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PROSPECTUS                                      FILED PURSUANT TO RULE 424(B)(5)
- ----------                                      REGISTRATION NO. 333-82569

                                1,551,109 SHARES

                         GENERAL GROWTH PROPERTIES, INC.
                                  COMMON STOCK
                           (PAR VALUE $.10 PER SHARE)

         This Prospectus relates to 1,551,109 shares of our common stock that
may be sold from time to time by the selling stockholders in accordance with the
plan of distribution described in this Prospectus.

         Our common stock is listed on the New York Stock Exchange and traded
under the symbol "GGP". The last reported sale price of our common stock on the
New York Stock Exchange on July 26, 1999, was $33.125 per share.

         Our principal executive offices are located at 110 North Wacker Drive,
Chicago, Illinois 60606 and our telephone number is (312) 960-5000.


    Neither the Securities and Exchange Commission nor any state securities
      commission has approved or disapproved these securities or determined
        if this prospectus is truthful or complete. Any representation to
                       the contrary is a criminal offense.

                                   ----------

              The date of this Prospectus is July 27, 1999.


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         YOU SHOULD RELY ONLY ON INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. NEITHER WE NOR THE SELLING STOCKHOLDER HAS
AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT
MAKING AN OFFER OF THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT
PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION PROVIDED BY THE PROSPECTUS
IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THIS PROSPECTUS.

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

                                TABLE OF CONTENTS



                                                                      PAGE
                                                                   
WHERE TO FIND MORE INFORMATION .......................................  3

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE ......................  3

FORWARD-LOOKING STATEMENTS ...........................................  4

THE COMPANY ..........................................................  4

USE OF PROCEEDS ......................................................  5

SELLING STOCKHOLDERS .................................................  5

PLAN OF DISTRIBUTION .................................................  6

FEDERAL INCOME TAX CONSIDERATIONS ....................................  7

LEGAL MATTERS ........................................................ 12

EXPERTS .............................................................. 12


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                         WHERE TO FIND MORE INFORMATION

         We have filed with the Commission a Registration Statement on Form S-3
(the "Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), relating to the shares of Common Stock. This Prospectus is a
part of the Registration Statement, but the Registration Statement also contains
additional information and exhibits.

         We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Accordingly, we file
annual, quarterly and current reports with the Securities and Exchange
Commission (the "Commission"). You can read and copy the Registration Statement
and the reports that the Company files with the Commission at the Commission's
public reference rooms at 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549, 7 World Trade Center, Suite 1300, New York, New York 10048 and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can
also be obtained from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. Our filings with the
Commission are also available from the Commission's Web Site at
http://www.sec.gov. Please call the Commission's toll-free telephone number at
1-800-SEC-0330 if you need further information about the operation of the
Commission's public reference rooms. Our common stock is listed on the New York
Stock Exchange ("NYSE") and our reports can also be inspected at the offices of
the NYSE, 20 Broad Street, 17th Floor, New York, New York 10005.


                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

         We file annual, quarterly and special reports, proxy statements and
other information with the Commission. The Commission allows us to "incorporate
by reference" the information we file with it, which means that we can disclose
important information to you by referring to those documents. The information
incorporated by reference is an important part of this Prospectus. Any statement
contained in a document which is incorporated by reference in this Prospectus is
automatically updated and superseded if information contained in this
Prospectus, or information that we later file with the Commission, modifies or
replaces this information. We incorporate by reference the following documents:

                  1. Our Annual Report on Form 10-K for the year ended December
         31, 1998, dated March 19, 1999 (the "Company 10-K");

                  2. Our Current Report on Form 8-K dated March 18, 1999;

                  3. Our Current Report on Form 8-K dated July 12, 1999;

                  4. Our Current Report on Form 8-K dated July 14, 1999;

                  5. Our Quarterly Report on Form 10-Q for the quarter ended
         March 31, 1999, dated May 10, 1999;

                  6. The portions of our Proxy Statement for our 1999 Annual
         Meeting of Stockholders that have been incorporated by reference into
         our Annual Report on Form 10-K;

                  7. The description of our 7.25% Preferred Income Equity
         Redeemable Stock, Series A, par value $100 per share ("PIERS"), which
         is contained in our Registration Statement on Form 8-A filed with the
         Commission on June 5, 1998, pursuant to Section 12(b) of the Exchange
         Act;

                  8. The description of our Common Stock contained in our
         Registration Statement on Form 8-A filed with the Commission on January
         12, 1993, pursuant to Section 12(b) of the Exchange Act; and

                  9. The description of our Common Stock contained in our
         Registration Statement on Form 8-A filed with the Commission on
         November 18, 1998, pursuant to Section 12(b) of the Exchange Act.

         To receive a free copy of any of the documents incorporated by
         reference in this Prospectus (other than exhibits)


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call or write General Growth Properties, Inc., 110 North Wacker, Chicago, IL
60606, Attention: Director of Investor Relations, Telephone (312) 960-5000.


                           FORWARD LOOKING STATEMENTS

         This Prospectus and those documents incorporated by reference herein
may include certain "forward-looking information statements" within the meaning
of Section 27A of the Securities Act and Section 21E of the Exchange Act,
including (without limitation) statements with respect to anticipated future
operating and financial performance, growth and acquisition opportunities and
other similar forecasts and statements of expectation. Words such as "expects,"
"estimates," "plans," "anticipates," "predicts," "intends," "believes," "seeks,"
and "should" and other similar expressions and variations of these expressions
are intended to identify these forward-looking statements. Forward-looking
statements made by us are based on our estimates, projections, beliefs and
assumptions at the time of the statements and are not guarantees of future
performance. We disclaim any obligation to update or revise any forward-looking
statement based on the occurrence of future events, the receipt of new
information or otherwise.

         Actual future performance, outcomes and results may differ materially
from those expressed in forward-looking statements made by us as a result of a
number of risks, uncertainties and assumptions. Representative examples of these
factors include (without limitation) general industry and economic conditions,
interest rate trends, costs of capital and capital requirements, availability of
real estate properties, competition from other companies and venues for the
sale/distribution of goods and services, shifts in customer demands, tenant
bankruptcies, changes in operating expenses, including employee wages, benefits
and training, governmental and public policy changes, changes in applicable
laws, rules and regulations (including changes in tax laws), the ability to
obtain suitable equity and/or debt financing, and the continued availability of
financing in the amounts and on the terms necessary to support our future
business.

                        GENERAL GROWTH PROPERTIES, INC.


         We are a self-administered and self-managed real estate investment
trust ("REIT") that owns, operates, acquires, develops, expands, finances and
manages enclosed mall shopping centers in major and middle markets throughout
the United States. We were organized in 1986 to continue expanding the Bucksbaum
family business, which has been engaged in the shopping center business since
1954.

         We conduct our business through the Operating Partnership, which holds
substantially all of our interests in properties.  We own an approximately 67.6%
partnership interest in the Operating Partnership.  The remaining approximate
32.4% interest in the Operating Partnership is held by limited partners which
include a partnership comprised of trusts for the benefit of the Bucksbaum
family and others who have contributed properties to us.  As of July 26, 1999,
the Operating Partnership owned or had an ownership interest in 85 enclosed mall
shopping centers in 35 states and had two mall shopping centers under
development. Such enclosed mall shopping centers have approximately 71 million
square feet of gross retail space, including anchor stores, freestanding stores
and mall tenant areas ("GLA").

Specifically, the Operating Partnership owned:

     -    100% of 54 enclosed mall shopping centers, including two mall shopping
          centers currently under development.

     -    51% of the outstanding common stock of GGP/Ivanhoe, Inc., a Delaware
          corporation that has qualified as a REIT for federal income tax
          purposes. GGP/Ivanhoe owns 100% of two enclosed mall shopping centers.


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     -    51% of the common stock of GGP Ivanhoe III, Inc., a Delaware
          corporation that has qualified as a REIT for federal income tax
          purposes. GGP Ivanhoe III owns 100% of six enclosed mall shopping
          centers.

     -    50% of each of two enclosed mall shopping centers.

     -    Approximately 50% of the outstanding common stock of GGP/Homart, Inc.,
          a Delaware corporation that has qualified as a REIT for federal income
          tax purposes. GGP/Homart owns interests in 23 enclosed mall shopping
          centers.

     -    A 100% non-voting preferred stock interest, representing 95% of the
          equity interest, in General Growth Management, Inc. ("GGMI"). Several
          of our officers hold all of the voting common stock of GGMI, which
          represents 5% of the equity interest in GGMI.

     -    100% of the preferred units of limited partnership interest in GGP
          Limited Partnership.

         We are incorporated under the laws of the State of Delaware. We have
qualified as a REIT for federal income tax purposes. In order to maintain this
qualification, we must distribute at least 95% of our REIT taxable income,
computed without regard to net capital gains or the dividends-paid deduction,
and of our after-tax net income from foreclosure property each year. Dividends
on any preferred stock, including our 7.25% Preferred Income Equity Redeemable
Stock, Series A par value $100 per share, which we call "PIERS", would be
included as distributions for this purpose.

         In this Prospectus, references to "we," "us" or "our" include those
entities which we own or control, including the Operating Partnership, unless
the context indicates otherwise.


                                 USE OF PROCEEDS

         We will not receive any proceeds from the sale by the Equitable Life
Insurance Company of Iowa ("Equitable") or the USG Annuity & Life Company
("USG", and collectively with Equitable, the "Selling Stockholders") of any of
the shares of Common Stock (the "Shares") covered by this Prospectus.

                              SELLING STOCKHOLDERS

         The following table sets forth (i) the name of the Selling
Stockholders, (ii) the number of Shares currently beneficially owned by each of
the Selling Stockholders, (iii) the number of Shares to be offered by each of
the Selling Stockholders and (iv) the number of Shares which will be
beneficially owned by each of the Selling Stockholders after the offering,
assuming the sale of all the Shares set forth in (iii) above:

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                                        Beneficial                    Shares                   Beneficial
                                         Ownership                     to Be                    Ownership
Selling Stockholder                  Prior to Offering              Offered (1)           After Offering (1)
- -------------------                  -----------------              -----------           ------------------
                                                                                 
Equitable Life Insurance Company
  of Iowa                                 310,222                      310,222                    ---

USG Annuity & Life Company              1,240,887                    1,240,887                    ---




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

     (1) The number of Shares to be sold by each of the Selling Stockholders at
         any time or from time to time cannot currently be determined.


         Pursuant to a stockholders agreement dated as of December 20, 1995
among the Selling Stockholders and certain other stockholders (including the
Company) of GGP/Homart, Inc. (the "Stockholders Agreement"), on July 6, 1999,
the Selling Stockholders exchanged their respective shares of Class C Common
Stock of GGP/Homart, Inc. for the Shares.

                              PLAN OF DISTRIBUTION

         We are registering the Shares on behalf of the Selling Stockholders
pursuant to the Stockholders Agreement. The Shares may be offered and sold by
each of the Selling Stockholders, or by purchasers, transferees, donees,
pledgees or other successors in interest, directly or through brokers, dealers,
agents or underwriters who may receive compensation in the form of discounts,
commissions or similar selling expenses paid by the Selling Stockholders or by a
purchaser of the Shares on whose behalf such broker-dealer may act as agent.
Sales and transfers of the Shares may be effected from time to time in one or
more transactions, in private or public transactions, on the NYSE, in the
over-the-counter market, in negotiated transactions or otherwise, at a fixed
price or prices that may be changed, at market prices prevailing at the time of
sale, at negotiated prices, without consideration or by any other legally
available means. Any or all of the Shares may be sold from time to time by means
of (a) a block trade, in which a broker or dealer attempts to sell the Shares as
agent but may position and resell a portion of the Shares as principal to
facilitate the transaction; (b) purchases by a broker or dealer as principal and
the subsequent sale by such broker or dealer for its account pursuant to this
Prospectus; (c) ordinary brokerage transactions (which may include long or short
sales) and transactions in which the broker solicits purchasers; (d) the writing
(sale) of put or call options on the Shares; (e) the pledging of the Shares as
collateral to secure loans, credit or other financing arrangements and
subsequent foreclosure, the disposition of the Shares by the Lender thereunder;
and (f) any other legally available means.

         To the extent required with respect to a particular offer or sale of
the Shares, a Prospectus Supplement will be filed pursuant to Section 424(b)(3)
of the Securities Act, and will accompany this Prospectus, to disclose (a) the
number of Shares to be sold, (b) the purchase price, (c) the name of any broker,
dealer or agent effecting the sale or transfer and the amount of any applicable
discounts, commissions or similar selling expenses, and (d) any other relevant
information.

         Each of the Selling Stockholders may transfer the Shares by means of
gifts, donations and contributions. This Prospectus may be used by the
recipients of such gifts, donations and contributions to offer and sell the
Shares received by them, directly or through brokers, dealers or agents and in
private or public transactions; however, if sales pursuant to this Prospectus by
any such recipient could exceed 500 Shares, we may be required to file a
Prospectus Supplement pursuant to Section 424(b)(3) of the Securities Act to
identify the recipient as a Selling Stockholder and disclose any other relevant
information. Such Prospectus Supplement will be delivered together with this
Prospectus to any purchaser of such Shares.

         In connection with distributions of the Shares or otherwise, the
Selling Stockholders may enter into hedging transactions with brokers, dealers
or other financial institutions. In connection with such transactions,



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brokers, dealers or other financial institutions may engage in short sales of
our Common Stock in the course of hedging the positions they assume with each of
the Selling Stockholders. To the extent permitted by applicable law, the Selling
Stockholders also may sell the Shares short and redeliver the Shares to close
out such short positions.

         Each of the Selling Stockholders and any broker-dealers who participate
in the distribution of the Shares may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act and any discounts, commissions or
similar selling expenses they receive and any profit on the resale of the Shares
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. As a result, we have informed each of the Selling
Stockholders that Regulation M, promulgated under the Exchange Act, may apply to
sales by each of the Selling Stockholders in the market. The Selling
Stockholders may agree to indemnify any broker, dealer or agent that
participates in transactions involving the sale of the Shares against certain
liabilities, including liabilities arising under the Securities Act.

         The aggregate net proceeds to each of the Selling Stockholders from the
sale of the Shares will be the purchase price of such Shares less any discounts,
concessions or commissions. We will not receive any proceeds from the sale of
any Shares by each of the Selling Stockholders. We will pay all expenses
incurred in connection with this offering, other than underwriting discounts and
selling commissions.

         Each of the Selling Stockholders is acting independently of us in
making decisions with respect to the timing, price, manner and size of each
sale. No broker, dealer or agent has been engaged by us in connection with the
sale of the Shares, and there is no assurance that each of the Selling
Stockholders will sell any or all of the Shares. In connection with the offer
and sale of the Shares, we have agreed to make available to each of the Selling
Stockholders copies of this Prospectus and any applicable Prospectus Supplement
and have informed each of the Selling Stockholders of the need to deliver copies
of this Prospectus and any applicable Prospectus Supplement to purchasers prior
to the time of any sale of the Shares offered hereby.

         The Shares covered by this Prospectus may qualify for sale pursuant to
Section 4(1) of the Securities Act or Rule 144 promulgated thereunder, and may
be sold pursuant to such provisions rather than pursuant to this Prospectus.

                        FEDERAL INCOME TAX CONSIDERATIONS

FEDERAL INCOME TAX CONSIDERATIONS TO HOLDERS OF CAPITAL STOCK

         This section is a summary of certain federal income tax matters of
general application pertaining to REITs and their stockholders under the
Internal Revenue Code of 1986. The discussion is based on current law and does
not purport to deal with all aspects of federal income taxation that may be
relevant to investors subject to special treatment under federal income tax
laws, such as investors subject to the Employee Retirement Income Security Act
of 1974, as amended, other tax exempt investors, dealers in securities or
foreign persons. The provisions of the Code pertaining to REITs are highly
technical and complex and sometimes involve mixed questions of fact and law. In
addition, this section does not discuss foreign, state or local taxation.

         In the opinion of Neal, Gerber & Eisenberg, our tax counsel, we
have been organized and operated in a manner that has enabled us to qualify as a
REIT under Sections 856 through 859 of the Code, and our proposed method of
operation will enable us to continue to so qualify. No assurance can be given,
however, that we will so qualify or continue to so qualify. Our ability to
qualify as a REIT under the requirements of the Code and the regulations
promulgated thereunder is dependent upon actual operating results.

         To qualify as a REIT under the Code for a taxable year, we must meet
certain organizational and operational requirements, which generally require us
to be a passive investor in operating real estate and to avoid excessive
concentration of ownership of our stock. First, our principal activities must be
real estate related. Generally, at least 75% of the value of our total assets at
the end of each calendar quarter must consist of real estate assets, cash or
governmental securities. We may not own more than 10% of the


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outstanding voting securities of any corporation; shares of qualified REITs and
of certain wholly owned subsidiaries are exempt from this prohibition. For each
taxable year, at least 75% of a REIT's gross income must be derived from
specified real estate sources and 95% must be derived from such real estate
sources plus certain other permitted sources. Real estate income for purposes of
these requirements includes gains from the sale of real property not held
primarily for sale to customers in the ordinary course of business, dividends on
REIT shares, interest on loans secured by mortgages on real property, certain
rents from real property and income from foreclosure property. For rents to
qualify, they may not be based on the income or profits of any person, except
that they may be based on a percentage or percentages of gross income or
receipts, and, subject to certain limited exceptions, the REIT may not manage
the property or furnish services to residents except through an independent
contractor which is paid an arm's length fee and from which the REIT derives no
income.

         For us to remain qualified as a REIT, no more than 50% in value of our
outstanding capital stock, including in some circumstances stock into which
outstanding securities might be converted, may be owned actually or
constructively by five or fewer individuals (as defined in the Code to include
certain entities) at any time during the last half of our taxable year.
Accordingly, our Certificate of Incorporation, as amended, contains provisions
restricting the acquisition of shares of our capital stock.

         So long as we qualify for taxation as a REIT and distribute at least
95% of the sum of (a) our REIT taxable income (as computed without regard to net
capital gains or the dividends-paid deduction) and (b) our net income (after
tax) from foreclosure property for our taxable year to our stockholders
annually, we will not be subject to federal income tax on that portion of such
income distributed to stockholders. We will be taxed at regular corporate rates
on all income not distributed to stockholders. Our policy is to distribute at
least 95% of the sum of our REIT taxable income and net income from foreclosure
property. REITs may also incur taxes for certain other activities or to the
extent distributions do not satisfy certain other requirements.

         In the case of a REIT which is a partner in a partnership, such as us,
Treasury Department regulations provide that the REIT will be deemed to own its
proportionate share of the assets of the partnership and will be deemed to earn
the income of the partnership attributable to such share. In addition, for
purposes of satisfying the asset and income tests described above, the character
of the gross income and assets in the hands of the partnership remains the same
when allocated to the REIT. Accordingly, our proportionate share of the assets,
liabilities and items of income of GGP Limited Partnership will be treated as
our assets, liabilities, and items of income for purposes of qualifying as a
REIT.

         Our failure to qualify during any taxable year as a REIT could, unless
certain relief provisions were available, have a material adverse effect upon
investors. If disqualified for taxation as a REIT for a taxable year, we would
also be disqualified for taxation as a REIT for the next four taxable years,
unless the failure was due to reasonable cause rather than willful neglect and
certain other conditions are met. We would be subject to federal income tax at
corporate rates on all of our taxable income and would not be able to deduct the
dividends paid, which could result in a discontinuation of or substantial
reduction in dividends to stockholders. Dividends would also be subject to the
regular tax rules applicable to dividends received by stockholders of
corporations. Should the failure to qualify be determined to have occurred
retroactively in one of our earlier tax years, the imposition of a substantial
federal income tax liability on us attributable to such nonqualifying tax years
may adversely affect our ability to pay dividends. In the event that we fail to
meet certain income tests of the tax law, we may, generally, nonetheless retain
our qualification as a REIT if we pay a 100% tax on the amount by which we
failed to meet the income tests so long as our failure was due to reasonable
cause and not willful neglect. Any such taxes would adversely affect our ability
to pay dividends.

TAXATION OF TAXABLE DOMESTIC STOCKHOLDERS

         As used herein, the term "U.S. Stockholder" means a holder of our stock
who, for United States federal income tax purposes is (i) a citizen or resident
of the United States, (ii) a corporation created or organized in or under the
laws of the United States or of any political subdivision thereof, (iii) an
estate the






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income of which is subject to United States federal income taxation regardless
of its source, or (iv) a trust if a court within the United States is able to
exercise primary supervision over the administration of such trust and one or
more United States persons as defined in section 7701(a)(30) of the Code have
the authority to control all the substantial decisions of such trust.

         As long as we qualify as a REIT, distributions made to our U.S.
Stockholders out of current or accumulated earnings and profits (and not
designated as capital gain dividends) will be taxable to such U.S. Stockholders
as ordinary income. Corporate U.S. Stockholders will not be entitled to the
dividends-received deduction with respect to distributions by us. Distributions
that are designated as capital gain dividends will be taxable to U.S.
Stockholders as long-term capital gains (to the extent they do not exceed our
actual net capital gain for the taxable year) without regard to the period for
which the U.S. Stockholder has held its stock. Subject to certain limitations,
such capital gains dividends received by an individual U.S. Stockholder may be
eligible for the 20% or 25% capital gains rates of tax. However, corporate U.S.
Stockholders may be required to treat up to 20% of certain capital gain
dividends as ordinary income. Distributions by us in excess of our current and
accumulated earnings and profits will not be taxable to a U.S. Stockholder to
the extent that such distributions do not exceed the adjusted basis of the U.S.
Stockholder's shares, but rather, will be a nontaxable reduction in a U.S.
Stockholder's adjusted basis in such shares to the extent thereof and thereafter
will be taxed as capital gain.

         Any dividend declared by us in October, November or December of any
year payable to a U.S. Stockholder of record on a specified date in any such
month will be treated as both paid by us and received by the U.S. Stockholder on
December 31, of such year, provided that the dividend is actually paid by us
during January of the following calendar year.

         U.S. Stockholders holding capital stock at the close of our taxable
year will be required to include, in computing their long-term capital gains for
the taxable year in which the last day of our taxable year falls, such amount as
we may designate in a written notice mailed to our stockholders. We may not
designate amounts in excess of our undistributed net capital gain for the
taxable year. Each U.S. Stockholder required to include such a designated amount
in determining such stockholder's long-term capital gains will be deemed to have
paid, in the taxable year of the inclusion, the tax paid by us in respect of
such undistributed net capital gains. U.S. Stockholders subject to these rules
will be allowed a credit or a refund, as the case may be, for the tax deemed to
have been paid by such stockholders. U.S. Stockholders will increase their basis
in their capital stock by the difference between the amount of such includible
gains and the tax deemed paid by the U.S. Stockholder in respect of such gains.

         U.S. Stockholders may not include in their individual income tax
returns any of our net operating losses or capital losses. Instead, such losses
would be carried over by us for potential offset against our future income
(subject to certain limitations). Taxable distributions from us and gain from
the disposition of the capital stock will not be treated as passive activity
income and, therefore, U.S. Stockholders generally will not be able to apply any
"passive activity losses" (such as losses from certain types of limited
partnerships in which the U.S. Stockholder is a limited partner) against such
income. In addition, taxable distributions from us and gain from the disposition
of capital stock generally will be treated as investment income for purposes of
the investment interest limitations. We will notify the U.S. Stockholders after
the close of our taxable year as to the portions of the distributions
attributable to that year that constitute ordinary income, return of capital,
and capital gain. In general, any gain or loss realized upon a taxable
disposition of the capital stock by a U.S. Stockholder who is not a dealer in
securities will be treated as long-term capital gain if held for more than 12
months and otherwise as short-term capital gain or loss. Long-term capital gain
of an individual U.S. Stockholder with respect to the sale of stock is generally
subject to a maximum tax rate of 20% in respect of property held in excess of 12
months. However, any loss upon a sale or exchange of capital stock by a U.S.
Stockholder who has held such stock for six months or less (after applying
certain holding period rules) will be treated as long-term capital loss to the
extent of distributions from us required to be treated by such U.S. Stockholder
as long-term capital gain. All or a portion of any loss realized upon a taxable
disposition of the capital stock may be disallowed if other shares of the
capital stock are purchased within 30 days before or after the disposition.


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BACKUP WITHHOLDING

         We will report to our U.S. Stockholders and to the Internal Revenue
Service ("IRS") the amount of dividends paid during each calendar year, and the
amount of tax withheld, if any. Under the backup withholding rules, a U.S.
Stockholder may be subject to backup withholding at the rate of 31% with respect
to dividends paid unless such holder: (a) is a corporation or comes within
certain other exempt categories and when required demonstrates this fact, or (b)
provides a taxpayer identification number, certifies as to no loss of exemption
from backup withholding, and otherwise complies with applicable requirements of
the backup withholding rules. A U.S. Stockholder that does not provide us with a
correct taxpayer identification number may also be subject to penalties imposed
by the IRS. Any amount paid as backup withholding will be creditable against the
U.S. Stockholder's income tax liability. In addition, we may be required to
withhold a portion of capital gain distributions to any U.S. Stockholders that
fail to certify their non-foreign status to us. See " Taxation of Non-U.S.
Stockholders of the Company."

TAXATION OF PENSION TRUSTS

         One of the requirements for us to qualify as a REIT for federal income
tax purposes is that during the last half of each taxable year, not more than
50% in value of our capital stock can be owned by five or fewer individuals (as
defined in the Code to include certain entities). For purposes of the "five or
fewer" test described above, beneficiaries of a domestic pension trust that owns
shares of our capital stock generally will be treated as owning such shares in
proportion to their actuarial interests in the trust. In addition, amounts
distributed by us to a tax-exempt pension trust generally do not constitute
"unrelated business taxable income" ("UBTI") to such trust unless the trust owns
more than ten percent of the capital stock, in which case a portion of such
amounts distributed may be treated as UBTI.

TAXATION OF OUR NON-U.S. STOCKHOLDERS

         The rules governing United States federal income taxation of the
ownership and disposition of capital stock by persons that are, for purposes of
such taxation, nonresident alien individuals, foreign corporations, foreign
partnerships or foreign estates or trusts (collectively, "Non-U.S.
Stockholders") are complex, and no attempt is made herein to provide more than a
brief summary of such rules. Accordingly, the discussion does not address all
aspects of United States federal income tax and does not address state, local or
foreign tax consequences that may be relevant to a Non-U.S. Stockholder in light
of its particular circumstances. In addition, this discussion is based on
current law, which is subject to change, and assumes that we qualify for
taxation as a REIT. Prospective Non-U.S. Stockholders should consult with their
own tax advisers to determine the impact of federal, state, local and foreign
income tax laws with regard to an investment in capital stock, including any
reporting requirements.

         Distributions by us to a Non-U.S. Stockholder that are neither
attributable to gain from sales or exchanges by us of United States real
property interests nor designated by us as capital gains dividends will be
treated as dividends of ordinary income to the extent that they are made out of
our current or accumulated earnings and profits. Such distributions ordinarily
will be subject to withholding of United States federal income tax on a gross
basis (that is, without allowance of deductions) at a 30% rate or such lower
rate as may be specified by an applicable income tax treaty, unless the
dividends are treated as effectively connected with the conduct by the Non-U.S.
Stockholder of a United States trade or business. Dividends that are effectively
connected with such a trade or business will be subject to tax on a net basis
(that is, after allowance of deductions) at graduated rates, in the same manner
as domestic stockholders are taxed with respect to such dividends, and are
generally not subject to withholding. Any such dividends received by a Non-U.S.
Stockholder that is a corporation may also be subject to an additional branch
profits tax at a 30% rate or such lower rate as may be specified by an
applicable income tax treaty. We expect to withhold United States income tax at
the rate of 30% on the gross amount of any such distributions made to a Non-U.S.
Stockholder unless (i) a lower treaty rate applies and any required form or


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certification evidencing eligibility for that reduced rate is filed with the
Company or (ii) the Non-U.S. Stockholder files an IRS Form 4224 with us claiming
that the distribution is effectively connected income.

         Distributions in excess of our current or accumulated earnings and
profits will not be taxable to a Non-U.S. Stockholder to the extent that they do
not exceed the adjusted basis of the stockholder's capital stock, but rather
will reduce the adjusted basis of such capital stock. To the extent that such
distributions exceed the adjusted basis of a Non-U.S. Stockholder's capital
stock, they will give rise to gain from the sale or exchange of its capital
stock, the tax treatment of which is described below. As a result of a
legislative change made by the Small Business Job Protection Act of 1996, it
appears that we will be required to withhold 10% of any distribution in excess
of our current and accumulated earnings and profits. Consequently, although we
intend to withhold at a rate of 30% on the entire amount of any distribution (or
a lower applicable treaty rate), to the extent that we do not do so, any portion
of a distribution not subject to withholding at a rate of 30% (or a lower
applicable treaty rate) will be subject to withholding at a rate of 10%.
However, the Non-U.S. Stockholder may seek a refund of such amounts from the IRS
if it subsequently determined that such distribution was, in fact, in excess of
our current or accumulated earnings and profits, and the amount withheld
exceeded the Non-U.S. Stockholder's United States tax liability, if any, with
respect to the distribution.

         Distributions to a Non-U.S. Stockholder that are designated by us at
the time of distribution as capital gains dividends (other than those arising
from the disposition of a United States real property interest) generally will
not be subject to United States federal income taxation, unless (i) the
investment in the capital stock is effectively connected with the Non-U.S.
Stockholder's United States trade or business, in which case the Non-U.S.
Stockholder will be subject to the same treatment as U.S. Stockholders with
respect to such gain (except that a stockholder that is a foreign corporation
may also be subject to the 30% branch profits tax, as discussed above), or (ii)
the Non-U.S. Stockholder is a nonresident alien individual who is present in the
United States for 183 days or more during the taxable year and has a "tax home"
in the United States, in which case the nonresident alien individual will be
subject to a 30% tax on the individual's capital gains.

         Under the Foreign Investment in Real Property Tax Act ("FIRPTA"),
distributions to a Non-U.S. Stockholder that are attributable to gain from sales
or exchanges by us of United States real property interests (whether or not
designated as a capital gain dividend) will cause the Non-U.S. Stockholder to be
treated as recognizing such gain as income effectively connected with a United
States trade or business. Non-U.S. Stockholders would thus generally be taxed at
the same rates applicable to U.S. Stockholders (subject to a special alternative
minimum tax in the case of nonresident alien individuals). Also, such gain may
be subject to a 30% branch profits tax in the hands of a Non-U.S. Stockholder
that is a corporation, as discussed above. We are required to withhold 35% of
any such distribution. That amount is creditable against the Non-U.S.
Stockholder's United States federal income tax liability.

         Although the law is not entirely clear on the matter, it appears that
amounts designated by us as undistributed capital gains in respect of
stockholders' shares would be treated with respect to Non-U.S. Stockholders in
the manner outlined in the preceding two paragraphs for actual distributions by
us of capital gain dividends. Under that approach, the Non-U.S. Stockholders
would be able to offset as a credit against their United States federal income
tax liability resulting therefrom their proportionate share of the tax paid by
us on such undistributed capital gains (and to receive from the IRS a refund to
the extent their proportionate share of such tax paid by us were to exceed their
actual United States federal income tax liability).

         Gain recognized by a Non-U.S. Stockholder upon the sale or exchange of
capital stock generally will not be subject to United States taxation unless
such shares constitute a "United States real property interest" within the
meaning of FIRPTA. The capital stock will not constitute a "United States real
property interest" so long as we are a "domestically controlled REIT." A
"domestically controlled REIT" is a REIT in which at all times during the
specified testing period less than 50% in value of its stock is held directly or
indirectly by Non-U.S. Stockholders. Notwithstanding the foregoing, gain from
the sale or exchange


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of capital stock not otherwise subject to FIRPTA will be taxable to a Non-U.S.
Stockholder if the Non-U.S. Stockholder is a nonresident alien individual who is
present in the United States for 183 days or more during the taxable year and
has a "tax home" in the United States. In such case, the nonresident alien
individual will be subject to a 30% United States withholding tax on the amount
of such individual's gain.

         We believe that we will continue to be a "domestically controlled
REIT," and therefore that the sale of capital stock will not be subject to
taxation under FIRPTA. However, because the capital stock is publicly traded, no
assurance can be given that we will continue to be a "domestically controlled
REIT." If we fail to qualify as a "domestically controlled REIT," gain arising
from the sale or exchange by a Non-U.S. Stockholder of capital stock still would
not be subject to United States taxation under FIRPTA as a sale of a "United
States real property interest," if (i) the capital stock (as applicable) is
"regularly traded" (as defined by applicable treasury regulations) on an
established securities market (e.g., the NYSE) and (ii) the selling Non-U.S.
Stockholder held 5% or less of the value of the outstanding class or series of
shares being sold at all times during a specified testing period. If gain on the
sale or exchange of capital stock were subject to taxation under FIRPTA, the
Non-U.S. Stockholder would be subject to regular United States income tax with
respect to such gain in the same manner as a U.S. Stockholder (subject to any
applicable alternative minimum tax and a special alterative minimum tax in the
case of nonresident alien individuals), and the purchaser of the capital stock
would be required to withhold and remit to the IRS 10% of the purchase price.

         Backup withholding tax and information reporting will generally not
apply to distributions paid to Non-U.S. Stockholders outside the United States
that are treated as (i) dividends subject to the 30% (or lower treaty rate)
withholding tax discussed above, (ii) capital gains dividends or (iii)
distributions attributable to gain from the sale or exchange by us of United
States real property interests. As a general matter, backup withholding and
information reporting will not apply to a payment of the proceeds of a sale of
capital stock by or through a foreign office of a foreign broker. Information
reporting (but not backup withholding) will apply, however, to a payment of the
proceeds of sale of capital stock by a foreign office of a broker that (a) is a
United States person, (b) derives 50% or more of its gross income for certain
periods from the conduct of a trade or business in the United States or (c) is a
"controlled foreign corporation" (generally, a foreign corporation controlled by
United States stockholders) for United States tax purposes, unless the broker
has documentary evidence in its records that the holder is a Non-U.S.
Stockholder and certain other conditions are met, or the stockholder otherwise
establishes an exemption. Payment to or through a United States office of a
broker of the proceeds of a sale of capital stock is subject to both backup
withholding and information reporting unless the stockholder certifies under
penalty of perjury that the stockholder is a Non-U.S. Stockholder, or otherwise
establishes an exemption. A Non-U.S. Stockholder may obtain a refund of any
amounts withheld under the backup withholding rules by filing the appropriate
claim for refund with the IRS.

         The United States Treasury Department has issued final regulations
regarding the withholding and information reporting rules discussed above. In
general, these regulations do not alter the substantive withholding and
information reporting requirements but unify certification procedures and forms
and clarify and modify reliance standards. These regulations generally are
effective for payments made after December 31, 1999, subject to certain
transition rules. A Non-U.S. Stockholder should consult its own advisor
regarding the effect of the new Treasury Regulations.

                                  LEGAL MATTERS

         The validity of the Shares offered hereby will be passed upon for us
by Neal, Gerber & Eisenberg.

                                     EXPERTS

         The financial statements incorporated in this Registration Statement
by reference to the Annual Report on Form 10-K for the year ended December 31,
1998, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.


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