<PAGE>
 
   AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 23, 1997
 
                                                               FILE NO. 333-
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
 
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
 
                               ----------------
 
                                   FORM S-8
                            REGISTRATION STATEMENT
                                     UNDER
                          THE SECURITIES ACT OF 1933
 
                               ----------------
 
                      SECURITY CAPITAL GROUP INCORPORATED
            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
              MARYLAND                                 36-3692698
                                                    (I.R.S. EMPLOYER
    (STATE OR OTHER JURISDICTION                   IDENTIFICATION NO.)
  OF INCORPORATION OR ORGANIZATION)
 
         125 LINCOLN AVENUE
 
        SANTA FE, NEW MEXICO                              87501
   (ADDRESS OF PRINCIPAL EXECUTIVE                     (ZIP CODE)
              OFFICES)
 
              REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
                                (505) 982-9292
 
                      SECURITY CAPITAL GROUP INCORPORATED
                              1991 OPTION PLAN A
          (AS AMENDED AND RESTATED EFFECTIVE AS OF DECEMBER 3, 1996)
                           (FULL TITLE OF THE PLAN)
 
                               JEFFREY A. KLOPF
                                   SECRETARY
                              125 LINCOLN AVENUE
                          SANTA FE, NEW MEXICO 87501
                                (505) 982-9292
                              (AGENT FOR SERVICE)
 
                               ----------------
 
                        CALCULATION OF REGISTRATION FEE
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                        PROPOSED         PROPOSED
                                         MAXIMUM          MAXIMUM
  TITLE OF SECURITIES   AMOUNT TO BE  OFFERING PRICE    AGGREGATE         AMOUNT OF
   TO BE REGISTERED     REGISTERED(1)  PER SHARE(2)  OFFERING PRICE(2) REGISTRATION FEE
---------------------------------------------------------------------------------------
<S>                     <C>           <C>            <C>               <C>
Class A Common Stock,
 par value $.01 per
 share (including
 related preferred
 share purchase
 rights)..............  9,982 Shares      $1,650        $16,470,300         $4,991
</TABLE>
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(1) Includes 499,100 shares of the Company's Class B Common Stock into which
    the shares of Class A Common Stock are convertible into, beginning January
    1, 1998, for no additional consideration.
(2) Estimated solely for the purpose of computing the registration fee on the
    basis of the average of the high and low prices for the shares of Class A
    Common Stock as reported on the New York Stock Exchange on October 16,
    1997.
 
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<PAGE>
 
PROSPECTUS
OCTOBER 23, 1997
 
                      SECURITY CAPITAL GROUP INCORPORATED
 
                     9,982 SHARES OF CLASS A COMMON STOCK
 
                               ----------------
 
  All of the shares of Class A Common Stock, par value $.01 per share (the
"Class A Shares"), of Security Capital Group Incorporated ("Security Capital"
or the "Company"), and the shares of Class B Common Stock, par value $.01 per
share ("Class B Shares" together with the Class A Shares, the "Shares") into
which the Class A Shares may be converted, offered hereby are being offered
and sold by certain shareholders (the "Selling Shareholders") of Security
Capital. The Class A Shares were acquired by the Selling Shareholders pursuant
to the Security Capital Group Incorporated 1991 Option Plan A (the "Plan").
The Class A Shares are being registered to permit public secondary trading of
the Class A Shares from time to time after the date of this Prospectus, but
the registration of the Class A Shares does not necessarily mean that any of
the Class A Shares will be offered or sold by the Selling Shareholders.
 
  Security Capital's authorized capital stock includes Class A Shares and
Class B Shares. The rights of holders of Class A Shares and Class B Shares
differ as follows: the holders of Class A Shares are entitled to one vote,
while the holders of Class B Shares are entitled to one two-hundredth of a
vote, for each share held of record on all matters submitted to a vote of
shareholders; and holders of Class B Shares are entitled to receive dividends
and distributions (including liquidating distributions) equal to one-fiftieth
of the amount per share declared by the Board of Directors of Security Capital
(the "Board") for each Class A Share. Each Class A Share can be converted into
50 Class B Shares beginning on January 1, 1998 at the option of the holder
thereof.
 
  The Class A Shares and the Class B Shares are listed on the New York Stock
Exchange, Inc. (the "NYSE") under the symbols "SCZ.A" and "SCZ.B",
respectively. On October 16, 1997, the last reported sale price of the Class A
Shares and the Class B Shares on the NYSE was $1,650 and $33 15/16,
respectively.
 
  The Selling Shareholders may from time to time offer and sell the Class A
Shares on the NYSE or otherwise at market prices then prevailing or at prices
and upon terms then obtainable. Sales may be made in ordinary brokerage
transactions, in block transactions, in privately negotiated transactions,
pursuant to Rule 144 ("Rule 144") promulgated under the Securities Act of
1933, as amended (the "Securities Act"), or otherwise. If the Class A Shares
are sold through brokers, customary brokerage commissions and charges are
expected to be paid by the Selling Shareholders. All proceeds from any such
sale will go directly to the Selling Shareholder in the transaction.
 
                               ----------------
 
THESE  SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES  AND
 EXCHANGE  COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS  THE SECURI-
  TIES  AND EXCHANGE COMMISSION  OR ANY  STATE SECURITIES COMMISSION  PASSED
   UPON THE ACCURACY OR  ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
    THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
 
  NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY SELLING
SHAREHOLDER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE CLASS A SHARES OR
CLASS B SHARES OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY
PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR
SOLICITATION TO SUCH PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE ANY IMPLICATION THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE
DATE HEREOF.
 
                             AVAILABLE INFORMATION
 
  Security Capital is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy material and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information concerning Security Capital may be inspected
and copied at the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
located at Seven World Trade Center, New York, New York 10048 and at 500 West
Madison Street, Chicago, Illinois 60661 and are also available at the
Commission's Worldwide Web site at http://www.sec.gov. Copies of such material
can be obtained from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition,
Security Capital's Class A Shares and Class B Shares are listed on the NYSE,
and all such reports, proxy material and other information filed by Security
Capital with the NYSE may be inspected at the offices of the NYSE at 20 Broad
Street, New York, New York 10005.
 
  Security Capital has filed with the Commission a registration statement on
Form S-8 (together with all amendments and exhibits, the "Registration
Statement") under the Securities Act with respect to the securities offered
hereby. This Prospectus, which constitutes a part of the Registration
Statement, does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. Statements made in this
Prospectus as to the content of any contract, agreement or other document
referred to are not necessarily complete. With respect to each such contract,
agreement, or other document filed or incorporated by reference as an exhibit
to the Registration Statement, reference is made to the exhibit for a more
complete description of the matter involved, and each such statement shall be
deemed qualified in its entirety by such reference. For further information,
reference is hereby made to the Registration Statement which may be inspected
and copied in the manner and at the sources described above.
 
                INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
 
  The following documents filed by Security Capital with the Commission are
incorporated herein by reference:
 
  (a) Prospectus of Security Capital dated September 17, 1997 as filed with
      the Commission on September 19, 1997 pursuant to Rule 424(b)(5)
      promulgated under the Securities Act of 1933, as amended (File No. 333-
      26037);
 
  (b) Quarterly Report on Form 10-Q for the quarter ended June 30, 1997 (File
      No. 0-22455);
 
  (c) Current Report on Form 8-K filed October 1, 1997 (File No. 1-13355);
      and
 
  (d) The description of Security Capital's Class A Shares and Class B Shares
      (including the related preferred share purchase rights) contained in
      the Security Capital registration statements on Form 8-A filed with the
      Commission on September 11, 1997 (File No. 1-13355).
 
  All documents filed by Security Capital pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering shall be deemed to be
 
                                       2
<PAGE>
 
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated herein by reference shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently filed document
which also is, or is deemed to be, incorporated by reference herein modifies
or supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
 
  Security Capital hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, on the written or oral request of such person, a copy of any or all
of the documents referred to above which have been, or may be, incorporated in
this Prospectus by reference, other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference into such documents.
Requests for such copies should be directed to Security Capital Group
Incorporated, 125 Lincoln Avenue, Santa Fe, New Mexico 87501, Attention:
Jeffrey A. Klopf, Senior Vice President and Secretary, telephone (505) 982-
9292.
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                    PAGE
                                    ----
<S>                                 <C>
Available Information..............   2
Incorporation of Certain Documents
 by Reference......................   2
Security Capital Group
 Incorporated......................   4
Risk Factors.......................   5
Tax Status of Security Capital.....   5
Use of Proceeds....................   6
</TABLE>
<TABLE>
<CAPTION>
                                                             PAGE
                                                             ----
                         <S>                                 <C>
                         Selling Shareholders...............   6
                         Description of Capital Stock.......   7
                         Certain Provisions of Maryland Law
                          and of Security Capital's Charter
                          and Bylaws........................  12
                         Plan of Distribution...............  15
                         Experts............................  16
                         Legal Matters......................  16
</TABLE>
 
                                       3
<PAGE>
 
                      SECURITY CAPITAL GROUP INCORPORATED
 
  Security Capital is a real estate research, investment and operating
management company. Management has assembled a superior team of operating and
investment professionals to implement the firm's strategy. Security Capital's
strategy is to create the optimal organization to lead and profit from global
real estate securitization. Security Capital will implement this strategy by:
 
  . Providing leadership in real estate research conducted on a global basis.
    Security Capital's proprietary research, which is available to Security
    Capital's affiliates, provides a strong foundation for its capital
    deployment strategy.
 
  . Continuing to invest its capital in fully integrated, value-added
    operating companies that have strong prospects for sustained growth.
    Security Capital plans to utilize the results of its research to identify
    opportunities in which it can invest its capital in the start-up of
    highly focused, private operating companies with the objective of
    becoming publicly traded and having the prospect of dominating their
    respective niches. The Company currently is considering several new
    business initiatives, both domestically and globally, in which it has
    recently made or has agreed to make investments. While none of the new
    business initiatives is material at present to Security Capital's results
    of operations or financial condition, such initiatives are expected to be
    an important component of Security Capital's future growth. In addition,
    Security Capital will continue to make investments in public companies in
    which it can provide strategic and operating guidance and capital and
    thereby enable the companies to pursue an attractive growth strategy.
 
  . Creating a global real estate securities management business.
 
  Since its commencement of operations in 1991, Security Capital has
continually committed research and development capital to generate new start-
up, fully integrated real estate operating companies and new business
services. Based on such research and development activities, Security Capital
has established a range of real estate research, service and management
businesses and made a series of investments in Security Capital Pacific Trust
("PTR"), Security Capital Industrial Trust ("SCI"), Security Capital Atlantic
Incorporated ("ATLANTIC"), Security Capital U.S. Realty ("SC-USREALTY") and
Homestead Village Incorporated ("Homestead"), each of which is now publicly
traded. Through September 12, 1997, Security Capital has invested an aggregate
of approximately $2.3 billion in the common shares of PTR, SCI, ATLANTIC,
SC-USREALTY and Homestead and warrants of Homestead. Those securities had an
aggregate market value of approximately $3.3 billion (based on the closing
price of those securities on the principal exchange on which such securities
are listed on September 12, 1997). As of September 12, 1997, Security Capital
owned approximately 33% of PTR, 50% of ATLANTIC, 68% of Homestead, 43% of SCI
and 33% of SC-USREALTY (based in each case on common shares outstanding) and,
pursuant to a series of investor agreements, advisory agreements, board
representation or other control rights, has significant influence over the
operations of each of these entities. As of September 12, 1997, these five
publicly traded real estate companies had a collective equity market
capitalization (assuming full conversion or exercise of convertible
securities, options and warrants) of approximately $9.4 billion. SC-USREALTY
has made strategic investments in three publicly traded companies, CarrAmerica
Realty Corporation, Storage USA, Inc. and Regency Realty Corporation, and one
private company, Pacific Retail Trust, which had a collective equity market
capitalization of approximately $4.6 billion as of September 12, 1997
(assuming contractual equity commitments by investors have been funded, and
full conversion or exercise of convertible securities, options and warrants).
 
  Security Capital has several new business initiatives which recently became
operational, including Strategic Hotel Capital Incorporated, Security Capital
Preferred Growth Incorporated and Security Capital Employee REIT Fund
Incorporated, in which Security Capital has initially committed to invest $300
million, $50 million and $100 million, respectively, and several other new
business initiatives which are in varying stages of research and development.
Security Capital and SC-USREALTY also have several new business initiatives
expected to be operational by the end of 1997, including Security Capital
Global Realty and Security Capital EuroPacific Real Estate Shares, in which
Security Capital has committed to invest $300 million and $50 million,
respectively.
 
                                       4
<PAGE>
 
Security Capital believes that an important component of its future growth
will come from new business initiatives and the implementation of new business
strategies, although there can be no assurance that current new business
initiatives will be continued or prove successful.
 
                                 RISK FACTORS
 
  An investment in the Class A Shares and Class B Shares involves certain
risks including the following: (i) recent underlying favorable conditions in
the real estate industry may not continue and Security Capital may not
continue to grow at rates similar to those which it has achieved in the past;
(ii) there can be no assurance that Security Capital will be successful in
creating new businesses; (iii) Security Capital is dependent on dividends,
capital gains and management and service fees from its operating companies to
meet its operating needs and to pay principal and interest on debt; (iv)
Security Capital, through its investees, is subject to general real estate
investment risks; (v) there are limitations on the shareholders' ability to
change control of Security Capital; and (vi) there has been a limited prior
market for the Class A Shares.
 
                        TAX STATUS OF SECURITY CAPITAL
 
  For federal income tax purposes, Security Capital is a Subchapter C
corporation subject to applicable federal and state tax on its taxable income
at regular corporate rates. As a result, it is under no obligation to make any
distributions to shareholders. If distributions are made by Security Capital,
shareholders will recognize ordinary income to the extent of current and
accumulated earnings and profits of Security Capital and any amounts
distributed in excess of current and accumulated earnings and profits will be
considered a tax-free return of capital, reducing the tax basis in the
shareholder's Shares by the amount of such distribution (but not below zero),
with distributions in excess of the shareholder's tax basis taxable as capital
gains (if the Shares are held as a capital asset). In general, any gain or
loss upon a sale or other disposition of Class A Shares by a shareholder will
be considered either short-term or long-term capital gain depending upon the
period of time the Class A Shares were held by the shareholder. Non-U.S.
holders not holding Class A Shares in connection with a U.S. trade or business
generally will be subject to U.S. withholding tax in connection with
distributions unless reduced or eliminated by an applicable tax treaty. In
addition, non-U.S. holders not holding Class A Shares in connection with a
U.S. trade or business generally will not be subject to U.S. federal income
tax on a sale or other disposition of Class A Shares unless Security Capital
has been a "United States real property holding corporation" within the five-
year period preceding such sale or disposition.
 
                                       5
<PAGE>
 
                                USE OF PROCEEDS
 
  The Company will not receive any proceeds from the sale of the Class A Shares
offered hereby. All proceeds from the sale of the Class A Shares offered hereby
will be received by the Selling Shareholders.
 
                              SELLING SHAREHOLDERS
 
  All of the Class A Shares may be reoffered and resold using this Prospectus
directly by the participants in the Plan described herein as Selling
Shareholders. Certain unnamed Selling Shareholders that are not affiliates of
Security Capital may use this Prospectus for reoffers and resales of up to
99.82 Class A Shares. The amount of Class A Shares that may be sold by a
Selling Shareholder who is an affiliate of Security Capital or who has held the
Class A Shares for less than two years pursuant to this Prospectus during any
three-month period is limited to the greater of (i) one percent of the Class A
Shares outstanding or (ii) the average weekly reported volume of trading in
Class A Shares during the preceding four calendar weeks. The table below sets
forth the names of certain Selling Shareholders, the total number of Class A
Shares held by each such Selling Shareholder prior to the offering, the total
number of the Class A Shares offered hereby by each such Selling Shareholder
and the number of Class A Shares (based on the total number of Class A Shares
held by the Selling Shareholders as of the date hereof) which will be held by
each such Selling Shareholder after the offering assuming that all the Class A
Shares offered hereby by the Selling Shareholder are sold. Selling Shareholders
may, at any time and from time to time after the date hereof, sell all or a
portion of the Shares offered hereby. Since the Selling Shareholders may sell
all, some or none of the Class A Shares offered hereby, no estimate can be made
of the number of Class A Shares that will be sold in the offering to which this
Prospectus relates and that will be owned by each Selling Shareholder upon
completion of the offering to which this Prospectus relates. If, however, all
the Class A Shares offered hereby are sold by the Selling Shareholders, no
Selling Shareholder (based on the total number of Class A Shares held by the
Selling Shareholders as of the date hereof) would hold one percent or more of
the outstanding Class A Shares.
 
<TABLE>
<CAPTION>
                                                                    NUMBER OF
                              NUMBER OF CLASS A    NUMBER OF     CLASS A SHARES
                              SHARES HELD PRIOR  CLASS A SHARES    HELD AFTER
   NAME                        TO THE OFFERING   OFFERED HEREBY   THE OFFERING
   ----                       ------------------ --------------- ---------------
<S>                           <C>                <C>             <C>
Thomas P. Garrigan(1)........     1,262.908          149.189        1,113.719
James H. Polk III(2).........     2,607.409          538.920        2,068.489
                                  ---------          -------        ---------
  Total......................     3,870.317          688.109        3,182.208
                                  =========          =======        =========
</TABLE>
--------
(1) Vice President of SCI from March 1995 to August 1997 and Senior Vice
    President of Security Capital from June 1993 to February 1995.
(2) Trustee of PTR since 1976; from March 1997 until June 1997, President of
    Security Capital Markets Group Incorporated and Managing Director of
    Security Capital Markets Group from August 1992 to March 1997.
 
                                       6
<PAGE>
 
                         DESCRIPTION OF CAPITAL STOCK
 
  The following summary of terms of the stock of Security Capital does not
purport to be complete and is subject to and qualified in its entirety by
reference to Maryland law and to the Security Capital Articles of Amendment
and Restatement (the "Charter") and the Security Capital Amended and Restated
Bylaws (the "Bylaws"), copies of which are filed as exhibits to the
Registration Statement of which this Prospectus is a part.
 
GENERAL
 
  The authorized stock of Security Capital consists of 250,000,000 shares,
consisting of 20,000,000 Class A Shares, 229,861,000 Class B Shares and
139,000 shares of Series A Cumulative Convertible Redeemable Voting Preferred
Stock (the "Series A Preferred Stock"). The Board may, by articles
supplementary, classify or reclassify any unissued shares of stock from time
to time by setting or changing the preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends and other
distributions, qualifications or terms or conditions of redemption of such
stock. No holder of any class of stock of Security Capital will have any
preemptive right to subscribe for any securities of Security Capital except as
may be granted by the Board pursuant to an agreement between Security Capital
and a shareholder. Under Maryland law, shareholders are generally not liable
for Security Capital's debts or obligations.
 
  The transfer agent and registrar for the Class A Shares and the Class B
Shares is BankBoston, N.A., 150 Royall Street, Canton, Massachusetts 02021.
 
COMMON STOCK
 
  The holders of outstanding Class A Shares are entitled to one vote, and the
holders of outstanding Class B Shares are entitled to one two-hundredth
(1/200th) of a vote, for each share held of record on all matters submitted to
a vote of shareholders. Unless otherwise required by Maryland law, the Class A
Shares and the Class B Shares will vote as a single class with respect to all
matters submitted to a vote of shareholders of Security Capital, including the
election of directors. Shareholders do not have the right to cumulate their
votes in the election of directors, which means that the holders of a majority
of the outstanding Class A Shares can elect all of the directors then standing
for election.
 
  Commencing January 1, 1998, each Class A Share may be converted into 50
Class B Shares at the holder's option at any time. Class B Shares are not
convertible to Class A Shares or any other security.
 
  Holders of Class A Shares are entitled to receive ratably such dividends as
may be authorized by the Board out of funds legally available therefor.
Holders of Class B Shares are entitled to dividends equal to one-fiftieth
(1/50th) of the amount per share declared by the Board for each Class A Share.
Dividends with respect to the Class B Shares will be paid in the same form and
at the same time as dividends with respect to the Class A Shares, except that,
in the event of a stock split or stock dividend, holders of Class A Shares
will receive Class A Shares and holders of Class B Shares will receive Class B
Shares, unless otherwise specifically designated by a resolution of the Board.
Security Capital has no present intention to pay a dividend on Class B Shares
or Class A Shares (which would necessitate a one-fiftieth (1/50th) equivalent
dividend on Class B Shares) in the future.
 
  In the event of the liquidation, dissolution or winding-up of Security
Capital, holders of Class A Shares and Class B Shares are entitled to share
ratably in all assets remaining after the payment of liabilities, with holders
of Class B Shares entitled to receive per share one-fiftieth (1/50th) of any
amount per share received by holders of Class A Shares. Neither holders of
Class A Shares or Class B Shares shall have preemptive rights to subscribe for
additional shares of either class. All outstanding Class A Shares and Class B
Shares are fully paid and non- assessable.
 
PREFERRED STOCK
 
  The Board is empowered by the Charter, without the approval of shareholders,
to cause shares of preferred stock to be issued in one or more series and to
determine, among other things, the number of preferred shares of
 
                                       7
<PAGE>
 
each series and the rights, preferences, powers and limitations of each series
which may be senior to the rights of Class A Shares or Class B Shares. The
issuance of preferred stock could have the effect of delaying, deferring or
preventing a change in control of Security Capital and may adversely affect
the voting and other rights of shareholders. Except for the Series A Preferred
Stock described below, no shares of preferred stock are outstanding and
Security Capital has no present plans to issue any preferred stock other than
as contemplated by the Rights Agreement (as defined below).
 
  Security Capital currently has outstanding 139,000 shares of Series A
Preferred Stock. Generally, the Series A Preferred Stock is entitled to
receive quarterly cumulative cash dividends in an annual amount equal to $75
per share. The Series A Preferred Stock is entitled to receive $1,000 per
share, plus an amount equal to accrued and unpaid dividends, if any, upon any
liquidation, dissolution or winding up of Security Capital before any
distribution could be made to holders of Class A Shares or Class B Shares.
Each share of Series A Preferred Stock is convertible at the option of the
holder, into 0.76184 Class A Shares, subject to customary adjustments to
prevent dilution. In the event that a holder of the Series A Preferred Stock
would be prohibited under the Bank Holding Company Act of 1956, as amended,
from owning securities constituting or convertible into 5% or more of the
outstanding Class A Shares, then the conversion rights of the shares of Series
A Preferred Stock by such holder shall be modified as follows: (i) the number
of shares of Series A Preferred Stock held by such holder which may then be
converted by such holder without resulting in such holder owning 5% or more of
the Class A Shares outstanding after such conversion shall be convertible into
Class A Shares; and (ii) any shares of Series A Preferred Stock held by such
holder in excess of the number of shares which may then be converted as
described in clause (i) will not be convertible into Class A Shares until such
time as (and only to the extent that) (A) such shares may be converted without
resulting in such holder owning 5% or more of the Class A Shares outstanding
after such conversion or (B) such shares are held by a person not prohibited
from owning securities constituting or convertible into 5% or more of Class A
Shares as described above.
 
  The Series A Preferred Stock is not redeemable before March 29, 1999. On and
after such date, the Series A Preferred Stock is redeemable, in whole or in
part, at the option of Security Capital upon not less than 30 days' notice, in
cash at $1,000 per share plus accrued and unpaid dividends, if any. The vote
or consent of a majority of the Series A Preferred Stock is necessary (i) to
amend, alter or repeal any provision of the Articles Supplementary governing
the Series A Preferred Stock in a manner which materially and adversely
affects the voting powers, rights or preferences of the Series A Preferred
Stock or (ii) to authorize, reclassify, create or increase the authorized
amount of any stock of any class (or any security convertible into stock of
any class) ranking prior to the Series A Preferred Stock in the distribution
of assets on any liquidation, dissolution or winding up of Security Capital or
in the payment of dividends. The Series A Preferred Stock is entitled to one
vote per Class A Share into which the Series A Preferred Stock is then
convertible, voting together with the Class A Shares, on any of the following
matters if the Class A Shares are entitled to vote thereon: (i) an amendment,
alteration or repeal of any of the provisions of the Charter, (ii) a
consolidation or merger of Security Capital with or into another entity or of
another entity with or into Security Capital, (iii) a sale or transfer of all
or substantially all of Security Capital's assets or (iv) the voluntary
liquidation or dissolution of Security Capital. Also, the Series A Preferred
Stock is entitled to one-half vote per Class A Share into which the Series A
Preferred Stock is then convertible, voting together with the Class A Shares,
on any other matter submitted to a vote of Security Capital's shareholders.
 
PURCHASE RIGHTS
 
  On April 21, 1997, the Board declared a dividend of one Purchase Right for
each Class A Share outstanding at the close of business on April 21, 1997 (the
"Rights Record Date") to the holders of Class A Shares of record as of the
Rights Record Date. The dividend was paid on the Rights Record Date. The
holders of any additional shares issued after the Rights Record Date and
before the redemption or expiration of the Purchase Rights will also be
entitled to one Shareholder Purchase Right for each such additional share.
Each Purchase Right entitles the registered holder, under certain
circumstances, to purchase from Security Capital, in the event the underlying
share is a Class A Share, one one-hundredth of a Participating Preferred Share
of Security Capital at a price of $6,000 per one one-hundredth of a
Participating Preferred Share (the "Purchase Price"), subject to adjustment.
 
                                       8
<PAGE>
 
In the event the underlying share is a Class B Share, the Purchase Right
entitles the registered holder under certain circumstances to purchase from
Security Capital one five-thousandth of a Participating Preferred Share of
Security Capital at a price of $120 per one five-thousandth of a Participating
Preferred Share. The description and terms of the Purchase Rights are set
forth in the Rights Agreement dated as of April 21, 1997 between Security
Capital and The First National Bank of Boston, as rights agent (the "Rights
Agreement").
 
  The Purchase Rights will be exercisable and will be evidenced by separate
certificates only after the earlier to occur of: (1) 10 days following a
public announcement that a person or group of affiliated or associated
persons, other than SC-USREALTY and certain affiliates of Security Capital,
has acquired beneficial ownership of 20% or more of the voting power of the
voting equity securities of Security Capital (thereby becoming an "Acquiring
Person") or (2) 15 business days (or such later date as may be determined by
action of the Board prior to such time as any person or group of affiliated
persons becomes an Acquiring Person) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of persons of 25% or more of the voting power of the voting equity
securities of Security Capital (the first to occur of such dates being called
the "Rights Distribution Date"). With respect to any of the Class A Share or
Class B Share certificates outstanding as of the Rights Record Date, until the
Rights Distribution Date the Purchase Rights will be evidenced by such
certificate. Until the Rights Distribution Date (or earlier redemption or
expiration of the Purchase Rights), new certificates issued after the Rights
Record Date upon transfer or new issuance of Class A Shares or Class B Shares
will contain a notation incorporating the Rights Agreement by reference.
Notwithstanding the foregoing, if the Board in good faith determines that a
person who would otherwise be an Acquiring Person under the Rights Agreement
has become such inadvertently, and such person divests as promptly as
practicable a sufficient number of Class A Shares or Class B Shares so that
such person would no longer be an Acquiring Person, then such person shall not
be deemed to be an Acquiring Person for purposes of the Rights Agreement.
 
  The Purchase Rights will expire on April 21, 2007 (the "Final Expiration
Date"), unless the Final Expiration Date is extended or unless the Rights are
earlier redeemed or exchanged by Security Capital, in each case as described
below.
 
  The Purchase Price payable, and the number of Participating Preferred Shares
or other securities or property issuable, upon exercise of the Purchase Rights
are subject to adjustment under certain circumstances from time to time to
prevent dilution. With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at
least 1% in such Purchase Price.
 
  Participating Preferred Shares purchasable upon exercise of the Purchase
Rights will not be redeemable. Each Participating Preferred Share will be
entitled to a minimum preferential quarterly distribution payment of $1 per
share but will be entitled to an aggregate distribution of 100 times the
distribution declared per Class A Share, or if no Class A Shares are
outstanding, 2 times the distribution declared per Class B Share. Each
Participating Preferred Share will have 100 votes, voting together with the
Shares. In the event of liquidation, the holders of the Participating
Preferred Shares will be entitled to a minimum preferential liquidation
payment of $1 per share but will be entitled to an aggregate payment of 100
times the payment made per Class A Share, or if no Class A Shares are
outstanding, 2 times the payment made per Class B Share. In the event of any
merger, consolidation or other transaction in which Class A Shares or Class B
Shares are exchanged, each Participating Preferred Share will be entitled to
receive 100 times the amount received per Class A Share or Class B Share, as
the case may be. In the event of issuance of Participating Preferred Shares
upon exercise of the Purchase Rights, in order to facilitate trading, a
depositary receipt may be issued for each one one-hundredth or one five-
thousandth of a Participating Preferred Share. The Purchase Rights will be
protected by customary antidilution provisions.
 
  In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, proper provision will be made so that each holder
of Purchase Right, other than Purchase Rights beneficially owned by the
Acquiring Person (which will thereafter be void), will thereafter have the
right to receive upon exercise a number of Class A Shares or Class B Shares,
as the case may be, having a market value (determined
 
                                       9
<PAGE>
 
in accordance with the Rights Agreement) of twice the Purchase Price. In lieu
of the issuance of Class A Shares or Class B Shares, as the case may be, upon
exercise of Purchase Rights, the Board may under certain circumstances, and if
there is an insufficient number of Class A Shares or Class B Shares, as the
case may be, authorized but unissued or held as treasury Shares to permit the
exercise in full of the Purchase Rights, the Board is required to take such
action as may be necessary to cause Security Capital to issue or pay upon the
exercise of Purchase Rights, cash (including by way of a reduction of purchase
price), property, other securities or any combination of the foregoing having
an aggregate value equal to that of the Class A Shares or Class B Shares, as
the case may be, which otherwise would have been issuable upon the exercise of
Purchase Rights.
 
  In the event that, after any person or group becomes an Acquiring Person,
Security Capital is acquired in a merger or other business combination
transaction of 50% or more of its consolidated assets or earning power are
sold, proper provision will be made so that each holder of a Purchase Right
will thereafter have the right to receive, upon the exercise thereof at the
then current Purchase Price, a number of shares of common stock of the
acquiring company having a market value (determined in accordance with the
Rights Agreement) of twice the Purchase Price.
 
  At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by that person or group of 50% or more of the outstanding
Class A Shares or Class B Shares, the Board may exchange the Purchase Rights
(other than Purchase Rights owned by that person or group which will have
become void), in whole or in part, at an exchange ratio of one Class A Share
or Class B Share, as the case may be (or one one- hundredth or one five-
thousandth of a Participating Preferred Share as the case may be), per
Purchase Right (subject to adjustment).
 
  As soon as practicable after a Rights Distribution Date, Security Capital is
obligated to use its best efforts to file a registration statement under the
Securities Act relating to the securities issuable upon exercise of Purchase
Rights and to cause such registration statement to become effective as soon as
practicable.
 
  At any time prior to the time a person or group of persons becomes an
Acquiring Person, the Board may redeem the Purchase Rights in whole, but not
in part, at a price of $.01 per Purchase Right (the "Redemption Price")
payable in cash, Shares or any other form of consideration deemed appropriate
by the Board. The redemption of the Purchase Rights may be made effective at
such time, on such basis and with such conditions as the Board in its sole
discretion may establish. Immediately upon the effectiveness of any redemption
of the Purchase Rights, the right to exercise the Purchase Rights will
terminate and the only right of the holders of Purchase Rights will be to
receive the Redemption Price.
 
  The terms of the Purchase Rights may be amended by the Board without the
consent of the holders of the Purchase Rights, except that from and after the
time any person or group of affiliated or associated persons becomes an
Acquiring Person no such amendment may adversely affect the interest of the
holders of the Purchase Rights and in no event shall any such amendment change
the 20% threshold at which a person acquiring beneficial ownership of Class A
Shares or Class B Shares becomes an Acquiring Person.
 
  The Purchase Rights have certain anti-takeover effects. The Purchase Rights
will cause substantial dilution to a person or group that attempts to acquire
Security Capital on terms not approved by its Board, except pursuant to an
offer conditioned on a substantial number of Purchase Rights being acquired.
The Purchase Rights should not interfere with any merger or other business
combination approved by the Board since the Purchase Rights may be redeemed by
Security Capital at the Redemption Price prior to the time that a person or
group has acquired beneficial ownership of 20% or more of the voting power of
the voting equity securities of Security Capital. The form of Rights Agreement
specifying the terms of the Purchase Rights has been incorporated by reference
into the Registration Statement of which this Prospectus forms a part and is
incorporated herein by reference. The foregoing description of the Purchase
Rights does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, the Rights Agreement, including the definitions
therein of certain terms.
 
                                      10
<PAGE>
 
RESTRICTION ON SIZE OF HOLDINGS OF SHARES
 
  The Charter contains certain restrictions on the number of shares of stock
that individual shareholders may own. For the operating companies to qualify
as REITs under the Code, no more than 50% of the value of their shares (after
taking into account options to acquire shares) may be owned, directly or
indirectly, by five or fewer individuals (as defined in the Internal Revenue
Code of 1986, as amended (the "Code"), to include certain entities and
constructive ownership among specified family members) during the last half of
a taxable year (other than the first taxable year). Because certain of the
operating companies are REITs, their respective charters and Security
Capital's Charter contain restrictions on the acquisition of shares intended
to ensure compliance with these requirements.
 
  Subject to certain exceptions specified in the Charter, no holder may own,
or be deemed to own by virtue of the attribution provisions of the Code, more
than 9.8% (the "Ownership Limit") of the number or value of the issued and
outstanding shares of Security Capital's stock. The Board, upon receipt of a
ruling from the Internal Revenue Service ("IRS") or an opinion of counsel or
other evidence satisfactory to the Board and upon such other conditions as the
Board may direct, may also exempt a proposed transferee from the Ownership
Limit. As a condition of such exemption, the proposed transferee must give
written notice to Security Capital of the proposed transfer no later than the
fifteenth day prior to any transfer which, if consummated, would result in the
intended transferee owning shares of Security Capital's stock in excess of the
Ownership Limit. The Board may require such opinions of counsel, affidavits,
undertakings or agreements as it may deem necessary or advisable in order to
determine or ensure the operating companies' status as REITs. Any transfer of
Shares that would (i) create a direct or indirect ownership of shares of
Security Capital's stock in excess of the Ownership Limit or (ii) result in a
Security Capital investee being "closely held" within the meaning of Section
856(h) of the Code, shall be null and void ab initio, and the intended
transferee will acquire no rights to the shares of Security Capital's stock.
The foregoing restrictions on transferability and ownership will not apply if
the Board determines, which determination must be approved by the
shareholders, that it is no longer in the best interests of Security Capital
to attempt to, or to continue to, assist Security Capital's operating
companies in qualifying as REITs. The Charter excludes SC-USREALTY (and its
transferees) from the Ownership Limit and the Board has waived the Ownership
Limit with respect to the number of shares of stock, but not the value, that
may be owned by SCPG Holdings Pte. Ltd. and its affiliates.
 
  Any shares of Security Capital's stock, the purported transfer of which
would result in a person owning Shares in excess of the Ownership Limit or
cause any or all of the operating companies to become "closely held" under
Section 856(h) of the Code, that is not otherwise permitted as provided above
will constitute excess shares ("Excess Shares"), which will be transferred
pursuant to the Charter to a party not affiliated with Security Capital
designated by Security Capital as the trustee of a trust for the exclusive
benefit of an organization or organizations described in Sections 170(b)(1)(A)
and 170(c) of the Code and identified by the Board as the beneficiary or
beneficiaries of the trust (the "Charitable Beneficiary"), until such time as
the Excess Shares are transferred to a person whose ownership will not violate
the restrictions on ownership. While these Excess Shares are held in trust,
they will be entitled to share in any distributions which will be paid to the
trust for the benefit of the Charitable Beneficiary and may only be voted by
the trustee for the benefit of the Charitable Beneficiary. Subject to the
Ownership Limit, the Excess Shares shall be transferred by the trustee at the
direction of Security Capital to any person (if the Excess Shares would not be
Excess Shares in the hands of such person). The purported transferee will
receive the lesser of (i) the price paid by the purported transferee for the
Excess Shares (or, if no consideration was paid, fair market value on the day
of the event causing the Excess Shares to be held in trust) and (ii) the price
received from the sale or other disposition of the Excess Shares held in
trust. Any proceeds in excess of the amount payable to the purported
transferee will be paid to the Charitable Beneficiary. In addition, such
Excess Shares held in trust are subject to purchase by Security Capital for a
90-day period at a purchase price equal to the lesser of (i) the price paid
for the Excess Shares by the purported transferee (or, if no consideration was
paid, fair market value at the time of the event causing the shares to be held
in trust) and (ii) the fair market value of the Excess Shares on the date
Security Capital elects to purchase. Fair market value, for these purposes,
means the last reported sales price reported on the NYSE on the trading day
immediately preceding the relevant date, or if not then traded on the NYSE,
the last reported sales price on the trading day
 
                                      11
<PAGE>
 
immediately preceding the relevant date as reported on any exchange or
quotation system over or through which the relevant class of shares of stock
may be traded, or if not then traded over or through any exchange or quotation
system, then the market price on the relevant date as determined in good faith
by the Board.
 
  From and after the purported transfer to the purported transferee of the
Excess Shares, the purported transferee shall cease to be entitled to
distributions, voting rights and other benefits with respect to the Excess
Shares except the right to payment on the transfer of the Excess Shares as
described above. Any distribution paid to a purported transferee on Excess
Shares prior to the discovery by Security Capital that such Excess Shares have
been transferred in violation of the provisions of the Charter shall be
repaid, upon demand, to Security Capital, which shall pay any such amounts to
the trust for the benefit of the Charitable Beneficiary. If the foregoing
transfer restrictions are determined to be void, invalid or unenforceable by
any court of competent jurisdiction, then the purported transferee of any
Excess Shares may be deemed, at the option of Security Capital, to have acted
as an agent on behalf of Security Capital in acquiring such Excess Shares and
to hold such Excess Shares on behalf of Security Capital.
 
  All certificates representing shares of Security Capital's stock will bear a
legend referring to the restrictions described above.
 
  Each shareholder shall upon demand be required to disclose to Security
Capital in writing such information with respect to the direct, indirect and
constructive ownership of shares of Security Capital's stock as the Board
deems reasonably necessary to assist its operating companies in complying with
the provisions of the Code applicable to REITs, to determine Security
Capital's operating companies status as REITs, to comply with the requirements
of any taxing authority or governmental agency or to determine any such
compliance.
 
  These ownership limitations could have the effect of discouraging a takeover
or other transaction in which holders of some, or a majority, of the shares of
Security Capital's stock might receive a premium for their shares over the
then prevailing market price or which such holders might believe to be
otherwise in their best interest.
 
         CERTAIN PROVISIONS OF MARYLAND LAW AND OF SECURITY CAPITAL'S
                              CHARTER AND BYLAWS
 
  The following paragraphs summarize certain provisions of Maryland law and
the Charter and Bylaws. The summary does not purport to be complete and is
subject to and qualified in its entirety by reference to Maryland law and to
the Charter and Bylaws, copies of which have been filed as exhibits to the
Registration Statement of which this Prospectus is a part.
 
CLASSIFICATION OF THE BOARD
 
  The Bylaws provide that the number of directors may be established by the
Board but may not be fewer than three nor more than fifteen. Any vacancy will
be filled, at any regular meeting or at any special meeting called for that
purpose, by a majority of the remaining directors, except that a vacancy
resulting from an increase in the number of directors will be filled by a
majority vote of the entire Board. Pursuant to the terms of the Charter, the
directors are divided into three classes. One class holds office for a term
expiring at the annual meeting of shareholders to be held in 1998, another
class holds office for a term expiring at the annual meeting of shareholders
to be held in 1999 and another class holds office for a term expiring at the
annual meeting of shareholders to be held in 2000. As the term of each class
expires, directors in that class will be elected for a term of three years and
until their successors are duly elected and qualify. Security Capital believes
that classification of the Board will help to assure the continuity and
stability of Security Capital's business strategies and policies as determined
by the Board.
 
  The classified director provision could have the effect of making the
removal of incumbent directors more time-consuming and difficult, which could
discourage a third party from making a tender offer or otherwise
 
                                      12
<PAGE>
 
attempting to obtain control of Security Capital, even though such an attempt
might be beneficial to Security Capital and its shareholders. At least two
annual meetings of shareholders, instead of one, will generally be required to
effect a change in a majority of the Board. Thus, the classified board
provision could increase the likelihood that incumbent directors will retain
their positions.
 
DIRECTOR LIABILITY LIMITATION AND INDEMNIFICATION
 
  Maryland law permits a Maryland corporation to include in its charter a
provision limiting the liability of its directors and officers to the
corporation and its stockholders for money damages except for liability
resulting from (a) actual receipt of an improper benefit or profit in money,
property or services or (b) active and deliberate dishonesty established by a
final judgment as being material to the cause of action. The Charter contains
such a provision which limits such liability to the maximum extent permitted
by Maryland law.
 
  The Bylaws provide that Security Capital will, to the maximum extent
permitted by Maryland law in effect from time to time, indemnify and pay or
reimburse reasonable expenses in advance of final disposition of a proceeding
to (a) any individual who is a present or former director or officer of
Security Capital or (b) any individual who, while a director or officer of
Security Capital and at the request of Security Capital, serves or has served
another corporation, partnership, joint venture, trust, employee benefit plan
or any other enterprise as a director, officer, partner or trustee of such
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise and who is made a party to the proceeding by reason of his or her
service in that capacity. Security Capital has the power, with the approval of
the Board, to provide such indemnification and advancement of expenses to a
person who has served a predecessor of Security Capital in any of the
capacities described in (a) or (b) above and to any employee or agent of
Security Capital or its predecessors.
 
  Maryland law requires a corporation (unless its charter requires otherwise,
which the Charter does not) to indemnify a director or officer who has been
successful, on the merits or otherwise, in the defense of any proceeding to
which he or she is made a party by reason of his or her service in that
capacity. Maryland law permits a corporation to indemnify its present and
former directors and officers, among others, against judgments, penalties,
fines, settlements and reasonable expenses actually incurred by them in
connection with any proceeding to which they may be made a party by reason of
their service in those or other capacities unless it is established that (a)
the act or omission of the director or officer was material to the matter
giving rise to the proceeding and (i) was committed in bad faith or (ii) was
the result of active and deliberate dishonesty, (b) the director or officer
actually received an improper personal benefit in money, property or services
or (c) in the case of any criminal proceeding, the director or officer had
reasonable cause to believe that the act or omission was unlawful. However, a
Maryland corporation may not indemnify for an adverse judgment in a suit by or
in the right of the corporation or for a judgment of liability on the basis
that personal benefit was improperly received, unless in either case a court
orders indemnification and then only for expenses. In addition, Maryland law
permits a corporation to advance reasonable expenses to a director or officer
upon the corporation's receipt of (a) a written affirmation by the director or
officer of his or her good faith belief that he or she has met the standard of
conduct necessary for indemnification by the corporation and (b) a written
statement by or on his or her behalf to repay the amount paid or reimbursed by
the corporation if it shall ultimately be determined that the standard of
conduct was not met.
 
  Additionally, Security Capital has entered into indemnity agreements with
each of its officers and directors which provide for reimbursement of all
expenses and liabilities of such officer or director, arising out of any
lawsuit or claim against such officer or director due to the fact that he or
she was or is serving as an officer or director, except for such liabilities
and expenses (a) the payment of which is judicially determined to be unlawful,
(b) relating to claims under Section 16(b) of the Exchange Act or (c) relating
to judicially determined criminal violations.
 
  Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling Security
Capital pursuant to the foregoing provisions, Security Capital has been
informed that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is therefore
unenforceable.
 
                                      13
<PAGE>
 
BUSINESS COMBINATIONS
 
  Under Maryland law, certain "business combinations" (including a merger,
consolidation, share exchange, or, in certain circumstances, an asset transfer
or issuance or reclassification of equity securities) between a Maryland
corporation and any person who beneficially owns 10% or more of the voting
power of the corporation's shares or an affiliate of the corporation who, at
any time within the two-year period prior to the date in question, was the
beneficial owner of 10% or more of the voting power of the then-outstanding
voting stock of the corporation (an "Interested Stockholder") or an affiliate
of such an Interested Stockholder are prohibited for five years after the most
recent date on which the Interested Stockholder becomes an Interested
Stockholder. Thereafter, any such business combination must be recommended by
the Board of such corporation and approved by the affirmative vote of at least
(a) 80% of the votes entitled to be cast by holders of outstanding voting
shares of the corporation and (b) two-thirds of the votes entitled to be cast
by holders of outstanding voting shares of the corporation other than shares
held by the Interested Stockholder with whom the business combination is to be
effected, unless, among other conditions, the corporation's stockholders
receive a minimum price (as defined under Maryland law) for their shares and
the consideration is received in cash or in the same form as previously paid
by the Interested Stockholder for its shares. These provisions of Maryland law
do not apply, however, to business combinations that are approved or exempted
by the Board of the corporation prior to the time that the Interested
Stockholder becomes an Interested Stockholder.
 
  Security Capital's Charter exempts from these provisions of Maryland law any
business combination with SC-USREALTY and its affiliates and successors. As a
result, SC-USREALTY and its affiliates and successors may be able to enter
into business combinations with Security Capital that may not be in the best
interests of its shareholders without compliance by Security Capital with the
supermajority vote requirements and other provisions of the statute.
 
CONTROL SHARE ACQUISITIONS
 
  Maryland law provides that "Control Shares" of a Maryland corporation
acquired in a "Control Share acquisition" have no voting rights except to the
extent approved by a vote of two-thirds of the votes entitled to be cast on
the matter, excluding shares of stock owned by the acquiror or by officers or
directors who are employees of the corporation. "Control Shares" are voting
shares of stock which, if aggregated with all other such shares of stock
previously acquired by the acquiror, or in respect of which the acquiror is
able to exercise or direct the exercise of voting power (except solely by
virtue of a revocable proxy), would entitle the acquiror to exercise voting
power in electing directors within one of the following ranges of voting
power: (i) one-fifth or more but less than one-third, (ii) one-third or more
but less than a majority, or (iii) a majority of all voting power. Control
Shares do not include shares the acquiring person is then entitled to vote as
a result of having previously obtained stockholder approval. A "Control Share
acquisition" means the acquisition of Control Shares, subject to certain
exceptions.
 
  A person who has made or proposes to make a Control Share acquisition, upon
satisfaction of certain conditions (including an undertaking to pay expenses),
may compel the Board to call a special meeting of stockholders to be held
within 50 days of demand to consider the voting rights of the shares. If no
request for a meeting is made, the corporation may itself present the question
at any stockholders meeting.
 
  If voting rights are not approved at the meeting or if the acquiring person
does not deliver an acquiring person statement as required by the statute,
then, subject to certain conditions and limitations, the corporation may
redeem any or all of the Control Shares (except those for which voting rights
have previously been approved) for fair value determined, without regard to
the absence of voting rights for the Control Shares, as of the date of the
last Control Share acquisition by the acquiror or of any meeting of
stockholders at which the voting rights of such shares are considered and not
approved. If voting rights for Control Shares are approved at a stockholders
meeting and the acquiror become entitled to vote a majority of the shares
entitled to vote, all other stockholders may exercise appraisal rights. The
fair value of the shares as determined for purposes of such appraisal rights
may not be less than the highest price per share paid by the acquiror in the
Control Share acquisition.
 
                                      14
<PAGE>
 
  The Control Share acquisition statute does not apply to shares acquired in a
merger, consolidation or share exchange if the corporation is a party to the
transaction, or to acquisitions approved or exempted by the charter or bylaws
of the corporation.
 
  Security Capital's Bylaws contain a provision exempting SC-USREALTY and its
affiliates and successors from the provisions of the Control Share acquisition
statute.
 
ADVANCE NOTICE OF DIRECTOR NOMINATIONS AND NEW BUSINESS
 
  For nominations or other business to be properly brought before an annual
meeting of shareholders by a stockholder, the Bylaws require such shareholder
to deliver a notice to the Secretary, absent specified circumstances, not less
than 60 days nor more than 90 days prior to the first anniversary of the
preceding year's annual meeting setting forth: (i) as to each person whom the
shareholder proposes to nominate for election or reelection as a director, all
information relating to such person that is required to be disclosed in
solicitations of proxies for the election of directors, pursuant to Regulation
14A of the Exchange Act; (ii) as to any other business that the shareholder
proposes to bring before the meeting, a brief description of the business
desired to be brought before the meeting, the reasons for conducting such
business at the meeting and any material interest in such business of such
shareholder and of the beneficial owner, if any, on whose behalf the proposal
is made; and (iii) as to the shareholder giving notice and the beneficial
owner, if any, on whose behalf the nomination or proposal is made, (x) the
name and address of such shareholder as they appear on Security Capital's
books, and of such beneficial owner and (y) the number of Shares which are
owned beneficially and of record by such shareholder and such beneficial
owner, if any.
 
                             PLAN OF DISTRIBUTION
 
  The Selling Shareholders may from time to time offer and sell, the Class A
Shares, and the Class B Shares into which they may be converted, on the NYSE
or otherwise at market prices then prevailing or at prices and upon terms then
obtainable. Sales may be made in ordinary brokerage transactions, in block
transactions, in privately negotiated transactions, pursuant to Rule 144 or
otherwise. If the Class A Shares and Class B Shares are sold through brokers,
customary brokerage commissions and charges are expected to be paid by the
Selling Shareholders. The Class A Shares and Class B Shares are being
registered to permit public secondary trading of the Class A Shares and Class
B Shares from time to time after the date of this Prospectus. Security Capital
will bear all expenses (other than the selling commissions and fees and
expenses of counsel to any Selling Shareholders) in connection with the
registration and sale of the Class A Shares and Class B Shares.
 
  The Selling Shareholders and any dealer, broker or other agent selling
securities offered hereby for a Selling Shareholder or purchasing any such
securities from a Selling Shareholder for purposes of resale may be deemed to
be an underwriter under the Securities Act and any compensation received by
the Selling Shareholder, dealer, broker or other agent may be deemed
underwriting compensation. The amount of such compensation cannot currently be
estimated. Security Capital knows of no existing arrangements between any
Selling Shareholder and any dealer, broker or other agent.
 
                                      15
<PAGE>
 
                                    EXPERTS
 
  The consolidated financial statements and related schedules of Security
Capital and SCI incorporated by reference in this Prospectus and elsewhere in
the Registration Statement of which this Prospectus forms a part, have been
audited by Arthur Andersen LLP, independent public accountants to the extent
indicated in their reports thereon also incorporated by reference herein and
in the Registration Statement. Such financial statements have been
incorporated by reference herein in reliance upon such reports given upon the
authority of such firm as experts in accounting and auditing.
 
  The financial statements and related schedule of PTR incorporated by
reference in this Prospectus and elsewhere in the Registration Statement, of
which this Prospectus forms a part, have been audited by KPMG Peat Marwick
LLP, independent public accountants to the extent indicated in their report
thereon also incorporated by reference herein and in the Registration
Statement. Such financial statements have been incorporated by reference
herein in reliance upon such reports given upon the authority of such firm as
experts in accounting and auditing.
 
  The financial statements and related schedules of ATLANTIC and Homestead
consolidated into the financial statements of Security Capital have been
audited by Ernst & Young LLP, independent auditors to the extent indicated in
their reports thereon incorporated by reference herein and in the Registration
Statement. Such financial statements have been consolidated in reliance upon
such reports given upon the authority of such firm as experts in accounting
and auditing.
 
  With respect to the unaudited condensed interim financial statements for the
three- and six-month periods ended June 30, 1997 and 1996, incorporated by
reference in this Prospectus, Arthur Andersen LLP and KPMG Peat Marwick LLP
have reported that they have applied limited procedures in accordance with
professional standards for a review of such information. However, their
separate reports state that they did not audit and they do not express an
opinion on that interim financial information. Accordingly, the degree of
reliance on their reports on such information should be restricted considering
the limited nature of the review procedures applied. None of such accountants
is subject to the liability provisions of Section 11 of the Securities Act for
their reports on the unaudited interim financial information because neither
of those reports is a "report" or a "part" of the Registration Statement
prepared or certified by the accountants within the meaning of Sections 7 and
11 of the Securities Act.
 
  The financial statements and related schedules of SC-USREALTY incorporated
by reference in this Prospectus and elsewhere in the Registration Statement of
which this Prospectus forms a part, have been audited by Price Waterhouse LLP,
independent public accountants to the extent indicated in their reports
thereon also incorporated by reference herein and in the Registration
Statement. Such financial statements have been incorporated by reference
herein in reliance upon such reports given upon the authority of such firm as
experts in accounting and auditing.
 
                                 LEGAL MATTERS
 
  Certain legal matters in respect of the validity of the issuance of the
Class A Shares and the Class B Shares into which they are converted offered
hereby will be passed upon for Security Capital by Mayer, Brown & Platt,
Chicago, Illinois. Mayer, Brown & Platt has in the past represented and is
currently representing Security Capital and certain of its affiliates in
various legal matters.
 
                                      16
<PAGE>
 
                                    PART II
 
              INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
 
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
 
  The following documents, which have heretofore been filed by Security
Capital Group Incorporated ("Security Capital" or "Registrant") with the
Securities and Exchange Commission (the "SEC") are incorporated by reference
herein and shall be deemed to be a part hereof:
 
  (a) Prospectus of Security Capital dated September 17, 1997 as filed with
      the SEC on September 19, 1997 pursuant to Rule 424(b)(5) promulgated
      under the Securities Act of 1933, as amended (File No. 333-26037);
 
  (b) Form 10-Q for the quarter ended June 30, 1997 (File No. 0-22455);
 
  (c) Form 8-K filed October 1, 1997 (File No. 1-13355); and
 
  (d) The description of Security Capital's shares of Class A Common Stock
      and Class B Common Stock (including the related preferred share
      purchase rights) contained in the Security Capital's registration
      statements on Form 8-A filed with the SEC on September 11, 1997 (File
      No. 1-13355).
 
  All documents subsequently filed by Security Capital pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated herein by
reference and shall be deemed a part hereof from the date of filing of such
documents.
 
ITEM 4. DESCRIPTION OF SECURITIES.
 
  Not applicable.
 
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
 
  The validity of the issuance of the shares of Class A Common Stock
registered hereunder is being passed upon for Security Capital by the law firm
of Mayer, Brown & Platt, Chicago, Illinois. Mayer, Brown & Platt has
represented and is currently representing Security Capital and certain of its
affiliates.
 
ITEM 6. INDEMNIFICATION OF TRUSTEES AND OFFICERS.
 
  Article EIGHTH of the Registrant's Charter provides as follows with respect
to the indemnification of directors and officers of the Registrant:
 
  "The Corporation shall have the power, to the maximum extent permitted by
  Maryland law in effect from time to time, to obligate itself to indemnify
  and to pay or reimburse reasonable expenses in advance of final disposition
  of a proceeding to (a) any individual who is a present or former director
  or officer of the Corporation or (b) any individual who, while a director
  or officer of the Corporation and at the request of the Corporation, serves
  or has served as a director, officer, partner or trustee of another
  corporation, partnership, joint venture, trust, employee benefit plan or
  any other enterprise from and against any claim or liability to which such
  person may become subject or which such person may incur by reason of his
  or her status as a present or former director or officer of the
  Corporation. The Corporation shall have the power, with the approval of the
  Board of Directors, to provide such indemnification and advancement of
  expenses to a person who served a predecessor of the Corporation in any of
  the capacities described in (a) or (b) above and to any employee or agent
  of the Corporation or a predecessor of the Corporation."
 
                                     II-1
<PAGE>
 
  Article NINTH of the Registrant's Charter provides as follows with respect
to limitation of liability of its directors and officers:
 
  "To the maximum extent that Maryland law in effect from time to time
  permits limitation of the liability of directors and officers of a Maryland
  corporation, no director or officer of the Corporation shall be liable to
  the Corporation or its stockholders for money damages. Neither the
  amendment nor repeal of this Article NINTH nor the adoption or amendment of
  any other provision of the Charter or Bylaws of the Corporation
  inconsistent with this Article NINTH, shall apply to or affect in any
  respect the applicability of the preceding sentence with respect to any act
  or failure to act which occurred prior to such amendment, repeal or
  adoption."
 
  Article XIII of the Registrant's Bylaws provides as follows with respect to
limitation of liability of its directors and officers and advances for
expenses:
 
  "To the maximum extent permitted by Maryland law in effect from time to
  time, the Corporation shall indemnify and, without requiring a preliminary
  determination of the ultimate entitlement to indemnification shall pay or
  reimburse reasonable expenses in advance of final disposition of a
  proceeding to (a) any individual who is a present or former director or
  officer of the Corporation and who is made a party to the proceeding by
  reasons of his service in that capacity or (b) any individual who, while a
  director of the Corporation and at the request of the Corporation, serves
  or has served another corporation, partnership, joint venture, trust,
  employee benefit plan or other enterprise and who is made a party to the
  proceeding by reason of his or her service in that capacity. The
  Corporation may, with the approval of the Board of Directors, provide such
  indemnification and advance for expenses to a person who served a
  predecessor of the Corporation in any of the capacities described in (a) or
  (b) above and to any employee or agent of the Corporation or a predecessor
  of the Corporation.
 
  Neither the amendment nor repeal of this Article, nor the adoption or
  amendment of any other provision of the Bylaws or Charter of the
  Corporation inconsistent with this Article, shall apply to or affect in any
  respect the applicability of the preceding paragraph with respect to any
  act or failure to act which occurred prior to such amendment, repeal or
  adoption."
 
  Maryland law permits a Maryland corporation to include in its charter a
provision limiting the liability of its directors and officers to the
corporation and its stockholders for money damages except for liability
resulting from (a) actual receipt of an improper benefit or profit in money,
property or services or (b) active and deliberate dishonesty established by a
final judgment as being material to the cause of action. The Charter contains
such a provision which limits such liability to the maximum extent permitted
by Maryland law.
 
  Maryland law requires a corporation (unless its charter requires otherwise,
which the Charter does not) to indemnify a director or officer who has been
successful, on the merits or otherwise, in the defense of any proceeding to
which he or she is made a party by reason of his or her service in that
capacity. Maryland law permits a corporation to indemnify its present and
former directors and officers, among others, against judgments, penalties,
fines, settlements and reasonable expenses actually incurred by them in
connection with any proceeding to which they may be made a party by reason of
their service in those or other capacities unless it is established that (a)
the act or omission of the director or officer was material to the matter
giving rise to the proceeding and (i) was committed in bad faith or (ii) was
the result of active and deliberate dishonesty, (b) the director or officer
actually received an improper personal benefit in money, property or services
or (c) in the case of any criminal proceeding, the director or officer had
reasonable cause to believe that the act or omission was unlawful. However, a
Maryland corporation may not indemnify for an adverse judgment in a suit by or
in the right of the corporation or for a judgment of liability on the basis
that personal benefit was improperly received, unless in either case a court
orders indemnification and then only for expenses. In addition, Maryland law
permits a corporation to advance reasonable expenses to a director or officer
upon the corporation's receipt of (a) a written affirmation by the director or
officer of his or her good faith belief that he or she has met the standard of
conduct necessary for indemnification by the corporation and (b) a written
statement by or in his or her behalf to repay the amount paid or reimbursed by
the corporation if it shall ultimately be determined that the standard of
conduct was not met.
 
                                     II-2
<PAGE>
 
  The Registrant has entered into indemnity agreements with each of its
officers and directors which provide for reimbursement of all expenses and
liabilities of such officer or director, arising out of any lawsuit or claim
against such officer or director due to the fact that he was or is serving as
an officer or director, except for such liabilities and expenses (a) the
payment of which is judicially determined to be unlawful, (b) relating to
claims under Section 16(b) of the Securities Exchange Act of 1934, or (c)
relating to judicially determined criminal violations.
 
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
 
  The shares of Class A Common Stock (and the shares of Class B Common Stock
into which they may be converted) covered by the resale prospectus which is a
part of this Registration Statement were acquired by the Selling Shareholders
in transactions which were exempt from registration pursuant to Section 4(2)
of the Securities Act of 1933, as amended. Such shares were acquired solely in
connection with offers made to participants in the 1991 Option Plan A.
 
ITEM 8. EXHIBITS.
 
  See Index to Exhibits.
 
ITEM 9. UNDERTAKINGS.
 
 A. Rule 415 Offering.
 
  The undersigned registrant hereby undertakes:
 
    1. To file, during any period in which offers or sales are being made, a
  post-effective amendment to this registration statement:
 
      (i) To include any prospectus required by section 10(a)(3) of the
    Securities Act of 1933;
 
      (ii) To reflect in the prospectus any facts or events arising after
    the effective date of the registration statement (or the most recent
    post-effective amendment thereof) which, individually or in the
    aggregate, represent a fundamental change in the information set forth
    in the registration statement;
 
      (iii) To include any material information with respect to the plan of
    distribution not previously disclosed in the registration statement or
    any material change to such information in the registration statement;
 
    Provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not
    apply if the registration statement is on Form S-3 or Form S-8, and the
    information required to be included in a post-effective amendment by
    those paragraphs is contained in periodic reports filed by the
    registrant pursuant to section 13 or section 15(d) of the Exchange Act
    that are incorporated by reference in the registration statement.
 
    2. That, for the purpose of determining any liability under the
  Securities Act of 1933, each such post-effective amendment shall be deemed
  to be a new registration statement relating to the securities offered
  therein, and the offering of such securities at that time shall be deemed
  to be the initial bona fide offering thereof.
 
    3. To remove from registration by means of a post-effective amendment any
  of the securities being registered which remain unsold at the termination
  of the offering.
 
 B. Filings Incorporating Subsequent Exchange Act Documents by Reference.
 
  The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
 
                                     II-3
<PAGE>
 
 C. Indemnification of Directors and Officers.
 
  Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions of the registrant's charter or by-laws
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
 
                                     II-4
<PAGE>
 
                               POWER OF ATTORNEY
 
  Know All Men By These Presents, that each of the undersigned directors and
officers of Security Capital Group Incorporated, hereby constitutes and
appoints William D. Sanders, C. Ronald Blankenship, Paul E. Szurek, Jeffrey A.
Klopf and Ariel Amir, his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, with full power to act alone, to sign
any and all amendments (including post-effective amendments) to this
registration statement, and to file the same, with all exhibits thereto, and
any and all documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform any and all acts and
things requisite and necessary to be done in and about the premises, as fully
and to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or his substitute or nominee, may lawfully do or cause to be done by
virtue hereof.
 
                                     II-5
<PAGE>
 
                                  SIGNATURES
 
  PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-8 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF SANTA FE, STATE OF NEW MEXICO, ON OCTOBER 22, 1997.
 
                                          Security Capital Group Incorporated
 
                                                   /s/ Jeffrey A. Klopf
                                          By __________________________________
                                               JEFFREY A. KLOPF SENIOR VICE
                                                  PRESIDENT AND SECRETARY
 
  PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
 
              SIGNATURE                        TITLE                 DATE
 
       /s/ William D. Sanders          Chairman of the           October 22,
-------------------------------------   Board of Directors,          1997
         WILLIAM D. SANDERS             President and Chief
                                        Executive Officer
                                        (principal
                                        executive officer)
                                        and Director
 
         /s/ Paul E. Szurek            Chief Financial           October 22,
-------------------------------------   Officer (principal           1997
           PAUL E. SZUREK               financial officer)
 
          /s/ Jayson C. Cyr            Vice President            October 22,
-------------------------------------   (principal                   1997
            JAYSON C. CYR               accounting officer)
 
        /s/ Samuel W. Bodman           Director                  October 22,
-------------------------------------                                1997
          SAMUEL W. BODMAN
 
         /s/ Hermann Buerger           Director                  October 22,
-------------------------------------                                1997
           HERMANN BUERGER
 
                                       Director
-------------------------------------
         JOHN P. FRAZEE, JR.
 
     /s/ Cyrus F. Freidheim, Jr.       Director                  October 22,
-------------------------------------                                1997
       CYRUS F. FREIDHEIM, JR.
 
                                       Director
-------------------------------------
         H. LAURANCE FULLER
 
           /s/ Ray L. Hunt             Director                  October 22,
-------------------------------------                                1997
             RAY L. HUNT
 
       /s/ John T. Kelley III          Director                  October 22,
-------------------------------------                                1997
         JOHN T. KELLEY III
 
        /s/ Peter S. Willmott          Director                  October 22,
-------------------------------------                                1997
          PETER S. WILLMOTT
 
                                     II-6
<PAGE>
 
                               INDEX TO EXHIBITS
 
<TABLE>
<CAPTION>
 EXHIBIT
 NUMBER                         DESCRIPTION OF DOCUMENT
 -------                        -----------------------
 <C>     <S>
   4.1   Articles of Amendment and Restatement (incorporated by reference to
         Exhibit 4.1 to Security Capital's Registration Statement on Form S-11
         (File No. 333-26037) (the "Form S-11"))
   4.2   Amended and Restated Bylaws (incorporated by reference to Exhibit 4.2
         to the Form S-11)
   4.3   Form of Rights Agreement between Security Capital and The First
         National Bank of Boston, as Rights Agent, including form of Rights
         Certificate (incorporated by reference to Exhibit 4.3 to the Form S-
         11)
   4.4   Form of stock certificate for shares of Class A Common Stock
         (incorporated by reference to Exhibit 4.4 to the Form S-11)
   4.5   Form of stock certificate for shares of Class B Common Stock
         (incorporated by reference to Exhibit 4.5 to the Form S-11)
   4.6   Form of 12% Convertible Subordinated Debentures due June 30, 2014
         (incorporated by reference to Exhibit 4.6 to the Form S-11)
   4.7   Security Capital 1991 Option Plan A (as amended and restated
         effective December 3, 1996) (incorporated by reference to Exhibit
         10.30 to the Form S-11)
   5     Opinion of Mayer, Brown & Platt
  15.1   Letter of Arthur Andersen LLP regarding unaudited interim financial
         information
  15.2   Letter of KPMG Peat Marwick LLP regarding unaudited interim financial
         information
  15.3   Letter of Arthur Andersen LLP regarding unaudited interim financial
         information
  23.1   Consent of Mayer, Brown & Platt (included in its opinion filed as
         Exhibit 5 hereto)
  23.2   Consent of Arthur Andersen LLP
  23.3   Consent of KPMG Peat Marwick LLP
  23.4   Consent of Price Waterhouse
  23.5   Consent of Ernst & Young LLP
  23.6   Consent of Ernst & Young LLP
  24     Power of Attorney (included on page II-5)
</TABLE>
 
                                      II-7
[{"type": "S-8", "sequence": "1", "description": "FORM S-8", "secsgml_size_bytes": 91835}]
{"company-data": {"conformed-name": "SECURITY CAPITAL GROUP INC/", "cik": "0000923687", "assigned-sic": "6500", "irs-number": "363692698", "state-of-incorporation": "MD", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-38531", "film-number": "97699402"}, "business-address": {"street1": "125 LINCOLN AVE", "city": "SANTA FE", "state": "NM", "zip": "87501", "phone": "5059829292"}, "mail-address": {"street1": "125 LINCOLN AVE", "city": "SANTA FE", "state": "NM", "zip": "87501"}, "former-company": {"former-conformed-name": "SECURITY CAPITAL REALTY INC ET AL", "date-changed": "19940524"}}
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 23, 1997
 
                                                               FILE NO. 333-
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
 
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
 
                               ----------------
 
                                   FORM S-8
                            REGISTRATION STATEMENT
                                     UNDER
                          THE SECURITIES ACT OF 1933
 
                               ----------------
 
                      SECURITY CAPITAL GROUP INCORPORATED
            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
              MARYLAND                                 36-3692698
                                                    (I.R.S. EMPLOYER
    (STATE OR OTHER JURISDICTION                   IDENTIFICATION NO.)
  OF INCORPORATION OR ORGANIZATION)
 
         125 LINCOLN AVENUE
 
        SANTA FE, NEW MEXICO                              87501
   (ADDRESS OF PRINCIPAL EXECUTIVE                     (ZIP CODE)
              OFFICES)
 
              REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
                                (505) 982-9292
 
                      SECURITY CAPITAL GROUP INCORPORATED
                              1991 OPTION PLAN A
          (AS AMENDED AND RESTATED EFFECTIVE AS OF DECEMBER 3, 1996)
                           (FULL TITLE OF THE PLAN)
 
                               JEFFREY A. KLOPF
                                   SECRETARY
                              125 LINCOLN AVENUE
                          SANTA FE, NEW MEXICO 87501
                                (505) 982-9292
                              (AGENT FOR SERVICE)
 
                               ----------------
 
                        CALCULATION OF REGISTRATION FEE
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
PROPOSED         PROPOSED
                                         MAXIMUM          MAXIMUM
  TITLE OF SECURITIES   AMOUNT TO BE  OFFERING PRICE    AGGREGATE         AMOUNT OF
   TO BE REGISTERED     REGISTERED(1)  PER SHARE(2)  OFFERING PRICE(2) REGISTRATION FEE
---------------------------------------------------------------------------------------
Class A Common Stock,
 par value $.01 per
 share (including
 related preferred
 share purchase
 rights)..............  9,982 Shares      $1,650        $16,470,300         $4,991
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(1) Includes 499,100 shares of the Company's Class B Common Stock into which
    the shares of Class A Common Stock are convertible into, beginning January
    1, 1998, for no additional consideration.
(2) Estimated solely for the purpose of computing the registration fee on the
    basis of the average of the high and low prices for the shares of Class A
    Common Stock as reported on the New York Stock Exchange on October 16,
    1997.
 
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
PROSPECTUS
OCTOBER 23, 1997
 
                      SECURITY CAPITAL GROUP INCORPORATED
 
                     9,982 SHARES OF CLASS A COMMON STOCK
 
                               ----------------
 
  All of the shares of Class A Common Stock, par value $.01 per share (the
"Class A Shares"), of Security Capital Group Incorporated ("Security Capital"
or the "Company"), and the shares of Class B Common Stock, par value $.01 per
share ("Class B Shares" together with the Class A Shares, the "Shares") into
which the Class A Shares may be converted, offered hereby are being offered
and sold by certain shareholders (the "Selling Shareholders") of Security
Capital. The Class A Shares were acquired by the Selling Shareholders pursuant
to the Security Capital Group Incorporated 1991 Option Plan A (the "Plan").
The Class A Shares are being registered to permit public secondary trading of
the Class A Shares from time to time after the date of this Prospectus, but
the registration of the Class A Shares does not necessarily mean that any of
the Class A Shares will be offered or sold by the Selling Shareholders.
 
  Security Capital's authorized capital stock includes Class A Shares and
Class B Shares. The rights of holders of Class A Shares and Class B Shares
differ as follows: the holders of Class A Shares are entitled to one vote,
while the holders of Class B Shares are entitled to one two-hundredth of a
vote, for each share held of record on all matters submitted to a vote of
shareholders; and holders of Class B Shares are entitled to receive dividends
and distributions (including liquidating distributions) equal to one-fiftieth
of the amount per share declared by the Board of Directors of Security Capital
(the "Board") for each Class A Share. Each Class A Share can be converted into
50 Class B Shares beginning on January 1, 1998 at the option of the holder
thereof.
 
  The Class A Shares and the Class B Shares are listed on the New York Stock
Exchange, Inc. (the "NYSE") under the symbols "SCZ.A" and "SCZ.B",
respectively. On October 16, 1997, the last reported sale price of the Class A
Shares and the Class B Shares on the NYSE was $1,650 and $33 15/16,
respectively.
 
  The Selling Shareholders may from time to time offer and sell the Class A
Shares on the NYSE or otherwise at market prices then prevailing or at prices
and upon terms then obtainable. Sales may be made in ordinary brokerage
transactions, in block transactions, in privately negotiated transactions,
pursuant to Rule 144 ("Rule 144") promulgated under the Securities Act of
1933, as amended (the "Securities Act"), or otherwise. If the Class A Shares
are sold through brokers, customary brokerage commissions and charges are
expected to be paid by the Selling Shareholders. All proceeds from any such
sale will go directly to the Selling Shareholder in the transaction.
 
                               ----------------
 
THESE  SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES  AND
 EXCHANGE  COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS  THE SECURI-
  TIES  AND EXCHANGE COMMISSION  OR ANY  STATE SECURITIES COMMISSION  PASSED
   UPON THE ACCURACY OR  ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
    THE CONTRARY IS A CRIMINAL OFFENSE.
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY SELLING
SHAREHOLDER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE CLASS A SHARES OR
CLASS B SHARES OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY
PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR
SOLICITATION TO SUCH PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE ANY IMPLICATION THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE
DATE HEREOF.
 
                             AVAILABLE INFORMATION
 
  Security Capital is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy material and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information concerning Security Capital may be inspected
and copied at the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
located at Seven World Trade Center, New York, New York 10048 and at 500 West
Madison Street, Chicago, Illinois 60661 and are also available at the
Commission's Worldwide Web site at http://www.sec.gov. Copies of such material
can be obtained from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition,
Security Capital's Class A Shares and Class B Shares are listed on the NYSE,
and all such reports, proxy material and other information filed by Security
Capital with the NYSE may be inspected at the offices of the NYSE at 20 Broad
Street, New York, New York 10005.
 
  Security Capital has filed with the Commission a registration statement on
Form S-8 (together with all amendments and exhibits, the "Registration
Statement") under the Securities Act with respect to the securities offered
hereby. This Prospectus, which constitutes a part of the Registration
Statement, does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. Statements made in this
Prospectus as to the content of any contract, agreement or other document
referred to are not necessarily complete. With respect to each such contract,
agreement, or other document filed or incorporated by reference as an exhibit
to the Registration Statement, reference is made to the exhibit for a more
complete description of the matter involved, and each such statement shall be
deemed qualified in its entirety by such reference. For further information,
reference is hereby made to the Registration Statement which may be inspected
and copied in the manner and at the sources described above.
 
                INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
 
  The following documents filed by Security Capital with the Commission are
incorporated herein by reference:
 
  (a) Prospectus of Security Capital dated September 17, 1997 as filed with
      the Commission on September 19, 1997 pursuant to Rule 424(b)(5)
      promulgated under the Securities Act of 1933, as amended (File No. 333-
      26037);
 
  (b) Quarterly Report on Form 10-Q for the quarter ended June 30, 1997 (File
      No. 0-22455);
 
  (c) Current Report on Form 8-K filed October 1, 1997 (File No. 1-13355);
      and
 
  (d) The description of Security Capital's Class A Shares and Class B Shares
      (including the related preferred share purchase rights) contained in
      the Security Capital registration statements on Form 8-A filed with the
      Commission on September 11, 1997 (File No. 1-13355).
 
  All documents filed by Security Capital pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering shall be deemed to be
 
                                       2
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated herein by reference shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently filed document
which also is, or is deemed to be, incorporated by reference herein modifies
or supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
 
  Security Capital hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, on the written or oral request of such person, a copy of any or all
of the documents referred to above which have been, or may be, incorporated in
this Prospectus by reference, other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference into such documents.
Requests for such copies should be directed to Security Capital Group
Incorporated, 125 Lincoln Avenue, Santa Fe, New Mexico 87501, Attention:
Jeffrey A. Klopf, Senior Vice President and Secretary, telephone (505) 982-
9292.
 
                               TABLE OF CONTENTS
PAGE
                                    ----
Available Information..............   2
Incorporation of Certain Documents
 by Reference......................   2
Security Capital Group
 Incorporated......................   4
Risk Factors.......................   5
Tax Status of Security Capital.....   5
Use of Proceeds....................   6
PAGE
                                                             ----
Selling Shareholders...............   6
                         Description of Capital Stock.......   7
                         Certain Provisions of Maryland Law
                          and of Security Capital's Charter
                          and Bylaws........................  12
                         Plan of Distribution...............  15
                         Experts............................  16
                         Legal Matters......................  16
3
SECURITY CAPITAL GROUP INCORPORATED
 
  Security Capital is a real estate research, investment and operating
management company. Management has assembled a superior team of operating and
investment professionals to implement the firm's strategy. Security Capital's
strategy is to create the optimal organization to lead and profit from global
real estate securitization. Security Capital will implement this strategy by:
 
  . Providing leadership in real estate research conducted on a global basis.
    Security Capital's proprietary research, which is available to Security
    Capital's affiliates, provides a strong foundation for its capital
    deployment strategy.
 
  . Continuing to invest its capital in fully integrated, value-added
    operating companies that have strong prospects for sustained growth.
    Security Capital plans to utilize the results of its research to identify
    opportunities in which it can invest its capital in the start-up of
    highly focused, private operating companies with the objective of
    becoming publicly traded and having the prospect of dominating their
    respective niches. The Company currently is considering several new
    business initiatives, both domestically and globally, in which it has
    recently made or has agreed to make investments. While none of the new
    business initiatives is material at present to Security Capital's results
    of operations or financial condition, such initiatives are expected to be
    an important component of Security Capital's future growth. In addition,
    Security Capital will continue to make investments in public companies in
    which it can provide strategic and operating guidance and capital and
    thereby enable the companies to pursue an attractive growth strategy.
 
  . Creating a global real estate securities management business.
 
  Since its commencement of operations in 1991, Security Capital has
continually committed research and development capital to generate new start-
up, fully integrated real estate operating companies and new business
services. Based on such research and development activities, Security Capital
has established a range of real estate research, service and management
businesses and made a series of investments in Security Capital Pacific Trust
("PTR"), Security Capital Industrial Trust ("SCI"), Security Capital Atlantic
Incorporated ("ATLANTIC"), Security Capital U.S. Realty ("SC-USREALTY") and
Homestead Village Incorporated ("Homestead"), each of which is now publicly
traded. Through September 12, 1997, Security Capital has invested an aggregate
of approximately $2.3 billion in the common shares of PTR, SCI, ATLANTIC,
SC-USREALTY and Homestead and warrants of Homestead. Those securities had an
aggregate market value of approximately $3.3 billion (based on the closing
price of those securities on the principal exchange on which such securities
are listed on September 12, 1997). As of September 12, 1997, Security Capital
owned approximately 33% of PTR, 50% of ATLANTIC, 68% of Homestead, 43% of SCI
and 33% of SC-USREALTY (based in each case on common shares outstanding) and,
pursuant to a series of investor agreements, advisory agreements, board
representation or other control rights, has significant influence over the
operations of each of these entities. As of September 12, 1997, these five
publicly traded real estate companies had a collective equity market
capitalization (assuming full conversion or exercise of convertible
securities, options and warrants) of approximately $9.4 billion. SC-USREALTY
has made strategic investments in three publicly traded companies, CarrAmerica
Realty Corporation, Storage USA, Inc. and Regency Realty Corporation, and one
private company, Pacific Retail Trust, which had a collective equity market
capitalization of approximately $4.6 billion as of September 12, 1997
(assuming contractual equity commitments by investors have been funded, and
full conversion or exercise of convertible securities, options and warrants).
 
  Security Capital has several new business initiatives which recently became
operational, including Strategic Hotel Capital Incorporated, Security Capital
Preferred Growth Incorporated and Security Capital Employee REIT Fund
Incorporated, in which Security Capital has initially committed to invest $300
million, $50 million and $100 million, respectively, and several other new
business initiatives which are in varying stages of research and development.
Security Capital and SC-USREALTY also have several new business initiatives
expected to be operational by the end of 1997, including Security Capital
Global Realty and Security Capital EuroPacific Real Estate Shares, in which
Security Capital has committed to invest $300 million and $50 million,
respectively.
 
                                       4
Security Capital believes that an important component of its future growth
will come from new business initiatives and the implementation of new business
strategies, although there can be no assurance that current new business
initiatives will be continued or prove successful.
 
                                 RISK FACTORS
 
  An investment in the Class A Shares and Class B Shares involves certain
risks including the following: (i) recent underlying favorable conditions in
the real estate industry may not continue and Security Capital may not
continue to grow at rates similar to those which it has achieved in the past;
(ii) there can be no assurance that Security Capital will be successful in
creating new businesses; (iii) Security Capital is dependent on dividends,
capital gains and management and service fees from its operating companies to
meet its operating needs and to pay principal and interest on debt; (iv)
Security Capital, through its investees, is subject to general real estate
investment risks; (v) there are limitations on the shareholders' ability to
change control of Security Capital; and (vi) there has been a limited prior
market for the Class A Shares.
 
                        TAX STATUS OF SECURITY CAPITAL
 
  For federal income tax purposes, Security Capital is a Subchapter C
corporation subject to applicable federal and state tax on its taxable income
at regular corporate rates. As a result, it is under no obligation to make any
distributions to shareholders. If distributions are made by Security Capital,
shareholders will recognize ordinary income to the extent of current and
accumulated earnings and profits of Security Capital and any amounts
distributed in excess of current and accumulated earnings and profits will be
considered a tax-free return of capital, reducing the tax basis in the
shareholder's Shares by the amount of such distribution (but not below zero),
with distributions in excess of the shareholder's tax basis taxable as capital
gains (if the Shares are held as a capital asset). In general, any gain or
loss upon a sale or other disposition of Class A Shares by a shareholder will
be considered either short-term or long-term capital gain depending upon the
period of time the Class A Shares were held by the shareholder. Non-U.S.
holders not holding Class A Shares in connection with a U.S. trade or business
generally will be subject to U.S. withholding tax in connection with
distributions unless reduced or eliminated by an applicable tax treaty. In
addition, non-U.S. holders not holding Class A Shares in connection with a
U.S. trade or business generally will not be subject to U.S. federal income
tax on a sale or other disposition of Class A Shares unless Security Capital
has been a "United States real property holding corporation" within the five-
year period preceding such sale or disposition.
 
                                       5
USE OF PROCEEDS
 
  The Company will not receive any proceeds from the sale of the Class A Shares
offered hereby. All proceeds from the sale of the Class A Shares offered hereby
will be received by the Selling Shareholders.
 
                              SELLING SHAREHOLDERS
 
  All of the Class A Shares may be reoffered and resold using this Prospectus
directly by the participants in the Plan described herein as Selling
Shareholders. Certain unnamed Selling Shareholders that are not affiliates of
Security Capital may use this Prospectus for reoffers and resales of up to
99.82 Class A Shares. The amount of Class A Shares that may be sold by a
Selling Shareholder who is an affiliate of Security Capital or who has held the
Class A Shares for less than two years pursuant to this Prospectus during any
three-month period is limited to the greater of (i) one percent of the Class A
Shares outstanding or (ii) the average weekly reported volume of trading in
Class A Shares during the preceding four calendar weeks. The table below sets
forth the names of certain Selling Shareholders, the total number of Class A
Shares held by each such Selling Shareholder prior to the offering, the total
number of the Class A Shares offered hereby by each such Selling Shareholder
and the number of Class A Shares (based on the total number of Class A Shares
held by the Selling Shareholders as of the date hereof) which will be held by
each such Selling Shareholder after the offering assuming that all the Class A
Shares offered hereby by the Selling Shareholder are sold. Selling Shareholders
may, at any time and from time to time after the date hereof, sell all or a
portion of the Shares offered hereby. Since the Selling Shareholders may sell
all, some or none of the Class A Shares offered hereby, no estimate can be made
of the number of Class A Shares that will be sold in the offering to which this
Prospectus relates and that will be owned by each Selling Shareholder upon
completion of the offering to which this Prospectus relates. If, however, all
the Class A Shares offered hereby are sold by the Selling Shareholders, no
Selling Shareholder (based on the total number of Class A Shares held by the
Selling Shareholders as of the date hereof) would hold one percent or more of
the outstanding Class A Shares.
NUMBER OF
                              NUMBER OF CLASS A    NUMBER OF     CLASS A SHARES
                              SHARES HELD PRIOR  CLASS A SHARES    HELD AFTER
   NAME                        TO THE OFFERING   OFFERED HEREBY   THE OFFERING
   ----                       ------------------ --------------- ---------------
Thomas P. Garrigan(1)........     1,262.908          149.189        1,113.719
James H. Polk III(2).........     2,607.409          538.920        2,068.489
                                  ---------          -------        ---------
  Total......................     3,870.317          688.109        3,182.208
                                  =========          =======        =========
--------
(1) Vice President of SCI from March 1995 to August 1997 and Senior Vice
    President of Security Capital from June 1993 to February 1995.
(2) Trustee of PTR since 1976; from March 1997 until June 1997, President of
    Security Capital Markets Group Incorporated and Managing Director of
    Security Capital Markets Group from August 1992 to March 1997.
 
                                       6
DESCRIPTION OF CAPITAL STOCK
 
  The following summary of terms of the stock of Security Capital does not
purport to be complete and is subject to and qualified in its entirety by
reference to Maryland law and to the Security Capital Articles of Amendment
and Restatement (the "Charter") and the Security Capital Amended and Restated
Bylaws (the "Bylaws"), copies of which are filed as exhibits to the
Registration Statement of which this Prospectus is a part.
 
GENERAL
 
  The authorized stock of Security Capital consists of 250,000,000 shares,
consisting of 20,000,000 Class A Shares, 229,861,000 Class B Shares and
139,000 shares of Series A Cumulative Convertible Redeemable Voting Preferred
Stock (the "Series A Preferred Stock"). The Board may, by articles
supplementary, classify or reclassify any unissued shares of stock from time
to time by setting or changing the preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends and other
distributions, qualifications or terms or conditions of redemption of such
stock. No holder of any class of stock of Security Capital will have any
preemptive right to subscribe for any securities of Security Capital except as
may be granted by the Board pursuant to an agreement between Security Capital
and a shareholder. Under Maryland law, shareholders are generally not liable
for Security Capital's debts or obligations.
 
  The transfer agent and registrar for the Class A Shares and the Class B
Shares is BankBoston, N.A., 150 Royall Street, Canton, Massachusetts 02021.
 
COMMON STOCK
 
  The holders of outstanding Class A Shares are entitled to one vote, and the
holders of outstanding Class B Shares are entitled to one two-hundredth
(1/200th) of a vote, for each share held of record on all matters submitted to
a vote of shareholders. Unless otherwise required by Maryland law, the Class A
Shares and the Class B Shares will vote as a single class with respect to all
matters submitted to a vote of shareholders of Security Capital, including the
election of directors. Shareholders do not have the right to cumulate their
votes in the election of directors, which means that the holders of a majority
of the outstanding Class A Shares can elect all of the directors then standing
for election.
 
  Commencing January 1, 1998, each Class A Share may be converted into 50
Class B Shares at the holder's option at any time. Class B Shares are not
convertible to Class A Shares or any other security.
 
  Holders of Class A Shares are entitled to receive ratably such dividends as
may be authorized by the Board out of funds legally available therefor.
Holders of Class B Shares are entitled to dividends equal to one-fiftieth
(1/50th) of the amount per share declared by the Board for each Class A Share.
Dividends with respect to the Class B Shares will be paid in the same form and
at the same time as dividends with respect to the Class A Shares, except that,
in the event of a stock split or stock dividend, holders of Class A Shares
will receive Class A Shares and holders of Class B Shares will receive Class B
Shares, unless otherwise specifically designated by a resolution of the Board.
Security Capital has no present intention to pay a dividend on Class B Shares
or Class A Shares (which would necessitate a one-fiftieth (1/50th) equivalent
dividend on Class B Shares) in the future.
 
  In the event of the liquidation, dissolution or winding-up of Security
Capital, holders of Class A Shares and Class B Shares are entitled to share
ratably in all assets remaining after the payment of liabilities, with holders
of Class B Shares entitled to receive per share one-fiftieth (1/50th) of any
amount per share received by holders of Class A Shares. Neither holders of
Class A Shares or Class B Shares shall have preemptive rights to subscribe for
additional shares of either class. All outstanding Class A Shares and Class B
Shares are fully paid and non- assessable.
 
PREFERRED STOCK
 
  The Board is empowered by the Charter, without the approval of shareholders,
to cause shares of preferred stock to be issued in one or more series and to
determine, among other things, the number of preferred shares of
 
                                       7
each series and the rights, preferences, powers and limitations of each series
which may be senior to the rights of Class A Shares or Class B Shares. The
issuance of preferred stock could have the effect of delaying, deferring or
preventing a change in control of Security Capital and may adversely affect
the voting and other rights of shareholders. Except for the Series A Preferred
Stock described below, no shares of preferred stock are outstanding and
Security Capital has no present plans to issue any preferred stock other than
as contemplated by the Rights Agreement (as defined below).
 
  Security Capital currently has outstanding 139,000 shares of Series A
Preferred Stock. Generally, the Series A Preferred Stock is entitled to
receive quarterly cumulative cash dividends in an annual amount equal to $75
per share. The Series A Preferred Stock is entitled to receive $1,000 per
share, plus an amount equal to accrued and unpaid dividends, if any, upon any
liquidation, dissolution or winding up of Security Capital before any
distribution could be made to holders of Class A Shares or Class B Shares.
Each share of Series A Preferred Stock is convertible at the option of the
holder, into 0.76184 Class A Shares, subject to customary adjustments to
prevent dilution. In the event that a holder of the Series A Preferred Stock
would be prohibited under the Bank Holding Company Act of 1956, as amended,
from owning securities constituting or convertible into 5% or more of the
outstanding Class A Shares, then the conversion rights of the shares of Series
A Preferred Stock by such holder shall be modified as follows: (i) the number
of shares of Series A Preferred Stock held by such holder which may then be
converted by such holder without resulting in such holder owning 5% or more of
the Class A Shares outstanding after such conversion shall be convertible into
Class A Shares; and (ii) any shares of Series A Preferred Stock held by such
holder in excess of the number of shares which may then be converted as
described in clause (i) will not be convertible into Class A Shares until such
time as (and only to the extent that) (A) such shares may be converted without
resulting in such holder owning 5% or more of the Class A Shares outstanding
after such conversion or (B) such shares are held by a person not prohibited
from owning securities constituting or convertible into 5% or more of Class A
Shares as described above.
 
  The Series A Preferred Stock is not redeemable before March 29, 1999. On and
after such date, the Series A Preferred Stock is redeemable, in whole or in
part, at the option of Security Capital upon not less than 30 days' notice, in
cash at $1,000 per share plus accrued and unpaid dividends, if any. The vote
or consent of a majority of the Series A Preferred Stock is necessary (i) to
amend, alter or repeal any provision of the Articles Supplementary governing
the Series A Preferred Stock in a manner which materially and adversely
affects the voting powers, rights or preferences of the Series A Preferred
Stock or (ii) to authorize, reclassify, create or increase the authorized
amount of any stock of any class (or any security convertible into stock of
any class) ranking prior to the Series A Preferred Stock in the distribution
of assets on any liquidation, dissolution or winding up of Security Capital or
in the payment of dividends. The Series A Preferred Stock is entitled to one
vote per Class A Share into which the Series A Preferred Stock is then
convertible, voting together with the Class A Shares, on any of the following
matters if the Class A Shares are entitled to vote thereon: (i) an amendment,
alteration or repeal of any of the provisions of the Charter, (ii) a
consolidation or merger of Security Capital with or into another entity or of
another entity with or into Security Capital, (iii) a sale or transfer of all
or substantially all of Security Capital's assets or (iv) the voluntary
liquidation or dissolution of Security Capital. Also, the Series A Preferred
Stock is entitled to one-half vote per Class A Share into which the Series A
Preferred Stock is then convertible, voting together with the Class A Shares,
on any other matter submitted to a vote of Security Capital's shareholders.
 
PURCHASE RIGHTS
 
  On April 21, 1997, the Board declared a dividend of one Purchase Right for
each Class A Share outstanding at the close of business on April 21, 1997 (the
"Rights Record Date") to the holders of Class A Shares of record as of the
Rights Record Date. The dividend was paid on the Rights Record Date. The
holders of any additional shares issued after the Rights Record Date and
before the redemption or expiration of the Purchase Rights will also be
entitled to one Shareholder Purchase Right for each such additional share.
Each Purchase Right entitles the registered holder, under certain
circumstances, to purchase from Security Capital, in the event the underlying
share is a Class A Share, one one-hundredth of a Participating Preferred Share
of Security Capital at a price of $6,000 per one one-hundredth of a
Participating Preferred Share (the "Purchase Price"), subject to adjustment.
 
                                       8
In the event the underlying share is a Class B Share, the Purchase Right
entitles the registered holder under certain circumstances to purchase from
Security Capital one five-thousandth of a Participating Preferred Share of
Security Capital at a price of $120 per one five-thousandth of a Participating
Preferred Share. The description and terms of the Purchase Rights are set
forth in the Rights Agreement dated as of April 21, 1997 between Security
Capital and The First National Bank of Boston, as rights agent (the "Rights
Agreement").
 
  The Purchase Rights will be exercisable and will be evidenced by separate
certificates only after the earlier to occur of: (1) 10 days following a
public announcement that a person or group of affiliated or associated
persons, other than SC-USREALTY and certain affiliates of Security Capital,
has acquired beneficial ownership of 20% or more of the voting power of the
voting equity securities of Security Capital (thereby becoming an "Acquiring
Person") or (2) 15 business days (or such later date as may be determined by
action of the Board prior to such time as any person or group of affiliated
persons becomes an Acquiring Person) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of persons of 25% or more of the voting power of the voting equity
securities of Security Capital (the first to occur of such dates being called
the "Rights Distribution Date"). With respect to any of the Class A Share or
Class B Share certificates outstanding as of the Rights Record Date, until the
Rights Distribution Date the Purchase Rights will be evidenced by such
certificate. Until the Rights Distribution Date (or earlier redemption or
expiration of the Purchase Rights), new certificates issued after the Rights
Record Date upon transfer or new issuance of Class A Shares or Class B Shares
will contain a notation incorporating the Rights Agreement by reference.
Notwithstanding the foregoing, if the Board in good faith determines that a
person who would otherwise be an Acquiring Person under the Rights Agreement
has become such inadvertently, and such person divests as promptly as
practicable a sufficient number of Class A Shares or Class B Shares so that
such person would no longer be an Acquiring Person, then such person shall not
be deemed to be an Acquiring Person for purposes of the Rights Agreement.
 
  The Purchase Rights will expire on April 21, 2007 (the "Final Expiration
Date"), unless the Final Expiration Date is extended or unless the Rights are
earlier redeemed or exchanged by Security Capital, in each case as described
below.
 
  The Purchase Price payable, and the number of Participating Preferred Shares
or other securities or property issuable, upon exercise of the Purchase Rights
are subject to adjustment under certain circumstances from time to time to
prevent dilution. With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at
least 1% in such Purchase Price.
 
  Participating Preferred Shares purchasable upon exercise of the Purchase
Rights will not be redeemable. Each Participating Preferred Share will be
entitled to a minimum preferential quarterly distribution payment of $1 per
share but will be entitled to an aggregate distribution of 100 times the
distribution declared per Class A Share, or if no Class A Shares are
outstanding, 2 times the distribution declared per Class B Share. Each
Participating Preferred Share will have 100 votes, voting together with the
Shares. In the event of liquidation, the holders of the Participating
Preferred Shares will be entitled to a minimum preferential liquidation
payment of $1 per share but will be entitled to an aggregate payment of 100
times the payment made per Class A Share, or if no Class A Shares are
outstanding, 2 times the payment made per Class B Share. In the event of any
merger, consolidation or other transaction in which Class A Shares or Class B
Shares are exchanged, each Participating Preferred Share will be entitled to
receive 100 times the amount received per Class A Share or Class B Share, as
the case may be. In the event of issuance of Participating Preferred Shares
upon exercise of the Purchase Rights, in order to facilitate trading, a
depositary receipt may be issued for each one one-hundredth or one five-
thousandth of a Participating Preferred Share. The Purchase Rights will be
protected by customary antidilution provisions.
 
  In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, proper provision will be made so that each holder
of Purchase Right, other than Purchase Rights beneficially owned by the
Acquiring Person (which will thereafter be void), will thereafter have the
right to receive upon exercise a number of Class A Shares or Class B Shares,
as the case may be, having a market value (determined
 
                                       9
in accordance with the Rights Agreement) of twice the Purchase Price. In lieu
of the issuance of Class A Shares or Class B Shares, as the case may be, upon
exercise of Purchase Rights, the Board may under certain circumstances, and if
there is an insufficient number of Class A Shares or Class B Shares, as the
case may be, authorized but unissued or held as treasury Shares to permit the
exercise in full of the Purchase Rights, the Board is required to take such
action as may be necessary to cause Security Capital to issue or pay upon the
exercise of Purchase Rights, cash (including by way of a reduction of purchase
price), property, other securities or any combination of the foregoing having
an aggregate value equal to that of the Class A Shares or Class B Shares, as
the case may be, which otherwise would have been issuable upon the exercise of
Purchase Rights.
 
  In the event that, after any person or group becomes an Acquiring Person,
Security Capital is acquired in a merger or other business combination
transaction of 50% or more of its consolidated assets or earning power are
sold, proper provision will be made so that each holder of a Purchase Right
will thereafter have the right to receive, upon the exercise thereof at the
then current Purchase Price, a number of shares of common stock of the
acquiring company having a market value (determined in accordance with the
Rights Agreement) of twice the Purchase Price.
 
  At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by that person or group of 50% or more of the outstanding
Class A Shares or Class B Shares, the Board may exchange the Purchase Rights
(other than Purchase Rights owned by that person or group which will have
become void), in whole or in part, at an exchange ratio of one Class A Share
or Class B Share, as the case may be (or one one- hundredth or one five-
thousandth of a Participating Preferred Share as the case may be), per
Purchase Right (subject to adjustment).
 
  As soon as practicable after a Rights Distribution Date, Security Capital is
obligated to use its best efforts to file a registration statement under the
Securities Act relating to the securities issuable upon exercise of Purchase
Rights and to cause such registration statement to become effective as soon as
practicable.
 
  At any time prior to the time a person or group of persons becomes an
Acquiring Person, the Board may redeem the Purchase Rights in whole, but not
in part, at a price of $.01 per Purchase Right (the "Redemption Price")
payable in cash, Shares or any other form of consideration deemed appropriate
by the Board. The redemption of the Purchase Rights may be made effective at
such time, on such basis and with such conditions as the Board in its sole
discretion may establish. Immediately upon the effectiveness of any redemption
of the Purchase Rights, the right to exercise the Purchase Rights will
terminate and the only right of the holders of Purchase Rights will be to
receive the Redemption Price.
 
  The terms of the Purchase Rights may be amended by the Board without the
consent of the holders of the Purchase Rights, except that from and after the
time any person or group of affiliated or associated persons becomes an
Acquiring Person no such amendment may adversely affect the interest of the
holders of the Purchase Rights and in no event shall any such amendment change
the 20% threshold at which a person acquiring beneficial ownership of Class A
Shares or Class B Shares becomes an Acquiring Person.
 
  The Purchase Rights have certain anti-takeover effects. The Purchase Rights
will cause substantial dilution to a person or group that attempts to acquire
Security Capital on terms not approved by its Board, except pursuant to an
offer conditioned on a substantial number of Purchase Rights being acquired.
The Purchase Rights should not interfere with any merger or other business
combination approved by the Board since the Purchase Rights may be redeemed by
Security Capital at the Redemption Price prior to the time that a person or
group has acquired beneficial ownership of 20% or more of the voting power of
the voting equity securities of Security Capital. The form of Rights Agreement
specifying the terms of the Purchase Rights has been incorporated by reference
into the Registration Statement of which this Prospectus forms a part and is
incorporated herein by reference. The foregoing description of the Purchase
Rights does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, the Rights Agreement, including the definitions
therein of certain terms.
 
                                      10
RESTRICTION ON SIZE OF HOLDINGS OF SHARES
 
  The Charter contains certain restrictions on the number of shares of stock
that individual shareholders may own. For the operating companies to qualify
as REITs under the Code, no more than 50% of the value of their shares (after
taking into account options to acquire shares) may be owned, directly or
indirectly, by five or fewer individuals (as defined in the Internal Revenue
Code of 1986, as amended (the "Code"), to include certain entities and
constructive ownership among specified family members) during the last half of
a taxable year (other than the first taxable year). Because certain of the
operating companies are REITs, their respective charters and Security
Capital's Charter contain restrictions on the acquisition of shares intended
to ensure compliance with these requirements.
 
  Subject to certain exceptions specified in the Charter, no holder may own,
or be deemed to own by virtue of the attribution provisions of the Code, more
than 9.8% (the "Ownership Limit") of the number or value of the issued and
outstanding shares of Security Capital's stock. The Board, upon receipt of a
ruling from the Internal Revenue Service ("IRS") or an opinion of counsel or
other evidence satisfactory to the Board and upon such other conditions as the
Board may direct, may also exempt a proposed transferee from the Ownership
Limit. As a condition of such exemption, the proposed transferee must give
written notice to Security Capital of the proposed transfer no later than the
fifteenth day prior to any transfer which, if consummated, would result in the
intended transferee owning shares of Security Capital's stock in excess of the
Ownership Limit. The Board may require such opinions of counsel, affidavits,
undertakings or agreements as it may deem necessary or advisable in order to
determine or ensure the operating companies' status as REITs. Any transfer of
Shares that would (i) create a direct or indirect ownership of shares of
Security Capital's stock in excess of the Ownership Limit or (ii) result in a
Security Capital investee being "closely held" within the meaning of Section
856(h) of the Code, shall be null and void ab initio, and the intended
transferee will acquire no rights to the shares of Security Capital's stock.
The foregoing restrictions on transferability and ownership will not apply if
the Board determines, which determination must be approved by the
shareholders, that it is no longer in the best interests of Security Capital
to attempt to, or to continue to, assist Security Capital's operating
companies in qualifying as REITs. The Charter excludes SC-USREALTY (and its
transferees) from the Ownership Limit and the Board has waived the Ownership
Limit with respect to the number of shares of stock, but not the value, that
may be owned by SCPG Holdings Pte. Ltd. and its affiliates.
 
  Any shares of Security Capital's stock, the purported transfer of which
would result in a person owning Shares in excess of the Ownership Limit or
cause any or all of the operating companies to become "closely held" under
Section 856(h) of the Code, that is not otherwise permitted as provided above
will constitute excess shares ("Excess Shares"), which will be transferred
pursuant to the Charter to a party not affiliated with Security Capital
designated by Security Capital as the trustee of a trust for the exclusive
benefit of an organization or organizations described in Sections 170(b)(1)(A)
and 170(c) of the Code and identified by the Board as the beneficiary or
beneficiaries of the trust (the "Charitable Beneficiary"), until such time as
the Excess Shares are transferred to a person whose ownership will not violate
the restrictions on ownership. While these Excess Shares are held in trust,
they will be entitled to share in any distributions which will be paid to the
trust for the benefit of the Charitable Beneficiary and may only be voted by
the trustee for the benefit of the Charitable Beneficiary. Subject to the
Ownership Limit, the Excess Shares shall be transferred by the trustee at the
direction of Security Capital to any person (if the Excess Shares would not be
Excess Shares in the hands of such person). The purported transferee will
receive the lesser of (i) the price paid by the purported transferee for the
Excess Shares (or, if no consideration was paid, fair market value on the day
of the event causing the Excess Shares to be held in trust) and (ii) the price
received from the sale or other disposition of the Excess Shares held in
trust. Any proceeds in excess of the amount payable to the purported
transferee will be paid to the Charitable Beneficiary. In addition, such
Excess Shares held in trust are subject to purchase by Security Capital for a
90-day period at a purchase price equal to the lesser of (i) the price paid
for the Excess Shares by the purported transferee (or, if no consideration was
paid, fair market value at the time of the event causing the shares to be held
in trust) and (ii) the fair market value of the Excess Shares on the date
Security Capital elects to purchase. Fair market value, for these purposes,
means the last reported sales price reported on the NYSE on the trading day
immediately preceding the relevant date, or if not then traded on the NYSE,
the last reported sales price on the trading day
 
                                      11
immediately preceding the relevant date as reported on any exchange or
quotation system over or through which the relevant class of shares of stock
may be traded, or if not then traded over or through any exchange or quotation
system, then the market price on the relevant date as determined in good faith
by the Board.
 
  From and after the purported transfer to the purported transferee of the
Excess Shares, the purported transferee shall cease to be entitled to
distributions, voting rights and other benefits with respect to the Excess
Shares except the right to payment on the transfer of the Excess Shares as
described above. Any distribution paid to a purported transferee on Excess
Shares prior to the discovery by Security Capital that such Excess Shares have
been transferred in violation of the provisions of the Charter shall be
repaid, upon demand, to Security Capital, which shall pay any such amounts to
the trust for the benefit of the Charitable Beneficiary. If the foregoing
transfer restrictions are determined to be void, invalid or unenforceable by
any court of competent jurisdiction, then the purported transferee of any
Excess Shares may be deemed, at the option of Security Capital, to have acted
as an agent on behalf of Security Capital in acquiring such Excess Shares and
to hold such Excess Shares on behalf of Security Capital.
 
  All certificates representing shares of Security Capital's stock will bear a
legend referring to the restrictions described above.
 
  Each shareholder shall upon demand be required to disclose to Security
Capital in writing such information with respect to the direct, indirect and
constructive ownership of shares of Security Capital's stock as the Board
deems reasonably necessary to assist its operating companies in complying with
the provisions of the Code applicable to REITs, to determine Security
Capital's operating companies status as REITs, to comply with the requirements
of any taxing authority or governmental agency or to determine any such
compliance.
 
  These ownership limitations could have the effect of discouraging a takeover
or other transaction in which holders of some, or a majority, of the shares of
Security Capital's stock might receive a premium for their shares over the
then prevailing market price or which such holders might believe to be
otherwise in their best interest.
 
         CERTAIN PROVISIONS OF MARYLAND LAW AND OF SECURITY CAPITAL'S
                              CHARTER AND BYLAWS
 
  The following paragraphs summarize certain provisions of Maryland law and
the Charter and Bylaws. The summary does not purport to be complete and is
subject to and qualified in its entirety by reference to Maryland law and to
the Charter and Bylaws, copies of which have been filed as exhibits to the
Registration Statement of which this Prospectus is a part.
 
CLASSIFICATION OF THE BOARD
 
  The Bylaws provide that the number of directors may be established by the
Board but may not be fewer than three nor more than fifteen. Any vacancy will
be filled, at any regular meeting or at any special meeting called for that
purpose, by a majority of the remaining directors, except that a vacancy
resulting from an increase in the number of directors will be filled by a
majority vote of the entire Board. Pursuant to the terms of the Charter, the
directors are divided into three classes. One class holds office for a term
expiring at the annual meeting of shareholders to be held in 1998, another
class holds office for a term expiring at the annual meeting of shareholders
to be held in 1999 and another class holds office for a term expiring at the
annual meeting of shareholders to be held in 2000. As the term of each class
expires, directors in that class will be elected for a term of three years and
until their successors are duly elected and qualify. Security Capital believes
that classification of the Board will help to assure the continuity and
stability of Security Capital's business strategies and policies as determined
by the Board.
 
  The classified director provision could have the effect of making the
removal of incumbent directors more time-consuming and difficult, which could
discourage a third party from making a tender offer or otherwise
 
                                      12
attempting to obtain control of Security Capital, even though such an attempt
might be beneficial to Security Capital and its shareholders. At least two
annual meetings of shareholders, instead of one, will generally be required to
effect a change in a majority of the Board. Thus, the classified board
provision could increase the likelihood that incumbent directors will retain
their positions.
 
DIRECTOR LIABILITY LIMITATION AND INDEMNIFICATION
 
  Maryland law permits a Maryland corporation to include in its charter a
provision limiting the liability of its directors and officers to the
corporation and its stockholders for money damages except for liability
resulting from (a) actual receipt of an improper benefit or profit in money,
property or services or (b) active and deliberate dishonesty established by a
final judgment as being material to the cause of action. The Charter contains
such a provision which limits such liability to the maximum extent permitted
by Maryland law.
 
  The Bylaws provide that Security Capital will, to the maximum extent
permitted by Maryland law in effect from time to time, indemnify and pay or
reimburse reasonable expenses in advance of final disposition of a proceeding
to (a) any individual who is a present or former director or officer of
Security Capital or (b) any individual who, while a director or officer of
Security Capital and at the request of Security Capital, serves or has served
another corporation, partnership, joint venture, trust, employee benefit plan
or any other enterprise as a director, officer, partner or trustee of such
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise and who is made a party to the proceeding by reason of his or her
service in that capacity. Security Capital has the power, with the approval of
the Board, to provide such indemnification and advancement of expenses to a
person who has served a predecessor of Security Capital in any of the
capacities described in (a) or (b) above and to any employee or agent of
Security Capital or its predecessors.
 
  Maryland law requires a corporation (unless its charter requires otherwise,
which the Charter does not) to indemnify a director or officer who has been
successful, on the merits or otherwise, in the defense of any proceeding to
which he or she is made a party by reason of his or her service in that
capacity. Maryland law permits a corporation to indemnify its present and
former directors and officers, among others, against judgments, penalties,
fines, settlements and reasonable expenses actually incurred by them in
connection with any proceeding to which they may be made a party by reason of
their service in those or other capacities unless it is established that (a)
the act or omission of the director or officer was material to the matter
giving rise to the proceeding and (i) was committed in bad faith or (ii) was
the result of active and deliberate dishonesty, (b) the director or officer
actually received an improper personal benefit in money, property or services
or (c) in the case of any criminal proceeding, the director or officer had
reasonable cause to believe that the act or omission was unlawful. However, a
Maryland corporation may not indemnify for an adverse judgment in a suit by or
in the right of the corporation or for a judgment of liability on the basis
that personal benefit was improperly received, unless in either case a court
orders indemnification and then only for expenses. In addition, Maryland law
permits a corporation to advance reasonable expenses to a director or officer
upon the corporation's receipt of (a) a written affirmation by the director or
officer of his or her good faith belief that he or she has met the standard of
conduct necessary for indemnification by the corporation and (b) a written
statement by or on his or her behalf to repay the amount paid or reimbursed by
the corporation if it shall ultimately be determined that the standard of
conduct was not met.
 
  Additionally, Security Capital has entered into indemnity agreements with
each of its officers and directors which provide for reimbursement of all
expenses and liabilities of such officer or director, arising out of any
lawsuit or claim against such officer or director due to the fact that he or
she was or is serving as an officer or director, except for such liabilities
and expenses (a) the payment of which is judicially determined to be unlawful,
(b) relating to claims under Section 16(b) of the Exchange Act or (c) relating
to judicially determined criminal violations.
 
  Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling Security
Capital pursuant to the foregoing provisions, Security Capital has been
informed that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is therefore
unenforceable.
 
                                      13
BUSINESS COMBINATIONS
 
  Under Maryland law, certain "business combinations" (including a merger,
consolidation, share exchange, or, in certain circumstances, an asset transfer
or issuance or reclassification of equity securities) between a Maryland
corporation and any person who beneficially owns 10% or more of the voting
power of the corporation's shares or an affiliate of the corporation who, at
any time within the two-year period prior to the date in question, was the
beneficial owner of 10% or more of the voting power of the then-outstanding
voting stock of the corporation (an "Interested Stockholder") or an affiliate
of such an Interested Stockholder are prohibited for five years after the most
recent date on which the Interested Stockholder becomes an Interested
Stockholder. Thereafter, any such business combination must be recommended by
the Board of such corporation and approved by the affirmative vote of at least
(a) 80% of the votes entitled to be cast by holders of outstanding voting
shares of the corporation and (b) two-thirds of the votes entitled to be cast
by holders of outstanding voting shares of the corporation other than shares
held by the Interested Stockholder with whom the business combination is to be
effected, unless, among other conditions, the corporation's stockholders
receive a minimum price (as defined under Maryland law) for their shares and
the consideration is received in cash or in the same form as previously paid
by the Interested Stockholder for its shares. These provisions of Maryland law
do not apply, however, to business combinations that are approved or exempted
by the Board of the corporation prior to the time that the Interested
Stockholder becomes an Interested Stockholder.
 
  Security Capital's Charter exempts from these provisions of Maryland law any
business combination with SC-USREALTY and its affiliates and successors. As a
result, SC-USREALTY and its affiliates and successors may be able to enter
into business combinations with Security Capital that may not be in the best
interests of its shareholders without compliance by Security Capital with the
supermajority vote requirements and other provisions of the statute.
 
CONTROL SHARE ACQUISITIONS
 
  Maryland law provides that "Control Shares" of a Maryland corporation
acquired in a "Control Share acquisition" have no voting rights except to the
extent approved by a vote of two-thirds of the votes entitled to be cast on
the matter, excluding shares of stock owned by the acquiror or by officers or
directors who are employees of the corporation. "Control Shares" are voting
shares of stock which, if aggregated with all other such shares of stock
previously acquired by the acquiror, or in respect of which the acquiror is
able to exercise or direct the exercise of voting power (except solely by
virtue of a revocable proxy), would entitle the acquiror to exercise voting
power in electing directors within one of the following ranges of voting
power: (i) one-fifth or more but less than one-third, (ii) one-third or more
but less than a majority, or (iii) a majority of all voting power. Control
Shares do not include shares the acquiring person is then entitled to vote as
a result of having previously obtained stockholder approval. A "Control Share
acquisition" means the acquisition of Control Shares, subject to certain
exceptions.
 
  A person who has made or proposes to make a Control Share acquisition, upon
satisfaction of certain conditions (including an undertaking to pay expenses),
may compel the Board to call a special meeting of stockholders to be held
within 50 days of demand to consider the voting rights of the shares. If no
request for a meeting is made, the corporation may itself present the question
at any stockholders meeting.
 
  If voting rights are not approved at the meeting or if the acquiring person
does not deliver an acquiring person statement as required by the statute,
then, subject to certain conditions and limitations, the corporation may
redeem any or all of the Control Shares (except those for which voting rights
have previously been approved) for fair value determined, without regard to
the absence of voting rights for the Control Shares, as of the date of the
last Control Share acquisition by the acquiror or of any meeting of
stockholders at which the voting rights of such shares are considered and not
approved. If voting rights for Control Shares are approved at a stockholders
meeting and the acquiror become entitled to vote a majority of the shares
entitled to vote, all other stockholders may exercise appraisal rights. The
fair value of the shares as determined for purposes of such appraisal rights
may not be less than the highest price per share paid by the acquiror in the
Control Share acquisition.
 
                                      14
The Control Share acquisition statute does not apply to shares acquired in a
merger, consolidation or share exchange if the corporation is a party to the
transaction, or to acquisitions approved or exempted by the charter or bylaws
of the corporation.
 
  Security Capital's Bylaws contain a provision exempting SC-USREALTY and its
affiliates and successors from the provisions of the Control Share acquisition
statute.
 
ADVANCE NOTICE OF DIRECTOR NOMINATIONS AND NEW BUSINESS
 
  For nominations or other business to be properly brought before an annual
meeting of shareholders by a stockholder, the Bylaws require such shareholder
to deliver a notice to the Secretary, absent specified circumstances, not less
than 60 days nor more than 90 days prior to the first anniversary of the
preceding year's annual meeting setting forth: (i) as to each person whom the
shareholder proposes to nominate for election or reelection as a director, all
information relating to such person that is required to be disclosed in
solicitations of proxies for the election of directors, pursuant to Regulation
14A of the Exchange Act; (ii) as to any other business that the shareholder
proposes to bring before the meeting, a brief description of the business
desired to be brought before the meeting, the reasons for conducting such
business at the meeting and any material interest in such business of such
shareholder and of the beneficial owner, if any, on whose behalf the proposal
is made; and (iii) as to the shareholder giving notice and the beneficial
owner, if any, on whose behalf the nomination or proposal is made, (x) the
name and address of such shareholder as they appear on Security Capital's
books, and of such beneficial owner and (y) the number of Shares which are
owned beneficially and of record by such shareholder and such beneficial
owner, if any.
 
                             PLAN OF DISTRIBUTION
 
  The Selling Shareholders may from time to time offer and sell, the Class A
Shares, and the Class B Shares into which they may be converted, on the NYSE
or otherwise at market prices then prevailing or at prices and upon terms then
obtainable. Sales may be made in ordinary brokerage transactions, in block
transactions, in privately negotiated transactions, pursuant to Rule 144 or
otherwise. If the Class A Shares and Class B Shares are sold through brokers,
customary brokerage commissions and charges are expected to be paid by the
Selling Shareholders. The Class A Shares and Class B Shares are being
registered to permit public secondary trading of the Class A Shares and Class
B Shares from time to time after the date of this Prospectus. Security Capital
will bear all expenses (other than the selling commissions and fees and
expenses of counsel to any Selling Shareholders) in connection with the
registration and sale of the Class A Shares and Class B Shares.
 
  The Selling Shareholders and any dealer, broker or other agent selling
securities offered hereby for a Selling Shareholder or purchasing any such
securities from a Selling Shareholder for purposes of resale may be deemed to
be an underwriter under the Securities Act and any compensation received by
the Selling Shareholder, dealer, broker or other agent may be deemed
underwriting compensation. The amount of such compensation cannot currently be
estimated. Security Capital knows of no existing arrangements between any
Selling Shareholder and any dealer, broker or other agent.
 
                                      15
EXPERTS
 
  The consolidated financial statements and related schedules of Security
Capital and SCI incorporated by reference in this Prospectus and elsewhere in
the Registration Statement of which this Prospectus forms a part, have been
audited by Arthur Andersen LLP, independent public accountants to the extent
indicated in their reports thereon also incorporated by reference herein and
in the Registration Statement. Such financial statements have been
incorporated by reference herein in reliance upon such reports given upon the
authority of such firm as experts in accounting and auditing.
 
  The financial statements and related schedule of PTR incorporated by
reference in this Prospectus and elsewhere in the Registration Statement, of
which this Prospectus forms a part, have been audited by KPMG Peat Marwick
LLP, independent public accountants to the extent indicated in their report
thereon also incorporated by reference herein and in the Registration
Statement. Such financial statements have been incorporated by reference
herein in reliance upon such reports given upon the authority of such firm as
experts in accounting and auditing.
 
  The financial statements and related schedules of ATLANTIC and Homestead
consolidated into the financial statements of Security Capital have been
audited by Ernst & Young LLP, independent auditors to the extent indicated in
their reports thereon incorporated by reference herein and in the Registration
Statement. Such financial statements have been consolidated in reliance upon
such reports given upon the authority of such firm as experts in accounting
and auditing.
 
  With respect to the unaudited condensed interim financial statements for the
three- and six-month periods ended June 30, 1997 and 1996, incorporated by
reference in this Prospectus, Arthur Andersen LLP and KPMG Peat Marwick LLP
have reported that they have applied limited procedures in accordance with
professional standards for a review of such information. However, their
separate reports state that they did not audit and they do not express an
opinion on that interim financial information. Accordingly, the degree of
reliance on their reports on such information should be restricted considering
the limited nature of the review procedures applied. None of such accountants
is subject to the liability provisions of Section 11 of the Securities Act for
their reports on the unaudited interim financial information because neither
of those reports is a "report" or a "part" of the Registration Statement
prepared or certified by the accountants within the meaning of Sections 7 and
11 of the Securities Act.
 
  The financial statements and related schedules of SC-USREALTY incorporated
by reference in this Prospectus and elsewhere in the Registration Statement of
which this Prospectus forms a part, have been audited by Price Waterhouse LLP,
independent public accountants to the extent indicated in their reports
thereon also incorporated by reference herein and in the Registration
Statement. Such financial statements have been incorporated by reference
herein in reliance upon such reports given upon the authority of such firm as
experts in accounting and auditing.
 
                                 LEGAL MATTERS
 
  Certain legal matters in respect of the validity of the issuance of the
Class A Shares and the Class B Shares into which they are converted offered
hereby will be passed upon for Security Capital by Mayer, Brown & Platt,
Chicago, Illinois. Mayer, Brown & Platt has in the past represented and is
currently representing Security Capital and certain of its affiliates in
various legal matters.
 
                                      16
PART II
 
              INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
 
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
 
  The following documents, which have heretofore been filed by Security
Capital Group Incorporated ("Security Capital" or "Registrant") with the
Securities and Exchange Commission (the "SEC") are incorporated by reference
herein and shall be deemed to be a part hereof:
 
  (a) Prospectus of Security Capital dated September 17, 1997 as filed with
      the SEC on September 19, 1997 pursuant to Rule 424(b)(5) promulgated
      under the Securities Act of 1933, as amended (File No. 333-26037);
 
  (b) Form 10-Q for the quarter ended June 30, 1997 (File No. 0-22455);
 
  (c) Form 8-K filed October 1, 1997 (File No. 1-13355); and
 
  (d) The description of Security Capital's shares of Class A Common Stock
      and Class B Common Stock (including the related preferred share
      purchase rights) contained in the Security Capital's registration
      statements on Form 8-A filed with the SEC on September 11, 1997 (File
      No. 1-13355).
 
  All documents subsequently filed by Security Capital pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated herein by
reference and shall be deemed a part hereof from the date of filing of such
documents.
 
ITEM 4. DESCRIPTION OF SECURITIES.
 
  Not applicable.
 
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
 
  The validity of the issuance of the shares of Class A Common Stock
registered hereunder is being passed upon for Security Capital by the law firm
of Mayer, Brown & Platt, Chicago, Illinois. Mayer, Brown & Platt has
represented and is currently representing Security Capital and certain of its
affiliates.
 
ITEM 6. INDEMNIFICATION OF TRUSTEES AND OFFICERS.
 
  Article EIGHTH of the Registrant's Charter provides as follows with respect
to the indemnification of directors and officers of the Registrant:
 
  "The Corporation shall have the power, to the maximum extent permitted by
  Maryland law in effect from time to time, to obligate itself to indemnify
  and to pay or reimburse reasonable expenses in advance of final disposition
  of a proceeding to (a) any individual who is a present or former director
  or officer of the Corporation or (b) any individual who, while a director
  or officer of the Corporation and at the request of the Corporation, serves
  or has served as a director, officer, partner or trustee of another
  corporation, partnership, joint venture, trust, employee benefit plan or
  any other enterprise from and against any claim or liability to which such
  person may become subject or which such person may incur by reason of his
  or her status as a present or former director or officer of the
  Corporation. The Corporation shall have the power, with the approval of the
  Board of Directors, to provide such indemnification and advancement of
  expenses to a person who served a predecessor of the Corporation in any of
  the capacities described in (a) or (b) above and to any employee or agent
  of the Corporation or a predecessor of the Corporation."
 
                                     II-1
Article NINTH of the Registrant's Charter provides as follows with respect
to limitation of liability of its directors and officers:
 
  "To the maximum extent that Maryland law in effect from time to time
  permits limitation of the liability of directors and officers of a Maryland
  corporation, no director or officer of the Corporation shall be liable to
  the Corporation or its stockholders for money damages. Neither the
  amendment nor repeal of this Article NINTH nor the adoption or amendment of
  any other provision of the Charter or Bylaws of the Corporation
  inconsistent with this Article NINTH, shall apply to or affect in any
  respect the applicability of the preceding sentence with respect to any act
  or failure to act which occurred prior to such amendment, repeal or
  adoption."
 
  Article XIII of the Registrant's Bylaws provides as follows with respect to
limitation of liability of its directors and officers and advances for
expenses:
 
  "To the maximum extent permitted by Maryland law in effect from time to
  time, the Corporation shall indemnify and, without requiring a preliminary
  determination of the ultimate entitlement to indemnification shall pay or
  reimburse reasonable expenses in advance of final disposition of a
  proceeding to (a) any individual who is a present or former director or
  officer of the Corporation and who is made a party to the proceeding by
  reasons of his service in that capacity or (b) any individual who, while a
  director of the Corporation and at the request of the Corporation, serves
  or has served another corporation, partnership, joint venture, trust,
  employee benefit plan or other enterprise and who is made a party to the
  proceeding by reason of his or her service in that capacity. The
  Corporation may, with the approval of the Board of Directors, provide such
  indemnification and advance for expenses to a person who served a
  predecessor of the Corporation in any of the capacities described in (a) or
  (b) above and to any employee or agent of the Corporation or a predecessor
  of the Corporation.
 
  Neither the amendment nor repeal of this Article, nor the adoption or
  amendment of any other provision of the Bylaws or Charter of the
  Corporation inconsistent with this Article, shall apply to or affect in any
  respect the applicability of the preceding paragraph with respect to any
  act or failure to act which occurred prior to such amendment, repeal or
  adoption."
 
  Maryland law permits a Maryland corporation to include in its charter a
provision limiting the liability of its directors and officers to the
corporation and its stockholders for money damages except for liability
resulting from (a) actual receipt of an improper benefit or profit in money,
property or services or (b) active and deliberate dishonesty established by a
final judgment as being material to the cause of action. The Charter contains
such a provision which limits such liability to the maximum extent permitted
by Maryland law.
 
  Maryland law requires a corporation (unless its charter requires otherwise,
which the Charter does not) to indemnify a director or officer who has been
successful, on the merits or otherwise, in the defense of any proceeding to
which he or she is made a party by reason of his or her service in that
capacity. Maryland law permits a corporation to indemnify its present and
former directors and officers, among others, against judgments, penalties,
fines, settlements and reasonable expenses actually incurred by them in
connection with any proceeding to which they may be made a party by reason of
their service in those or other capacities unless it is established that (a)
the act or omission of the director or officer was material to the matter
giving rise to the proceeding and (i) was committed in bad faith or (ii) was
the result of active and deliberate dishonesty, (b) the director or officer
actually received an improper personal benefit in money, property or services
or (c) in the case of any criminal proceeding, the director or officer had
reasonable cause to believe that the act or omission was unlawful. However, a
Maryland corporation may not indemnify for an adverse judgment in a suit by or
in the right of the corporation or for a judgment of liability on the basis
that personal benefit was improperly received, unless in either case a court
orders indemnification and then only for expenses. In addition, Maryland law
permits a corporation to advance reasonable expenses to a director or officer
upon the corporation's receipt of (a) a written affirmation by the director or
officer of his or her good faith belief that he or she has met the standard of
conduct necessary for indemnification by the corporation and (b) a written
statement by or in his or her behalf to repay the amount paid or reimbursed by
the corporation if it shall ultimately be determined that the standard of
conduct was not met.
 
                                     II-2
The Registrant has entered into indemnity agreements with each of its
officers and directors which provide for reimbursement of all expenses and
liabilities of such officer or director, arising out of any lawsuit or claim
against such officer or director due to the fact that he was or is serving as
an officer or director, except for such liabilities and expenses (a) the
payment of which is judicially determined to be unlawful, (b) relating to
claims under Section 16(b) of the Securities Exchange Act of 1934, or (c)
relating to judicially determined criminal violations.
 
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
 
  The shares of Class A Common Stock (and the shares of Class B Common Stock
into which they may be converted) covered by the resale prospectus which is a
part of this Registration Statement were acquired by the Selling Shareholders
in transactions which were exempt from registration pursuant to Section 4(2)
of the Securities Act of 1933, as amended. Such shares were acquired solely in
connection with offers made to participants in the 1991 Option Plan A.
 
ITEM 8. EXHIBITS.
 
  See Index to Exhibits.
 
ITEM 9. UNDERTAKINGS.
 
 A. Rule 415 Offering.
 
  The undersigned registrant hereby undertakes:
 
    1. To file, during any period in which offers or sales are being made, a
  post-effective amendment to this registration statement:
 
      (i) To include any prospectus required by section 10(a)(3) of the
    Securities Act of 1933;
 
      (ii) To reflect in the prospectus any facts or events arising after
    the effective date of the registration statement (or the most recent
    post-effective amendment thereof) which, individually or in the
    aggregate, represent a fundamental change in the information set forth
    in the registration statement;
 
      (iii) To include any material information with respect to the plan of
    distribution not previously disclosed in the registration statement or
    any material change to such information in the registration statement;
 
    Provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not
    apply if the registration statement is on Form S-3 or Form S-8, and the
    information required to be included in a post-effective amendment by
    those paragraphs is contained in periodic reports filed by the
    registrant pursuant to section 13 or section 15(d) of the Exchange Act
    that are incorporated by reference in the registration statement.
 
    2. That, for the purpose of determining any liability under the
  Securities Act of 1933, each such post-effective amendment shall be deemed
  to be a new registration statement relating to the securities offered
  therein, and the offering of such securities at that time shall be deemed
  to be the initial bona fide offering thereof.
 
    3. To remove from registration by means of a post-effective amendment any
  of the securities being registered which remain unsold at the termination
  of the offering.
 
 B. Filings Incorporating Subsequent Exchange Act Documents by Reference.
 
  The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
 
                                     II-3
C. Indemnification of Directors and Officers.
 
  Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions of the registrant's charter or by-laws
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
 
                                     II-4
POWER OF ATTORNEY
 
  Know All Men By These Presents, that each of the undersigned directors and
officers of Security Capital Group Incorporated, hereby constitutes and
appoints William D. Sanders, C. Ronald Blankenship, Paul E. Szurek, Jeffrey A.
Klopf and Ariel Amir, his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, with full power to act alone, to sign
any and all amendments (including post-effective amendments) to this
registration statement, and to file the same, with all exhibits thereto, and
any and all documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform any and all acts and
things requisite and necessary to be done in and about the premises, as fully
and to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or his substitute or nominee, may lawfully do or cause to be done by
virtue hereof.
 
                                     II-5
SIGNATURES
 
  PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-8 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF SANTA FE, STATE OF NEW MEXICO, ON OCTOBER 22, 1997.
 
                                          Security Capital Group Incorporated
 
                                                   /s/ Jeffrey A. Klopf
                                          By __________________________________
                                               JEFFREY A. KLOPF SENIOR VICE
                                                  PRESIDENT AND SECRETARY
 
  PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
 
              SIGNATURE                        TITLE                 DATE
 
       /s/ William D. Sanders          Chairman of the           October 22,
-------------------------------------   Board of Directors,          1997
         WILLIAM D. SANDERS             President and Chief
                                        Executive Officer
                                        (principal
                                        executive officer)
                                        and Director
 
         /s/ Paul E. Szurek            Chief Financial           October 22,
-------------------------------------   Officer (principal           1997
           PAUL E. SZUREK               financial officer)
 
          /s/ Jayson C. Cyr            Vice President            October 22,
-------------------------------------   (principal                   1997
            JAYSON C. CYR               accounting officer)
 
        /s/ Samuel W. Bodman           Director                  October 22,
-------------------------------------                                1997
          SAMUEL W. BODMAN
 
         /s/ Hermann Buerger           Director                  October 22,
-------------------------------------                                1997
           HERMANN BUERGER
 
                                       Director
-------------------------------------
         JOHN P. FRAZEE, JR.
 
     /s/ Cyrus F. Freidheim, Jr.       Director                  October 22,
-------------------------------------                                1997
       CYRUS F. FREIDHEIM, JR.
 
                                       Director
-------------------------------------
         H. LAURANCE FULLER
 
           /s/ Ray L. Hunt             Director                  October 22,
-------------------------------------                                1997
             RAY L. HUNT
 
       /s/ John T. Kelley III          Director                  October 22,
-------------------------------------                                1997
         JOHN T. KELLEY III
 
        /s/ Peter S. Willmott          Director                  October 22,
-------------------------------------                                1997
          PETER S. WILLMOTT
 
                                     II-6
INDEX TO EXHIBITS
EXHIBIT
 NUMBER                         DESCRIPTION OF DOCUMENT
 -------                        -----------------------
4.1   Articles of Amendment and Restatement (incorporated by reference to
         Exhibit 4.1 to Security Capital's Registration Statement on Form S-11
         (File No. 333-26037) (the "Form S-11"))
   4.2   Amended and Restated Bylaws (incorporated by reference to Exhibit 4.2
         to the Form S-11)
   4.3   Form of Rights Agreement between Security Capital and The First
         National Bank of Boston, as Rights Agent, including form of Rights
         Certificate (incorporated by reference to Exhibit 4.3 to the Form S-
         11)
   4.4   Form of stock certificate for shares of Class A Common Stock
         (incorporated by reference to Exhibit 4.4 to the Form S-11)
   4.5   Form of stock certificate for shares of Class B Common Stock
         (incorporated by reference to Exhibit 4.5 to the Form S-11)
   4.6   Form of 12% Convertible Subordinated Debentures due June 30, 2014
         (incorporated by reference to Exhibit 4.6 to the Form S-11)
   4.7   Security Capital 1991 Option Plan A (as amended and restated
         effective December 3, 1996) (incorporated by reference to Exhibit
         10.30 to the Form S-11)
   5     Opinion of Mayer, Brown & Platt
  15.1   Letter of Arthur Andersen LLP regarding unaudited interim financial
         information
  15.2   Letter of KPMG Peat Marwick LLP regarding unaudited interim financial
         information
  15.3   Letter of Arthur Andersen LLP regarding unaudited interim financial
         information
  23.1   Consent of Mayer, Brown & Platt (included in its opinion filed as
         Exhibit 5 hereto)
  23.2   Consent of Arthur Andersen LLP
  23.3   Consent of KPMG Peat Marwick LLP
  23.4   Consent of Price Waterhouse
  23.5   Consent of Ernst & Young LLP
  23.6   Consent of Ernst & Young LLP
  24     Power of Attorney (included on page II-5)
II-7