasing costs as a percentage of total revenues increased only
slightly from 14.0% to 14.1% when comparing 1996 to 1997 due to efficiencies
realized by the Company.

General and administrative expenses increased by $0.5 million for the period
due primarily to the growth of the Company, but as a percentage of total
revenues decreased from 4.1% to 3.6% when comparing years.

Depreciation and amortization increased by $4.6 million due to a full period
of depreciation on 1996 acquisitions and depreciation on 1997 acquisitions.

Interest incurred increased by approximately $0.2 million over the same
period last year due to the Company holding higher average balances outstanding
in the second quarter of 1997 compared to 1996.

Other income (expenses) increased due to the non-recurring disposal of fixed
assets for a gain which occurred in 1997.

In 1996, the Company incurred an extraordinary loss of $3.3 million
representing a write off of unamortized deferred financing costs as a result of
the re-financing of its outstanding revenue bonds. In addition, the Company
replaced its $92 million secured lines of credit with a $135 million unsecured
credit facility at a significant savings in interest.

Net Income and Other Measures of Operations

Net income increased $12.7 million or 85.0% due to the growth of the Company
through the net acquisition of Warehouse/Industrial real estate and merchant
income.

FFO increased 41.4% from $30.4 million to $43.0 million.

On a cash basis, when comparing the 1996 results of operations of properties
owned January 1, 1996 with the results of operations of the same properties for
1997 (the "same property" portfolio), the Company recognized an increase of
approximately 6.0% in net operating income. This same property increase was due
to the timely lease up of vacant space, rental increases on renewed leases and
contractual increases in minimum rent under leases in place.

The Net Revenue Margin for 1997 was 87.9% compared with 84.3% for 1996.

LIQUIDITY AND CAPITAL RESOURCES

OPERATING AND INVESTMENT CASH FLOW

Cash flow generated from Company operations has historically been utilized
for working capital purposes and distributions, while proceeds from financings
and capital raises have been used to fund acquisitions and other capital costs.
However, cash flow from operations during 1998 of $61.4 million net of $41.1
million of 1998 distributions provided $20.3 million of retained capital. The
Company expects retained capital to fund a portion of future investment
activities.

In 1998, the Company's investment activities include acquisitions of $68.9
million, advances for construction in progress of $20.8 million, advances on
mortgage notes receivable of $21.3 million, advances to affiliate to fund
construction activities of $37.2 million and improvements and additions to
properties of $27.0 million. These activities were funded with dispositions of
real estate of $29.0 million, advances on the company's line of credit of $132.0
million and a portion of the Company's retained capital.

Equity and Share Activity

On March 25, 1998, the Company completed a public offering of 370,371 common
shares of beneficial interest at $32.0625 per share in an underwritten offering
to a unit investment trust. Net proceeds of $11.8 million from the public
offering, proceeds from the repayment of mortgage notes receivable, and working
capital were used to repay amounts outstanding under the Company's line of
credit of $30.1 million.

On April 8, 1998 the Company completed the private placement of 370,000
common shares of beneficial interest at $33.375 per share to an institutional
investor. The net proceeds of the offering of approximately $12.1 million were
used to fund working capital requirements.

During 1998, the Company paid distributions on common shares of $31.2
million or $1.75 per share and on class B common shares of $3.7 million or $1.80
per share. Also, in January of 1998, the Company paid dividends on preferred
shares of $1.4 million or $0.477 per share, and in April, July and October of
1998, paid dividends of $1.6 million or $0.53 per share each time. The following
factors, among others, will affect the future availability of funds for
distribution: (i) scheduled increases in base rents under existing leases, (ii)
changes in minimum base rents attributable to replacement of existing leases
with new or replacement leases and (iii) restrictions under certain covenants of
the Company's unsecured credit facility co-led by The First National Bank of
Chicago and Lehman Brothers Holdings, Inc.

Debt Capacity

In November, 1998, the Company increased to $250 million its unsecured
credit facility co-led by The First National Bank of Chicago and Lehman Brothers
Holdings Inc. As of March 11, 1999, the Company had outstanding borrowings of
approximately $102.6 million under the unsecured revolving line of credit
(approximately 9.2% of the Company's fully diluted total market capitalization),
and the Company had remaining availability of approximately $147.4 million under
its unsecured line of credit.

At December 31, 1998, the Company's debt constituted approximately 31.7% of
its fully diluted total market capitalization. Also, the Company's EBITDA to
debt service coverage ratio remained high at 5.7 to 1, and the Company's EBITDA
to fixed charge coverage ratio decreased to 3.8 to 1 due to preferred dividends.
The Company's fully diluted common equity market capitalization was
approximately $696.3 million, and its fully diluted total market capitalization
exceeded $1.1 billion. The Company's leverage ratios benefited during 1998 from
the conversion of approximately $3.7 million of its 8.22% Convertible
Subordinated Debentures, due 2004, to 201,748 common shares.

In February, 1998, Duff & Phelps Credit Rating Co. joined Moody's Investors
Service's January, 1997 evaluation by assigning investment grade rating to the
Company's senior unsecured debt and preferred stock issuable under the Company's
shelf registration statement and convertible subordinated notes. Also in 1997,
Standard and Poors assigned an investment grade rating to the Company's senior
unsecured debt. These investment grade ratings further enhance the Company's
financial flexibility.

The Company has considered its short-term (one year or less) capital needs,
in conjunction with its estimated future cash flow from operations and other
expected sources. The Company believes that its ability to fund operating
expenses, building improvements, debt service requirements and the minimum
distribution required to maintain the Company's REIT qualification under the
Internal Revenue Code, will be met by recurring operating and investment revenue
and other real estate income.

Long-term (greater than one year) capital needs for property acquisitions,
scheduled debt maturities, major redevelopment projects, expansions, and
construction of build-to-suit properties will be supported, initially, by draws
on the Company's unsecured line of credit, followed by the issuance of long-term
unsecured indebtedness and the issuance of equity securities. Management expects
that a significant portion of the Company's investment funds will be supplied by
the proceeds of property dispositions.

INFLATION

Inflation has not had a significant impact on the Company because of the
relatively low inflation rates in the Company's markets of operation. Most of
the Company's leases require the tenants to pay their share of operating
expenses, including common area maintenance, real estate taxes and insurance,
thereby reducing the Company's exposure to increases in costs and operating
expenses resulting from inflation. In addition, many of the leases are for
remaining terms less than five years which may enable the Company to replace
existing leases with new leases at higher base rental rates if rents of existing
leases are below the then-existing market rate.

YEAR 2000 COMPLIANCE

In response to the Year 2000 issue, the Company initiated a project in early
1997 to identify, evaluate and implement a new computerized real estate
management system. The Company is addressing the issue through a combination of
modifications to existing programs and conversion to Year 2000 compliant
software. In addition, the Company is discussing with its tenants, vendors, and
other service providers the possibility of any interface difficulties relating
to the Year 2000 issue which may affect the Company. If the Company and those it
conducts business with do not make modifications or conversions in a timely
manner, the Year 2000 issue may have a material adverse effect on the Company's
business, financial condition, and results of operations. The total cost
associated with the required modifications is not expected to be material to the
Company's consolidated results of operations, liquidity and financial position,
and is being expensed as incurred.

RECENT PRONOUNCEMENTS

as other financial statements. Comprehensive income is defined by Concepts
Statement No. 6, "Elements of Financial Statements" as the change in equity of a
business enterprise during a period from transactions and other events and
circumstances from nonowner sources. It includes all changes in equity during
the period except those resulting from investment by owners and distributions to
owners. As required by this statement, the Company adopted the new standard for
reporting comprehensive income. The Company's net income is equal to
comprehensive income.

In June, 1997, the FASB issued SFAS Statement No. 131, "Disclosures about
Segments of an Enterprise and Related Information." This statement, effective
for financial statements for fiscal years beginning after December 15, 1997,
requires that a public business enterprise report financial and descriptive
information about its reportable operating segments. Generally, financial
information is required to be reported on the basis that it is used internally
for evaluating segment performance and deciding how to allocate resources to
segments. The Company has determined its statement disclosure reflects the basis
by which management analyzes the Company's performance.

In March, 1998, the FASB's Emerging Issues Task Force ("EITF") issued EITF
Issue No. 97-11, "Accounting for Internal Costs Related to Real Estate
Acquisitions." This statement, effective as of March 19, 1998, requires that
internal costs of identifying and acquiring operating properties should be
expensed as incurred. Prior to March 19, 1998, the Company capitalized internal
preacquisition costs. The adoption of this EITF has not had a significant impact
on the results of current operations and the Company estimates this EITF will
not have a significant impact on the results of operations in the future.

In May, 1998, the FASB issued SFAS Statement No. 133, "Accounting for
Derivative Instruments and Hedging Activities." This statement, effective for
financial statements for fiscal years beginning after June 15, 1999, provides a
comprehensive and consistent standard for the recognition and measurement of
derivatives and hedging activities. The Company has disclosed its only
derivative position within the Debt footnote to the financial statements.

FORWARD LOOKING STATEMENTS

This Report on Form 10-K contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. The Company's actual
results could differ materially from those set forth in the forward looking
statements as a result of various factors, including, but not limited to,
uncertainties affecting real estate businesses generally (such as entry into new
leases, renewals of leases and dependence on tenants' business operations),
risks relating to acquisition, construction and development activities, possible
environmental liabilities, risks relating to leverage, debt service and
obligations with respect to the payment of dividends (including availability of
financing terms acceptable to the Company and sensitivity of the Company's
operations to fluctuations in interest rates), the potential for the need to use
borrowings to make distributions necessary for the Company to qualify as a REIT,
dependence on the primary market in which the Company's properties are located,
the existence of complex regulations relating to the Company's status as a REIT,
the failure of the Company and entities the Company does business with to make
necessary modifications and conversions to Year 2000 compliant software in a
timely manner and the potential adverse impact of the market interest rates on
the cost of borrowings by the Company and on the market price for the Company's
securities.

ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is subject to market risk associated with changes in interest
rates as follows:

During 1998 the Company entered into an agreement to lock in a fixed
interest rate on an anticipated 1999 refinancing of certain mortgage notes
payable. The agreement has a notional amount of $25 million and provides that
the Company will either receive or pay an amount equal to the spread between a
locked in treasury rate (4.835%) and the interest rate on treasury securities
underlying the agreement as of the

determination date, which is to be triggered by the Company on or before May 17,
1999. If settlement of the agreement had been triggered at December 31, 1998 or
February 25, 1999 the Company would have had to pay approximately $365,000 or
would have received approximately $436,000, respectively. A 25 basis point
movement in the base treasury securities underlying the agreement would have an
approximately $468,000 increase or decrease in the amount the Company would
receive or pay under the agreement as of February 25, 1999.

As of December 31, 1998 the Company's long term debt includes a mortgage
note payable, tax exempt debt and borrowings under a line of credit totaling
$154.8 million, all of which bear interest at variable rates that float with the
market. A 25 basis point movement in the interest rates underlying these debt
agreements would result in an approximate $387,000 annualized increase or
decrease in interest expense and cash flows. The remaining debt is fixed rate
debt.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

See Index to Financial Statements on Page F-1 of this Annual Report on Form
10-K for the financial statements and financial statement schedules.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

Item 10 is incorporated herein pursuant to General Instruction G to Form
10-K by referencing the Company's definitive proxy statement, which will be
filed with the Securities and Exchange Commission pursuant to Regulation 14A not
later than 120 days after the close of the fiscal year.

ITEM 11. EXECUTIVE COMPENSATION

Item 11 is incorporated herein pursuant to General Instruction G to Form
10-K by referencing the Company's definitive proxy statement, which will be
filed with the Securities and Exchange Commission pursuant to Regulation 14A not
later than 120 days after the close of the fiscal year.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Item 12 is incorporated herein pursuant to General Instruction G to Form
10-K by referencing the Company's definitive proxy statement, which will be
filed with the Securities and Exchange Commission pursuant to Regulation 14A not
later than 120 days after the close of the fiscal year.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Item 13 is incorporated herein pursuant to General Instruction G to Form
10-K by referencing the Company's definitive proxy statement, which will be
filed with the Securities and Exchange Commission pursuant to Regulation 14A not
later than 120 days after the close of the fiscal year.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a) The following documents are filed as part of this report:

1. The consolidated financial statements indicated in Part II, Item 8
"Financial Statements and Supplementary Data." See Index to Financial
Statements on Page F-1 of this Annual Report on Form 10-K.

2. The financial statement schedules indicated in Part II, Item 8
"Financial Statements and Supplementary Data." See Index to Financial
Statements on Page F-1 of this Annual Report on Form 10-K.

3. The exhibits listed in part (c) of this Item 14.

(b) Reports on Form 8-K filed during the fourth quarter:

1. A Current Report on Form 8-K for October 23, 1998 pursuant to Item
5--"Other Events" announced the Company's filing of supplement to the
Company's registration statement on Form S-3, Registration Statement
No. 333-49359, with the Securities and Exchange Commission relating
to the issuance and sale from time to time of $250,000,000 aggregate
principal amount of the Company's Medium Term Notes, Series A.

EXHIBIT
NUMBER DESCRIPTION
- --------------- -------------------------------------------------------------------------------------------------

***3.1 Declaration of Trust, as supplemented by Articles Supplementary

***3.2 Bylaws, as amended

***4.1 Form of Certificate representing Common Shares of Beneficial Interest

*****4.2 1995 Restricted Stock Incentive Plan

*****4.3 1995 Director Stock Plan

*****4.4 Bonus Stock Grant Agreement between the Company and John S. Gates, Jr.

*****4.5 Bonus Stock Grant Agreement between the Company and Robert L. Stovall

*****4.6 Registration Rights Agreement between the Company and LaSalle Advisors Limited Partnership

******4.7 Rights Amendment dated as of July 30, 1998 between CenterPoint Properties Trust and First Chicago
Trust Company of New York, as Rights Agent.

*4.8 Form of Senior Securities Indenture

*******4.9 Form of Second Supplemental Indenture

10.1 Second Amended and Restated Credit Agreement dated as of November 23, 1998 among CenterPoint
Properties Trust, the First National Bank of Chicago and Bank of America N.T.S.A.

10.2 Form of Employment and Severance Agreement between the Company and each of John S. Gates, Jr.,
Paul S. Fisher, Rockford O. Kottka, Paul T. Ahern and Mike M. Mullen

***10.3 Stock Purchase Agreement between the Company and Davis Selected Advisors, L.P.

EXHIBIT
NUMBER DESCRIPTION
- --------------- -------------------------------------------------------------------------------------------------

***10.4 CenterPoint Properties Amended and Restated 1993 Stock Option Plan, as amended

***10.5 First Amendment to the CenterPoint Properties 1995 Director Stock Plan

***10.6 Stock Option Agreement between the Company and Martin Barber

***10.7 Stock Option Agreement between the Company and Nicholas C. Babson

***10.8 Stock Option Agreement between the Company and Alan D. Feld

***10.9 Stock Option Agreement between the Company and John J. Kinsella

***10.10 Stock Option Agreement between the Company and Thomas E. Robinson

***10.11 Stock Option Agreement between the Company and Robert L. Stovall

***10.12 Stock Option Agreement between the Company and Norman Bobins

12.1 Computation of the ratios of earnings to fixed charges

12.2 Computation of ratio of earnings to combined fixed charges and preferred dividends

21 Subsidiaries of the Company

23 Consent of Independent Accountants

27 Financial Data Schedule

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

* Incorporated by reference to the Company's Registration Statement on Form S-3
(File No. 333-49359)

** Incorporated by reference to the Company's Registration Statement on Form S-11
File No. 333-85440)

*** Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 1998

**** Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 1996

***** Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 1995

****** Incorporated by reference to the Company's Current Report on Form 8-K dated August
3, 1998

******* Incorporated by reference to the Company's Current Report on Form 8-K dated
October 23, 1998

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

CENTERPOINT PROPERTIES TRUST,
a Maryland business trust

By: /s/ JOHN S. GATES, JR.
-----------------------------------------
John S. Gates, Jr., President and Chief
Executive Officer (Principal Executive
Officer)

By: /s/ PAUL S. FISHER
-----------------------------------------
Paul S. Fisher, Executive Vice
President and Chief Financial Officer
(Principal Financial and Accounting
Officer)

Pursuant to the requirements of the Securities Act of 1934, this report has
been signed by the following persons on behalf of the registrant in the
capacities and on the dates indicated.

SIGNATURE NAME AND TITLE DATE
- ------------------------------ -------------------------- -------------------

Martin Barber, Chairman
/s/ MARTIN BARBER and Trustee March 12, 1999
- ------------------------------

John S. Gates, Jr.,
President Chief
/s/ JOHN S. GATES, JR. Executive Officer and March 12, 1999
- ------------------------------ Trustee

Robert L. Stovall, Vice
/s/ ROBERT L. STOVALL Chairman and Trustee March 12, 1999
- ------------------------------

Nicholas C. Babson,
/s/ NICHOLAS C. BABSON Trustee March 12, 1999
- ------------------------------

/s/ ALAN D. FELD Alan D. Feld, Trustee March 12, 1999
- ------------------------------

/s/ JOHN J. KINSELLA John J. Kinsella, Trustee March 12, 1999
- ------------------------------

Thomas E. Robinson,
/s/ THOMAS E. ROBINSON Trustee March 12, 1999
- ------------------------------

/s/ NORMAN BOBINS Norman Bobins, Trustee March 12, 1999
- ------------------------------

CENTERPOINT PROPERTIES TRUST

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

AND FINANCIAL STATEMENT SCHEDULES

PAGE(S)
--------------

Consolidated Financial Statements:

Report of Independent Accountants............................................................... F-2

Consolidated Balance Sheets as of December 31, 1998 and 1997.................................... F-3

Consolidated Statements of Operations for the years ended December 31, 1998, 1997 and 1996...... F-4

Consolidated Statements of Shareholders' Equity for the years ended December 31, 1998, 1997 and F-5
1996..........................................................................................

Consolidated Statements of Cash Flows for the years ended December 31, 1998, 1997 and 1996...... F-6

Notes to Consolidated Financial Statements...................................................... F-7 to F-22

Financial Statement Schedules:

Report of Independent Accountants............................................................... F-23

Schedule II--Valuation and Qualifying Accounts.................................................. F-24

Schedule III--Real Estate and Accumulated Depreciation.......................................... F-25 to F-31

F-1

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
Shareholders of CenterPoint Properties Trust

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, shareholders' equity and cash flows
present fairly, in all material respects, the financial position of CenterPoint
Properties Trust and its subsidiaries at December 31, 1998 and 1997, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1998 in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.

PRICEWATERHOUSECOOPERS LLP

Chicago, Illinois
February 9, 1999

F-2

CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)

DECEMBER 31,
----------------------
1998 1997
---------- ----------

ASSETS
Assets:
Investment in real estate:
Land and leasehold.................................................................... $ 128,045 $ 123,014
Buildings............................................................................. 487,996 414,314
Building improvements................................................................. 94,474 64,372
Furniture, fixtures, and equipment.................................................... 18,817 13,912
Construction in progress.............................................................. 18,401 26,034
---------- ----------
747,733 641,646
Less accumulated depreciation and amortization........................................ 62,257 44,352
---------- ----------
Net investment in real estate....................................................... 685,476 597,294

Cash and cash equivalents............................................................... 475 1,652
Restricted cash and cash equivalents.................................................... 33,056 36,509
Tenant accounts receivable, net......................................................... 18,067 12,416
Mortgage notes receivable............................................................... 20,353 30,297
Investment in and advances to affiliate................................................. 48,564 11,143
Prepaid expenses and other assets....................................................... 5,264 3,303
Deferred expenses, net.................................................................. 10,681 6,661
---------- ----------
$ 821,936 $ 699,275
---------- ----------
---------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage notes payable and other debt................................................... $ 103,520 $ 85,755
Senior unsecured debt................................................................... 100,000
Tax-exempt debt......................................................................... 75,540 75,540
Line of credit.......................................................................... 77,600 97,700
Convertible subordinated debentures payable............................................. 8,058 11,740
Preferred dividends payable............................................................. 1,060 901
Accounts payable........................................................................ 7,986 10,311
Accrued expenses........................................................................ 30,810 24,444
Rents received in advance and security deposits......................................... 5,323 4,759
---------- ----------
409,897 311,149
---------- ----------
Commitments and contingencies

Shareholders' equity:
Preferred shares of beneficial interest, $.001 par value, 10,000,000 shares authorized;
3,000,000 issued and outstanding, having a liquidation preference of $25 per share
($75,000)............................................................................. 3 3
Common shares of beneficial interest, $.001 par value, 47,727,273 shares authorized;
18,753,474 and 16,891,951 issued and outstanding, respectively........................ 19 17
Class B common shares of beneficial interest, $.001 par value, 2,272,727 shares
authorized; 1,398,088 and 2,272,727 issued and outstanding, respectively.............. 1 2
Additional paid-in-capital.............................................................. 449,229 420,743
Retained earnings (deficit)............................................................. (36,917) (32,142)
Unearned compensation--restricted shares................................................ (296) (497)
---------- ----------
Total shareholders' equity............................................................ 412,039 388,126
---------- ----------
$ 821,936 $ 699,275
---------- ----------
---------- ----------

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

F-3

CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)

YEARS ENDED DECEMBER 31,
-------------------------------

1998 1997 1996
--------- --------- ---------
Revenue:
Operating and investment revenue:
Minimum rents................................................................ $ 75,763 $ 57,519 $ 42,107
Straight-line rents.......................................................... 4,030 2,732 2,087
Expense reimbursements....................................................... 21,924 18,228 11,413
Mortgage interest income..................................................... 2,573 2,146 1,514
--------- --------- ---------
Total operating and investment revenue..................................... 104,290 80,625 57,121
--------- --------- ---------
Other revenue:
Real estate fee income....................................................... 8,581 3,159 5,140
Equity in net income of affiliate............................................ 237 2,174 1,069
--------- --------- ---------
Total other revenue........................................................ 8,818 5,333 6,209
--------- --------- ---------
Total revenue.............................................................. 113,108 85,958 63,330
--------- --------- ---------
Expenses:
Real estate taxes.............................................................. 22,218 17,091 11,868
Property operating and leasing................................................. 13,482 12,091 8,883
General and administrative..................................................... 4,041 3,105 2,567
Depreciation and amortization.................................................. 21,418 15,278 10,648
Interest expense:
Interest incurred, net....................................................... 13,659 10,071 9,865
Amortization of deferred financing costs..................................... 1,817 800 1,127
--------- --------- ---------
Total expenses............................................................. 76,635 58,436 44,958
--------- --------- ---------
Operating income........................................................... 36,473 27,522 18,372

Other income (expense)........................................................... (15) 108 (100)
--------- --------- ---------
Income before extraordinary item................................................. 36,458 27,630 18,272

Extraordinary item, early extinguishment of debt................................. (3,331)
--------- --------- ---------
Net income....................................................................... 36,458 27,630 14,941
Preferred dividends............................................................ (6,360) (901) (947)
--------- --------- ---------
Net income available to common shareholders...................................... $ 30,098 $ 26,729 $ 13,994
--------- --------- ---------
--------- --------- ---------
Per share net income available to common shareholders before extraordinary item:
Basic........................................................................ $ 1.51 $ 1.43 $ 1.25
Diluted...................................................................... $ 1.50 $ 1.41 $ 1.22

Per share net income available to common shareholders:
Basic........................................................................ $ 1.51 $ 1.43 $ 1.01
Diluted...................................................................... $ 1.50 $ 1.41 $ 0.99

Distributions per common share................................................... $ 1.75 $ 1.68 $ 1.62

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

F-4

CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)

COMMON
PREFERRED SHARES CLASS B COMMON SHARES SHARES
-------------------------- ------------------------- -----------
NUMBER NUMBER NUMBER
OF SHARES AMOUNT OF SHARES AMOUNT OF SHARES
----------- ------------- ---------- ------------- -----------

Balance, January 1, 1996....................................... 2,272,727 $ 2 0 $ 0 10,358,958
Issuance of common shares, less $2,387 of offering costs....... 3,450,000
Conversion of convertible preferred shares to Class B common
shares....................................................... (2,272,727) (2) 2,272,727 2
Conversion of convertible subordinated debentures to common
shares....................................................... 485,680
Shares issued for stock options exercised...................... 27,787
Incentive share awards......................................... 8,290
Director share awards.......................................... 2,516
Amortization of unearned compensation..........................
Distributions declared on common shares, $1.62 per share.......
Distributions declared on convertible preferred shares, $0.42
per share....................................................
Distributions declared on Class B common shares, $1.25 per
share........................................................
Net income.....................................................
-- --
----------- ---------- -----------
Balance, December 31, 1996..................................... 0 0 2,272,727 2 14,333,231
Issuance of common shares, less $4,054 of offering costs....... 2,250,000
Issuance of preferred shares, less $3,101 of offering costs.... 3,000,000 3
Conversion of convertible subordinated debentures to common
shares....................................................... 144,640
Shares issued for stock options exercised...................... 149,715
Incentive share awards......................................... 12,444
Director share awards.......................................... 1,921
Amortization of unearned compensation..........................
Distributions declared on common shares, $1.68 per share.......
Distributions declared on preferred shares, $0.30 per share....
Distributions declared on Class B common shares, $1.73 per
share........................................................
Net income.....................................................
-- --
----------- ---------- -----------
Balance, December 31, 1997..................................... 3,000,000 3 2,272,727 2 16,891,951
Issuance of common shares, less $343 of offering costs......... 740,371
Conversion of Class B common shares to common shares........... (874,639) (1) 874,639
Conversion of convertible subordinated debentures to common
shares....................................................... 201,748
Shares issued for stock options exercised...................... 42,461
Director share awards.......................................... 2,304
Amortization of unearned compensation..........................
Distributions declared on common shares, $1.75 per share.......
Distributions declared on preferred shares, $2.12 per share....
Distributions declared on Class B common shares, $1.80 per
share........................................................
Net income.....................................................
-- --
----------- ---------- -----------
Balance, December 31, 1998..................................... 3,000,000 $ 3 1,398,088 $ 1 18,753,474
-- --
-- --
----------- ---------- -----------
----------- ---------- -----------

UNEARNED
ADDITIONAL RETAINED COMPENSATION- TOTAL

PAID-IN EARNINGS RESTRICTED SHAREHOLDERS'

AMOUNT CAPITAL (DEFICIT) SHARES EQUITY

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

Balance, January 1, 1996....................................... $ 10 $ 187,161 $ (18,602) $ (251) $ 168,320

Issuance of common shares, less $2,387 of offering costs....... 3 79,547 79,550

Conversion of convertible preferred shares to Class B common
shares.......................................................
Conversion of convertible subordinated debentures to common
shares....................................................... 1 8,683 8,684

Shares issued for stock options exercised...................... 508 508

Incentive share awards......................................... 186 (186)
Director share awards.......................................... 57 57

Amortization of unearned compensation.......................... 118 118

Distributions declared on common shares, $1.62 per share....... (20,277) (20,277)

Distributions declared on convertible preferred shares, $0.42
per share.................................................... (947) (947)

Distributions declared on Class B common shares, $1.25 per
share........................................................ (2,841) (2,841)

Net income..................................................... 14,941 14,941

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

Balance, December 31, 1996..................................... 14 276,142 (27,726) (319) 248,113

Issuance of common shares, less $4,054 of offering costs....... 2 66,819 66,821

Issuance of preferred shares, less $3,101 of offering costs.... 71,896 71,899

Conversion of convertible subordinated debentures to common
shares....................................................... 2,564 2,564

Shares issued for stock options exercised...................... 1 2,873 2,874

Incentive share awards......................................... 392 (392)
Director share awards.......................................... 57 57

Amortization of unearned compensation.......................... 214 214

Distributions declared on common shares, $1.68 per share....... (27,221) (27,221)

Distributions declared on preferred shares, $0.30 per share.... (901) (901)

Distributions declared on Class B common shares, $1.73 per
share........................................................ (3,924) (3,924)

Net income..................................................... 27,630 27,630

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

Balance, December 31, 1997..................................... 17 420,743 (32,142) (497) 388,126

Issuance of common shares, less $343 of offering costs......... 1 23,880 23,881

Conversion of Class B common shares to common shares........... 1
Conversion of convertible subordinated debentures to common
shares....................................................... 3,644 3,644

Shares issued for stock options exercised...................... 882 882

Director share awards.......................................... 80 80

Amortization of unearned compensation.......................... 201 201

Distributions declared on common shares, $1.75 per share....... (31,182) (31,182)

Distributions declared on preferred shares, $2.12 per share.... (6,360) (6,360)

Distributions declared on Class B common shares, $1.80 per
share........................................................ (3,691) (3,691)

Net income..................................................... 36,458 36,458

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

Balance, December 31, 1998..................................... $ 19 $ 449,229 $ (36,917) $ (296) $ 412,039

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

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

F-5

CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

YEARS ENDED DECEMBER 31,
-------------------------------

1998 1997 1996
--------- --------- ---------
Cash flows from operating activities:
Net income................................................................... $ 36,458 $ 27,630 $ 14,941
Adjustments to reconcile net income to net cash provided by operating
activities:
Extraordinary item-early extinguishment of debt............................ 3,331
Bad debts.................................................................. 550 279 462
Depreciation............................................................... 20,081 14,275 10,199
Amortization of deferred financing costs................................... 1,817 800 1,127
Other amortization......................................................... 1,337 1,003 449
Straight-line rents........................................................ (4,030) (2,732) (2,087)
Incentive stock awards..................................................... 281 271 175
Interest on converted debentures........................................... 44 12 77
Equity in net income of affiliate.......................................... (237) (2,174) (1,069)
(Gain)/loss on disposal of real estate..................................... (140) 60
Net changes in:
Tenant accounts receivable............................................... (1,604) (973) 197
Prepaid expenses and other assets........................................ 57 (205) (937)
Rents received in advance and security deposits.......................... 623 317 590
Accounts payable and accrued expenses.................................... 6,067 1,048 2,037
--------- --------- ---------
Net cash provided by operating activities...................................... 61,444 39,411 29,552
--------- --------- ---------
Cash flows from investing activities:
Change in restricted cash and cash equivalents............................... 3,746 (35,532) 325
Acquisition of real estate................................................... (68,882) (121,661) (85,268)
Construction in progress..................................................... (20,765) (26,625) (17,063)
Improvements and additions to properties..................................... (27,038) (42,441) (12,575)
Disposition of real estate................................................... 28,962 13,510 18,991
Change in deposits on acquisitions........................................... (2,081) 1,303 1,037
Issuance of mortgage notes receivable........................................ (21,271) (16,115) (18,523)
Repayment of mortgage notes receivable....................................... 29,378 5,670 5,543
Investment in and advances to affiliate...................................... (37,183) (19,639) (1,048)
Receivables from affiliates and employees.................................... 62 (3) 106
Additions to deferred expenses............................................... (7,274) (3,803) (3,079)
--------- --------- ---------
Net cash used in investing activities.......................................... (122,346) (245,336) (111,554)
--------- --------- ---------
Cash flows from financing activities:
Proceeds from sale of preferred shares....................................... 75,000
Proceeds from sale of common shares.......................................... 25,106 73,749 82,445
Offering costs paid.......................................................... (343) (7,155) (2,387)
Proceeds from issuance of unsecured bonds.................................... 100,000
Proceeds from issuance of line of credit..................................... 132,000 211,650 46,100
Repayment of line of credit.................................................. (152,100) (160,050)
Proceeds from issuance of bonds payable...................................... 55,000 45,882
Repayments of mortgage notes payable......................................... (3,831) (8,156) (62,705)
Repayments of notes payable.................................................. (33) (2,385) (123)
Distributions................................................................ (41,074) (31,145) (29,017)
Conversion of convertible subordinated debentures payable.................... (1) (1)
--------- --------- ---------
Net cash provided by financing activities...................................... 59,725 206,507 80,194
--------- --------- ---------
Net change in cash and cash equivalents........................................ (1,177) 582 (1,808)
Cash and cash equivalents, beginning of year................................... 1,652 1,070 2,878
--------- --------- ---------
Cash and cash equivalents, end of year......................................... $ 475 $ 1,652 $ 1,070
--------- --------- ---------
--------- --------- ---------

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

F-6

CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

1. ORGANIZATION

CenterPoint Properties Trust (the "Company"), a Maryland trust, and its
subsidiaries, owns and operates primarily warehouse/industrial properties in the
metropolitan Chicago area and operates as a real estate investment trust.

On October 15, 1997, the Company completed a reorganization pursuant to
which it converted from a Maryland corporation to a Maryland real estate
investment trust by means of a merger of CenterPoint Properties Corporation (the
"Corporation") with and into the Company, which prior to the merger was a
wholly-owned subsidiary of the Corporation, with the Company as the surviving
entity. Pursuant to a Plan of Reorganization, which was approved by the
stockholders of the Corporation at a Special Meeting of Stockholders held on
October 1, 1997, each issued and outstanding share of common stock of the
corporation, par value $.001 per share (the "Common Stock"), was converted into
one common share of beneficial interest in the Company, par value $.001 per
share (the "Common Shares"), each outstanding share of Class B common stock of
the Corporation was converted into one Class B common share of beneficial
interest (the "Class B Common Shares") in the Company; and the outstanding
principal amount of the Corporation's 8.22% Convertible Subordinated Debentures
due 2004 was assumed by the Company and converted into the same principal amount
of 8.22% Convertible Subordinated Debentures due 2004 of the Company.

In June, 1997, the FASB issued SFAS Statement No. 131, "Disclosures about
Segments of an Enterprise and Related Information." This statement, effective
for financial statements for fiscal years beginning after December 15, 1997,
requires that a public business enterprise report financial and descriptive
information about its reportable operating segments. Generally, financial
information is required to be reported on the basis that it is used internally
for evaluating segment performance and deciding how to allocate resources to
segments. Based on this criteria, the Company has determined that it operates in
one business segment, that being the development, management and ownership of
warehouse/ industrial property located in Greater Chicago. Thus, all information
required by SFAS No. 131 is included in the Company's financial statements. No
single tenant represented more than 10% of consolidated minimum rents in 1998,
1997 and 1996.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REVENUE RECOGNITION

Minimum rents are recognized on a straight-line basis over the terms of the
respective leases. Unbilled rents receivable represents the amount that
straight-line rental revenue exceeds rents due under the lease agreements.
Unbilled rents receivable, included in tenants accounts receivable, at December
31, 1998 and 1997 were $8,530 and $5,075, respectively. Recoveries from tenants
for taxes, insurance and other property operating expenses are recognized in the
period the applicable costs are incurred.

Real estate fee income includes tenant lease termination fees of $1,770 in
1998, $1,894 in 1997 and $1,200 in 1996.

The Company provides an allowance for doubtful accounts against the portion
of accounts receivable which is estimated to be uncollectible. Accounts
receivable in the consolidated balance sheets are shown net of an allowance for
doubtful accounts of $575 and $272 as of December 31, 1998 and 1997,
respectively.

F-7

CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
DEFERRED EXPENSES

Deferred expenses consist principally of financing fees and leasing
commissions. Leasing commissions are amortized on a straight-line basis over the
terms of the respective lease agreements ranging from 1 to 15 years. Financing
costs are amortized over the terms of the respective loan agreements. Deferred
expenses relating to debenture conversions of $82 and $86 were charged to
paid-in capital in 1998 and 1997, respectively, and fully amortized deferred
expenses of $1,562 and $1,207 were written off in 1998 and 1997, respectively.
Also, in 1998 the Company disposed of properties and deferred leasing and other
costs of $94 were written off.

The balances are as follows:

DECEMBER 31,
--------------------
1998 1997
--------- ---------

Deferred financing costs, net of accumulated amortization of $1,893 and
$1,081................................................................. $ 4,601 $ 2,766
Deferred leasing and other costs, net of accumulated amortization of
$2,127 and $1,478...................................................... 6,080 3,895
--------- ---------
$ 10,681 $ 6,661
--------- ---------
--------- ---------

PROPERTIES

Real estate assets are stated at cost. Interest and real estate taxes and
other directly related expenses incurred during construction periods are
capitalized and amortized on the same basis as the related assets. Depreciation
expense is computed using the straight-line method based upon the following
estimated useful lives:

YEARS
-------------

Building and improvements...................................................... 31.5 and 40
Land improvements.............................................................. 15
Furniture, fixtures and equipment.............................................. 4 to 15

Construction allowances for tenant improvements are capitalized and
amortized over the terms of each specific lease. Repairs and maintenance are
charged to expense when incurred. Expenditures for improvements are capitalized.
When assets are sold or retired, their cost and related accumulated depreciation
are removed from the accounts. The resulting gains or losses for taxable
dispositions of properties are reflected in operations. However, no gain or loss
is recognized for transactions that qualify as tax-free exchanges of properties.

The Company annually reviews the recoverability of the carrying value of its
investment in real estate. The reviews are conducted by estimating the fair
value of its properties generally by analysis and comparison of the capitalized
values of the expected net operating cash flows of the properties. If management
determines that an impairment of a property has occurred, the carrying value of
such property will be reduced to its fair value.

F-8

CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CASH AND CASH EQUIVALENTS

For purposes of the consolidated financial statements, the Company considers
all investments purchased with original maturities of three months or less to be
cash equivalents.

INVESTMENT IN AND ADVANCES TO AFFILIATE

The Company accounts for its investment in affiliate using the equity method
whereby its cost of the investment is adjusted for its share of equity in net
income or loss from the date of acquisition and reduced by distributions
received.

ESTIMATES

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

INCOME TAXES

The Company qualifies as a real estate investment trust ("REIT") under
sections 856-860 of the Internal Revenue Code beginning January 1, 1994. In
order to qualify as a REIT, the Company is required to distribute at least 95%
of its taxable income to shareholders and to meet certain asset and income tests
as well as certain other requirements. As a REIT, the Company will generally not
be liable for Federal income taxes, provided it satisfies the necessary
distribution requirements. The distributions declared and paid for the years
ended December 31, 1998, 1997 and 1996 include a return of capital of
approximately 9%, 12% and 51%, respectively.

F-9

CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
EARNINGS PER COMMON SHARE

Following are the reconciliations of the numerators and denominators for
computing basic and diluted earnings per share ("EPS") data:

YEARS ENDED DECEMBER 31,
----------------------------------------
1998 1997 1996
------------ ------------ ------------

Numerators:
Income before extraordinary items..................................... $36,458 $27,630 $18,272
Dividends on preferred shares....................................... (6,360) (901)
Dividends on convertible preferred stock............................ (947)
------------ ------------ ------------
Income available to common shareholders before extraordinary
item--for basic and diluted EPS................................... 30,098 26,729 17,325
Extraordinary items................................................. (3,331)
------------ ------------ ------------
Net income available to common shareholders--for basic and diluted
EPS................................................................. $30,098 $26,729 $13,994
------------ ------------ ------------
------------ ------------ ------------
Denominators:

Weighted average common shares outstanding--for
basic EPS........................................................... 19,867,509 18,634,850 13,890,049
Effect of dilutive securities--options.............................. 234,428 312,280 285,913
Weighted average common shares outstanding--for
diluted EPS......................................................... 20,101,937 18,947,130 14,175,962

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

The assumed conversion of the convertible subordinated debentures into
common shares for purposes of computing diluted EPS by adding interest expense
for the debentures to the numerators and adding assumed share conversions to the
denominators for 1998, 1997 and 1996 would be anti-dilutive. The assumed
conversion of the convertible preferred stock in 1996 would also be
anti-dilutive.

RECLASSIFICATIONS

Certain items presented in the consolidated statements of operations for
prior periods have been reclassified to conform with current classifications
with no effect on results of operations.

ACCOUNTING PRONOUNCEMENTS

In June, 1997, the FASB issued SFAS Statement No. 130, "Reporting
Comprehensive Income." This statement, effective for periods beginning after
December 15, 1997, requires the Company to report components of comprehensive
income in a financial statement that is displayed with the same prominence as
other financial statements. Comprehensive income is defined by Concepts
Statement No. 6, "Elements of Financial Statements" as the change in equity of a
business enterprise during a period from transactions and other events and
circumstances from nonowner sources. It includes all changes in equity during
the period except those resulting from investment by owners and distributions to
owners. As required by this statement, the Company adopted the new standard for
reporting comprehensive income. The Company's net income is equal to
comprehensive income.

F-10

CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
In March, 1998, the FASB's Emerging Issues Task Force ("EITF") issued EITF
Issue No. 97-11, "Accounting for Internal Costs Related to Real Estate
Acquisitions." This statement, effective as of March 19, 1998, requires that
internal costs of identifying and acquiring operating properties should be
expensed as incurred. Prior to March 19, 1998, the Company capitalized internal
preacquisition costs. The adoption of this EITF has not had a significant impact
on the results of current operations and the Company estimates this EITF will
not have a significant impact on the results of operations in the future.

3. PROPERTY ACQUISITIONS AND DISPOSITIONS

During each of the years ended December 31, 1998, 1997 and 1996, the Company
acquired thirty, twenty-one and fifteen properties, respectively, consisting
principally of single-tenant buildings for an aggregate amount of approximately
$91,692, $124,923 and $103,532, respectively. Fifteen of the properties in 1998
were acquired as a portfolio from an unrelated third party. All of the remaining
property acquisitions were closed in singular transactions, and except for one
transaction in 1998, one transaction in 1997 and three transactions in 1996,
were acquired from unrelated third parties. The properties were funded with
borrowings under the Company's lines of credit, proceeds from properties sold
during 1998, 1997 and 1996, and from proceeds of public offerings of the
Company's common shares completed in 1998, 1997 and 1996, and from proceeds of a
public offering of the Company's preferred shares completed in 1997. The
acquisitions have been accounted for utilizing the purchase method of
accounting, and accordingly, the results of operations of the acquired
properties are included in the consolidated statements of operations from the
dates of acquisition.

The Company disposed of five properties during the 1998, three properties
during 1997 and eight properties during 1996. In those years, five, one and five
of the properties, respectively, were disposed of in transactions that qualify
as a tax-free exchange under applicable provisions of the Internal Revenue Code.

Due to the effect of the March, 1997 common offering, the November, 1997
preferred offering, the May and April, 1998 common offerings and the
acquisitions and dispositions of properties, the historical results are not
indicative of the future results of operations. The following 1996 unaudited pro
forma information is presented as if the 1996 and 1997 acquisitions and
dispositions of properties, the 1997 and 1996 offerings, and the corresponding
repayment of certain debt had occurred on January 1, 1996. The 1997 and 1998
unaudited proforma information is presented as if the 1998 and 1997 offerings,
the corresponding repayment of certain debt, and the 1998 and 1997 acquisitions
and dispositions had all occurred on January 1, 1997. The unaudited pro forma
information is based upon the historical consolidated statements of operations
before any extraordinary items and does not purport to present what actual

F-11

CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

3. PROPERTY ACQUISITIONS AND DISPOSITIONS (CONTINUED)
results would have been had the transactions, in fact, occurred at the beginning
of 1997 or 1996, or to project results for any future period.

PROFORMA FOR THE YEARS
ENDED DECEMBER 31, (UNAUDITED)
--------------------------------
1998 1997 1996
---------- --------- ---------

Total revenues.............................................. $ 116,760 $ 96,336 $ 80,294
Total expenses.............................................. 79,968 62,328 50,103
---------- --------- ---------
Income before extraordinary item............................ 36,792 34,008 30,191
Preferred dividends......................................... (6,360) (6,360) (7,307)
---------- --------- ---------
Income available to common shareholders before extraordinary
item...................................................... $ 30,432 $ 27,648 $ 22,884
---------- --------- ---------
---------- --------- ---------
Per share income available to common shareholders before
extraordinary item:
Basic................................................... $1.52 $1.39 $1.28
Diluted................................................. $1.50 $1.37 $1.26

4. MORTGAGE NOTES RECEIVABLE

As of December 31, 1998 and 1997, the Company had notes receivable
outstanding of $20,353 and $30,297, respectively, consisting of mortgage loans
and construction loans. The notes bear interest ranging from 8.5% to 10.50% and
8.25% to 11.25% as of December 31, 1998 and 1997, respectively. Certain notes
require payment of interest and principle monthly. As of December 31, 1998 the
notes mature from May, 2000 to June, 2010, as follows:

1999............................................................... $ 24
2000............................................................... 19,484
2001............................................................... 40
2002............................................................... 50
2003............................................................... 61
Thereafter......................................................... 694
---------
Total............................................................ $ 20,353
---------
---------

Based on borrowing rates available at the end of 1998 and 1997 for mortgage
loans with similar terms and maturities, the fair value of the mortgage notes
receivable approximates the carrying values.

Land and buildings have been pledged as collateral for the above notes
receivable.

5. INVESTMENT IN AND ADVANCES TO AFFILIATE

The Company holds approximately 99% of the economic interest in CenterPoint
Realty Services Corporation ("CRS"). To maintain compliance with limitations on
income from business activities received by REITs and their qualified REIT
subsidiaries, the Company holds its interest in CRS in the form of non-voting
equity ownership which qualifies as an unconsolidated taxable subsidiary.

F-12

CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

5. INVESTMENT IN AND ADVANCES TO AFFILIATE (CONTINUED)
As of December 31, 1998 and 1997, the Company had an outstanding balance due
from CRS of $41,379 and $7,868, respectively, under a series of demand loans
with interest rates ranging from 8.0% to 11.1%, and $3,673 for participation
interest for 1998. The proceeds of the loans were required for development
projects.

Summarized financial information of CRS is shown below.

Balance Sheets:

DECEMBER 31,
--------------------
1998 1997
--------- ---------

Assets:
Investment in land and real estate under development.................. $ 31,784 $ 9,405
Notes receivable...................................................... 18,313 1,559
Other assets.......................................................... 4,441 832
--------- ---------
$ 54,538 $ 11,796
--------- ---------
--------- ---------
Liabilities:
Note payable to affiliate............................................. $ 41,379 $ 7,868
Due to affiliate...................................................... 3,673
Other liabilities..................................................... 5,985 658
--------- ---------
51,037 8,526

Stockholder's equity.................................................... 3,501 3,270
--------- ---------
$ 54,538 $ 11,796
--------- ---------
--------- ---------

Statements of Operations:

YEARS ENDED DECEMBER 31,
-------------------------------
1998 1997 1996
--------- --------- ---------

Total Income................................................. $ 25,950 $ 45,794 $ 16,000
Operating Expenses........................................... (25,589) (42,269) (14,261)
Provision for income taxes................................... (122) (1,329) (659)
--------- --------- ---------
Net income................................................. $ 239 $ 2,196 $ 1,080
--------- --------- ---------
--------- --------- ---------

F-13

CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

6. LONG TERM DEBT

The long-term debt as of December 31, 1998 and 1997 consist of the
following:

CARRYING AMOUNT OF
NOTES
DECEMBER 31, PERIODIC ESTIMATED FINAL
PROPERTY PLEDGED AS ---------------------- INTEREST PAYMENT BALLOON PAYMENT MATURITY
COLLATERAL 1998 1997 RATE TERMS AT MATURITY DATE
- ----------------------------------------------- ---------- ---------- ----------- --------- --------------- ---------

MORTGAGE NOTES PAYABLE AND OTHER DEBT:
Designated pool of 20 properties............... $ 50,000 $ 50,000 7.62% $ 318(a) $ 50,000 11/1/02
Designated pool of 18 properties............... 30,000 30,000 6.91% 173(a) 30,000 5/15/99
850 Arthur Avenue Elk Grove Village, IL........ 575 575 8.00% 12(b) 575 10/3/00
11801 South Central Alsip, IL.................. 4,901 7.35% 49(c) 1/1/12
2553 N. Edgington Avenue Franklin Park, IL
(d)........................................... 3,500 (e)
Designated pool of 11 properties............... 8,985 8.81% 114(c) 8,484 1/1/00
Designated pool of 2 properties................ 4,108 9.21% 45(c) 3,936 1/1/00
Designated pool of 2 properties................ 2,261 7.71% 21(c) 2,181 1/1/00
440 N. Lake Street Miller, IN.................. 1,680 1,680 (f) (a) 1,680 3/1/31
Capitalized lease obligation................... 1,010 7.00% 19(c) 101 12/1/03
---------- ----------
103,520 85,755
---------- ----------
SENIOR UNSECURED DEBT:
Bonds Payable.................................. 100,000 6.75% (g) 100,000 4/1/05
---------- ----------
TAX EXEMPT DEBT:
City of Chicago Revenue Bonds.................. 55,000 55,000 (h) (a) 55,000 9/8/32
440 N. Lake Street Miller, IN.................. 20,540 20,540 (f) (a) 20,540 3/1/31
---------- ----------
75,540 75,540
---------- ----------
LINE OF CREDIT:
Revolving line of credit....................... 77,600 97,700 (i) (a) 10/24/01
---------- ----------
Total long term debt........................... $ 356,660 $ 258,995
---------- ----------
---------- ----------

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

(a) The note requires monthly payments of interest only.

(b) The note requires quarterly payments of interest only.

(d) In November, 1998, the Company repaid the outstanding amount upon maturity.

(e) The interest rate is one month LIBOR plus 1.75% (6.9% at December 31, 1997).

(f) These revenue bonds consist of two series ($1,680 taxable and $20,540
tax-exempt) of Economic Development Revenue Bonds issued in April, 1996 by
the City of Gary, Indiana. $1,680 of the bonds are collateralized by a
letter of credit which contains certain financial covenants pertaining to
the tangible net worth and liabilities in relation to portfolio value of the
Company. The bonds bear interest based on the Weekly Adjustable Interest
Rate Mode at a rate determined by the Remarketing

F-14

CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

6. LONG TERM DEBT (CONTINUED)
Agent (5.15% and 6.1% on the taxable bonds and 4.1% and 4.2% on the tax
exempt bonds at December 31, 1998 and 1997, respectively).

(g) The note requires semi-annual payments of interest only.

(h) These Variable/Fixed Rate Demand Special Facilities Airport Revenue Bonds
issued by the City of Chicago, Illinois are enhanced by a letter of credit.
The letter of credit contains certain financial covenants pertaining to
consolidated net worth. The tax-exempt bonds bear initial interest at a
Weekly Adjustable Interest Rate, which from time to time may be changed by
the Company, at a rate determined by the Remarketing Agent (4.2% and 3.95%
at December 31, 1998 and 1997, respectively). The bonds require monthly
payments of interest only and mature in September, 2032. Of the original
proceeds, the Company holds $30,447 and $34,593 in escrow at December 31,
1998 and 1997, respectively, for future construction costs.

(i) In October, 1996, the Company obtained a $135,000 unsecured line of credit,
and increased the line in November 1997 and November 1998 to $150 million
and $250 million, respectively. The interest rate at December 31, 1998 is
6.1125% (LIBOR plus 1.0%) for LIBOR borrowings and Prime Rate (7.75%) for
other borrowings. As of December 31, 1997, the interest rate range from 6.8%
to 6.863% (LIBOR plus 0.80%) for LIBOR borrowings and Prime Rate (8.5%) for
other borrowings. The Company may receive competitive bids for up to half
its commitment. The line requires payments of interest only when LIBOR
contracts mature and monthly on borrowings under Prime Rate. There is a
commitment fee of $300 per year. At December 31, 1998 and 1997, the Company
had $172,400 and $52,300, respectively, available under the line.

As of December 31, 1998 mortgage notes, other debt, senior unsecured debt,
tax-exempt debt and line of credit mature as follows:

1999.............................................................. $ 31,141
2000.............................................................. 15,595
2001.............................................................. 78,049
2002.............................................................. 50,483
2003.............................................................. 620
Thereafter........................................................ 180,772
---------
Total........................................................... $ 356,660
---------
---------

Based on borrowing rates available to the Company at the end of 1998 and
1997 for mortgage loans with similar terms and maturities, the fair value of the
mortgage notes payable approximates the carrying values.

On September 10, 1998, the Company entered into an interest rate protection
agreement to lock into a fixed interest rate on an anticipated refinancing of
mortgage notes payable with a notional amount of $25,000. The agreement provides
that the Company will either receive or pay an amount equal to the spread
between a locked in treasury rate (4.835%) and the interest rate on treasury
securities underlying the agreement as of the determination date. The
determination date is to be triggered by the Company before May 17, 1999. If not
triggered, the agreement will be settled on May 17, 1999 based on interest rates
effective at the time. If settlement of the agreement had been triggered at
December 31, 1998 the

F-15

CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

6. LONG TERM DEBT (CONTINUED)
Company would have had to pay $365. The Company plans that ultimate receipt or
payment made upon settlement of the agreement will be reflected as an adjustment
to interest expense on the related refinancing.

Land, buildings and equipment related to such mortgages with an aggregate
net book value of approximately $212,168 at December 31, 1998 have been pledged
as collateral for the above debt.

7. EXTRAORDINARY ITEM

In 1996, the Company incurred a loss of $3,331 (per share--basic $0.24;
diluted $0.23), representing a write off of unamortized deferred financing costs
as a result of early extinguishment of certain debt obligations.

8. CONVERTIBLE SUBORDINATED DEBENTURES PAYABLE

Concurrent with the initial public offering in December, 1993, the Company
issued $58,500 of convertible subordinated debentures ("Debentures") due 2004.
At December 31, 1998 and 1997, $8,058 and $11,740 of debentures were
outstanding, respectively. The Debentures are unsecured general obligations of
the Company and are subordinate to all existing and subsequently incurred
indebtedness of the Company. The Debentures are optionally redeemable by the
Company, at par, commencing December 4, 1998. Holders may convert the Debentures
at any time, without premium, to Common Shares of the Company at a conversion
price of $18.25 per share, subject to certain adjustments. The Debentures bear
interest at 8.22% per annum, payable semiannually on January 15 and July 15 of
each year, commencing July 15, 1994. During 1998, 1997 and 1996 debentures
totaling $3,682, $2,640 and $8,864, respectively, were converted into shares of
common stock. Based principally on the conversion feature and share price of
common stock at the end of 1998 and 1997, the fair value of the outstanding
Debentures approximates $14,929 and $22,595, respectively.

9. RELATED PARTY TRANSACTIONS

In May, 1998 and December, 1997, the Company purchased a fully leased
building, located in Wood Dale, Illinois and Des Plaines, Illinois,
respectively, from partnerships, in which one of the Company's Senior Officers
and a Company Director were limited partners. The two properties were purchased
for approximately $3.3 million and $4.7 million, respectively. In June, 1996,
the Company acquired three properties in which the Company's Chief Operations
Officer and Director, and the Company's Executive Vice President of Acquisitions
during 1996 had an interest and, in which they, continue to own an insignificant
interest in two of the properties. The three properties were purchased for an
aggregate amount of approximately $24.6 million. The above transactions
satisfied the Company's investment criteria and were approved by the Company's
independent directors.

F-16

CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

10. SHAREHOLDERS' EQUITY

COMMON SHARES OF BENEFICIAL INTEREST

As of December 31, 1998 the Company has reserved 621,829 Common Shares for
future issuance under the 1993 Stock Option Plan, 119,596 Common Shares for
future issuance under the 1995 Restricted Stock Incentive Plan, 65,409 Common
Shares for future issuance under the 1995 Director Stock Plan, 441,534 Common
Shares for issuance upon the conversion of the Debentures and 1,000,000 Common
Shares for future issuance under the dividend reinvestment and stock purchase
plan.

CLASS B COMMON SHARES OF BENEFICIAL INTEREST

On September 22, 1995, the Company completed a $50 million private equity
placement of non-voting preferred shares of beneficial interest. In May, 1996,
the preferred shares of beneficial interest automatically converted, on a share
for share basis, to non-voting Class B Common Shares, upon shareholder approval
of an amendment to the Company's charter permitting non-voting Class B Common
Shares at the Company's annual meeting. The distribution on the non-voting
shares is equal to the distribution paid on the voting shares of the Company
plus an additional $.0468 per share. In October, 1998, 874,639 non-voting Class
B Shares converted to voting shares. In May, 1999, a portion of the remaining
non-voting Class B shares will be converted to voting common shares on a share
for share basis up to 4.9 percent of the Company's then outstanding voting
shares with all shares to fully convert within ten years. As the shares convert
to voting common, the distribution paid shall be the same as all other voting
common shares.

PREFERRED SHARES OF BENEFICIAL INTEREST

On November 10, 1997, the Company issued 3 million shares of 8.48% Series A
Cumulative Redeemable Preferred Shares of Beneficial Interest ("Preferred
Shares") at a purchase price of $25 per share. Dividends on the Preferred Shares
are cumulative from the date of issuance and payable quarterly commencing on
January 30, 1998. The payment of dividends and amounts upon liquidation will
rank senior to the Common Shares and Class B Common Shares, which are the only
other shares of the Company currently outstanding. The Preferred Shares are
not redeemable prior to October 30, 2002. On or after October 30, 2002 the
Preferred Shares will be redeemable for cash at the option of the Company, in
whole or part, at the redemption price of $25 per share, plus dividends accrued
and unpaid to the redemption date. The Preferred Shares are not convertible into
or exchangeable for any other property or securities of the Company.

RESTRICTED STOCK INCENTIVE PLAN

Under the terms of the 1995 Restricted Stock Incentive Plan, adopted in
1995, the Company initially reserved 150,000 common shares for future grants. In
1997 and 1996 certain key employees were granted 12,444 and 8,290 restricted
shares, respectively. Shares were awarded in the name of each of the
participants, who have all the rights of other common shareholders, subject to
certain restrictions and forfeiture provisions. Restrictions on the shares
expire no more than eight years after the date of award, or earlier if certain
performance targets are met.

Unearned compensation is recorded at the date of awards based on the market
value of shares. Unearned compensation, which is shown as a separate component
of shareholders' equity, is being

F-17

CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

10. SHAREHOLDERS' EQUITY (CONTINUED)
amortized to expense over the eight year vesting period. The amount amortized to
expense during 1998, 1997 and 1996 was $201, $214, and $118, respectively.

DIRECTOR STOCK PLAN

The 1995 Director Stock Plan is for an aggregate of 75,000 common shares and
provides that each independent director, upon election or re-election to the
Board, may elect to receive 50% of his annual retainer fee in Common Shares at
the market price on such date. In 1998, 1997, and 1996, 2,304, 1,921, and 2,516
Common Shares were issued under this plan, respectively. In connection with the
issuance of such shares, $80, $57 and $57 was charged to expense in 1998, 1997
and 1996, respectively.

SHAREHOLDER RIGHTS PLAN

In July, 1998, the Board of Trustees approved a shareholder protection plan
(the "plan"), declaring a dividend of one right for each share of the Company's
common shares outstanding on or after August 11, 1998. Exercisable 10 days after
any person or group acquires 15 percent or more or commences a tender offer for
15 percent or more of the Company's common shares, each right entitles the
holder to purchase from the Company one one-thousandth of a Junior Preferred
Share of Beneficial Interest, Series A (a "Rights Preferred Share"), at a price
of $120, subject to adjustment. The Rights Preferred Shares (1) are
non-redeemable, (2) are entitled to a minimum preferential quarterly dividend
payment equal to the greater of $25 per share or 1,000 times the Company's
common share dividend, (3) have a minimum liquidation preference equal to the
greater of $100 per share or 1,000 times the liquidation payment made per common
share and (4) are entitled to vote with the common shares with each Rights
Preferred Share having 1,000 votes. 50,000 of the Company's authorized preferred
shares have been designated for the plan.

The plan was not adopted in response to any takeover attempt but was
intended to provide the Board with sufficient time to consider any and all
alternatives under such circumstances. Its provisions are designed to protect
the Company's shareholders in the event of an unsolicited attempt to acquire the
Company at a value that is not in the best interest of the Company's
shareholders.

11. STOCK OPTION PLAN

The Company has adopted the 1993 Stock Option Plan (the "Plan") and in May,
1996, increased the maximum number of shares from 750,000 to 1,500,000 common
shares of beneficial interest which may be granted for qualified and
non-qualified options. In May, 1998, the Plan was amended to increase the
maximum number of shares to 10% of the total number of common shares outstanding
as of May 1, 1998 (2,003,915). The May, 1998, Plan amendment also provides that
the maximum number of options granted under the plan be the total of 10% of the
number of common shares outstanding on the last day of the preceding calendar
year, commencing January 1, 1999, minus the number of options previously granted
under the Plan before the end of the preceding calendar year plus the number of
options which have expired. The Company adopted the Plan to provide additional
incentives to attract and retain directors, officers and key employees. The Plan
was amended in 1995 to provide that each independent director receive an option
for 3,000 common shares of beneficial interest at fair market value at the time
of being elected or re-elected to the Board. Options are to be granted by the
Compensation Committee of the

F-18

CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

11. STOCK OPTION PLAN (CONTINUED)
Board of Directors. The term of the option shall be fixed by the Compensation
Committee, but no option shall be exercisable more than 10 years after the date
of grant.

The options granted are at fair market value on the date of grant, are for
10-year terms and become exercisable in 20% annual increments after one year
from date of grant. Option activity for the three years ended December 31, 1998
is as follows:

1998 1997 1996
----------------------- ----------------------- ----------------------

WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
---------- ----------- ---------- ----------- --------- -----------
Outstanding at beginning of year.................. 740,669 $ 22.92 683,480 $ 19.20 606,839 $ 18.59
Granted......................................... 588,179 33.97 241,769 31.38 104,428 22.50
Exercised....................................... (25,500) 18.86 (149,715) 19.19 (27,787) 18.28
Expired......................................... (69,190) 32.00 (34,865) 24.73 --
---------- ---------- ---------
Outstanding at end of year........................ 1,234,158 $ 27.76 740,669 $ 22.92 683,480 $ 19.20
---------- ---------- ---------
---------- ---------- ---------
Exercisable at end of year........................ 441,126 327,137 282,784
Available for future grant at year end............ 569,155 584,229 791,133
Weighted average per share fair value of options
granted during the year......................... $ 4.92 $ 3.65 $ 2.43

The fair value of each option grant was estimated on the date of grant using
the Black-Scholes option-pricing model with the following assumptions:

1998 1997 1996
--------- --------- ---------

Risk free interest rate........................................ 5.7% 6.4% 6.1%
Dividend yield................................................. 5.1% 6.5% 6.5%
Expected lives................................................. 6 years 6 years 6 years
Expected volatility............................................ 18.6% 17.5% 17.4%

The following table summarizes information about stock options at December
31, 1998:

OPTIONS OUTSTANDING
- ------------------------------------------------------- OPTIONS EXERCISABLE
WEIGHTED ------------------------
AVERAGE WEIGHTED WEIGHTED
NUMBER REMAINING AVERAGE NUMBER AVERAGE
RANGE OF OUTSTANDING CONTRACTUAL EXERCISE EXERCISABLE EXERCISE
EXERCISE PRICE AT 12/31/98 LIFE PRICE AT 12/31/98 PRICE
- ---------------- ----------- ----------- ----------- ----------- -----------

$ 18.25-$22.50 487,711 5.83 years $ 19.19 406,539 $ 18.79
$ 31.50-$34.375 746,447 9.77 years $ 33.36 34,587 $ 31.34

The Company has applied Accounting Principles Board Opinion No. 25 and
related interpretations in accounting for its Plan, accordingly, no compensation
costs have been recognized. Had compensation costs for the Company's Plan been
determined based on the fair value at the grant date for options granted in
1998, 1997 and 1996 in accordance with the method required by Statement of
Financial Accounting

F-19

CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

11. STOCK OPTION PLAN (CONTINUED)
Standards No. 123, the Company's net income and net income per share would have
been reduced to the pro forma amounts as follows:

YEAR ENDED DECEMBER 31,
(IN THOUSANDS, EXCEPT PER SHARE
DATA)
-------------------------------
1998 1997 1996
--------- --------- ---------

Net income available to common shareholders
As reported............................................ $ 30,098 $ 26,729 $ 13,994
Pro forma.............................................. 29,616 26,591 13,901
Per share net income available to common shareholders
As reported
Basic................................................ 1.51 1.43 1.01
Diluted.............................................. 1.50 1.41 0.99
Pro forma
Basic................................................ 1.49 1.43 1.00
Diluted.............................................. 1.47 1.40 0.98

12. FUTURE RENTAL REVENUES

Under existing noncancelable operating lease agreements as of December 31,
1998, tenants of the warehouse/industrial properties are committed to pay in
aggregate the following minimum rentals:

1998.............................................................. $ 64,609
1999.............................................................. 53,532
2000.............................................................. 46,280
2001.............................................................. 40,521
2002.............................................................. 32,860
Thereafter........................................................ 85,874
---------
Total........................................................... $ 323,676
---------
---------

At December 31, 1998 and 1997, 621 and 630, respectively, of the total 682
apartments available for rental at the Lakeshore Dunes property were leased.
Lease terms are generally for one year.

F-20

CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

13. SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS

YEAR ENDED DECEMBER 31,
----------------------------------
1998 1997 1996
---------- ---------- ----------

Supplemental disclosure of cash flow information:
Interest paid, net of interest capitalized.................................. $ 12,122 $ 11,820 $ 10,603
Interest capitalized........................................................ 2,214 893 142
Dividends declared, not paid................................................ 1,060 901
Assignment of note receivable to affiliate.................................. 4,650
Repayment of advance from affiliate with real estate at book value.......... 24,993

In conjunction with the property acquisitions, the Company assumed the
following assets and liabilities:
Purchase of real estate..................................................... $ 91,692 $ 124,923 $ 103,532
Liabilities, net of other assets............................................ (2,224) (3,262) (4,956)
Mortgage notes payable...................................................... (20,586) (13,308)
---------- ---------- ----------
Acquisition of real estate.................................................. $ 68,882 $ 121,661 $ 85,268
---------- ---------- ----------
---------- ---------- ----------
In conjunction with the property dispositions, the Company disposed of the
following assets and liabilities:
Sale of real estate......................................................... $ (29,527) $ (12,877) $ (22,481)
Liabilities, net of other assets............................................ 565 (633) 1,421
Mortgage notes payable...................................................... 2,069
---------- ---------- ----------
Disposition of real estate.................................................. $ (28,962) $ (13,510) $ (18,991)
---------- ---------- ----------
---------- ---------- ----------
Conversion of convertible subordinated debentures payable:
Convertible subordinated dentures converted................................. $ 3,682 $ 2,640 $ 8,864
Common shares issued at $18.25 per share; 201,748, 144,640 and 485,680...... 3,682 2,639 8,863
---------- ---------- ----------
Cash disbursed for fractional shares........................................ $ -- $ 1 $ 1
---------- ---------- ----------
---------- ---------- ----------

14. COMMITMENTS AND CONTINGENCIES

In the normal course of business, from time to time, the Company is involved
in legal actions relating to the ownership and operations of its properties. In
management's opinion, the liabilities, if any, that may ultimately result from
such legal actions are not expected to have a materially adverse effect on the
consolidated financial position, results of operations, or liquidity of the
Company.

The Company has entered into several contracts for the acquisition of
properties. Each acquisition is subject to satisfactory completion of due
diligence and, in the case of developments, completion and occupancy of the
project.

At December 31, 1998, six of the properties owned are subject to purchase
options held by certain tenants. The purchase options are exercisable at various
intervals through 2006 for amounts that are greater than the net book value of
the assets. The tenant for a property at 655 Wheat Lane, Wood Dale, Illinois
exercised its option and purchase the building in May, 1997.

F-21

CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

15. QUARTERLY FINANCIAL HIGHLIGHTS (UNAUDITED)

QUARTER ENDED
--------------------------------------------------- YEAR ENDED
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
1998 1998 1998 1998 1998
----------- --------- ------------- ------------ ------------

Total revenues................................ $ 27,317 $ 27,984 $ 28,566 $ 29,241 $ 113,108
Net income available to common shareholders... 7,121 7,479 7,980 7,518 30,098
Net income available to common shareholders
per share:
Basic..................................... 0.37 0.37 0.40 0.37 1.51
Diluted................................... 0.37 0.37 0.39 0.37 1.50
EBITDA (earnings before interest, taxes,
amortization and depreciation).............. 16,821 17,750 19,130 19,651 73,352
Per share distributions....................... 0.438 0.438 0.438 0.438 1.75

QUARTER ENDED
--------------------------------------------------- YEAR ENDED
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
1997 1997 1997 1997 1997
----------- --------- ------------- ------------ ------------

Total revenues................................ $ 19,729 $ 20,130 $ 21,559 $ 24,540 $ 85,958
Net income available to common shareholders... 5,671 7,143 6,742 7,173 26,729
Net income available to common shareholders
per share:
Basic..................................... 0.33 0.38 0.35 0.38 1.43
Diluted................................... 0.32 0.37 0.35 0.37 1.41
EBITDA (earnings before interest, taxes,
amortization and depreciation).............. 11,699 12,971 13,801 15,308 53,779
Per share distributions....................... 0.42 0.42 0.42 0.42 1.68

F-22

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders
CenterPoint Properties Trust

Our report on the consolidated financial statements of CenterPoint
Properties Trust and Subsidiaries is included as page F-2 of this Form 10-K. In
connection with our audits of such financial statements, we have also audited
the related financial statement schedules listed in the Index to Consolidated
Financial Statements on page F-1 of this Form 10-K.

In our opinion, these financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information required to be
included therein.

PRICEWATERHOUSECOOPERS LLP

Chicago, Illinois
February 9, 1999

F-23

CENTERPOINT PROPERTIES TRUST
VALUATION AND QUALIFYING ACCOUNTS
SCHEDULE II
(DOLLARS IN THOUSANDS)

BEGINNING CHARGE TO COST ENDING
DESCRIPTION BALANCE AND EXPENSES RECOVERIES DEDUCTIONS(A) BALANCE
- ---------------------------------------------- ----------- ------------------- ------------- --------------- -----------

For year ended December 31, 1998:
Allowance for doubtful accounts............. $ 272 $ 550 $ -- ($ 247) $ 575
----- ----- --- ----- -----
----- ----- --- ----- -----
For year ended December 31, 1997:
Allowance for doubtful accounts............. $ 748 $ 279 $ -- ($ 755) $ 272
----- ----- --- ----- -----
----- ----- --- ----- -----
For year ended December 31, 1996:
Allowance for doubtful accounts............. $ 500 $ 462 $ -- ($ 214) $ 748
----- ----- --- ----- -----
----- ----- --- ----- -----

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

NOTE: (a) Deductions represent write-off of accounts receivable against the
allowance for doubtful accounts.

F-24

SCHEDULE III

CENTERPOINT PROPERTIES CORPORATION AND SUBSIDIARIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1998

GROSS
AMOUNTS
AT WHICH
CARRIED
AT
INITIAL COSTS COSTS CAPITALIZED CLOSE OF
------------------------ SUBSEQUENT TO ACQUISITION PERIOD
BUILDINGS AND ------------------------------------- ---------
ENCUMBRANCES IMPROVEMENTS BUILDINGS AND CARRYING
DESCRIPTION (E) LAND (A) LAND IMPROVEMENTS COSTS (B) LAND
- --------------------------- ------------- --------- ------------- --------- ------------- ----------- ---------

WAREHOUSE/INDUSTRIAL
PROPERTIES:
425 W. 151st Street
East Chicago, IN......... $ 252 $ 1,805 $ 33 $ 4,523 $ 1,155 $ 285
201 Mississippi Street
Gary, IN................. $ 50,000(h) 807 9,948 275 18,042 1,082
1201 Lunt Avenue
Elk Grove Village, IL.... (h) 57 146 4 57
620 Butterfield Road
Mundelein, IL............ 30,000(g) 335 1,974 61 5 396
1319 Marquette Drive
Romeoville, IL........... (h) 948 2,530 98 948
900 E. 103rd Street
Chicago, IL.............. 2,226 10,693 4,497 2,226
1520 Pratt Avenue
Elk Grove Village, IL.... (h) 498 1,558 6 498
1850 Greenleaf
Elk Grove Village, IL.... 509 1,386 349 509
2743 Armstrong Court
Des Plaines, IL.......... 1,320 2,679 281 1,320
5990 Touhy Avenue
Niles, IL................ 2,047 8,509 1,238 2,047
950 Tower Road
Mundelein, IL............ (h) 171 778 143 171
2339 Ernie Krueger Court
Waukegan, IL............. (g) 158 1,819 10 158
4501 W. Augusta Blvd.
Chicago, IL.............. 175 4,988 860 175
1400 Busse Road
Elk Grove Village, IL.... 439 5,719 287 439
1250 Carolina Drive
West Chicago, IL......... (g) 583 3,836 260 583
5619 W. 115th Street
Alsip, IL................ (h) 2,267 12,169 1,641 2,267
825 Tollgate Road
Elgin, IL................ (g) 712 3,584 112 712
720 Frontenac
Naperville, IL........... (g) 1,014 4,055 22 122 1,036
820 Frontenac
Naperville, IL........... (g) 906 3,626 111 906
1120 Frontenac
Naperville, IL........... (g) 791 3,164 23 720 814

LIFE UPON WHICH

DEPRECIATION IN

LATEST INCOME

BUILDINGS AND TOTAL ACCUMULATED DATE OF DATE STATEMENT IS

DESCRIPTION IMPROVEMENTS (C)(D) DEPRECIATION CONSTRUCTION ACQUIRED COMPUTED

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

WAREHOUSE/INDUSTRIAL
PROPERTIES:
425 W. 151st Street
East Chicago, IN......... $ 7,483 $ 7,768 ($ 2,864) 1913/1988-1990 1987 (f)

201 Mississippi Street
Gary, IN................. 27,990 29,072 (9,432) 1946/1985-1988 1985 (f)

1201 Lunt Avenue
Elk Grove Village, IL.... 150 207 (24) 1971 1993 (f)

620 Butterfield Road
Mundelein, IL............ 1,979 2,375 (317) 1990 1993 (f)

1319 Marquette Drive
Romeoville, IL........... 2,628 3,576 (408) 1990-1991 1993 (f)

900 E. 103rd Street
Chicago, IL.............. 15,190 17,416 (2,197) 1910 1993 (f)

1520 Pratt Avenue
Elk Grove Village, IL.... 1,564 2,062 (250) 1968 1993 (f)

1850 Greenleaf
Elk Grove Village, IL.... 1,735 2,244 (225) 1965 1993 (f)

2743 Armstrong Court
Des Plaines, IL.......... 2,960 4,280 (449) 1989-1990 1993 (f)

5990 Touhy Avenue
Niles, IL................ 9,747 11,794 (1,462) 1957 1993 (f)

950 Tower Road
Mundelein, IL............ 921 1,092 (139) 1979 1993 (f)

2339 Ernie Krueger Court
Waukegan, IL............. 1,829 1,987 (292) 1990 1993 (f)

4501 W. Augusta Blvd.
Chicago, IL.............. 5,848 6,023 (878) 1942-1943 1993 (f)

1400 Busse Road
Elk Grove Village, IL.... 6,006 6,445 (1,029) 1987 1993 (f)

1250 Carolina Drive
West Chicago, IL......... 4,096 4,679 (637) 1989-1990 1993 (f)

5619 W. 115th Street
Alsip, IL................ 13,810 16,077 (2,154) 1974 1993 (f)

825 Tollgate Road
Elgin, IL................ 3,696 4,408 (579) 1989-1991 1993 (f)

720 Frontenac
Naperville, IL........... 4,177 5,213 (663) 1991 1993 (f)

820 Frontenac
Naperville, IL........... 3,737 4,643 (584) 1988 1993 (f)

1120 Frontenac
Naperville, IL........... 3,884 4,698 (592) 1980 1993 (f)

F-25

1510 Frontenac
Naperville, IL........... (g) 621 2,485 16 84 637
1020 Frontenac
Naperville, IL........... (g) 591 2,363 11 226 602
1560 Frontenac
Naperville, IL........... (g) 508 2,034 11 71 519
1500 Shore Road
Naperville, IL........... (g) 260 1,042 7 57 267
800 Enterprise
Naperville, IL........... (g) 212 849 6 40 218
1651 Frontenac
Naperville, IL........... (g) 185 742 5 60 190
1150 Shore Road
Naperville, IL........... (g) 184 736 5 121 189
2764 Golfview
Naperville, IL........... (g) 125 498 3 34 128
920 Frontenac
Naperville, IL........... (g) 717 2,367 486 717
1300 Northpoint Road
Waukegan IL.............. (h) 592 2,366 17 592
1 Wildlife Way
Long Grove, IL........... 530 2,122 129 530
900 W. University Drive
Arlington Heights, IL.... (h) 817 3,268 17 96 834
7001 Adams Street
Willowbrook, IL.......... (h) 297 1,326 4 297
745 Birginal Drive
Bensenville, IL.......... 601 2,406 497 601
21399 Torrence Avenue
Sauk Village, IL......... 1,550 6,199 566 707 2,115
2600 N. Elmhurst Road
Elk Grove Village, IL.... (g) 842 3,366 8 46 850
8901 W. 102nd Street
Pleasant Prarie, WI...... (h) 900 3,608 46 900
8200 100th Street
Pleasant Prarie, WI...... (h) 1,220 4,890 42 1,220
1700 Hawthorne
West Chicago, IL......... 2,522 10,089 1 25 2,523
245 Beinoris Drive
Wood Dale, IL............ (h) 168 570 5 168
825-845 Hawthorne
West Chicago, IL......... (g) 721 2,884 23 504 744
1700 Butterfield Road
Mundelein, IL............ (h) 343 1,371 (1) 143 342
1810-1820 Industrial Drive
Libertyville, IL......... (h) 407 1,629 (5) 173 402
1733 Downs Drive
West Chicago............. (h) 488 1,953 1 45 489
1645 Downs Drive
West Chicago............. (h) 508 2,033 1 571 509

LIFE UPON WHICH

DEPRECIATION IN

LATEST INCOME

BUILDINGS AND TOTAL ACCUMULATED DATE OF DATE STATEMENT IS

DESCRIPTION IMPROVEMENTS (C)(D) DEPRECIATION CONSTRUCTION ACQUIRED COMPUTED

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

1510 Frontenac
Naperville, IL........... 2,569 3,206 (406) 1986 1993 (f)

1020 Frontenac
Naperville, IL........... 2,589 3,191 (398) 1980 1993 (f)

1560 Frontenac
Naperville, IL........... 2,105 2,624 (335) 1987 1993 (f)

1500 Shore Road
Naperville, IL........... 1,099 1,366 (172) 1985 1993 (f)

800 Enterprise
Naperville, IL........... 889 1,107 (139) 1985 1993 (f)

1651 Frontenac
Naperville, IL........... 802 992 (122) 1978 1993 (f)

1150 Shore Road
Naperville, IL........... 857 1,046 (122) 1985 1993 (f)

2764 Golfview
Naperville, IL........... 532 660 (83) 1985 1993 (f)

920 Frontenac
Naperville, IL........... 2,853 3,570 (413) 1987 1993 (f)

1300 Northpoint Road
Waukegan IL.............. 2,383 2,975 (350) 1994 1994 (f)

1 Wildlife Way
Long Grove, IL........... 2,251 2,781 (329) 1994 1994 (f)

900 W. University Drive
Arlington Heights, IL.... 3,364 4,198 (479) 1974 1994 (f)

7001 Adams Street
Willowbrook, IL.......... 1,330 1,627 (188) 1994 1994 (f)

745 Birginal Drive
Bensenville, IL.......... 2,903 3,504 (359) 1974 1994 (f)

21399 Torrence Avenue
Sauk Village, IL......... 6,906 9,021 (957) 1987 1994 (f)

2600 N. Elmhurst Road
Elk Grove Village, IL.... 3,412 4,262 (409) 1995 1995 (f)

8901 W. 102nd Street
Pleasant Prarie, WI...... 3,654 4,554 (485) 1990 1994 (f)

8200 100th Street
Pleasant Prarie, WI...... 4,932 6,152 (657) 1990 1994 (f)

1700 Hawthorne
West Chicago, IL......... 10,114 12,637 (1,312) 1959/1969 1994 (f)

245 Beinoris Drive
Wood Dale, IL............ 575 743 (91) 1988 1984 (f)

825-845 Hawthorne
West Chicago, IL......... 3,388 4,132 (367) 1974 1995 (f)

1700 Butterfield Road
Mundelein, IL............ 1,514 1,856 (169) 1976 1995 (f)

1810-1820 Industrial Drive
Libertyville, IL......... 1,802 2,204 (188) 1977 1995 (f)

1733 Downs Drive
West Chicago............. 1,998 2,487 (221) 1976 1995 (f)

1645 Downs Drive
West Chicago............. 2,604 3,113 (280) 1976 1995 (f)

F-26

10601 Seymour Avenue
Franklin Park, IL........ 2,020 8,081 184 10,715 2,204
11701 South Central
Alsip, IL................ 1,241 4,964 22 1,241 1,263
11601 South Central
Alsip, IL................ 1,071 4,285 51 376 1,122
850 Arthur Avenue
Elk Grove Village, IL.... 575 270 1,081 1 283 271
1827 North Bendix Drive
South Bend, IN........... (h) 1,010 4,040 24 109 1,034
4400 S. Kolmar
Chicago, IL.............. (h) 603 2,412 9 70 612
6600 River Road
Hodgkins, IL............. 2,640 10,562 47 350 2,687
7501 N. 81st Street
Milwaukee, WI............ 1,018 4,073 19 83 1,037
1100 Chase Avenue
Elk Grove Village, IL.... 248 993 7 238 255
2553 N. Edgington
Franklin Park, IL........ 1,870 7,481 67 1,278 1,937
875 Fargo Avenue
Elk Grove Village, IL.... 572 2,284 14 882 586
1800 Bruning Drive
Itasca, IL............... 1,999 7,995 26 108 2,025
1501 Pratt
Elk Grove Village, IL.... 1,047 4,189 67 501 1,114
400 N. Wolf Road
Northlake, IL............ 4,504 18,017 (418) 7,478 4,086
10740 W. Grand Avenue
Franklin Park, IL........ 383 1,532 8 172 391
16400 W. 103rd Street
Lemont, IL............... 446 1,748 21 236 467
425 S. 37th Avenue
St. Charles, IL.......... 644 2,575 7 236 651
1500 W. Dundee Road
Arlington Heights, IL.... 4,995 10,006 (1,073) 5,649 3,922
Lot 51-Naperville Business
Center
Naperville, IL........... 220 (11) 1 209
3145 Central Avenue
Waukeegan, IL............ 1,270 5,080 20 1,620 1,290
2003-2207 South 114th
Street
West Allis, WI........... 942 3,770 7 76 949
2501-2701 Busse Road
Elk Grove Village, IL.... (h) 1,875 7,556 12 578 107 1,887
6464 West 51st Street
Forest View, IL.......... 934 3,734 3 156 937

LIFE UPON WHICH

DEPRECIATION IN

LATEST INCOME

BUILDINGS AND TOTAL ACCUMULATED DATE OF DATE STATEMENT IS

DESCRIPTION IMPROVEMENTS (C)(D) DEPRECIATION CONSTRUCTION ACQUIRED COMPUTED

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

10601 Seymour Avenue
Franklin Park, IL........ 18,796 21,000 (999) 1963/1965 1995 (f)

11701 South Central
Alsip, IL................ 6,205 7,468 (555) 1972 1995 (f)

11601 South Central
Alsip, IL................ 4,661 5,783 (469) 1971 1995 (f)

850 Arthur Avenue
Elk Grove Village, IL.... 1,364 1,635 (132) 1972/1973 1995 (f)

1827 North Bendix Drive
South Bend, IN........... 4,149 5,183 (411) 1964/1990 1995 (f)

4400 S. Kolmar
Chicago, IL.............. 2,482 3,094 (245) 1964 1995 (f)

6600 River Road
Hodgkins, IL............. 10,912 13,599 (933) Unknown 1996 (f)

7501 N. 81st Street
Milwaukee, WI............ 4,156 5,193 (345) 1987 1996 (f)

1100 Chase Avenue
Elk Grove Village, IL.... 1,231 1,486 (104) 1969 1996 (f)

2553 N. Edgington
Franklin Park, IL........ 8,759 10,696 (649) 1967/1989 1996 (f)

875 Fargo Avenue
Elk Grove Village, IL.... 3,167 3,753 (220) 1979 1996 (f)

1800 Bruning Drive
Itasca, IL............... 8,103 10,128 (653) 1975/1978 1996 (f)

1501 Pratt
Elk Grove Village, IL.... 4,690 5,804 (371) 1973 1996 (f)

400 N. Wolf Road
Northlake, IL............ 25,495 29,581 (1,716) 1956/1965 1996 (f)

10740 W. Grand Avenue
Franklin Park, IL........ 1,704 2,095 (126) 1964/1970 1996 (f)

16400 W. 103rd Street
Lemont, IL............... 1,984 2,451 (131) 1983 1996 (f)

425 S. 37th Avenue
St. Charles, IL.......... 2,811 3,462 (195) 1976 1996 (f)

1500 W. Dundee Road
Arlington Heights, IL.... 15,655 19,577 (853) 1969/1971 1996 (f)

Lot 51-Naperville Business
Center
Naperville, IL........... 1 210 1996 1996 (f)

3145 Central Avenue
Waukeegan, IL............ 6,700 7,990 (396) 1960 1997 (f)

2003-2207 South 114th
Street
West Allis, WI........... 3,846 4,795 (212) 1965/1966 1997 (f)

2501-2701 Busse Road
Elk Grove Village, IL.... 8,241 10,128 (453) 1997 1997 (f)

6464 West 51st Street
Forest View, IL.......... 3,890 4,827 (205) 1973 1997 (f)

F-27

6500 West 51st Street
Forest View, IL.......... 805 3,221 4 29 809
7447 South Central Avenue
Bedford Park, IL......... 437 1,748 7 37 444
7525 S. Sayre Avenue
Bedford Park, IL......... 587 2,345 4 29 591
2901 Centre Circle
Downers Grove, IL........ 207 828 4 557 211
1 Allsteel Drive
Aurora, IL............... 2,458 9,832 28 7,929 2,486
2525 Busse Highway
Elk Grove Village, IL.... 5,400 12,601 (728) 2,558 4,672
106th and Buffalo Avenue
Chicago, IL.............. 248 992 9 558 257
7400 South Narragansett
Bedford Park, IL......... 743 2,972 9 179 752
2701 S. Busse Road
Elk Grove Village, IL.... (h) 1,875 5,667 4 1,288 255 1,879
East Avenue and 55th Street
McCook, IL............... 1,190 4,761 47 431 1,237
6757 S. Sayre
Bedford Park, IL......... 1,236 4,945 7 28 1,243
1951 Landmeir Road
Elk Grove Village, IL.... 280 1,120 11 48 291
1355 Enterprise Drive
Romeoville, IL........... 580 2,320 8 112 588
110-190 Old Higgins Road
Des Plaines, IL.......... 1,862 7,447 12 327 1,874
1475 S. 101st Street
West Allis, WI........... 331 1,323 1 40 332
1333 Grandview Drive
Yorkville, WI............ 1,516 6,062 5 21 1,521
2301 Route 30
Plainfield, IL........... 1,217 4,868 69 1,310 1,286
1796 Sherwin Avenue
Des Plaines, IL.......... 944 3,778 8 1,032 952
2885 W. Diehl Road
Naperville, IL........... 1,539 8,630 2 112 1,541
2727 W. Diehl Road
Naperville, IL........... 3,071 14,232 5 388 3,076
O'hare Express Center--A2
Elk GroveVillage, IL..... 1,097 7,060 244 110 1,097
O'hare Express Center--B1
Elk GroveVillage, IL..... 1,682 10,500 522 96 1,682
2021 Lunt Avenue
Elk Grove, IL............ 464 1,855 7 130 471
2121 Touhy Avenue
Elk Grove, IL............ 918 3,672 11 163 929

LIFE UPON WHICH

DEPRECIATION IN

LATEST INCOME

BUILDINGS AND TOTAL ACCUMULATED DATE OF DATE STATEMENT IS

DESCRIPTION IMPROVEMENTS (C)(D) DEPRECIATION CONSTRUCTION ACQUIRED COMPUTED

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

6500 West 51st Street
Forest View, IL.......... 3,250 4,059 (171) 1974 1997 (f)

7447 South Central Avenue
Bedford Park, IL......... 1,785 2,229 (94) 1980 1997 (f)

7525 S. Sayre Avenue
Bedford Park, IL......... 2,374 2,965 (125) 1980 1997 (f)

2901 Centre Circle
Downers Grove, IL........ 1,385 1,596 (67) 1975 1997 (f)

1 Allsteel Drive
Aurora, IL............... 17,761 20,247 (755) 1957-1967 1997 (f)

2525 Busse Highway
Elk Grove Village, IL.... 15,159 19,831 (645) 1975 1997 (f)

106th and Buffalo Avenue
Chicago, IL.............. 1,550 1,807 (89) 1971 1997 (f)

7400 South Narragansett
Bedford Park, IL......... 3,151 3,903 (129) 1977 1997 (f)

2701 S. Busse Road
Elk Grove Village, IL.... 7,210 9,089 (227) 1997 1997 (f)

East Avenue and 55th Street
McCook, IL............... 5,192 6,429 (201) 1979 1997 (f)

6757 S. Sayre
Bedford Park, IL......... 4,973 6,216 (197) 1975 1997 (f)

1951 Landmeir Road
Elk Grove Village, IL.... 1,168 1,459 (46) 1967 1997 (f)

1355 Enterprise Drive
Romeoville, IL........... 2,432 3,020 (93) 1980/1986 1997 (f)

110-190 Old Higgins Road
Des Plaines, IL.......... 7,774 9,648 (243) 1980 1997 (f)

1475 S. 101st Street
West Allis, WI........... 1,363 1,695 (43) 1968/1988 1997 (f)

1333 Grandview Drive
Yorkville, WI............ 6,083 7,604 (193) 1994 1997 (f)

2301 Route 30
Plainfield, IL........... 6,178 7,464 (185) 1972/1984 1997 (f)

1796 Sherwin Avenue
Des Plaines, IL.......... 4,810 5,762 (152) 1964 1997 (f)

2885 W. Diehl Road
Naperville, IL........... 8,742 10,283 (276) 1997 1997 (f)

2727 W. Diehl Road
Naperville, IL........... 14,620 17,696 (460) 1997 1997 (f)

O'hare Express Center--A2
Elk GroveVillage, IL..... 7,414 8,511 (376) 1997 1997 (f)

O'hare Express Center--B1
Elk GroveVillage, IL..... 11,118 12,800 (547) 1997 1997 (f)

2021 Lunt Avenue
Elk Grove, IL............ 1,985 2,456 (56) 1972 1998 (f)

2121 Touhy Avenue
Elk Grove, IL............ 3,835 4,764 (109) 1962 1998 (f)

F-28

Champion
North Lake, IL........... 467 6,124 87 467
860 West Evergreen
Chicago, IL.............. 1,169 4,675 10 59 1,179
2001 S. Mt. Prospect Road
Des Plaines, IL.......... 980 3,920 (76) 256 904
745 Dillon Drive
Wood Dale, IL............ 650 2,600 (60) (208) 590
1030 Fabyan Parkway
Batavia, IL.............. 1,220 4,880 (117) (211) 1,103
5730 N. Tripp
Chicago, IL.............. 603 2,814 3 (176) 606
4700 Ironwood Drive
Franklin, WI............. 419 3,415 7 151 426
2601 Bond Street
University Park, IL...... 380 1,518 6 21 386
201 Oakton
Des Plaines, IL.......... 838 3,351 6 1,108 844
3601 Runge Avenue
Franklin Park, IL........ 8,985(i) 541 2,172 3 46 544
3400 N. Powell
Franklin Park, IL........ (i) 812 3,277 3 29 815
11100 West Addition
Franklin Park, IL........ (i) 250 1,013 3 35 253
11440 West Addition
Franklin Park, IL........ (i) 540 2,200 3 45 543
3434 N. Powell
Franklin Park, IL........ (i) 429 1,723 3 26 432
7633 S. Sayre
Bedford Park............. (i) 167 700 3 26 170
1999 N. Ruby
Franklin Park, IL........ (i) 402 1,615 3 34 405
11550 W. King Drive
Franklin Park, IL........ (i) 320 1,303 3 27 323
7201 S. Leamington
Bedford Park, IL......... (i) 340 1,697 (4) 336
1575 Executive Drive
Elgin, IL................ (i) 240 964 3 27 243
7200 S. Mason
Bedford Park, IL......... (i) 1,037 4,286 3 24 1,040
6000 W. 73rd
Bedford Park, IL......... 4,108(k) 794 3,190 3 27 797
28160 N. Keith
Lake Forest, IL.......... (k) 616 2,496 3 26 619
28618 N. Ballard
Lake Forest, IL.......... 2,261(j) 469 1,943 3 30 472
28161 N. Keith
Lake Forest, IL.......... (j) 270 1,092 3 24 273

LIFE UPON WHICH

DEPRECIATION IN

LATEST INCOME

BUILDINGS AND TOTAL ACCUMULATED DATE OF DATE STATEMENT IS

DESCRIPTION IMPROVEMENTS (C)(D) DEPRECIATION CONSTRUCTION ACQUIRED COMPUTED

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

Champion
North Lake, IL........... 6,211 6,678 (163) 1998 1998 (f)

860 West Evergreen
Chicago, IL.............. 4,734 5,913 (113) 1890/1995 1998 (f)

2001 S. Mt. Prospect Road
Des Plaines, IL.......... 4,176 5,080 (92) 1980 1998 (f)

745 Dillon Drive
Wood Dale, IL............ 2,392 2,982 (50) 1985/1986 1998 (f)

1030 Fabyan Parkway
Batavia, IL.............. 4,669 5,772 (99) 1978 1998 (f)

5730 N. Tripp
Chicago, IL.............. 2,638 3,244 (77) 1975 1998 (f)

4700 Ironwood Drive
Franklin, WI............. 3,566 3,992 (70) 1998 1998 (f)

2601 Bond Street
University Park, IL...... 1,539 1,925 (28) 1975 1998 (f)

201 Oakton
Des Plaines, IL.......... 4,459 5,303 (57) 1984 1998 (f)

3601 Runge Avenue
Franklin Park, IL........ 2,218 2,762 (35) 1962 1998 (f)

3400 N. Powell
Franklin Park, IL........ 3,306 4,121 (52) 1961 1998 (f)

11100 West Addition
Franklin Park, IL........ 1,048 1,301 (16) 1967 1998 (f)

11440 West Addition
Franklin Park, IL........ 2,245 2,788 (35) 1961 1998 (f)

3434 N. Powell
Franklin Park, IL........ 1,749 2,181 (28) 1960 1998 (f)

7633 S. Sayre
Bedford Park............. 726 896 (11) 1968/1969 1998 (f)

1999 N. Ruby
Franklin Park, IL........ 1,649 2,054 (26) 1962 1998 (f)

11550 W. King Drive
Franklin Park, IL........ 1,330 1,653 (21) 1963 1998 (f)

7201 S. Leamington
Bedford Park, IL......... 1,697 2,033 (27) 1958 1998 (f)

1575 Executive Drive
Elgin, IL................ 991 1,234 (16) 1980 1998 (f)

7200 S. Mason
Bedford Park, IL......... 4,310 5,350 (68) 1974 1998 (f)

6000 W. 73rd
Bedford Park, IL......... 3,217 4,014 (51) 1974 1998 (f)

28160 N. Keith
Lake Forest, IL.......... 2,522 3,141 (40) 1989 1998 (f)

28618 N. Ballard
Lake Forest, IL.......... 1,973 2,445 (31) 1984 1998 (f)

28161 N. Keith
Lake Forest, IL.......... 1,116 1,389 (18) 1986 1998 (f)

F-29

11400 W. Melrose Street
Franklin Park, IL........ 168 43 3 11 171
11801 S. Central
Alsip, IL................ 4,901 1,592 6,367 2 753 1,594
1925 Holmes Road
Elgin, IL................ 772 3,087 16 772
1381 N. Northbrank
Chicago, IL.............. 161 645 14 56 175
5611 W. Mill Road
Milwaukee, WI............ 177 709 (23) (94) 154
543 W. Algonquin
Arlington Heights, IL.... 260 1,041 260

CONSTRUCTION IN PROGRESS:
O'hare Express--B2
Elk Grove Village, IL.... 1,618 6,287 (1) 216 1,618
O'hare Express--C
Elk Grove Village, IL.... 2,603 1,890 92 2,603
1808 Swift Road
Oak Brook, IL............ 143 123 332 2,497 475
5480 W. 70th
Bedford Park, IL......... 475 475
NIC (South Building)
Northlake, IL............ 5,026 (1) 81
10801 W. Irving Park Rd
Chicago, IL.............. 1,106 6
5700 West Touhy Avenue
Niles, IL................ 18,005 139 (9,108) 911 30 8,897

RETAIL PROPERTIES:
84 Old McHenry Road
Wheeling, IL............. 482 2,152 31 482
351 N. Rohlwing Road
Itasca, IL............... 81 464 81
4-48 Barrington Road
Streamwood, IL........... 573 2,297 (62) 92 511

RESIDENTIAL PROPERTIES
440 North Lake Street
Miller, IN............... 22,220 711 3,086 101 18,471 3,980 812
Offices of the Management
Company
Chicago, IL.............. 15,918 826 (2) 513 826
------------- --------- ------------- --------- ------------- ----------- ---------
Totals..................... 123,050 $ 136,407 $ 500,747 $ (8,362) $ 112,213 $ 6,728 $ 128,045
------------- --------- ------------- --------- ------------- ----------- ---------
------------- --------- ------------- --------- ------------- ----------- ---------

LIFE UPON WHICH
DEPRECIATION IN
LATEST INCOME
BUILDINGS AND TOTAL ACCUMULATED DATE OF DATE STATEMENT IS
DESCRIPTION IMPROVEMENTS (C)(D) DEPRECIATION CONSTRUCTION ACQUIRED COMPUTED
- --------------------------- ------------- --------- ------------ -------------- ----------- -----------------

11400 W. Melrose Street
Franklin Park, IL........ 54 225 (4) 1998 (f)
11801 S. Central
Alsip, IL................ 7,120 8,714 (70) 1985 1998 (f)
1925 Holmes Road
Elgin, IL................ 3,103 3,875 (33) 1989 1998 (f)
1381 N. Northbrank
Chicago, IL.............. 701 876 (6) 1900 1998 (f)
5611 W. Mill Road
Milwaukee, WI............ 615 769 (4) 1960 1998 (f)
543 W. Algonquin
Arlington Heights, IL.... 1,041 1,301 (3) 1970 1998 (f)
CONSTRUCTION IN PROGRESS:
O'hare Express--B2
Elk Grove Village, IL.... 6,502 8,120 (66)
O'hare Express--C
Elk Grove Village, IL.... 1,982 4,585 (107)
1808 Swift Road
Oak Brook, IL............ 2,620 3,095 Var. (f)
5480 W. 70th
Bedford Park, IL......... 475
NIC (South Building)
Northlake, IL............ 5,106 5,106
10801 W. Irving Park Rd
Chicago, IL.............. 1,112 1,112
5700 West Touhy Avenue
Niles, IL................ 1,080 9,977 (8) 1948 1997 (f)
RETAIL PROPERTIES:
84 Old McHenry Road
Wheeling, IL............. 2,183 2,665 (376) 1989-1990 1993 (f)
351 N. Rohlwing Road
Itasca, IL............... 464 545 (75) 1989 1993 (f)
4-48 Barrington Road
Streamwood, IL........... 2,389 2,900 (334) 1989 1994 (f)
RESIDENTIAL PROPERTIES
440 North Lake Street
Miller, IN............... 25,537 26,349 (6,791) 1971/1990-1993 1990 (f)
Offices of the Management
Company
Chicago, IL.............. 16,429 17,255 (3,098)
------------- --------- ------------
Totals..................... $ 619,688 $ 747,733 $ (62,257)
------------- --------- ------------
------------- --------- ------------

F-30

CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
SCHEDULE III (CONTINUED)
(DOLLARS IN THOUSANDS)

Notes to Schedule III:

(a) Initial cost for each respective property is the total acquisition costs
associated with its purchase.

(b) Carrying costs consist of capitalized construction period interest, taxes
and insurance.

(c) At December 31, 1998, the aggregate cost of land and buildings and equipment
for Federal income tax purposes was approximately $772 million.

(d) Reconciliation of real estate and accumulated depreciation:

RECONCILIATION OF REAL ESTATE

YEAR ENDED DECEMBER 31,
----------------------------------

1998 1997 1996
---------- ---------- ----------
Balance at the beginning of year............................................. $ 641,646 $ 429,034 $ 317,460
Additions.................................................................. 137,861 225,834 135,342
Dispositions............................................................... (31,774) (13,222) (23,768)
---------- ---------- ----------
Balance at close of year..................................................... $ 747,733 $ 641,646 $ 429,034
---------- ---------- ----------
---------- ---------- ----------

RECONCILIATION OF ACCUMULATED DEPRECIATION AND AMORTIZATION

YEAR ENDED DECEMBER 31,
-------------------------------

1998 1997 1996
--------- --------- ---------
Balance at beginning of year..................................................... $ 44,352 $ 30,206 $ 21,576
Depreciation and amortization.................................................. 20,151 14,494 10,199
Dispositions................................................................... (2,246) (348) (1,569)
--------- --------- ---------
Balance at close of year......................................................... $ 62,257 $ 44,352 $ 30,206
--------- --------- ---------
--------- --------- ---------

(e) See description of encumbrances in Note 6 to Consolidated Financial
Statements.

(f) Depreciation is computed based upon the following estimated lives:

31.5 to 40
Buildings, improvements and carrying costs.............................. years
Land improvements....................................................... 15 years
Furniture, fixtures and equipment....................................... 4 to 15 years

(g) These 18 properties collateralize a $30,000 mortgage loan payable.

(h) These 20 properties collateralize $50,000 of mortgage bonds payable.

(i) These 11 properties collateralize a $8,985 mortgage loan payable.

(j) These 2 properties collateralize a $4,108 mortgage loan payable.

(k) These 2 properties collateralize a $2,261 mortgage loan payable.

F-31

EXHIBIT 12-1

CENTERPOINT PROPERTIES TRUST

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

(DOLLARS IN THOUSANDS)

YEAR ENDED DECEMBER 31,
-----------------------------------------------------

1998 1997 1996 1995 1994
--------- --------- --------- --------- ---------
Available earnings:
Net income (loss)........................................ $ 36,458 $ 27,630 $ 14,941 $ 8,212 $ 2,359
Add interest expense (1)................................. 15,476 10,871 10,992 12,985 12,157
--------- --------- --------- --------- ---------
Available earnings (loss) (2).............................. $ 51,934 $ 38,501 $ 25,933 $ 21,197 $ 14,516
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Fixed charges:
Interest expense......................................... $ 15,476 $ 10,871 $ 10,992 $ 12,985 $ 12,157
Capitalized interest..................................... 2,214 893 142 20 63
--------- --------- --------- --------- ---------
Total fixed charges........................................ $ 17,690 $ 11,764 $ 11,134 $ 13,005 $ 12,220
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Ratio of earnings to fixed charges......................... 2.94 3.27 2.33 1.63 1.19
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------

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

NOTES:

(1) Interest expense includes amortization of deferred financing costs.

(2) Interest portion of rental expense is not calculated because annual rental
expense for the Company is not significant.

F-32

EXHIBIT 12-2

CENTERPOINT PROPERTIES TRUST

COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED DIVIDENDS

(DOLLARS IN THOUSANDS)

YEAR ENDED DECEMBER 31,
-----------------------------------------------------

1998 1997 1996 1995 1994
--------- --------- --------- --------- ---------
Available earnings:
Net income (loss)........................................ $ 36,458 $ 27,630 $ 14,941 $ 8,212 $ 2,359
Add interest expense (1)................................. 15,476 10,871 10,992 12,985 12,157
--------- --------- --------- --------- ---------
Available earnings (loss) (2).............................. $ 51,934 $ 38,501 $ 25,933 $ 21,197 $ 14,516
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Combined fixed charges:
Interest expense......................................... $ 15,476 $ 10,871 $ 10,992 $ 12,985 $ 12,157
Capitalized interest..................................... 2,214 893 142 20 63
Preferred dividends...................................... 6,360 901 947 1,002
--------- --------- --------- --------- ---------
Total fixed charges........................................ $ 24,050 $ 12,665 $ 12,081 $ 14,007 $ 12,220
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Ratio of earnings to combined fixed charges................ 2.16 3.04 2.15 1.51 1.19
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------

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

NOTES:

(1) Interest expense includes amortization of deferred financing costs.

(2) Interest portion of rental expense is not calculated because annual rental
expense for the Company is not significant.

F-33

EXHIBIT 23

CENTERPOINT PROPERTIES TRUST
CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in the registration statements
of CenterPoint Properties Trust on Form S-3 (File Nos. 33-95792, 33-99858,
333-18235 and 333-49359), Form S-8/S-3 (File Nos. 333-05087 and 333-34687) and
Form S-8 (File No. 333-05141 and 333-62887) of our reports dated February 9,
1999, on our audits of the consolidated financial statements and financial
statement schedules of CenterPoint Properties Trust and Subsidiaries as of
December 31, 1998 and 1997, and for each of the three years in the period ended
December 31, 1998, which reports are included in this Annual Report on Form
10-K.

PRICEWATERHOUSECOOPERS LLP

Chicago, Illinois
March 12, 1999

F-34