UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________

FORM 10-Q

__________________________________

(Mark One)



x	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the quarterly period ended ~~September 30, 2012~~March 31, 2013



o	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the transition period from ______ to ______

Commission file number 000-51262

~~WELLS REAL ESTATE INVESTMENT~~COLUMBIA PROPERTY TRUST, ~~II,~~ INC.

(Exact name of registrant as specified in its charter)



Maryland		20-0068852
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

~~6200 The Corners~~One Glenlake Parkway, Suite 1200

~~Norcross, Georgia 30092~~Atlanta, GA 30328

(Address of principal executive offices)

(Zip Code)

~~(770) 449-7800~~(404) 465-2200

(Registrant's telephone number, including area code)

~~N/A~~Wells Real Estate Investment Trust II, Inc., 6200 The Corners Parkway, Norcross, GA 30092

(Former name, former address, and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer", "accelerated filer", and "smaller reporting company" in Rule 12b-2 of the Exchange Act (check one).



Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x (Do not check if a smaller reporting company)	Smaller reporting company	o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

Number of shares outstanding of the registrant's

only class of common stock, as of ~~October 31, 2012~~April 30, 2013: ~~547,636,076~~542,777,805 shares

Table of Contents

FORM 10-Q

~~WELLS REAL ESTATE INVESTMENT~~COLUMBIA PROPERTY TRUST, ~~II,~~ INC.

TABLE OF CONTENTS



		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements	Page 4

	Consolidated Balance Sheets as of ~~September 30, 2012~~March 31, 2013 (unaudited) and December 31, ~~2011~~2012	Page 5

	Consolidated Statements of Operations for the Three ~~and Nine~~ Months Ended ~~September 30, 2012~~March 31, 2013 (unaudited) and ~~2011~~2012 (unaudited)	Page 6

	Consolidated ~~Statement~~Statements of Comprehensive Income (Loss) for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2013 (unaudited) and 2012 ~~(unaudited)~~ ~~and 2011~~ (unaudited)	Page 7

	Consolidated Statements of Equity for the ~~Nine~~Three Months Ended ~~September 30, 2012~~March 31, 2013 (unaudited) and ~~2011~~2012 (unaudited)	Page 8

	Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30, 2012~~March 31, 2013 (unaudited) and ~~2011~~2012 (unaudited)	Page 10

	Condensed Notes to Consolidated Financial Statements (unaudited)	Page 11

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	Page 3530

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	Page 4939

Item 4.	Controls and Procedures	Page 5040

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	Page 5140

Item 1A.	Risk Factors	Page 5140

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	Page 5141

Item 3.	Defaults Upon Senior Securities	Page 5141

Item 4.	Mine Safety Disclosures	Page 5141

Item 5.	Other Information	Page 5241

Item 6.	Exhibits	Page 5241

Page 2

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Form 10-Q of ~~Wells Real Estate Investment~~Columbia Property Trust, ~~II,~~ Inc. ("~~Wells REIT II,~~Columbia Property Trust," "we," "our" or "us") other than historical facts may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in those acts. Such statements include, in particular, statements about our plans, strategies, and prospects and are subject to certain risks and uncertainties, including known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "estimate," "believe," "continue," or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this report is filed with the U.S. Securities and Exchange Commission ("SEC"). We make no representations or warranties (express or implied) about the accuracy of any such forward-looking statements contained in this Form 10-Q, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Any such forward-looking statements are subject to risks, uncertainties, and other factors and are based on a number of assumptions involving judgments with respect to, among other things, future economic, competitive, and market conditions, all of which are difficult or impossible to predict accurately. To the extent that our assumptions differ from actual conditions, our ability to accurately anticipate results expressed in such forward-looking statements, including our ability to generate positive cash flow from operations, make distributions to stockholders, and maintain the value of our real estate properties, may be significantly hindered. See Item 1A in ~~Wells REIT II's~~Columbia Property Trust's Annual Report on Form 10-K for the year ended December 31, ~~2011 as well as Item 1A in Wells REIT II's Quarterly Report on Form 10-Q for the period ended June 30,~~ 2012 for a discussion of some of the risks and uncertainties that could cause actual results to differ materially from those presented in our forward-looking statements. The risk factors described in our Annual ~~Report and Quarterly~~ Report are not the only ones we face, but do represent those risks and uncertainties that we believe are material to us. Additional risks and uncertainties not currently known to us or that we currently deem immaterial may also harm our business.

Page 3

Table of Contents


PART I.	FINANCIAL INFORMATION


ITEM 1.	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The information furnished in the accompanying consolidated balance sheets, and related consolidated statements of operations, comprehensive (loss) income, ~~(loss),~~ equity and cash flows, reflects all normal and recurring adjustments that are, in management's opinion, necessary for a fair and consistent presentation of the aforementioned financial statements. The accompanying consolidated financial statements should be read in conjunction with the condensed notes to ~~Wells REIT II's~~Columbia Property Trust's financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations included in this quarterly report on Form 10-Q, and with ~~Wells REIT II's~~Columbia Property Trust's Annual Report on Form 10-K filed for the year ended December 31, ~~2011~~2012. ~~Wells REIT II's~~Columbia Property Trust's results of operations for the three ~~and nine~~ months ended ~~September 30, 2012~~March 31, 2013 are not necessarily indicative of the operating results expected for the full year.

Page 4

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~~WELLS REAL ESTATE INVESTMENT~~COLUMBIA PROPERTY TRUST, ~~II,~~ INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per-share amounts)


	(Unaudited)						(Unaudited)
	September 30, 2012			December 31, 2011			March 31, 2013			December 31, 2012
Assets:
Real estate assets, at cost:
Land	$	700,476		$	704,336		$	786,336		$	789,237
Buildings and improvements, less accumulated depreciation of $600,396 and $514,961, as of September 30, 2012 and December 31, 2011, respectively	3,393,157			3,472,971
Intangible lease assets, less accumulated amortization of $337,726 and $343,463, as of September 30, 2012 and December 31, 2011, respectively	342,976			391,989
Buildings and improvements, less accumulated depreciation of $604,698 and $580,334, as of March 31, 2013 and December 31, 2012, respectively							3,383,141			3,468,218
Intangible lease assets, less accumulated amortization of $324,908 and $315,840, as of March 31, 2013 and December 31, 2012, respectively							329,120			341,460
Construction in progress	15,429			8,414			12,417			12,680
Real estate assets held for sale, less accumulated depreciation and amortization of $9,551, as of December 31, 2011	—			37,508
Total real estate assets	4,452,038			4,615,218			4,511,014			4,611,595
Cash and cash equivalents	48,436			39,468			68,623			53,657
Tenant receivables, net of allowance for doubtful accounts of $114 and $3,728, as of September 30, 2012 and December 31, 2011, respectively	134,564			130,549
Tenant receivables, net of allowance for doubtful accounts of $896 and $117, as of March 31, 2013 and December 31, 2012, respectively							134,640			134,099
Prepaid expenses and other assets	32,074			32,831			35,125			29,373
Deferred financing costs, less accumulated amortization of $7,691 and $5,590, as of September 30, 2012 and December 31, 2011, respectively	10,285			9,442
Intangible lease origination costs, less accumulated amortization of $240,171 and $236,679, as of September 30, 2012 and December 31, 2011, respectively	197,508			231,338
Deferred lease costs, less accumulated amortization of $25,803 and $22,390, as of September 30, 2012 and December 31, 2011, respectively	99,263			68,289
Deferred financing costs, less accumulated amortization of $9,395 and $8,527, as of March 31, 2013 and December 31, 2012, respectively							9,624			10,490
Intangible lease origination costs, less accumulated amortization of $239,422 and $230,930, as of March 31, 2013 and December 31, 2012, respectively							197,004			206,927
Deferred lease costs, less accumulated amortization of $26,916 and $24,222, as of March 31, 2013 and December 31, 2012, respectively							97,785			98,808
Investment in development authority bonds	646,000			646,000			586,000			586,000
Other assets held for sale, less accumulated amortization of $2,260, as of December 31, 2011	—			3,432
Total assets	$	5,620,168		$	5,776,567		$	5,639,815		$	5,730,949
Liabilities:
Line of credit and notes payable	$	1,216,800		$	1,221,060		$	1,383,935		$	1,401,618
Bonds payable, net of discount of $1,385 and $1,574, as of September 30, 2012 and December 31, 2011, respectively	248,615			248,426
Bonds payable, net of discount of $1,259 and $1,322, as of March 31, 2013 and December 31, 2012, respectively							248,741			248,678
Accounts payable, accrued expenses, and accrued capital expenditures	91,533			72,349			99,704			102,858
Due to affiliates	1,661			3,329			27,081			1,920
Deferred income	28,489			35,079			26,021			28,071
Intangible lease liabilities, less accumulated amortization of $84,796 and $74,326, as of September 30, 2012 and December 31, 2011, respectively	76,827			89,581
Intangible lease liabilities, less accumulated amortization of $87,253 and $84,326, as of March 31, 2013 and December 31, 2012, respectively							94,572			98,298
Obligations under capital leases	646,000			646,000			586,000			586,000
Liabilities held for sale	—			624
Total liabilities	2,309,925			2,316,448			2,466,054			2,467,443
Commitments and Contingencies (Note 6)	—			—			—			—
Redeemable Common Stock	129,033			113,147			159,507			99,526
Equity:
Common stock, $0.01 par value, 900,000,000 shares authorized, 548,852,093 and 546,197,750 shares issued and outstanding as of September 30, 2012 and December 31, 2011, respectively	5,489			5,462
Common stock, $0.01 par value, 900,000,000 shares authorized, 544,729,626 and 547,603,642 shares issued and outstanding as of March 31, 2013 and December 31, 2012, respectively							5,447			5,476
Additional paid-in capital	4,905,058			4,880,806			4,881,854			4,897,782
Cumulative distributions in excess of earnings	(1,594,505		)	(1,426,550		)	(1,708,785		)	(1,634,531		)
Redeemable common stock	(129,033		)	(113,147		)	(159,507		)	(99,526		)
Other comprehensive (loss) income	(5,799		)	84
Total Wells Real Estate Investment Trust II, Inc. stockholders' equity	3,181,210			3,346,655
Nonredeemable noncontrolling interests	—			317
Other comprehensive loss							(4,755		)	(5,221		)
Total equity	3,181,210			3,346,972			3,014,254			3,163,980
Total liabilities, redeemable common stock, and equity	$	5,620,168		$	5,776,567		$	5,639,815		$	5,730,949

See accompanying notes.

Page 5

Table of Contents

~~WELLS REAL ESTATE INVESTMENT~~COLUMBIA PROPERTY TRUST, ~~II,~~ INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per-share amounts)


	(Unaudited)						(Unaudited)						(Unaudited)
	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
	2012			2011			2012			2011			2013			2012
Revenues:
Rental income	$	116,387		$	120,105		$	355,713		$	354,837		$	115,121		$	110,186
Tenant reimbursements	27,260			27,023			77,873			77,495			25,432			25,080
Hotel income	6,689			6,272			17,527			15,638			4,954			4,375
Other property income	4,082			3,744			6,239			6,027			288			1,699
	154,418			157,144			457,352			453,997			145,795			141,340
Expenses:
Property operating costs	47,546			44,790			135,230			130,594			43,712			41,238
Hotel operating costs	4,913			5,001			14,006			13,282			4,261			4,097
Asset and property management fees:
Related-party	8,903			9,463			27,432			27,502			5,541			8,820
Other	886			689			2,535			2,308			700			701
Depreciation	30,410			30,094			90,767			87,635			30,252			27,885
Amortization	24,630			29,355			79,639			90,823			21,910			25,719
Impairment loss on real estate assets	18,467			—			18,467			—			16,867			—
General and administrative	7,020			6,107			18,158			19,156			36,907			4,870
Acquisition fees and expenses	—			29			—			11,249
	142,775			125,528			386,234			382,549			160,150			113,330
Real estate operating income	11,643			31,616			71,118			71,448			(14,355		)	28,010
Other income (expense):
Interest expense	(27,287		)	(28,660		)	(81,237		)	(81,490		)	(27,260		)	(26,281		)
Interest and other income	10,011			10,315			30,039			32,383			9,111			10,016
Loss on interest rate swaps	(29		)	(14,774		)	(118		)	(22,219		)
Gain (loss) on interest rate swaps													57			(76		)
	(17,305		)	(33,119		)	(51,316		)	(71,326		)	(18,092		)	(16,341		)
Income (loss) before income tax (expense) benefit	(5,662		)	(1,503		)	19,802			122
Income tax (expense) benefit	(252		)	(62		)	(553		)	337
Income (loss) before income tax benefit													(32,447		)	11,669
Income tax benefit													97			97
Income (loss) from continuing operations	(5,914		)	(1,565		)	19,249			459			(32,350		)	11,766
Discontinued operations:
Operating income (loss) from discontinued operations	55			(6,851		)	(6		)	(10,938		)	(272		)	2,484
Gains on disposition of discontinued operations	—			13,522			16,947			13,522			10,014			16,885
Income from discontinued operations	55			6,671			16,941			2,584			9,742			19,369
Net income (loss)	(5,859		)	5,106			36,190			3,043			(22,608		)	31,135
Less: net income attributable to nonredeemable noncontrolling interests	—			(4		)	(4		)	(11		)	—			(4		)
Net income (loss) attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc.	$	(5,859	)	$	5,102		$	36,186		$	3,032
Net income (loss) attributable to the common stockholders of Columbia Property Trust, Inc.													$	(22,608	)	$	31,131
Per-share information – basic and diluted:
Income from continuing operations	$	(0.01	)	$	0.00		$	0.04		$	0.00
Income (loss) from continuing operations													$	(0.06	)	$	0.02
Income from discontinued operations	$	0.00		$	0.01		$	0.03		$	0.01		$	0.02		$	0.04
Net income attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc.	$	(0.01	)	$	0.01		$	0.07		$	0.01
Net income (loss) attributable to the common stockholders of Columbia Property Trust, Inc.													$	(0.04	)	$	0.06
Weighted-average common shares outstanding – basic and diluted	546,962			543,288			546,235			542,169			546,082			545,600

See accompanying notes.

Page 6

Table of Contents

~~WELLS REAL ESTATE INVESTMENT~~COLUMBIA PROPERTY TRUST, ~~II,~~ INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)


	(Unaudited)						(Unaudited)						(Unaudited)
	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
	2012			2011			2012			2011			2013			2012
Net income (loss) attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc.	$	(5,859	)	$	5,102		$	36,186		$	3,032
Net income (loss) attributable to the common stockholders of Columbia Property Trust, Inc.													$	(22,608	)	$	31,131
Foreign currency translation adjustment realized in discontinued operations													(83		)	—
Market value adjustment to interest rate swap	(2,475		)	(3,198		)	(5,883		)	(4,025		)	549			608
Comprehensive income (loss) attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc.	(8,334		)	1,904			30,303			(993		)
Comprehensive income (loss) attributable to the common stockholders of Columbia Property Trust, Inc.													(22,142		)	31,739
Comprehensive income attributable to noncontrolling interests	—			4			4			11			—			4
Comprehensive income (loss)	$	(8,334	)	$	1,908		$	30,307		$	(982	)	$	(22,142	)	$	31,743

See accompanying notes.

Page 7

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~~WELLS REAL ESTATE INVESTMENT~~COLUMBIA PROPERTY TRUST, ~~II,~~ INC.

CONSOLIDATED STATEMENTS OF EQUITY

FOR THE ~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER 30, 2012~~MARCH 31, 2013 (UNAUDITED)

(in thousands, except per-share amounts)

Stockholders' Equity
Common Stock
Additional
Paid-In
Capital

Cumulative
Distributions
in Excess of
Earnings

Redeemable
Common
Stock

Other
Comprehensive
Income (Loss)

Total Wells Real
Estate Investment
Trust II, Inc.
Stockholders'
Equity

Nonredeemable
Noncontrolling
Interests

Total
Equity
Shares Amount
Balance, December 31, 2011 546,198
$ 5,462
$ 4,880,806
$ (1,426,550 ) $ (113,147 ) $ 84
$ 3,346,655
$ 317
$ 3,346,972
Issuance of common stock 13,240
132
94,270
—
—
—
94,402
—
94,402
Redemptions of common stock (10,586 ) (105 ) (70,006 ) —
—
—
(70,111 ) —
(70,111 )
Increase in redeemable common stock —
—
—
—
(15,886 ) —
(15,886 ) —
(15,886 )
Distributions to common stockholders
($0.375 per share)
—
—
—
(204,141 ) —
—
(204,141 ) —
(204,141 )
Distributions to noncontrolling interests —
—
—
—
—
—
—
(15 ) (15 )
Offering costs —
—
(17 ) —
—
—
(17 ) —
(17 )
Acquisition of noncontrolling interest in consolidated joint ventures —
—
5
—
—
—
5
(306 ) (301 )
Net income attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc. —
—
—
36,186
—
—
36,186
—
36,186
Net income attributable to noncontrolling interests —
—
—
—
—
—
—
4
4
Market value adjustment to interest rate swap —
—
—
—
—
(5,883 ) (5,883 ) —
(5,883 )
Balance, September 30, 2012 548,852
$ 5,489
$ 4,905,058
$ (1,594,505 ) $ (129,033 ) $ (5,799 ) $ 3,181,210
$ —

$ 3,181,210



	Stockholders' Equity
	Common Stock					Additional Paid-In Capital			Cumulative Distributions in Excess of Earnings			��	Redeemable Common Stock			Other Comprehensive Income (Loss)			Total Equity
	Shares		Amount			Additional Paid-In Capital			Cumulative Distributions in Excess of Earnings				Redeemable Common Stock			Other Comprehensive Income (Loss)			Total Equity
Balance, December 31, 2012	547,604		$	5,476		$	4,897,782		$	(1,634,531	)		$	(99,526	)	$	(5,221	)	$	3,163,980
Issuance of common stock	3,271		32			22,861			—				—			—			22,893
Redemptions of common stock	(6,145	)	(61		)	(38,692		)	—				—			—			(38,753		)
Decrease in redeemable common stock	—		—			—			—				(59,981		)	—			(59,981		)
Distributions to common stockholders ($0.095 per share)	—		—			—			(51,646		)		—			—			(51,646		)
Offering costs	—		—			(97		)	—				—			—			(97		)
Net loss attributable to the common stockholders of Columbia Property Trust, Inc.	—		—			—			(22,608		)		—			—			(22,608		)
Foreign currency translation adjustment	—		—			—			—				—			(83		)	(83		)
Market value adjustment to interest rate swap	—		—			—			—				—			549			549
Balance, March 31, 2013	544,730		$	5,447		$	4,881,854		$	(1,708,785	)		$	(159,507	)	$	(4,755	)	$	3,014,254

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~~WELLS REAL ESTATE INVESTMENT~~COLUMBIA PROPERTY TRUST, ~~II,~~ INC.

CONSOLIDATED STATEMENTS OF EQUITY

FOR THE ~~NINE~~THREE MONTHS ENDED ~~September 30, 2011~~MARCH 31, 2012 (UNAUDITED)

(in thousands, except per-share amounts)


	Stockholders' Equity																															Stockholders' Equity
	Common Stock					Additional Paid-In Capital				Cumulative Distributions in Excess of Earnings				Redeemable Common Stock				Other Comprehensive Loss				Total Wells Real Estate Investment Trust II, Inc. Stockholders' Equity			Nonredeemable Noncontrolling Interests				Total Equity			Common Stock							Additional Paid-In Capital				Cumulative Distributions in Excess of Earnings			Redeemable Common Stock			Other Comprehensive Income		Total Columbia Property Trust, Inc. Stockholders' Equity			Nonredeemable Noncontrolling Interests			Total Equity
	Shares		Amount										Shares					Other Comprehensive Loss			Amount																		Additional Paid-In Capital				Cumulative Distributions in Excess of Earnings			Redeemable Common Stock			Other Comprehensive Income		Total Columbia Property Trust, Inc. Stockholders' Equity			Nonredeemable Noncontrolling Interests			Total Equity
Balance, December 31, 2010	540,907		$	5,409		Additional Paid-In Capital			$	Cumulative Distributions in Excess of Earnings		4,835,088		Redeemable Common Stock		$	(1,212,472	)		$	(161,189			)	Nonredeemable Noncontrolling Interests			$	Total Equity		(11,139	)		$	3,455,697			$	347			$	3,456,044
Balance, December 31, 2011																																546,198			$	5,462			$	4,880,806			$	(1,426,550	)	$	(113,147	)	$	84	$	3,346,655		$	317		$	3,346,972
Issuance of common stock	10,281		103			97,905				—				—				—				98,008			—				98,008			4,356			44				31,017				—			—			—		31,061			—			31,061
Redemptions of common stock	(6,545	)	(66		)	(60,183		)		—				—				—				(60,249		)	—				(60,249		)	(3,823	)		(39		)		(24,979		)		—			—			—		(25,018		)	—			(25,018		)
Decrease in redeemable common stock	—		—			—				—				23,783				—				23,783			—				23,783			—			—				—				—			(64,303		)	—		(64,303		)	—			(64,303		)
Distributions to common stockholders ($0.375 per share)	—		—			—				(202,871		)		—				—				(202,871		)	—				(202,871		)
Distributions to common stockholders ($0.125 per share)																																—			—				—				(67,954		)	—			—		(67,954		)	—			(67,954		)
Distributions to noncontrolling interests	—		—			—				—				—				—				—			(33		)		(33		)	—			—				—				—			—			—		—			(15		)	(15		)
Net income attributable to common stockholders of Wells Real Estate Investment Trust II, Inc.	—		—			—				3,032				—				—				3,032			—				3,032
Net income attributable to common stockholders of Columbia Property Trust, Inc.																																—			—				—				31,131			—			—		31,131			—			31,131
Net income attributable to noncontrolling interests	—		—			—				—				—				—				—			11				11			—			—				—				—			—			—		—			4			4
Market value adjustment to interest rate swap	—		—			—				—				—				(4,025		)		(4,025		)	—				(4,025		)	—			—				—				—			—			608		608			—			608
Balance, September 30, 2011	544,643		$	5,446		$	4,872,810			$	(1,412,311	)		$	(137,406	)		$	(15,164	)		$	3,313,375		$	325			$	3,313,700
Balance, March 31, 2012																																546,731			$	5,467			$	4,886,844			$	(1,463,373	)	$	(177,450	)	$	692	$	3,252,180		$	306		$	3,252,486

See accompanying notes.

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~~WELLS REAL ESTATE INVESTMENT~~COLUMBIA PROPERTY TRUST, ~~II,~~ INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	(unaudited)						(Unaudited)
	Nine months ended September 30,						Three months ended March 31,
	2012			2011			2013			2012
Cash Flows from Operating Activities:
Net income	$	36,190		$	3,043
Adjustments to reconcile net income to net cash provided by operating activities:
Net income (loss)							$	(22,608	)	$	31,135
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Straight-line rental income	(4,794		)	(13,046		)	(6,593		)	(809		)
Depreciation	90,767			89,538			30,627			30,125
Amortization	78,070			93,847			21,329			26,792
(Gain) loss on interest rate swaps	(807		)	14,644
Impairment losses on real estate assets							16,867			—
Noncash interest expense							858			909
Gain on interest rate swaps							(1,678		)	(231		)
Gain on sale of discontinued operations	(16,947		)	—			(10,014		)	(16,885		)
Impairment losses on real estate assets	18,467			5,817
Gain on early extinguishment of debt of discontinued operations	—			(13,522		)
Noncash interest expense	2,893			19,619
Changes in assets and liabilities, net of acquisitions:
Increase in tenant receivables, net	(593		)	(1,702		)
Increase in prepaid expenses and other assets	(349		)	(3,621		)
Increase in accounts payable and accrued expenses	1,415			7,261
Decrease in due to affiliates	(1,670		)	(2,850		)
(Decrease) increase in deferred income	(7,036		)	9,388
Decrease in tenant receivables, net							3,945			4,061
Decrease (increase) in prepaid expenses and other assets							(5,942		)	2,271
Decrease in accounts payable and accrued expenses							(1,661		)	(2,689		)
Increase (decrease) in due to affiliates							25,280			(1,713		)
Increase (decrease) in deferred income							(1,886		)	628
Net cash provided by operating activities	195,606			208,416			48,524			73,594
Cash Flows from Investing Activities:
Net proceeds from the sale of real estate	57,747			—			65,928			57,685
Investment in real estate and earnest money paid	(28,134		)	(628,141		)
Investment in real estate							(9,197		)	(6,327		)
Deferred lease costs paid	(28,476		)	(21,782		)	(2,857		)	(6,671		)
Net cash provided by (used in) investing activities	1,137			(649,923		)
Net cash provided by investing activities							53,874			44,687
Cash Flows from Financing Activities:
Financing costs paid	(3,265		)	(12,337		)	(41		)	(2,721		)
Proceeds from lines of credit and notes payable	568,000			1,254,000			69,000			409,000
Repayments of lines of credit and notes payable	(572,590		)	(891,772		)	(86,609		)	(452,415		)
Proceeds from issuance of bonds payable	—			248,237
Issuance of common stock	94,402			98,008			22,893			31,061
Redemptions of common stock	(69,879		)	(58,634		)	(40,854		)	(25,261		)
Distributions paid to stockholders	(109,739		)	(104,863		)	(28,753		)	(36,893		)
Distributions paid to stockholders and reinvested in shares of our common stock	(94,402		)	(98,008		)	(22,893		)	(31,061		)
Redemption of noncontrolling interests	(301		)	(87		)
Offering costs paid	(8		)	—			(72		)	—
Distributions paid to nonredeemable noncontrolling interests	(15		)	(33		)	—			(15		)
Net cash (used in) provided by financing activities	(187,797		)	434,511
Net increase (decrease) in cash and cash equivalents	8,946			(6,996		)
Net cash used in financing activities							(87,329		)	(108,305		)
Net increase in cash and cash equivalents							15,069			9,976
Effect of foreign exchange rate on cash and cash equivalents	22			(77		)	(103		)	(288		)
Cash and cash equivalents, beginning of period	39,468			38,882			53,657			39,468
Cash and cash equivalents, end of period	$	48,436		$	31,809		$	68,623		$	49,156

See accompanying notes.

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~~WELLS REAL ESTATE INVESTMENT~~COLUMBIA PROPERTY TRUST, ~~II,~~ INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER 30, 2012~~MARCH 31, 2013

(unaudited)


1.	Organization

~~Wells Real Estate Investment~~Columbia Property Trust, ~~II,~~ Inc. ("~~Wells REIT II"~~Columbia Property Trust") is a Maryland corporation that ~~has elected~~operates in a manner as to ~~be taxed~~qualify as a real estate investment trust ("REIT") for federal income tax ~~purposes. Wells REIT II~~purposes and engages in the acquisition and ownership of commercial real estate properties, including properties that ~~are under construction,~~have operating histories, are newly constructed, or ~~have operating histories. Wells REIT II~~are under construction. Columbia Property Trust was incorporated ~~on July 3,~~in 2003, ~~and~~ commenced operations ~~on January 22, 2004. Wells REIT II~~in 2004, and conducts business primarily through ~~Wells~~Columbia Property Trust Operating Partnership, ~~II,~~ L.P. ("~~Wells OP II"~~Columbia Property Trust OP"), a Delaware limited partnership. ~~Wells REIT II~~Columbia Property Trust is the ~~sole~~ general partner and sole owner of ~~Wells~~Columbia Property Trust OP ~~II, and Wells OP II LP, LLC, a wholly owned subsidiary of Wells REIT II, is the sole limited partner of Wells OP II. Therefore, Wells REIT II owns~~ ~~100%~~ ~~of the equity interests in,~~ and possesses full legal control and authority over ~~the operations of Wells~~its operations. Columbia Property Trust OP ~~II. Wells OP II~~ acquires, develops, owns, leases, and operates real properties directly, through wholly owned subsidiaries, or through joint ventures. References to ~~Wells REIT II~~Columbia Property Trust, "we," "us," or "our" herein shall include ~~Wells REIT II~~Columbia Property Trust and all subsidiaries of ~~Wells REIT II,~~Columbia Property Trust, direct and indirect, and consolidated joint ventures.

From inception through February 27, 2013, Columbia Property Trust operated as an externally advised REIT pursuant to an advisory agreement under which a subsidiary of Wells Real Estate Funds ("WREF"), Columbia Property Trust Advisory Services, ~~II,~~ LLC ("~~WREAS II"~~Columbia Property Trust Advisory Services"), performed certain key functions on behalf of Columbia Property Trust, including, among others, managing the day-to-day operations, investing capital proceeds, and arranging financings. Also during this period of time, a subsidiary of WREF, Columbia Property Trust Services, LLC ("Columbia Property Trust Services"), provided the personnel necessary to carry out property management services on behalf of Wells Management Company, Inc. ("Wells Management") ~~serves as the external advisor~~and its affiliates pursuant to ~~Wells REIT II. See~~a property management agreement. The advisory agreement and property management agreement are described in Note 8.8, Related-Party Transactions and Agreements ~~for a discussion of the advisory services provided by WREAS II.~~.

On February 28, 2013, Columbia Property Trust terminated the above-mentioned advisory agreement and property management agreement, and acquired Columbia Property Trust Advisory Services and Columbia Property Trust Services. As a result, the contractual services described above are now performed by employees of Columbia Property Trust (except for certain investor services). Contemporaneous with this transaction, Columbia Property Trust entered into a consulting agreement and an investor services agreement with WREF for the remainder of 2013. While no fees were paid to execute these acquisitions, Columbia Property Trust will pay fees to WREF for consulting and investor services for the remainder of 2013. For additional details about this transaction and the related agreements, please refer to Note 8, Related-Party Transactions and Agreements.

Columbia Property Trust typically invests in high-quality, income-generating office properties leased to creditworthy companies and governmental entities. As of ~~September 30, 2012~~March 31, 2013, ~~Wells REIT II~~Columbia Property Trust owned controlling interests in 6960 office properties and one hotel, which ~~include~~includes 9182 operational buildings. These properties are comprised of approximately ~~22.2~~20.8 million square feet of commercial space and are located in 2219 states and the District of ~~Columbia, and Moscow, Russia.~~Columbia. As of ~~September 30, 2012~~March 31, 2013, 6859 of the office properties were wholly owned and the remaining property was owned through a consolidated subsidiary; the office properties were approximately ~~91.7%~~93.3% leased.

OnFrom December 1, 2003 ~~Wells REIT II commenced its initial~~through June 2010, Columbia Property Trust raised proceeds through three uninterrupted public ~~offering~~offerings of ~~up to~~ ~~785.0 million~~ shares of its common stock. Columbia Property Trust is continuing to offer shares of its common stock ~~of which~~ ~~185.0 million~~ ~~shares were reserved for issuance~~to its current investors through ~~Wells REIT II's dividend~~its distribution reinvestment plan ("DRP"), pursuant to a ~~Registration Statement filed~~registration statement on Form S-11 (the "Initial Public Offering") with the Securities and Exchange Commission (the "SEC"). Except for continuing to offer shares for sale through its DRP, Wells REIT II stopped offering shares for sale under the Initial Public Offering on November 26, 2005. Wells REIT II raised gross offering proceeds of approximately ~~$2.0 billion~~ ~~from the sale of approximately~~ ~~197.1 million~~ ~~shares under the Initial Public Offering, including shares sold under the DRP through March 2006. On November 10, 2005, Wells REIT II commenced a follow-on offering of up to~~ ~~300.6 million~~ ~~shares of common stock, of which~~ ~~0.6 million~~ shares were reserved for issuance under Wells REIT II's DRP, pursuant to a Registration Statement filed on Form S-11 with the SEC (the "Follow-On Offering"). On April 14, 2006, Wells REIT II amended the aforementioned registration statements to offer in a combined prospectus ~~300.6 million~~ ~~shares registered under the Follow-On Offering and~~ ~~174.4 million~~ ~~unsold shares related to the DRP originally registered under the Initial Public Offering. Wells REIT II raised gross offering proceeds of approximately~~ ~~$2.6 billion~~ ~~from the sale of approximately~~ ~~257.6 million~~ ~~shares under the Follow-On Offering, including shares sold under the DRP, through November 2008. Wells REIT II stopped offering shares for sale under the Follow-On Offering on November 10, 2008.~~

~~On November 11, 2008, Wells REIT II commenced a third offering of up to~~ ~~375.0 million~~ shares of common stock pursuant to a Registration Statement filed on Form S-11 with the SEC (the "Third Offering"). Under the Third Offering registration statement, as amended, Wells REIT II offered up to ~~300.0 million~~ ~~shares of common stock in a primary offering for~~ ~~$10~~ ~~per share, with discounts available to certain categories of purchasers, and up to~~ ~~75.0 million~~ ~~shares pursuant to its DRP at a purchase price equal to~~ ~~$9.55~~. Effective June 30, 2010, Wells REIT II ceased offering shares under the Third Offering. On August 27, 2010, the Third Offering was deregistered under the Form S-11 filing and the shares issuable pursuant to the DRP were registered on Form S-3. ~~As of~~ ~~September 30, 2012, Wells REIT II had raised gross offering proceeds of approximately~~ ~~$1.5 billion~~ ~~from the sale of approximately~~ ~~154.9 million~~ ~~shares under the Third Offering, including shares sold under the DRP.~~

As of ~~September 30, 2012~~March 31, 2013, ~~Wells REIT II~~Columbia Property Trust had raised gross offering proceeds from the sale of common stock under its public offerings of approximately $~~6.0~~6.1 billion. After deductions from such gross offering proceeds for selling commissions and dealer-manager fees of approximately $509.5 million, acquisition fees of approximately $116.8 million, other organization and offering expenses of approximately $~~75.9~~76.0 million, and common stock redemptions pursuant to its share redemption program of approximately $~~608.1~~716.3 million, ~~Wells REIT II~~Columbia Property Trust had received aggregate net offering proceeds of approximately $4.7 billion. Substantially all of ~~Wells REIT II's~~Columbia Property Trust's net offering proceeds have been invested in real estate.

~~Wells REIT II's~~Columbia Property Trust's stock is not listed on a public securities exchange. However, ~~Wells REIT II's~~Columbia Property Trust's charter requires that in the event ~~Wells REIT II's~~Columbia Property Trust's stock is not listed on a national securities exchange by October 2015, ~~Wells REIT II~~Columbia Property Trust must either seek stockholder approval to extend or amend this listing deadline or seek stockholder approval to begin liquidating investments and distributing

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the resulting proceeds to the stockholders. If ~~Wells REIT II~~Columbia Property Trust seeks stockholder approval to extend or amend this listing date and does not obtain it, ~~Wells REIT II~~Columbia Property Trust would then be required to seek stockholder approval to liquidate. In this circumstance, if ~~Wells REIT II~~Columbia Property Trust seeks and does not obtain approval to liquidate, ~~Wells REIT II~~Columbia Property Trust would not be required to list or liquidate and could continue to operate indefinitely as an unlisted company.

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2.	Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements of ~~Wells REIT II~~Columbia Property Trust have been prepared in accordance with the rules and regulations of the ~~SEC,~~U.S. Securities and Exchange Commission ("SEC"), including the instructions to Form 10-Q and Article 10 of Regulation S-X, and do not include all of the information and footnotes required by U.S. generally accepted accounting principles ("GAAP") for complete financial statements. In the opinion of management, the statements for these unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Results for these interim periods are not necessarily indicative of a full year's results. ~~Wells REIT II's~~Columbia Property Trust's consolidated financial statements include the accounts of ~~Wells REIT II, Wells~~Columbia Property Trust, Columbia Property Trust OP, ~~II,~~ and any variable interest entity in which ~~Wells REIT II~~Columbia Property Trust or ~~Wells~~Columbia Property Trust OP II was deemed the primary beneficiary. With respect to entities that are not variable interest entities, ~~Wells REIT II's~~Columbia Property Trust's consolidated financial statements also include the accounts of any entity in which ~~Wells REIT II, Wells~~Columbia Property Trust, Columbia Property Trust OP, ~~II,~~ or their subsidiaries own a controlling financial interest and any limited partnership in which ~~Wells REIT II, Wells~~Columbia Property Trust, Columbia Property Trust OP, ~~II,~~ or its subsidiaries own a controlling general partnership interest. All intercompany balances and transactions have been eliminated in consolidation. For further information, refer to the financial statements and footnotes included in ~~Wells REIT II's~~Columbia Property Trust's Annual Report on Form 10-K for the year ended December 31, ~~2011~~2012.

Fair Value Measurements

~~Wells REIT II~~Columbia Property Trust estimates the fair value of its assets and liabilities (where currently required under GAAP) consistent with the provisions of Accounting Standard Codification ("ASC") 820, Fair Value Measurements ("ASC 820"). Under this standard, fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date. While various techniques and assumptions can be used to estimate fair value depending on the nature of the asset or liability, the accounting standard for fair value measurements and disclosures provides the following fair value technique parameters and hierarchy, depending upon availability:

Level 1 – Assets or liabilities for which the identical term is traded on an active exchange, such as publicly traded instruments or futures contracts.

Level 2 – Assets and liabilities valued based on observable market data for similar instruments.

Level 3 – Assets or liabilities for which significant valuation assumptions are not readily observable in the market. Such assets or liabilities are valued based on the best available data, some of which may be internally developed. Significant assumptions may include risk premiums that a market participant would consider.

Real Estate Assets

~~Wells REIT II~~Columbia Property Trust is required to make subjective assessments as to the useful lives of its depreciable assets. ~~Wells REIT II~~Columbia Property Trust considers the period of future benefit of the asset to determine the appropriate useful lives. These assessments have a direct impact on net income. The estimated useful lives of its assets by class are as follows:



	Buildings		40 years
	Building improvements		5-25 years
	Site improvements		15 years
	Tenant improvements		Shorter of economic life or lease term
	Intangible lease assets		Lease term

Evaluating the Recoverability of Real Estate Assets

~~Wells REIT II~~Columbia Property Trust continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate and related intangible assets, of both operating properties and properties under construction, in which ~~Wells REIT II~~Columbia Property Trust has an ownership interest, either directly or through investments in joint ventures, may not be recoverable. When indicators of potential impairment are present that suggest that the carrying amounts of real estate assets and related intangible assets (liabilities) may not be recoverable, ~~Wells REIT II~~Columbia Property Trust assesses the recoverability of these assets by determining whether the respective carrying values will be recovered through the estimated undiscounted future operating cash flows expected from the use of the assets and their

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eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying values, ~~Wells REIT II~~Columbia Property Trust adjusts the carrying value of the real estate assets and related intangible assets to the estimated fair values, pursuant to the property, plant, and equipment accounting standard for the impairment or disposal of

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long-lived assets, and recognizes an impairment loss. Estimated fair values are calculated based on the following information, in order of preference, depending upon availability: (i) recently quoted market prices, (ii) market prices for comparable properties, or (iii) the present value of future cash flows, including estimated salvage value. Certain of our assets may be carried at more than an amount that could be realized in a current disposition transaction.

~~During~~Projections of expected future operating cash flows require that Columbia Property Trust estimates future market rental income amounts subsequent to the ~~third~~expiration of current lease agreements, property operating expenses, the number of months it takes to re-lease the property, and the number of years the property is held for investment, among other factors. The subjectivity of assumptions used in the future cash flow analysis, including discount rates, could result in an incorrect assessment of the property's fair value and could result in the misstatement of the carrying value of our real estate assets and related intangible assets and net income (loss).

In connection with furthering its portfolio repositioning efforts, in the first quarter of ~~2012, Wells REIT II has focused on refining the portfolio by marketing and negotiating the~~2013, Columbia Property Trust initiated a process to market for sale of a ~~collection~~group of ~~nine~~18 ~~assets in outlying markets. Wells REIT II has~~properties. Pursuant to the accounting policy outlined above, Columbia Property Trust evaluated the recoverability of the carrying values of ~~these assets pursuant to~~each of the ~~accounting policy outlined above~~properties in this group and determined that the ~~carrying value of the 180 E 100 South~~120 Eagle Rock property in ~~Salt Lake City, Utah is~~East Hanover, New Jersey and the 333 & 777 Republic Drive property in Allen Park, Michigan are no longer recoverable due to shortening the ~~change~~respective expected property holding periods in ~~disposition strategy and the shortening of the expected hold period for this asset in the third quarter of 2012.~~connection with these repositioning efforts. As a result, ~~Wells REIT II has~~Columbia Property Trust reduced the carrying value of the ~~180 E 100 South~~120 Eagle Rock property and the 333 & 777 Republic Drive property to reflect their respective fair ~~value (as~~values estimated based on ~~the relative fair value of the property's negotiated selling price to total contract price)~~projected discounted future cash flows and recorded a corresponding property impairment ~~loss~~losses of $~~18.5~~11.7 million ~~in the third quarter of 2012.~~

~~During the third quarter of 2011, Wells REIT II evaluated the recoverability of the carrying value of the Manhattan Towers property~~ and ~~determined that it was not recoverable, as defined by the accounting policy outlined above. The Manhattan Towers property is located in Manhattan Beach, California and includes~~ ~~two~~ ~~office buildings, which had total occupancy of~~ ~~22%~~. In the third quarter of 2011, upon considering the economic impact of various property disposition scenarios not previously contemplated, including the likelihood of achieving the projected returns associated with each scenario, Wells REIT II opted to transfer the Manhattan Towers property to an affiliate of the lender in full settlement of a $~~75.0 million~~ ~~nonrecourse mortgage loan through a deed in lieu of foreclosure transaction, which closed on~~ ~~September 6, 2011~~. As a result of this transaction, Wells REIT II reduced the carrying value of the Manhattan Towers property to its fair value, estimated based on the present value of estimated future property cash flows, by recognizing a property impairment loss of approximately ~~$5.8~~5.2 million, ~~which is included in operating income (loss) from discontinued operations~~respectively, in the ~~statement of operations; and recognized a gain on early extinguishment of debt~~first quarter of ~~$13.5 million~~2013~~, which is reflected as gain on disposition of discontinued operations in the statement of operations.~~.

The fair value measurements used in this evaluation of nonfinancial assets are considered to be Level 3 valuations within the fair value hierarchy outlined above, as there are significant unobservable inputs. Examples of inputs that were utilized in the fair value calculations include estimated holding periods, discount rates, market capitalization rates, expected lease rental rates, and potential sales prices. The table below represents the detail of the adjustments recognized for the three ~~and nine~~ months ended ~~as of~~ ~~September 30, 2012~~ ~~and~~ ~~2011~~March 31, 2013 (in thousands) using Level 3 inputs. There were no adjustments recognized in the three months ended March 31, 2012.

Property Net Book Value Impairment Loss Recognized Fair Value
For the three and nine months ended September 30, 2012 180 E 100 South $ 30,847
$ (18,467 ) $ 12,380
For the three and nine months ended September 30, 2011 Manhattan Towers $ 65,317
$ (5,817 ) $ 59,500



Property	Net Book Value		Impairment Loss Recognized			Fair Value
120 Eagle Rock	$	23,808	$	(11,708	)	$	12,100
333 & 777 Republic Drive	$	13,359	$	(5,159	)	$	8,200

Assets Held for Sale

~~Wells REIT II~~Columbia Property Trust classifies assets as held for sale according to ASC 360, Accounting for the Impairment or Disposal of Long-Lived Assets ("ASC 360"). According to ASC 360, assets are considered held for sale when the following criteria are met:

Management, having the authority to approve the action, commits to a plan to sell the property.

The property is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such property.

An active program to locate a buyer and other actions required to complete the plan to sell the property have been initiated.

The sale of the property is probable, and transfer of the property is expected to qualify for recognition as a completed sale, within one year.

The property is being actively marketed for sale at a price that is reasonable in relation to its current fair value.

Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

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~~Table of Contents~~

At such time that a property is determined to be held for sale, its carrying amount is reduced to the lower of its depreciated book value or its estimated fair value, less costs to sell, and depreciation is no longer recognized. As of ~~December~~March 31, ~~2011, Emerald Point and 5995 Opus Parkway were~~2013, none of Columbia Property Trust's properties met the criteria to be classified as held for sale ~~at their respective depreciated book values (see Note 9.~~ ~~Assets Held for Sale and Discontinued Operations~~ ~~for additional detail). Both 5995 Opus Parkway and Emerald Point were sold~~ in ~~January 2012.~~the accompanying balance sheet.

Intangible Assets and Liabilities Arising from In-Place Leases where ~~Wells REIT II~~Columbia Property Trust is the Lessor

Upon the acquisition of real properties, ~~Wells REIT II~~Columbia Property Trust allocates the purchase price of properties to tangible assets, consisting of land, building, site improvements, and identified intangible assets and liabilities, including the value of in-place leases, based in each case on ~~Wells REIT II's~~Columbia Property Trust's estimate of their fair values in accordance with ASC 820 (see Fair Value

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Measurements section above for additional detail). As of ~~September 30, 2012~~March 31, 2013 and December 31, ~~2011~~2012, ~~Wells REIT II~~Columbia Property Trust had the following gross intangible in-place lease assets and liabilities (in thousands):

Intangible Lease Assets
Intangible
Lease
Origination
Costs

Intangible
Below-Market
In-Place Lease
Liabilities

Above-Market
In-Place
Lease Assets

Absorption
Period Costs

September 30, 2012 Gross $ 94,604
$ 475,425
$ 437,679
$ 161,623
Accumulated Amortization $ (61,279 ) $ (265,983 ) $ (240,171 ) $ (84,796 )
Net $ 33,325
$ 209,442
$ 197,508
$ 76,827
December 31, 2011 Gross $ 109,457
$ 515,322
$ 468,017
$ 163,907
Accumulated Amortization $ (68,706 ) $ (265,844 ) $ (236,679 ) $ (74,326 )
Net $ 40,751
$ 249,478
$ 231,338
$ 89,581



		Intangible Lease Assets						Intangible Lease Origination Costs			Intangible Below-Market In-Place Lease Liabilities
		Above-Market In-Place Lease Assets			Absorption Period Costs			Intangible Lease Origination Costs			Intangible Below-Market In-Place Lease Liabilities
March 31, 2013	Gross	$	86,083		$	457,272		$	436,426		$	181,825
	Accumulated Amortization	$	(57,331	)	$	(256,078	)	$	(239,422	)	$	(87,253	)
	Net	$	28,752		$	201,194		$	197,004		$	94,572
December 31, 2012	Gross	$	86,696		$	459,931		$	437,857		$	182,624
	Accumulated Amortization	$	(56,259	)	$	(248,600	)	$	(230,930	)	$	(84,326	)
	Net	$	30,437		$	211,331		$	206,927		$	98,298

~~For the three and~~ ~~nine~~ ~~months ended~~ ~~September 30, 2012~~ ~~and the year ended~~ ~~December 31, 2011, Wells REIT II~~Columbia Property Trust recognized the following amortization of intangible lease assets and liabilities (in thousands):

Intangible Lease Assets
Intangible
Lease
Origination
Costs

Intangible
Below-Market
In-Place Lease
Liabilities
Above-Market
In-Place
Lease Assets

Absorption
Period Costs

For the three months ended September 30, 2012 $ 2,233
$ 11,718
$ 10,608
$ 3,479
For the three months ended September 30, 2011 $ 3,440
$ 15,321
$ 12,539
$ 4,424
For the nine months ended September 30, 2012 $ 7,098
$ 38,749
$ 32,891
$ 12,003
For the nine months ended September 30, 2011 $ 11,104
$ 47,695
$ 37,922
$ 12,764



	Intangible Lease Assets				Intangible Lease Origination Costs		Intangible Below-Market In-Place Lease Liabilities
	Above-Market In-Place Lease Assets		Absorption Period Costs		Intangible Lease Origination Costs		Intangible Below-Market In-Place Lease Liabilities
For the three months ended March 31, 2013	$	1,685	$	10,136	$	9,923	$	3,726
For the three months ended March 31, 2012	$	2,433	$	13,372	$	10,647	$	4,241

The remaining net intangible assets and liabilities as of ~~September 30, 2012~~March 31, 2013 will be amortized as follows (in thousands):


	Intangible Lease Assets				Intangible Lease Origination Costs		Intangible Below-Market In-Place Lease Liabilities		Intangible Lease Assets				Intangible Lease Origination Costs		Intangible Below-Market In-Place Lease Liabilities
	Above-Market In-Place Lease Assets		Absorption Period Costs						Above-Market In-Place Lease Assets		Absorption Period Costs
For the three months ended December 31, 2012	$	2,063	$	10,980	$	10,179	$	3,397
For the nine months ended December 31, 2013									$	4,943	$	29,631	$	29,459	$	11,068
For the years ending December 31:
2013	7,507		41,666		39,861		13,406
2014	6,592		36,835		36,903		12,973		6,224		35,771		36,425		14,362
2015	6,007		32,530		33,177		11,326		5,810		32,018		32,980		12,828
2016	5,732		25,320		25,467		8,639		5,665		25,676		26,383		10,398
2017	2,432		17,182		17,642		6,462		2,514		18,635		19,495		8,306
2018									787		13,265		13,760		7,557
Thereafter	2,992		44,929		34,279		20,624		2,809		46,198		38,502		30,053
	$	33,325	$	209,442	$	197,508	$	76,827	$	28,752	$	201,194	$	197,004	$	94,572

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Intangible Assets and Liabilities Arising from In-Place Leases where ~~Wells REIT II~~Columbia Property Trust is the Lessee

In-place ground leases where ~~Wells REIT II~~Columbia Property Trust is the lessee may have value associated with effective contractual rental rates that are above or below market rates at the time of execution or assumption. Such values are calculated based on the present value (using a discount rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place lease and (ii) management's estimate of fair market lease rates for the corresponding in-place lease at the time of execution or assumption, measured over a period equal to the remaining terms of the leases. The capitalized above-market and below-market in-place lease values are recorded as intangible lease liabilities and assets, respectively, and are amortized as an adjustment to property operating cost over the remaining term of the respective leases. ~~Wells REIT II~~Columbia Property Trust had gross below-market lease assets of approximately $110.7 million as of ~~September 30, 2012~~March 31, 2013 and December 31, ~~2011~~2012, and recognized amortization of these assets of approximately $~~0.6~~0.5 million for the three months ended ~~September 30, 2012~~March 31, 2013 and ~~2011, and~~ ~~$1.6 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30,~~ 2012 ~~and~~ ~~2011~~.

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As of ~~September 30, 2012~~March 31, 2013, the remaining net below-market lease asset will be amortized as follows (in thousands):


For the nine months ended December 31, 2013			$	1,552
For the year ending December 31:
2012	$	517
2013	2,069
2014	2,069		2,069
2015	2,069		2,069
2016	2,069		2,069
2017	2,069		2,069
2018			2,069
Thereafter	89,347		87,277
	$	100,209	$	99,174

Prepaid Expenses and Other Assets

Prepaid expenses and other assets primarily are comprised of escrow accounts held by lenders to pay future real estate taxes, insurance and tenant improvements, notes receivable, nontenant receivables, prepaid taxes, insurance and operating costs, certain corporate assets, hotel inventory, and deferred tax assets. Prepaid expenses and other assets will be expensed as incurred or reclassified to other asset accounts upon being put into service in future periods.

Interest Rate Swap Agreements

~~Wells REIT II~~Columbia Property Trust enters into interest rate swap contracts to mitigate its interest rate risk on the related financial instruments. ~~Wells REIT II~~Columbia Property Trust does not enter into derivative or interest rate transactions for speculative purposes; however, certain of its derivatives may not qualify for hedge accounting treatment. ~~Wells REIT II~~Columbia Property Trust records the fair value of its interest rate swaps either as prepaid expenses and other assets or as accounts payable, accrued expenses, and accrued capital expenditures. Changes in the fair value of the effective portion of interest rate swaps that are designated as cash flow hedges are recorded as other comprehensive (loss) income, ~~(loss),~~ while changes in the fair value of the ineffective portion of a hedge, if any, is recognized currently in earnings. Changes in the fair value of interest rate swaps that do not qualify for hedge accounting treatment are recorded as gain (loss) on interest rate swaps. Amounts received or paid under interest rate swap agreements are recorded as interest expense for contracts that qualify for hedge accounting treatment and as gain (loss) on interest rate swaps for contracts that do not qualify for hedge accounting treatment.

The following tables provide additional information related to ~~Wells REIT II's~~Columbia Property Trust's interest rate swaps ~~as of~~ ~~September 30, 2012~~ ~~and~~ ~~December 31, 2011~~(in thousands):


		Estimated Fair Value as of							Estimated Fair Value as of
Instrument Type	Balance Sheet Classification	September 30, 2012			December 31, 2011			Balance Sheet Classification	March 31, 2013			December 31, 2012
Derivatives designated as hedging instruments:
Interest rate contracts	Accounts payable	$	(5,883	)	$	—		Accounts payable	$	(4,756	)	$	(5,305	)
Derivatives not designated as hedging instruments:
Interest rate contracts	Accounts payable	$	(915	)	$	(1,722	)	Accounts payable	$	(11,431	)	$	(13,109	)

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~~Wells REIT II~~Columbia Property Trust applied the provisions of ASC 820 in recording its interest rate swaps at fair value. The fair values of the interest rate swaps, classified under Level 2, were determined using a third-party proprietary model that is based on prevailing market data for contracts with matching durations, current and anticipated London Interbank Offered Rate ("LIBOR") information, and reasonable estimates about relevant future market conditions. ~~Wells REIT II~~Columbia Property Trust has determined that the fair value, as determined by the third party, is reasonable. The fair value of ~~Wells REIT II's~~Columbia Property Trust's interest rate swaps were $~~(6.8)~~(16.2) million and $~~(1.7)~~(18.4) million at ~~September 30, 2012~~March 31, 2013 and December 31, ~~2011~~2012, respectively.

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Nine months ended
September 30,
2012 2011
Market value adjustment to interest rate swaps designated as hedging instruments and included in
other comprehensive income
$ (5,883 ) $ (4,025 )
Loss on interest rate swap recognized through earnings $ (118 ) $ (22,219 )



	Three months ended March 31,
	2013		2012
Market value adjustment to interest rate swaps designated as hedging instruments and included in other comprehensive income (loss)	$	549	$	608
Gain (loss) on interest rate swap recognized through earnings	$	57	$	(76	)

During the periods presented, there was no hedge ineffectiveness required to be recognized into earnings on the interest rate swaps that qualified for hedge accounting treatment.

Income Taxes

~~Wells REIT II~~Columbia Property Trust has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the "Code"), and has operated as such beginning with its taxable year ended December 31, 2003. To qualify as a REIT, ~~Wells REIT II~~Columbia Property Trust must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of its REIT taxable income, as defined by the Code, to its stockholders. As a REIT, ~~Wells REIT II~~Columbia Property Trust generally is not subject to income tax on income it distributes to stockholders. ~~Wells REIT II's~~Columbia Property Trust's stockholder distributions typically exceed its taxable income due to the inclusion of noncash expenses, such as depreciation, in taxable income. As a result, ~~Wells REIT II~~Columbia Property Trust typically does not incur federal income taxes other than as described in the following paragraph. ~~Wells REIT II~~Columbia Property Trust is, however, subject to certain state and local taxes related to the operations of properties in certain locations, which have been provided for in the accompanying consolidated financial statements.

Columbia Property Trust TRS, LLC ("Columbia Property Trust TRS"), formerly Wells TRS II, ~~LLC ("Wells TRS"); Wells~~LLC; Columbia KCP TRS, LLC ("Columbia KCP TRS"), formerly Wells KCP ~~TRS");~~TRS, LLC; and Wells Energy TRS, LLC ("Wells Energy TRS") (collectively, the ~~"Wells TRS~~"TRS Entities") are wholly owned subsidiaries of ~~Wells REIT II,~~Columbia Property Trust, are organized as Delaware limited liability companies, and operate, among other things, a full-service hotel. ~~Wells REIT II~~Columbia Property Trust has elected to treat the ~~Wells~~ TRS Entities as taxable REIT subsidiaries. ~~Wells REIT II~~Columbia Property Trust may perform certain additional, noncustomary services for tenants of its buildings through the ~~Wells~~ TRS Entities; however, any earnings related to such services are subject to federal and state income taxes. In addition, for ~~Wells REIT II~~Columbia Property Trust to continue to qualify as a REIT, ~~Wells REIT II~~Columbia Property Trust must limit its investments in taxable REIT subsidiaries to 25% of the value of the total assets. The ~~Wells~~ TRS Entities' deferred tax assets and liabilities represent temporary differences between the financial reporting basis and the tax basis of assets and liabilities based on the enacted rates expected to be in effect when the temporary differences reverse. If applicable, ~~Wells REIT II~~Columbia Property Trust records interest and penalties related to uncertain tax positions as general and administrative expense in the accompanying consolidated statements of operations.


3.	Real Estate ~~Acquisitions~~and Other Transactions

Acquisitions

~~Wells REIT II~~Columbia Property Trust did not acquire any real properties during the ~~nine~~three months ended ~~September 30, 2012~~March 31, 2013. ~~Wells REIT II~~

As described in Note 1, Organization, Columbia Property Trust acquired ~~the Market Square Buildings~~Columbia Property Trust Advisory Services and Columbia Property Trust Services on ~~March 7, 2011.~~February 28, 2013. The following unaudited pro forma statements of operations presented for the three ~~and nine~~ months ended ~~September 30, 2011~~2013 and 2012 have been prepared for ~~Wells REIT II~~Columbia Property Trust to give effect to the ~~acquisition~~acquisitions of ~~the Market Square Buildings~~Columbia Property Trust Advisory Services and Columbia Property Trust Services as if the ~~acquisition~~acquisitions occurred on January 1, ~~2011.~~2012. The following unaudited pro forma financial ~~information has~~results for Columbia Property Trust have been prepared for informational purposes only and isare not necessarily indicative of future results or of actual results that would have been achieved had the ~~acquisition~~acquisitions of ~~the Market Square Buildings acquisition~~Columbia Property Trust Advisory Services and Columbia Property Trust Services been consummated as of January 1, ~~2011~~2012 (in thousands).


						Three months ended March 31,
	Three months ended September 30, 2011		Nine months ended September 30, 2011			2013		2012
Revenues	$	157,144	$	461,123		$	147,024	$	143,302
Net income (loss) attributable to common stockholders	$	5,102	$	(382	)
Net income attributable to common stockholders						$	11,169	$	4,802

Dispositions

On March 21, 2013, Columbia Property Trust closed on the sale of the Dvintsev Business Center - Tower B building in Moscow, Russia and its holding entity, Landlink Ltd., which was 100% owned by Columbia Property Trust, for $67.5 million, exclusive of

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transaction costs, resulting in a gain on disposition of discontinued operations in the accompanying consolidated statement of operations of $10.0 million.


4.	Line of Credit and Notes Payable

As of ~~September 30, 2012~~March 31, 2013 and December 31, ~~2011~~2012, ~~Wells REIT II~~Columbia Property Trust had the following line of credit and notes payable indebtedness outstanding (excluding bonds payable; see Note 5.5, Bonds Payable) in thousands:

Facility September 30,
2012 December 31,
2011
$450 Million Term Loan $ 450,000
$ —
Market Square Buildings mortgage note 325,000
325,000
100 East Pratt Street Building mortgage note 105,000
105,000
Wildwood Buildings mortgage note 90,000
90,000
JPMorgan Chase Credit Facility 65,000
484,000
263 Shuman Boulevard Building mortgage note 49,000
49,000
SanTan Corporate Center mortgage notes 39,000
39,000
One West Fourth Street Building mortgage note 37,804
39,555
Three Glenlake Building mortgage note 26,187
25,958
215 Diehl Road Building mortgage note 21,000
21,000
544 Lakeview Building mortgage note 8,809
8,707
Highland Landmark Building mortgage note —
33,840
Total indebtedness $ 1,216,800
$ 1,221,060

~~On January 10, 2012, Wells REIT II used cash on hand and proceeds from the JPMorgan Chase Credit Facility to fully repay the Highland Landmark Building mortgage note of~~ ~~$33.8 million~~ ~~at its maturity.~~

~~On February 3, 2012, Wells REIT II closed on a~~ ~~four-year, unsecured term loan with a syndicate of banks led by JPMorgan Chase Bank, N.A. (the "$450 Million~~ ~~Term Loan"), which yielded initial gross proceeds of~~ ~~$375.0 million, and additional gross proceeds of~~ ~~$35.0 million~~ ~~in the second quarter and~~ ~~$40.0 million~~ ~~in the third quarter, for total outstanding borrowings of~~ ~~$450.0 million~~ ~~as of~~ ~~September 30, 2012. The~~ ~~$450 Million~~ ~~Term Loan bears interest at~~ ~~LIBOR, plus an applicable base margin; however, Wells REIT II effectively fixed the interest rate (assuming no change in its corporate credit rating) at~~ ~~2.64%~~ ~~per annum with an interest rate swap executed contemporaneously with the loan. The~~ ~~$450 Million~~ ~~Term Loan matures on February 3, 2016 provided that certain conditions are met prior to that date. Furthermore, provided that certain additional conditions are met prior to, and at, maturity, the~~ ~~$450 Million~~ ~~Term Loan will become eligible for a one-year extension upon paying an extension fee equal to~~ ~~0.15%~~ ~~of the outstanding balance.~~

~~As described above, the~~ ~~$450 Million~~ ~~Term Loan provided two accordion options to increase total borrowings to~~ ~~$450.0 million~~, both of which have been exercised. Contemporaneous with closing on these new borrowings, Wells REIT II effectively fixed the interest rate (assuming no change in its corporate credit rating) on each accordion option with an interest rate swap agreement, which together caused the weighted average effective borrowing rate on aggregate borrowings under the ~~$450 Million~~ ~~Term Loan to decrease slightly from~~ ~~2.64%~~ ~~per annum to~~ ~~2.63%~~ ~~per annum. The total proceeds from the~~ ~~$450 Million~~ Term Loan were used to repay temporary borrowings, and thereby create additional borrowing capacity, under the JPMorgan Chase Credit Facility. The majority of these temporary borrowings were drawn to settle mortgage loans during the second half of 2011 and during 2012.



Facility	March 31, 2013		December 31, 2012
$450 Million Term Loan	$	450,000	$	450,000
Market Square Buildings mortgage note	325,000		325,000
333 Market Street Building mortgage note	208,122		208,308
100 East Pratt Street Building mortgage note	105,000		105,000
Wildwood Buildings mortgage note	90,000		90,000
263 Shuman Boulevard Building mortgage note	49,000		49,000
SanTan Corporate Center mortgage notes	39,000		39,000
One Glenlake Building mortgage note	36,595		37,204
Three Glenlake Building mortgage note	26,342		26,264
JPMorgan Chase Credit Facility	25,000		42,000
215 Diehl Road Building mortgage note	21,000		21,000
544 Lakeview Building mortgage note	8,876		8,842
Total indebtedness	$	1,383,935	$	1,401,618

The estimated fair value of ~~Wells REIT II's~~Columbia Property Trust's line of credit and notes payable as of ~~September 30, 2012~~March 31, 2013 and December 31, ~~2011~~2012 was approximately $~~1,238.6~~1,412.2 million and $~~1,282.6~~1,433.1 million, respectively. ~~Wells REIT II~~Columbia Property Trust estimated the fair value of its line of credit by obtaining estimates for similar facilities from multiple market participants as of the respective reporting dates. Therefore, the fair values determined are considered to be based on observable market data for similar instruments (Level 2). The fair values of all other debt instruments were estimated based on discounted cash flow analyses using the current incremental borrowing rates for similar types of borrowing arrangements as of the respective reporting dates. The discounted cash flow method of assessing fair value results in a general approximation of value, and such value may never actually be realized. During the ~~nine~~three months ended ~~September 30, 2012~~March 31, 2013 and ~~2011~~2012, ~~Wells REIT II~~Columbia Property Trust made interest payments of approximately $~~37.3~~15.0 million and $~~34.2~~11.7 million, respectively. There was no interest capitalized in either period. As of ~~September 30, 2012~~March 31, 2013, ~~Wells REIT II~~Columbia Property Trust believes it was in compliance with the restrictive covenants on its ~~$450 Million~~ ~~Term Loan,~~term loan, outstanding line of credit, and notes payable obligations.

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5.	Bonds Payable

In 2011, ~~Wells REIT II~~Columbia Property Trust issued $250.0 million of ~~its~~ 7seven-year, unsecured 5.875% senior notes at 99.295% of their face value (the "2018 Bonds Payable")~~.Wells REIT II~~. Columbia Property Trust received proceeds from the 2018 Bonds Payable, net of fees, of $246.7 million. The 2018 Bonds Payable require semi-annual interest payments in April and October based on a contractual annual interest rate of 5.875%, which is subject to adjustment in certain circumstances. In the accompanying consolidated balance sheets, the 2018 Bonds Payable are shown net of the initial issuance discount of approximately $1.8 million, which is amortized to interest expense over the term of the 2018 Bonds Payable using the effective interest method. The principal amount of the 2018 Bonds Payable is due and payable on the maturity date, April 1, 2018. ~~Interest~~No interest payments of ~~$7.3 million~~ were made on the 2018 Bonds Payable during the ~~nine~~three months ended ~~September 30, 2012~~March 31, 2013. As of ~~September 30, 2012~~March 31, 2013, ~~Wells REIT II~~Columbia Property Trust believes it was in compliance with the restrictive covenants on the 2018 Bonds Payable.

The estimated fair value of the 2018 Bonds Payable as of ~~September 30, 2012~~March 31, 2013 and December 31, ~~2011~~2012 was approximately $251.0 million and $~~251.1~~250.9 million, respectively. The fair value of the 2018 Bonds Payable was estimated based on discounted cash flow analyses using the current incremental borrowing rates for similar types of borrowing as the 2018 Bonds Payable arrangements as of the respective reporting dates (Level 2). The discounted cash flow method of assessing fair value results in a general approximation of value, and such value may never actually be realized.

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6.	Commitments and Contingencies

Commitments Under Existing Lease Agreements

Certain lease agreements include provisions that, at the option of the tenant, may obligate ~~Wells REIT II~~Columbia Property Trust to expend capital to expand an existing property or provide other expenditures for the benefit of the tenant. As of ~~September 30, 2012~~March 31, 2013, no ~~tenants~~such options have been exercised ~~such options~~ that had not been materially satisfied.

Litigation

~~Wells REIT II~~Columbia Property Trust is subject to various legal proceedings, claims and administrative proceedings arising in the ordinary course of business, some of which are expected to be covered by liability insurance. Management makes assumptions and estimates concerning the likelihood and amount of any reasonably possible loss relating to these matters using the latest information available. ~~Wells REIT II~~Columbia Property Trust records a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, ~~Wells REIT II~~Columbia Property Trust accrues the best estimate within the range. If no amount within the range is a better estimate than any other amount, ~~Wells REIT II~~Columbia Property Trust accrues the minimum amount within the range. If an unfavorable outcome is probable but the amount of the loss cannot be reasonably estimated, ~~Wells REIT II~~Columbia Property Trust discloses the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible and the estimated loss is material, ~~Wells REIT II~~Columbia Property Trust discloses the nature and estimate of the possible loss of the litigation. ~~Wells REIT II~~Columbia Property Trust does not disclose information with respect to litigation where the possibility of an unfavorable outcome is considered to be remote. Based on current expectations, such matters, both individually and in the aggregate, are not expected to have a material adverse effect on the liquidity, results of operations, business or financial condition of ~~Wells REIT II. Wells REIT II~~Columbia Property Trust. Columbia Property Trust is not currently involved in any legal proceedings of which management would consider the outcome to be reasonably likely to have a material adverse effect on the results of operations or financial condition of ~~Wells REIT II.~~Columbia Property Trust.

~~Page 18~~

~~Table~~7. Supplemental Disclosures of ~~Contents~~Noncash Investing and Financing Activities


7.	~~Supplemental Disclosures of Noncash Investing and Financing Activities~~

Outlined below are significant noncash investing and financing activities for the ~~nine~~three months ended ~~September 30, 2012~~March 31, 2013 and ~~2011~~2012 (in thousands):

Nine months ended
September 30,
2012 2011
Other assets assumed upon acquisition of properties $ —
$ 3,202
Other liabilities assumed upon acquisition of property $ —
$ 1,174
Notes payable assumed at acquisition $ —
$ 8,607
Noncash interest accruing to notes payable $ 229
$ 11,809
Market value adjustment to interest rate swaps that qualifies for hedge accounting treatment $ (5,883 ) $ (4,025 )
Accrued capital expenditures and deferred lease costs $ 21,439
$ 6,191
Accrued deferred financing costs $ —
$ 63
Accrued redemptions of common stock $ 1,872
$ 1,629
Settlement of redeemable controlling interest through issuance of common stock $ —
$ 13
Increase (decrease) in redeemable common stock $ 15,886
$ (23,783 )
Settlement of Manhattan Towers mortgage note by transferring property to lender $ —
$ 75,000



	Three months ended March 31,
	2013			2012
Other assets assumed at acquisition	$	680		$	50
Other liabilities assumed at acquisition	$	680		$	—
Other liabilities settled at disposition	$	872		$	—
Interest accruing to notes payable	$	78		$	75
Amortization of discounts (premiums) on debt	$	(89	)	$	97
Market value adjustment to interest rate swaps that qualify for hedge accounting treatment	$	549		$	608
Accrued capital expenditures and deferred lease costs	$	7,300		$	8,660
Accrued deferred financing costs	$	—		$	10
Accrued offering costs	$	25		$	—
Accrued redemptions of common stock	$	1,554		$	1,397
Increase in redeemable common stock	$	59,981		$	64,303


8.	Related-Party Transactions and Agreements

Advisory Agreement

~~Wells REIT II is~~From December 2003 through February 28, 2013, Columbia Property Trust was party to uninterrupted advisory agreements with ~~WREAS II, under~~affiliates of WREF (the "Advisor"), pursuant to which ~~WREAS II is required to perform~~the Advisor acted as Columbia Property Trust's external advisor and performed certain key functions on behalf of ~~Wells REIT II,~~Columbia Property Trust, including, among others, the investment of capital proceeds and management of day-to-day operations (the "Advisory Agreement"). WREAS II has executed master services agreements with Wells Capital, Inc. ("Wells Capital") and Wells Management Company, Inc. ("Wells Management"), wherein WREAS II may retain the use of Wells Capital's and Wells Management's employees as necessary to perform the services required under the Advisory Agreement, andAs discussed in return, shall reimburse Wells Capital and Wells Management for the associated personnel costs. Further, under the terms of the Advisory Agreement, Wells Real Estate Funds, Inc. ("WREF") guarantees WREAS II's performance of services and any amounts payable to Wells REIT IIdetail below, in connection ~~therewith. The~~with Columbia Property Trust's transition to a self-managed structure, the most recent advisory agreement ~~may be~~was terminated ~~without cause or penalty, by either party upon providing~~ ~~60 days' prior written notice to the other party.~~effective February 28, 2013.

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Under the terms of the Advisory Agreement ~~Wells REIT II incurs~~most recently in place, Columbia Property Trust incurred fees and reimbursements payable to ~~WREAS II and its affiliates~~the Advisor for services as described below:

Asset management fees ~~are~~were incurred monthly at one-twelfth of 0.625% of the lesser of (i) gross cost, as defined, of all properties of ~~Wells REIT II~~Columbia Property Trust (other than those that ~~fail~~failed to meet specified occupancy thresholds) and investments in joint ventures, or (ii) the aggregate value of ~~Wells REIT II's~~Columbia Property Trust's interest in the properties and joint ventures as established with the most recent asset-based valuation, until the monthly payment equals $~~2.7~~2.5 million (or $~~32.5~~30.5 million annualized), as of the last day of each preceding month. ~~For~~Columbia Property Trust paid fees at the ~~first three months of 2011, Wells REIT II generally paid monthly asset management fees equal to one-twelfth of~~ ~~0.625%~~ ~~of the cost of all of Wells REIT II's properties (other than those that failed to meet specified occupancy thresholds)~~cap in January and ~~its investments in joint ventures; from April 2011 through September 2012, asset management fees were capped at~~ ~~$2.7 million~~ ~~per month (or~~ ~~$32.5 million~~ ~~annualized) following the March 2011 acquisition of the Market Square Buildings.~~February 2013. With respect to (ii) above, ~~our~~Columbia Property Trust's published net asset-based valuations ~~have~~did not ~~impacted~~impact asset management fees incurred ~~to date~~ due to continued applicability of the ~~$2.7 million~~ ~~per month ($32.5 million~~ ~~annualized)~~ cap described above. ~~Effective July 1, 2012, monthly asset management fees charged under the advisory agreement were reduced by~~ ~~$83,333~~ ~~(or, a total of~~ ~~$0.5 million~~ ~~for the six months ended~~ ~~December 31, 2012~~).

Reimbursement for all costs and expenses ~~WREAS II and its affiliates incur~~the Advisor incurred in fulfilling its duties as the asset portfolio manager, generally ~~including~~included (i) wages and salaries and other employee-related expenses of ~~WREAS II and its affiliates'~~the Advisor's employees, who ~~perform~~performed a full range of real estate services for ~~Wells REIT II,~~Columbia Property Trust, including management, administration, operations, and marketing, and are billed to ~~Wells REIT II~~Columbia Property Trust based on the amount of time spent on ~~Wells REIT II~~Columbia Property Trust by such personnel, provided that such expenses are not reimbursed if incurred in connection with services for which ~~WREAS II and its affiliates receive~~the Advisor received a disposition fee (described below) or an acquisition fee; and (ii) amounts paid for ~~IRA~~an individual retirement account, or "IRA," custodial

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service costs allocated to ~~Wells REIT II~~Columbia Property Trust accounts. The Advisory Agreement ~~limits~~limited the amount of reimbursements to the ~~advisor~~Advisor of "portfolio general and administrative expenses" and "personnel expenses," as defined, to the extent they would exceed $~~18.7~~18.2 million and $~~10.5~~10.0 million, respectively, for the period from January 1, ~~2011~~2013 through December 31, ~~2011, and~~ ~~$13.5 million~~ ~~and~~ ~~$7.5 million, respectively, for the period from January 1, 2012 through~~ ~~September 30, 2012~~2013.

~~Through July 31, 2011, acquisition~~Acquisition fees were ~~incurred at~~ ~~2.0%~~ ~~of gross offering proceeds, subject to certain limitations. Effective August 1, 2011, acquisition fees have been~~ incurred at 1.0% of property purchase price (excluding acquisition expenses); however, in no event ~~may~~could total acquisition fees for the calendar year exceed 2.0% of total gross offering proceeds. ~~Wells REIT II~~Columbia Property Trust also ~~reimburses WREAS II and its affiliates~~reimbursed the Advisor for expenses it ~~pays~~paid to third parties in connection with acquisitions or potential acquisitions. Per the Transition Services Agreement, as amended, discussed below, acquisition fees payable to the Advisor for 2012 and 2013 had an aggregate cap of $1.5 million. Columbia Property Trust paid acquisition fees of $1.5 million related to the acquisition on the 333 Market Street Building in San Francisco, California, in December 2012. As a result, no acquisition fees will be paid to the Advisor during 2013.

~~For~~The disposition fee payable for the sale of any property ~~sold by Wells REIT II, other than part of a "bulk sale" of assets, as defined, a disposition fee equal to~~ ~~1.0%~~ offor which the ~~sales price, with the limitation that the total real estate commissions (including such disposition fee) for any Wells REIT II property sold may not exceed~~Advisor provided substantial services was the lesser of (i) ~~6.0%~~0.3% ~~of the sales price of each property~~ or (ii) the ~~level of real estate commissions customarily charged~~broker fee paid to a third-party broker in ~~light of~~connection with the ~~size, type, and location of the property.~~sale.

Reimbursement of organization and offering costs paid by ~~WREAS II and its affiliates~~the Advisor on behalf of ~~Wells REIT II,~~Columbia Property Trust, not to exceed 2.0% of gross offering proceeds.

~~Incentive fee of~~ ~~10.0%~~ ~~of net sales proceeds remaining after stockholders have received distributions equal to the sum of the stockholders' invested capital, plus an~~ 8% ~~per annum cumulative return of invested capital, which fee is payable only if the shares of common stock of Wells REIT II are not listed on an exchange.~~

~~Listing fee of~~ ~~10%~~ ~~of the amount by which the market value of the stock plus distributions~~For January and February 2013 Columbia Property Trust paid ~~prior to listing exceeds the sum of~~ ~~100%~~ ~~of the invested capital, plus an~~ 8% ~~per annum cumulative return on invested capital, which fee will be reduced by the amount of any incentive fees paid as described in the preceding bullet.~~

~~Effective July 1, 2012,~~ occupancy costs of $~~21,000~~42,000 (~~$252,000~~ ~~annualized) are incurred~~to the Advisor's for ~~WREAS II's~~use of dedicated office space.

~~Renewal Advisory~~Transition Services Agreement

~~Upon expiration of the Advisory Agreement on December 31, 2012, Wells REIT II expects to enter into a new advisory agreement for~~For the period ~~of January~~from July 1, ~~2013~~2012 through December 31, 2013, Columbia Property Trust, Columbia Property Trust Advisory Services, and WREF are parties to an agreement under which WREF provides services to support the transition of Columbia Property Trust from an externally advised management platform to a self-managed structure (the ~~"Renewal Advisory~~"Transition Services Agreement"). ~~The terms of~~Pursuant to the ~~Renewal Advisory~~Transition Services Agreement, ~~would be~~(i) WREF was required to transfer the ~~same as~~assets and employees necessary to provide the services under the Advisory Agreement ~~except~~(other than investor services and property management) to Columbia Property Trust Advisory Services by January 1, 2013; provided that if WREF was not able to transfer certain assets by then, WREF was required to use its commercially reasonable best efforts to transfer such delayed assets as promptly as possible, but no later than June 30, 2013; and (ii) Columbia Property Trust had the ~~asset~~option to acquire Columbia Property Trust Advisory Services from WREF at any time during 2013 (the "Columbia Property Trust Advisory Services Assignment Option"). The Columbia Property Trust Advisory Services Assignment Option closed as of February 28, 2013. No payment was associated with the assignment; however, Columbia Property Trust is required to pay WREF for the work required to transfer sufficient employees, proprietary systems and processes, and assets to Columbia Property Trust Advisory Services to prepare for a successful transition to a self-managed structure a total of $6.0 million payable in 12 monthly installments of $0.5 million commencing on July 31, 2012. In addition, Columbia Property Trust and WREF will each pay half of any out-of-pocket and third-party costs and expenses incurred in connection with providing these services, provided that Columbia Property Trust's obligation to reimburse WREF for such expenses is limited to approximately $250,000 in the aggregate. Pursuant to the Transition Services Agreement, as amended, at the close of the Columbia Property Trust Advisory Services Assignment Option, Columbia Property Trust entered into a consulting services agreement with WREF as described below.

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On December 28, 2012, the Transition Services Agreement was amended and Wells Management and Columbia Property Trust Services were made parties to the agreement. Pursuant to the amendment, Columbia Property Trust could acquire Columbia Property Trust Services, the entity that provided personnel to carry out property management services on behalf of Wells Management and its affiliates, in connection with exercising the Columbia Property Trust Advisory Services Assignment Option. Columbia Property Trust exercised this option on February 28, 2013. No payment was associated with this assignment; however, Columbia Property Trust is obligated to pay a fee ~~reduction (as described above) would change from~~to WREF of approximately $~~83,333~~2.8 million in monthly installments from July 2013 through December 2013. The fees paid under the Transition Services Agreement, as amended, are included in general and administrative expense in the accompanying consolidated statement of operations. The Transition Services Agreement, as amended, is terminable if there is a material breach by WREF that is not cured, or if WREF is in an insolvency proceeding. Otherwise, if Columbia Property Trust elects to ~~$166,667~~ ~~per month. The Renewal Advisory Agreement~~terminate the agreement early, all remaining payments due under the agreement will be ~~terminable, without cause or penalty, by either party upon providing~~ ~~60 days' prior written notice to the other party.~~accelerated.

Investor Services Agreement

~~Effective July~~Columbia Property Trust and WREF entered into an investor services agreement, effective January 1, 2012, stockholder and communications services and expense reimbursements related thereto were separated out of the Advisory Agreement and covered under a separate agreement (the "Investor Services Agreement"). The Investor Services Agreement requires2013 through February 28, 2013, that required WREF to provide ~~the stockholder~~certain investor and ~~communications~~transfer agent support services to ~~Wells REIT II~~Columbia Property Trust, which were previously provided under the advisory agreement ~~in effect through June~~dated March 30, ~~2012.~~2011 (the "Investor Services Agreement"). As the sole consideration for these services, ~~Wells REIT II will reimburse~~Columbia Property Trust reimbursed WREF for expenses incurred in connection with carrying out such services, subject to the cap on "portfolio general and administrative expenses" and "personnel expenses" included in the Advisory Agreement and, thus, ~~will~~did not incur a separate fee. ~~The~~

2013 Investor Services Agreement ~~is terminable on~~ ~~60 days' notice without penalty~~

Effective February 28, 2013, upon the effective date of the Columbia Property Trust Advisory Services Assignment Option, Columbia Property Trust entered into an agreement with WREF, which requires WREF to provide the investor and ~~expires on December 31, 2012. If Wells REIT II enters the Renewal Advisory Agreement, it expects~~transfer agent support services to ~~enter a renewal investor services agreement upon expiration of~~Columbia Property Trust that were previously provided for under the Investor Services Agreement ~~on the same terms and conditions until the termination of the Renewal Advisory Agreement.~~

~~Transition Services Agreement~~

~~Wells REIT II, WREAS II, and WREF have entered into an agreement for transition services~~ (the ~~"Transition~~"2013 Investor Services Agreement")~~, for the period from July 1, 2012~~. The 2013 Investor Services Agreement requires Columbia Property Trust to December 31, 2013, pursuant to which (i) WREF is required to transfer the assets and employees necessary to provide the services under the Advisory Agreement (other than investor services and property management) to WREAS II by January 1, 2013; provided that if WREF is not able to transfer certain assets by then, WREF must use its commercially reasonable best efforts to transfer such delayed assets as promptly as possible, but no later than June 30, 2013; and (ii) Wells REIT II will have the option to acquire WREAS II at any time during 2013 (the "WREAS II Assignment Option"). No payment is associated with the assignment; however, Wells REIT II is required to paycompensate WREF for these services by reimbursing the ~~work required to transfer sufficient employees, proprietary systems~~related expenses and ~~processes, and assets to WREAS II to prepare for~~payroll costs, plus a ~~successful transition to self-management. Accordingly, pursuant to the Transition Services Agreement, Wells REIT II is obligated to pay WREF a total of~~ ~~$6.0 million~~ ~~payable~~

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in 12 ~~monthly installments of~~ ~~$0.5 million~~ commencing on July 31, 2012. In addition, Wells REIT II and WREF will each pay half of any out-of-pocket and third-party costs and expenses incurred in connection with providing the services provided that Wells REIT II's obligation to reimburse WREF for such expenses is limited to approximately ~~$0.3 million~~ in the aggregate. The Transition Services Agreement is terminable if there is a material breach by WREF that is not cured, or if WREF is in an insolvency proceeding. Otherwise, if Wells REIT II elects to terminate the agreement early, all remaining payments due under the agreement will be accelerated such that WREF receives ~~$6.0 million~~ ~~in the aggregate.~~premium.

Consulting Services Agreement

~~Should Wells REIT II exercise~~On February 28, 2013, the ~~WREAS II~~Columbia Property Trust Advisory Services Assignment Option ~~provided under~~and Columbia Property Trust Services Assignment Option closed, and in connection therewith, the ~~Transition Services Agreement, the Renewal~~ Advisory Agreement and ~~renewal investor services agreement would terminate~~Investor Services Agreement terminated and ~~Wells REIT II would enter~~Columbia Property Trust entered into a consulting services agreement with WREF (the "Consulting Services Agreement") ~~and may negotiate a new investor services agreement.~~. Under the Consulting Services Agreement, WREF will provide consulting services with respect to the same matters that ~~WREAS II and its affiliates would provide advisory~~the Advisor provided services under the ~~Renewal Advisory Agreement.~~most recently effective advisory agreement. Payments under the Consulting Services Agreement are monthly fees in the same amount as the asset management fee that would ~~equal the remaining payments due~~have been paid under the ~~Renewal Advisory Agreement and Investor~~most recently effective advisory agreement, if the most recently effective advisory agreement was not terminated. The Consulting Services Agreement ~~had they not been terminated.~~will terminate on December 31, 2013. If ~~Wells REIT II~~Columbia Property Trust elects to terminate the Consulting Services Agreement early for cause, ~~Wells REIT II~~Columbia Property Trust would not be required to make further payments under the agreement other than fees earned by WREF and unpaid at the time of termination. If ~~Wells REIT II~~Columbia Property Trust terminates the Consulting Services Agreement other than for cause, ~~Wells REIT II~~Columbia Property Trust would be required to make a fee acceleration payment, which is calculated as the fees incurred in the last month prior to termination, adjusted for partial months, multiplied by the number of months remaining between the time of termination and December 31, 2013. The fees paid under the Consulting Services Agreement are included in general and administrative expense in the accompanying consolidated statement of operations.

Property Management ~~Leasing and Construction~~ Agreement

~~Through June 30, 2012, Wells REIT II and WREAS II were~~Columbia Property Trust was party to a master property management, leasing, and construction ~~agreement~~agreements (the ~~"Prior~~"Property Management Agreement") with affiliates of WREF (the "Property Manager") until February 28, 2013, on which date Columbia Property Trust terminated the Property Management ~~Agreement"), under which WREAS II~~Agreement contemporaneous with acquiring Columbia Property Trust Services. As a result, property management services are now performed by employees of Columbia Property Trust. While no fee was paid to execute this acquisition, Columbia Property Trust is obligated to pay a fee to WREF totaling $2.8 million from July through December 2013 for the transition of property management services to Columbia Property Trust Services.

During January and February 2013, the Property Manager received the following fees and reimbursements in consideration for supervising the management, leasing, and construction of certain ~~Wells REIT II~~Columbia Property Trust properties:

Property management fees in an amount equal to a percentage negotiated for each property managed by ~~WREAS II~~the Property Manager of the gross monthly income collected for that property for the preceding month;

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Leasing commissions for new, renewal, or expansion leases entered into with respect to any property for which ~~Wells Management~~the Property Manager serves as leasing agent equal to a percentage as negotiated for that property of the total base rental and operating expenses to be paid to ~~Wells REIT II~~Columbia Property Trust during the applicable term of the lease, provided, however, that no commission shall be payable as to any portion of such term beyond 10ten years;

Initial lease-up fees for newly constructed properties under the agreement, generally equal to one month's rent;

Fees equal to a specified percentage of up to 5.0% of all construction build-out funded by ~~Wells REIT II,~~Columbia Property Trust, given as a leasing concession, and overseen by ~~WREAS II;~~the Property Manager; and

Other fees as negotiated with the addition of each specific property covered under the agreement.

~~Wells Management, an affiliate of WREAS II, guaranteed the performance of all of WREAS II's obligations under the Property Management Agreement.~~

Effective July 1, 2012, Wells REIT II entered into a new agreement with Wells Management for property management services (the "Property Management Agreement"). The Property Management Agreement is substantially the same as the Prior Property Management Agreement except that Wells Management is party to the agreement instead of WREAS II and will also provide Wells REIT II with portfolio-level property management services previously provided under the Advisory Agreement. These portfolio-level services shall be subject to the cap on "portfolio general and administrative expenses" and "personnel expenses" included in the Advisory Agreement as described above. The Property Management Agreement is terminable on 60 days' notice without penalty and expires on December 31, 2013.

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Related-Party Costs

Pursuant to the terms of the agreements described above, ~~Wells REIT II~~Columbia Property Trust incurred the following related-party costs for the three ~~and nine~~ months ended ~~September 30, 2012~~March 31, 2013 and ~~2011~~2012, respectively (in thousands):

Three months ended
September 30, Nine months ended
September 30,
2012 2011 2012 2011
Asset management fees $ 7,875
$ 8,125
$ 24,125
$ 23,969
Administrative reimbursements, net⁽¹⁾
2,665
2,913
8,256
9,337
Property management fees 1,028
1,350
3,307
3,566
Transition services 1,500
—
1,500
—
Acquisition fees —
—
—
1,307
Occupancy Costs 63
—
63
—
Construction fees⁽²⁾
55
60
116
109
Total $ 13,186
$ 12,448
$ 37,367
$ 38,288



	Three months ended March 31,
	2013		2012
Consulting fees⁽¹⁾	$	25,417	$	—
Transition services⁽²⁾	5,750		—
Asset management fees	5,083		8,125
Administrative reimbursements, net⁽³⁾	1,821		2,752
Property management fees	523		1,226
Construction fees⁽⁴⁾	139		41
Investor services	91		—
Other	49		—
Total	$	38,873	$	12,144


⁽¹⁾	$2.5 million of the $25.4 million of consulting fees incurred were paid during the three months ended March 31, 2013. The remaining $22.9 million will be paid ratably over the remainder of 2013.


⁽²⁾	$1.5 million of the $5.8 million of transition services fees incurred were paid during the three months ended March 31, 2013; $1.5 million will be paid in both the second and third quarters of 2013; and the remaining $1.3 million will be paid in the forth quarter of 2013.


⁽³⁾	Administrative reimbursements are presented net of reimbursements from tenants of approximately $~~1.2~~0.7 million and $1.1 million for the three months ended ~~September 30, 2012~~March 31, 2013 and ~~2011, and approximately~~ ~~$3.3 million~~ ~~and~~ ~~$3.0 million~~ ~~for the nine month ended~~ ~~September 30,~~ 2012 ~~and~~ ~~2011~~, respectively.


⁽²⁾⁽⁴⁾	Construction fees are capitalized to real estate assets as incurred.

~~Wells REIT II~~Columbia Property Trust incurred no related-party commissions, dealer-manager fees, offering costs, incentive fees, listing fees, acquisition fees, disposition fees, or leasing commissions during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2013 or the three months endedMarch 31, 2012 ~~and~~ ~~2011, respectively.~~.

Due to Affiliates

The detail of amounts due to ~~WREAS II~~WREF and its affiliates ~~is provided below~~ as of ~~September 30, 2012~~March 31, 2013 and December 31, ~~2011~~2012 (in thousands): are provided below:

September 30,
2012 December 31,
2011
Administrative reimbursements $ 1,312
$ 217
Asset and property management fees 349
3,112
Total $ 1,661
$ 3,329

~~Operational Dependency~~

Wells REIT II has engaged WREAS II, WREF, and Wells Management to provide certain services that are essential to Wells REIT II, including asset management services, supervision of the property management and leasing of some properties owned by Wells REIT II, asset acquisition and disposition services, as well as other administrative responsibilities for Wells REIT II, including accounting services, stockholder communications, and investor relations. Further, WREAS II has engaged Wells Capital to retain the use of its employees to carry out certain of the services listed above. As a result of these relationships, Wells REIT II's operations are dependent upon WREAS II, WREF, Wells Capital, and Wells Management.

WREAS II, Wells Capital, and Wells Management are owned and controlled by WREF. Historically, the operations of WREAS II, Wells Capital, and Wells Management have represented substantially all of the business of WREF. Accordingly, Wells REIT II focuses on the financial condition of WREF when assessing the financial condition of WREAS II, Wells Capital, and Wells Management. In the event that WREF were to become unable to meet its obligations as they become due, Wells REIT II might be required to find alternative service providers. Future net income generated by WREF will be largely dependent upon the amount of fees earned by WREF's subsidiaries based on, among other things, the level of investor proceeds raised and the volume of future acquisitions and dispositions of real estate assets by other WREF-sponsored real estate programs, as well as distribution income earned from equity interests in another REIT previously sponsored by Wells Capital. As of ~~September 30, 2012, Wells REIT II has no reason to believe that WREF does not have access to adequate liquidity and capital resources, including cash flow generated~~



	March 31, 2013			December 31, 2012
Consulting fees	$	22,875		$	—
Transition services	4,250			—
Administrative reimbursements	(44		)	1,360
Asset and property management fees	—			560
Total	$	27,081		$	1,920

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from operations, cash on hand, and other investments and borrowing capacity necessary to meet its obligations as they become due. Modifying Wells REIT II's service agreements, as described in the preceding ~~Renewal Advisory Agreement~~, ~~Transition Services Agreement,~~ ~~and~~ ~~Consulting Services Agreement~~ ~~sections~~, ~~could impact WREF's future net income and future access to liquidity and capital resources.~~


9.	~~Assets Held for Sale and~~ Discontinued Operations

~~Assets Held for Sale~~

In accordance with GAAP, assets that meet certain criteria for disposal are required to be classified as "held for sale" in the accompanying balance sheets. Emerald Point, a four-story office building in Dublin, California, and 5995 Opus Parkway, a five-story office building in Minnetonka, Minnesota, were subject to firm sales contracts and, thus, classified as "held for sale" in the accompanying consolidated balance sheet as of December 31, 2011. The Emerald Point sale closed on January 9, 2012 for ~~$37.3 million, exclusive of transaction costs, and the 5995 Opus Parkway sale closed on January 12, 2012 for~~ ~~$22.8 million, exclusive of transaction costs.~~

~~The major classes of assets and liabilities classified as held for sale as of December 31, 2011 is provided below (in thousands):~~

December 31,
2011
Real estate assets held for sale:
Real estate assets, at cost:
Land $ 11,536
Buildings and improvements, less accumulated depreciation of $6,509 25,972
Intangible lease assets, less accumulated amortization of $3,042 —
Total real estate assets held for sale, net $ 37,508

Other assets held for sale:
Tenant receivables $ 1,747
Prepaid expenses and other assets 39
Intangible lease origination costs, less accumulated amortization of $2,018 —
Deferred lease costs, less accumulated amortization of $242 1,646
Total other assets held for sale, net $ 3,432

Liabilities held for sale:
Accounts payable, accrued expenses, and accrued capital expenditures $ 176
Due to affiliates 2
Deferred income 446
Total liabilities held for sale $ 624

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Discontinued Operations

The historical operating results and gains from the disposition of certain assets, including assets "held for sale" and operating properties sold, are required to be reflected in a separate section ("discontinued operations") in the consolidated statements of operations for all periods presented. As a result, the revenues and expenses of ~~Emerald~~Dvintsev Business Center - Tower B (see Note 3, Real Estate and Other Transactions); the properties included in the portfolio disposition that closed in December 2012 (the "Nine Property Sale"), consisting of the One West Fourth Street, 180 E 100 South, Baldwin Point, Tampa Commons, Lakepointe 5, Lakepointe 3, 11950 Corporate Boulevard, Edgewater Corporate Center, and 2000 Park Lane properties, which closed for $260.5 million, resulting in a net gain of $3.2 million; and 5995 Opus Parkway and ~~the Manhattan Towers property~~Emerald Point, which closed in January 2012 for $60.1 million, resulting in total gains of $16.9 million, are included in income from discontinued operations in the accompanying consolidated statements of operations for all periods presented. ~~On September 6, 2011, Wells REIT II transferred the Manhattan Towers property, an office building located in Manhattan Beach, California, to an affiliate of its lender in connection with settling a~~ ~~$75.0 million~~ ~~mortgage note through a deed in lieu of foreclosure transaction, resulting in a~~ ~~$13.5 million~~ ~~gain on extinguishment of debt.~~

The following table shows the revenues and expenses of the above-described discontinued operations (in thousands):


	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
	2012			2011			2012			2011			2013			2012
Revenues:
Rental income	$	—		$	1,219		$	89		$	3,730		$	1,307		$	10,389
Tenant reimbursements	43			449			122			1,055			177			914
Other property income	—			42			—			42
	43			1,710			211			4,827			1,484			11,303
Expenses:
Property operating costs	(5		)	1,279			185			4,306			177			3,482
Asset and property management fees	—			19			39			68			223			699
Depreciation	—			528			—			1,904			375			2,240
Amortization	—			113			6			571			37			1,337
Impairment loss on real estate assets	—			5,817			—			5,817
General and administrative	(7		)	66			(13		)	200			947			486
Total expenses	(12		)	7,822			217			12,866			1,759			8,244
Real estate operating income (loss)	55			(6,112		)	(6		)	(8,039		)	(275		)	3,059
Other income (expense):
Interest expense	—			(740		)	—			(2,900		)	—			(575		)
Interest and other income	—			1			—			1			3			—
Operating income (loss) from discontinued operations	55			(6,851		)	(6		)	(10,938		)	(272		)	2,484
Gains on disposition of discontinued operations	—			—			16,947			—
Gain on early extinguishment of debt	—			13,522			—			13,522
Gain on disposition of discontinued operations													10,014			16,885
Income from discontinued operations	$	55		$	6,671		$	16,941		$	2,584		$	9,742		$	19,369

10. Financial Information for Parent Guarantor, Other Guarantor Subsidiaries and Non-Guarantor Subsidiaries

The 2018 Bonds Payable (see Note 5.5, Bonds Payable) are guaranteed by ~~Wells REIT II~~Columbia Property Trust and certain direct and indirect subsidiaries of each of ~~Wells REIT II~~Columbia Property Trust and ~~Wells OP II. On~~Columbia Property Trust OP. Columbia Property Trust Advisory Services and Columbia Property Trust Services, were added to the non-guarantor grouping upon acquisition in February ~~3, 2012, in connection with the execution~~2013. In March 2013, as a result of closing of the ~~$450.0 Million~~ ~~Term Loan, Wells REIT II~~Nine Property Sale, Columbia Property Trust added ~~two~~four subsidiaries as guarantors to the $450.0 Million Term Loan, the JPMorgan Chase Credit Facility, and the 2018 Bonds Payable, which resulted in the reclassification of prior-period amounts between the guarantor and non-guarantor groupings within the condensed consolidating financial statements to conform with the current period presentation. In accordance with SEC Rule 3-10(d), ~~Wells REIT II~~Columbia Property Trust includes herein condensed consolidating financial information in lieu of separate financial statements of the subsidiary issuer ~~(Wells OP II)~~(Columbia Property Trust OP) and Subsidiary Guarantors, as defined in the bond indenture, because all of the following criteria are met:


(1)	The subsidiary issuer ~~(Wells OP II)~~(Columbia Property Trust OP) and all Subsidiary Guarantors are 100% owned by the parent company guarantor ~~(Wells REIT II)~~(Columbia Property Trust);


(2)	The guarantees are full and unconditional; and


(3)	The guarantees are joint and several.

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~~Wells REIT II~~Columbia Property Trust uses the equity method with respect to its investment in subsidiaries included in its condensed consolidating financial statements. Set forth below are ~~Wells REIT II's~~Columbia Property Trust's condensed consolidating balance sheets as of ~~September 30, 2012~~March 31, 2013 and December 31, ~~2011~~2012 (in thousands), as well as its condensed consolidating statements of operations and its condensed consolidating statements of comprehensive income for the ~~three and~~ ~~nine~~three ~~month periods~~months ended ~~September 30, 2012~~March 31, 2013 and ~~2011~~2012 (in thousands); and its condensed consolidating statements of cash flows for the ~~nine~~three months ended ~~September 30, 2012~~March 31, 2013 and ~~2011~~2012 (in thousands).

Condensed Consolidating Balance Sheets (in thousands)


	As of September 30, 2012													As of March 31, 2013
	Wells REIT II (Parent)		Wells OP II (the Issuer)		Guarantors		Non- Guarantors		Consolidating adjustments			Wells REIT II (Consolidated)		Columbia Property Trust (Parent)		Columbia Property Trust OP (the Issuer)		Guarantors		Non- Guarantors		Consolidating adjustments			Columbia Property Trust (Consolidated)
Assets:
Real estate assets, at cost:
Land	$	—	$	12,175	$	223,522	$	464,779	$	—		$	700,476	$	—	$	6,241	$	270,261	$	509,834	$	—		$	786,336
Buildings and improvements, net	—		61,977		1,604,643		1,726,537		—			3,393,157		—		23,530		1,795,521		1,564,090		—			3,383,141
Intangible lease assets, net	—		1,487		129,864		211,625		—			342,976		—		—		140,067		189,053		—			329,120
Construction in progress	—		2,316		8,708		4,405		—			15,429		—		452		2,485		9,480		—			12,417
Total real estate assets	—		77,955		1,966,737		2,407,346		—			4,452,038		—		30,223		2,208,334		2,272,457		—			4,511,014
Cash and cash equivalents	20,469		10,131		5,611		12,225		—			48,436		20,503		15,070		17,505		15,545		—			68,623
Investment in subsidiaries	3,113,543		2,645,113		—		—		(5,758,656		)	—		2,977,044		2,649,742		—		—		(5,626,786		)	—
Tenant receivables, net of allowance	—		3,339		62,114		73,546		(4,435		)	134,564		—		93		75,743		63,262		(4,458		)	134,640
Prepaid expenses and other assets	178,113		204,433		3,131		27,629		(381,232		)	32,074		178,148		152,380		4,143		25,028		(324,574		)	35,125
Deferred financing costs, net	—		9,269		—		1,016		—			10,285		—		7,723		—		1,901		—			9,624
Intangible lease origination costs, net	—		995		115,068		81,445		—			197,508		—		—		123,615		73,389		—			197,004
Deferred lease costs, net	—		2,050		35,087		62,126		—			99,263		—		61		54,345		43,379		—			97,785
Investment in development authority bonds	—		60,000		466,000		120,000		—			646,000		—		—		466,000		120,000		—			586,000
Total assets	$	3,312,125	$	3,013,285	$	2,653,748	$	2,785,333	$	(6,144,323	)	$	5,620,168	$	3,175,695	$	2,855,292	$	2,949,685	$	2,614,961	$	(5,955,818	)	$	5,639,815
Liabilities:
Line of credit and notes payable	$	—	$	515,000	$	146,425	$	934,936	$	(379,561	)	$	1,216,800	$	—	$	475,000	$	145,514	$	1,086,292	$	(322,871	)	$	1,383,935
Bonds payable, net	—		248,615		—		—		—			248,615		—		248,741		—		—		—			248,741
Accounts payable, accrued expenses, and accrued capital expenditures	$	1,879	$	17,600	$	23,291	$	53,198	$	(4,435	)	$	91,533	1,934		17,044		31,978		53,206		(4,458		)	99,704
Due to affiliates	—		868		1,233		1,231		(1,671		)	1,661		—		27,065		1,679		40		(1,703		)	27,081
Deferred income	—		880		14,552		13,057		—			28,489		—		41		13,618		12,362		—			26,021
Intangible lease liabilities, net	—		—		34,049		42,778		—			76,827		—		—		42,552		52,020		—			94,572
Obligations under capital leases	—		60,000		466,000		120,000		—			646,000		—		—		466,000		120,000		—			586,000
Total liabilities	1,879		842,963		685,550		1,165,200		(385,667		)	2,309,925		1,934		767,891		701,341		1,323,920		(329,032		)	2,466,054
Redeemable Common Stock	129,033		—		—		—		—			129,033		159,507		—		—		—		—			159,507
Equity:
Total Wells Real Estate Investment Trust II, Inc. stockholders' equity	3,181,213		2,170,322		1,968,198		1,620,133		(5,758,656		)	3,181,210
Total equity	3,181,213		2,170,322		1,968,198		1,620,133		(5,758,656		)	3,181,210		3,014,254		2,087,401		2,248,344		1,291,041		(5,626,786		)	3,014,254
Total liabilities, redeemable common stock, and equity	$	3,312,125	$	3,013,285	$	2,653,748	$	2,785,333	$	(6,144,323	)	$	5,620,168	$	3,175,695	$	2,855,292	$	2,949,685	$	2,614,961	$	(5,955,818	)	$	5,639,815

Page 2523

Table of Contents

Condensed Consolidating Balance Sheets (in thousands)


	As of December 31, 2011													As of December 31, 2012
	Wells REIT II (Parent)		Wells OP II (the Issuer)		Guarantors		Non- Guarantors		Consolidating adjustments			Wells REIT II (Consolidated)		Columbia Property Trust (Parent)		Columbia Property Trust OP (the Issuer)		Guarantors		Non- Guarantors		Consolidating adjustments			Columbia Property Trust (Consolidated)
Assets:
Real estate assets, at cost:
Land	$	—	$	—	$	223,522	$	480,814	$	—		$	704,336	$	—	$	6,241	$	271,757	$	511,239	$	—		$	789,237
Building and improvements, net	—		—		1,635,910		1,837,061		—			3,472,971		—		16,513		1,812,882		1,638,823		—			3,468,218
Intangible lease assets, net	—		—		153,070		238,919		—			391,989		—		—		146,448		195,012		—			341,460
Construction in progress	—		—		4,224		4,190		—			8,414		—		5,252		2,505		4,923		—			12,680
Real estate assets held for sale, net	—		—		—		37,508		—			37,508
Total real estate assets	—		—		2,016,726		2,598,492		—			4,615,218		—		28,006		2,233,592		2,349,997		—			4,611,595
Cash and cash equivalents	11,291		10,597		9,133		8,447		—			39,468		20,914		4,822		13,673		14,248		—			53,657
Investment in subsidiaries	3,275,979		2,786,248		—		—		(6,062,227		)	—		3,068,106		2,679,950		—		—		(5,748,056		)	—
Tenant receivables, net of allowance	—		—		58,435		77,471		(5,357		)	130,549		—		22		72,283		66,017		(4,223		)	134,099
Prepaid expenses and other assets	177,444		202,126		2,056		29,009		(377,804		)	32,831		178,131		203,589		1,531		26,806		(380,684		)	29,373
Deferred financing costs, net	—		8,287		—		1,155		—			9,442		—		8,498		—		1,992		—			10,490
Intangible lease origination costs, net	—		—		133,052		98,286		—			231,338		—		—		129,947		76,980		—			206,927
Deferred lease costs, net	—		—		28,650		39,639		—			68,289		—		68		54,900		43,840		—			98,808
Investment in development authority bonds	—		—		466,000		180,000		—			646,000		—		—		466,000		120,000		—			586,000
Other assets held for sale, net	—		—		—		3,432		—			3,432
Total assets	$	3,464,714	$	3,007,258	$	2,714,052	$	3,035,931	$	(6,445,388	)	$	5,776,567	$	3,267,151	$	2,924,955	$	2,971,926	$	2,699,880	$	(6,132,963	)	$	5,730,949
Liabilities:
Lines of credit and notes payable	$	—	$	484,000	$	147,730	$	966,123	$	(376,793	)	$	1,221,060	$	—	$	492,000	$	145,974	$	1,142,644	$	(379,000	)	$	1,401,618
Bonds payable, net	—		248,426		—		—		—			248,426		—		248,678		—		—		—			248,678
Accounts payable, accrued expenses, and accrued capital expenditures	1,652		5,696		24,871		45,487		(5,357		)	72,349		3,645		12,417		39,834		51,185		(4,223		)	102,858
Due to affiliates	—		2,779		1,178		383		(1,011		)	3,329		—		960		1,593		1,051		(1,684		)	1,920
Deferred income	—		—		22,280		12,799		—			35,079		—		81		16,748		11,242		—			28,071
Intangible lease liabilities, net	—		—		39,224		50,357		—			89,581		—		—		44,201		54,097		—			98,298
Obligations under capital leases	—		—		466,000		180,000		—			646,000		—		—		466,000		120,000		—			586,000
Liabilities held for sale	—		—		—		624		—			624
Total liabilities	1,652		740,901		701,283		1,255,773		(383,161		)	2,316,448		3,645		754,136		714,350		1,380,219		(384,907		)	2,467,443
Redeemable Common Stock	113,147		—		—		—		—			113,147		99,526		—		—		—		—			99,526
Equity:
Total Wells Real Estate Investment Trust II, Inc. stockholders' equity	3,349,915		2,266,357		2,012,769		1,779,841		(6,062,227		)	3,346,655
Nonredeemable noncontrolling interests	—		—		—		317		—			317
Total equity	3,349,915		2,266,357		2,012,769		1,780,158		(6,062,227		)	3,346,972		3,163,980		2,170,819		2,257,576		1,319,661		(5,748,056		)	3,163,980
Total liabilities, redeemable common stock, and equity	$	3,464,714	$	3,007,258	$	2,714,052	$	3,035,931	$	(6,445,388	)	$	5,776,567	$	3,267,151	$	2,924,955	$	2,971,926	$	2,699,880	$	(6,132,963	)	$	5,730,949

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Table of Contents

Consolidating Statements of Operations (in thousands)


	For the three months ended September 30, 2012																		For the three months ended March 31, 2013
	Wells REIT II (Parent)			Wells OP II (the Issuer)			Guarantors			Non- Guarantors			Consolidating adjustments			Wells REIT II (Consolidated)			Columbia Property Trust (Parent)			Columbia Property Trust OP (the Issuer)			Guarantors			Non- Guarantors			Consolidating adjustments			Columbia Property Trust (Consolidated)
Revenues:
Rental income	$	—		$	2,159		$	56,618		$	58,461		$	(851	)	$	116,387		$	—		$	101		$	64,613		$	51,421		$	(1,014	)	$	115,121
Tenant reimbursements	—			83			10,265			17,562			(650		)	27,260			—			103			14,961			11,046			(678		)	25,432
Hotel income	—			—			—			6,689			—			6,689			—			—			—			4,954			—			4,954
Other property income	—			31			3,827			390			(166		)	4,082			—			17			—			1,681			(1,410		)	288
	—			2,273			70,710			83,102			(1,667		)	154,418			—			221			79,574			69,102			(3,102		)	145,795
Expenses:
Property operating costs	—			1,006			17,982			29,352			(794		)	47,546			—			475			22,456			21,639			(858		)	43,712
Hotel operating costs	—			—			—			5,755			(842		)	4,913			—			—			—			5,192			(931		)	4,261
Asset and property management fees:
Related-party	7,875			48			436			575			(31		)	8,903			5,018			3			823			978			(1,281		)	5,541
Other	—			—			439			447			—			886			—			—			262			438			—			700
Depreciation	—			614			13,832			15,964			—			30,410			—			233			16,132			13,887			—			30,252
Amortization	—			278			12,416			11,936			—			24,630			—			7			12,782			9,121			—			21,910
Impairment loss on real estate assets	—			—			—			18,467			—			18,467			—			—			5,159			11,708			—			16,867
General and administrative	23			6,082			328			587			—			7,020			—			33,705			937			2,790			(525		)	36,907
	7,898			8,028			45,433			83,083			(1,667		)	142,775			5,018			34,423			58,551			65,753			(3,595		)	160,150
Real estate operating (loss) income	(7,898		)	(5,755		)	25,277			19			—			11,643			(5,018		)	(34,202		)	21,023			3,349			493			(14,355		)
Other income (expense):
Interest expense	—			(9,164		)	(10,055		)	(14,584		)	6,516			(27,287		)	—			(8,177		)	(10,038		)	(13,773		)	4,728			(27,260		)
Interest and other income	1,997			5,421			7,307			1,802			(6,516		)	10,011
Loss on interest rate swaps	—			—			—			(29		)	—			(29		)
Interest and other income (expense)																			1,997			2,732			7,307			1,803			(4,728		)	9,111
Gain on interest rate swaps																			—			—			—			57			—			57
Income (loss) from equity investment	42			7,470			—			—			(7,512		)	—			(19,587		)	18,301			—			—			1,286			—
	2,039			3,727			(2,748		)	(12,811		)	(7,512		)	(17,305		)	(17,590		)	12,856			(2,731		)	(11,913		)	1,286			(18,092		)
Income (loss) before income tax benefit (expense)	(5,859		)	(2,028		)	22,529			(12,792		)	(7,512		)	(5,662		)	(22,608		)	(21,346		)	18,292			(8,564		)	1,779			(32,447		)
Income tax benefit (expense)	—			1			(53		)	(200		)	—			(252		)	—			(1		)	(62		)	160			—			97
Income (loss) from continuing operations	(5,859		)	(2,027		)	22,476			(12,992		)	(7,512		)	(5,914		)	(22,608		)	(21,347		)	18,230			(8,404		)	1,779			(32,350		)
Discontinued operations:
Operating income from discontinued operations	—			—			—			55			—			55			—			658			19			(949		)	—			(272		)
Gain on disposition of discontinued operations																			—			—			—			10,014			—			10,014
Income from discontinued operations	—			—			—			55			—			55			—			658			19			9,065			—			9,742
Net income (loss) attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc.	$	(5,859	)	$	(2,027	)	$	22,476		$	(12,937	)	$	(7,512	)	$	(5,859	)
Net income (loss) attributable to the common stockholders of Columbia Property Trust, Inc.																			$	(22,608	)	$	(20,689	)	$	18,249		$	661		$	1,779		$	(22,608	)

Page 25

Table of Contents

Consolidating Statements of Operations (in thousands)



	For the three months ended March 31, 2012
	Columbia Property Trust (Parent)			Columbia Property Trust OP (the Issuer)			Guarantors			Non- Guarantors			Consolidating adjustments			Columbia Property Trust (Consolidated)
Revenues:
Rental income	$	—		$	1,361		$	64,682		$	44,893		$	(750	)	$	110,186
Tenant reimbursements	—			16			14,934			10,130			—			25,080
Hotel income	—			—			—			4,375			—			4,375
Other property income	—			36			201			1,604			(142		)	1,699
	—			1,413			79,817			61,002			(892		)	141,340
Expenses:
Property operating costs	—			542			20,826			19,976			(106		)	41,238
Hotel operating costs	—			—			—			4,847			(750		)	4,097
Asset and property management fees:
Related-party	7,557			43			588			668			(36		)	8,820
Other	—			—			418			283			—			701
Depreciation	—			173			15,756			11,956			—			27,885
Amortization	—			338			15,293			10,088			—			25,719
General and administrative	—			4,354			205			311			—			4,870
	7,557			5,450			53,086			48,129			(892		)	113,330
Real estate operating income (loss)	(7,557		)	(4,037		)	26,731			12,873			—			28,010
Other income (expense):
Interest expense	—			(7,804		)	(10,072		)	(13,166		)	4,761			(26,281		)
Interest and other income (expense)	1,997			2,767			7,307			2,706			(4,761		)	10,016
Loss on interest rate swaps	—			—			—			(76		)	—			(76		)
Income (loss) from equity investment	36,691			43,680			—			—			(80,371		)	—
	38,688			38,643			(2,765		)	(10,536		)	(80,371		)	(16,341		)
Income (loss) before income tax benefit (expense)	31,131			34,606			23,966			2,337			(80,371		)	11,669
Income tax benefit (expense)	—			(11		)	(68		)	176			—			97
Income (loss) from continuing operations	31,131			34,595			23,898			2,513			(80,371		)	11,766
Discontinued operations:
Operating loss from discontinued operations	—			1,699			664			121			—			2,484
Gain on disposition of discontinued operations	—			—			—			16,885			—			16,885
Income from discontinued operations	—			1,699			664			17,006			—			19,369
Net income (loss)	31,131			36,294			24,562			19,519			(80,371		)	31,135
Less: net income attributable to noncontrolling interests	—			—			—			(4		)	—			(4		)
Net income (loss) attributable to the common stockholders of Columbia Property Trust, Inc.	$	31,131		$	36,294		$	24,562		$	19,515		$	(80,371	)	$	31,131

Page 26

Table of Contents

Consolidating Statements of Comprehensive Income (in thousands)



	For the three months ended March 31, 2013
	Columbia Property Trust (Parent)			Columbia Property Trust OP (the Issuer)			Guarantors		Non- Guarantors			Consolidating adjustments			Columbia Property Trust (Consolidated)
Net income (loss) attributable to the common stockholders of Columbia Property Trust, Inc.	$	(22,608	)	$	(20,689	)	$	18,249	$	661		$	1,779		$	(22,608	)
Foreign currency translation adjustment	(83		)	—			—		(83		)	83			(83		)
Market value adjustment to interest rate swap	549			549			—		—			(549		)	549
Comprehensive income (loss)	$	(22,142	)	$	(20,140	)	$	18,249	$	578		$	1,313		$	(22,142	)



	For the three months ended March 31, 2012
	Columbia Property Trust (Parent)		Columbia Property Trust OP (the Issuer)		Guarantors		Non- Guarantors		Consolidating adjustments			Columbia Property Trust (Consolidated)
Net income (loss) attributable to the common stockholders of Columbia Property Trust, Inc.	$	31,131	$	36,294	$	24,562	$	19,515	$	(80,371	)	$	31,131
Market value adjustment to interest rate swap	608		608		—		—		(608		)	608
Comprehensive income (loss) attributable to the common stockholders of Columbia Property Trust, Inc.	31,739		36,902		24,562		19,515		(80,979		)	31,739
Comprehensive income attributable to noncontrolling interests	—		—		—		4		—			4
Comprehensive income (loss)	$	31,739	$	36,902	$	24,562	$	19,519	$	(80,979	)	$	31,743

Page 27

Table of Contents

Consolidating Statements of ~~Operations~~Cash Flows (in thousands)

For the three months ended September 30, 2011

Wells
REIT II
(Parent)

Wells
OP II
(the Issuer)
Guarantors
Non-
Guarantors

Consolidating
adjustments

Wells
REIT II
(Consolidated)
Revenues:
Rental income $ —
$ —
$ 59,978
$ 61,420
$ (1,293 ) $ 120,105
Tenant reimbursements —
—
11,602
15,421
—
27,023
Hotel income —
—
—
6,272
—
6,272
Other property income 151
38
209
3,683
(337 ) 3,744
151
38
71,789
86,796
(1,630 ) 157,144
Expenses:
Property operating costs —
—
18,344
26,594
(148 ) 44,790
Hotel operating costs —
—
—
6,294
(1,293 ) 5,001
Asset and property management fees:
Related-party 7,952
—
500
1,200
(189 ) 9,463
Other —
—
445
244
—
689
Depreciation —
—
13,788
16,306
—
30,094
Amortization —
—
12,909
16,446
—
29,355
General and administrative —
4,583
259
1,265
—
6,107
Acquisition fees and expenses —
—
—
29
—
29
7,952
4,583
46,245
68,378
(1,630 ) 125,528
Real estate operating income (loss) (7,801 ) (4,545 ) 25,544
18,418
—
31,616
Other income (expense):
Interest expense (11 ) (6,264 ) (10,927 ) (15,898 ) 4,440
(28,660 )
Interest and other income (expense) 26
4,717
7,307
2,705
(4,440 ) 10,315
Loss on interest rate swaps —
—
—
(14,774 ) —
(14,774 )
Income (loss) from equity investment 12,887
18,978
—
—
(31,865 ) —
12,902
17,431
(3,620 ) (27,967 ) (31,865 ) (33,119 )
Income (loss) before income tax (expense) benefit 5,101
12,886
21,924
(9,549 ) (31,865 ) (1,503 )
Income tax (expense) benefit —
—
(130 ) 68
—
(62 )
Income (loss) from continuing operations 5,101
12,886
21,794
(9,481 ) (31,865 ) (1,565 )
Discontinued operations:
Operating loss from discontinued operations —
—
—
(6,851 ) —
(6,851 )
Gain on disposition of discontinued operation —
—
—
13,522
—
13,522
Income from discontinued operations —

—
—
6,671
—
6,671
Net income (loss) 5,101
12,886
21,794
(2,810 ) (31,865 ) 5,106
Less: net income attributable to noncontrolling interests —
—
—
(4 ) —
(4 )
Net income (loss) attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc. $ 5,101
$ 12,886
$ 21,794
$ (2,814 ) $ (31,865 ) $ 5,102

~~Page 28~~

~~Table of Contents~~

~~Consolidating Statements of Operations~~ ~~(in thousands)~~

For the nine months ended September 30, 2012

Wells
REIT II
(Parent)

Wells
OP II
(the Issuer)
Guarantors
Non-
Guarantors

Consolidating
adjustments

Wells
REIT II
(Consolidated)
Revenues:
Rental income $ —
$ 7,840
$ 173,933
$ 176,351
$ (2,411 ) $ 355,713
Tenant reimbursements —
427
29,973
49,467
(1,994 ) 77,873
Hotel income —
—
—
17,527
—
17,527
Other property income —
105
4,229
2,411
(506 ) 6,239
—
8,372
208,135
245,756
(4,911 ) 457,352
Expenses:
Property operating costs —
3,370
51,421
82,843
(2,404 ) 135,230
Hotel operating costs —
—
—
16,408
(2,402 ) 14,006
Asset and property management fees:
Related-party 23,915
182
1,328
2,112
(105 ) 27,432
Other —
—
1,321
1,214
—
2,535
Depreciation —
1,821
41,305
47,641
—
90,767
Amortization —
1,184
39,630
38,825
—
79,639
Impairment loss on real estate assets —
—
—
18,467
—
18,467
General and administrative 23
15,010
2,138
987
—
18,158
23,938
21,567
137,143
208,497
(4,911 ) 386,234
Real estate operating income (loss) (23,938 ) (13,195 ) 70,992
37,259
—
71,118
Other income (expense):
Interest expense —
(26,852 ) (30,191 ) (43,632 ) 19,438
(81,237 )
Interest and other income 5,991
16,154
21,921
5,411
(19,438 ) 30,039
Loss on interest rate swaps —
—
—
(118 ) —
(118 )
Income (loss) from equity investment 54,133
73,741
—
—
(127,874 ) —
60,124
63,043
(8,270 ) (38,339 ) (127,874 ) (51,316 )
Income (loss) before income tax expense 36,186
49,848
62,722
(1,080 ) (127,874 ) 19,802
Income tax expense —
(13 ) (153 ) (387 ) —
(553 )
Income (loss) from continuing operations 36,186
49,835
62,569
(1,467 ) (127,874 ) 19,249
Discontinued operations:
Operating loss from discontinued operations —
—
—
(6 ) —
(6 )
Gains on dispositions of discontinued operations —
—
—
16,947
—
16,947
Income from discontinued operations —
—
—
16,941
—
16,941
Net income (loss) 36,186
49,835
62,569
15,474
(127,874 ) 36,190
Less: net income attributable to noncontrolling interests —
—
—
(4 ) —
(4 )
Net income (loss) attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc. $ 36,186
$ 49,835
$ 62,569
$ 15,470
$ (127,874 ) $ 36,186



	For the three months ended March 31, 2013
	Columbia Property Trust (Parent)			Columbia Property Trust OP (the Issuer)			Guarantors			Non- Guarantors			Columbia Property Trust (Consolidated)
Cash flows from operating activities:	$	—		$	(21,051	)	$	47,463		$	22,112		$	48,524

Cash flows from investing activities:
Net proceeds from sale of real estate	—			65,928			—			—			65,928
Investment in real estate and related assets	—			(2,481		)	(2,790		)	(6,783		)	(12,054		)
Net cash provided by (used in) investing activities	—			63,447			(2,790		)	(6,783		)	53,874

Cash flows from financing activities:
Borrowings, net of fees	—			69,000			—			(41		)	68,959
Repayments	—			(86,000		)	—			(609		)	(86,609		)
Issuance of common stock, net of redemptions and fees	(18,033		)	—			—			—			(18,033		)
Distributions	(51,646		)	—			—			—			(51,646		)
Intercompany transfers, net	69,268			(15,148		)	(40,841		)	(13,279		)	—
Net cash provided by (used in) financing activities	(411		)	(32,148		)	(40,841		)	(13,929		)	(87,329		)

Net increase (decrease) in cash and cash equivalents	(411		)	10,248			3,832			1,400			15,069
Effect of foreign exchange rate on cash and cash equivalents	—			—			—			(103		)	(103		)
Cash and cash equivalents, beginning of period	20,914			4,822			13,673			14,248			53,657
Cash and cash equivalents, end of period	$	20,503		$	15,070		$	17,505		$	15,545		$	68,623

Page 29

~~Table of Contents~~

~~Consolidating Statements of Operations~~ ~~(in thousands)~~

For the nine months ended September 30, 2011

Wells
REIT II
(Parent)

Wells
OP II
(the Issuer)
Guarantors
Non-
Guarantors

Consolidating
adjustments

Wells
REIT II
(Consolidated)
Revenues:
Rental income $ —
$ —
$ 178,701
$ 179,963
$ (3,827 ) $ 354,837
Tenant reimbursements —
—
31,794
45,701
—
77,495
Hotel income —
—
—
15,638
—
15,638
Other property income 151
109
704
5,735
(672 ) 6,027
151
109
211,199
247,037
(4,499 ) 453,997
Expenses:
Property operating costs —
—
52,620
78,386
(412 ) 130,594
Hotel operating costs —
—
—
17,109
(3,827 ) 13,282
Asset and property management fees:
Related-party 23,188
—
1,266
3,308
(260 ) 27,502
Other —
—
1,502
806
—
2,308
Depreciation —
—
41,290
46,345
—
87,635
Amortization —
—
41,770
49,053
—
90,823
General and administrative 43
14,157
1,765
3,191
—
19,156
Acquisition fees and expenses 1,307
—
—
9,942
—
11,249
24,538
14,157
140,213
208,140
(4,499 ) 382,549
Real estate operating income (loss) (24,387 ) (14,048 ) 70,986
38,897
—
71,448
Other income (expense):
Interest expense (11 ) (22,277 ) (32,935 ) (39,382 ) 13,115
(81,490 )
Interest and other income (expense) 2,079
13,381
21,923
8,115
(13,115 ) 32,383
Loss on interest rate swaps —
—
—
(22,219 ) —
(22,219 )
Income (loss) from equity investment 25,351
53,071
—
—
(78,422 ) —
27,419
44,175
(11,012 ) (53,486 ) (78,422 ) (71,326 )
Income (loss) before income tax (expense) benefit 3,032
30,127
59,974
(14,589 ) (78,422 ) 122
Income tax (expense) benefit —
—
(252 ) 589
—
337
Income (loss) from continuing operations 3,032
30,127
59,722
(14,000 ) (78,422 ) 459
Discontinued operations:
Operating loss from discontinued operations —
—
—
(10,938 ) —
(10,938 )
Gain on disposition of discontinued operations —
—
—
13,522
—
13,522
Income from discontinued operations —

—
—
2,584
—
2,584
Net income (loss) 3,032
30,127
59,722
(11,416 ) (78,422 ) 3,043
Less: net income attributable to noncontrolling interests —
—
—
(11 ) —
(11 )
Net income (loss) attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc. $ 3,032
$ 30,127
$ 59,722
$ (11,427 ) $ (78,422 ) $ 3,032

~~Page 30~~

~~Table of Contents~~

~~Consolidating Statements of Comprehensive Income~~ ~~(in thousands)~~

For the three months ended September 30, 2012

Wells
REIT II
(Parent)

Wells
OP II
(the Issuer)
Guarantors
Non-
Guarantors

Consolidating
adjustments

Wells
REIT II
(Consolidated)
Net income (loss) attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc. $ (5,859 ) $ (2,027 ) $ 22,476
$ (12,937 ) $ (7,512 ) $ (5,859 )
Market value adjustment to interest rate swap (2,475 ) (2,475 ) —
—
2,475
(2,475 )
Comprehensive income (loss) $ (8,334 ) $ (4,502 ) $ 22,476
$ (12,937 ) $ (5,037 ) $ (8,334 )

For the three months ended September 30, 2011

Wells
REIT II
(Parent)

Wells
OP II
(the Issuer)
Guarantors
Non-
Guarantors

Consolidating
adjustments

Wells
REIT II
(Consolidated)
Net income (loss) attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc. $ 5,101
$ 12,886
$ 21,794
$ (2,814 ) $ (31,865 ) $ 5,102
Market value adjustment to interest rate swap (3,198 ) —
—
(3,198 ) 3,198
(3,198 )
Comprehensive income (loss) attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc. 1,903
12,886
21,794
(6,012 ) (28,667 ) 1,904
Comprehensive income attributable to noncontrolling interests —
—
—
4
—
4
Comprehensive income (loss) $ 1,903
$ 12,886
$ 21,794
$ (6,008 ) $ (28,667 ) $ 1,908

~~Page 31~~

~~Table of Contents~~

~~Consolidating Statements of Comprehensive Income~~ ~~(in thousands)~~

For the nine months ended September 30, 2012

Wells
REIT II
(Parent)

Wells
OP II
(the Issuer)
Guarantors
Non-
Guarantors

Consolidating
adjustments

Wells
REIT II
(Consolidated)
Net income (loss) attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc. $ 36,186
$ 49,835
$ 62,569
$ 15,470
$ (127,874 ) $ 36,186
Market value adjustment to interest rate swap (5,883 ) (5,883 ) —
—
5,883
(5,883 )
Comprehensive income (loss) attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc. 30,303
43,952
62,569
15,470
(121,991 ) 30,303
Comprehensive income attributable to noncontrolling interests —
—
—
4
—
4
Comprehensive income (loss) $ 30,303
$ 43,952
$ 62,569
$ 15,474
$ (121,991 ) $ 30,307

For the nine months ended September 30, 2011

Wells
REIT II
(Parent)

Wells
OP II
(the Issuer)
Guarantors
Non-
Guarantors

Consolidating
adjustments

Wells
REIT II
(Consolidated)
Net income (loss) attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc. $ 3,032
$ 30,127
$ 59,722
$ (11,427 ) $ (78,422 ) $ 3,032
Market value adjustment to interest rate swap (4,025 ) —
—
(4,025 ) 4,025
(4,025 )
Comprehensive income (loss) attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc. (993 ) 30,127
59,722
(15,452 ) (74,397 ) (993 )
Comprehensive income attributable to noncontrolling interests —
—
—
11
—
11
Comprehensive income (loss) $ (993 ) $ 30,127
$ 59,722
$ (15,441 ) $ (74,397 ) $ (982 )

~~Page 32~~28

Table of Contents

Consolidating Statements of Cash Flows (in thousands)

For the nine months ended September 30, 2012

Wells
REIT II
(Parent)

Wells
OP II
(the Issuer)
Guarantors
Non-
Guarantors

Wells
REIT II
(Consolidated)
Cash flows from operating activities: $ (23 ) $ (57,354 ) $ 144,469
$ 108,514
$ 195,606

Cash flows from investing activities:
Net proceeds from sale of real estate —
57,747
—
—
57,747
Investment in real estate and related assets —
(3,983 ) (22,608 ) (30,019 ) (56,610 )
Net cash provided by (used in) investing activities —
53,764
(22,608 ) (30,019 ) 1,137

Cash flows from financing activities:
Borrowings, net of fees —
564,735
—
—
564,735
Repayments —
(537,000 ) —
(35,590 ) (572,590 )
Issuance of common stock, net of redemptions and fees 24,515
—
—
—
24,515
Distributions (204,141 ) —
—
(15 ) (204,156 )
Intercompany transfers, net 188,827
(24,611 ) (125,383 ) (38,833 ) —
Redemption of noncontrolling interest —
—
—
(301 ) (301 )
Net cash provided by (used in) financing activities 9,201
3,124
(125,383 ) (74,739 ) (187,797 )

Net increase (decrease) in cash and cash equivalents 9,178
(466 ) (3,522 ) 3,756
8,946
Effect of foreign exchange rate on cash and cash equivalents —
—
—
22
22
Cash and cash equivalents, beginning of period 11,291
10,597
9,133
8,447
39,468
Cash and cash equivalents, end of period $ 20,469
$ 10,131
$ 5,611
$ 12,225
$ 48,436

~~Page 33~~

~~Table of Contents~~

~~Consolidating Statements of Cash Flows~~ ~~(in thousands)~~


	For the nine months ended September 30, 2011															For the three months ended March 31, 2012
	Wells REIT II (Parent)			Wells OP II (the Issuer)			Guarantors			Non- Guarantors			Wells REIT II (Consolidated)			Columbia Property Trust (Parent)			Columbia Property Trust OP (the Issuer)			Guarantors			Non- Guarantors			Columbia Property Trust (Consolidated)
Cash flows from operating activities:	$	859		$	(60,743	)	$	157,956		$	110,344		$	208,416		$	—		$	(19,952	)	$	59,790		$	33,756		$	73,594

Cash flows from investing activities:
Net proceeds from sale of real estate																—			57,685			—			—			57,685
Investment in real estate and related assets	(604,126		)	—			(13,752		)	(32,045		)	(649,923		)	—			(291		)	(7,260		)	(5,447		)	(12,998		)
Net cash used in investing activities	(604,126		)	—			(13,752		)	(32,045		)	(649,923		)
Net cash provided by (used in) investing activities																—			57,394			(7,260		)	(5,447		)	44,687

Cash flows from financing activities:
Borrowings, net of fees	—			1,165,529			—			324,371			1,489,900			—			406,279			—			—			406,279
Repayments	—			(780,500		)	(63,396		)	(47,876		)	(891,772		)	—			(418,000		)	—			(34,415		)	(452,415		)
Issuance of common stock, net of redemptions and fees	39,374			—			—			—			39,374			5,800			—			—			—			5,800
Distributions	(202,871		)	—			—			(33		)	(202,904		)	(67,954		)	—			—			(15		)	(67,969		)
Intercompany transfers	769,512			(329,538		)	(84,301		)	(355,673		)	—			73,442			(28,194		)	(55,050		)	9,802			—
Redemptions of noncontrolling interest	—			(87		)	—			—			(87		)
Net cash provided by (used in) financing activities	606,015			55,404			(147,697		)	(79,211		)	434,511			11,288			(39,915		)	(55,050		)	(24,628		)	(108,305		)

Net increase (decrease) in cash and cash equivalents	2,748			(5,339		)	(3,493		)	(912		)	(6,996		)	11,288			(2,473		)	(2,520		)	3,681			9,976
Effect of foreign exchange rate on cash and cash equivalents	—			—			—			(77		)	(77		)	—			—			—			(288		)	(288		)
Cash and cash equivalents, beginning of period	8,281			11,074			8,250			11,277			38,882			11,291			10,597			9,134			8,446			39,468
Cash and cash equivalents, end of period	$	11,029		$	5,735		$	4,757		$	10,288		$	31,809		$	22,579		$	8,124		$	6,614		$	11,839		$	49,156


11.	Subsequent Event

~~Wells REIT II~~Columbia Property Trust has evaluated subsequent events in connection with the preparation of ~~its~~the consolidated financial statements and notes thereto included in this report on Form 10-Q and ~~notes~~noted the following item in addition to those disclosed elsewhere in this report:

~~Declaration~~On May 7, 2013, the Board of ~~Distributions~~

~~On November 6, 2012, Wells REIT II's board of directors~~Directors declared distributions to stockholders for the ~~fourth~~second quarter of ~~2012~~2013 in the amount of $0.095 (~~9.5 cent~~s)(9.5 cents) per share on the outstanding shares of common stock payable to stockholders of record as of ~~December~~June 15, ~~2012, which reflects a reduction from the previous quarterly rate of~~ ~~$0.125~~ ~~per share. The~~2013. Such distributions will be paid in ~~December 2012.~~June 2013.

~~Nine-Property Sale Contract~~

~~On November 6, 2012, Wells REIT II entered into a contract to sell nine of its assets for a gross sales price of~~ ~~$260.5~~ ~~million, exclusive of closing costs, and targets closing on this sale in the fourth quarter of 2012.~~

Page 3429

Table of Contents


ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our accompanying consolidated financial statements (and notes thereto) and the "Cautionary Note Regarding Forward-Looking Statements" preceding Part I of this report, as well as our consolidated financial statements (and the notes thereto) and Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, ~~2011~~2012.

Overview

From 2004 through 2010, we raised approximately $5.8 billion in gross equity proceeds and, along with borrowings, invested those proceeds, net of fees, into commercial real estate consisting of high-quality, income-producing office and industrial properties leased to creditworthy entities located in major metropolitan areas throughout the United States.

Following our initial growth period, ~~during 2011 and 2012,~~ we have concentrated on actively managing our assets and pursuing a variety of strategic opportunities focused on enhancing the composition of our portfolio and the total return potential for the REIT. ~~Earlier this year,~~In early 2012, we consummated a series of favorable debt transactions, which ~~have~~ allowed us to improve our secured-to-unsecured debt mix and to lower our total cost of borrowings without disrupting the laddering of our debt maturities or materially altering our aggregate borrowing levels. ~~More recently,~~Later in 2012, we shifted our focus towards repositioning our portfolio to optimize our geographic market concentration. Over the past two quarters, we have ~~focused~~made progress on ~~refining~~this objective by disposing of nine properties situated in secondary markets for a gross selling price of $260.5 million, and recycling those sale proceeds into the acquisition of the 333 Market Street Building in San Francisco, California for $395.3 million, in December 2012; and, more recently, selling Dvintsev Business Center - Tower B in Moscow, Russia for a gross selling price of $67.5 million in March 2013. We are continuing to advance our portfolio ~~by marketing~~repositioning efforts in 2013. Recently, we initiated a process to market for sale a group of 18 additional properties with an aggregate carrying value of approximately $530 million, the disposition of which would further enhance our concentration in strategic geographical markets and ~~negotiating~~strengthen the ~~sale of a collection of nine~~underlying real estate fundamentals of our ~~assets in outlying markets. As a result of changing our disposition strategy and shortening our anticipated holding period for these assets, we recorded an impairment loss of~~ ~~$18.5 million~~ ~~on the 180 E 100 South property located in Salt Lake City, Utah in the third quarter of 2012.~~portfolio.

~~During 2012, in~~In connection with preparing ~~the REIT~~ for various liquidity options, we ~~also~~ established and carried out a plan to transition our externally advised management ~~structure~~platform to a self-managed ~~platform as outlined in~~structure, which culminated on February 28, 2013, upon terminating the ~~Transition~~advisory and property management agreements and acquiring Columbia Property Trust Advisory Services ~~Agreement made effective July 1, 2012. The Transition~~and Columbia Property Trust Services, ~~Agreement requires WREF to transfer~~including the ~~assets and~~ employees necessary to ~~provide~~perform the ~~services outlined~~requisite corporate and property management functions previously performed by our external advisor and property manager. We will continue to prepare for liquidity options through the remainder of 2013 by, among other things, further refining our portfolio in an effort to enhance the ~~Advisory Agreement~~REIT's value potential and, consequently, its attractiveness to ~~WREAS II~~future investors. Our goal is to optimize the allocation between our traditional, stabilized core investments, and growth-oriented, core-plus, and value-added investments, which have an expectation for meaningful upside potential in net operating income and value over the intermediate term. We will also continue to focus on our market concentration by ~~January 1, 2013, except as otherwise provided, and includes an option for us to acquire WREAS II during 2013 (see Note 8.~~ ~~Related-Party Transactions and Agreements~~ ~~for additional detail).~~building on our economic presence in key markets.

Liquidity and Capital Resources

Overview

In ~~2011~~2012 and ~~2012,~~2013, we actively managed our real estate portfolio with an emphasis on leasing and re-leasing space, and pursuing and closing on strategic acquisitions and ~~selective~~ dispositions to ~~better align~~concentrate our ~~portfolio with our current investment objectives.~~market focus. During this period, we also enhanced our capital structure by continuing to raise net equity proceeds through our DRP, improving the composition, maturities and capacity of our debt portfolio while lowering our overall borrowing costs, accessing new sources of capital, and identifying additional sources of future capital.

In determining how and when to allocate cash resources, we initially consider the source of the cash. We ~~use substantially all net~~reserve a portion of operating cash flows to fund ~~distributions to stockholders.~~capital expenditures for our existing portfolio. The amount of distributions that we pay to our common stockholders is determined by our board of directors and is dependent upon a number of factors, including the funds available for distribution to common stockholders, our financial condition, our capital expenditure requirements, our expectations of future sources of liquidity, and the annual distribution requirements necessary to maintain our status as a REIT under the Code. When evaluating funds available for stockholder distributions, we consider net cash provided by operating activities, as presented in the accompanying GAAP-basis consolidated statements of cash flows, adjusted to exclude certain costs that were incurred for the purpose of generating future earnings and appreciation in value over the long term, including acquisition fees and expenses. We use DRP proceeds to fund share redemptions (subject to the limitations of our share redemption program), and make residual DRP proceeds available to fund capital improvements for our existing portfolio, additional real estate investments, and other cash needs.

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Table of Contents

Short-term Liquidity and Capital Resources

During the ~~nine~~three months ended ~~September 30, 2012~~March 31, 2013, we generated net cash flows from operating activities of $~~195.6~~48.5 million, which consists primarily of receipts from tenants for rent and reimbursements, reduced by payments for operating costs, administrative expenses, and interest expense. During the same period, we paid total distributions to stockholders of $~~204.1~~51.6 million, which includes $~~94.4~~22.9 million reinvested in our common stock pursuant to our DRP. In the event that distributions exceed current-period and prior-period accumulated operating cash flow, borrowings are used to pay stockholder distributions. We expect to use the majority of our future net cash flow from operating activities to fund distributions to ~~stockholders.~~stockholders and capital improvements to our existing assets.

~~Page 35~~

~~Table of Contents~~

During the ~~nine~~three months ended ~~September 30, 2012~~March 31, 2013, we sold the ~~5995 Opus Parkway building and the Emerald Point building~~Dvintsev Business Center - Tower B for net proceeds of $~~57.7~~65.9 million and generated net proceeds from the sale of common stock under our DRP of $~~94.4~~22.9 million. We used these proceeds, along with cash on hand, to fund share redemptions of $~~69.9~~40.9 million, capital expenditures of $~~56.6~~12.1 million, and net debt repayments of $~~4.6~~17.6 million.

We believe that we have adequate liquidity and capital resources to meet our current obligations as they come due. As of ~~October 31,~~April 30, 2012, we had access to the borrowing capacity under the JPMorgan Chase Credit Facility of ~~$430.0~~$468.0 million.

Long-term Liquidity and Capital Resources

Over the long term, we expect that our primary sources of capital will include operating cash flows, proceeds from our DRP, proceeds from secured or unsecured borrowings from third-party lenders, and, if and when deemed appropriate, proceeds from strategic property sales. We expect that our primary uses of capital will continue to include stockholder distributions; redemptions of shares of our common stock under our share redemption program; capital expenditures, such as building improvements, tenant improvements, and leasing costs; repaying or refinancing debt; and selective property acquisitions, either directly or through investments in joint ventures.

On February 3, 2012, we closed on the $450 Million Term Loan, a four-year, unsecured term loan with a syndicate of banks led by JPMorgan Chase Bank, N.A., which yielded initial gross proceeds of $375.0 million and additional gross proceeds of $40.0 million in the second quarter and $35.0 million in the third quarter, for total outstanding borrowings of $450.0 million as of ~~September 30, 2012. The~~ ~~$450 Million~~ ~~Term Loan bears interest at~~ ~~LIBOR, plus an applicable base margin; however, we effectively fixed the interest rate on the initial borrowing (assuming no change in our corporate credit rating) at~~ ~~2.64%~~ ~~per annum with an interest rate swap executed contemporaneously with the loan. The~~ ~~$450 Million~~ ~~Term Loan matures on February 3, 2016, provided that certain conditions are met prior to that date. Furthermore, provided that certain additional conditions are met prior to, and at maturity, the~~ ~~$450 Million~~ ~~Term Loan shall become eligible for a one-year extension upon paying an extension fee equal to~~ ~~0.15%~~ ~~of the outstanding balance.~~

~~As described above, the $450 Million Term Loan provided two accordion options to increase total borrowings to a maximum of~~ ~~$450.0 million~~, both of which have been exercised. Contemporaneous with closing on these new borrowings, we effectively fixed the interest rate (assuming no change in our corporate credit rating) on each accordion option with an interest rate swap agreement, which together caused the weighted-average effective borrowing rate on aggregate borrowings under the $450 Million Term loan to decrease slightly from ~~2.64%~~ ~~per annum to~~ ~~2.63%~~ ~~per annum. The total proceeds from the~~ ~~$450 Million~~ Term Loan were used to repay temporary borrowings, and thereby create additional borrowing capacity, under the JPMorgan Chase Credit Facility. The majority of these temporary borrowings were drawn to settle mortgage loans during the second half of 2011 and during 2012.

Consistent with our financing objectives and operational strategy, we continue to maintain low debt levels, ~~over the long term,~~ historically less than 40% of the cost of our assets. This conservative leverage goal could reduce the amount of current income we can generate for our stockholders, but it also reduces their risk of loss. We believe that preserving investor capital while generating stable current income is in the best interest of our stockholders. Our debt-to-real-estate-asset ratio is calculated using the outstanding debt balance and real estate at cost. As of ~~September 30, 2012~~March 31, 2013, our debt-to-real-estate-asset ratio was approximately ~~25.9%~~28.7%.

For the first three quarters of 2012, quarterly stockholder distributions were declared and paid at $0.125 per share, consistent with the rate paid throughout 2011. In the fourth quarter of 2012, our board of directors ~~has~~ elected to reduce the quarterly stockholder distribution rate ~~from the third quarter 2012 rate of $0.125 per share~~ to $0.095 per share. Economic downturns in certain of our geographic ~~market~~markets and in certain industries in which our tenants operate have impacted our recent leasing activities and caused our current and future operating cash flows to experience some deterioration. ~~We are continuing to carefully monitor~~During 2012, we renewed leases for 9.2% of our ~~cash flows and market conditions and to assess their impact~~portfolio, based on ~~our future earnings and future distribution decisions.~~square footage, which resulted in tenant concessions of $49.7 million. Furthermore, in preparing for various liquidity options, our board ~~has also~~ decided to adjust our ~~dividend~~distribution payment policy to reserve additional operating cash flow to fund capital expenditures for our existing portfolio and to provide additional financial flexibility as we begin to shape our portfolio through the strategic sale and redeployment of capital proceeds in furtherance of our investment objectives, which include concentrating our market focus.

Our board of directors elected to maintain the distribution rate of $0.095 for the first and second quarters of 2013. We are continuing to monitor our cash flows and market conditions and to assess their impact on our future earnings and future distribution decisions.

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Debt Covenants

Our portfolio debt instruments, the $450 Million Term Loan, the JPMorgan Chase Credit Facility, and the unsecured senior notes, contain certain covenants and restrictions that require us to meet certain financial ratios, including the following key financial covenants and respective covenant levels as of ~~September 30, 2012~~March 31, 2013:



			~~Actual Performance~~
	Covenant Level		~~September 30, 2012~~Actual Performance March 31, 2013
JP Morgan Chase Credit Facility and $450 Million Term ~~Loan~~Loan:
Total debt to total asset value ratio		Less than 50%		~~31%~~34	%
Secured debt to total asset value ratio		Less than 40%		~~15%~~19	%
Fixed charge coverage ratio		Greater than 1.75x		~~4.24x~~2.27x
Unencumbered interest coverage ratio		Greater than 2.0x		~~6.07x~~6.30x
Unencumbered asset coverage ratio		Greater than 2.0x		~~2.88x~~3.44x
Unsecured Senior Notes due 2018:
Aggregate debt test		Less than 60%		~~25%~~28	%
Debt service test		Greater than 1.5x		~~4.89x~~3.76x
Secured debt test		Less than 40%		~~12%~~15	%
Maintenance of total unencumbered assets		Greater than 150%		~~587%~~568	%

We were in compliance with all of our debt covenants as of ~~September 30, 2012~~March 31, 2013. Currently, we expect to continue to meet the requirements of our debt covenants over the short and long term.

Contractual Commitments and Contingencies

As of ~~September 30, 2012~~March 31, 2013, our contractual obligations will become payable in the following periods (in thousands):


Contractual Obligations	Total		2012		2013-2014		2015-2016		Thereafter		Total		2013		2014-2015		2016-2017		Thereafter
Debt obligations	$	1,467,091	$	600	$	130,418	$	559,758	$	776,315	$	1,632,535	$	28,223	$	336,035	$	670,102	$	598,175
Interest obligations on debt⁽¹⁾	375,783		16,013		123,986		101,953		133,831		367,865		55,356		133,614		82,651		96,244
Capital lease obligations⁽²⁾	646,000		60,000		466,000		—		120,000		586,000		466,000		—		—		120,000
Operating lease obligations	227,278		2,604		5,263		5,263		214,148		221,189		2,557		5,113		5,259		208,260
Total	$	2,716,152	$	79,217	$	725,667	$	666,974	$	1,244,294	$	2,807,589	$	552,136	$	474,762	$	758,012	$	1,022,679

⁽¹⁾

Interest obligations on variable-rate debt are measured at the rate at which they are effectively fixed with interest rate ~~swaps~~swap agreements (where applicable), a portion of which is reflected as ~~Loss~~gain (loss) on interest rate swaps in our accompanying consolidated statements of operations. Interest obligations on all other debt are measured at the contractual rate. See Item 3.3, Quantitative and Qualitative Disclosure About Market Risk, for more information regarding our interest rate swaps.


⁽²⁾	Amounts include principal obligations only. We made interest payments on these obligations of ~~$30.0~~$9.1 million during the ~~nine~~three months ended ~~September 30, 2012~~March 31, 2013, all of which was funded with interest income earned on the corresponding investments in development authority bonds.

Results of Operations

Overview

As of ~~September 30, 2012~~March 31, 2013, we owned controlling interests in 6960 office properties, which were approximately ~~91.7%~~93.3% leased, and one hotel. Our real estate operating results have ~~remained relatively stable~~decreased for the ~~three and~~ ~~nine~~three months ended ~~September 30, 2012~~March 31, 2013, as compared to the same periods in ~~2011~~2012., primarily due to fees payable to WREF incurred in the first quarter of 2013, included in general and administrative expense in our accompanying statement of operations. In the near term, absent future acquisitions or dispositions, we expect future real estate operating income to fluctuate primarily based on acquisitions, dispositions, and leasing activities for our ~~current~~ portfolio.

Comparison of the three months ended ~~September 30, 2012~~March 31, 2013 versus the three months ended ~~September 30, 2011~~March 31, 2012

Rental income was $~~116.4~~115.1 million for the three months ended ~~September 30, 2012~~March 31, 2013, which represents ~~a slight decrease~~an increase as compared to $~~120.1~~110.2 million for the three months ended ~~September 30, 2011~~March 31, 2012., primarily due to the acquisition of the 333 Market Street Building in

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December 2012, partially offset by the impact of 2012 leasing activities. Absent changes to our portfolio or the leases currently in place at our properties, future rental income is expected to remain at similar levels in future periods.

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Tenant reimbursements remained relatively stable at $~~27.3~~25.4 million for the three months ended ~~September 30, 2012~~March 31, 2013, as compared to $~~27.0~~25.1 million for the three months ended ~~September 30, 2011~~March 31, 2012. Property operating costs, ~~were~~however, increased to $~~47.5~~43.7 million for the three months ended ~~September 30, 2012~~March 31, 2013, ~~which represents an increase~~ as compared to $~~44.8~~41.2 million for the three months ended ~~September 30, 2011~~March 31, 2012, primarily due to ~~the commencement of new leases and~~ increases in property taxes, resulting from annual ~~reassessments.~~reassessments, and ice and snow removal costs. Tenant reimbursements of the additional 2013 property operating costs were neutralized by the impact of concessions offered with new and modified leases. Absent changes to our portfolio, orover the ~~leases currently in place at our properties, future~~near term, tenant reimbursements and property operating costs are expected to fluctuate in a similar manner based ~~primarily~~ on leasing ~~activities for our current portfolio.~~activities.

Hotel income, net of hotel operating costs, was $~~1.8~~0.7 million for the three months ended ~~September 30, 2012~~March 31, 2013, which represents an increase as compared to $~~1.3~~0.3 million for the three months ended ~~September 30, 2011~~March 31, 2012, ~~primarily~~ due to increased ~~room rates~~food and ~~hotel occupancy.~~beverage sales. Hotel income and hotel operating costs are primarily driven by the local economic conditions and, as a result, are expected to fluctuate in the future primarily based on changes in the supply of, and demand for, hotel and banquet space in Cleveland, Ohio, similar to that offered by the Key Center Marriott hotel.

Other property income was $~~4.1~~0.3 million for the three months ended ~~September 30, 2012~~March 31, 2013, which represents ~~an increase~~a decrease as compared to $~~3.7~~1.7 million for the three months ended ~~September 30, 2011~~March 31, 2012, primarily due to fees earned in connection with additional lease terminations in the ~~third~~first quarter of ~~2012, offset by lease terminations in the third quarter of 2011.~~2012. Future other property income fluctuations are expected to primarily relate to future lease restructuring and termination activities.

Asset and property management fees were $~~9.8~~6.2 million for the three months ended ~~September 30, 2012~~March 31, 2013, which represents a ~~slight~~ decrease as compared to $~~10.2~~9.5 million for the three months ended ~~September 30, 2011~~March 31, 2012, ~~primarily~~ due to ~~the $83,333 in monthly savings provided for under~~terminating the Advisory Agreement effective ~~July 1, 2012. Pursuant to the limitations outlined~~February 28, 2013 as further discussed in ~~the Advisory Agreement, monthly~~Note 8, Related-Party Transactions and Agreements. Thus, going forward, no related-party asset management fees ~~have been capped at $2.7 million (or $32.5 million annualized) since April 2011 following the March 2011 acquisition~~will be incurred, as such services will be performed by employees of ~~the Market Square Buildings for $603.4 million, adjusted for monthly savings of $83,333 beginning in July 2012 (see Note 8.~~ ~~Related Party Transactions and Agreements). Future asset and property management fees are expected to fluctuate based on disposition and acquisition activity.~~Columbia Property Trust.

Depreciation ~~remained stable at~~was $~~30.4~~30.3 million for the three months ended ~~September 30, 2012~~March 31, 2013 ~~and~~, which represents an increase as compared to $~~30.1~~27.9 million for the three months ended ~~September 30, 2011~~March 31, 2012., primarily due to the acquisition of the 333 Market Street building in December 2012. Excluding the impact of acquisitions, dispositions, and changes to the leases currently in place at our properties, depreciation is expected to continue to increase in future periods, as compared to historical periods, due to ongoing capital improvements to our properties.

Amortization was $~~24.6~~21.9 million for the three months ended ~~September 30, 2012~~March 31, 2013, which represents a decrease as compared to $~~29.4~~25.7 million for the three months ended ~~September 30, 2011~~March 31, 2012, primarily due to the expiration of in-place leases at ~~several of~~ our properties in 2012 and 2013, partially offset by ~~amortization~~the acquisition of ~~deferred leasing costs incurred~~333 Market Street in ~~connection with the leases executed during the second half of 2011 and the first three quarters of 2012 (approximately 3.3 million square feet).~~December 2012. Future amortization is expected to fluctuate, primarily based on the expiration of additional in-place leases, offset by amortization of deferred lease costs incurred in connection with recent leasing ~~activity.~~activity and in-place leases at acquired properties.

We recognized an impairment loss ~~on real estate assets~~ of $~~18.5~~16.9 million in the ~~third~~first quarter of ~~2012~~2013 to reduce the carrying ~~value~~values of the ~~180 E 100 South property~~120 Eagle Rock and 333 & 777 Republic Drive properties to ~~its~~their estimated fair ~~value~~values in connection with refining our disposition strategy for ~~this asset~~these assets as ~~part~~a result of initiating a ~~strategic~~process to market for sale a group of ~~a collection of nine assets situated in outlying markets.~~18 properties. We expect future impairment losses on real estate assets to be dependent upon the nature and timing of future disposition activities.

General and administrative expenses were $~~7.0~~36.9 million for the three months ended ~~September 30, 2012~~March 31, 2013, which represents an increase as compared to $~~6.1~~4.9 million for the three months ended ~~September 30, 2011~~March 31, 2012, primarily due to the contractual impact of transitioning to a self-managed platform (see Note 8, Related-Party Transactions and Agreements for details). As a result, for the first quarter of 2013, general and administrative expenses include all of the fees ~~incurred~~payable under the Consulting Service Agreement and the Transition Services Agreement, ~~effective July 1, 2012 (see Note 8.~~ ~~Related-Party Transactions and Agreements~~ ~~for additional detail), partially offset by litigation expenses incurred in lease-related litigation~~as amended, during ~~the third quarter of 2011.~~2013. General and administrative expenses are expected to ~~remain at a level comparable to current general and administrative expenses over~~decrease in the near ~~term.~~

~~No acquisition~~term as we do not expect to incur additional fees ~~were incurred for the three months ended~~ ~~September 30, 2012, as compared to~~ ~~$29,000~~ ~~for the three months ended~~ ~~September 30, 2011~~ ~~related to the acquisition of the Market Square Buildings earlier that year. We expect future acquisition fees and expenses to fluctuate based on future acquisition activity.~~under either agreement going forward.

Interest expense was $27.3 million for the three months ended ~~September 30, 2012~~March 31, 2013, which represents a slight ~~decrease~~increase as compared to $~~28.7~~26.3 million for the three months ended ~~September 30, 2011~~March 31, 2012, primarily due to the 333 Market Street Building mortgage note assumed at acquisition in December 2012, partially offset by lowering our ~~weighted average~~weighted-average cost of borrowing upon executing the $450 Million Term ~~Loan. Future~~Loan and the settlement of the development authority bonds and the related obligation under capital lease related to One Glenlake Parkway Building in December 2012. Absent acquisition activity, interest expense ~~will depend largely upon changes~~is expected to remain at comparable levels in ~~market interest rates~~the near term, and decrease over the longer term, as $466.0 million of our ~~ability to secure financings or refinancings.~~$586.0 million total capital lease obligations mature in December 2013.

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Interest and other income ~~remained stable at~~was $9.1 million for the three months ended March 31, 2013, which represents a slight decrease as compared to $10.0 million for the three months ended ~~September 30,~~March 31, 2012, ~~as compared~~due to ~~$10.3 million~~ ~~for~~ the ~~three months ended~~ ~~September 30, 2011~~.settlement of the development authority bonds and the related obligation under capital lease related to One Glenlake Parkway Building in December 2012. Interest income is expected to remain ~~relatively consistent~~at comparable levels in ~~future periods given that~~the near term, as the majority of this activity consists of interest income earned on investments in development authority bonds ~~which had~~with a weighted-average remaining term of approximately ~~4.9~~2.6 years as of ~~September 30, 2012~~March 31, 2013., and decrease significantly over the longer term, as $466.0 million of our $586.0 million total development authority bonds mature in December 2013. Interest income earned on investments in development authority bonds is entirely offset by interest expense incurred on the corresponding capital leases.

We recognized a ~~loss~~gain (loss) on interest rate swaps that do not qualify for hedge accounting treatment of approximately $~~29,000~~57,000 for the three months ended ~~September 30, 2012~~March 31, 2013, compared to $~~14.8 million~~(76,000) for the three months ended ~~September 30, 2011~~March 31, 2012. We anticipate future gains and losses on interest rate swaps that do not qualify for hedge accounting treatment will fluctuate, primarily due to changes in the estimated fair value of our interest rate swaps relative to then-current market conditions. Market value adjustments to swaps that qualify for hedge accounting treatment are recorded directly to equity, and therefore do not impact net income.

Income from discontinued operations was approximately $~~55,000~~ ~~for the three months ended~~ ~~September 30, 2012~~ ~~and~~ ~~$6.7~~9.7 million for the three months ended ~~September 30, 2011~~March 31, 2013 and $19.4 million for the three months ended March 31, 2012. As further explained in Note 9.9, ~~Assets Held for Sale and~~ Discontinued Operations, to the accompanying consolidated financial statements, properties meeting certain criterion for disposal are classified as "discontinued operations" in the accompanying consolidated statements of operations for all periods presented. For ~~2011,~~the periods presented, discontinued operations ~~includes~~include Dvintsev Business Center - Tower B, which closed in March 2013 for a net gain of $10.0 million; the ~~Manhattan Towers property (transferred to~~Nine Property Sale, which closed in December 2012 for a net gain of $3.2 million after recognizing an ~~affiliate~~$18.5 million impairment loss on the 180 E 100 South Building, one of ~~its lender~~the properties in ~~connection with settling a $75.0 million mortgage note through a deed in lieu of foreclosure transaction in September 2011)~~the Nine Property Sale; and 5995 Opus Parkway and Emerald Point, which ~~sold~~both closed in January 2012 for total gains of $16.9 ~~million in January 2012; for 2012, discontinued operations includes 5995 Opus Parkway and Emerald Point.~~million.

Net income (loss) attributable to ~~Wells REIT II~~Columbia Property Trust was $~~(5.9)~~(22.6) million, or $~~(0.01)~~(0.04) per share, for the three months ended ~~September 30, 2012~~March 31, 2013, which represents a decrease as compared to $~~5.1~~31.1 million, or $~~0.01~~0.06 per share, for the three months ended ~~September 30, 2011~~March 31, 2012. The decrease is primarily attributable to the impairment loss on the 180 E 100 South property in the third quarter of 2012 and nonrecurring gains in 2011 related to the disposition of the Manhattan Towers property, partially offset by a decrease in the losses incurred to mark interest rate swaps to market as compared to the prior year due to settling the swaps on the 80 Park Plaza Building and the 222 East 41st Street Building in December 2011. We expect future net income to fluctuate based on future disposition and acquisition activity and current and future leasing activity. Should the U.S. economic recovery remain sluggish, or the U.S. real estate markets remain depressed for a prolonged period of time, the creditworthiness of our tenants and our ability to achieve market rents comparable to the leases currently in place at our properties may suffer and could lead to a decline in net income over the long term.

~~Comparison of the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2012~~ ~~versus the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2011~~

~~Rental income was~~ ~~$355.7~~incurring $28.6 million ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2012, which represents a slight increase as compared to~~ ~~$354.8 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2011. Absent changes to our portfolio or the leases currently in place at our properties, rental income is expected to remain at similar levels in future periods.~~

~~Tenant reimbursements remained stable at~~ ~~$77.9 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2012, as compared to~~ ~~$77.5 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2011~~, as additional reimbursements from the Market Square property are offset by fewer reimbursements for the remainder of the portfolio primarily due to concessions offered with new and modified leases executed in 2011 and 2012. Property operating costs were ~~$135.2 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2012, which represents an increase as compared to~~ ~~$130.6 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2011~~, primarily due to the acquisition of the Market Square Buildings in March 2011 and the commencement of new leases. Absent changes to our portfolio or the leases currently in place at our properties, future tenant reimbursement fluctuations are generally expected to correspond with future property operating cost reimbursements.

~~Hotel income, net of hotel operating costs were~~ ~~$3.5 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2012, which represents a slight increase as compared to~~ ~~$2.4 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2011~~, due to increased room rates and hotel occupancy primarily in the second and third quarters of 2012. Hotel income and hotel operating costs are primarily driven by the local economic conditions and, as a result, are expected to fluctuate in the future primarily based on changes in the supply of, and demand for, hotel and banquet space in Cleveland, Ohio, similar to that offered by the Key Center Marriott hotel.

~~Other property income remained stable at~~ ~~$6.2 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2012, as compared to~~ ~~$6.0 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2011. Future other property income fluctuations are expected to primarily relate to future lease restructuring and termination activities.~~

~~Asset and property management fees were relatively stable at~~ ~~$30.0 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2012~~ ~~as compared to~~ ~~$29.8 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2011. Pursuant to the limitations outlined in the Advisory Agreement, monthly asset management fees have remained capped at $2.7 million (or $32.5 million annualized) since April 2011~~

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following the March 2011 acquisition of the Market Square Buildings for $603.4 million. Future asset and property management fees are expected to decrease in the near term as a result the Advisory Agreement effective July 1, 2012, which provides for a monthly fee reduction of $83,333 (see Note 8. ~~Related Party Transactions and Agreements~~ ~~for additional detail).~~

~~Depreciation was~~ ~~$90.8 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2012, which represents an increase as compared to~~ ~~$87.6 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2011~~, primarily due to the Market Square Buildings acquisition in March 2011. Excluding the impact of changes to the leases currently in place at our properties, depreciation is expected to continue to increase in future periods, as compared to historical periods, due to ongoing capital improvements to our properties.

~~Amortization was~~ ~~$79.6 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2012, which represents a decrease as compared to~~ ~~$90.8 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2011~~, due to the expiration of in-place leases at several of our properties, partially offset by accelerated amortization for a lease termination effected at 1950 University Circle in the second quarter of 2012, and amortization of deferred leasing costs incurred in connection with the leases executed during the second half of 2011 and the first half of 2012 (approximately 3.0 million square feet). Future amortization is expected to fluctuate primarily based on the expiration of additional in-place leases, offset by amortization of deferred lease costs incurred in connection with recent leasing activity.

~~We recognized an impairment loss on real estate assets of~~ ~~$18.5 million~~ in the third quarter of 2012 to reduce the carrying value of the 180 E 100 South property to its estimated fair value in connection with refining our disposition strategy for this asset as part of a strategic sale of a collection of nine assets situated in outlying markets. We expect future impairment losses on real estate assets to be dependent upon the nature and timing of future disposition activities.

~~General and administrative expenses were~~ ~~$18.2 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2012, which represents a decrease as compared to~~ ~~$19.2 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2011, primarily due to bad debt expense incurred in 2011, partially offset by fees paid~~ under the Transition Services Agreement, ~~effective July 1, 2012 (see~~as amended, and the Consulting Services Agreement, as described in Note 8.8, Related-Party Transactions and Agreements, ~~for additional detail). General and administrative expenses are expected to remain at a level comparable to current general and administrative expenses over the near term.~~

~~No acquisition fees were incurred for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2012, as compared to~~ ~~$11.2 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2011, which relates primarily to the acquisition~~ of the Market Square Buildings and the acquisition fees charged under the advisory agreement in place in 2011. Until July 31, 2011, acquisition fees were incurred at 2.0% of gross offering proceeds, subject to certain limitations; effective August 1, 2011, acquisition fees are incurred at 1.0% of the property purchase price (excluding acquisition expenses); however, in no event may total acquisition fees for the 2012 calendar year exceed 2.0% of total gross offering proceeds. As a result of the change, we expect future acquisition fees and expenses to fluctuate based on future acquisition activity.

~~Interest expense remained relatively stable~~at ~~$81.2 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2012~~ ~~as compared to~~ ~~$81.5 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2011. Future interest expense will depend largely upon changes in market interest rates and our ability to secure financings or refinancings.~~

~~Interest and other income was~~ ~~$30.0 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2012, which represents a decrease as compared to~~ ~~$32.4 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2011~~, primarily due to the settlement of litigation in 2011 related to a prospective acquisition that did not close. Interest income is expected to remain relatively consistent in future periods given that the majority of this activity consists of interest income earned on investments in development authority bonds, which had a weighted-average remaining term of approximately 4.9 years as of ~~September 30, 2012. Interest income earned on investments in development authority bonds is entirely offset by interest expense incurred on the corresponding capital leases.~~

~~We recognized a loss on interest rate swaps that do not qualify for hedge accounting treatment of approximately~~ ~~$118,000~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2012, as compared to~~ ~~$22.2 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2011~~. We anticipate future gains and losses on interest rate swaps that do not qualify for hedge accounting treatment will fluctuate, primarily due to changes in the estimated fair value of our interest rate swaps relative to then-current market conditions. Market value adjustments to swaps that qualify for hedge accounting treatment are recorded directly to equity, and therefore do not impact net income.

~~Income from discontinued operations was~~ ~~$16.9 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2012, as compared to~~ ~~$2.6 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2011. As further explained in Note 9.~~ ~~Assets Held for Sale and Discontinued Operations~~ to the accompanying consolidated financial ~~statements, properties meeting certain criterion for disposal are classified as "discontinued operations"~~statements; and changes in disposition activity between the periods presented. We expect earnings to improve due to the nonrecurring transition services and consulting fees incurred in the accompanying consolidated statements of operations for all periods presented. For 2011, discontinued operations includes the Manhattan Towers property (transferred to an affiliate of its lender in connection with settling

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a $75.0 million mortgage note through a deed in lieu of foreclosure transaction in September 2011) and 5995 Opus Parkway and Emerald Point, which sold for total gains of $16.9 million in January 2012; for 2012, discontinued operations includes 5995 Opus Parkway and Emerald Point.

~~Net income attributable to Wells REIT II was~~ ~~$36.2 million, or~~ ~~$0.07~~ ~~per share, for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2012, which represents an increase from~~ ~~$3.0 million, or~~ ~~$0.01~~ ~~per share, for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2011~~. The increase is primarily attributable to a decrease in the losses incurred to mark interest rate swaps to market as compared to the prior year (due to settling the swaps on the 80 Park Plaza Building and the 222 East 41st Street Building in December 2011), nonrecurring gains from the sale of 5995 Opus Parkway and Emerald Point in January 2012, and nonrecurring acquisition fees in connection with acquiring the Market Square Buildings in March 2011, partially offset by incurring an impairment loss on the 180 E 100 South property in the thirdfirst quarter of ~~2012. We expect future net income to fluctuate based on future disposition and acquisition activity and current and future leasing activity.~~2013. Should the U.S. economic recovery remain sluggish, or the U.S. real estate markets remain depressed for a prolonged period of time, the creditworthiness of our tenants and our ability to achieve market rents comparable to the leases currently in place at our properties may suffer and could lead to a decline in net income over the long term.

Funds From Operations and Adjusted Funds From Operations

Funds from Operations ("FFO"), as defined by the National Association of Real Estate Investment Trusts ("NAREIT"), is a non-GAAP financial measure considered by some equity REITs in evaluating operating performance. FFO is computed as GAAP net income (loss) regardless of classification as continuing or discontinuing operations, adjusted to exclude: extraordinary items, gains (or losses) from property sales (including deemed sales and settlements of pre-existing relationships), depreciation and amortization of real estate assets, impairment losses related to sales of real estate assets, and adjustments for earnings allocated to noncontrolling interests in consolidated partnerships. Effective December 31, 2011, we adjusted our calculation of FFO to be consistent with NAREIT's recent Accounting and Financial Standards Hot Topics, which clarifies that impairment losses on real estate assets should be excluded from FFO. We believe it is useful to consider GAAP net income, adjusted to exclude the above-mentioned items, when assessing our performance because excluding the above-described adjustments highlights the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be readily apparent from GAAP net income alone. We do not, however, believe that FFO is the best measure of the sustainability of our operating performance. Changes in the GAAP accounting and reporting rules that were put into effect after the establishment of NAREIT's definition of FFO in 1999 are resulting in the inclusion of a number of items in FFO that do not correlate with the sustainability of our operating performance (e.g., acquisition expenses, market value adjustments to interest rate swaps, and amortization of certain in-place lease intangible assets and liabilities, among others). Therefore, in addition to FFO, we present Adjusted Funds from Operations ~~("AFFO"~~(or "AFFO"), a non-GAAP financial measure. AFFO is calculated by adjusting FFO to exclude the income and expenses that we believe are not reflective of the sustainability of our ongoing operating performance, as further explained below:

Additional amortization of lease assets (liabilities). GAAP implicitly assumes that the value of intangible lease assets (liabilities) diminishes predictably over time and, thus, requires these charges to be recognized ratably over the respective lease terms. Such intangible lease assets (liabilities) arise from the allocation of acquisition price related to direct costs associated with obtaining a new tenant, the value of opportunity costs associated with lost rentals, the value of tenant relationships, and the value of effective rental rates of in-place leases that are above or below market rates of comparable leases at the time of acquisition. Like real estate values, market lease rates in aggregate have historically risen or fallen

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with local market conditions. As a result, ~~management believes~~we believe that by excluding these charges, AFFO provides useful supplemental information that is reflective of the performance of our real estate investments, which is useful in assessing the sustainability of our operations.

Straight-line rental income. In accordance with GAAP, rental payments are recognized as income on a straight-line basis over the terms of the respective leases. Thus, for any given period, straight-line rental income represents the difference between the contractual rental billings for that period and the average rental billings over the lease term for the same length of time. This application results in income recognition that can differ significantly from the current contract terms. By adjusting for this item, we believe AFFO provides useful supplemental information reflective of the realized economic impact of our leases, which is useful in assessing the sustainability of our operating performance.

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Loss on interest rate swaps and remeasurement of loss on foreign currency. These items relate to fair value adjustments, which are based on the impact of current market fluctuations, underlying market conditions and the performance of the specific holding, which is not attributable to our current operating performance. By adjusting for this item, we believe that AFFO provides useful supplemental information by focusing on the changes in our core operating fundamentals (rather than anticipated gains or losses that may never be realized), which is useful in assessing the sustainability of our operations.

Noncash interest expense. This item represents amortization of financing costs paid in connection with executing our debt instruments, and the accretion of premiums (and amortization of discounts) on certain of our debt instruments. GAAP requires these items to be recognized over the remaining term of the respective debt instrument, which may not correlate with the ongoing operations of our real estate portfolio. By excluding these items, ~~management believes~~we believe that AFFO provides supplemental information that allows for better comparability of reporting periods, which is useful in assessing the sustainability of our operations.

Real estate acquisition-related costs. Acquisition expenses are incurred for investment purposes (i.e., to promote portfolio appreciation and generation of future earnings over the long term) and, therefore, do not correlate with the ongoing operations of our portfolio. By excluding these items, ~~management believes~~we believe that AFFO provides supplemental information that allows for ~~better comparability of reporting periods, which is useful in assessing the sustainability of our operations.~~

~~Gains on early extinguishment of debt~~. This item represents gains resulting from debt settled prior to the stated maturity date, which do not correlate with our ongoing operating performance. By adjusting for this item, we believe that AFFO provides better comparability of reporting periods, which is useful in assessing the sustainability of our operations.

Reconciliations of net income to FFO and to AFFO (in thousands):


	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
	2012			2011			2012			2011			2013			2012
Reconciliation of Net Income to Funds From Operations and Adjusted Funds From Operations:
Net income attributable to the common stockholders of Wells Real Estate Investment Trust II, Inc.	$	(5,859	)	$	5,102		$	36,186		$	3,032
Net income (loss) attributable to the common stockholders of Columbia Property Trust, Inc.													$	(22,608	)	$	31,131
Adjustments:
Depreciation of real estate assets	30,410			30,622			90,767			89,538			30,627			30,125
Amortization of lease-related costs	24,630			29,468			79,645			91,395			21,947			27,056
Impairment loss on real estate assets	18,467			5,817			18,467			5,817			16,867			—
Gain on disposition of discontinued operations	—			—			(16,947		)	—			(10,014		)	(16,885		)
Total Funds From Operations adjustments	73,507			65,907			171,932			186,750			59,427			40,296
Funds From Operations	67,648			71,009			208,118			189,782			36,819			71,427
Other income (expenses) included in net income, which do not correlate with our operations:
Other income (expenses) included in net (loss) income, which do not correlate with our operations:
Additional amortization of lease assets (liabilities)	110			349			(1,575		)	2,452			(618		)	(264		)
Straight-line rental income	(3,949		)	(5,289		)	(4,794		)	(13,046		)	(6,593		)	(809		)
(Gain) loss on interest rate swaps	(280		)	12,236			(807		)	14,644
Gain on interest rate swaps													(1,678		)	(231		)
Noncash interest expense	996			5,631			2,893			19,619			858			909
Gain on early extinguishment of debt	—			(13,522		)	—			(13,522		)
Subtotal	(3,123		)	(595		)	(4,283		)	10,147			(8,031		)	(395		)
Real estate acquisition-related costs	—			29			—			11,249			—			—
Adjusted Funds From Operations	$	64,525		$	70,443		$	203,835		$	211,178		$	28,788		$	71,032

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The decrease in AFFO is primarily attributable to incurring $28.6 million of nonrecurring fees under the Consulting Agreement and the Transition Services Agreement, as amended, in the first quarter of 2013, and the near-term impact of lease restructuring activities.

Election as a REIT

We have elected to be taxed as a REIT under the Code, and have operated as such beginning with our taxable year ended December 31, 2003. To qualify as a REIT, we must meet certain organizational and operational requirements, including a

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requirement to distribute at least 90% of our adjusted taxable income, as defined in the Code, to our stockholders, computed without regard to the dividends-paid deduction and by excluding our net capital gain. As a REIT, we generally will not be subject to federal income tax on income that we distribute to our stockholders. If we fail to qualify as a REIT in any taxable year, we will then be subject to federal income taxes on our taxable income for that year and for the four years following the year during which qualification is lost, unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could materially affect our net income and net cash available for distribution to our stockholders. However, we believe that we are organized and operate in such a manner as to qualify for treatment as a REIT for federal income tax purposes.

Columbia Property Trust TRS, Columbia KCP TRS, and Wells Energy TRS ~~Entities~~ are wholly owned subsidiaries of ~~Wells REIT II~~Columbia Property Trust and are organized as Delaware limited liability companies and include the operations of, among other things, a full-service hotel. We have elected to treat ~~Wells~~the TRS Entities as taxable REIT subsidiaries. We may perform certain additional, noncustomary services for tenants of our buildings through the ~~Wells~~the TRS Entities; however, any earnings related to such services are subject to federal and state income taxes. In addition, for us to continue to qualify as a REIT, we must limit our investments in taxable REIT subsidiaries to 25% of the value of our total assets. Deferred tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of assets and liabilities at the enacted rates expected to be in effect when the temporary differences reverse.

No provisions for federal income taxes have been made in our accompanying consolidated financial statements, other than the provisions relating to ~~Wells~~Columbia Property Trust TRS, Columbia KCP TRS, and Wells ~~KCP~~Energy TRS, as we made distributions in excess of taxable income for the periods presented. We are subject to certain state and local taxes related to property operations in certain locations, which have been provided for in our accompanying consolidated financial statements.

Inflation

We are exposed to inflation risk, as income from long-term leases is the primary source of our cash flows from operations. There are provisions in the majority of our tenant leases that are intended to protect us from, and mitigate the risk of, the impact of inflation. These provisions include rent steps, reimbursement billings for operating expense pass-through charges, real estate tax and insurance reimbursements on a per-square-foot basis, or in some cases, annual reimbursement of operating expenses above a certain per-square-foot allowance. However, due to the long-term nature of the leases, the leases may not reset frequently enough to fully cover inflation.

Application of Critical Accounting Policies

Our accounting policies have been established to conform with GAAP. The preparation of financial statements in conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied, thus resulting in a different presentation of the financial statements. Additionally, other companies may utilize different estimates that may impact the comparability of our results of operations to those of companies in similar businesses.

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Investment in Real Estate Assets

We are required to make subjective assessments as to the useful lives of our depreciable assets. We consider the period of future benefit of the asset to determine the appropriate useful lives. These assessments have a direct impact on net income. The estimated useful lives of our assets by class are as follows:



	Buildings		40 years
	Building improvements		5-25 years
	Site improvements		15 years
	Tenant improvements		Shorter of economic life or lease term
	Intangible lease assets		Lease term

Evaluating the Recoverability of Real Estate Assets

We continually monitor events and changes in circumstances that could indicate that the carrying amounts of the real estate and related intangible assets of both operating properties and properties under construction, in which we have an ownership interest, either directly or through investments in joint ventures, may not be recoverable. When indicators of potential impairment are present that suggest that the carrying amounts of real estate assets and related intangible assets (liabilities) may not be recoverable,

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we assess the recoverability of these assets by determining whether the respective carrying values will be recovered through the estimated undiscounted future operating cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying values, we adjust the carrying value of the real estate assets and related intangible assets to the estimated fair values, pursuant to the property, plant, and equipment accounting standard for the impairment or disposal of long-lived assets, and recognize an impairment loss. Estimated fair values are calculated based on the following information, in order of preference, depending upon availability: (i) recently quoted market prices, (ii) market prices for comparable properties, or (iii) the present value of future cash flows, including estimated salvage value. Certain of our assets may be carried at more than an amount that could be realized in a current disposition transaction.

Projections of expected future operating cash flows require that we estimate future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, the number of months it takes to re-lease the property, and the number of years the property is held for investment, among other factors. The subjectivity of assumptions used in the future cash flow analysis, including discount rates, could result in an incorrect assessment of the property's fair value and could result in the misstatement of the carrying value of our real estate assets and related intangible assets and net income (loss).

~~During~~In connection with furthering our portfolio repositioning efforts, in the ~~third~~first quarter of ~~2012,~~2013, we ~~have focused on improving our~~began to market ~~concentration by assembling, marketing, and negotiating~~for sale a group of 18 properties. Pursuant to the ~~sale of a collection of nine assets in outlying markets. We have~~accounting policy outlined above, we evaluated the recoverability of the carrying values of ~~these assets pursuant to~~each of the ~~accounting policy outlined above~~properties in this group and determined that the ~~carrying value of the 180 E 100 South~~120 Eagle Rock property in ~~Salt Lake City, Utah is~~East Hanover, New Jersey and the 333 & 777 Republic Drive property in Allen Park, Michigan are no longer recoverable due to ~~refining our disposition strategy and~~ shortening ~~our~~the respective expected property holding ~~period for this asset~~periods in ~~the third quarter of 2012.~~connection with these repositioning efforts. As a result, we have reduced the carrying value of the 180 E 100 South property to reflect fair value (as estimated based on the relative fair value of the property's negotiated selling price to total contract price) and recorded a corresponding property impairment loss of ~~$18.5 million~~ ~~in the third quarter of 2012.~~

During the third quarter of 2011, we evaluated the recoverability of the carrying value of the Manhattan Towers property and determined that it was not recoverable, as defined by the accounting policy outlined above. The Manhattan Towers property is located in Manhattan Beach, California, and includes two office buildings with total occupancy of 22%. In the third quarter of 2011, upon considering the economic impact of various property disposition scenarios not previously contemplated, including the likelihood of achieving the projected returns associated with each scenario, we opted to transfer the Manhattan Towers property to an affiliate of the lender in full settlement of a ~~$75.0 million~~ ~~nonrecourse mortgage loan through a deed in lieu of foreclosure transaction, which closed on~~ ~~September 6, 2011. As a result of this transaction,~~ we reduced the carrying value of the ~~Manhattan Towers~~120 Eagle Rock property and the 333 & 777 Republic Drive property to ~~its~~reflect their respective fair ~~value,~~values estimated based on ~~the present value of estimated~~projected discounted future ~~property~~ cash flows ~~by recognizing a~~and recorded corresponding property impairment ~~loss~~losses of ~~approximately~~ $~~5.8~~11.7 million and $5.2 million, ~~which is included in operating income (loss) from discontinued operations~~respectively, in the ~~statement of operations; and recognized a gain on early extinguishment of debt~~first quarter of ~~$13.5 million~~2013~~, which is reflected as gain on disposition of discontinued operations in the statement of operations.~~.



Property	Net Book Value		Impairment Loss Recognized			Fair Value
120 Eagle Rock	$	23,808	$	(11,708	)	$	12,100
333 & 777 Republic Drive	$	13,359	$	(5,159	)	$	8,200

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Assets Held for Sale

We classify assets as held for sale according to ASC 360, Accounting for the Impairment or Disposal of Long-Lived Assets ("ASC 360"). According to ASC 360, assets are considered held for sale when the following criteria are met:

Management, having the authority to approve the action, commits to a plan to sell the property.

The property is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such property.

An active program to locate a buyer and other actions required to complete the plan to sell the property have been initiated.

The sale of the property is probable, and transfer of the property is expected to qualify for recognition as a completed sale, within one year.

The property is being actively marketed for sale at a price that is reasonable in relation to its current fair value.

Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

At such time that a property is determined to be held for sale, its carrying amount is reduced to the lower of its depreciated book value or its estimated fair value, less costs to sell, and depreciation is no longer recognized. As of March 31, 2013, none of our properties met the criteria to be classified as held for sale in the accompanying balance sheet.

Allocation of Purchase Price of Acquired Assets

Upon the acquisition of real properties, we allocate the purchase price of properties to tangible assets, consisting of land and building, site improvements, and identified intangible assets and liabilities, including the value of in-place leases, based in each case on our estimate of their fair values.

The fair values of the tangible assets of an acquired property (which includes land and building) are determined by valuing the property as if it were vacant, and the "as-if-vacant" value is then allocated to land and building based on our determination of the relative fair value of these assets. We determine the as-if-vacant fair value of a property using methods similar to those used by independent appraisers. Factors we consider in performing these analyses include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases, including leasing commissions and

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other related costs. In estimating carrying costs, we include real estate taxes, insurance, and other operating expenses during the expected lease-up periods based on current market demand.

Intangible Assets and Liabilities Arising from In-Place Leases where We are the Lessor

As further described below, in-place leases where we are the lessor may have values related to direct costs associated with obtaining a new tenant, opportunity costs associated with lost rentals that are avoided by acquiring an in-place lease, tenant relationships, and effective contractual rental rates that are above or below market rates:

Direct costs associated with obtaining a new tenant, including commissions, tenant improvements, and other direct costs, are estimated based on management's consideration of current market costs to execute a similar lease. Such direct costs are included in intangible lease origination costs in the accompanying consolidated balance sheets and are amortized to expense over the remaining terms of the respective leases.

The value of opportunity costs associated with lost rentals avoided by acquiring an in-place lease is calculated based on the contractual amounts to be paid pursuant to the in-place leases over a market absorption period for a similar lease. Such opportunity costs are included in intangible lease assets in the accompanying consolidated balance sheets and are amortized to expense over the remaining terms of the respective leases.

The value of tenant relationships is calculated based on expected renewal of a lease or the likelihood of obtaining a particular tenant for other locations. Values associated with tenant relationships are included in intangible lease assets in the accompanying consolidated balance sheets and are amortized to expense over the remaining terms of the respective leases.

The value of effective rental rates of in-place leases that are above or below the market rates of comparable leases is calculated based on the present value (using a discount rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be received pursuant to the in-place leases and (ii) management's estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining terms of the leases. The capitalized above-market and below-market lease values are recorded as intangible lease assets or liabilities and amortized as an adjustment to rental income over the remaining terms of the respective leases.

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Evaluating the Recoverability of Intangible Assets and Liabilities

The values of intangible lease assets and liabilities are determined based on assumptions made at the time of acquisition and have defined useful lives, which correspond with the lease terms. There may be instances in which intangible lease assets and liabilities become impaired and we are required to write-off the remaining asset or liability immediately or over a shorter period of time. Lease restructurings, including lease terminations and lease extensions, may impact the value and useful life of in-place leases. In-place leases that are terminated, partially terminated, or modified will be evaluated for impairment if the original in-place lease terms have been modified. In the event that the discounted cash flows of the original in-place lease stream do not exceed the discounted modified in-place lease stream, we adjust the carrying value of the intangible lease assets to the discounted cash flows and recognize an impairment loss. For in-place lease extensions that are executed more than one year prior to the original in-place lease expiration date, the useful life of the in-place lease will be extended over the new lease term with the exception of those in-place lease components, such as lease commissions and tenant allowances, which have been renegotiated for the extended term. Renegotiated in-place lease components, such as lease commissions and tenant allowances, will be amortized over the shorter of the useful life of the asset or the new lease term.

Intangible Assets and Liabilities Arising from In-Place Leases where We are the Lessee

In-place ground leases where we are the lessee may have value associated with effective contractual rental rates that are above or below market rates. Such values are calculated based on the present value (using a discount rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place lease and (ii) management's estimate of fair market lease rates for the corresponding in-place lease, measured over a period equal to the remaining terms of the leases. The capitalized above-market and below-market in-place lease values are recorded as intangible lease liabilities or assets and amortized as an adjustment to property operating cost over the remaining term of the respective leases.

Related Parties

Transactions and Agreements

~~We have entered into~~During the periods presented, we were party to agreements with our advisor, ~~WREAS II,~~ and its affiliates, whereby we ~~pay certain~~incurred and paid fees and reimbursements to ~~WREAS II or~~our advisor and its affiliates for ~~acquisition fees, asset~~certain advisory services and property management ~~fees, construction fees, reimbursement of offering costs,~~services. On February 28, 2013, we terminated the related agreements and ~~reimbursement of operating costs.~~acquired Columbia Property Trust Advisory Services and Columbia Property Trust Services, including the employees necessary to perform the corporate and property management functions previously performed by our advisor and property manager. See Note 8.8, ~~Related Party Transactions~~Related-Party Transition and Agreements, toof our accompanying consolidated financial statements ~~included herein~~ for ~~a discussion~~details of ~~the various~~our related-party transactions, agreements, and fees.

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~~Assertion of Legal Action Against Related-Parties~~

~~On March 12, 2007, a stockholder of Piedmont Office Realty Trust, Inc. ("Piedmont REIT") filed a putative class action and derivative complaint, presently styled~~ ~~In re Wells Real Estate Investment Trust, Inc. Securities Litigation~~, in the United States District Court for the District of Maryland against, among others, Piedmont REIT; Leo F. Wells, III, the Chairman of our Board of Directors; Wells Capital; Wells Management; certain affiliates of WREF; the directors of Piedmont REIT; and certain individuals who formerly served as officers or directors of Piedmont REIT prior to the closing of the internalization transaction on April 16, 2007.

The complaint alleged, among other things, violations of the federal proxy rules and breaches of fiduciary duty arising from the Piedmont REIT internalization transaction and the related proxy statement filed with the SEC on February 26, 2007, as amended. The complaint sought, among other things, unspecified monetary damages and nullification of the Piedmont REIT internalization transaction.

On June 27, 2007, the plaintiff filed an amended complaint, which attempted to assert class action claims on behalf of those persons who received and were entitled to vote on the Piedmont REIT proxy statement filed with the SEC on February 26, 2007, and derivative claims on behalf of Piedmont REIT.

On March 31, 2008, the Court granted in part the defendants' motion to dismiss the amended complaint. The Court dismissed five of the seven counts of the amended complaint in their entirety. The Court dismissed the remaining two counts with the exception of allegations regarding the failure to disclose in the Piedmont REIT proxy statement details of certain expressions of interest in acquiring Piedmont REIT. On April 21, 2008, the plaintiff filed a second amended complaint, which alleges violations of the federal proxy rules based upon allegations that the proxy statement to obtain approval for the Piedmont REIT internalization transaction omitted details of certain expressions of interest in acquiring Piedmont REIT. The second amended complaint seeks, among other things, unspecified monetary damages, to nullify and rescind the internalization transaction, and to cancel and rescind any stock issued to the defendants as consideration for the internalization transaction. On May 12, 2008, the defendants answered and raised certain defenses to the second amended complaint. Since the filing of the second amended complaint, the plaintiff has said it intends to seek monetary damages of approximately $159 million plus prejudgment interest.

On June 23, 2008, the plaintiff filed a motion for class certification. On September 16, 2009, the Court granted the plaintiff's motion for class certification. On September 20, 2009, the defendants filed a petition for permission to appeal immediately the Court's order granting the motion for class certification with the Eleventh Circuit Court of Appeals. The petition for permission to appeal was denied on October 30, 2009.

~~On April 13, 2009, the plaintiff moved for leave to amend the second amended complaint to add additional defendants. The Court denied the plaintiff's motion for leave to amend on June 23, 2009.~~

On December 4, 2009, the parties filed motions for summary judgment. On August 2, 2010, the Court entered an order denying the defendants' motion for summary judgment and granting, in part, the plaintiff's motion for partial summary judgment. The Court ruled that the question of whether certain expressions of interest in acquiring Piedmont REIT constituted "material" information required to be disclosed in the proxy statement to obtain approval for the Piedmont REIT internalization transaction raises questions of fact that must be determined at trial.

On November 17, 2011, the court issued rulings granting several of the plaintiff's motions in limine to prohibit the defendants from introducing certain evidence, including evidence of the defendants' reliance on advice from their outside legal and financial advisors, and limiting the defendants' ability to relate their subjective views, considerations, and observations during the trial of the case. On February 23, 2012, the Court granted several of the defendants' motions, including a motion for reconsideration regarding a motion the plaintiff had filed seeking exclusion of certain evidence impacting damages, and motions seeking exclusion of certain evidence proposed to be submitted by the plaintiff.

On March 20, 2012, the Court granted the defendants leave to file a motion for summary judgment. On April 5, 2012, the defendants filed a motion for summary judgment. On September 26, 2012, the Court granted the defendants' motion for summary judgment and entered judgment in favor of the defendants. On October 12, 2012, the plaintiff filed a notice of appeal with the Eleventh Circuit Court of Appeals.

On October 22, 2012 Piedmont REIT announced that the parties reached agreement in principle to settle the lawsuit on October 12, 2012. Under the terms of the proposed settlement, the plaintiff will dismiss the appeal and release all defendants from liability in exchange for total payment of $4.9 million in cash by Piedmont REIT and its insurer. The settlement, which is subject to court approval following the negotiation and execution of definitive agreements and notice to the class, will resolve the appeal and result in the final disposition of the case.

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Mr. Wells, Wells Capital, and Wells Management believe that the allegations contained in the complaint are without merit and intend to continue to vigorously defend this action if for any reason the settlement is not approved. Although WREF believes that it has meritorious defenses to the claims of liability and damages in these actions, WREF is unable at this time to predict the outcome of the appeal of this action or, if reinstated, reasonably estimate a range of damages, or how any liability and responsibility for damages might be allocated among the 17 defendants in the action, which includes 11 defendants not affiliated with Mr. Wells, Wells Capital, or Wells Management. The ultimate resolution of this matter could have a material adverse impact on WREF's financial results, financial condition, or liquidity.

Commitments and Contingencies

We are subject to certain commitments and contingencies with regard to certain transactions. Refer to Note 6.6, Commitments and Contingencies, of our accompanying consolidated financial statements for further explanation. Examples of such commitments and contingencies include:

obligations under operating leases;

obligations under capital leases;

commitments under existing lease agreements; and

litigation.

Subsequent Events

We have evaluated subsequent events in connection with the preparation of our consolidated financial statements and notes thereto included in this report on Form 10-Q and ~~note~~noted the following ~~items~~item in addition to those disclosed elsewhere in this report:

~~Determination~~On May 7, 2013, our Board of ~~Estimated Per-Share Value~~

~~Overview~~

On ~~November 8, 2012, we announced an estimated per-share value of our common stock equal~~Directors declared distributions to ~~$7.33~~ ~~per share, calculated as of~~ ~~September 30, 2012~~. Previously we had announced an estimated per-share value of $7.47 as of September 30, 2011. This estimate is being provided to assist broker/dealers in connection with their obligations under applicable Financial Industry Regulatory Authority ("FINRA") Rules with respect to customer account statements and to assist fiduciaries in discharging their obligations under Employee Retirement Income Security Act ("ERISA") reporting requirements.

~~Valuation Methodology~~

~~Summary:~~

~~We again engaged Altus Group U.S., Inc. ("Altus"), a third-party commercial real estate valuation firm, to appraise our assets, both real estate and other assets, to estimate~~stockholders for the ~~fair value of our liabilities, and to use those estimates to calculate an estimated fair value of our shares as of~~ ~~September 30, 2012~~. The engagement of Altus was approved by the asset management committee of our board of directors, which committee is composed only of directors who are not affiliated with our advisor. Altus's analyses, opinions, and conclusions were developed in conformity with the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute and in conformity with the Uniform Standards of Professional Appraisal Practice. Altus appraised each of our real estate assets individually, and the asset management committee of our board and our advisor reviewed these analyses and conclusions.

~~Altus worked with our advisor and the asset management committee of our board of directors to gather information regarding our assets and liabilities. On~~ ~~October 29, 2012~~, Altus delivered a final report to our advisor, who shared the report with the asset management committee of our board of directors. At a subsequent meeting of our board of directors, our advisor presented the report and recommended an estimated per-share value. Our board of directors considered all information provided in light of its own extensive familiarity with our assets and, upon the recommendation of our asset management committee, unanimously agreed upon an estimated value of ~~$7.33~~ ~~per share, which is consistent with both the advisor's recommendation and Altus's estimate.~~

~~Our estimated per-share value of~~ ~~$7.33~~ ~~as of~~ ~~September 30, 2012~~ reflects a decline from our previous estimated share value of $7.47 as of September 30, 2011, primarily due to changes in the leasing expectations and renewal probabilities for some of the assets in our portfolio. Proactive leasing has been a focal point of our operational strategy in 2012, and has yielded more than 2.4 million square feet of new and extended leases (approximately 10% of our portfolio) during the first nine months of the year. This activity has improved our average remaining lease term from 6.3 years to 6.7 years; however, current economic conditions in certain markets have required us to offer additional tenant incentives and, in some cases, accept space contractions as conditions

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~~of the new lease contracts. The associated leasing capital has been, and is expected to continue to be, funded with a combination of cash and debt.~~

~~Consistent with the methodology used when we estimated our per share value as of September 30, 2011, our estimated per-share value as of~~ ~~September 30, 2012~~ was calculated by aggregating the value of our real estate and other assets, subtracting the fair value of our liabilities, and dividing the total by the number of our common shares outstanding, all as of ~~September 30, 2012~~. The potential dilutive effect of our common stock equivalents does not impact our estimated per-share value. Our estimated share value is the same as our net asset value. It does not reflect "enterprise value," which includes a premium for:

~~the large size of our portfolio, although it may be true that some buyers are willing to pay more for a large portfolio than they are willing to pay for each property in the portfolio separately;~~

~~our rights under our advisory agreement and our potential ability to secure the services of a management team on a long-term basis; or~~

~~the potential increase in our share value if we were to list our shares on a national securities exchange.~~

Our key objectives are to arrive at an estimated per-share value that is supported by methodologies and assumptions that are appropriate based on our current circumstances and calculated using processes and procedures that may be repeated in future periods. We believe that this approach reflects the conservative investment principles that guided the assembly of our portfolio over the past eight years, and comports with industry-standard valuation methodologies used for nontraded real estate companies. We plan to continue to update our estimated per-share value on an annual basis.

~~Details:~~

~~As of~~ ~~September 30, 2012, our estimated per-share value was calculated as follows:~~

Real estate assets $ 10.00
(1)
Debt (2.68 ) (2)
Other 0.01
(3)
Estimated net asset value per-share value $ 7.33

Estimated enterprise value premium None assumed

Total estimated per-share value $ 7.33

⁽¹⁾

Our real estate assets were appraised using valuation methods that we believe are typically used by investors for properties that are similar to ours, including capitalization of the net property operating income, 10-year discounted cash flow models, and comparison with sales of similar properties. Primary emphasis was placed on the discounted cash flow analysis, with the other approaches used to confirm the reasonableness of the value conclusion. Using this methodology, the appraised value of the real estate assets we owned as of ~~September 30, 2012~~ ~~reflects an overall decline of~~ ~~8.6%~~ from original purchase price, exclusive of acquisition costs, plus post-acquisition capital investments. We believe that the assumptions employed in the valuation are within the ranges used for properties that are similar to ours and held by investors with similar expectations to our investors.

~~The following are the key assumptions (shown on a weighted-average basis) that are used in the discounted cash flow models to estimate the value of our real estate assets:~~



~~Exit capitalization rate~~	~~7.11~~	%
~~Discount rate/internal rate of return ("IRR")~~	~~8.02~~	%
~~Annual market rent growth rate~~	~~3.21~~	%
~~Annual holding period~~	~~10.03 years~~

While we believe our assumptions are reasonable, a change in these assumptions would impact the calculation of the value of our real estate assets. For example, assuming all other factors remain unchanged, a change in the weighted-average annual discount rate/IRR of 0.25% would yield a change in our total real estate asset value of ~~1.9%~~.


⁽²⁾	The fair value of our debt instruments was estimated using discounted cash flow models, which incorporate assumptions that we believe reflect the terms currently available on similar borrowing arrangements to borrowers with credit profiles similar to ours.


⁽³⁾	~~The fair value of our non-real estate assets and liabilities is estimated to materially reflect book value given their typically short-term (less than one year) settlement periods.~~

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~~Limitations and Risks~~

As with any valuation methodology, our methodology is based upon a number of estimates and assumptions that may not be accurate or complete (see footnotes in above Valuation Methodology section). Different parties with different assumptions and estimates could derive a different estimated per-share value. Accordingly, with respect to our estimated per-share value, we can provide no assurance that:


▪	~~a stockholder would be able to realize this estimated value per share upon attempting to resell his or her shares;~~


▪	we would be able to achieve, for our stockholders, the estimated value per share, upon a listing of our shares of common stock on a national securities exchange, selling our real estate portfolio, or merging with another company; or


▪	~~the estimated share value, or the methodologies relied upon to estimate the share value, will be found by any regulatory authority to comply with FINRA, ERISA, or any other regulatory requirements.~~

Furthermore, the estimated value of our shares was calculated as of a particular point in time. The value of our shares will fluctuate over time in response to, among other things, changes in real estate market fundamentals, capital markets activities, and attributes specific to the properties and leases within our portfolio.

~~Share Redemption Program Share Price~~

~~Effective~~ ~~November 8, 2012~~, the price paid for shares redeemed under the Share Redemption Program (the "SRP") in cases of death, disability, or qualification for federal assistance for confinement to a long-term care facility (i.e. a nursing home), will change from 100% of the previously disclosed estimated-per-share value of (~~$7.47) to 100% of the current estimated per-share value ($7.33); and the price paid per share for all other redemptions ("Ordinary Redemptions") will remain~~ ~~$6.25~~.

~~Dividend Reinvestment Plan Share Price~~

~~Effective beginning in the fourth~~second quarter of ~~2012, the price at which investors may purchase shares under the DRP will change from 95.5% of the previous estimated per-share value (or, $7.13) to 95.5% of the current estimated per-share value (or,~~ ~~$7.00~~).

~~Declaration of Distributions~~

~~On November 6, 2012, our board of directors declared distributions for the fourth quarter of 2012~~2013 in the amount of ~~$0.095~~ (~~9.5 cent~~s)$0.095 (9.5 cents) per share on the outstanding shares of common stock payable to stockholders of record as of ~~December~~June 15, ~~2012, which reflects a reduction from the previous quarterly rate of $0.125 per share. The~~2013. Such distributions will be paid in ~~December 2012.~~

~~Nine-Property Sale Contract~~

~~On November 6, 2012, we entered into a contract to sell nine of our assets for a gross sales price of~~ ~~$260.5~~ ~~million, exclusive of closing costs, and targets closing on this sale in the fourth quarter of 2012.~~June 2013.


ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a result of our debt facilities, we are exposed to interest rate changes. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flow primarily through a low to moderate level of overall borrowings. However, we currently have a substantial amount of debt outstanding. We manage our ratio of fixed- to floating-rate debt with the objective of achieving a mix that we believe is appropriate in light of anticipated changes in interest rates. We closely monitor interest rates and will continue to consider the sources and terms of our borrowing facilities to determine whether we have appropriately guarded ourselves against the risk of increasing interest rates in future periods.

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Additionally, we have entered into interest rate swaps, and may enter into other interest rate swaps, caps, or other arrangements to mitigate our interest rate risk on a related financial instrument. We do not enter into derivative or interest rate transactions for speculative purposes; however, certain of our derivatives may not qualify for hedge accounting treatment. All of our debt was entered into for other-than-trading purposes.

Our financial instruments consist of both fixed-rate and variable-rate debt. Our variable-rate borrowings consist of the JPMorgan Chase Credit Facility, the $450 Million Term Loan, the 333 Market Street Building mortgage note, and the Three Glenlake Building mortgage note. However, only the JPMorgan Chase Credit Facility bears interest at an effectively variable rate, as the variable rate on the $450.0 Million Term Loan, the 333 Market Street Building mortgage note, and the Three Glenlake Building mortgage note have been effectively fixed through the interest rate swap agreements described below.

As of ~~September 30, 2012~~March 31, 2013, we had $~~65.0~~25.0 million outstanding under the JPMorgan Chase Credit Facility; $450.0 million outstanding on the $450 Million Term Loan; $~~26.2~~$208.1 million outstanding on the 333 Market Street Building mortgage note; $26.3 million outstanding on the Three Glenlake Building mortgage note; $~~248.6~~248.7 million in

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5.875% bonds outstanding; and ~~$675.6~~$674.5 million outstanding on fixed-rate, term mortgage loans. The weighted-average interest rate of all of our debt instruments was ~~4.40%~~4.52% as of ~~September 30, 2012~~March 31, 2013.

~~On February 3, 2012, we closed on the $450 Million Term Loan, a~~ ~~four-year~~, unsecured term loan with a syndicate of banks led by JPMorgan Chase Bank, N.A., which yielded initial gross proceeds of $375.0 million and additional gross proceeds of $35.0 million in the second quarter and $40.0 million in the third quarter, for total outstanding borrowings of $450.0 million as of September 30, 2012. The ~~$450 Million~~ ~~Term Loan bears interest at~~ ~~LIBOR, plus an applicable base margin; however, we effectively fixed the interest rate (assuming no change in our corporate credit rating) at~~ ~~2.64%~~ ~~per annum with an interest rate swap executed contemporaneously with the loan. The~~ ~~$450 Million~~ ~~Term Loan matures on February 3, 2016, provided that certain conditions are met prior to that date. Furthermore, provided that certain additional conditions are met prior to, and at maturity, the~~ ~~$450 Million~~ ~~Term Loan shall become eligible for a one-year extension upon paying an extension fee equal to~~ ~~0.15%~~ ~~of the outstanding balance.~~

~~As described above, the $450 Million Term Loan provided two accordion options to increase total borrowings to a maximum of~~ ~~$450.0 million~~, both of which have been exercised. Contemporaneous with closing on these new borrowings, we effectively fixed the interest rate (assuming no change in our corporate credit rating) on each accordion option with an interest rate swap agreement, which together caused the weighted average effective borrowing rate on aggregate borrowings under the $450 Million Term Loan to decrease slightly from ~~2.64%~~ ~~per annum to~~ ~~2.63%~~ ~~per annum. The total proceeds from the~~ ~~$450 Million~~ Term Loan were used to repay temporary borrowings, and thereby create additional borrowing capacity, under the JPMorgan Chase Credit Facility. The majority of these temporary borrowings were drawn to settle mortgage loans during the second half of 2011 and during 2012.

During the first quarter of 2012, we used cash on hand and proceeds from the JPMorgan Chase Credit Facility to fully repay the Highland Landmark Building mortgage note of $33.8 million at its maturity. During the ~~nine~~ ~~months ended~~ ~~September 30, 2012~~ ~~and~~ ~~2011, we made interest payments of approximately~~ ~~$37.3 million~~ ~~and~~ ~~$34.2 million, respectively, related to our line of credit and notes payable.~~

Approximately ~~$1,400.4~~$1,607.7 million of our total debt outstanding as of ~~September 30, 2012~~March 31, 2013, is subject to fixed rates, either directly or when coupled with an interest rate swap agreement. As of ~~September 30, 2012~~March 31, 2013, these balances incurred interest expense at an average interest rate of ~~4.51%~~4.54% and have expirations ranging from ~~2012~~2013 through 2023. A change in the market interest rate impacts the net financial instrument position of our fixed-rate debt portfolio; however, it has no impact on interest incurred or cash flows. The amounts outstanding on our variable-rate debt facilities in the future will largely depend upon the level of investor proceeds raised under our DRP and the rate at which we are able to employ such proceeds in acquisitions of real properties.

We do not believe there is any exposure to increases in interest rates related to the capital lease obligations of ~~$646.0~~$586.0 million at ~~September 30, 2012~~March 31, 2013, as the obligations are at fixed interest rates.

~~Foreign Currency Risk~~

~~We are also subject to foreign exchange risk arising from our foreign operations in Russia. Foreign operations represented 2.1% and 1.9% of total assets at~~ ~~September 30, 2012~~ ~~and~~ ~~December 31, 2011, respectively, and 1.0% and 0.6% of total revenue for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2012~~ ~~and~~ ~~2011, respectively. As compared to rates in effect at~~ ~~September 30, 2012, an increase or decrease in the U.S. dollar to Russian rouble exchange rate by 10% would not materially impact the accompanying consolidated financial statements.~~


ITEM 4.	CONTROLS AND PROCEDURES

Management's Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of management, including the Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(e) under the Securities Exchange Act of 1934 as of the end of the period covered by this report. Based upon that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report in providing a reasonable level of assurance that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods in SEC rules and forms, including providing a reasonable level of assurance that information required to be disclosed by us in such reports is accumulated and communicated to our management, including our Principal Executive Officer and our Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

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Changes in Internal Control Over Financial Reporting

There have been no significant changes in our internal control over financial reporting during the quarter ended ~~September 30, 2012~~March 31, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


PART II.	OTHER INFORMATION


ITEM 1.	LEGAL PROCEEDINGS

From time to time, we are party to legal proceedings, which arise in the ordinary course of our business. We are not currently involved in any legal proceedings of which the outcome is reasonably likely to have a material adverse effect on our results of operations or financial condition, nor are we aware of any such legal proceedings contemplated by governmental authorities.


ITEM 1A.	RISK FACTORS

There have been no material changes from the risk factors disclosed in the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, ~~2011~~2012 ~~and our Quarterly Report on Form 10-Q for the period ended June 30, 2012.~~.

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ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


(a)	All equity securities sold by us in the quarter ended ~~September 30, 2012~~March 31, 2013 were sold in an offering registered under the Securities Act of 1933.


(b)	Not applicable.


(c)	During the quarter ended ~~September 30, 2012~~March 31, 2013, we redeemed shares as follows (in thousands, except per-share amounts):

Period
Total Number
of Shares
Purchased⁽¹⁾

Average Price
Paid per Share

Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs⁽²⁾

Approximate Dollar
Value of Shares
Available That May
Yet Be Redeemed
Under the Program
July 2012 1,040 $6.70 1,040
⁽³⁾
August 2012 1,092 $6.74 1,092
⁽³⁾
September 2012 653 $6.58 653
⁽³⁾



Period	Total Number of Shares Purchased⁽¹⁾	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs⁽²⁾	Approximate Dollar Value of Shares Available That May Yet Be Redeemed Under the Program
January 2013	2,341	$	6.44	2,341	⁽³⁾
February 2013	2,021	$	6.40	2,021	⁽³⁾
March 2013	1,993	$	6.44	1,993	⁽³⁾

During the quarter ended ~~September 30, 2012~~March 31, 2013, we redeemed all of the shares eligible and properly submitted for redemption prior to the redemption payment date in ~~September 2012~~March 2013. Redemption requests for the period were funded with cash on hand, along with proceeds from the sale of common stock under our DRP.


⁽¹⁾	All purchases of our equity securities by us in the three months ended ~~September 30, 2012~~March 31, 2013 were made pursuant to our SRP.


⁽²⁾	We announced the commencement of the program on December 10, 2003, and amendments to the program on April 22, 2004; March 28, 2006; May 11, 2006; August 10, 2006; August 8, 2007; November 13, 2008; March 31, 2009; August 13, 2009; February 18, 2010; July 21, 2010; September 23, 2010; July 19, 2011; August 12, 2011; November 8, 2011; ~~and~~ December 12, ~~2011.~~2011; and February 28, 2013.

⁽³⁾

We currently limit the dollar value and number of shares that may yet be redeemed under the program. First, we limit requests for redemptions other than those made within two years of a stockholder's death on a pro rata basis so that the aggregate of such redemptions during any calendar year do not exceed 5.0% of the weighted-average number of shares outstanding in the prior calendar year. Requests precluded by this test are not considered in the test below. In addition, if necessary, we limit all redemption requests, including those sought within two years of a stockholder's death, on a pro rata basis so that the aggregate of such redemptions during any calendar year do not exceed the greater of 100% of the net proceeds from our DRP during the calendar year or 5.0% of ~~weighted average~~weighted-average number of shares outstanding in the prior calendar year.


ITEM 3.	DEFAULTS UPON SENIOR SECURITIES


(a)	There have been no defaults with respect to any of our indebtedness.


(b)	Not applicable.


ITEM 4.	MINE SAFETY DISCLOSURES

Not applicable.

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ITEM 5.	OTHER INFORMATION


(a)	During the ~~third~~first quarter of ~~2012~~2013, there was no information that was required to be disclosed in a report of Form 8-K that was not disclosed in a report on Form 8-K.


(b)	There are no material changes to the procedures by which stockholders may recommend nominees to our board of directors since the filing of our Schedule 14A.


ITEM 6.	EXHIBITS

The exhibits required to be filed with this report are set forth on the Exhibit Index to this quarterly report attached hereto.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		~~WELLS REAL ESTATE INVESTMENT~~COLUMBIA PROPERTY TRUST, ~~II,~~ INC. (Registrant)

Dated:	~~November~~May 8, ~~2012~~2013	By:	/s/ ~~DOUGLAS P. WILLIAMS~~WENDY W. GILL
			~~Douglas P. Williams~~Wendy W. Gill ~~Executive Vice President,~~Chief Accounting Officer, Treasurer and Principal Financial Officer

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EXHIBIT INDEX TO

~~THIRD~~FIRST QUARTER ~~2012~~2013 FORM 10-Q OF

~~WELLS REAL ESTATE INVESTMENT~~COLUMBIA PROPERTY TRUST, ~~II,~~ INC.

The following documents are filed as exhibits to this report. Exhibits that are not required for this report are omitted.



Ex.	Description
3.1	Second Amended and Restated Articles of Incorporation as Amended by the First Articles of Amendment (incorporated by reference to Exhibit 3.1 to the Company's ~~quarterly~~Annual Report on Form ~~10-Q~~10-K filed with the Commission on ~~August 6, 2012)~~March 1, 2013).
3.2	Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Company's ~~quarterly~~Annual Report on Form ~~10-Q~~10-K filed with the Commission on ~~August 6, 2012)~~March 1, 2013).
4.1	Form of Dividend Reinvestment Enrollment Form (incorporated by reference to Appendix A to the Prospectus included in Post-Effective Amendment No. 7 to the Registration Statement on Form S-11 on Form S-3 (No. 333-144414) and filed with the Commission on August 27, 2010 (the "DRP Registration Statement")).
~~4.2~~	Statement regarding restrictions on transferability of shares of common stock (to appear on stock certificate or to be sent upon request and without charge to stockholders issued shares without certificates) (incorporated by reference to Exhibit ~~4.2 to Amendment No. 2~~4.1 to the ~~Registration Statement~~Company's Annual Report on Form ~~S-11 (No. 333-144414)~~10-K filed with the Commission on ~~September 22, 2008)~~March 1, 2013).
~~4.3~~4.2	Third Amended and Restated ~~Dividend~~Distribution Reinvestment Plan (incorporated by reference to ~~Appendix B to the Prospectus included in the DRP Registration Statement).~~
~~4.4~~	~~Fifth Amended and Restated Share Redemption Program (incorporated by reference to~~ Exhibit ~~4.4~~4.1 to the Company's ~~Current~~Annual Report on Form ~~8-K~~10-K filed with the Commission on ~~December 12, 2011)~~March 1, 2013).
10.1	~~Initial Term~~Renewal Advisory Agreement between the Company and Wells Real Estate Advisory Services II, LLC dated December 28, 2012 and effective as of ~~July~~January 1, ~~2012~~2013 (incorporated by reference to Exhibit ~~10.2~~10.9 to the Company's ~~quarterly~~Annual Report on Form ~~10-Q~~10-K filed with the Commission on ~~August 6, 2012)~~March 1, 2013).
10.2	~~Transition~~Renewal Investor Services Agreement between the Company ~~Wells Real Estate Advisory Services II, LLC~~ and Wells Real Estate Funds, Inc. dated as of December 28, 2012 and effective as of ~~July~~January 1, ~~2012~~2013 (incorporated by reference to Exhibit ~~10.3~~10.10 to the Company's ~~quarterly~~Annual Report on Form ~~10-Q~~10-K filed with the Commission on ~~August 6, 2012)~~March 1, 2013).
~~10.3~~10.3*	Investor Services Agreement between the Company and Wells Real Estate Funds, Inc. dated February 28, 2013 and effective as of ~~July~~March 1, ~~2012 (incorporated by reference to Exhibit 10.4 to the Company's quarterly Report on Form 10-Q filed with the Commission on August 6, 2012).~~2013.
~~10.4~~10.4*	~~Master Property Management, Leasing and Construction Management~~Consulting Services Agreement between the Company and Wells Real Estate Funds, Inc. dated February 28, 2013 and effective as of March 1, 2013 .
10.5*	Assignment and Assumption Agreement between Wells Real Estate Funds, Inc. to Wells Operating Partnership II, L.P.~~, and Wells Management Company, Inc. effective~~ dated as of ~~July 1, 2012 (incorporated by reference~~February 28, 2013 (related to ~~Exhibit 10.5~~Wells Real Estate Advisory Services II, LLC)
10.6*	Assignment and Assumption Agreement between Wells Real Estate Funds, Inc. to ~~the Company's quarterly Report on Form 10-Q filed with the Commission on August 6, 2012).~~Wells Operating Partnership II, L.P. dated as of February 28, 2013 (related to Wells Real Estate Services, LLC)
31.1*	Certification of the Principal Executive Officer of the Company, pursuant to Securities Exchange Act Rules 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Principal Financial Officer of the Company, pursuant to Securities Exchange Act Rules 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of the Principal Executive Officer and Principal Financial Officer of the Company, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1	Sixth Amended and Restated Share Redemption Program (incorporated by reference to Exhibit 99.1 to the Company's Annual Report on Form 10-K filed with the Commission on March 1, 2013).
101.INS**	XBRL Instance Document.
101.SCH**	XBRL Taxonomy Extension Schema.
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase.
101.DEF**	XBRL Taxonomy Extension Definition Linkbase.
101.LAB**	XBRL Taxonomy Extension Label Linkbase.
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase.



*	Filed herewith.
**	Furnished with this Form ~~10-Q~~10-Q.

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	December 31, 2011
Real estate assets held for sale:
Real estate assets, at cost:
Land	$	11,536
Buildings and improvements, less accumulated depreciation of $6,509	25,972
Intangible lease assets, less accumulated amortization of $3,042	—
Total real estate assets held for sale, net	$	37,508

Other assets held for sale:
Tenant receivables	$	1,747
Prepaid expenses and other assets	39
Intangible lease origination costs, less accumulated amortization of $2,018	—
Deferred lease costs, less accumulated amortization of $242	1,646
Total other assets held for sale, net	$	3,432

Liabilities held for sale:
Accounts payable, accrued expenses, and accrued capital expenditures	$	176
Due to affiliates	2
Deferred income	446
Total liabilities held for sale	$	624



Real estate assets	$	10.00		(1)
Debt	(2.68		)	(2)
Other	0.01			(3)
Estimated net asset value per-share value	$	7.33
Estimated enterprise value premium	None assumed
Total estimated per-share value	$	7.33