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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:

o
 
Preliminary Proxy Statement

o
 
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

ý
 
Definitive Proxy Statement

o
 
Definitive Additional Materials

o
 
Soliciting Material Pursuant to §240.14a-12

CRT PROPERTIES, INC.
(Name of Registrant as Specified In Its Charter)

 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
         
Payment of Filing Fee (Check the appropriate box):

o
 
No fee required.

o
 
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
    (1)   Title of each class of securities to which transaction applies:
    (2)   Aggregate number of securities to which transaction applies:
    (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11:
    (4)   Proposed maximum aggregate value of transaction:
    (5)   Total fee paid:

ý
 
Fee paid previously with preliminary materials.

o
 
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 
 
(1)
 
Amount Previously Paid:
        
    (2)   Form, Schedule or Registration Statement No.:
        
    (3)   Filing Party:
        
    (4)   Date Filed:
        

GRAPHIC

August 8, 2005

Dear Shareholder:

        You are cordially invited to attend a Special Meeting of shareholders of CRT Properties, Inc. (or the "Company") to be held Friday, September 23, 2005 at 10:00 a.m. local time. The meeting will take place at the offices of Goodwin Procter LLP, our corporate counsel, at 599 Lexington Avenue, New York, NY 10022.

        At the Special Meeting, we will ask you to consider and vote on a proposal to approve an Agreement and Plan of Merger that we entered into on June 17, 2005, which provides for the acquisition of the Company by clients advised by DRA Advisors LLC. DRA is a registered investment advisor specializing in real estate investment management services for institutional and private investors. If the merger is completed, you will receive $27.80 in cash for each share of the Company's common stock you own, plus unpaid dividends through the earlier of closing and September 30, 2005. No dividends will accrue on the common stock after September 30, 2005.

        Our Board of Directors has unanimously adopted the merger agreement and recommends that our shareholders vote FOR approval of the merger agreement. Your vote is very important. The merger cannot be completed unless shareholders holding a majority of our outstanding common stock vote to approve the merger agreement. To be certain that your shares are voted at the Special Meeting, please mark, sign, date and return promptly the enclosed proxy card or vote by telephone or over the Internet, whether or not you plan to attend the Special Meeting in person. Please note that if you do not submit your proxy, abstain or do not instruct your broker or nominee how to vote your shares, it will have the same effect as voting AGAINST the merger. Please do not send your stock certificates to the Company or the exchange agent at this time.

        We urge you to read carefully the attached proxy statement and merger agreement, a copy of which is included in the proxy statement as Appendix A. The proxy statement provides you with a summary of the merger and merger agreement, and a detailed description of the process and reasons that led our Board of Directors to unanimously adopt the merger agreement and recommend it for your approval at the Special Meeting.

        Thank you for your continued support and interest in CRT Properties, Inc.

    Victor A. Hughes, Jr.
Chairman of the Board

 
 
Thomas J. Crocker
Chief Executive Officer

        The accompanying Proxy Statement is dated August 8, 2005 and is first being mailed to shareholders on or about August 10, 2005.

CRT PROPERTIES, INC.
225 NE Mizner Boulevard, Suite 200
Boca Raton, Florida 33432
(561) 395-9666


NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

Dear Shareholder:

        A Special Meeting of shareholders of CRT Properties, Inc. (the "Company") will be held on Friday, September 23, 2005 at 10:00 a.m., local time, at the offices of Goodwin Procter LLP, our corporate counsel, located at 599 Lexington Avenue, New York, NY 10022. The Board of Directors of the Company asks you to attend this meeting (in person or by proxy) for the following purposes:

        Only common shareholders of record at the close of business on August 2, 2005, are entitled to notice of and to vote at the Special Meeting and at any adjournments or postponements. All common shareholders of record are cordially invited to attend the Special Meeting in person. There are no appraisal or dissenters' rights available under applicable law.

        The Board of Directors unanimously recommends that you vote FOR approval of the merger agreement. Approval of the merger agreement will require the affirmative vote of a majority of the shares of the Company's common stock entitled to vote at the Special Meeting. Even if you plan to attend the Special Meeting in person, we request that you complete, sign, date and return the enclosed proxy, or submit your proxy by telephone or the Internet prior to the Special Meeting and thus ensure that your shares will be represented if you are unable to attend. If you sign, date and mail your proxy card without indicating how you wish to vote, your proxy will be voted in favor of approval of the merger agreement. If you do not return your proxy card or do not submit your proxy by telephone or the Internet, this will have the same effect as a vote AGAINST approval of the merger agreement.

        Your vote is important. To ensure that your shares are represented at the Special Meeting, you are urged to complete, date and sign the enclosed proxy card and mail it promptly in the postage-prepaid envelope provided, whether or not you plan to attend the Special Meeting in person. You may revoke your proxy in the manner described in the accompanying Proxy Statement at any time before it has been voted at the Special Meeting. If you attend the Special Meeting, you may vote in person even if you returned a proxy.

    By Order of the Board of Directors

 
 
William J. Wedge, Esq.
 Senior Vice President, General Counsel and Corporate Secretary

August 8, 2005


SUMMARY TERM SHEET

        This summary term sheet is not intended to be complete and is qualified in all respects by the more detailed information appearing elsewhere in this proxy statement. We encourage investors to review this entire proxy statement carefully, including the appendices attached hereto. We have included as Appendix A to this proxy statement a copy of the Agreement and Plan of Merger relating to the proposed transaction (the "Merger Agreement") and urge you to read the complete text of this agreement for its precise legal terms and other important information. For information on how to obtain the documents that we have filed with the Securities and Exchange Commission (the "SEC"), see "Where You Can Find More Information" elsewhere in this proxy statement. As used herein, the terms "we", "us", "our", the "Company" and "CRT Properties" refer to CRT Properties, Inc.

Form of the Proposed Merger

        If the conditions specified in the Merger Agreement are satisfied, CRT Properties, Inc. will be merged with and into DRA CRT Acquisition Corp., a Delaware corporation ("MergerCo"), with MergerCo continuing as the surviving corporation (the "Merger"). MergerCo is a newly formed wholly-owned subsidiary of DRA G&I Fund V Real Estate Investment Trust, a Maryland business Trust ("Parent"), which is an entity controlled by DRA Advisors LLC ("DRA"). At the effective time of the Merger, each outstanding share of CRT Properties, Inc. common stock will be exchanged for the right to receive the merger consideration described below.

Effect of the Merger on Our Capital Stock and Options (page 28)

        Common Stock.    At the effective time of the Merger, each of our outstanding shares of common stock will be converted into the right to receive $27.80 in cash, plus a quarterly dividend of $0.35 per share, prorated for the number of days from July 1, 2005 through the earlier of the date the Merger is effected and September 30, 2005. No dividends will accrue after September 30, 2005. The separate corporate existence of CRT Properties, Inc. will terminate at the effective time of the Merger and our common stock will cease to be traded on the New York Stock Exchange.

        If you hold your shares in registered form, you will receive a letter of transmittal and instructions from Wells Fargo Bank, N.A., as paying agent, as soon as possible after the completion of the Merger advising you on how to receive the merger consideration in exchange for your common shares. You should not return your stock certificates with the enclosed proxy card and you should not forward your stock certificates to the paying agent without a letter of transmittal. If you hold your shares through a brokerage account, you will receive the merger consideration directly from your broker.

        Company Stock Options.    At the effective time of the Merger, the holder of each option to acquire our common stock will be entitled to receive an amount in cash equal to the product of (i) the number of common shares subject to each option and (ii) the excess of $27.80 over the exercise price per share of the option.

        Preferred Stock.    At the effective time of the Merger, each share of our 8.5% Series A Cumulative Redeemable Preferred Stock issued and outstanding will be automatically converted into one preferred share of the surviving company with identical terms. Holders of the preferred stock will continue to be entitled to receive the same dividends that they were entitled to receive prior to the signing of the Merger Agreement. DRA has indicated that it may seek to deregister the preferred stock under the Securities Exchange Act of 1934, as amended, following the Merger and delist the preferred shares from the New York Stock Exchange.

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The Special Meeting (page 6)

        Date, Time and Place; Record Date.    The Special Meeting will take place on Friday, September 23, 2005 at 10:00 a.m., local time, at the offices of Goodwin Procter LLP, our corporate counsel, located at 599 Lexington Avenue, New York, NY 10022. The close of business on August 2, 2005 is the record date for determining if you are entitled to vote at the Special Meeting. Only holders of record of our common stock on the record date will be entitled to vote at the Special Meeting.

        Required Vote.    The holders of a majority of the outstanding shares of our common stock entitled to vote at the Special Meeting must vote to approve the Merger Agreement. Each share of common stock entitles the beneficial owner to one vote with respect to the Merger Agreement.

Reasons for the Merger and Recommendation of Our Board of Directors (page 17)

        After due consideration, our Board of Directors adopted the Merger Agreement and determined that it is advisable, fair to and in the best interests of the Company and our shareholders to consummate the Merger and the other transactions contemplated by the Merger Agreement. The Board of Directors unanimously recommends that our common shareholders vote FOR approval of the Merger Agreement. In reaching its decision, the Board of Directors considered a number of factors, including:

Each of these reasons and others are described in more detail beginning on page 16 under the heading "—Reasons for the Merger and Recommendation of Our Board of Directors".

Opinion of Wachovia Capital Markets, LLC (page 19)

        Wachovia Capital Markets, LLC, or "Wachovia Securities", rendered its oral opinion to our Board of Directors, which was subsequently confirmed in writing, that, as of June 17, 2005 and based upon and subject to the procedures performed, the assumptions made, matters considered, limitations of the review undertaken and their experience as investment bankers, in their opinion, the $27.80 per common share to be received by holders of our common shares pursuant to the Merger Agreement was fair, from a financial point of view, to such holders. The full text of Wachovia Securities' opinion is attached as Appendix C to this proxy statement and this summary is qualified in its entirety by reference to the full text of the opinion. The opinion of Wachovia Securities does not constitute a recommendation as to how any holder of our common shares should vote in connection with the Merger Agreement or any other matters related thereto.

Interests of Our Directors and Executive Officers in the Merger (page 24)

        Our directors and executive officers have interests in the Merger that differ from, or are in addition to, the interests of shareholders generally. Our Board of Directors was aware of these interests and considered them, among other matters, in approving the Merger Agreement. These interests

ii


include consideration payable on account of options held by directors and officers, and severance payments payable to members of senior management under existing employment agreements and long-term incentive programs. The amounts and descriptions of each of these interests is set forth in detail under "—Interests of Our Directors and Executive Officers in the Merger" beginning on page 24 of this proxy statement.

No Appraisal Rights (page 30)

        No dissenters' or appraisal rights are available in connection with the Merger. Florida law does not provide for such rights because our common shares are listed on a national securities exchange.

Litigation Relating to the Merger (page 30)

        We are aware of two purported class action lawsuits related to the Merger filed against us, each of our directors and DRA in the Circuit Court of the 15th Judicial Circuit, Palm Beach County, Florida. The complaints allege, among other things, that the merger consideration to be paid to our shareholders in the Merger is inadequate, unfairly favors insiders and that our directors violated their fiduciary duties by failing to take all reasonable steps to maximize shareholder value. On August 8, 2005, we entered into a memorandum of understanding with the plaintiffs in these two cases, pursuant to which we agreed in principal to settle the lawsuits, subject to the execution of definitive settlement documents, completion by plaintiffs' counsel of confirmatory discovery and court approval.

Material United States Federal Income Tax Consequences of the Merger (page 31)

        The Merger will be treated as a taxable sale by you of your shares of our common stock in exchange for the merger consideration. If you are a U.S. shareholder, you will recognize gain or loss with respect to your shares, measured by the difference between your adjusted tax basis in the shares exchanged and the amount of cash received for those shares. Please read "—Material United States Federal Income Tax Consequences of the Merger" below for a more complete discussion of the federal income tax consequences of the Merger. We urge you to consult your tax advisor regarding the tax consequences of the Merger to you.

Conditions to the Merger (page 41)

        The obligations of the parties to complete the Merger are subject to the satisfaction or waiver of customary conditions, including:


Termination of the Merger Agreement (page 42)

        We, Parent or MergerCo may terminate the Merger Agreement, whether before or after receiving shareholder approval, if:

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        In addition, we may terminate the Merger Agreement if, prior to the Special Meeting, our Board of Directors decides to withdraw or modify its approval or recommendation of the agreement in connection with a third-party acquisition proposal and we pay Parent the termination fee described below.

        Each of Parent and MergerCo may also terminate the Merger Agreement if our Board of Directors fails to recommend in this proxy statement that our common shareholders approve the Merger Agreement, withdraws or modifies its recommendation of the Merger Agreement, or recommends that shareholders accept or approve a third-party acquisition proposal.

Expenses and Termination Fee (page 42)

        If either party terminates the Merger Agreement because of the other party's breach of a representation, warranty or covenant, the breaching party must reimburse the other for out-of-pocket expenses incurred in connection with the Merger and related transactions, in an amount up to $10,000,000. Additionally, we have agreed to pay Parent's out-of-pocket expenses in an amount up to $10,000,000 if the Merger Agreement is terminated by us or Parent because the requisite shareholder approval is not obtained or if our tax counsel is unable to deliver a tax opinion relating to our qualification as a REIT for our taxable years ending December 31, 2000 through the effective time of the Merger.

        If we terminate the Merger Agreement to pursue an alternative acquisition proposal, we will generally be required to pay Parent a termination fee in the amount of $40,000,000. In any case in which we are required to pay a termination fee, the amount of any expenses that we pay to Parent will be credited against the amount of the termination fee.

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TABLE OF CONTENTS

 
   Page
SUMMARY TERM SHEET   i

QUESTIONS AND ANSWERS ABOUT THE MERGER
 
2

FORWARD LOOKING STATEMENTS
 
6

THE SPECIAL MEETING OF THE COMPANY'S SHAREHOLDERS
 
7
  Date, Time and Place of Meeting   7
  Purpose of the Special Meeting   7
  Recommendation of the Board of Directors   7
  Record Date   7
  Votes Required for Approval of the Merger Agreement   7
  Quorum and Abstentions   8
  Shares Owned by Directors and Officers   8
  Voting of Proxies at the Special Meeting and Revocation of Proxies   8
  Solicitation of Proxies and Expenses   9

THE PARTIES TO THE MERGER
 
10

THE MERGER
 
11
  Background of the Merger   11
  Reasons for the Merger and Recommendation of Our Board of Directors   17
  Opinion of Wachovia Capital Markets, LLC   19
  Interests of Our Directors and Executive Officers in the Merger   24
  Delisting and Deregistration of Capital Stock   28
  Effect of the Merger on Our Capital Stock and Options   28
  Procedures for Exchange of Common Stock Certificates   29
  Financing; Source of Funds   30
  No Appraisal Rights   30
  Litigation Relating to the Merger   30
  Regulatory Matters   31
  Material United States Federal Income Tax Consequences of the Merger   31

THE MERGER AGREEMENT
 
34
  Form of the Merger   34
  Effective Time   34
  Merger Consideration; Dividends   34
  Exchange of Stock Certificates   35
  Representations and Warranties   36
  Covenants Under the Merger Agreement   37
  Solicitation of Proposals from Other Parties   39
  Indemnification of Officers and Directors   40
  Employment Agreements and Benefits   40
  Conditions to the Merger   41
  Termination of the Merger Agreement   42
  Termination Fee; Expenses   42
  Amendment and Waiver   43
  Assignment   43
  Governing Law; Venue   43

INFORMATION ABOUT CRT PROPERTIES COMMON STOCK OWNERSHIP
 
44

SHAREHOLDER PROPOSALS
 
46

OTHER MATTERS
 
46

WHERE YOU CAN FIND MORE INFORMATION
 
46

APPENDIX A—Agreement and Plan of Merger
 
A-1
APPENDIX B—Guaranty of DRA Grown and Income Fund V LLC   B-1
APPENDIX C—Fairness Opinion of Wachovia Securities, LLC   C-1


QUESTIONS AND ANSWERS ABOUT THE MERGER

        The following questions and answers address briefly some questions you may have regarding the Special Meeting and the proposed merger. These questions and answers may not address all questions that may be important to you as a shareholder of CRT Properties, Inc. Please refer to the more detailed information contained elsewhere in this proxy statement, the appendices to this proxy statement and the documents referred to or incorporated by reference in this proxy statement.

Q:
What is the proposed transaction to be voted on at the Special Meeting?

A:
The proposed transaction is the acquisition of the Company by a corporation controlled by DRA Advisors LLC ("DRA") pursuant to an Agreement and Plan of Merger (the "Merger Agreement") dated as of June 17, 2005 among the Company, DRA G&I Fund V Real Estate Investment Trust and its wholly-owned subsidiary, DRA CRT Acquisition Corp ("MergerCo"). If the Merger Agreement is approved by the Company's shareholders and the other closing conditions under the Merger Agreement are satisfied or waived, the Company will merge with and into MergerCo, with MergerCo being the surviving corporation (the "Merger"). Following the Merger, the Company will no longer be publicly held and our common stock will cease to be traded on the New York Stock Exchange.

Q:
What will I receive in the Merger and how will the Merger affect my dividends?

A:
If the Merger is completed, you will be entitled to receive $27.80 in cash for each share of our common stock that you own, plus a quarterly dividend of $0.35 per share for all periods through the earlier of the closing date of the Merger and September 30, 2005. Accordingly, if, for example, you own 100 shares of our common stock, you would be entitled to receive $2,780 in cash, plus an additional $35 in dividends (in each case, without interest and less any applicable withholding taxes). If the Merger is effected earlier than September 30, 2005, the dividend amount would be prorated accordingly. If the Merger is effected later than September 30, 2005, common shareholders will not be entitled to receive dividends for any period after September 30, 2005.

Q:
Does our Board of Directors recommend approval of the Merger Agreement?

A:
Yes. Our Board of Directors unanimously recommends that shareholders vote FOR approval of the Merger Agreement.

Q:
Why does our Board of Directors recommend that I vote to approve the Merger Agreement?

A:
Our Board of Directors recommends you vote FOR approval of the Merger Agreement because it believes that the Merger represents the strategic alternative that is in the best interest of our shareholders. The merger consideration to be received by our shareholders represents a significant premium to the historical and recent market price of our common shares. The Board of Directors considered many factors in deciding to recommend the approval of the Merger Agreement, including the premium to the then-current market price offered by DRA, the Company's earning prospects, funds from operations multiples, net asset value estimates and comparable company merger transactions. Our Board of Directors also considered each of the factors described on pages 17 through 19 of this proxy statement under "—Reasons for the Merger and Recommendation of Our Board of Directors."

Q:
Do shareholders have dissenters' rights or appraisal rights with respect to the Merger?

A:
No. Under Florida law, since the shares of the Company's common stock are listed on a national securities exchange, holders do not have any appraisal rights or dissenters' rights in connection with the Merger.

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Q:
Will the Merger affect holders of the Company's preferred stock?

A:
At the effective time of the merger, each share of our 8.5% Series A Cumulative Redeemable Preferred Stock issued and outstanding will be automatically converted into one preferred share of the surviving company with identical terms. Holders of the preferred stock will continue to be entitled to receive the same dividends that they were entitled to receive prior to the signing of the Merger Agreement. DRA has indicated that it may seek to deregister the preferred stock under the Securities Exchange Act of 1934, as amended, following the Merger and delist the preferred shares from the New York Stock Exchange.

Q:
When do you expect the Merger to be completed?

A:
We are working to complete the Merger as quickly as possible after satisfaction of the conditions specified in the Merger Agreement, including approval of our shareholders. We currently expect to complete the Merger on or about September 30, 2005. However, we cannot predict the exact timing of the Merger and not all the conditions to the Merger are within the Company's or DRA's control. Please see "The Merger Agreement—Conditions to the Merger" on page 41 for a detailed description of the conditions to closing specified in the Merger Agreement.

Q:
If the Merger Agreement is approved and the Merger consummated, how will I receive my merger consideration?

A:
If you hold your shares in registered form, we will send you a letter of transmittal immediately following the closing of the Merger with instructions for exchanging your shares and receiving the merger consideration. If you hold your shares through a brokerage account, you will receive the merger consideration directly from your broker.

Q:
What are the U.S. federal income tax consequences of the Merger to shareholders?

A:
In general, you will recognize gain or loss equal to the difference between the amount of cash you receive in the Merger and your adjusted tax basis in your shares of CRT Properties, Inc. common stock. For a more detailed explanation of the tax consequences of the Merger, see "—Material United States Federal Income Tax Consequences" below. Tax matters are very complicated, and the tax consequences of the Merger to you will depend on the facts of your particular situation. You should consult your own tax advisor as to the specific tax consequences to you of the Merger, including the applicable federal, state, local, foreign and other tax consequences.

Q:
What vote is required to approve the Merger Agreement?

A:
For us to complete the Merger, shareholders holding at least a majority of the shares of our common stock outstanding, or 15,926,186 shares, must vote "FOR" approval of the Merger Agreement. Accordingly, failure to vote or an abstention will have the same effect as a vote AGAINST adoption of the Merger Agreement.

Q:
What if I do not want to sell my shares?

A:
If a majority of our common shareholders vote FOR approval of the Merger Agreement at the Special Meeting and all other conditions to the Merger are satisfied or waived, we currently expect to complete the Merger on or about September 30, 2005. If the Merger is consummated, your shares of common stock will automatically be canceled and converted into the right to receive the merger consideration, whether or not you voted in favor of the Merger Agreement. In addition, because our common stock is listed on a national securities exchange, Florida law does not provide for dissenters' or appraisal rights in connection with the Merger.

3

Q:
Who can vote at the Special Meeting?

A:
Holders of record of our common stock at the close of business on August 2, 2005 are entitled to vote at the Special Meeting. On that date, approximately 31,852,370 shares of common stock were outstanding and entitled to vote.

Q:
How do I vote my shares?

A:
Shareholders whose shares of common stock are registered in their own name may submit their proxies by one of the following methods:

•
sign the enclosed proxy card and mail it in the enclosed, prepaid and addressed envelope or to CRT Properties, Inc., c/o Shareowner Services, P.O. Box 64873, St. Paul, MN 55164-0873;

•
call toll free 1-800-560-1965, 24 hours a day, 7 days a week, and follow the instructions; or

•
access the webpage at www.eproxy.com/cro and follow the on-screen instructions.

        Votes submitted via telephone or over the Internet must be received by 12:00 midnight (CT), on Thursday, September 22, 2005.

        You may also vote your shares in person at the Special Meeting. The Company will pass out written ballots to anyone who wants, and is entitled, to vote at the Special Meeting. If you hold your shares in street name, you must request a legal proxy from your broker or bank in order to vote in person at the Special Meeting. Submitting your proxy will not affect your right to vote in person if you decide to attend the Special Meeting. If you receive more than one proxy card, it is because you hold your shares in different names or in different capacities. You should complete, date, sign and return all of the proxy cards.

Q:
If I hold my shares of common stock in "street name," will my shares be voted if I do not return my proxy card or vote via the Internet or by telephone?

A:
If you hold your shares of common stock in "street name", it is important that you provide instructions to your broker or bank by voting your proxy promptly to ensure that all shares of common stock you own will be voted as you wish at the Special Meeting. If your broker or bank does not receive your instructions, it may not vote your shares on the approval of the Merger Agreement because this proposal is not considered a "routine" matter by the New York Stock Exchange. If the broker or bank cannot vote on a particular matter because it is considered "non-routine," there is a "broker non-vote" on that matter. Abstentions and broker non-votes will be treated as shares present, in person or by proxy, and entitled to vote for purposes of determining a quorum at the Special Meeting but will have the same effect as votes against approval of the Merger Agreement.

Q:
What happens if I don't indicate how to vote my proxy?

A:
If you sign and send in your proxy, but do not include instructions on how to vote your properly signed proxy card, your shares will be voted FOR approval of the Merger Agreement.

Q:
What happens if I don't return a proxy card?

A:
Not returning your proxy card will have the same effect as voting AGAINST approval of the Merger Agreement.

Q:
Can I change my vote after I have mailed my signed proxy card?

4

A:
Yes. You can change your vote at any time before your proxy is voted at the Special Meeting. You can do this in one of three ways:

•
first, you can send a written notice stating that you would like to revoke your proxy to the address below;

•
second, you can complete and submit a later-dated proxy card to the address below; or

•
third, you can attend the Special Meeting and vote in person. Your attendance at the Special Meeting alone will not revoke your proxy. You must vote at the Special Meeting in order to revoke your previously submitted proxy.

Q:
Who can help answer my questions about the proposals?

A:
If you have any questions about the proposals presented in this proxy statement, you should contact:

Investor Relations
CRT Properties, Inc.
225 NE Mizner Blvd., Suite 200
Boca Raton, FL 33432
Tel: 800-607-0088
Tel: 561-395-9666

5


FORWARD LOOKING STATEMENTS

        Many of the statements contained in this proxy statement that are not historical facts are forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor provisions for forward-looking information. Words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "estimate," variations of such words and other similar expressions identify such forward-looking statements. The Company also may provide oral or written forward-looking information in other materials released by the Company to the public. These forward-looking statements are based on current expectations, beliefs, assumptions, estimates and projections about the industry and markets in which the Company operates. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. In addition, other factors may affect the accuracy of the forward-looking information, including the following:

        Accordingly, while forward-looking statements in this proxy statement reflect the Company's estimates and beliefs, they are not guarantees of future performance. The Company does not promise to update any forward-looking statements to reflect changes in the underlying assumptions or factors, new information, future events or other changes.

6


THE SPECIAL MEETING OF THE COMPANY'S SHAREHOLDERS

        The Company is furnishing this proxy statement to all shareholders of record of common stock in connection with the solicitation of proxies by the Board of Directors for use at the Special Meeting of shareholders to be held on Friday, September 23, 2005, and at any adjournment or postponement of the Special Meeting.

Date, Time and Place of Meeting

        The Special Meeting will be held on Friday, September 23, 2005 at 10:00 a.m., local time, at the offices of Goodwin Procter LLP, our corporate counsel, located at 599 Lexington Avenue, New York, NY 10022.

Purpose of the Special Meeting

        The Board of Directors of the Company asks you to attend this meeting (in person or by proxy) for the following purposes:

        A copy of the Merger Agreement is attached to this proxy statement as Appendix A. Shareholders are encouraged to read the Merger Agreement in its entirety and the other information contained in this proxy statement carefully before deciding how to vote.

Recommendation of the Board of Directors

        The Board of Directors has unanimously determined that the Merger is advisable, in the best interests of shareholders and on terms that are fair to the shareholders. Accordingly, the Board of Directors has unanimously approved the Merger Agreement and the Merger and recommends that shareholders vote FOR approval of the Merger Agreement.

        The matters to be considered at the Special Meeting are of great importance to the shareholders. Shareholders are urged to read and carefully consider the information presented in this proxy statement, and to complete, date, sign and promptly return the enclosed proxy in the enclosed postage-prepaid envelope.

Record Date

        The Board of Directors has fixed the close of business on August 2, 2005 as the record date for determination of shareholders entitled to notice of and to vote at the Special Meeting. At that date, there were approximately 31,852,370 shares of common stock outstanding. Only holders of record of our common stock on the record date will be entitled to vote at the Special Meeting.

Votes Required for Approval of the Merger Agreement

        The holders of a majority of the outstanding shares of our common stock, par value $0.01 per share, entitled to vote at the Special Meeting must vote to approve the Merger Agreement. Each share of common stock entitles the beneficial holder to one vote per share with respect to the Merger

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Agreement. There are no other voting securities of the Company entitled to vote at the Special Meeting.

        If you hold your shares in an account with a broker or bank, you must instruct the broker or bank on how to vote your shares. If a proxy card returned by a broker or bank holding shares indicates that the broker or bank does not have authority to vote on the proposal to approve the Merger Agreement, the shares will be considered present at the Special Meeting for purposes of determining the presence of a quorum, but will not be voted on the Merger Agreement. This is called a "broker non-vote" and will have the effect of a vote AGAINST the Merger Agreement Your broker or bank will vote your shares on the Merger Agreement only if you provide instructions on how to vote by following the instructions provided to you by your broker or bank.

Quorum and Abstentions

        A majority of all voting shares of our common stock issued and outstanding as of the record date, represented in person or by proxy, constitutes a quorum for the transaction of business at the Special Meeting. Abstentions and broker non-votes will be treated as shares present and entitled to vote for purposes of determining a quorum. There must be a quorum for the vote on the Merger Agreement to be taken.

        If you submit a proxy that indicates an abstention from voting on all matters presented at the Special Meeting, your shares will not be voted on any matter presented at the Special Meeting. Consequently, your abstention will have the same effect as a vote against the proposal to approve the Merger Agreement. In addition, broker non-votes and the failure of any shareholder to return a proxy will have the effect of a vote against the proposal to approve the Merger Agreement.

Shares Owned by Directors and Officers

        As of the close of business on the record date for the Special Meeting, directors and executive officers (and their respective affiliates) of the Company collectively owned approximately 3.06% of the outstanding shares of common stock entitled to vote at the Special Meeting and expressed their intention to vote FOR approval of the Merger Agreement.

Voting of Proxies at the Special Meeting and Revocation of Proxies

        We request that all holders of common stock on the record date complete, date and sign the accompanying proxy card and promptly return it in the accompanying envelope. All properly executed proxies received prior to the vote at the Special Meeting, that are not revoked, will be voted in accordance with the instructions indicated on the proxy card. If no direction is indicated on the proxies, the proxies will be voted in favor of approval of the Merger Agreement. Shareholders whose shares of common stock are registered in their own name may submit their proxies by one of the following methods:

        Votes submitted via telephone or over the Internet must be received by 12:00 midnight (CT), on Thursday, September 22, 2005.

        You may also vote your shares in person at the Special Meeting. The Company will pass out written ballots to anyone who wants, and is entitled, to vote at the Special Meeting. If you hold your shares in street name, you must request a legal proxy from your broker or bank in order to vote in

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person at the Special Meeting. Submitting your proxy will not affect your right to vote in person if you decide to attend the Special Meeting. If you receive more than one proxy card, it is because you hold your shares in different names or in different capacities. You should complete, date, sign and return all of the proxy cards.

        Shareholders may revoke a previously submitted proxy at any time prior to its use. You can do this in one of three ways:

        DO NOT SEND YOUR STOCK CERTIFICATES WITH YOUR PROXY. A LETTER OF TRANSMITTAL CONTAINING INSTRUCTIONS FOR THE SURRENDER OF STOCK CERTIFICATES WILL BE MAILED TO RECORD SHAREHOLDERS AS SOON AS PRACTICABLE FOLLOWING THE COMPLETION OF THE MERGER. IF YOU HOLD YOUR SHARES THROUGH A BROKERAGE ACCOUNT, YOU WILL RECEIVE THE MERGER CONSIDERATION DIRECTLY FROM YOUR BROKER.

Solicitation of Proxies and Expenses

        The Company will bear the costs of solicitation of proxies. In addition to the use of telephone, Internet or the mails, proxies may be solicited by personal interview, telephone and telegram by directors, officers and employees of the Company, and no additional compensation will be paid to such individuals. The Company also has retained Morrow and Co., Inc., 445 Park Avenue, New York, NY 10022 to solicit proxies by mail, personal interview, telephone, or telegraph, for which service the Company anticipates a cost not in excess of $10,000, plus disbursements. Arrangements may also be made with the stock transfer agent and with brokerage houses and other custodians, nominees, and fiduciaries that are record holders of shares for the forwarding of solicitation material to the beneficial owners of shares. The Company will, upon the request of any such entity, pay such entity's reasonable expenses for completing the mailing of such material to beneficial owners.

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THE PARTIES TO THE MERGER

CRT Properties, Inc.

        CRT Properties, Inc., a Florida corporation, is a fully integrated, self administered and managed equity real estate investment trust, or REIT, which develops, owns, operates, leases and manages office buildings in metropolitan areas in the southeastern United States, Maryland and Texas. Our common stock is listed on the New York Stock Exchange under the symbol "CRO." Our principal executive offices are located at 225 NE Mizner Boulevard, Suite 200, Boca Raton, Florida 33432, and our telephone number is (561) 395-9666. For additional information about our Company, see "Where You Can Find More Information" on page 46.

DRA Advisors LLC

        DRA Advisors LLC, or "DRA", is a New York-based registered investment advisor specializing in real estate investment management services for institutional and private investors, including pension funds, university endowments, foundations and insurance companies. Founded in 1986, the firm currently manages over $3.6 billion in assets. DRA's principal executive offices are located at 220 East 42nd Street, 27th Floor, New York, New York 10017, and its telephone number is (212) 697-4740. Prior to the consummation of the Merger, DRA and/or its affiliates may enter into one or more agreements with co-venturers.

DRA G&I Fund V Real Estate Investment Trust

        DRA G&I Fund V Real Estate Investment Trust, or "Parent", is a Maryland business trust and a wholly-owned subsidiary of DRA Growth and Income Fund V LLC, an entity advised and controlled by DRA Advisors LLC. The principal executive offices of Parent are located at 220 East 42nd Street, 27th Floor, New York, New York 10017, and its telephone number is (212) 697-4740.

DRA CRT Acquisition Corp.

        DRA CRT Acquisition Corp., or "MergerCo", is a Delaware corporation and a wholly-owned subsidiary of Parent. MergerCo was formed in 2005 solely for the purpose of facilitating the acquisition of our Company and has not carried on any activities to date other than those incident to its formation and the negotiation and execution of the Merger Agreement. MergerCo's principal executive offices are located at 220 East 42nd Street, 27th Floor, New York, New York 10017, and its telephone number is (212) 697-4740.

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PROPOSAL NO. 1

THE MERGER

Background of the Merger

        CRT Properties, Inc. is a fully integrated, self administered and managed equity real estate investment trust, or REIT, which develops, owns, operates, leases and manages office buildings in metropolitan areas in the southeastern United States, Maryland and Texas. We were incorporated as a Florida corporation in 1988 under the name Koger Equity, Inc. and our common stock was listed on the American Stock Exchange and, beginning in March 2000, on the New York Stock Exchange. In early 2000, we named Thomas J. Crocker as our chief executive officer and embarked on a long-term strategic growth plan to maximize shareholder value by repositioning our portfolio through select asset sales and reinvestment in opportunities with higher growth prospects. During the period from 2001 through the first fiscal quarter of 2005, we sold or otherwise disposed of older, non-core office properties located primarily in tertiary markets in the southeast and concurrently acquired Class A office properties in the substantially larger and faster growing markets of Atlanta, Houston and South Florida. The net result of these activities was to initially shrink our asset base and capitalization, and to reposition our overall portfolio to take advantage of an expected upturn in the property markets. To better reflect the change in the character of our Company and to signal our continuing strategy to acquire dominant Class A properties in major southeastern United States, Maryland and Texas markets, we changed our name to CRT Properties, Inc. in June of 2004.

        As of March 2005, our properties contained 11.7 million total square feet, compared with 10.8 million as of December 2000. Of the total square footage, approximately 41% had been acquired within the past three-and-a-half years. From December 31, 2000 to December 31, 2004, the market price of our common stock rose 53% from $15.56 per share to $23.86 per share. Throughout this period, we paid regular quarterly dividends on our common shares of $0.35 per share and, in January 2002, we made a special distribution on our common shares of $1.74 per share, occasioned by substantial capital gains from the sale of non-core assets. From 2001 through 2004, the company's funds from operations and dividend payout did not increase due to the dilutive effect of our selling non-core assets and occupancy declines in the balance of the portfolio in the face of a national economic recession.

        Our Board of Directors and senior management have periodically reviewed the Company's strategic growth objectives and plans for achieving those objectives, including considering alternatives to our repositioning strategy, such as potential strategic initiatives and business combinations. Beginning in early 2005, we began to see office property assets trading at all-time highs and our board and senior management began to consider whether alternatives to our current strategic growth plan should be given additional consideration, as they might better maximize shareholder value.

        At a meeting of the Board of Directors held on March 21, 2005, the board discussed current valuations of office portfolios, as well as the projected value of the Company's portfolio on a net asset and equity market value basis over the near and mid term under our current strategic growth plan. The board remained confident in the viability of the strategic growth plan but also discussed the possibility that market conditions might present an opportunity to enhance shareholder value through a capital transaction. The board noted that as we continued with the planned disposition of some of the older, non-core assets in our portfolio and positioned our Company for future growth, we were faced with challenges that included interest rate volatility, high capital costs associated with attracting and retaining tenants, and difficulty of making accretive acquisitions in an extremely competitive investment environment. The board also noted that the strategic growth plan contemplated a 3-5 year time period over which it was to be implemented. In the board's view, if a comparable or superior valuation for the Company could be obtained through an earlier cash sale of the Company, this would effectively eliminate the time and execution risks inherent in the strategic growth plan and would be a more

11


certain means of maximizing shareholder value. The board recognized that, despite the favorable valuation of the Company implied by other recent transactions in the office REIT industry, it might prove challenging to identify one or more bidders willing to pay a price per share sufficient to justify abandoning our current strategic growth plan. Following its deliberations, the board determined that, in light of favorable market valuations, it was in the best interests of the Company's shareholders to explore other strategic alternatives to maximize shareholder value, including a sale of the Company, with the assistance of an experienced investment banking firm.

        At the March 21 meeting, representatives from Wachovia Capital Markets LLC, or Wachovia Securities, were invited to present their views to the board regarding possible strategic alternatives available to the Company and likely valuations of the Company. We selected Wachovia Securities due to its experience in business combination transactions in the REIT sector, its relationships with private and public equity sources, and because of its knowledge of the Company's business and affairs based on the fact that it had previously provided investment banking and lending services to the Company. Wachovia Securities provided the board with a detailed analysis of the current office real estate market and trends, including those relating to capitalization rates, occupancy rates, rental growth and portfolio turnover. Wachovia Securities reviewed various strategic alternatives, including continuing to implement the Company's strategic growth plan, selling all or part of the Company's properties (including potential joint venture transactions), a merger of the Company and other similar transactions. In addition, Wachovia Securities reviewed with the board the pricing of numerous recent real estate portfolio and company transactions, both publicly and privately held. Wachovia Securities indicated that their preliminary analysis suggested a potential transaction price per share for the Company that was significantly above the then-current trading price of $22.03.

        Following Wachovia Securities' presentation, the Board of Directors had extensive discussions regarding the alternatives available to the Company and the costs and benefits of each alternative. Following these discussions, the board voted to approve the engagement of Wachovia Securities to assist the Company in exploring the feasibility of a sale of the Company. A formal engagement letter was executed with Wachovia Securities on March 28, 2005. After consultation with Wachovia Securities and Goodwin Procter LLP, our general outside counsel, the board decided that setting a deadline for all potentially interested parties to submit preliminary indications of interest would be the most efficient method for allowing the board to assess whether a transaction meeting its objectives, including a price sufficient to offset abandoning our strategic growth plan, was possible.

        Beginning the last week of March 2005, Wachovia Securities contacted over 60 potential bidders on a confidential basis. These potential bidders were selected by Wachovia Securities based on its business experience in the REIT sector and on its estimation of those companies and firms most likely to be interested in an acquisition of the Company and able to offer the highest possible value to our shareholders. In compiling the list of potential bidders Wachovia Securities sought to provide a comprehensive cross section of real estate companies, both public and private, in addition to institutional investors and advisors. Wachovia Securities also considered whether particular firms or companies had the apparent financial ability to effectuate acquisitions as large as the Company. From late March through mid-April, we entered into confidentiality agreements with 41 potential bidders. These parties received confidential information about the Company to assist them in preparing their initial indication of value, which was requested by April 28, 2005.

        During telephonic discussions conducted on April 6, 7 and 8, Thomas J. Crocker, our chief executive officer, advised members of the finance committee of the Board of Directors that the senior management team was considering the possibility of participating in the process as a bidder or of teaming up with one of several other potential bidders. Mr. Crocker indicated that management had taken no action in this direction yet, but thought it appropriate to notify the committee well in advance of taking any steps. After discussing the ways in which the possibility of a management bid might affect the exploratory process and after consultation with Wachovia Securities and Goodwin Procter, the

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finance committee requested that management not contact any potential financing sources until the full Board of Directors could be apprised of this development.

        At a telephonic meeting of the full Board of Directors held on April 11, 2005, the board determined that, in light of management's possible participation as a bidder, the integrity of the exploratory process would best be served by the establishment of a special committee of independent directors, whose task would be to consider and evaluate any proposals or potential transactions and to generally oversee and regulate the process. Messrs. D. Pike Aloian, Peter J. Farrell and David B. Hiley were designated by the board to serve as members of the special committee, and Victor A. Hughes, Jr., the Chairman of the Board of Directors, was designated as the liaison between the special committee and the full board. The board delegated to the special committee the power to direct the negotiation of the terms and conditions of any proposed transaction and to make a recommendation to the full board on the advisability of entering into any definitive agreement. It was further determined that the special committee would hold frequent meetings, both scheduled and unscheduled, in order to remain closely apprised of the progress of Wachovia Securities' marketing efforts, to provide necessary guidance and to deal with all other issues that might arise from the Company's exploratory process. While the special committee would keep Mr. Hughes and the full board up to date with the process through periodic updates, it was determined that no bidder information, including identity and bid prices, would be disclosed to management. The board agreed to permit management to speak to prospective capital sources but requested that Wachovia Securities generally monitor the process. Following Mr. Crocker's excusal from the meeting, Wachovia Securities updated the board as to the status of the confidentiality agreement process and list of potential bidders.

        At the April 11 meeting, the board also discussed severance and compensation matters for executive officers, noting in particular that under current executive employment agreements, severance payments payable to certain members of senior management upon a change of control of the Company would be meaningfully reduced due to the imposition of excise taxes pursuant to applicable Internal Revenue Code provisions. Following Mr. Crocker's excusal from the meeting, the board acknowledged that the treatment of change-in-control payments among individual members of the management team was not necessarily consistent under existing arrangements and requested that the compensation committee consider the issue and formulate a recommendation for the board to consider. In consultation with counsel and financial advisors, the board noted that gross-up payments on account of these taxes was customary among publicly-traded REITs as a method of continuing to incentivize management during a sale process. The board further noted that absent a reasonable incentivization structure for key management employees, the Company might encounter difficulties retaining these employees throughout the course of a sale process, particularly those whose expertise in the industry might make them valuable to other real estate companies and firms, including the Company's competitors.

        Wachovia Securities updated the special committee, at telephonic meetings held on April 14 and April 22, 2005, on the status of the exploratory process and summarized Wachovia Securities' conversations with many of the potential bidders.

        At telephonic meetings of the special committee held on April 23 and April 28, 2005, Mr. Crocker, on behalf of senior management, advised the committee that, as a result of preliminary conversations with potential partners and sources of capital, management was no longer considering submitting a bid to acquire the Company, but that they would still consider partnering with other potential bidders, though no meaningful conversations in that regard had taken place to date. Mr. Crocker noted that he and the other members of senior management continued to have confidence in the Company's current business plan and strategy and were encouraged by positive results and trends in the Company's business. Following Mr. Crocker's excusal from the meeting, the committee further discussed this development and concluded that, as potential partners to a bid for the Company, it remained appropriate to continue to exclude Mr. Crocker and other members of management from discussions

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concerning specific bidders and price proposals. The committee noted that permitting management full access to information concerning the process might serve to discourage potential bidders were management subsequently to decide to partner with another bidder.

        On the April 28, 2005 deadline, the Company received written preliminary indications of interest from six bidders, including both private real estate funds and public companies. Five of the six preliminary bids were for the acquisition of the Company in an all-cash transaction, and one included up to 50% consideration in stock. Two of the preliminary bids were at a price the special committee deemed to be within an acceptable range, three were slightly below an acceptable range and one was meaningfully below an acceptable range. At telephonic meetings of the special committee held on April 28, April 29 and April 30, 2005, Wachovia Securities reviewed the preliminary indications of interest with the special committee, following which the committee determined that the terms of the bids were such that the committee believed it was in the best interest of the Company and its shareholders to continue the process and further explore the feasibility of a transaction that would maximize shareholder value at an acceptable price per share. Along with Wachovia Securities and Goodwin Procter, the committee had extensive discussions about the terms and merits of each bid on an individual basis and gave Wachovia Securities detailed comments to pass along to each bidder with regard to each proposal. The committee decided to invite five of the six bidders to conduct further diligence, with a view to receiving final, fully-financed bids from these parties by mid-June. The proposal submitted by the sixth bidder was at a price significantly below those of the other five bidders, such that the committee did not believe that further discussions with this bidder were warranted. The committee declined to offer exclusivity to any of the bidders at this point.

        At a telephonic meeting of the special committee held on May 3, 2005, Wachovia Securities updated the committee as to the status of the bid process, noting that the five remaining bidders were exhibiting sustained interest and were conducting detailed due diligence. After this update, Mr. Crocker joined the meeting and the committee further discussed the proposed terms of the severance arrangement for members of senior management (other than Mr. Crocker and Mr. Brockwell, whose severance and termination provisions were governed by the terms of their respective employment agreements with the Company). Also on May 3, the committee updated the full Board of Directors (other than Mr. Crocker) via teleconference as to the results of the preliminary indications of interest and the proposed procedures going forward.

        On May 5, 2005, Wachovia Securities further updated the special committee via telephone conference call on the bidding process to date, noting that one of the five bidders had since withdrawn. The committee also agreed to consider, in connection with the proposed transaction on an "if-and-when" basis, recommending to the compensation committee customary "good reason" termination provisions upon change of control and gross-ups for excise tax for members of senior management (other than Mr. Crocker and Mr. Brockwell, whose severance and termination provisions were governed by the terms of their respective employment agreements with the Company).

        At telephonic meetings of the special committee held on May 10, 12, 19, and 26, 2005, Wachovia Securities reviewed the status of the bid process, noting that an additional bidder had withdrawn and that the three remaining bidders, DRA Advisors LLC ("DRA") and two other bidders, referred to in this proxy statement as "Bidder X" and "Bidder Y", were conducting substantial work in reviewing documents via the online data room and conducting site visits of many or all of the Company's properties. Each bidder had also already hired its own legal counsel and other advisors.

        On May 18, 2005, Mr. Crocker reiterated to the special committee at a telephonic meeting that, due to the risks inherent in implementing the Company's strategic growth plan, management believed a sale of the Company at an acceptable all-cash price was appropriate. Mr. Crocker also told the committee that DRA and management had had preliminary conversations concerning a possible role

14


for the management team in the operation of the portfolio following a sale but that no agreement had been reached.

        During the second and third week of May 2005, Goodwin Procter prepared a draft agreement and plan of merger in consultation with the special committee and with management, and, at the direction of the special committee, Wachovia Securities distributed the draft agreement to each of the three remaining bidders. A primary concern for the committee was the identity and financial net worth of the entity each bidder proposed as the signatory to the agreement. Each bidder was informed of the committee's expectation that its proposed signatory would be an entity with significant net worth or one on whose behalf the bidder would make a significant deposit. In addition, the committee sought to ensure that, to the extent a definitive merger agreement was reached with any of the bidders, regular quarterly dividends continued to be paid prior to closing to holders of the Company's common stock, prorated as necessary for any periods through the closing date of the merger. A well financed bid, with fully committed equity and debt, was another prerequisite that the committee sought to ensure for each bidder.

        At the direction of the special committee, Wachovia Securities instructed each bidder that final bids were due on June 14, 2005 and that each bidder should submit its markup of the draft merger agreement no later than June 1, 2005, so as to be in position to sign a definitive agreement promptly after final bids were submitted two weeks later. Each remaining bidder was also contacted directly by a member of the special committee to discuss the process generally and to answer any questions or address any concerns. Draft disclosure schedules to the merger agreement were also made available to the bidders.

        On or about June 1, 2005, each of the three bidders submitted a markup of the draft merger agreement. At telephonic meetings of the special committee held on June 3 and June 6, 2005, the committee, Goodwin Procter and Wachovia Securities discussed the markups of the draft merger agreement that had been submitted by each of DRA, Bidder X and Bidder Y. At the direction of the special committee, Goodwin Procter and Wachovia Securities held calls with each bidder and their counsel to discuss the more substantive items arising from each markup. Over the course of the next week, a majority of outstanding issues was resolved with each of DRA and Bidder X, and, to a lesser extent, with Bidder Y. As a result, we reached substantial agreement with DRA and Bidder X on the terms of a proposed merger agreement and, with Bidder Y, on many of the key issues.

        At a telephonic meeting of the special committee held on June 9, 2005, Wachovia Securities updated the committee as to the status of the bid process and Goodwin Procter updated the committee as to the status of negotiation of a definitive merger agreement.

        On June 14, 2005, we received final bids from DRA and Bidder X for the purchase of the Company in an all-cash transaction, accompanied by forms of merger agreement that each was prepared to execute. DRA proposed to purchase all of our outstanding common stock for $27.55 per share, increased by a prorated regular quarterly dividend through closing or September 30, 2005, whichever came earlier. DRA's proposal was not subject to any financing contingency and was accompanied by a form of financing commitment letter from a reputable lender to provide the requisite debt financing of up to $853 million. DRA's proposal did not, however, provide for an entity with significant net worth to be a signatory to the merger agreement. Bidder X also proposed to purchase all of our outstanding stock for cash, but at a price per share lower than DRA's proposed price. In addition, Bidder X indicated that it would require a significant amount of more time to finalize debt and equity financing for the transaction. Bidder Y elected not to submit a final bid.

        At a meeting of the special committee held on June 14, 2005, the committee, Goodwin Procter and Wachovia Securities reviewed the two proposals, the principal terms of their respective draft merger agreements and the related financing. The committee had extensive discussions regarding the value of DRA's bid in comparison to values projected to be achieved upon continued implementation

15


of the Company's strategic growth plan, as well as whether providing additional time to Bidder X and following up with Bidder Y might yield more favorable bids. The committee ultimately concluded that if DRA would raise its price per share, provide a guaranty of the performance of all obligations under the merger agreement from an entity with significant net worth and enter into a definitive agreement quickly so as to minimize risk inherent in further delaying the process, it would be in the best interest of the Company and its shareholders to pursue a final agreement with DRA. The committee instructed Wachovia Securities to propose a $28 per share price to DRA and instructed Goodwin Procter to negotiate a form of acceptable guaranty with Blank Rome LLP, counsel to DRA.

        On June 15, 2005, DRA indicated to Wachovia Securities that it would increase its proposal from $27.55 to $27.80 per share. The special committee instructed Goodwin Procter to meet with DRA and Blank Rome in New York to finalize the draft merger agreement and guaranty as soon as possible, including negotiating a reduction of the termination fee. Over the course of June 15 and June 16, 2005, Goodwin Procter met with Blank Rome in New York and resolved all outstanding substantive issues on the draft merger agreement, including a reduction of the termination fee from approximately $51 million to $40 million. The parties also agreed to a form of guaranty pursuant to which DRA Growth and Income Fund V LLC, an entity with significant funded capital, would guarantee the performance of all obligations of the DRA merger subsidiaries under the merger agreement through closing of the merger. On the evening of June 16, 2005, DRA indicated its willingness to sign the definitive agreement and guaranty early the following morning.

        While these discussions with DRA and their counsel were ongoing, the full Board of Directors convened in New York on June 16, 2005 and the special committee updated the board as to the status of the negotiations with DRA. At the meeting, each director received a summary of the proposed transaction and the provisions of the merger agreement. On behalf of management, Mr. Crocker advised the board that he and management had no agreement of any kind with DRA relating to post-transaction employment or similar arrangements. At the meeting, Goodwin Procter reviewed the terms of the proposed merger agreement and guaranty with the board and reviewed the board's fiduciary duties under applicable law. Wachovia Securities reviewed their financial analysis of the transaction with the board. Members of the board were asked if they had each received all of the information they believed was necessary to consider and vote on the proposed transaction and they indicated that they had. The board discussed at length the terms of the proposed transaction and a variety of positive and negative considerations concerning the transaction and the overall strategic alternatives available to the Company. (These factors are described in more detail below under the heading—"Reasons for the Merger and Recommendation of Our Board of Directors".) The board instructed Wachovia Securities and the special committee to complete all negotiations with DRA overnight and report back to the full board early the next day. At a further meeting of the full Board of Directors held early the next morning, June 17, 2005, Wachovia Securities and the special committee reported that all remaining issues had been resolved with DRA. Wachovia Securities rendered an oral opinion to the board, subsequently confirmed in writing, that as of that date and based upon and subject to procedures performed, assumptions made, matters considered, limitations of the review undertaken and their experience as investment bankers, in their opinion, the merger consideration to be received by the holders of our common stock pursuant to the merger agreement was fair, from a financial point of view, to holders or our common stock. Goodwin Procter updated the board as to final negotiations of the definitive documentation that had taken place after the board's meeting of June 16, 2005. The Board of Directors then unanimously approved the proposed merger, the draft merger agreement and the other transactions contemplated by the agreement. In contemplation of the proposed transaction, the board also determined that each of the DRA signatories to the definitive agreement would be an "exempt person" for purposes of the Company's Common Stock Rights Agreement and unanimously approved the making of certain other amendments to that agreement as necessary to effect the terms of the proposed transaction.

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        After the board concluded its meeting early on the morning of June 17, 2005, DRA G&I Fund V Real Estate Investment Trust, DRA CRT Acquisition Corp. and the Company executed the merger agreement, DRA Growth and Income Fund V LLC executed the guaranty and, prior to the opening of U.S. financial markets on that same day, we issued a press release announcing the transaction.

Reasons for the Merger and Recommendation of Our Board of Directors

        At a special meeting held on June 17, 2005, our Board of Directors, after due consideration, determined that it was advisable, fair to and in the best interests of the Company and our shareholders to enter into the Merger Agreement and to consummate the Merger and the other transactions contemplated by the Merger Agreement. The board unanimously also recommended that holders of our common stock vote for the approval of the Merger Agreement.

        In reaching its decision to adopt the Merger Agreement and to recommend that our shareholders approve the Merger Agreement, the board consulted with management and its legal and financial advisors. These consultations included discussions regarding our strategic growth plan, the historical prices of our capital stock, our past and current business operations and financial condition, our future prospects, the potential merger transaction with DRA and other strategic alternatives. The Board of Directors also consulted with Wachovia Securities as to the fairness, from a financial point of view, to holders of our common stock of the merger consideration.

        The Board of Directors identified and considered a number of positive factors in its deliberations, including:

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        Our Board of Directors also identified and considered a number of potentially negative factors in its deliberations concerning the Merger, including:

        After taking into account all of the factors set forth above, as well as others, including the personal interests of our directors and executive officers as described more fully under "—Interests of Our

18


Directors and Executive Officers in the Merger" on page 24, our Board of Directors agreed that the benefits of the Merger outweighed the risks and that the Merger Agreement and the Merger were advisable, fair to and in the best interests of the Company and its shareholders.

        Although the foregoing discussion sets forth the material factors considered by our Board of Directors in reaching its recommendation, it may not include all of the factors considered by our directors, and individual directors, may have given different weight to different factors. The board reached its conclusion to approve and adopt the Merger Agreement in light of the various factors described above and other factors that each member of our board, given their expertise and experience, felt were appropriate. In view of the wide variety of factors considered in connection with its evaluation of the Merger and the complexity of these matters, the board did not consider it practical, and did not attempt, to quantify, rank or otherwise assign relative weights to the specific factors it considered in reaching its decision. Rather, the board made its recommendation based on the totality of information presented to, and the investigation conducted by, the Board of Directors.

        Our Board of Directors unanimously recommends that our shareholders vote "FOR" the approval of the Merger Agreement.

Opinion of Wachovia Capital Markets, LLC

        Our Board of Directors retained Wachovia Capital Markets, LLC, or "Wachovia Securities" to act as its exclusive financial advisor with respect to a possible sale of the Company. Our Board of Directors selected Wachovia Securities to act as its exclusive financial advisor based on Wachovia Securities' qualifications, expertise and reputation. Wachovia Securities provided its written opinion that, as of June 17, 2005, subject to and based on the assumptions made, procedures followed, matters considered and limitations on the opinion and the review undertaken, as set forth in its opinion, the $27.80 per common share to be received by holders of our common shares pursuant to the merger agreement was fair, from a financial point of view, to such holders.

        The full text of Wachovia Securities' opinion, dated June 17, 2005, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the opinion and the review undertaken in connection with the opinion, is attached as Appendix C to this proxy statement. You should carefully read the opinion. This summary is qualified in its entirety by reference to the full text of the opinion.

        Wachovia Securities' opinion did not address the merits of the underlying business decision to enter into the Merger Agreement and does not constitute a recommendation to any holder of our common shares as to how such holder should vote in connection with the Merger Agreement.

        In arriving at its opinion, Wachovia Securities, among other things:

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        In connection with its review, Wachovia Securities, with our board's consent, relied upon the accuracy and completeness of the foregoing financial and other information Wachovia Securities obtained for the purpose of its opinion, including all accounting, legal and tax information and did not assume any responsibility for any independent verification of such information and assumed such accuracy and completeness for purposes of its opinion without independent verification or investigation. Wachovia Securities relied upon the assurance of our management that they were not aware of any facts or circumstances that would make such information about the Company inaccurate or misleading. With respect to the Company's financial forecasts furnished to Wachovia Securities by our management, Wachovia Securities assumed that they were reasonably prepared and reflected the best current estimates and judgments of management as to the future financial performance of the Company. Wachovia Securities assumed no responsibility for, and expressed no view as to, such financial forecasts of the Company or the assumptions upon which they were based. In arriving at its opinion, Wachovia Securities did not conduct physical inspections or assessments of the properties or facilities of the Company and did not prepare or obtain any independent evaluations or appraisals of the assets or liabilities of the Company, including any contingent liabilities.

        In rendering its opinion, Wachovia Securities assumed that the Merger will be consummated on the terms described in the Merger Agreement, without waiver of any material terms or conditions, and that in the course of obtaining any necessary legal, regulatory or third-party consents and/or approvals, no restrictions will be imposed or other actions will be taken that will have an adverse effect on the Company, the Merger or other transactions contemplated by the Merger Agreement in any way meaningful to its analysis.

        Wachovia Securities' opinion is necessarily based on economic, market, financial and other conditions as they existed and could be evaluated on and the information made available to Wachovia Securities as of the date of its opinion. Wachovia Securities' opinion does not address the relative merits of the Merger or other transactions contemplated by the Merger Agreement compared with other business strategies or transactions that may have been considered by our management, our Board of Directors or any committee thereof. Although subsequent developments may affect Wachovia Securities' opinion, Wachovia Securities does not have an obligation to update, revise or reaffirm its opinion.

        The summary set forth below does not purport to be a complete description of the analyses performed by Wachovia Securities, but describes, in summary form, the material elements of the presentation that Wachovia Securities made to our Board of Directors on June 17, 2005 in connection with Wachovia Securities' fairness opinion. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to a partial analysis or summary description. In arriving at its fairness opinion, Wachovia Securities considered the results of all its analyses as a whole and did not attribute any particular weight to any analysis or factors considered by it. Accordingly, the analyses listed in the tables and described below must be considered as a whole. Considering any portion of such analyses and the factors considered, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying Wachovia Securities' analyses and opinion.

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        Historical Stock Trading Analysis.    Wachovia Securities reviewed publicly available historical trading prices and volumes for the common shares for the period between June 15, 2004 and June 15, 2005. In the 52-week period preceding the announcement of the Merger, the high trading price for the common shares was $25.18 (on December 5, 2004) and the low trading price was $20.96 (on August 2, 2004). In addition, Wachovia Securities compared the $27.80 per common share to be received by holders of our common shares pursuant to the Merger Agreement to the average closing trading prices of our common shares during the 10-day, 30-day, and 60-day trading periods preceding the announcement of the Merger. The $27.80 per share offer price represents a premium to the average closing prices as follows:

 
   Closing/Average Price
   Premium to Closing/Average Price
  
June 15, 2005   $ 23.92   16.2 %
10-Day Trading Average   $ 23.46   18.5 %
30-Day Trading Average   $ 23.25   19.6 %
60-Day Trading Average   $ 22.74   22.3 %

        Comparable Companies Analysis.    Wachovia Securities compared financial, operating and stock market data of the Company to the following publicly traded REITs that own or operate office properties:

• Brandywine Realty Trust   • HRPT Properties Trust
• CarrAmerica Realty Corporation   • Liberty Property Trust
• Corporate Office Properties Trust   • Mack-Cali Realty Corporation
• Duke Realty Corporation   • Parkway Properties, Inc.
• Highwoods Properties, Inc.   • Prentiss Properties Trust

        Wachovia Securities calculated, among other things, the multiple of per share closing prices to projected funds from operations ("FFO") for 2005 for the comparable companies, based upon projected financial information from the SNL DataSource ("SNL") consensus estimates and closing share prices on June 15, 2005. Wachovia Securities calculated a range consisting of the high, mean, median and low multiples of per share price to FFO for the comparable companies and applied this range to our management's and SNL's consensus estimates of FFO for the Company for 2005. This analysis produced an implied per share value range for our common shares of $17.31 to $28.98. The range of implied share prices for our common shares is outlined below.

 
   2005 FFO
Multiple
   Implied Common Share Price
Based on Management's 2005E
FFO (without acquisitions)
   Implied Common Share Price Based
on SNL 2005E FFO
High   15.8 x $ 27.67   $ 28.98
Mean   12.6 x $ 22.07   $ 23.12
Median   12.8 x $ 22.31   $ 23.37
Low   9.9 x $ 17.31   $ 18.14

        Wachovia Securities selected the companies reviewed in the comparable companies analyses because of, among other reasons, their specialization in the office REIT sector, geographic location, asset quality, market capitalization and capital structure. None of the companies utilized in the above analyses, however, is identical to the Company. Accordingly, a complete analysis of the results of the foregoing calculations cannot be limited to a quantitative review of such results and involves complex considerations and judgments concerning the differences in the financial and operating characteristics of the comparable companies and other factors that could affect the public trading value of the comparable companies, as well as the potential trading value of the Company.

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        Precedent Transactions Analysis.    To consider the fairness of DRA's bid, which implied a total transaction size of approximately $1.7 billion, Wachovia Securities examined selected transactions involving publicly traded office real estate companies announced since 2000 with a total transaction size between $1 billion and $3 billion and 100% cash consideration. Wachovia Securities reviewed information relating to FFO and premiums paid in connection with these transactions. Using publicly available information, including estimates of 2005 FFO published by FactSet and our management's 2005 FFO estimate, Wachovia Securities compared transaction multiples of FFO and premiums paid for the Merger with the selected transactions. The selected transactions were:

Acquiror
   Target
ING Clarion   Gables Residential Trust
The Lightstone Group   Prime Group Realty Trust
Kimco Realty Corp. & DRA Advisors LLC   Price Legacy Corp.
Eaton Vance/Prologis   Keystone Property Trust
Transwestern Investment Company, LLC   Great Lakes REIT
Hometown America LLC   Chateau Communities
New NGOP LLC   National Golf Properties Inc.
General Growth Properties Inc.   JP Realty, Inc.
Security Capital Group   Storage USA
Heritage Property Investment Trust   Bradley Real Estate, Inc.

        Wachovia Securities calculated, among other things, a range consisting of the high, mean, median and low transaction prices to forward FFO multiples for the selected transactions and applied this range to our management's and FactSet's consensus estimates of FFO for the Company for 2005. Based upon transaction multiples, Wachovia Securities calculated the following range of implied share prices:

 
   FFO Multiple of Selected
Transactions Since 2000,
$1 billion to $3 billion in
Size and 100%
Cash Consideration
   Implied Common
Share Price Based on
Management's 2005E FFO
   Implied Common Share
Price Based on
FactSet 2005E FFO
High   19.2 x $ 33.48   $ 35.07
Mean   12.1 x $ 21.08   $ 22.08
Median   11.4 x $ 19.83   $ 20.77
Low   8.4 x $ 14.66   $ 15.36

        Premiums Paid Analysis.    In addition, Wachovia Securities analyzed the premium or discount paid by the acquiror in all of the transactions used in the selected transactions FFO analysis, in relation to the average closing market price of the targets' common shares on the day prior to announcement of the transaction, and the prior day, 10-day, 30-day, 60-day and 90-day average closing prices prior to the announcement of the transaction and the transaction price as of the day of announcement.

        Using publicly available information, Wachovia Securities calculated, among other things, a range consisting of the high, mean, median and low premiums paid in these transactions and applied this

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range to the closing price per common share of $23.92 on June 15, 2005. This analysis resulted in the following range of implied share prices for each of our common shares:

Selected Publicly Traded Real Estate Transactions Since 2000, $1 to $3 billion in Size and
100% Cash Consideration

 
   Implied Common Share Price
 
   Premium to Prior
Day Price
   Premium to
10-Day
Average
   Premium to
30-Day
Average
   Premium to
60-Day
Average
   Premium to
90-Day
Average
High   $ 28.45   $ 27.89   $ 29.58   $ 31.15   $ 31.42
Mean   $ 25.99   $ 25.78   $ 25.96   $ 25.90   $ 26.22
Median   $ 26.59   $ 26.40   $ 26.17   $ 25.78   $ 26.06
Low   $ 23.25   $ 22.98   $ 22.81   $ 22.27   $ 22.12

        Because the market conditions, rationale and circumstances surrounding each of the transactions analyzed in the various selected transaction analyses were specific to each transaction and because of the inherent differences between our businesses, operations and prospects and those of the comparable acquired companies, Wachovia Securities believed that it was inappropriate to, and therefore did not, rely solely on the quantitative results of the analysis. Accordingly, Wachovia Securities also made qualitative judgments concerning differences between the characteristics of these transactions and the proposed Merger that could affect the Company's potential acquisition values and those of such acquired companies.

        Discounted Cash Flow Analysis.    Wachovia Securities performed a discounted cash flow analysis of the Company based upon the projected unleveraged cash flows provided by our management for the years beginning in the second half of 2005 to the first half of 2006 through the second half of 2009 to the first half of 2010. Wachovia Securities calculated a range of equity values per common share based upon the sum of the discounted net present values of the Company's five year stream of unleveraged free cash flows plus the discounted net present value of the Company's terminal value based upon a range of capitalization rates and the Company's second half 2010 through first half 2011 net operating income. Discount rates and capitalization rates utilized in this analysis were derived from historical data for comparable asset sales from published sources such as Real Capital Analytics, a national research and consulting firm, from the calculation of our weighted average cost of capital using the capital asset pricing model and from conversations with potential buyers regarding their required rates of return. Using discount rates ranging from 9.0% to 10.0% and terminal capitalization rates ranging from 7.5% to 8.5%, Wachovia Securities calculated the following range of implied share values for the Company, as compared to the per share merger consideration of $27.80:

Range of Implied Share Values
   Per Share Merger Consideration
$24.68 to $31.70   $ 27.80

        Net Asset Value Analysis.    Using information provided by our management, Wachovia Securities calculated the net asset value per common share. For this analysis, Wachovia Securities applied a range of capitalization rates from 7.0% to 8.0% to our management's projected 12 month forward net operating income. The capitalization rates utilized in this analysis were derived from historical data for comparable asset sales from published sources and from conversations with potential buyers regarding their required rates of return. The resulting gross real estate value was added to the gross value of our other assets, less the liquidation preference of our preferred stock, less our outstanding debt and other liabilities, to arrive at an estimated net asset value per common share of the Company. In applying the range of capitalization rates, Wachovia Securities took into consideration current market conditions and property characteristics. The net asset value analysis produced an estimated per share value range of $18.30 to $24.43 for our common shares.

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        In performing its analyses, Wachovia Securities made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond our control. No company, transaction or business used in the analyses described above is identical to the Company or the Merger. Any estimates contained in Wachovia Securities' analyses are not necessarily indicative of future results or actual values, which may be significantly more or less favorable than those suggested by these estimates. The analyses performed were prepared solely as a part of Wachovia Securities' analysis of the fairness, from a financial point of view, to the holders of the Company's common shares, as of June 17, 2005, and subject to and based on the assumptions made, procedures followed, matters considered and limitations on the opinion and the review undertaken in such opinion, of the $27.80 per common share to be received by such holders pursuant to the terms of the Merger Agreement, and were conducted in connection with the delivery by Wachovia Securities of its fairness opinion, dated June 17, 2005.

        Wachovia Securities' opinion was one of the many factors taken into consideration by our board of directors in making its determination to approve the Merger Agreement and Merger. Wachovia Securities' analyses summarized above should not be viewed as determinative of the opinion of our board of directors with respect to the value of our common shares or of whether the board of directors would have been willing to agree to a different form of consideration.

        Wachovia Securities, a trade name of Wachovia Capital Markets, LLC, is a nationally recognized investment banking and advisory firm, and a subsidiary of Wachovia Corporation. Wachovia Securities, as part of its investment banking and financial advisory business, is continuously engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. Wachovia Securities and its affiliates in the past have provided to us financial and investment banking services unrelated to the proposed merger, for which services Wachovia Securities and its affiliates have received customary market compensation, including having acted as co-manager of our $105 million common stock offering in January 2004 and as advisor and placement agent in connection with the January 2004 equity private placement related to the Broward Financial Centre office property located in Fort Lauderdale, Florida. Wachovia Securities earned approximately $2.2 million in fees from these activities. Wachovia Securities and its affiliates (including Wachovia Corporation and its affiliates) may maintain relationships with the Company and DRA G&I Fund V Real Estate Investment Trust, as well as any of their principals or affiliates. Additionally, in the ordinary course of its business, Wachovia Securities may trade in our securities and affiliates of DRA G&I Fund V Real Estate Investment Trust for its own account and for the accounts of its customers and, accordingly, may at any time hold a long or short position in such securities.

        Pursuant to a letter agreement dated March 28, 2005, we engaged Wachovia Securities to render certain financial advisory services to our Board of Directors in connection with its consideration of a possible sale of the Company. Pursuant to the terms of this agreement, the Company agreed to pay Wachovia Securities a fee of approximately $8.9 million in connection with the consummation of the Merger, $0.5 million of which became payable upon delivery of its fairness opinion to our Board of Directors. In addition, the Company has agreed to reimburse Wachovia Securities for its expenses and to indemnify Wachovia Securities and certain related parties against certain liabilities and expenses related to or arising out of Wachovia Securities' engagement.

Interests of Our Directors and Executive Officers in the Merger

        In addition to their interests in the Merger as shareholders, certain of our directors and executive officers have interests in the Merger that differ from, or are in addition to, the interests of our shareholders generally. Our Board of Directors was aware of these interests and considered them, among other matters, in approving the Merger Agreement. As described in detail below, these interests

24


of our officers and directors consist of consideration for outstanding, fully-vested options, awards granted between 2000 and 2005 under performance-based long term incentive programs, and payments under pre-existing employment and participation agreements (with certain amendments as described below).

        Stock Options.    Certain executive officers and directors of our company hold options to purchase shares of our common stock and all of these options are presently vested and exercisable. At the effective time of the Merger, each outstanding option will be canceled, and the holder of each option will be entitled to receive an amount in cash, without interest and less applicable withholding taxes, equal to the product of (i) the number of shares of our common stock subject to each option, multiplied by (ii) the excess of $27.80 over the exercise price per share of the relevant option. If the result of this calculation is zero, the option will be cancelled and no payment will be made. Our officers and directors will receive approximately the cash payments indicated below in settlement of options (less any applicable withholding taxes and assuming no exercise of options prior to the effective time of the Merger):

 
   Number of
Options
   Weighted Average
Strike Price
   Net
Payment
Executive Officers                
Thomas J. Crocker   700,000   $ 16.0625   $ 8,216,250
Thomas C. Brockwell   200,000   $ 17.5625   $ 2,047,500
Christopher L. Becker   200,000   $ 17.5625   $ 2,047,500

Directors
 
 
 
 
 
 
 
 
D. Pike Aloian   4,000   $ 19.8125   $ 31,950
Benjamin C. Bishop, Jr.   4,000   $ 19.8125   $ 31,950
David B. Hiley   129,000   $ 22.7195   $ 655,388
Victor A. Hughes, Jr.   180,000   $ 21.8750   $ 1,066,500
George S. Staudter   4,000   $ 19.8125   $ 31,950
James C. Teagle   100,000   $ 21.8750   $ 592,500

        Employment Agreements and Incentive Arrangements.    As described in the annual proxy statement we mailed to shareholders and filed with the SEC on April 18, 2005, we renewed our employment agreements with each of Thomas J. Crocker, our chief executive officer, and Thomas C. Brockwell, our executive vice president. on January 13, 2005. The renewed agreements provide, in relevant part, that in the event of termination in connection with a change-of-control, subject to a release of claims, the applicable executive will receive a lump sum equal to the product of the sum of his annual base salary plus the average annual cash bonus earned for the three preceding calendar years, multiplied by the number of months remaining in the term of the agreement (but not less than 24 for Mr. Brockwell and not less than 36 for Mr. Crocker) divided by 12. Each agreement provides that if Mr. Crocker or Mr. Brockwell becomes subject to the excise tax imposed on any "excess parachute payments" under Section 4999 of the Internal Revenue Code, we will make an additional tax gross-up payment to the executive to cover the excise tax and other taxes on the tax gross-up payment.

        As part of the consideration for these payments, the employment agreements contain non-competition agreements whereby each of Mr. Crocker and Mr. Brockwell has agreed that, for two years following the termination of his employment, he will not become employed in an executive capacity similar to the capacity in which he served us by any southeastern public office REIT or any southeastern private office REIT with net assets greater than $200 million.

        In addition, we entered into renewed participation agreements with our other senior executive officers in January 2005. Among other things, each of these agreements provides that, subject to a release of claims, in the event that a change in control occurs in 2005 (or in 2006 pursuant to an agreement reached in 2005) and the executive is terminated within 12 months thereafter without cause,

25


the applicable executive will receive a lump sum severance payment equal to two times the sum of the executive's base salary and average bonus earned for the three preceding calendar years (or actual number of calendar years of employment if fewer than three, with bonuses annualized for any year of employment of less than 12 months. These agreements were subsequently amended on June 16, 2005 to provide that an executive would also be eligible to receive the severance payment if he were to resign for "good reason" (which includes adverse changes in job responsibilities and duties, reduction in base compensation or a material reduction in incentive opportunity, relocation or our failure to obtain an effective agreement from a successor entity to assume and agree to perform the agreements) within 12 months following a change in control. In addition, the amendments provided that if an executive officer becomes subject to the excise tax imposed on any "excess parachute payments" under Section 4999 of the Internal Revenue Code, we will make an additional tax gross-up payment to the executive to cover the excise tax and other taxes on the tax gross-up payment.

        In connection with the Merger, our compensation committee has agreed to award our annual cash bonuses immediately prior to the effective time of the Merger. The amount of the bonuses is determined partially by achievement of corporate-wide goals and partially by individual performances. Bonus payments will be pro-rated to reflect the partial year.

        Pursuant to the employment agreements and participation agreements described above, and assuming that the Merger is completed on or about September 30, 2005, the following severance and bonus payments will be made (subject to gross-up payments for applicable excise taxes, as noted above) at the effective time of the Merger:

Executive Officer
   Severance
   Bonus
Thomas J. Crocker   $ 2,370,751   $ 375,000
Thomas C. Brockwell   $ 1,212,198   $ 281,250
Christopher L. Becker   $ 806,673   $ 175,500
S. Mark Cypert   $ 792,064   $ 175,500
Terence D. McNally   $ 739,904   $ 126,563
William J. Wedge   $ 714,002   $ 175,500
Angelo J. Bianco   $ 698,964   $ 175,500
Benton M. Wakefield   $ 561,145   $ 93,750
Todd J. Amara   $ 508,459   $ 105,188

        Restricted Stock Awards.    Our executive officers participating in our 2005 Senior Management Compensation Plan were granted restricted stock in January 2005. Under the plan, half of each restricted stock grant vests in five equal installments of 10% per year over five years and half vests based on our achievement of threshold total return to shareholders over the same five-year period. At the effective time of the Merger, all restricted stock grants will become fully vested and the threshold total return to shareholders will have been deemed met. Pursuant to the Merger Agreement, all outstanding shares of restricted stock under the plan will be treated as outstanding common shares, holders of which will be entitled to receive the merger consideration.

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        Payments to be made with respect to the restricted stock awards upon the effective time of the Merger are set forth below:

Executive Officer
   Restricted
Shares
   Merger
Consideration
Thomas J. Crocker   43,821   $ 1,218,224
Thomas C. Brockwell   32,866   $ 913,675
Christopher L. Becker   21,911   $ 609,126
S. Mark Cypert   21,911   $ 609,126
William J. Wedge   21,911   $ 609,126
Angelo J. Bianco   15,337   $ 426,369
Todd J. Amara   13,146   $ 365,459
Terence D. McNally   8,764   $ 243,639

        Out-performance Plan and Long-Term Incentive Plan.    Our 2005 Senior Management Compensation Plan discussed above provides for grants to participating employees of awards based on our achievement of certain corporate performance goals over a three-year period. The purpose of this component of the plan is to encourage management to "outperform" and to create shareholder value in excess of industry expectations. The out-performance award is granted if our total shareholder return over a three-year period exceeds a formula-based benchmark. In connection with the Merger, the performance measurement period and vesting schedule under the out-performance plan will be accelerated upon consummation of the Merger.

        Our senior executives also received LTI units in each of 2002, 2003 and 2004 pursuant to our long-term incentive plan. Each LTI unit is the economic equivalent of a share of our common stock and dividends payable with respect to LTI units are reinvested based on the then-current price of a share of our common stock. LTI units are earned if our total shareholder return over a three-year period exceeds a formula-based benchmark, with a greater number of units earned if our performance exceeds the benchmark threshold level. In connection with the Merger, the performance measurement period and vesting for all LTI units awarded will be accelerated upon consummation of the Merger and it is expected that our performance will exceed the benchmark threshold level.

        Estimated payments to be made under the out-performance and the long-term incentive plans at the effective time of the Merger are set forth below:

Executive Officer
   Out-performance
Plan*
   Long-Term
Incentive Plan*
Thomas J. Crocker   $ 1,864,785   $ 2,355,054
Thomas C. Brockwell   $ 1,243,190   $ 1,292,115
Christopher L. Becker   $ 776,994   $ 1,248,622
S. Mark Cypert   $ 776,994   $ 379,095
William J. Wedge   $ 776,994   $ 379,095
Angelo J. Bianco   $ 388,497   $ 651,479
Todd J. Amara   $ 388,497   $ 783,212
Terence D. McNally   $ 192,246   $ 0
*
Estimated, based on projected benchmark measures as of the closing date of the Merger, currently expected to be on or about September 30, 2005.

        Supplemental Executive Retirement Plan.    On June 16, 2005, our Board of Directors amended our Supplemental Executive Retirement Plan to permit each participant to make an election in 2005 to receive the present value of his retirement benefit in a lump sum. A participant who has made the foregoing election may also make another election to receive the present value of his retiree medical

27

insurance coverage in a lump sum in cash. The participants in the Supplemental Executive Retirement Plan who are currently receiving benefits are all former executives of the Company. Two of these participants, Messrs. Hiley and Hughes, continue to serve as directors of the Company.

        Indemnification.    Under the Merger Agreement, at the effective time of the Merger, the surviving entity will, for six years following the Merger, indemnify our current directors and officers against claims based on, arising from, or pertaining to, their relationship with us or the negotiation, execution or performance of the Merger Agreement. In addition, after the effective time of the Merger, Parent and MergerCo will be obligated to promptly pay and advance reasonable expenses and costs incurred by each of these persons as they become due and payable in advance of the final disposition of any claim, action, suit, proceeding or investigation to the full extent and in the manner permitted by law. The Merger Agreement requires that, for six years following the effective time of the Merger, Parent and MergerCo maintain the current coverage under the director and officer liability insurance policy or a substantially equivalent policy. The governing documents of MergerCo will require it to exculpate and indemnify our current directors and officers to the extent provided in our current charter and bylaws. For a more complete discussion of these ongoing indemnification provisions, please see "—Indemnification of Officers and Directors" below.

Delisting and Deregistration of Capital Stock

        If the Merger Agreement is approved by our stockholders and the other conditions to the closing of the Merger are either satisfied or waived, CRT Properties, Inc. will be merged with and into DRA CRT Acquisition Corp., which will be the surviving corporation. When the Merger is completed, we will cease to be a publicly traded company and will instead become a wholly owned subsidiary of DRA G&I Fund V Real Estate Investment Trust. Accordingly, if the Merger is completed our common stock will be delisted from the New York Stock Exchange and will be deregistered under the Securities Exchange Act of 1934, as amended (which we refer to in this proxy statement as the Exchange Act) at the effective time of the Merger.

        Depending on the number of holders of the 8.5% Series A Cumulative Redeemable Preferred Stock of the surviving corporation following the Merger, DRA has indicated that it may also seek to deregister the preferred stock under the Exchange Act and to delist the preferred shares from the New York Stock Exchange. DRA has further indicated that it does not intend to contest a delisting of the preferred shares should the preferred stock no longer satisfy the listing requirements of the New York Stock Exchange or to seek to list the preferred shares on another trading market. Accordingly, we cannot assure that an active trading market for the preferred stock will continue to exist following the effective time of the Merger.

Effect of the Merger on Our Capital Stock and Options

        At the effective time of the Merger, each share of our common stock issued and outstanding (other than treasury shares, which will be canceled without conversion or consideration) will be converted into the right to receive $27.80 per share in cash, without interest, plus an amount equal to a quarterly dividend of $0.35 per share, prorated for the number of days since the first day after the period for which the last dividend was paid until the date the Merger is effected (or September 30, 2005, whichever is earlier). If the Merger Agreement is approved by shareholders at the Special Meeting, we currently estimate that the Merger will be effected on September 30, 2005, which would result in a regular quarterly dividend for the third quarter of $0.35 per share. If the Merger is effected earlier than September 30, 2005, the prorated dividend amount would be reduced accordingly.

        After the effective time of the Merger, each of our outstanding stock certificates representing shares of common stock will represent only the right to receive the merger consideration. The merger

28


consideration paid upon surrender of each certificate will be paid in full satisfaction of all rights pertaining to the shares of our common stock represented by that certificate.

        We will use our commercially reasonable efforts to ensure that at the effective time of the Merger, each outstanding option to acquire our common stock will be canceled and the holder of each option will be entitled to receive an amount in cash, without interest and less applicable withholding taxes, equal to the product of:

        If the exercise price per share of any stock option is equal to or greater than $27.80 per share, the option will be cancelled without any cash payment being made in respect thereof.

        Certain of Our executive officers and key employees hold restricted shares, long-term incentive awards and out-performance awards that will vest in full immediately prior to the effective time of the Merger and will be treated as common shares outstanding entitled to receipt of the merger consideration. For a more complete discussion of these awards, please see "—Interests of our Directors and Executive Officers in the Merger" above.

Procedures for Exchange of Common Stock Certificates

        We have appointed Wells Fargo Bank, N.A. as the paying agent for the purpose of exchanging certificates representing our shares of common stock for the merger consideration. On or prior to the closing date of the merger, Parent will deposit with the paying agent funds sufficient to pay the aggregate merger consideration to each holder of shares of our common stock and stock options.

        If you hold your shares in registered form, Parent and MergerCo will cause the paying agent to mail a letter of transmittal and instructions to you and the other shareholders as soon as possible after the effective time of the Merger (but in any event within three (3) business days). The letter of transmittal and instructions will tell you how to surrender your common stock certificates in exchange for the merger consideration. If you hold your shares through a brokerage account, you will receive the merger consideration directly from your broker.

        You should not send in your certificates until you receive the letter of transmittal and instructions from the paying agent following the closing of the Merger. Do not return your stock certificates with the enclosed proxy card.

        If you hold your shares in registered form, you will not be entitled to receive the merger consideration until you surrender your stock certificate or certificates to the paying agent, together with a duly completed and executed letter of transmittal and any other documents that the paying agent may reasonably require. After you mail the letter of transmittal, duly executed and completed in accordance with its instructions, and your stock certificates to the paying agent, the paying agent will mail a check to you. The stock certificates you surrender will be canceled. The merger consideration may be paid to a person other than the person in whose name the corresponding certificate is registered if the certificate is properly endorsed or is otherwise in the proper form for transfer. In addition, the person who surrenders such certificate must either pay any transfer or other applicable taxes or establish to the satisfaction of the Parent that such taxes have been paid or are not applicable. If you hold your shares

29


of common stock in "street name," your bank or broker will surrender your shares for cancellation following the completion of the Merger.

        If your stock certificates have been lost, stolen or destroyed, upon making an affidavit of that fact and upon posting of a bond to the satisfaction of Parent and paying agent, the paying agent will issue the merger consideration to you in cash in exchange for your lost, stolen, or destroyed stock certificates.

        Any merger consideration held by the paying agent that remains undistributed to the former shareholders for twelve (12) months or longer after the effective time of the Merger will be delivered to Parent, and any former holder of common stock or stock options who has not already complied with the surrender and exchange procedures may thereafter look only to Parent for payment of a claim for merger consideration.

        None of the Parent, MergerCo, the Surviving Corporation, the Company or paying agent, or any employee, officer, director, agent or affiliate thereof, will be liable to any former holder of common stock or stock options for any cash delivered to public officials pursuant to any applicable abandoned property, escheat or similar law.

Financing; Source of Funds

        Approximately $905.5 million will be required to provide the aggregate consideration for our shares of common stock and options pursuant to the Merger Agreement. In addition, total existing debt outstanding, as of July 1, 2005, that will need to be repaid or assumed at closing of the Merger was approximately $676.4 million. The Merger is not conditioned upon DRA or its designated subsidiaries obtaining the requisite financing. DRA has represented to us that at the closing of the Merger it will have cash reserves and/or borrowing capacity sufficient in the aggregate to pay the total merger consideration, option merger consideration and all other payments contemplated by the Merger Agreement. In connection with the execution and delivery of the Merger Agreement, DRA's subsidiary also obtained a commitment letter from a reputable national lender to provide up to approximately $853 million in debt financing.

No Appraisal Rights

        No dissenters' or appraisal rights are available in connection with the Merger or any of the transactions contemplated by the Merger Agreement. Florida law does not provide for dissenters' or appraisal rights because our common shares are listed on the New York Stock Exchange.

Litigation Relating to the Merger

        We are aware of two purported class action lawsuits related to the Merger filed against us, each of our directors and DRA Advisors LLC in the Circuit Court of the 15th Judicial Circuit, Palm Beach County, Florida. The two lawsuits, Sam Leff et al v. CRT Properties, Inc. et al., Case No. 50 2005CA 005704XXXXMB(AJ), filed on June 21, 2005, and Robert Dee et al v. CRT Properties, Inc. et al., Case No. 50 2005CA 006374XXXXMB(AH), filed on July 8, 2005, allege, among other things, that the merger consideration to be paid to our shareholders in the Merger is unfair and inadequate and unfairly favors insiders. In addition, the complaints allege that our directors violated their fiduciary duties by, among other things, failing to take all reasonable steps to assure the maximization of shareholder value, including the implementation of a bidding mechanism to foster a fair auction of our company to the highest bidder or the exploration of strategic alternatives that will return greater or equivalent short-term value to our shareholders. The complaints seek, among other relief, certification of the lawsuit as a class action, a declaration that the Merger is unfair, unjust and inequitable to our shareholders, an injunction preventing completion of the Merger at a price that is not fair and equitable, compensatory damages to the class, attorneys' fees and expenses, along with such other relief as the court might find just and proper. On August 8, 2005, we entered into a memorandum of

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understanding with the plaintiffs in the two cases described above, pursuant to which we agreed in principal to settle these lawsuits. Under the terms of the proposed settlement, which is subject to the execution of definitive settlement documents, completion by plaintiffs' counsel of confirmatory discovery and court approval, we agreed to make certain additional disclosures in this definitive proxy statement that were not contained in the preliminary proxy statement we filed on July 15, 2005. In addition, we agreed not to oppose application by plaintiffs' counsel to the court for an award of attorneys' fees and expenses in an amount not to exceed in the aggregate $400,000, which would be paid by us or our successors. Additional lawsuits pertaining to the Merger could be filed in the future.

Regulatory Matters

        No material federal or state regulatory requirements must be complied with or approvals obtained in connection with the Merger.

Material United States Federal Income Tax Consequences of the Merger

        The following is a general summary of the material federal income tax considerations that you should take into account in determining whether to vote for or against the Merger Agreement. This summary is based upon interpretations of the Internal Revenue Code, Treasury Regulations promulgated under the Internal Revenue Code, judicial decisions and administrative rulings as of the date of this proxy statement, all of which are subject to change or differing interpretations, including changes and interpretations with retroactive effect. The discussion below does not address all federal income tax considerations, or any state, local or foreign tax consequences of the Merger. Your tax treatment may vary depending upon your particular situation. Also, this discussion does not address various tax rules that may apply if you are a shareholder subject to special treatment under the Internal Revenue Code, such as a dealer, financial institution, insurance company, tax-exempt entity, U.S. expatriate, non-U.S. shareholder (except as discussed below), a person who holds common shares as part of a "straddle," a "hedge," a "constructive sale" transaction or a "conversion" transaction, a person that has a functional currency other than the U.S. dollar, a person who is subject to the alternative minimum tax, an investor in a pass-through entity, or if you do not hold our common shares as a capital asset.

        A U.S. shareholder is a U.S. citizen or resident alien individual as defined in the Internal Revenue Code, a domestic corporation or entity that has elected to be treated as a domestic corporation for federal income tax purposes, an estate the income from which is includable in its gross income for federal income tax purposes without regard to its source, or a trust if a U.S. court is able to exercise primary supervision over the administration of the trust, and one or more U.S. persons have the authority to control all of the substantial decisions of the trust.

        A non-U.S. shareholder is any shareholder that is not a U.S. shareholder.

        THIS FEDERAL INCOME TAX DISCUSSION IS FOR GENERAL INFORMATION PURPOSES ONLY AND MAY NOT ADDRESS ALL TAX CONSIDERATIONS THAT MAY BE SIGNIFICANT TO YOU. YOU ARE URGED TO CONSULT YOUR TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO YOU OF THE MERGER, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR FOREIGN LAWS.

        Consequences to Us of the Merger.    We will treat the Merger as if we had sold all of our assets to MergerCo in exchange for the merger consideration and then made a liquidating distribution of the merger consideration to our shareholders in exchange for shares of our common stock.

        Consequences to You of the Merger—U.S. Shareholders.    The Merger will be treated as a taxable sale by you of your shares of our common stock in exchange for the merger consideration. As a result, if you are a U.S. shareholder, you will recognize capital gain or loss with respect to your shares,

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measured by the difference between your adjusted tax basis in the shares exchanged and the amount of cash received for those shares. Your gain or loss will constitute long-term capital gain or loss if you held your shares for more than one year as of the effective time of the Merger. However a shareholder who has held our shares for six months or less at the effective time of the Merger, taking into account the holding period rules of Sections 246(c)(3) and (4) of the Internal Revenue Code, and who recognizes a loss with respect to that stock will be treated as recognizing long-term capital loss to the extent of any capital gain dividends received from us, or such shareholder's share of any designated retained capital gains, with respect to those shares. In addition, the Internal Revenue Service has the authority to prescribe, but has not yet prescribed, regulations that would apply a capital gain tax rate of 25%, which is generally higher than the long-term capital gain tax rates for noncorporate shareholders, to a portion of capital gain realized by a noncorporate shareholder on the sale of REIT shares that would correspond to the REIT's "unrecaptured Section 1250 gain."

        If you hold blocks of shares which were acquired separately at different times and/or prices, you must calculate separately your gain or loss for each block of shares. Shareholders are urged to consult with their own tax advisors with respect to their capital gain tax liability.

        Consequences to You of the Merger—Non-U.S. Shareholders.    If you are a non-U.S. shareholder, generally you will recognize capital gain or loss with respect to your shares of our common stock calculated in the same manner as for U.S. shareholders above. The manner in which you will be subject to tax on your capital gain or loss is complex and will depend on various factors, including the treatment of the Merger for purposes of the Foreign Investment in Real Property Tax Act of 1980, or FIRPTA. In particular, the consequences to non-U.S. shareholders will depend on whether their receipt of the merger consideration is taxed under the provisions of FIRPTA governing sales of REIT shares, consistent with the treatment of the Merger as a sale of shares for purposes of determining the tax consequences to U.S. shareholders, or whether their receipt of the merger consideration is taxed under the provisions of FIRPTA governing distributions from REITs. The provisions governing distributions from REITs could apply because, for federal income tax purposes, the Merger will be treated as a sale of our assets followed by a liquidating distribution from us to our shareholders of the proceeds from the asset sale. Current law is unclear as to which provisions should apply, and both sets of provisions are discussed below. In general, the provisions governing the taxation of distributions by REITs are less favorable to non-U.S. shareholders, and non-U.S. shareholders should consult with their tax advisors regarding the possible application of those provisions.

        Taxable Sale of Shares.    Subject to the discussion of backup withholding and of distribution of gain from the disposition of U.S. real property interests below, if the Merger is treated as a taxable sale of shares, then you should not be subject to federal income taxation on any gain or loss from the Merger unless (a) the gain is effectively connected with a trade or business that you conduct in the United States, (b) you are an individual who has been present in the United States for 183 days or more during the taxable year of the Merger and certain other conditions are satisfied, or (c) your shares constitute a "U.S. real property interest" under FIRPTA.

        If your gain is effectively connected with a U.S. trade or business, then you will be subject to federal income tax on your gain on a net basis in the same manner as U.S. shareholders. In addition, if you are a non-U.S. corporation, you will be subject to the 30% branch profits tax.

        If you are an individual non-U.S. shareholder and have been present in the United States for 183 days or more during the taxable year of the Merger and certain other conditions are satisfied, you will be subject to a 30% tax on the gross amount of your capital gains. In addition, non-U.S. shareholders may be subject to applicable alternative minimum taxes.

        If your shares constitute a "U.S. real property interest" under FIRPTA, you will be subject to federal income tax on your gain on a net basis in the same manner as U.S. shareholders. In addition, if you are a non-U.S. corporation, you may be subject to the 30% branch profits tax. Your shares

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generally will constitute a "U.S. real property interest" if (a) we are not a "domestically-controlled REIT" at the effective time of the Merger, and (b) you hold more than 5% of the total fair market value of our shares at any time during the shorter of (x) the five-year period ending with the effective date of the Merger and (y) your holding period for your shares. We will be a "domestically-controlled REIT" at the effective time of the Merger if non-U.S. shareholders held less than 50% of the value of our common stock at all times during the five-year period ending with the effective time of the Merger. No assurances can be given that the actual ownership of shares of our common stock has been or will be sufficient for us to qualify as a domestically-controlled REIT at the effective time of the Merger.

        Distribution of Gain from the Disposition of U.S. Real Property Interests.    The tax treatment described above assumes that the receipt of the merger consideration in the deemed liquidating distribution will be treated as a sale or exchange of shares of our common stock for purposes of FIRPTA, which is consistent with the general treatment of the Merger for other federal income tax purposes. It is possible, however, that the Internal Revenue Service (or IRS) may assert that the merger consideration you receive is subject to tax as a distribution from us, and not as a sale of shares of our common stock. If the IRS were successful in making this assertion, then such distribution would be treated as an ordinary dividend distribution from us if the "look-through exception" applies to such distribution. The "look-through exception" would apply if (a) the deemed distribution is attributable to a class of our stock that is regularly traded on an established securities market located in the United States and (b) you do not own more than 5% of such class of stock at any time during the taxable year. If the look-though exception would not apply to you, you generally would be subject to federal income tax on your gain on a net basis in the same manner as U.S. shareholders, to the extent your merger consideration is attributable to gain from the deemed sale by us to MergerCo of "U.S. real property interests," and, if you are a non-U.S. corporation, you may be subject to the 30% branch profits tax.

        Income Tax Treaties.    If you are eligible for treaty benefits under an income tax treaty with the United States, you may be able to reduce or eliminate certain of the federal income tax consequences discussed above, such as the branch profits tax. You should consult your tax advisor regarding possible relief under an applicable income tax treaty.

        U.S. Withholding Tax Under FIRPTA.    You will be subject to withholding tax if the merger consideration you receive is considered attributable to the sale of "U.S. real property interests." In that case, an amount equal to 10% of the merger consideration you receive will be withheld and paid to the IRS. You may be entitled to a refund or credit against your U.S. tax liability, if any, with respect to the amount withheld, provided that the required information is furnished to the IRS on a timely basis. You should consult your tax advisor regarding withholding tax considerations.

        Consequences to Holders of Preferred Stock.    The Merger will be treated as a taxable transaction to holders of our 8.5% Series A Cumulative Redeemable Preferred Stock. The federal income tax consequences to holders of preferred stock generally will be the same as the consequences to holders of our common stock described above, except that the capital gain or loss recognized by a holder of preferred stock will be measured by the difference between the holder's adjusted tax basis in the preferred shares exchanged and the fair market value of the preferred shares of the surviving corporation received by the holder.

        Information Reporting and Backup Withholding.    Under certain circumstances you may be subject to information reporting and backup withholding with respect to your merger consideration. Backup withholding generally will not apply if you are a corporation or other exempt entity, or you furnish a correct taxpayer identification number and certify that you are not subject to backup withholding on IRS Form W-9 if you are a U.S. shareholder, or on the applicable Form(s) W-8 if you are a non-U.S. shareholder, or an appropriate substitute form. If you are subject to backup withholding, the amount withheld is not an additional tax, but rather is credited against your federal income tax liability. You should consult your tax advisor to ensure compliance with the procedures for exemption from backup withholding.

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THE MERGER AGREEMENT

        The terms of and conditions to the Merger are contained in the Merger Agreement, a copy of which is attached to this proxy statement as Appendix A and incorporated in this document by reference. The following is a summary of the material terms of the Merger Agreement. This summary is qualified in its entirety by, and made subject to, the more complete information set forth in the Merger Agreement.

        In addition, you should note that the representations and warranties made by the parties in the Merger Agreement are qualified and were used solely as a tool to allocate risks between the respective parties to the Merger Agreement. These representations and warranties may or may not be accurate as of any specific date and you should not rely on them as statements of fact.

Form of the Merger

        If the conditions to the Merger are satisfied, CRT Properties, Inc. will be merged with and into MergerCo, with MergerCo continuing as the surviving corporation under Delaware law as a wholly owned subsidiary of Parent. At the effective time of the Merger, each outstanding share of CRT Properties, Inc. common stock will be exchanged for the right to receive the merger consideration. The separate corporate existence of CRT Properties, Inc. will terminate at the effective time of the Merger and all of its properties, assets, rights, privileges, immunities, powers and franchises, and all of its debts, liabilities, and duties, will become those of MergerCo.

        Following the Merger, the certificate of incorporation and bylaws of MergerCo will continue as the certificate of incorporation and bylaws of the surviving corporation and the directors and officers of MergerCo immediately prior to the Merger will be the directors and officers of MergerCo following the Merger.

Effective Time

        The Merger will become effective on the later of the filing date of a certificate of merger with the Secretary of State of the State of Delaware and the filing date of the articles of merger with the Department of State of the State of Florida, or at such later time (not to exceed 90 days after the filing date) which Parent, MergerCo and the Company agree upon and as designated in the certificate of merger and articles of merger. If the Merger Agreement is approved by shareholders at the Special Meeting, we currently estimate that the Merger will be effected on or about September 30, 2005, assuming the satisfaction or waiver of all other conditions to effecting the Merger described below.

Merger Consideration; Dividends

        Common Shareholders.    At the effective time of the Merger, each share of our common stock issued and outstanding (other than treasury shares, which will be canceled without conversion or consideration) will be converted into the right to receive $27.80 per share in cash, without interest, plus an amount equal to a quarterly dividend of $0.35 per share, prorated for the number of days since the first day after the period for which the last dividend was paid until the date the Merger is effected (or September 30, 2005, whichever is earlier). If the Merger Agreement is approved by shareholders at the Special Meeting, we currently estimate that the Merger will be effected on September 30, 2005, which would result in a regular quarterly dividend for the third quarter of $0.35 per share. If the Merger is effected earlier than September 30, 2005, the prorated dividend amount would be reduced accordingly.

        After the effective time of the Merger, each of our outstanding stock certificates representing shares of common stock will represent only the right to receive the merger consideration. The merger consideration paid upon surrender of each certificate will be paid in full satisfaction of all rights pertaining to the shares of our common stock represented by that certificate.

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        Options.    At the effective time of the Merger, each outstanding option to purchase shares of our common stock will be canceled, and the holder of each option will be entitled to receive an amount in cash, without interest and less applicable withholding taxes, equal to the product of (i) the number of shares of our common stock subject to each option, multiplied by (ii) the excess of $27.80, if any, over the exercise price per share of the relevant option. If the result of this calculation is zero, the option will be cancelled and no payment will be made.

        Restricted Stock, LTI and Out-Performance Awards.    Certain of our executive officers and key employees hold restricted shares, long-term incentive awards and out-performance awards that will vest in full immediately prior to the effective time of the Merger and will be treated as common shares outstanding entitled to receipt of the merger consideration. For a more complete discussion of these awards, please see "—Interests of Our Directors and Executive Officers in the Merger" above.

        Preferred Shareholders.    At the effective time of the merger, each share of our 8.5% Series A Cumulative Redeemable Preferred Stock issued and outstanding will be automatically converted into one preferred share of the surviving company with identical terms. Holders of the preferred stock will continue to be entitled to receive the same dividends that they were entitled to receive prior to the signing of the Merger Agreement.

Exchange of Stock Certificates

        By 10:00 a.m. on the effective date of the Merger, Parent will deposit in trust, for the benefit of the holders of our common shares, options and compensation plan awards, an amount of cash sufficient to pay the total merger consideration and option merger with a reputable bank or trust company (the "paying agent"). Promptly following the effective time of the Merger (and within three business days), the paying agent will mail a letter of transmittal to each record holder of certificates representing our common shares containing, among other things, instructions as to the surrender of the share certificates in exchange for the merger consideration. Delivery of the share certificates will be effected, and risk of loss and title to the share certificates will pass, only upon proper delivery of the share certificate to the paying agent. You are urged not to surrender your share certificates until you receive a letter of transmittal and instructions. If you hold your shares of common stock in "street name," your bank or broker will surrender your shares for cancellation following the completion of the Merger.

        You should not return your stock certificates with the enclosed proxy card, and you should not forward your stock certificates to the paying agent without a letter of transmittal.

        Upon the surrender to the paying agent of your share certificate, together with a duly executed and properly completed letter of transmittal and any other required documents, and subject to any required withholding of taxes, you will be paid the merger consideration for each common share previously represented by your certificate, and the certificate will then be canceled. If you hold your shares through a brokerage account, you will receive the merger consideration directly from your broker. After the effective time of the Merger, certificates representing shares of our common stock will represent only the right to receive the merger consideration and options representing the right to acquire shares of our common stock will represent only the right to receive the option merger consideration.

        No interest will be paid or accrued on the cash payable upon the surrender of your certificate. If payment is to be made to a holder other than the registered holder of the certificate surrendered, the certificate so surrendered must be properly endorsed or otherwise in proper form for transfer and the person requesting the exchange must pay transfer or other taxes required by reason of the payment to a person other than the registered holder of the certificate surrendered or establish that any tax has been paid or is not applicable.

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        After the effective time of the Merger, no transfers of certificates that previously represented our common shares will be permitted or recorded on our share ledger. If, after the effective time, certificates are presented to the Parent, MergerCo or the paying agent for payment, they will be canceled and exchanged for the merger consideration, without interest; however, no holder of a share certificate or option will have any greater rights against Parent or MergerCo than may be accorded to general creditors under applicable law. If certificates are lost, stolen or destroyed, the paying agent may require their holders to make an affidavit of that fact and the posting of a bond before it will pay out the merger consideration for the shares represented by the lost, stolen or destroyed certificates.

Representations and Warranties

        The Merger Agreement contains customary representations and warranties given by us, Parent, and MergerCo that expire upon completion of the Merger as to, among other things:


        In addition, the Merger Agreement contains representations and warranties by Parent as to, among other things, having sufficient funds at the effective time to pay the merger consideration and other amounts contemplated by the Merger Agreement.

        The Merger Agreement also contains customary representations and warranties given by us that expire upon completion of the Merger as to, among other things:

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        Material Adverse Effect.    As described below, one of the conditions to the obligations of Parent and MergerCo to consummate the Merger is that our representations and warranties must be true and correct at the time made and at the closing date, with only those exceptions as would not reasonably be expected to have, individually or in the aggregate, a "material adverse effect" on the Company. The term "material adverse effect" is defined in the Merger Agreement as an event, effect or change which has a material adverse effect on the assets, results of operations or financial condition of the Company and its subsidiaries taken as a whole, other than events, effects or changes relating to:

Covenants Under the Merger Agreement

        Conduct of the Business Before the Merger.    We have agreed that prior to the Merger, we and our subsidiaries will:

        In addition, we have agreed that prior to the Merger, we and our subsidiaries will not, without the prior written consent of Parent:

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        The covenants in the merger agreement relating to the conduct of our business are very detailed and the above description is only a summary. You are urged to read carefully and in its entirety the section of the Merger Agreement entitled "Conduct of Business Pending the Merger" in Appendix A attached to this proxy statement.

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        The Merger Agreement contains a number of mutual covenants between us, Parent and MergerCo, including covenants relating to:

        The Merger Agreement also contains covenants requiring us to:

Solicitation of Proposals from Other Parties

        We have agreed that, until the termination of the Merger Agreement, we will not, nor will we authorize or cause our officers, directors, employees, investment banker, financial advisor, attorney, accountant or other representatives to, solicit, initiate or knowingly encourage any inquiries with respect to, make any proposal for, or participate in any discussions or negotiations regarding, any proposal or offer for any "acquisition proposal". The Merger Agreement defined "acquisition proposal" as any:

        If we receive an unsolicited bona fide acquisition proposal, we may furnish information to, and participate in discussions and negotiations with, the party making the proposal if our Board of Directors determines in good faith that (i) failure to do so would be inconsistent with its duties to us or our shareholders, and (ii) the acquisition proposal is reasonably likely to lead to a transaction that would be more favorable to our common shareholders than the Merger (a "superior proposal").

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        We have agreed that we will notify Parent within three business days after receipt of any acquisition proposal, including its material terms and conditions. We are under no duty, however, to notify or update Parent on the status of discussions or negotiations or the identity of the party making the proposal.

        Under the Merger Agreement, our Board of Directors may not, prior to the Special Meeting:

unless a superior proposal has been made and the board determines that failure to take these actions would be inconsistent with its duties to us or our shareholders and we notify Parent of our decision to withdraw or modify the board's approval or recommendation of the Merger Agreement. If the board makes this determination, we may not enter into a definitive agreement in connection with the superior proposal prior to seventy-two hours after we have provided Parent with written notice that we intend to terminate the Merger Agreement.

Indemnification of Officers and Directors

        Under the Merger Agreement, we have agreed, and, after the effective time of the Merger, Parent and MergerCo has each agreed, to indemnify and hold harmless each person who has been at any time on or before June 17, 2005, or who becomes prior to the effective time of the Merger, a director, officer, employee, fiduciary or agent of ours against claims based on, arising from, or pertaining to, their relationship with us or the negotiation, execution or performance of the Merger Agreement. In addition, we are obligated, and, after the effective time of the Merger, Parent and MergerCo will be obligated, to promptly pay and advance reasonable expenses and costs incurred by each of these persons as they become due and payable in advance of the final disposition of any claim, action, suit, proceeding or investigation to the full extent and in the manner permitted by law.

        Following the Merger, all rights to and limitations on indemnification under our existing organizational documents and agreement will survive the Merger and will become the joint and several obligations of Parent, MergerCo and any applicable subsidiary for a period of six years from the effective time of the Merger. In addition, Prior to the effective time of the Merger, we will purchase a non-cancelable endorsement under our directors' and officers' liability insurance coverage that will provide applicable persons with coverage for six years following the Merger at at least the same level as the existing coverage. These indemnification obligations may not be terminated or modified as to adversely affect any potential indemnitee without the consent of each affected indemnitee.

Employment Agreements and Benefits

        On and after the closing of the Merger, Parent has agreed to, and has agreed to cause MergerCo to, honor all of our existing employment agreements, severance agreements, retention bonus agreements in accordance with their terms. Pursuant to the terms of these agreement, we or Parent will also make certain payments to officers and employees on or before the effective time of the Merger. For a more complete discussion of these agreements, please see "—Interests of Our Directors and Executive Officers in the Merger" above.

        For a period of at least one year following the effective time of the Merger, Parent has agreed to cause MergerCo to provide our employees who remain employed by Parent or one of its subsidiaries with at least the types and levels of employee benefits that Parent or MergerCo provides for similarly

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situated employees. Parent has also agreed to treat the period of service of our employees to us before the effective time of the Merger as service rendered to Parent or MergerCo, as applicable, for purposes of eligibility to participate, vesting and for other appropriate benefits. In addition, Parent has agreed not to treat any of our employees as "new" employees for purposes of exclusions under any health or similar employee benefit plan for a pre-existing medical condition if our employee was enrolled in a health plan of ours at the effective time of the Merger.

        On and after the effective time, Parent has agreed to cause MergerCo to honor all obligations accrued prior to the effective time under our deferred compensation plans, supplemental retirement plans, management compensation plans, performance cash bonus plans and long-term incentive plans.

Conditions to the Merger

        The obligations of the parties to complete the Merger are subject to the satisfaction or waiver of the following mutual conditions:

        The obligations of Parent and MergerCo to complete the Merger are subject to the satisfaction or waiver of the following conditions:

        Our obligations to complete the Merger are subject to the satisfaction or waiver of the following conditions:

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Termination of the Merger Agreement

        We, Parent or MergerCo may terminate the Merger Agreement, whether before or after receiving shareholder approval, if:

        In addition, we may terminate the Merger Agreement if, prior to the Special Meeting, our Board of Directors decides to withdraw or modify its approval or recommendation of the agreement in connection with a superior proposal and we pay Parent the termination fee described below.

        Each of Parent and MergerCo may also terminate the Merger Agreement if our Board of Directors:


Termination Fee; Expenses

        We must pay Parent a termination fee in the amount of $40,000,000 in any of the following circumstances:

If we terminate the Merger Agreement, payment of any applicable termination fee is due immediately upon termination. If Parent or MergerCo terminates the Merger Agreement, payment of any applicable termination fee is due within three business days of termination. If the termination fee is payable

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because we consummate a third-party acquisition within 12 months, as described above, the termination fee is payable on the same day the third-party acquisition is consummated.

        All fees, costs and expenses incurred in connection with the Merger Agreement and related transactions will be paid by the party incurring such expenses. However, if either party terminates the Merger Agreement because of the other party's breach of a representation, warranty or covenant, the breaching party must reimburse the other for out-of-pocket expenses incurred in connection with the Merger and related transactions, in an amount not to exceed the lesser of the actual amount of the costs and expenses incurred and $10,000,000.

        Additionally, we have agreed to pay Parent's out-of-pocket expenses incurred in connection with the Merger and related transactions, in an amount not to exceed the lesser of the actual amount of the costs and expenses incurred and $10,000,000:

In any case in which we are required to pay a termination fee, as described above, the amount of any expenses that we pay to Parent will be credited against the amount of the termination fee.

Amendment and Waiver

        The Merger Agreement may be amended at any time by the written consent of each of us, Parent, and MergerCo, provided that after shareholder approval is received, no further amendment may be made that would require shareholder approval.

        At any time prior to the effective time of the Merger, we, Parent, and MergerCo may (i) extend the time for performance of any of the obligations or other acts of another party; (ii) waive any inaccuracies in the representations contained in the Merger Agreement or in any document delivered pursuant to the Merger Agreement; and (iii) waive compliance by the other parties with any of the agreements or conditions contained within the Merger Agreement. Any agreement by any party to the Merger Agreement to an extension or waiver will be valid if set forth in a written instrument signed by the party against which such waiver or extension is to be enforced.

Assignment

        The Merger Agreement may not be assigned by operation of law or otherwise, except that MergerCo may assign the Merger Agreement to a Delaware corporation of which Parent owns at least 75% upon three days written notice to us.

Governing Law; Venue

        The Merger Agreement provides that all disputes, claims or controversies arising under or in connection with it will be governed and construed in accordance with the laws of the State of Delaware. Likewise, each of Parent, MergerCo and us have consented to the sole and exclusive jurisdiction of Delaware Chancery Court for any litigation arising out of relating to the Merger Agreement.

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INFORMATION ABOUT CRT PROPERTIES COMMON STOCK OWNERSHIP

        The following sections discuss the beneficial ownership of our shares by significant shareholders and our officers and directors. The number of common shares "beneficially owned" by each shareholder is determined under rules issued by the SEC regarding the beneficial ownership of securities. Under these rules, beneficial ownership of common shares includes (i) any shares as to which the person or entity has sole or shared voting power or investment power and (ii) any shares as to which the person or entity has the right to acquire beneficial ownership within 60 days, including any shares which could be purchased by the exercise of options at or within 60 days.

        The following table shows, as of July 12, 2005, all persons we know to be "beneficial owners" of more than five percent of the shares of CRT Properties. This information is based on Schedule 13D or Schedule 13G reports filed with the Securities and Exchange Commission (the "SEC") by the firm listed in the table below. If you wish, you may obtain these reports from the SEC.

Name of Beneficial Owner
   Shares Owned
Beneficially
   Percent of
Class
  
Third Avenue Management LLC(1)   2,562,061   9.5 %
Barclays Global Investors(2)   2,100,574   6.7 %
Kensington Investment Group, Inc.(3)   1,684,965   5.3 %
Cohen & Steers Capital Management(4)   1,561,200   5.0 %
(1)
Address is 622 Third Avenue, 32nd Floor, New York, New York 10017. Sole voting power as to 2,553,861 shares and sole dispositive power as to 2,562,061 shares. Source: Schedule 13G/A dated February 16, 2005.

(2)
Address is 45 Fremont Street, San Francisco, California 94105. Sole voting power as to 1,957,914 shares and sole dispositive power as to 2,100,574 shares. Source: Schedule 13G dated February 14, 2005.

(3)
Address is 4 Orinda Way, Suite 200C, Orinda, California 94563. Sole voting power and sole dispositive power as to 1,684,965 shares. Source: Schedule 13G dated July 8, 2005.

(4)
Address is 757 Third Avenue, New York, New York 10017. Sole voting power as to 1,517,700 shares and sole dispositive power as to 1,561,200 shares. Source: Schedule 13G dated February 14, 2005.

44

Stock Owned by Directors and Executive Officers

        The following table shows, as of July 1, 2005, the common shares owned beneficially by CRT Properties' directors and executive officers:

Name of Beneficial Owner
   Shares Owned
Beneficially
   Percent of
Class
  
Directors:          
  D. Pike Aloian   22,971 (1) *  
  Benjamin C. Bishop, Jr.   38,976 (1) *  
  Thomas J. Crocker   1,090,717 (2) 3.35 %
  Peter J. Farrell   1,590   *  
  David B. Hiley   159,980 (3) *  
  Victor A. Hughes, Jr.   504,904 (4) 1.58 %
  Randall E. Paulson   —   *  
  George F. Staudter   22,303 (1) *  
Executive Officers:          
  Christopher L. Becker   228,484 (5) *  
  Thomas C. Brockwell   239,544 (6) *  
  S. Mark Cypert   22,314 (7) *  
  William J. Wedge   22,431 (7) *  
Directors and Executive Officers as a group (13 persons):   2,354,214 (8) 7.08 %
*
Less than one percent (1%).

(1)
Includes 4,000 shares subject to presently exercisable options.

(2)
Includes 700,000 shares subject to presently exercisable options and 43,821 shares subject to restrictions on sale.

(3)
Includes 129,000 shares subject to presently exercisable options.

(4)
Includes 180,000 shares subject to presently exercisable options.

(5)
Includes 200,000 shares subject to presently exercisable options and 21,911 shares subject to restrictions on sale.

(6)
Includes 200,000 shares subject to presently exercisable options and 32,866 shares which are subject to restrictions on sale.

(7)
Includes 21,911 shares subject to restrictions on sale.

(8)
Sole voting and dispositive power as to 2,475,203 shares. Includes 1,521,000 shares subject to presently exercisable options and 142,420 shares subject to restrictions on sale.

45


SHAREHOLDER PROPOSALS

        If the Merger is completed, we will not hold a 2006 annual meeting of our shareholders. If the Merger is not completed, we intend to hold our 2006 annual meeting on our traditional schedule.

        Our Board of Directors will make provision for presentation of appropriate proposals by shareholders at the 2006 annual meeting of shareholders, provided that such proposals are submitted in writing by eligible shareholders to us at Investor Relations, CRT Properties, Inc., 225 NE Mizner Boulevard, Suite 200, Boca Raton, Florida 33432 no later than December 5, 2005. The form and substance of such proposals must satisfy requirements established by the Securities and Exchange Commission in order to be eligible for inclusion in our proxy statement for our 2006 annual meeting of shareholders.

        Under the rules of the Exchange Act, a shareholder proposal must be submitted to us within a reasonable time before we print and mail the proxy statement for the next annual meeting in order for the proposal to be considered at the meeting. If we receive timely notice, we generally will be able to vote proxies in our discretion if we include in the proxy statement advice on the nature of the matter and how we intend to exercise discretion on the matter.


OTHER MATTERS

        As of the date of this proxy statement, our Board of Directors knows of no matters that will be presented for consideration at the Special Meeting other than as described in this proxy statement. Should any other matter requiring a vote of our shareholders arise, the persons named as proxies on the enclosed proxy card will vote the shares represented thereby in accordance with their best judgment as to matters they believe to be in the best interests of shareholders.


WHERE YOU CAN FIND MORE INFORMATION

        CRT Properties, Inc. files annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any reports, statements or other information that we file with the SEC at the SEC's Public Reference Room, 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. These SEC filings are also available to the public at the Internet site maintained by the SEC at http://www.sec.gov. Our Internet site address is http://www.crtproperties.com. However, any information that is included on or linked to our Internet site is not a part of this proxy statement. Reports, proxy statements and other information concerning CRT Properties, Inc. may also be inspected at the offices of The New York Stock Exchange, Inc. at 20 Broad Street, New York, New York 10005.

        Any person, including any beneficial owner, to whom this proxy statement is delivered may request copies of reports, proxy statements or other information concerning us, without charge, by written or telephonic request directed to us at CRT Properties, Inc., 225 NE Mizner Boulevard, Suite 200, Boca Raton, Florida 33432, Attention: Investor Relations, telephone (561) 395-9666. If you would like to request documents, please do so by September 2, 2005, in order to receive them before the Special Meeting.

        The SEC allows us to "incorporate by reference" into this proxy statement documents we file with the SEC. This means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be a part of this proxy statement, and later information that we file with the SEC will update and supersede that information. We incorporate by reference any documents filed by us pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this proxy statement and prior to the date of the Special Meeting.

46


        No persons have been authorized to give any information or to make any representations other than those contained in this proxy statement and, if given or made, such information or representations must not be relied upon as having been authorized by us or any other person. This proxy statement is dated August 8, 2005. You should not assume that the information contained in this proxy statement is accurate as of any date other than that date, and the mailing of this proxy statement to shareholders shall not create any implication to the contrary.

47


 Appendix A


AGREEMENT AND PLAN OF MERGER
AMONG
DRA G&I FUND V REAL ESTATE INVESTMENT TRUST,
DRA CRT ACQUISITION CORP.
AND
CRT PROPERTIES, INC.

DATED AS OF JUNE 17, 2005

TABLE OF CONTENTS

 
    
   Page
ARTICLE I   The Merger   A-1
  1.1   The Merger   A-1
  1.2   Certificate of Incorporation and Bylaws   A-1
  1.3   Effective Time   A-2
  1.4   Closing   A-2
  1.5   Directors and Officers of the Surviving Corporation   A-2

ARTICLE II
 
Merger Consideration; Conversion of Stock
 
A-2
  2.1   Conversion of Company Stock   A-2
  2.2   Exchange of Certificates   A-4
  2.3   Withholding Rights   A-5
  2.4   Dissenters' Rights   A-6
  2.5   Tax Treatment of Merger   A-6

ARTICLE III
 
Representations and Warranties of the Company
 
A-6
  3.1   Existence; Good Standing; Authority; Compliance with Law   A-6
  3.2   Authorization, Takeover Laws, Validity and Effect of Agreements   A-7
  3.3   Capitalization   A-7
  3.4   Subsidiaries   A-9
  3.5   Other Interests   A-9
  3.6   Consents and Approvals; No Violations   A-9
  3.7   No Restraints   A-10
  3.8   SEC Reports   A-10
  3.9   Litigation   A-11
  3.10   Absence of Certain Changes   A-11
  3.11   Taxes   A-11
  3.12   Properties   A-13
  3.13   Environmental Matters   A-16
  3.14   Employee Benefit Plans   A-17
  3.15   Labor and Employment Matters   A-17
  3.16   No Brokers   A-18
  3.17   Opinion of Financial Advisor   A-18
  3.18   Vote Required   A-18
  3.19   Material Contracts   A-18
  3.20   Insurance   A-19
  3.21   Definition of the Company's Knowledge   A-19
  3.22   Proxy Statement; Company Information   A-19
  3.23   No Payments to Employees, Officers or Directors   A-19
  3.24   Intellectual Property   A-19
  3.25   Investment Company Act of 1940   A-20
  3.26   No Other Representations or Warranties   A-20

ARTICLE IV
 
Representations and Warranties of Parent and MergerCo
 
A-20
  4.1   Corporate Organization   A-20
  4.2   Authority Relative to this Agreement   A-20
  4.3   Consents and Approvals; No Violations   A-21
  4.4   Brokers   A-21
         

A-i

  4.5   Available Funds   A-21
  4.6   Takeover Statutes   A-21

ARTICLE V
 
Conduct of Business Pending the Merger
 
A-22
  5.1   Conduct of Business by the Company   A-22
  5.2   Distribution by Company of REIT Taxable Income   A-24

ARTICLE VI
 
Covenants
 
A-25
  6.1   Preparation of the Proxy Statement; Stockholders Meeting   A-25
  6.2   Other Filings   A-25
  6.3   Additional Agreements   A-25
  6.4   No Solicitations   A-26
  6.5   Officers' and Directors' Indemnification   A-27
  6.6   Access to Information; Confidentiality   A-29
  6.7   Public Announcements   A-29
  6.8   Employee Benefit Arrangements   A-30
  6.9   Company Rights Agreement   A-30
  6.10   Certain Tax Matters   A-30
  6.11   Environmental Reports   A-31

ARTICLE VII
 
Conditions to the Merger
 
A-31
  7.1   Conditions to the Obligations of Each Party to Effect the Merger   A-31
  7.2   Conditions to Obligations of Parent and MergerCo   A-31
  7.3   Conditions to Obligations of the Company   A-32
  7.4   Frustration of Closing Conditions   A-32

ARTICLE VIII
 
Termination, Amendment and Waiver
 
A-32
  8.1   Termination   A-32
  8.2   Effect of Termination   A-33
  8.3   Fees and Expenses   A-35
  8.4   Payment of Amount or Expense   A-35
  8.5   Amendment   A-36
  8.6   Extension; Waiver   A-36

ARTICLE IX
 
General Provisions
 
A-36
  9.1   Notices   A-36
  9.2   Certain Definitions   A-37
  9.3   Terms Defined Elsewhere   A-39
  9.4   Interpretation   A-41
  9.5   Non-Survival of Representations, Warranties, Covenants and Agreements   A-41
  9.6   Miscellaneous   A-41
  9.7   Assignment; Benefit   A-41
  9.8   Severability   A-42
  9.9   Choice of Law/Consent to Jurisdiction   A-42
  9.10   Waiver   A-42
  9.11   Counterparts   A-42

A-ii

COMPANY DISCLOSURE SCHEDULE

Section Title
    
2.1(f)   Company Stock Option Plans
3.1(a)   Good Standing
3.1(b)   Subsidiaries
3.1(c)   Compliance With Laws
3.3(a)   Company Stock Option Plans
3.3(c)   Company Options
3.3(d)   Restricted Stock Awards
3.3(e)   LTI and Out-Performance Awards
3.3(f)   Voting or Transfer
3.3(g)   Stock Obligations
3.3(h)   Registration
3.3(i)   Partnership Interests
3.4   Subsidiaries: Contractual Obligations
3.5   Other Interests
3.6   Consents and Approvals; No Violations
3.8   Company SEC Reports
3.9   Litigation
3.10   Absence of Certain Changes
3.11   Taxes
3.12(a)   Properties
3.12(b)   Encumbrances and Property Restrictions
3.12(c)   Title Insurance
3.12(d)   Permits
3.12(e)   Properties: No Violations
3.12(f)   Company Space Leases
3.12(g)   Performance; Payments
3.12(h)   Lessor Ground Leases
3.12(i)   Lessee Ground Leases
3.12(j)   Certain Circumstances
3.12(k)   Option Agreements; Rights of First Refusal
3.12(l)   Management Agreements
3.12(m)   Construction or Alterations
3.13   Environmental Matters
3.14(a)   Employee Programs
3.15   Labor and Employment Matters
3.19(a)   Material Contracts
3.19(b)   Loan Agreements
3.20   Insurance
3.21   Definition of the Company's Knowledge
3.23   Employee Payments
5.1(c)   Existing Property Transactions
5.1(g)   Corporate Budget
5.1(m)   Litigation
6.5(b)   Officers' and Directors' Indemnification
6.8(a)   Employee Benefit Arrangements
6.8(c)   Company Obligations

A-iii

EXHIBITS

Exhibit A   Legal Opinion of Goodwin Procter LLP

A-iv

        WHEREAS, the parties wish to effect a business combination through a merger of the Company with and into MergerCo (the "Merger") on the terms and conditions set forth in this Agreement and in accordance with the Delaware General Corporation Law (the "DGCL") and the Florida Business Corporation Act (the "FBCA");

        WHEREAS, the Board of Directors of the Company (the "Company Board") has approved this Agreement, the Merger and the other transactions contemplated by this Agreement and determined that this Agreement, the Merger and the other transactions contemplated by this Agreement are advisable;

        WHEREAS, the Board of Directors of Parent (the "Parent Board") and the Board of Directors of MergerCo have approved this Agreement, the Merger and the other transactions contemplated by this Agreement and determined that this Agreement, the Merger and the other transactions contemplated by this Agreement are advisable, and Parent has approved this Agreement and the Merger as the sole stockholder of MergerCo; and

        WHEREAS, Parent, MergerCo and the Company desire to make certain representations, warranties, covenants and agreements in connection with the Merger, and also to prescribe various conditions to the Merger.

        NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and agreements set forth herein, and intending to be legally bound, Parent, MergerCo and the Company hereby agree as follows:

ARTICLE I
 The Merger

        1.1    The Merger.    Subject to the terms and conditions of this Agreement, at the Effective Time, the Company and MergerCo shall consummate the Merger, pursuant to which (a) the Company shall be merged with and into MergerCo and the separate corporate existence of the Company shall thereupon cease and (b) MergerCo shall be the surviving corporation in the Merger (the "Surviving Corporation") and shall remain a wholly owned subsidiary of Parent. From and after the Effective Time, MergerCo shall succeed to and assume all the rights and obligations of the Company. The Merger shall have the effects specified in Section 259 of the DGCL and Section 607.1106 of the FBCA.

        1.2    Certificate of Incorporation and Bylaws.    

A-1

        1.3    Effective Time.    On the Closing Date, MergerCo and the Company shall duly execute and file a certificate of merger (the "Certificate of Merger") with the Secretary of State of the State of Delaware (the "DSOS") in accordance with the DGCL and articles of merger (the "Articles of Merger") with the Department of State for the State of Florida (the "FDOS") in accordance with the FBCA. The Merger shall become effective upon the later of the filing date of the Certificate of Merger with the DSOS or the filing date of the Articles of Merger with the FDOS, or such later time which the parties hereto shall have agreed upon and designated in such filings in accordance with the DGCL and the FBCA as the effective time of the Merger but not to exceed ninety (90) days after the respective filing dates of the Certificate of Merger with the DSOS and the Articles of Merger with the FDOS (the "Effective Time").

        1.4    Closing.    The closing of the Merger (the "Closing") shall occur as promptly as practicable (but in no event later than the second (2nd) Business Day) after all of the conditions set forth in Article VII (other than conditions that by their terms are required to be satisfied or waived at the Closing) shall have been satisfied or, to the extent permitted by applicable law, waived by the party entitled to the benefit of the same (unless extended by the mutual agreement of the parties hereto), and, subject to the foregoing, shall take place at 10:00 a.m., local time, on such date (the "Closing Date") at the offices of Goodwin Procter LLP, 599 Lexington Avenue, New York, NY 10022, or at such other place as mutually agreed to by the parties hereto.

        1.5    Directors and Officers of the Surviving Corporation.    The directors of MergerCo immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation and the officers of MergerCo immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation, each to hold office in accordance with the Amended Charter and bylaws of the Surviving Corporation.

ARTICLE II
 Merger Consideration; Conversion of Stock

        2.1    Conversion of Company Stock.    At the Effective Time, by virtue of the Merger and without any action on the part of any holder thereof:

A-2

A-3

        2.2    Exchange of Certificates.    

A-4

        2.3    Withholding Rights.    The Surviving Corporation or the Paying Agent, as applicable, shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of shares of Company Common Stock or Company Stock Options such amounts as it is

A-5

required to deduct and withhold with respect to the making of such payment under the Internal Revenue Code of 1986, as amended (the "Code"), and the rules and regulations promulgated thereunder, or any provision of state, local or foreign tax Law. To the extent that amounts are so withheld by the Surviving Corporation or the Paying Agent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the shares of Company Common Stock or Company Stock Options in respect of which such deduction and withholding was made by the Surviving Corporation or the Paying Agent.

        2.4    Dissenters' Rights.    No dissenters' or appraisal rights shall be available with respect to the Merger.

        2.5    Tax Treatment of Merger.    The parties shall treat the Merger for all income tax purposes as a taxable purchase of assets by MergerCo in exchange for the Merger Consideration and the assumption of liabilities of the Company followed by a liquidating distribution of the Merger Consideration to the shareholders of the Company.

ARTICLE III
 Representations and Warranties of the Company

        Except as set forth in the disclosure schedules delivered at or prior to the execution hereof to Parent and MergerCo (the "Company Disclosure Schedule") the Company represents and warrants to Parent and MergerCo as follows:

        3.1    Existence; Good Standing; Authority; Compliance with Law.    

A-6

        3.2    Authorization, Takeover Laws, Validity and Effect of Agreements.    

        3.3    Capitalization.    

A-7

A-8

        3.4    Subsidiaries.    Section 3.1(b) of the Company Disclosure Schedule sets forth the name, jurisdictions of incorporation or organization of each Company Subsidiary. All issued and outstanding shares or other equity interests of each Company Subsidiary are duly authorized, validly issued, fully paid and nonassessable. Except as set forth in Section 3.1(b) of the Company Disclosure Schedule and except for the Partnership Units listed on Section 3.3(i) of the Company Disclosure Schedule, all issued and outstanding shares or other equity interests of each Company Subsidiary are (i) owned directly or indirectly by the Company free and clear of all liens, pledges, security interests, claims or other encumbrances and (ii) free of all other restrictions (including restrictions on the right to vote, sell or otherwise dispose of such capital stock or other ownership interests) other than those set forth in the organizational documents and those imposed by applicable securities laws. There are not any existing options, warrants, calls, subscriptions, convertible securities, or other rights, agreements or commitments which obligate any Company Subsidiary to issue, transfer or sell any equity interests of such Company Subsidiary. Except as set forth in Section 3.4 of the Company Disclosure Schedule, there are no outstanding contractual obligations of any Company Subsidiary to repurchase, redeem or otherwise acquire any equity interest of such Company Subsidiary.

        3.5    Other Interests.    Except for the interests in the Company Subsidiaries set forth in Section 3.1(b) of the Company Disclosure Schedule and except as set forth in Section 3.5 of the Company Disclosure Schedule, neither the Company nor any Company Subsidiary owns directly or indirectly any interest or investment (whether equity or debt) in any Person (other than investments in short-term investment securities). Except as set forth in Section 3.4 and 3.5 of the Company Disclosure Schedule, no Affiliate of the Company or any Company Subsidiary owns any interest or investment (whether equity or debt) in any Company Subsidiary.

        3.6    Consents and Approvals; No Violations.    Except as set forth in Section 3.6 of the Company Disclosure Schedule, assuming the approval of this Agreement by holders of the Company Common Stock and except (a) for filings, permits, authorizations, consents and approvals as may be required under, and other applicable requirements of, the Exchange Act, the Securities Act, state securities or state "blue sky" laws, the HSR Act or any other antitrust laws and (b) for filing of the Certificate of Merger and the Articles of Merger, none of the execution, delivery or performance of this Agreement by the Company, the consummation by the Company of the transactions contemplated hereby or

A-9


compliance by the Company with any of the provisions hereof will (i) conflict with or result in any breach of any provision of the organizational documents of the Company or any Company Subsidiary, (ii) require any filing by the Company with, notice to, or permit, authorization, consent or approval of, any state or federal government or governmental authority or by any United States or state court of competent jurisdiction (a "Governmental Entity"), (iii) result in a violation or breach by the Company of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, any of the terms, conditions or provisions of any Material Contract to which the Company or any Company Subsidiary is a party or by which it or any of its respective properties or assets may be bound, or (iv) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Company or any Company Subsidiary or any of its respective properties or assets (collectively, "Laws"), excluding from the foregoing clauses (ii), (iii) and (iv) such filings, notices, permits, authorizations, consents, approvals, violations, breaches or defaults which would not, individually or in the aggregate, (A) prevent or materially delay consummation of the Merger, (B) otherwise prevent or materially delay performance by the Company of its material obligations under this Agreement or (C) reasonably be expected to have a Company Material Adverse Effect.

        3.7    No Restraints.    Neither the Company nor any Company Subsidiary is or will be subject to any outstanding judgment, order, restraining order, and/or injunction (temporary or otherwise), decree, statute, law, ordinance, rule or regulation, entered, enacted, promulgated, enforced or issued by any court or other Governmental Entity or other legal restraint or prohibition, or is party to any written agreement, consent agreement or memorandum of understanding that materially restricts the conduct of its business or that relates to policies, affairs, managements or its business, except any such judgments, orders, injunctions, decrees, statutes, laws, ordinances, rules, regulations or restrictions that would not have a Company Material Adverse Effect.

        3.8    SEC Reports.    Except as set forth in Section 3.8 of the Company Disclosure Schedule, the Company has filed (and, from the date hereof until the Closing Date, will file) all required forms and reports (and all certificates required pursuant to the Sarbanes-Oxley Act of 2002 ("SOX")) with the SEC since January 1, 2003 (collectively, the "Company SEC Reports"), all of which were (and will be) prepared in all material respects in accordance with the applicable requirements of the Exchange Act, the Securities Act and the rules and regulations promulgated thereunder (the "Securities Laws"). As of their respective dates, the Company SEC Reports (a) complied as to form in all material respects with the applicable requirements of the Securities Laws and (b) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading. Each of the consolidated balance sheets included in or incorporated by reference into the Company SEC Reports (including the related notes and schedules) complied as to form, as of their report filing dates, in all material respects with the Securities Laws and fairly presents in all material respects the consolidated financial position of the Company and the Company Subsidiaries as of its date and each of the consolidated statements of income, retained earnings and cash flows of the Company included in or incorporated by reference into the Company SEC Reports (including any related notes and schedules) fairly presents in all material respects the results of operations, retained earnings or cash flows, as the case may be, of the Company and the Company Subsidiaries for the periods set forth therein, in each case in accordance with GAAP consistently applied during the periods involved, except as may be noted therein and except, in the case of the unaudited statements, as permitted by Form 10-Q pursuant to Sections 13 or 15(d) of the Exchange Act and for normal year-end audit adjustments which would not be material in amount or effect. To the knowledge of the Company, there are no outstanding and unresolved comments from the SEC with respect to any of the Company SEC reports. No Company Subsidiary is required to make any filing with the SEC. The Company has established and maintains disclosure controls and procedures for the purposes of Rules 13a-15 and 15d-15 of the Exchange Act in all material respects. Those disclosure controls and procedures are

A-10


designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the Company's Chief Executive Officer and its Chief Financial Officer by others within those entities and such disclosure controls and procedures are effective to perform the functions for which they were established. The Company's auditors and the Audit Committee of the Board have been advised of: (i) any significant deficiencies in the design or operation of internal controls which could adversely affect the Company's ability to record, process, summarize, and report financial data and (ii) any fraud, whether or not material, that involves management or other employees who have a role in the Company's internal controls. Since the date of the most recent evaluation of such disclosure controls and procedures, there have been no significant changes in internal controls or in other factors that could significantly affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses.

        3.9    Litigation.    Except as set forth in the Company SEC Reports or in Section 3.9 of the Company Disclosure Schedule, (a) there is no suit, claim, action, proceeding or investigation pending or, to the knowledge of the Company, threatened against the Company or any of the Company Subsidiaries and (b) neither the Company nor any Company Subsidiary is subject to any outstanding order, writ, judgment, injunction or decree of any Governmental Entity or the person which, in the case of (a) or (b), would, individually or in the aggregate, (i) prevent or materially delay the consummation of the Merger, (ii) otherwise prevent or materially delay performance by the Company of any of its obligations under this Agreement or (iii) reasonably be expected to have a Company Material Adverse Effect. Section 3.9 of the Company Disclosure Schedule sets forth any suit, claim, action, proceeding or investigation that is, to the knowledge of the Company, pending or threatened against the Company or any of the Company Subsidiaries and any outstanding order, writ, judgment, injunction or decree of any Governmental Entity or other person against the Company or any Company Subsidiary.

        3.10    Absence of Certain Changes.    Except as disclosed in the Company SEC Reports or in Section 3.10 of the Company Disclosure Schedule, from March 31, 2005 through the date hereof, the Company and the Company Subsidiaries have conducted their businesses only in the ordinary course of business and there has not been: (a) any declaration, setting aside or payment of any dividend or other distribution with respect to any shares of capital stock of the Company (other than the regular quarterly dividend paid to holders of Company Common Stock on April 29, 2005); (b) any material commitment, contractual obligation (including, without limitation, any management or franchise agreement or any lease (capital or otherwise) or any letter of intent), borrowing, liability, guaranty, capital expenditure or transaction (each, a "Commitment") entered into by the Company or any of the Company Subsidiaries outside the ordinary course of business except for Commitments for expenses of attorneys, accountants, investment bankers and other services incurred in connection with the Merger; (c) any material change in the Company's accounting principles, practices or methods except insofar as may have been required by a change in GAAP; or (d) any material change in its methods of reporting income and deductions for any Tax.

        3.11    Taxes.    Except as otherwise provided in Section 3.11 of the Company Disclosure Schedule:

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        3.12    Properties.    

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        3.13    Environmental Matters.    Except as set forth in Section 3.13 of the Company Disclosure Schedule or as would otherwise not have a Company Material Adverse Effect, (a) the Company and the Company Subsidiaries are, and have been, in compliance with all applicable Environmental Laws and permits and authorizations thereunder; (b) there is no administrative or judicial enforcement proceeding pending, or to the knowledge of the Company threatened, against the Company or any Company Subsidiary involving Hazardous Materials or toxic fungi or mold or arising under any Environmental Law; (c) neither the Company nor any Company Subsidiary or, to the knowledge of the Company, any legal predecessor of the Company or any Company Subsidiary, has received any written notice from any third party that it is potentially responsible under any Environmental Law for costs of response, property damage or for damages to natural resources, as those terms are defined under the Environmental Laws, at any location; (d) neither the Company nor any Company Subsidiary has transported or disposed of, or allowed or arranged for any third party to transport or dispose of, any waste containing Hazardous Materials at any location identified as requiring response action on the Comprehensive Environmental Response, Compensation, and Liability Information System or similar state database or any location proposed for inclusion on such lists; (e) the Company has no knowledge of any release on the real property owned or leased by the Company or any Company Subsidiary or predecessor entity of Hazardous Materials that would be reasonably likely to result in a requirement under any Environmental Laws to perform a response action, the incurrence of natural resource damages or in any material liability under the Environmental Laws; and (f) to the knowledge of the Company, none of the Company or any Company Subsidiary is required, by virtue of the transactions contemplated hereby, or as a condition to the effectiveness of any transactions contemplated hereby, (A) to perform a site assessment for Hazardous Materials, (B) to remove or remediate Hazardous Materials, (C) to give notice to or receive approval from any governmental authority, or (D) to record or deliver to any Person any disclosure document or statement pertaining to environmental matters.

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        3.14    Employee Benefit Plans.    

        3.15    Labor and Employment Matters.    

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        3.16    No Brokers.    Neither the Company nor any of the Company Subsidiaries has entered into any contract, arrangement or understanding with any Person or firm which may result in the obligation of such entity or Parent or MergerCo to pay any finder's fees, brokerage or agent's commissions or other like payments in connection with the negotiations leading to this Agreement or consummation of the Merger, except that the Company has retained Wachovia Capital Markets, LLC as its financial advisor in connection with the Merger. The Company has furnished to Parent a true, complete and correct copy of all agreements between the Company and Wachovia Capital Markets, LLC relating to the Merger, which agreements disclose all fees payable by the Company or any of its Affiliates to Wachovia Capital Markets, LLC.

        3.17    Opinion of Financial Advisor.    The Company has received an opinion of Wachovia Capital Markets, LLC. to the effect that the Merger Consideration is fair to the holders of shares of Company Common Stock from a financial point of view. A copy of such opinion shall be delivered to Parent promptly after the date hereof.

        3.18    Vote Required.    The affirmative vote of the holders of majority of the shares of outstanding Company Common Stock is the only vote of the holders of any class or series of capital stock of the Company or any Company Subsidiary, necessary to approve this Agreement.

        3.19    Material Contracts.    

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        3.20    Insurance.    Section 3.20 of the Company Disclosure Schedule sets forth all material policies of insurance to which the Company or any Company Subsidiary is a party. The Company maintains insurance coverage with reputable insurers, or maintains self-insurance practices, in such amounts and covering such risks as are in accordance with normal industry practice for companies engaged in businesses similar to that of the Company (taking into account the cost and availability of such insurance). There is no claim by the Company or any Company Subsidiary pending under any such policies which (a) has been denied or disputed by the insurer or (b) would reasonably be likely to have, individually or in the aggregate, a Company Material Adverse Effect. All such insurance policies are in full force and effect, all premiums due and payable thereon have been paid, and no written notice of cancellation or termination has been received by the Company with respect to any such policy which has not been replaced on substantially similar terms prior to the date of such cancellation.

        3.21    Definition of the Company's Knowledge.    As used in this Agreement, the phrase "to the knowledge of the Company" or any similar phrase means the actual (and not the constructive or imputed) knowledge of those individuals identified in Section 3.21 of the Company Disclosure Schedule.

        3.22    Proxy Statement; Company Information.    The information relating to the Company and the Company Subsidiaries to be contained or incorporated by reference in the Proxy Statement and any other documents filed with the SEC in connection herewith, will not, on the date the Proxy Statement is first mailed to holders of the Company Common Stock or at the time of the Company Shareholders' Meeting, contain any untrue statement of any material fact, or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not false or misleading at the time and in light of the circumstances under which such statement is made, except that no representation is made by the Company with respect to the information supplied by Parent for inclusion therein.

        3.23    No Payments to Employees, Officers or Directors.    Except as set forth in Schedule 3.23 of the Company Disclosure Schedule, (i) there is no employment or severance payment payable or other benefit due on a change of control or otherwise as a result of the consummation of the Merger or any of the other transactions contemplated hereby, with respect to any employee, officer or director of the Company or any Company Subsidiary; (ii) no Employee Program provides for any gross-up payment to any current or former employee in the event that such employee or former employee becomes subject to an excise tax or other penalty under Section 409A of the Code; and (iii) neither the execution of this Agreement, stockholder approval of this Agreement, nor the consummation of the transactions contemplated hereby will, alone or in conjunction with another event (e.g., termination of employment), result in payments under any of the Employee Programs which would not be deductible under Section 162(m) or Section 280G of the Code.

        3.24    Intellectual Property.    The Company and the Company Subsidiaries own, possess or hold valid rights to use all trademarks, trade names, patents, service marks, brand marks, brand names, computer programs, databases, industrial designs and copyrights necessary for the operation of their businesses (collectively, the "Intellectual Property"). All of the Intellectual Property is owned or licensed by the Company or its subsidiaries free and clear of any and all Liens, and neither the Company nor any of its subsidiaries has forfeited or otherwise relinquished any Intellectual Property which forfeiture has resulted in, individually or in the aggregate, or would result in a Company

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Material Adverse Effect. The use of the Intellectual Property by the Company or its subsidiaries does not conflict with, infringe upon, violate or interfere with or constitute an appropriation of any right, title, interest or goodwill, including, without limitation, any intellectual property right, trademark, trade name, patent, service mark, brand mark, brand name, computer program, database, industrial design, copyright or any pending application therefor, of any other Person, and there have been no claims made against the Company or any subsidiary, and neither the Company nor any of its subsidiaries has received any notice of any claim or otherwise has knowledge that any of the Intellectual Property is invalid or conflicts with the asserted rights of any other Person or has not been used or enforced or has failed to have been used or enforced in a manner that would result in the abandonment, cancellation or unenforceability of any of the Intellectual Property, except, in all such cases, as would not have, individually or in the aggregate, a Company Material Adverse Effect.

        3.25    Investment Company Act of 1940.    Neither the Company nor any of the Company Subsidiaries is, or at the Effective Time will be, required to be registered as an investment company under the Investment Company Act of 1940, as amended.

        3.26    No Other Representations or Warranties.    Except for the representations and warranties made by the Company in this Article III, the Company makes no representations or warranties, and the Company hereby disclaims any other representations or warranties, with respect to the Company, the Company Subsidiaries, or its or their businesses, operations, assets, liabilities, condition (financial or otherwise) or prospects or the negotiation, execution, delivery or performance of this Agreement by the Company, notwithstanding the delivery or disclosure to Parent or its affiliates or representatives of any documentation or other information with respect to any one or more of the foregoing.

ARTICLE IV
 Representations and Warranties of Parent and MergerCo

Parent and MergerCo hereby jointly and severally represent and warrant to the Company as follows:

        4.1    Corporate Organization.    

        4.2    Authority Relative to this Agreement.    

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        4.3    Consents and Approvals; No Violations.    Except for filings, permits, authorizations, consents and approvals as may be required under, and other applicable requirements of, state securities or blue sky Laws, the HSR Act or any other Antitrust Law, the filing and recordation of the Articles of Merger as required by the FBCA and the filing and recordation of the Certificate of Merger as required by DGCL, no filing with or notice to, and no permit, authorization, consent or approval of, (i) any Governmental Entity or (ii) any other third party, is necessary for the execution and delivery by each of Parent and MergerCo of this Agreement or the consummation by each of Parent and MergerCo of the Merger or any of the other transactions contemplated hereby, except where the failure to obtain such permits, authorizations, consents or approvals or to make such filings or give such notice would not have or would not reasonably be likely to have, individually or in the aggregate, a Parent Material Adverse Effect. Neither the execution, delivery or performance of this Agreement by each of Parent and MergerCo nor the consummation by each of Parent and MergerCo of the Merger or any of the other transactions contemplated hereby will (i) conflict with or result in any breach of any provision of the respective articles or bylaws (or similar organizational documents) of each of Parent or MergerCo, (ii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration or Encumbrance or result in the reduction or loss of any benefit) under, any of the terms, conditions or provisions of any loan note, bond, mortgage, credit agreement, reciprocal easement agreement, permit, concession, franchise, indenture, lease, license, contract, agreement or other instrument or obligation to which each of Parent or MergerCo, or any of their respective subsidiaries, is a party or by which any of them or any of their respective properties or assets may be bound or any Parent Permit (as hereinafter defined), or (iii) violate any Law applicable to each of Parent or MergerCo, or any of their respective subsidiaries, or any of their respective properties or assets, in each case with respect to (ii) and (iii) above, except as which would not have or would not reasonably be likely to have, individually or in the aggregate, a Parent Material Adverse Effect.

        4.4    Brokers.    No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission payable by the Company in connection with the Merger based upon arrangements made by and on behalf of Parent or MergerCo or any of their subsidiaries.

        4.5    Available Funds.    

        4.6    Takeover Statutes.    Each of Parent and MergerCo has taken such actions and votes as are necessary on its part to render the provisions of any "fair price," "moratorium," "control share

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acquisition" or any other anti-takeover statute or similar federal or state statute inapplicable to this Agreement, the Merger and the transactions contemplated by this Agreement.

ARTICLE V
 Conduct of Business Pending the Merger

        5.1    Conduct of Business by the Company.    During the period from the date of this Agreement to the Effective Time, except as otherwise contemplated by this Agreement, the Company shall use its commercially reasonable efforts to, and shall cause each of the Company Subsidiaries to use its commercially reasonable efforts to, carry on their respective businesses in the usual, regular and ordinary course, consistent with past practice and in material compliance with all Laws, and use their commercially reasonable efforts to preserve intact their present business organizations, keep available the services of their present officers and employees and preserve their goodwill, the Company's status as a REIT, and their relationships with tenants and others having business dealings with them. The Company shall confer on a regular basis with Parent, report on operational matters and advise Parent orally and in writing of any Company Material Adverse Effect or any matter that could reasonably be expected to result in the Company being unable to deliver the certificate described in Section 7.2(a). Without limiting the generality of the foregoing, neither the Company nor any of the Company Subsidiaries will (except as expressly permitted by this Agreement or as contemplated by the transactions contemplated hereby, as set forth in Section 5.1 of the Company Disclosure Schedule or to the extent that Parent shall otherwise consent in writing (it being understood that Parent shall respond within five (5) Business Days to the Company's communications soliciting such consent from Parent, such consent not be unreasonably withheld, conditioned or delayed)):

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        5.2    Distribution by Company of REIT Taxable Income.    Notwithstanding anything to the contrary in this Agreement and subject to Section 5.1(a), prior to the Closing Date, the Company shall declare and pay a dividend to its shareholders distributing cash in an amount equal to the Company's estimated "real estate investment trust taxable income" (as such term is used in Section 857(a) of the Code and reflecting any dividends previously paid during the tax year that would be expected to give rise to a dividends paid deduction for such tax year, but before reduction for the dividend contemplated by this Section 5.2) for the tax year of the Company ending with the Merger, plus any other amounts determined by the Company in its sole discretion to be required to be distributed in order for the Company to qualify as a REIT for such year and to avoid to the extent reasonably possible the incurrence of income or excise tax by the Company.

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ARTICLE VI
 Covenants

        6.1    Preparation of the Proxy Statement; Stockholders Meeting.    

        6.2    Other Filings.    As soon as practicable following the date of this Agreement, the Company, Parent and MergerCo each shall properly prepare and file any other filings required under the Exchange Act or any other federal, state or foreign law relating to the Merger (including filings, if any, required under the HSR Act) (collectively, the "Other Filings"). Each of the Company, Parent and MergerCo shall promptly notify the other of the receipt of any comments on, or any request for amendments or supplements to, any of the Other Filings by the SEC or any other Governmental Entity or official, and each of the Company, Parent and MergerCo shall supply the other with copies of all correspondence between it and each of its Subsidiaries and representatives, on the one hand, and the SEC or the members of its staff or any other appropriate governmental official, on the other hand, with respect to any of the Other Filings. The Company, Parent and MergerCo each shall promptly obtain and furnish the other (a) the information which may be reasonably required in order to make such Other Filings and (b) any additional information which may be requested by a Governmental Entity and which the parties reasonably deem appropriate.

        6.3    Additional Agreements.    Subject to the terms and conditions herein provided, but subject to the obligation to act in good faith, and subject at all times to the Company's and its directors' right and duty to act in a manner consistent with their fiduciary duties, each of the parties hereto agrees to use

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its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective as promptly as practicable the Merger and to cooperate with each other in connection with the foregoing, including the taking of such actions as are necessary to obtain any necessary consents, approvals, orders, exemptions and authorizations by or from any public or private third party, including, without limitation, any that are required to be obtained under any federal, state or local law or regulation or any contract, agreement or instrument to which the Company or any Company Subsidiary is a party or by which any of their respective properties or assets are bound, to defend all lawsuits or other legal proceedings challenging this Agreement or the consummation of the Merger, to effect all necessary registrations and Other Filings and submissions of information requested by a Governmental Entity, and to use its best efforts to cause to be lifted or rescinded any injunction or restraining order or other order adversely affecting the ability of the parties to consummate the Merger.

        6.4    No Solicitations.    

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        6.5    Officers' and Directors' Indemnification.    

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        6.6    Access to Information; Confidentiality.    

        6.7    Public Announcements.    The Company and Parent shall consult with each other before issuing any press release or otherwise making any public statements with respect to this Agreement or the Merger and shall not issue any such press release or make any such public statement without the prior consent of the other party, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that a party may, without the prior consent of the other party, issue such press release or make such public statement as may be required by law or the applicable rules of any stock exchange or quotation system if the party issuing such press release or making such public statement has used its reasonable best efforts to consult with the other party and to obtain such party's consent but has been unable to do so in a timely manner. In this regard, the parties shall make a joint public announcement of the Merger contemplated hereby no later than the opening of trading on the NYSE on the Business Day following the date on which this Agreement is signed.

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        6.8    Employee Benefit Arrangements.    

        6.9    Company Rights Agreement.    The Company Board shall take all further action, if any, necessary in order to render the Company Rights Agreement inapplicable to the Merger and the other transactions contemplated by this Agreement.

        6.10    Certain Tax Matters.    

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        6.11    Environmental Reports.    The Company shall take all necessary action to cause the environmental reports referenced in Section 3.13 of the Company Disclosure Schedule and the engineering reports relating to the Company Properties provided to Parent prior to the date hereof, to be issued by ATC Associates, Inc. to Parent within 10 Business Days following the date hereof.

ARTICLE VII
 Conditions to the Merger

        7.1    Conditions to the Obligations of Each Party to Effect the Merger.    The respective obligations of each party to effect the Merger are subject to the satisfaction or waiver by consent of the other party, at or prior to the Effective Time, of each of the following conditions:

        7.2    Conditions to Obligations of Parent and MergerCo.    The obligations of Parent and MergerCo to effect the Merger are further subject to the satisfaction of the following conditions, any one or more of which may be waived by Parent at or prior to the Effective Time:

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        7.3    Conditions to Obligations of the Company.    The obligation of the Company to effect the Merger is further subject to the satisfaction of the following conditions, any one or more of which may be waived by the Company at or prior to the Effective Time:

        7.4    Frustration of Closing Conditions.    No party may rely on the failure of any condition set forth in this Article VII to be satisfied if such failure was caused by such party's failure to use its own commercially reasonable efforts to consummate the Merger and the other transactions contemplated hereunder.

ARTICLE VIII
 Termination, Amendment and Waiver

        8.1    Termination.    This Agreement may be terminated and abandoned at any time prior to the Effective Time, whether before or after the receipt of Company Shareholder Approval:

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        8.2    Effect of Termination.    

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        8.3    Fees and Expenses.    

The payment of expenses set forth herein is not an exclusive remedy, but is in addition to any other rights or remedies available to the parties hereto (whether at law or in equity).

        8.4    Payment of Amount or Expense.    

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        8.5    Amendment.    This Agreement may be amended by the parties hereto by an instrument in writing signed on behalf of each of the parties hereto at any time before or after any approval hereof by holders of the Company Common Stock; provided, however, that after any such approval, no amendment shall be made which by law requires further approval by such shareholders without obtaining such approval.

        8.6    Extension; Waiver.    At any time prior to the Effective Time, the parties hereto may, to the extent legally allowed, (a) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (b) waive any inaccuracies in the representations and warranties of the other parties contained herein or in any document delivered pursuant hereto and (c) waive compliance by the other parties with any of the agreements or conditions contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of the party against which such waiver or extension is to be enforced. The failure of a party to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights.

ARTICLE IX
 General Provisions

        9.1    Notices.    All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given or made as of the date delivered or sent if delivered personally or sent by facsimile (providing confirmation of transmission) or sent by prepaid

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overnight carrier (providing proof of delivery) to the parties at the following addresses or facsimile numbers (or at such other addresses or facsimile numbers as shall be specified by the parties by like notice):

        9.2    Certain Definitions.    For purposes of this Agreement, the term:

        "Acquisition Proposal" shall mean any proposal or offer for any (a) merger, consolidation or similar business combination transaction involving the Company, the Partnership or any Significant Subsidiary of the Company (as defined in Rule 1-02 of Regulation S-X, but substituting 20% for the references to 10% therein), (b) sale or other disposition, directly or indirectly (including by way of merger, consolidation, share exchange or any similar transaction), of any assets of the Company or the Company Subsidiaries representing 50% or more of the consolidated assets of the Company and the Company Subsidiaries, (c) issue, sale or other disposition of (including by way of merger, consolidation, share exchange or any similar transaction) securities (or options, rights or warrants to purchase, or securities convertible into, such securities) representing 50% or more of the votes associated with the outstanding securities of the Company, (d) tender offer or exchange offer in which any Person or "group" (as such term is defined under the Exchange Act) shall acquire beneficial ownership (as such

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term is defined in Rule 13d-3 under the Exchange Act), or the right to acquire beneficial ownership, of 50% or more of the outstanding shares of Company Common Stock, (e) recapitalization, restructuring, liquidation, dissolution, or other similar type of transaction with respect to the Company or (f) transaction which is similar in form, substance or purpose to any of the foregoing transactions; provided, however, that the term "Acquisition Proposal" shall not include the Merger or the other transactions contemplated by this Agreement.

        "Affiliate" of any Person means a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the first-mentioned Person.

        "Business Day" shall mean any day other than (a) a Saturday or Sunday or (b) a day on which banking and savings and loan institutions are authorized or required by law to be closed.

        "Code" means the Internal Revenue Code of 1986, as amended.

        "Company Material Adverse Effect" means, with respect to the Company, an effect, event or change which has a material adverse effect on the assets, results of operations, or financial condition of the Company and the Company Subsidiaries on a consolidated basis taken as a whole, other than effects, events or changes arising out of or resulting from (a) changes in conditions in the U.S. or global economy or capital or financial markets generally, including changes in interest or exchange rates, (b) changes in general legal, regulatory, political, economic or business conditions or changes in generally accepted accounting principles that, in each case, generally affect industries in which the Company and the Company Subsidiaries conduct business, (c) the negotiation, execution, announcement or performance of this Agreement or the consummation of the transactions contemplated by this Agreement, including the impact thereof on relationships, contractual or otherwise, with tenants, lenders, partners or employees, (d) acts of war, sabotage or terrorism, or any escalation or worsening of any such acts of war, sabotage or terrorism threatened or underway as of the date of this Agreement, (e) earthquakes, hurricanes or other natural disasters or (f) any decline in the market price, or change in trading volume, of the capital stock of the Company or any failure to meet publicly announced revenue or earnings projections.

        "Environment" means soil, sediment, surface or subsurface strata, surface water, ground water, ambient air and any biota living in or on such media.

        "Environmental Laws" means any federal, state or local statute, law, including common laws, ordinance, regulation, rule, code, or binding order, including any judicial or administrative order, consent decree, judgment, injunction, permitor authorization, in each case having the force and effect of law, relating to the pollution, protection, or restoration of the Environment, including, without limitation, those relating to the use, handling, presence, transportation, treatment, storage, disposal, release or discharge of Hazardous Materials.

        "ERISA" means the Employee Retirement Income Security Act of 1974, as amended.

        "ERISA Affiliate" means of the Company if it would have ever been considered a single employer with the Company under ERISA Section 4001(b) or part of the same "controlled group" as the Company for purposes of ERISA Section 302(d)(8)(C).

        "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

        "GAAP" means generally accepted accounting principles as applied in the United States.

        "Hazardous Materials" means any "hazardous waste" as defined in either the Resource Conservation and Recovery Act or regulations adopted pursuant to said act, any "hazardous substances" or "pollutant" or "contaminant" as defined in the Comprehensive Environmental

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Response, Compensation and Liability Act and, to the extent not included in the foregoing, any petroleum or fractions thereof and any materials subject to regulation under Environmental Laws.

        "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder.

        "Indebtedness" shall mean, with respect to any Person, without duplication, (A) all indebtedness of such Person for borrowed money, whether secured or unsecured, (B) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person, (C) all capitalized lease obligations of such Person, (D) all obligations of such Person under interest rate or currency hedging transactions (valued at the termination value thereof) and (E) all guarantees of such Person of any such Indebtedness of any other Person.

        "IRS" means the United States Internal Revenue Service.

        "Material Contracts" shall mean with respect to any Person: (a) all contracts, agreements or understandings with a customer of such Person or its Subsidiaries in the last fiscal year where such customer contracts, agreements or understandings in the aggregate account for more than 5% of such Person's annual revenues; (b) all acquisition, merger, asset purchase or sale agreements entered into by such Person or its Subsidiaries in the last two fiscal years with a transaction value in excess of 5% of such Person's consolidated annual revenues; and (c) any other agreements within the meaning set forth in Item 601(b)(10) of Regulation S-K of Title 17, Part 229 of the Code of Federal Regulations.

        "NYSE" means the New York Stock Exchange.

        "Parent Material Adverse Effect" means, with respect to Parent or MergerCo, an effect, event or change which materially adversely affects the ability of Parent or MergerCo to perform their obligations hereunder or to consummate the Merger and other transactions contemplated hereby.

        "Person" means an individual, corporation, limited liability company, partnership, association, trust, unincorporated organization, other entity or group (as defined in Section 13(d) of the Exchange Act).

        "SEC" means the Securities and Exchange Commission.

        "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

        "Subsidiary" means any corporation more than 50% of whose outstanding voting securities, or any partnership, limited liability company, joint venture or other entity more than 50% of whose total equity interest, is directly or indirectly owned by Parent or the Company, as the case may be.

        "Superior Proposal" means an Acquisition Proposal which the Company Board determines in good faith, after consultation with its financial advisors, will be more favorable to holders of the Company's Common Stock than the Merger (taking into account all of the terms and conditions of such Acquisition Proposal, including the financial terms, any conditions to consummation and the likelihood of such Acquisition Proposal being consummated).

        9.3    Terms Defined Elsewhere.    The following terms are defined elsewhere in this Agreement, as indicated below:

"Agreement"   Preamble
"Amended Charter"   Section 1.2(b)
"Articles of Merger"   Section 1.2
"Break-up Fee"   Section 8.2(b)
"Certificate"   Section 2.1(d)
"Certificate of Merger"   Section 1.2
     

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"Claim"   Section 6.6(b)
"Closing"   Section 1.3
"Closing Date"   Section 1.3
"Commitment"   Section 3.10
"Company"   Preamble
"Company Board"   Recitals
"Company Common Stock"   Section 2.1(b)
"Company Disclosure Schedule"   Article III
"Company Employees"   Section 6.8(b)
"Company ESIP"   Section 2.1(h)
"Company Preferred Stock"   Section 3.3(a)
"Company Properties"   Section 3.12(a)
"Company Recommendation"   Section 6.1(d)
"Company Rights Agreement"   Section 3.2(b)
"Company SEC Reports"   Section 3.8
"Company Shareholder Approval"   Section 6.1(b)
"Company Space Leases"   Section 3.12(f)
"Company Stock Options"   Section 2.1(f)
"Company Stock Option Plans"   Section 2.1(f)
"Company Shareholders Meeting"   Section 6.1(d)
"Company Subsidiaries"   Section 3.1(b)
"Confidentiality Agreement"   Section 6.7
"DGCL"   Recitals
"Drop Dead Date"   Section 8.1(b)
"DSOS"   Section 1.2
"Effective Time"   Section 1.2
"Employee Programs"   Section 3.14(a)
"Encumbrances"   Section 3.12(a)
"Excluded Shares"   Section 2.1(b)
"Paying Agent"   Section 2.3(a)
"Financing Letter"   Section 4.5
"Governmental Entity"   Section 3.6
"Indemnified Parties"   Section 6.6(a)
"Intellectual Property"   Section 3.24
"Proxy Statement"   Section 6.1(a)
"Laws"   Section 3.6
"Lender"   Section 4.5
"Merger"   Recitals
"MergerCo"   Preamble
"Merger Consideration"   Section 2.1(c)
"FBCA"   Recitals
"Option Merger Consideration"   Section 2.1(f)
"Other Filings"   Section 6.2
"Parent"   Preamble
     

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"Parent Board"   Recitals
"Partnership"   Section 3.3(i)
"Partnership Agreement"   Section 3.3(a)
"Partnership Units"   Section 3.3(i)
"Payee"   Section 8.3(a)
"Payor"   Section 8.3(a)
"Property Restrictions"   Section 3.12(b)
"Qualifying Income"   Section 8.3(a)
"REIT"   Section 3.11
"FDOS"   Section 1.2
"Section 8.2 Amount"   Section 8.3(a)
"Securities Laws"   Section 3.8
"Series A Preferred Stock"   Section 2.1(e)
"Surviving Corporation"   Section 1.1
"Surviving Corporation Preferred"   Section 2.1(e)
"Tax Protection Agreement"   Section 3.11
"Third Party"   Section 6.5(a)

        9.4    Interpretation.    The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Wherever used herein, a pronoun in the masculine gender shall be considered as including the feminine gender unless the context clearly indicates otherwise.

        9.5    Non-Survival of Representations, Warranties, Covenants and Agreements.    Except for Articles I and II, Sections 6.5 and 6.8 and any covenant or agreement of the parties which by its terms contemplates performance after the Effective Time (a) none of the representations, warranties, covenants and agreements contained in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Effective Time and (b) thereafter there shall be no liability on the part of any of Parent, MergerCo or the Company or any of their respective officers, directors, stockholders or shareholders in respect thereof. Except as expressly set forth in this Agreement, there are no representations or warranties of any party hereto, express or implied.

        9.6    Miscellaneous.    This Agreement (a) constitutes, together with the Confidentiality Agreement and the Company Disclosure Schedule, the entire agreement and supersedes all of the prior agreements and understandings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof, (b) shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns and is not intended to confer upon any other Person (except as set forth below) any rights or remedies hereunder and (c) may be executed in two or more counterparts which together shall constitute a single agreement. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in the federal and state courts located in Florida, this being in addition to any other remedy to which they are entitled at law or in equity.

        9.7    Assignment; Benefit.    Except as expressly permitted by the terms hereof, neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto without the prior written consent of the other parties; provided that MergerCo may assign its rights and interests hereunder, upon three (3) Business Days prior written notice to the Company, to any Delaware corporation at least 75% owned, directly or indirectly, by DRA Growth and

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Income Fund V LLC. Notwithstanding anything contained in this Agreement to the contrary (except for the provisions of Sections 6.5 and 6.8 hereof which shall inure to the benefit of the Persons or entities benefiting therefrom who are expressly intended to be third-party beneficiaries thereof and who may enforce the covenants contained therein), nothing in this Agreement, expressed or implied, is intended to confer on any person other than the parties hereto or their respective heirs, successors, executors, administrators and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement.

        9.8    Severability.    If any provision of this Agreement, or the application thereof to any person or circumstance is held invalid or unenforceable, the remainder of this Agreement, and the application of such provision to other persons or circumstances, shall not be affected thereby, and to such end, the provisions of this Agreement are agreed to be severable.

        9.9    Choice of Law/Consent to Jurisdiction.    

Each of the Company, Parent and MergerCo hereby irrevocably and unconditionally consents to submit to the sole and exclusive jurisdiction of Delaware Chancery Court for any litigation arising out of or relating to this Agreement, or the negotiation, validity or performance of this Agreement, or the transactions contemplated hereby (and agrees not to commence any litigation relating thereto except in such courts), waives any objection to the laying of venue of any such litigation in such court and agrees not to plead or claim in such court that such litigation brought therein has been brought in any inconvenient forum. Each of the parties hereto agrees, (a) to the extent such party is not otherwise subject to service of process in the State of Delaware, to appoint and maintain an agent in the State of Delaware as such party's agent for acceptance of legal process, and (b) that service of process may also be made on such party by prepaid certified mail with a proof of mailing receipt validated by the United States Postal Service constituting evidence of valid service. Service made pursuant to (a) or (b) above shall have the same legal force and effect as if served upon such party personally within the State of Delaware. For purposes of implementing the parties' agreement to appoint and maintain an agent for service of process in the State of Delaware, each of Parent and MergerCo does hereby appoint Corporation Services Company, 2711 Centerville Rd., Suite 400, Wilmington, DE 19808, as such agent, and the Company does hereby appoint The Corporation Trust Company, 1209 Orange Street, Wilmington, DE 19801 as such agent.

        9.10    Waiver.    Except as provided in this Agreement, no action taken pursuant to this Agreement, including, without limitation, any investigation by or on behalf of any party, shall be deemed to constitute a waiver by the party taking such action of compliance with any representations, warranties, covenants or agreements contained in this Agreement. The waiver by any party hereto of a breach of any provision hereunder shall not operate or be construed as a waiver of any prior or subsequent breach of the same or any other provision hereunder.

        9.11    Counterparts.    This Agreement may be executed in counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party. Facsimile transmission of any signed original document shall be deemed the same as delivery of an original. At the request of any party, the parties will confirm facsimile transmission by signing a duplicate original document.

[Remainder of page intentionally left blank]

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        IN WITNESS WHEREOF, DRA G&I Fund V Real Estate Investment Trust, DRA CRT Acquisition Corp. and CRT Properties, Inc. have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.


DRA G&I FUND V REAL ESTATE INVESTMENT TRUST

By: DRA Growth and Income Fund V LLC
 

By: Manageco V LLC
 

By:
 
/s/  ANDREW PELTZ      
Name: Andrew Peltz
Title: Authorized Signatory
 

DRA CRT ACQUISITION CORP.
 

By:
 
/s/  ANDREW PELTZ      
Name: Andrew Peltz
Title: Authorized Signatory
 

CRT PROPERTIES, INC.
 

By:
 
/s/  THOMAS CROCKER      
Name: Thomas Crocker
Title: Chief Executive Officer
 

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Appendix B

GUARANTY

        1.     For value received, and to induce the Company to enter into the Merger Agreement, the Guarantor, intending to be legally bound, hereby absolutely and unconditionally guarantees and becomes surety for the payment and/or performance when due of all of the liabilities, obligations and undertakings of Acquirors, their successors or assigns of every kind or nature now and hereafter owing to Company and/or any of its subsidiaries or affiliates under and pursuant to the Merger Agreement, whether joint or several, due or to become due, absolute or contingent, now existing or hereafter arising (collectively, the "Obligations"). For the avoidance of doubt, the Company's costs and expenses, including without limitation attorneys' fees, incurred by Company at any time to enforce, protect, preserve, or defend Company's rights shall constitute Obligations hereunder.

        2.     This Guaranty is an absolute, unconditional and continuing guarantee of the full and punctual payment and performance of the Obligations, and not of their collectibility only, and is in no way conditioned upon any requirement that the Company first attempt to collect the Obligations from Acquiror or resort to any security or other means of collecting payment. Should Acquirors default in the payment or performance of the Obligations, the Guarantor's obligations hereunder, shall become immediately due and payable to the Company. Claims hereunder may be made on one or more occasions. All payments of money made by Guarantor in performance and satisfaction of its Obligations hereunder shall be made in lawful money of the United States, in immediately available funds, unless payment by another means is authorized by the Merger Agreement,

        3.     The Guarantor hereby waives notice of acceptance of this Guaranty and notice of the Obligations, waives presentment, demand for payment, protest, notice of dishonor or non-payment of the Obligations, notice of acceleration or intent to accelerate the Obligations, and any other notice to Guarantor of Acquirors, and waives suretyship defenses generally, and the Company is not obligated to file any suit or take any action, or provide any notice to, Acquirors, the Guarantor, or others, except as expressly provided in the Merger Agreement or in this Guaranty. Without limiting the generality of the foregoing, the Guarantor agrees that the obligation of the Guarantor hereunder shall not be released or discharged, in whole or in part, or otherwise affected by: (i) the failure of the Company to assert any claim or demand or to enforce any right or remedy against Acquiror with respect to the Obligations; (ii) any extensions or renewals of the Obligations; (iii) any rescissions, waivers, amendments or modifications of the Merger Agreement; (iv) the adequacy of any means available to the Company to claim payment or performance of the Obligations; (v) except as otherwise provided herein, the addition or release of any person or entities primarily or secondarily liable for the Obligations (including the Guarantor) or (vi) any other act or omission that might in any means or to any extent vary the risk of the Guarantor or otherwise operate as a release or exchange of the Guarantor, all of which may be done without notice to the Guarantor. However, the Guarantor reserves the right to assert defenses that Acquirors may have to payment or performance of the Obligations, other than defenses arising from the bankruptcy, insolvency or similar rights of Acquirors, or defenses related to Acquirors' capacity to enter into the Merger Agreement.

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        4.     If either Acquiror defaults in the payment or performance of the Obligations, the Guarantor shall (subject to last sentence of the first paragraph of Section 3 above), make such payment or performance or otherwise cause such payment or performance to be made within ten (10) business days after the receipt by the Guarantor of written notice from the Company of such default under the Merger Agreement. A payment demand shall be in writing and shall reasonably and briefly specify what amount Acquirors have failed to pay, and an explanation of why such payment is due, with a specific statement that the Company is calling upon the Guarantor to pay under this Guaranty.

        5.     The obligation of the Guarantor hereunder is limited to its guarantee of the payment obligations and the timely performance when required of all other obligations of Acquiror (if any) to the Company under the Merger Agreement. All sums payable by the Guarantor hereunder shall be made in immediately available funds. Upon payment or performance of the Obligations owing to the Company, the Guarantor shall be subrogated to the rights of the Company against Acquirors, and the Company agrees to take, at the Guarantor's expense, such steps as the Guarantor may reasonably request to implement such subrogation. However, the Guarantor may not exercise any right of subrogation as to Acquirors until the Obligations are paid and performed in full.

        6.     This Guaranty shall terminate and be of no further force and effect and no party may attempt to enforce any rights hereunder upon the earlier to occur of (i) the Closing (as such term is defined in the Merger Agreement) and (ii) termination of the Merger Agreement other than as a result of default or breach by Acquirors.

        7.     This Guaranty shall apply in all respects to successors of Guarantor and permitted assigns and inure to the Company and its permitted assigns. No party may assign its rights and obligations hereunder (directly or indirectly) without the prior written consent of the other party hereto.

        8.     THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO ITS RULES OF CONFLICTS OF LAWS.

        9.     No amendment or waiver of any provision of this Guaranty shall be effective unless the same shall be in writing and signed by the Company and the Guarantor. No failure on the part of the Company to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right.

        10.   This Guaranty contains the entire agreement of the Guarantor with respect to the matters set forth herein. The rights and remedies herein provided are cumulative and not exclusive of any remedies provided by law. The invalidity or unenforceability of any one or more sections of this Guaranty shall not affect the validity or enforceability of its remaining provisions.

        11.   This Guaranty may be executed in counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party. Facsimile transmission of any signed original document shall be deemed the same as delivery of an original.

[Signature page to follow]

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Guarantor:  

DRA GROWTH & INCOME FUND V LLC
 

By: Manageco V LLC
 

By:
 
/s/  ANDREW PELTZ      
Name: Andrew Peltz
Title: Authorized Signatory
 
Acknowledged and Agreed:  

CRT PROPERTIES, INC.
 

By:
 
/s/  THOMAS CROCKER      
Name: Thomas Crocker
Title: Chief Executive Officer
 

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Appendix C

Wachovia Capital Markets, LLC

June 17, 2005

Board of Directors
CRT Properties, Inc.
225 NE Mizner Boulevard
Suite 200
Boca Raton, FL 33432

Gentlemen:

You have asked Wachovia Capital Markets, LLC ("Wachovia Securities") to advise you with respect to the fairness, from a financial point of view, of the Merger Consideration (as hereinafter defined) to be received by the holders of the common stock, par value $0.01 per share (the "CRT Common Shares"), of CRT Properties, Inc., a Florida corporation ("CRT" or the "Company"), pursuant to that certain Agreement and Plan of Merger, dated as of June 17, 2005 (the "Agreement"), by and among DRA G & I Fund V Real Estate Investment Trust, a Maryland business trust ("Parent"), DRA CRT Acquisition Corp., a Delaware corporation, and wholly owned subsidiary of Parent ("MergerCo"), and CRT.

As more fully described in the Agreement, the Company will be merged with and into MergerCo and the separate corporate existence of CRT will thereupon cease and MergerCo will be the entity surviving the merger (the "Merger"). Pursuant to the Agreement, each CRT Common Share (other than those cancelled without payment of consideration in accordance with the terms of the Agreement) will be converted into the right to receive an amount in cash equal to $27.80 (the "Merger Consideration"). In addition, the Agreement provides that so long as the Company has not paid its regular quarterly dividend on the CRT common shares for the fiscal quarter ending September 30, 2005 prior to the Closing (as defined in the Agreement), the Merger Consideration will be increased by an amount equal to $0.35 multiplied by a fraction, the numerator of which is number of days from and including July 1, 2005 until the Closing Date (as defined in the Agreement) and the denominator is the actual number of days in the fiscal quarter ending September 30, 2005.

In arriving at our opinion, we have, among other things:

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In connection with our review, we have, with your consent, relied upon the accuracy and completeness of the foregoing financial and other information we have obtained for the purpose of this opinion, including all accounting, legal and tax information and we have not assumed any responsibility for any independent verification of such information and have assumed such accuracy and completeness for purposes of this opinion without independent verification or investigation. We have relied upon the assurances of the management of the Company that they are not aware of any facts or circumstances that would make such information about the Company inaccurate or misleading. With respect to the Company's financial forecasts furnished to us by management of the Company, we have assumed that they have been reasonably prepared and reflect the best current estimates and judgments of management as to the future financial performance of the Company. We assume no responsibility for, and express no view as to, such financial forecasts of the Company or the assumptions upon which they are based. In arriving at our opinion, we have not conducted physical inspections or assessments of the properties or facilities of the Company and have not prepared or obtained any independent evaluations or appraisals of the assets or liabilities of the Company, including any contingent liabilities.

In rendering our opinion, we have assumed that the Merger contemplated by the Agreement will be consummated on the terms described in the Agreement, without waiver of any material terms or conditions, and that in the course of obtaining any necessary legal, regulatory or third-party consents and/or approvals, no restrictions will be imposed or other actions will be taken that will have an adverse effect on the Company, the Merger or other transactions contemplated by the Agreement in any way meaningful to our analysis. Our opinion is necessarily based on economic, market, financial and other conditions as they exist and can be evaluated on and the information made available to us as of the date hereof. Our opinion does not address the relative merits of the Merger or other transactions contemplated by the Agreement compared with other business strategies or transactions that may have been considered by the Company's management, its Board of Directors or any committee thereof. Although subsequent developments may affect this opinion, we do not have an obligation to update, revise or reaffirm this opinion.

Wachovia Securities is a trade name of Wachovia Capital Markets, LLC, an investment banking subsidiary and affiliate of Wachovia Corporation. We have been engaged to render certain financial advisory services to the Board of Directors of the Company in connection with its review of the Agreement and will receive a fee for such services, a portion of which is payable upon delivery of this opinion and a significant portion of which is payable upon consummation of the Merger. The fee for the delivery of this opinion will be credited against the fee payable upon the consummation of the Merger. In addition, the Company has agreed to reimburse our expenses and indemnify us against certain liabilities arising out of our engagement.

Wachovia Securities and our affiliates provide a full range of financial advisory securities and lending services in the ordinary course of business for which we receive customary fees. In connection with unrelated matters, Wachovia Securities and its affiliates (including Wachovia Corporation and its affiliates) in the past have acted as advisor and placement agent in the private placement to the Company of joint venture equity and, in January 2004, Wachovia Securities served as co-manager on

C-2


the Company's $106 million common equity follow-on offering. Wachovia Securities also maintains active equity research on the Company. In addition, we may provide similar or other such services to, and maintain our relationship with, the Company, Parent, and certain affiliates of Parent in the future. Additionally, in the ordinary course of our business, we may trade in the securities (or related derivative securities) of the Company for our own account and for the accounts of our customers and, accordingly, may at any time hold a long or short position in such securities.

This opinion is provided for the information and use of the Board of Directors of the Company in connection with its consideration of the Merger. Our opinion does not address the merits of the underlying decision by the Company to enter into the Agreement and does not and shall not constitute a recommendation to any holder of the CRT Common Shares as to how such holder should vote in connection with the Agreement. Our opinion may not be disclosed, summarized, excerpted from, or otherwise publicly referred to without our prior written consent, except that this opinion may be reproduced in full in any proxy statement mailed or provided to the holders of the CRT Common Shares in connection with the transactions contemplated by the Agreement.

Based upon and subject to the foregoing, our experience as investment bankers, our work as described above, and such other factors we deem to be relevant, it is our opinion that, as of the date hereof, the Merger Consideration to be received by holders of the CRT Common Shares pursuant to the Agreement is fair, from a financial point of view, to such holders.

Very truly yours,

WACHOVIA CAPITAL MARKETS, LLC

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CRT Properties, Inc.

SPECIAL MEETING OF SHAREHOLDERS
Friday, September 23, 2005
10:00 a.m. at the offices of
Goodwin Procter LLP
599 Lexington Avenue
New York, NY 10022

[logo]   225 NE Mizner Boulevard, Suite 200
Boca Raton, Florida 33432		   PROXY

This proxy is solicited by the Board of Directors for use at the Special Meeting on September 23, 2005, or any adjournments thereof.

The shares of stock you hold in your account will be voted as you specify on the reverse side.

If no choice is specified, the proxy will be voted "FOR" Proposal No. 1 (approval of the Agreement and Plan of Merger dated June 17, 2005, by and among DRA G&I Fund V Real Estate Investment Trust, DRA CRT Acquisition Corp. and CRT Properties, Inc., pursuant to which the Company will be acquired for $27.80 per share (plus unpaid dividends through a maximum of September 30, 2005)).

By signing the proxy, you revoke all prior proxies and appoint Thomas J. Crocker and Victor A. Hughes, Jr. with full power of substitution, to vote your shares in their discretion on the matter shown on the reverse side and all adjournments. See reverse for voting instructions.

See reverse for voting instructions.

There are three ways to vote your Proxy

Your telephone or Internet vote authorizes the Named Proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card.

VOTE BY PHONE—TOLL FREE—1-800-560-1965—QUICK *** EASY *** IMMEDIATE

VOTE BY INTERNET—http://www.exproxy.com/cro/—QUICK *** EASY **** IMMEDIATE

VOTE BY MAIL

Mark, sign and date your proxy card and return it in the postage-paid envelope we've provided or return it to CRT Properties, Inc., c/o Shareowner ServicesSM, P. O. Box 64873, St. Paul, MN 55164-0873.


If you vote by Phone or Internet, please do not mail your Proxy Card
Please detach here


THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL NO. 1 BELOW.

1.   Approval of the Agreement and Plan of Merger, dated June 17, 2005, by and among DRA G&I Fund V Real Estate Investment Trust, DRA CRT Acquisition Corp. and CRT Properties, Inc., pursuant to which the Company will be acquired for $27.80 per share (plus unpaid dividends through a maximum of September 30, 2005)   o   FOR   o   AGAINST   o   ABSTAIN

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR,
IF NO DIRECTION IS GIVEN, WILL BE VOTED "FOR" PROPOSAL NO. 1.

Address Change? Mark Box o
Indicate changes below:		   Date:
   
   
    Signature(s) in Box

 
 
Please sign exactly as your name(s) appear on Proxy. If held in joint tenancy, all persons must sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the proxy.



QuickLinks

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
SUMMARY TERM SHEET
TABLE OF CONTENTS
QUESTIONS AND ANSWERS ABOUT THE MERGER
FORWARD LOOKING STATEMENTS
THE SPECIAL MEETING OF THE COMPANY'S SHAREHOLDERS
THE PARTIES TO THE MERGER
PROPOSAL NO. 1 THE MERGER
THE MERGER AGREEMENT
INFORMATION ABOUT CRT PROPERTIES COMMON STOCK OWNERSHIP
SHAREHOLDER PROPOSALS
OTHER MATTERS
WHERE YOU CAN FIND MORE INFORMATION
Appendix A
Appendix B
Appendix C
If you vote by Phone or Internet, please do not mail your Proxy Card Please detach here
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL NO. 1 BELOW.