First Potomac Realty Trust (FPO) 8-K First Potomac Realty Trust Reports First Quarter 2006 Results

Exhibit 99.2

First Quarter 2006 Supplemental Financial Report

Matters other than historical facts set forth within this Supplemental Financial Report are forward-looking statements within the meaning of the federal securities laws. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which could materially affect actual results, performance or achievements. These factors include, without limitation, the ability to enter into new leases or renew leases on favorable terms, the financial condition of tenants, the uncertainties of acquisition activity, the cost and availability of financing, the effects of general and local economic and market conditions, regulatory changes and other risks and uncertainties detailed in the Company’s Annual Report on Form 10-K. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

Index to Supplemental Information
March 31, 2006

	Page
Company Information		2
Reconciliation of EBITDA to Net Income		3
Financial Measures		4
Net Operating Income (NOI) — Same Property Analysis		5
Consolidated Balance Sheets		6
Total Market Capitalization		7
Debt Analysis		8
Selected Operating Ratios		9
Description of Properties		10
Land Available for Development		11
Summary of Largest Tenants		12
Lease Expirations		13
Leasing Analysis		14
Portfolio by Size		15
Market Concentration		16
Portfolio Analysis		17
Washington Market		18
Norfolk Market		19
Baltimore Market		20
Richmond Market		21
Management Statements		22

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Company Information

First Potomac Realty Trust is a self-managed, self-administered real estate investment trust that focuses on owning and operating industrial and flex properties in the Washington, DC metropolitan area and other major markets in Virginia and Maryland. Our focus is acquiring properties that can benefit from our intensive property management and seeking to reposition these properties to increase their profitability and value.

Corporate Headquarters	7600 Wisconsin Avenue	Investor Relations	Tripp Sullivan
	11th Floor		Corporate Communications, Inc.
	Bethesda, MD 20814		(615) 254-3376
			tripp.sullivan@cci-ir.com
New York Stock Exchange			Barry H. Bass
			Chief Financial Officer
			(301) 986-9200
			bbass@first-potomac.com
Web Site	www.first-potomac.com

Note that figures are rounded to the nearest thousand throughout this document which may impact footing and/or crossfooting of subtotals and totals.

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Quarterly Supplemental Disclosure
March 31, 2006

RECONCILIATION OF EBITDA TO NET INCOME
(unaudited, in thousands)

	Three Months Ended
	March 31, 2006			December 31, 2005			September 30, 2005			June 30, 2005			March 31, 2005
OPERATING REVENUES
Rental revenues	$	20,319		$	18,496		$	16,315		$	15,615		$	13,895
Tenant reimbursements and other		4,055			3,653			4,095			2,129			2,240
		24,374			22,149			20,410			17,744			16,135
PROPERTY EXPENSES
Property operating		4,702			4,066			3,277			3,136			2,997
Real estate taxes and insurance		2,172			1,978			1,610			1,493			1,359
NET OPERATING INCOME	$	17,500		$	16,105		$	15,523		$	13,115		$	11,779
OTHER INCOME (EXPENSE)
General and administrative		(2,534	)		(2,249	)		(2,054	)		(1,767	)		(1,871	)
Interest and other income		403			59			41			23			15
EBITDA		15,369			13,915			13,510			11,371			9,923
Depreciation and amortization		(7,863	)		(7,340	)		(6,577	)		(5,793	)		(5,041	)
Interest expense		(6,590	)		(5,862	)		(5,312	)		(4,588	)		(4,429	)
Loss from early retirement of debt		—			(2,451	)		(95	)		—			—
Income (loss) from continuing operations before minority interests		916			(1,738	)		1,526			990			453
Minority interests		(52	)		110			(95	)		(68	)		(40	)
Income (loss) from continuing operations		864			(1,628	)		1,431			922			413
DISCONTINUED OPERATIONS
Income from operations of disposed property/ property held for sale		259			(161	)		139			125			125
Minority interests in discontinued operations		(15	)		13			(9	)		(9	)		(11	)
Income from discontinued operations		244			(148	)		130			116			114
NET INCOME (LOSS)	$	1,108		$	(1,776	)	$	1,561		$	1,038		$	527

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Quarterly Supplemental Disclosure
March 31, 2006

FINANCIAL MEASURES
(unaudited, in thousands, except per share data)

	Three Months Ended
	March 31, 2006			December 31, 2005			September 30, 2005			June 30, 2005			March 31, 2005
FUNDS FROM OPERATIONS (“FFO”)
Net income (loss)	$	1,108		$	(1,776	)	$	1,561		$	1,038		$	527
Add back:
Depreciation & amortization of real estate assets1		7,863			7,340			6,577			5,793			5,041
Depreciation & amortization related to discontinued operations		3			40			36			35			36
Minority interest		67			(123	)		104			77			51
FFO after debt retirement charges	$	9,041		$	5,481		$	8,278		$	6,943		$	5,655
Debt retirement charges		—			2,451			95			—			—
Debt retirement charges related to discontinued operations		—			325			—			—			—
FFO before debt retirement charges		9,041			8,257			8,373			6,943			5,655
ADJUSTED FUNDS FROM OPERATIONS (“AFFO”)
FFO before debt retirement charges	$	9,041		$	8,257		$	8,373		$	6,943		$	5,655
Non-cash stock-based compensation		460			91			82			90			82
Straight-line rent, net2		(328	)		(320	)		(214	)		(348	)		(325	)
Deferred market rent		(546	)		(504	)		(319	)		(300	)		(265	)
Non real-estate depreciation		57			46			33			19			17
Debt fair value amortization		(652	)		(681	)		(599	)		(667	)		(352	)
Amortization of finance costs		209			208			177			207			191
Tenant improvements4		(379	)		(226	)		(548	)		(630	)		(362	)
Leasing commissions4		(337	)		(572	)		(360	)		(151	)		(264	)
Capital expenditures3,4		(552	)		(436	)		(520	)		(305	)		(143	)
AFFO	$	6,973		$	5,863		$	6,105		$	4,858		$	4,234
Total weighted average shares and OP units
Basic		21,440			20,407			17,655			17,555			15,627
Diluted		21,675			20,627			17,895			17,750			15,801
FFO per share:
FFO per share and unit — basic	$	0.42		$	0.27		$	0.47		$	0.40		$	0.36
FFO per share and unit — diluted	$	0.42		$	0.27		$	0.46		$	0.39		$	0.36
FFO per share and unit — diluted before debt retirement charges	$	0.42		$	0.40		$	0.47		$	0.39		$	0.36
AFFO per share:
AFFO per share and unit — basic	$	0.33		$	0.29		$	0.35		$	0.28		$	0.27
AFFO per share and unit — diluted	$	0.32		$	0.28		$	0.34		$	0.27		$	0.27

1	Non-real estate depreciation is classified in general and administrative expense.
2	Straight-line rent is net of rent abatement and write-off of uncollectible accounts.
3	Capital expenditures exclude $0.4 million of non-real estate expenditures during third quarter 2005.
4	The following first-generation and development costs have been excluded from the calculation of AFFO:

Tenant improvements	$	97	$	20	$	29	$	92	$	64
Leasing commissions		63		51		—		9		22
Capital expenditures		348		771		384		208		22
Development		152		38		13		2		1
	$	660	$	880	$	426	$	311	$	109

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Quarterly Supplemental Disclosure
March 31, 2006

NET OPERATING INCOME (NOI)
SAME-PROPERTY ANALYSIS
(unaudited, in thousands)

	Three Months Ended March 31,
	2006			2005
Rental revenue	$	14,027		$	13,847
Tenant reimbursement and other		2,553			2,241
Property operating expenses		(3,142	)		(2,993	)
Real estate taxes and insurance		(1,461	)		(1,356	)
Same-property1 NOI — accrual basis		11,977			11,739
Straight-line revenue, net		(152	)		(334	)
Deferred market rental revenue		(252	)		(265	)
Same-property NOI — cash basis	$	11,573		$	11,140
Same-property NOI growth — accrual basis		2.0	%
Same-property NOI growth — cash basis		3.9	%
Components of Same Property NOI Increase — accrual basis
Rental revenue increases	$	260
Tenant reimbursement and other		312
Occupancy decreases		(80	)
Expense increase		(254	)
	$	238
Reconciliation of GAAP to Same Property NOI:
Total revenue	$	24,374		$	16,135
Property operating expenses		4,702			2,997
Real estate taxes and insurance		2,172			1,359
	$	17,500		$	11,779
Less: Non-same property NOI		(5,523	)		(40	)
Same-property1 NOI — accrual basis		11,977			11,739
Straight-line revenue, net		(152	)		(334	)
Deferred market rental revenue		(252	)		(265	)
Same-property NOI — cash basis	$	11,573		$	11,140

(1) Same property comparisons are based upon those properties owned for the entirety of the periods presented. Same properties for the periods compared exclude the following non-same properties: Reston Business Campus, 1400 Cavalier Boulevard, Enterprise Center, Glenn Dale Business Center, Gateway Centre Manassas, 1434 Crossways Boulevard, 2000 Gateway Boulevard, 403/405 Glenn Drive, Diamond Hill Distribution Center, Linden Business Center, Prosperity Business Center, Owings Mills Business Center, 1000 Lucas Way, River’s Bend Center, Northridge I & II, Crossways I, Sterling Park Business Center and 6600 Business Parkway.

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Quarterly Supplemental Disclosure
March 31, 2006

CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)

	March 31, 2006			December 31, 2005
	(unaudited)
Assets
Rental property, net	$	741,539		$	668,730
Assets held for sale		7,378			—
Cash and cash equivalents		5,191			3,356
Escrows and reserves		10,652			9,818
Accounts and other receivables, net		3,353			2,705
Accrued straight-line rents, net		3,523			3,638
Deferred costs, net		7,120			6,676
Prepaid expenses and other assets		3,161			3,322
Intangible assets, net		32,540			29,518
Total assets	$	814,457		$	727,763
Liabilities
Mortgage loans	$	367,651		$	369,266
Credit facility		68,000			26,999
Term loan		50,000			—
Accounts payable and accrued expenses		4,265			4,734
Accrued interest		2,597			1,618
Rents received in advance		3,220			2,932
Tenant security deposits		4,177			3,973
Deferred market rent		8,444			7,281
Total liabilities		508,354			416,803
Minority interest		12,676			21,629
Shareholders’ equity
Common shares, $0.001 par value, 100,000,000 common shares authorized:
20,431,255 and 20,072,755 shares issued and outstanding, respectively		20			20
Additional paid-in capital		347,781			338,564
Dividends in excess of accumulated earnings		(54,374	)		(49,253	)
Total shareholders’ equity		293,427			289,331
Total liabilities and shareholders’ equity	$	814,457		$	727,763

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Quarterly Supplemental Disclosure
March 31, 2006

TOTAL MARKET CAPITALIZATION
(unaudited, in thousands)

			Percent of
			Total Market
			Capitalization
Total common shares outstanding		20,431
Common operating partnership (“OP”) units		1,060
Total common shares and OP units		21,491
Market price at March 31, 2006	$	28.25
Total equity capitalization	$	607,121		55.6	%
Debt capitalization
Fixed-rate debt	$	367,651		33.6	%
Floating-rate debt	$	118,000		10.8	%
Total debt capitalization		485,651		44.4	%
Total market capitalization	$	1,092,772		100.0	%

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Quarterly Supplemental Disclosure
March 31, 2006

DEBT ANALYSIS
(unaudited, in thousands)

				Principal Balance		Annualized Debt				Balance at
Encumbered Properties	GAAP Interest Rate			March 31, 2006		Service2		Maturity Date		Maturity
Fixed Rate Debt
4200 Tech Court		8.07	%		1,792		168		10/1/2009		1,705
4212 Tech Court		8.53	%		1,744		169		6/1/2010		1,654
Crossways Commerce Center		6.70	%		25,969		2,087		10/1/2012		23,313
Newington Business Park Center		6.70	%		16,381		1,316		10/1/2012		14,706
Interstate Plaza1		5.30	%		8,477		726		1/1/2007		8,282
Herndon Corporate Center1		5.66	%		8,737		603		4/1/2008		8,548
Aquia Commerce Center I1		6.50	%		906		165		2/1/2013		42
Deer Park1
6900 English Muffin Way1
Gateway Center1
Gateway West1
4451 Georgia Pacific1
20270 Goldenrod Lane1
15 Worman’s Mills Court1
Girard Business Center1		5.54	%		77,481		6,434		9/11/2008		71,825
Girard Place1
Old Courthouse1
Patrick Center1
7561 Lindbergh Drive1
West Park1
Woodlands Business Center1
Norfolk Commerce Park II1		5.28	%		7,639		648		8/7/2008		7,034
4612 Navistar Drive1		5.20	%		14,274		1,131		7/11/2011		11,921
Campus at Metro Park North1		5.25	%		26,096		2,028		2/11/2012		21,581
Plaza 500
Van Buren Business Park
Rumsey Center
Snowden Center		5.19	%		100,000		5,190		8/1/2015		100,000
Greenbrier Technology Center II
Norfolk Business Center
Alexandria Corporate Park
Enterprise Center1		5.20	%		19,864		1,647		12/1/2010		16,712
Glenn Dale Business Center1		5.13	%		9,058		780		5/1/2009		8,033
Gateway Centre Manassas1		5.88	%		1,883		239		11/1/2016		0
1434 Crossways Boulevard1		5.38	%		20,472		1,491		8/5/2012		16,463
403 & 405 Glenn Drive1		5.50	%		9,213		746		7/1/2011		7,807
Linden Business Center1		5.58	%		7,736		559		10/1/2013		6,596
Owings Mills Business Center1		5.75	%		5,890		425		3/1/2014		5,066
Prosperity Business Center1		5.75	%		4,039		332		1/1/2013		3,242
				$	367,651	$	26,884			$	334,530
Floating Rate Debt
Term Loan	LIBOR + 1.45%				50,000		3,140		3/1/2011		50,000
Credit Facility3	LIBOR + 1.70%				68,000		4,440		12/31/2006		68,000
Total at March 31, 2006				$	485,651	$	34,464			$	452,530

1	The balance at March 31, 2006 includes the fair value impacts recorded at acquisition upon assumption of the mortgages encumbering these properties. The fair value impact and actual interest rates are (i) Interstate Plaza — $0.4 million, 7.45%, (ii) Herndon Corporate Center — $0.2 million, 5.11%, (iii) Deer Park, English Muffin Way, Gateway Center, Gateway West, Georgia Pacific, Goldenrod Lane, Worman’s Mills Court, Girard Business Center, Girard Place, Old Courthouse, Patrick Center, Lindbergh Drive, West Park and Woodlands Business Center — $3.6 million, 6.71%, (iv) Norfolk Commerce Park II — $0.3 million, 6.90%, (v) 4612 Navistar Drive — $1.7 million, 7.48%, (vi) Campus at Metro Park North — $2.7 million, 7.11%, (vii) Enterprise Center - $2.5 million, 8.03% and (viii) Glenn Dale Business Center — $0.8 million, 7.83%, (ix) Gateway Centre Manassas — $0.1 million, 7.35%, (x) 1434 Crossways I — $0.8 million, 6.25%, (xi) 1434 Crossways II — $1.3 million, 7.05%, (xii) 403 & 405 Glenn Drive -$0.9 million, 7.60%, (xiii) Linden Business Center — $0.2 million 6.01%, (xiv) Owings Mills Business Center — $0.04 million, 5.85%, and (xv) Prosperity Business Center -$0.1 million, 6.25%. The mortgage assumed upon acquisition of Aquia Commerce Center I approximated its market value.
2	Annual debt service for floating rate loans reflects the principal balance at the end of the period multiplied by the variable interest rate in effect at the end of the period.
3	As of March 31, 2006, the borrowing base for the Credit Facility included the following properties: 13129 Airpark Road, Virginia Center, Aquia Commerce Center II, Airpark Place, 15395 John Marshall Highway, Gateway West II, Crossways II, Windsor @ Battlefield, Reston Business Campus, 1400 Cavalier Boulevard, Gateway Centre Manassas II, 2000 Gateway Boulevard, Diamond Hill Distribution Center, Linden II (Building I) and 1000 Lucas Way.

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Quarterly Supplemental Disclosure
March 31, 2006

SELECTED OPERATING RATIOS
(unaudited, in thousands)

	Three Months Ended
	March 31, 2006			December 31, 2005			September 30, 2005			June 30, 2005			March 31, 2005
COVERAGE RATIOS
Interest Coverage Ratio
EBITDA	$	15,369		$	13,915		$	13,510		$	11,371		$	9,923
Divided by Interest Expense		6,590			5,862			5,312			4,588			4,429
		2.33	X		2.37	X		2.54	X		2.48	X		2.24	X
Fixed Charge Coverage Ratio
EBITDA	$	15,369		$	13,915		$	13,510		$	11,371		$	9,923
Divided by Interest Expense		6,590			5,862			5,312			4,588			4,429
+ Principal Amortization		971			1,095			909			827			778
		2.03	X		2.00	X		2.17	X		2.10	X		1.91	X
OVERHEAD RATIO
G&A to Real Estate Revenues
General and Administrative Expense1	$	2,534		$	2,249		$	1,854		$	1,767		$	1,871
Real Estate Revenues1		24,374			22,149			19,210			17,744			16,135
		10.4	%		10.2	%		9.7	%		10.0	%		11.6	%
LEVERAGE RATIO
Debt/Total Market Capitalization
Total Debt	$	485,651		$	396,266		$	390,043		$	331,462		$	267,902
Total Market Capitalization		1,092,772			967,553			843,699			769,331			671,342
		44.4	%		41.0	%		46.2	%		43.1	%		39.9	%

¹ Excludes non-recurring charges and termination fee income for third quarter 2005.

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Quarterly Supplemental Disclosure
March 31, 2006

FIRST POTOMAC REALTY TRUST
DESCRIPTION OF PROPERTIES

								Leased at
			Year of	Square		Annualized		March 31,
Property	Property Type	Location	Acquisition	Footage		Cash Rent		2006
Plaza 500	Multi-tenant Industrial	Alexandria, VA	1997		506,725		5,193,261		96.1	%
Van Buren Business Park	Flex	Herndon, VA	1997		109,310		1,968,172		96.5	%
6600 Business Parkway	Single-tenant Industrial	Elkridge, MD	1997		172,200		1,036,304		100.0	%
13129 Airpark Road	Multi-tenant Industrial	Culpeper, VA	1997		150,400		761,134		100.0	%
Tech Court	Flex	Chantilly, VA	1998		64,064		747,102		77.0	%
Newington Business Park Center	Multi-tenant Industrial	Lorton, VA	1999		254,114		2,479,764		98.3	%
Crossways Commerce Center I	Multi-tenant Industrial	Chesapeake, VA	1999		348,615		1,970,890		100.0	%
Crossways Commerce Center II	Flex	Chesapeake, VA	1999		147,736		1,513,918		100.0	%
Coast Guard Building	Flex	Chesapeake, VA	1999		61,992		920,934		100.0	%
Snowden Center	Flex	Columbia, MD	2002		140,438		1,855,960		90.5	%
Rumsey Center	Flex	Columbia, MD	2002		134,654		1,033,370		70.8	%
Greenbrier Technology Center II	Flex	Chesapeake, VA	2002		79,684		1,084,700		99.0	%
Norfolk Business Center	Flex	Norfolk, VA	2002		90,682		772,958		92.9	%
Virginia Center	Flex	Glen Allen, VA	2003		119,324		1,307,725		89.0	%
Interstate Plaza	Single-tenant Industrial	Alexandria, VA	2003		107,320		1,262,268		100.0	%
Alexandria Corporate Park	Multi-tenant Industrial	Alexandria, VA	2003		278,130		4,307,928		81.9	%
Herndon Corporate Center	Flex	Herndon, VA	2004		127,353		2,676,139		100.0	%
Aquia Commerce Center I & II	Flex	Stafford, VA	2004		64,488		1,342,404		100.0	%
Deer Park	Flex	Randallstown, MD	2004		171,140		1,226,103		81.9	%
Gateway Center	Flex	Gaithersburg, MD	2004		44,307		647,086		100.0	%
Gateway West	Flex	Westminster, MD	2004		110,147		894,241		77.9	%
Girard Business Center	Flex	Gaithersburg, MD	2004		123,900		1,190,832		83.1	%
Girard Place	Flex	Gaithersburg, MD	2004		175,217		1,448,780		100.0	%
15 Worman’s Mill Court	Flex	Frederick, MD	2004		39,966		377,810		100.0	%
20270 Goldenrod Lane	Flex	Germantown, MD	2004		24,468		347,812		75.2	%
6900 English Muffin Way	Multi-tenant Industrial	Frederick, MD	2004		165,690		1,107,486		100.0	%
4451 Georgia Pacific Boulevard	Multi-tenant Industrial	Frederick, MD	2004		169,750		1,145,066		100.0	%
7561 Lindbergh Drive	Single-tenant Industrial	Gaithersburg, MD	2004		36,000		300,437		100.0	%
Patrick Center	Office	Frederick, MD	2004		66,706		1,312,946		95.5	%
West Park	Office	Frederick, MD	2004		28,950		469,102		88.9	%
Woodlands Business Center	Office	Largo, MD	2004		37,940		454,520		60.1	%
Old Courthouse Square	Retail	Martinsburg, WV	2004		201,350		1,198,464		96.6	%
Airpark Place	Flex	Gaithersburg, MD	2004		82,200		957,072		92.7	%
15395 John Marshall Highway	Single-tenant Industrial	Haymarket, VA	2004		123,777		1,147,416		100.0	%
Norfolk Commerce Park II	Flex	Norfolk, VA	2004		128,147		1,496,187		100.0	%
Crossways II	Flex	Chesapeake, VA	2004		85,004		898,873		100.0	%
Windsor at Battlefield	Flex	Manassas, VA	2004		154,226		1,422,945		83.1	%
Campus at Metro Park North	Flex	Rockville, MD	2004		190,238		4,209,962		100.0	%
4612 Navistar Drive	Single-tenant Industrial	Frederick, MD	2004		215,085		1,781,034		100.0	%
Reston Business Campus	Flex	Reston, VA	2005		83,000		1,459,844		91.6	%
Enterprise Center	Flex	Chantilly, VA	2005		189,116		2,818,284		82.5	%
1400 Cavalier Boulevard	Multi-tenant Industrial	Chesapeake, VA	2005		299,963		1,280,463		100.0	%
Glenn Dale Business Center	Multi-tenant Industrial	Glenn Dale, MD	2005		315,191		1,649,365		99.2	%
Gateway Centre	Flex	Manassas, VA	2005		99,607		1,013,029		94.9	%
1434 Crossways Boulevard	Office	Chesapeake, VA	2005		220,501		2,447,394		100.0	%
403/405 Glenn Drive	Flex	Sterling, VA	2005		197,201		1,217,455		81.7	%
Diamond Hill Distribution Center	Multi-tenant Industrial	Chesapeake, VA	2005		712,550		2,991,624		99.8	%
Linden Business Center	Flex	Manassas, VA	2005		108,004		1,270,445		84.3	%
Owings Mills Business Center	Flex	Owings Mills, MD	2005		87,148		1,095,530		93.8	%
Prosperity Business Center	Multi-tenant Industrial	Merrifield, VA	2005		71,572		788,763		100.0	%
1000 Lucas Way	Flex	Hampton, VA	2005		182,175		1,390,595		91.5	%
River’s Bend Center	Multi-tenant Industrial	Richmond, VA	2006		492,400		2,761,263		93.1	%
Northridge I & II	Multi-tenant Industrial	Ashland, VA	2006		140,390		807,341		100.0	%
Crossways I	Flex	Chesapeake, VA	2006		143,398		1,759,726		85.1	%
Sterling Park Business Center	Flex	Sterling, VA	2006		127,814		784,331		61.0	%
Subtotal					8,801,467		81,804,557		93.9	%
2000 Gateway Boulevard	Multi-tenant Industrial	Hampton,VA	2005		421,100		—		—
					9,222,567		81,804,557		89.6	%

-10-

Quarterly Supplemental Disclosure
March 31, 2006

FIRST POTOMAC REALTY TRUST
LAND AVAILABLE FOR DEVELOPMENT

	Developable
	Square Feet
John Marshall Highway		100,000
1400 Cavalier		100,000
Crossways Commerce Center I		25,000
Glenn Dale		200,000
Snowden Center		5,000
Navistar		50,000
Plaza 500		200,000
Linden		30,000
Sterling Park		500,000
		1,210,000

-11-

Quarterly Supplemental Disclosure
March 31, 2006

TOP TEN TENANTS

						Percentage of			Weighted
						Total Annualized			Average
		Number of		Total Leased		Rental Revenue -			Remaining
Ranking	Tenant	Leases		Square Feet		Cash Basis1			Lease Term
1	U.S. Government		28		738,013		12.3	%		4.4
2	EDS		2		220,501		3.0	%		5.2
3	FKI Logistex		1		215,085		2.2	%		10.5
4	TDS Logistics, Inc.		4		316,950		1.9	%		1.6
5	Sentara Healthcare		5		145,019		1.8	%		6.9
6	First American Registry		1		55,851		1.6	%		8.3
7	CACI		6		76,472		1.5	%		4.8
8	First Data Corporation		1		117,336		1.5	%		2.7
9	Engineering Solutions		1		123,777		1.4	%		6.5
10	Montgomery County		1		48,002		1.4	%		9.7
	Subtotal Top 10 Tenants		50		2,057,006		28.5	%		5.4
	All Remaining Tenants		563		6,207,935		71.5	%		3.5
	Total / Weighted Average		613		8,264,941		100.0	%		4.0

¹ Annualized rental revenue is based on rental revenue as of March 31, 2006.

-12-

Quarterly Supplemental Disclosure
March 31, 2006

FIRST POTOMAC REALTY TRUST
LEASE EXPIRATIONS

			Gross Leased Area					Annualized Cash Rental Revenue
	Number of
	Leases		Square		Percent of					Percent of			Average
	Expiring		Footage		Total			Amount		Total			per Sq. Ft.
Year of Lease Expiration
MTM		19		87,618		1.0	%		809,492		1.0	%	$	9.24
2006		83		980,088		11.9	%		7,252,389		8.9	%		7.40
2007		124		1,259,315		15.2	%		13,202,409		16.1	%		10.48
2008		116		1,179,983		14.3	%		11,149,085		13.6	%		9.45
2009		89		1,173,201		14.2	%		11,775,461		14.3	%		10.04
2010		70		983,214		11.9	%		10,644,600		13.0	%		10.83
2011		45		1,185,036		14.3	%		10,735,715		13.1	%		9.06
2012		24		326,711		4.0	%		3,261,174		4.0	%		9.98
2013 and thereafter		43		1,089,775		13.2	%		12,974,232		15.9	%		11.91
Total		613		8,264,941		100	%		81,804,557		100	%	$	9.90

LEASE EXPIRATIONS—NEXT FOUR QUARTERS

	Number of		Gross Leased Area					Annualized Cash Rental Revenue
	Leases				Percent of					Percent of			Average per
	Expiring		Square Footage		Total			Amount		Total			Sq. Ft.
Quarter of Lease Expiration
2006 - Q2		18		115,657		1.4	%		925,686		1.1	%		8.00
2006 - Q3		32		237,436		2.9	%		2,847,834		3.5	%		11.99
2006 - Q4		31		558,095		6.8	%		3,138,159		3.8	%		5.62
2007 - Q1		27		300,352		3.6	%		3,254,703		4.0	%		10.84
Total		108		1,211,540		14.7	%		10,166,382		12.4	%	$	8.37

-13-

Quarterly Supplemental Disclosure
March 31, 2006

LEASING ANALYSIS

	3 months ended
	March 31, 2006
Leasing Production1
New and renewal leases
Square footage of new and renewal leases		573,426
Number of new and renewal leases commencing		37
Expired/Early Renewal/Terminated leases
Square footage of expired/early renewal leases		521,650
Square footage of terminated leases		12,611
Total — expired/early renewal/terminated leases		534,261
Signed in advance of existing lease expiration
Net Absorption		39,165
New Leases
New square footage		110,383
Number of new leases commencing		17
Rental Change — Cash
New base rent	$	8.26
Percentage change in base rent		18.0	%
Rental Change — GAAP
New base rent	$	8.62
Percentage change in base rent		1.4	%
Average capital cost per square foot	$	7.11
Average downtime between leases (months)		9.0
Average lease term (months)		46.8
Renewal Leases
Square footage of renewal leases		463,043
Number of renewal leases commencing		20
Retention rate		89	%
Rental Change — Cash
New base rent	$	6.22
Expiring base rent	$	5.61
Percentage change in base rent		10.8	%
Rental Change — GAAP
New base rent	$	6.27
Expiring base rent	$	6.01
Percentage change in base rent		4.2	%
Average capital cost per square foot	$	0.19
Average lease term (months)		30.8

¹ Includes 47,116 square feet of leases and associated costs for leases signed in 1st quarter for subsequent periods.

-14-

Quarterly Supplemental Disclosure
March 31, 2006

FIRST POTOMAC REALTY TRUST
PORTFOLIO BY SIZE

										% of
	Number of		Leased		% of Total			Annualized		Annualized			Revenue per
Square Feet Under Lease	Leases		Square Feet		Square Feet			Rent		Rent			SF
0-4,999		299		671,648		8.1	%	$	9,150,171		11.2	%	$	13.62
5,000-9,999		119		810,670		9.8	%		10,087,445		12.3	%		12.44
10,000-14,999		62		741,210		9.0	%		9,198,714		11.2	%		12.41
15,000-19,999		31		524,047		6.3	%		5,639,948		6.9	%		10.76
20,000-24,999		17		375,403		4.5	%		4,644,775		5.7	%		12.37
25,000-29,999		16		427,614		5.2	%		5,502,910		6.7	%		12.87
30,000-34,999		14		453,622		5.5	%		3,973,087		4.9	%		8.76
35,000-39,999		10		366,151		4.4	%		2,343,522		2.9	%		6.40
40,000-44,999		5		209,770		2.5	%		1,812,122		2.2	%		8.64
45,000-49,999		10		467,337		5.7	%		3,916,589		4.8	%		8.38
50,000-54,999		2		107,483		1.3	%		1,457,676		1.8	%		13.56
55,000-59,999		2		114,805		1.4	%		1,920,303		2.3	%		16.73
60,000-64,999		4		246,072		3.0	%		3,396,771		4.2	%		13.80
65,000-69,999		3		204,221		2.5	%		937,698		1.1	%		4.59
70,000-74,999		2		143,860		1.7	%		1,037,132		1.3	%		7.21
90,000-94,999		1		94,950		1.1	%		559,256		0.7	%		5.89
100,000-104,999		1		104,218		1.3	%		1,158,424		1.4	%		11.12
105,000-109,999		1		107,320		1.3	%		1,262,268		1.5	%		11.76
115,000-119,999		2		233,619		2.8	%		2,527,592		3.1	%		10.82
120,000-124,999		6		732,078		8.9	%		5,160,589		6.3	%		7.05
125,000-129,999		1		127,108		1.5	%		527,498		0.6	%		4.15
155,000-159,999		1		158,400		1.9	%		1,026,492		1.3	%		6.48
170,000-174,999		1		172,200		2.1	%		1,036,304		1.3	%		6.02
215,000-219,999		2		431,135		5.2	%		2,807,272		3.4	%		6.51
240,000-244,999		1		240,000		2.9	%		720,000		0.9	%		3.00
Total		613		8,264,941		100.0	%	$	81,804,557		100.0	%	$	9.90

-15-

Quarterly Supplemental Disclosure
March 31, 2006

MARKET CONCENTRATION

Market Concentration by square footage

	Washington			Norfolk			Baltimore			Richmond			Total
Single-tenant Industrial		5.2	%		—			1.9	%		—			7.1	%
Multi-tenant Industrial		20.7	%		19.3	%		—			6.9	%		46.9	%
Flex		21.7	%		10.0	%		7.0	%		1.3	%		40.0	%
Office		1.4	%		2.4	%		—			—			3.8	%
Retail		2.2	%		—			—			—			2.2	%
		51.2	%		31.7	%		8.9	%		8.2	%		100.0	%

Market Concentration by Annualized Rent

	Washington			Norfolk			Baltimore			Richmond			Total
Single-tenant Industrial		5.5	%		—			1.3	%		—			6.8	%
Multi-tenant Industrial		21.3	%		7.6	%		—			4.4	%		33.3	%
Flex		31.6	%		12.0	%		7.5	%		1.6	%		52.7	%
Office		2.7	%		3.0	%		—			—			5.7	%
Retail		1.5	%		—			—			—			1.5	%
Total		62.6	%		22.6	%		8.8	%		6.0	%		100.0	%

-16-

Quarterly Supplemental Disclosure
March 31, 2006

PORTFOLIO ANALYSIS

PORTFOLIO BY MARKET

									Percentage
							Annualized		of
	Number of			Percent			Rent - Cash		Annualized
	Buildings	Square Feet		Leased			Basis		Rent
Washington	74		4,733,179		93.0	%	$	51,258,458		62.7	%
Norfolk	21		2,921,547		84.0	%		18,528,263		22.6	%
Baltimore	21		815,727		86.1	%		7,141,508		8.7	%
Richmond	7		752,114		93.8	%		4,876,329		6.0	%
Total	123		9,222,567		89.6	%	$	81,804,558		100.0	%

PORTFOLIO BY PROPERTY TYPE

									Percentage
							Annualized		of
	Number of			Percent			Rent - Cash		Annualized
	Buildings	Square Feet		Leased			Basis		Rent
Single-tenant Industrial	5		654,382		100.0	%	$	5,527,459		6.8	%
Multi-tenant Industrial	31		4,469,988		87.6	%		29,004,073		35.5	%
Flex	81		3,542,750		89.4	%		41,390,599		50.5	%
Office	5		354,097		94.0	%		4,683,962		5.7	%
Retail	1		201,350		96.6	%		1,198,464		1.5	%
Total	123		9,222,567		89.6	%	$	81,804,557		100.0	%

PORTFOLIO BY LEASE TYPE

				Percentage
				of Leased
	Number of Leases	Square Feet1		Portfolio
Triple Net	406		6,119,763		74.0	%
Industrial Gross	64		729,662		8.8	%
Full Service	143		1,415,516		17.2	%
Total	613		8,264,941		100.0	%

¹ Does not include vacant and core factor space.

-17-

Quarterly Supplemental Disclosure
March 31, 2006

FIRST POTOMAC REALTY TRUST
WASHINGTON MARKET

												Annual
										Annual Base		Rent per
Washington	Buildings	Square Feet		% of Total			% Leased			Rent		Leased SF
13129 Airpark Road	1		150,400		3.2	%		100.0	%	$	761,134	$	5.06
15 Worman’s Mill Court	1		39,966		0.8	%		100.0	%		377,810		9.45
15395 John Marshall Highway	1		123,777		2.6	%		100.0	%		1,147,416		9.27
20270 Goldenrod Lane	1		24,468		0.5	%		75.2	%		347,812		18.90
403/405 Glenn Drive	2		197,201		4.2	%		81.7	%		1,217,455		7.56
4451 Georgia Pacific Boulevard	1		169,750		3.6	%		100.0	%		1,145,066		6.75
4612 Navistar Drive	1		215,085		4.5	%		100.0	%		1,781,034		8.28
6900 English Muffin Way	1		165,690		3.5	%		100.0	%		1,107,486		6.68
7561 Lindbergh Drive	1		36,000		0.8	%		100.0	%		300,437		8.35
Airpark Place	3		82,200		1.7	%		92.7	%		957,072		12.56
Alexandria Corporate Park	1		278,130		5.9	%		81.9	%		4,307,928		18.92
Aquia Commerce Center I & II	2		64,488		1.4	%		100.0	%		1,342,404		20.82
Campus at Metro Park North	4		190,238		4.0	%		100.0	%		4,209,962		22.13
Enterprise Center	4		189,116		4.0	%		82.5	%		2,818,284		18.05
Gateway Center	2		44,307		0.9	%		100.0	%		647,086		14.60
Gateway Centre	3		99,607		2.1	%		94.9	%		1,013,029		10.72
Girard Business Center	3		123,900		2.6	%		83.1	%		1,190,832		11.57
Girard Place	4		175,217		3.7	%		100.0	%		1,448,780		8.27
Glenn Dale Business Center	1		315,191		6.7	%		99.2	%		1,649,365		5.27
Herndon Corporate Center	4		127,353		2.7	%		100.0	%		2,676,139		21.01
Interstate Plaza	1		107,320		2.3	%		100.0	%		1,262,268		11.76
Linden Business Center	3		108,004		2.3	%		84.3	%		1,270,445		13.96
Newington Business Park Center	7		254,114		5.4	%		98.3	%		2,479,764		9.93
Old Courthouse Square	1		201,350		4.3	%		96.6	%		1,198,464		6.16
Patrick Center	1		66,706		1.4	%		95.5	%		1,312,946		20.62
Plaza 500	2		506,725		10.7	%		96.1	%		5,193,261		10.67
Prosperity Business Center	1		71,572		1.5	%		100.0	%		788,763		11.02
Reston Business Campus	4		83,000		1.8	%		91.6	%		1,459,844		19.20
Tech Court	2		64,064		1.4	%		77.0	%		747,102		15.14
Van Buren Business Park	5		109,310		2.3	%		96.5	%		1,968,172		18.66
West Park	1		28,950		0.6	%		88.9	%		469,102		18.22
Windsor at Battlefield	2		154,226		3.3	%		83.1	%		1,422,945		11.10
Woodlands Business Center	1		37,940		0.8	%		60.1	%		454,520		19.94
Sterling Park Business Center	2		127,814		2.7	%		61.0	%		784,331		10.06
Grand Total	74		4,733,179		100.0	%		93.0	%	$	51,258,458	$	11.64

LEASE EXPIRATIONS

	SF of		% of Total			Annual Base		% of			Revenue per
Year of Lease Expiration	Expiring Leased		SF			Rent		Annual Base Rent			SF
Vacant		330,884		7.0	%	$	—		0.0	%	$	—
MTM		13,881		0.3	%		197,768		0.4	%		14.25
2006		306,742		6.5	%		3,502,192		6.8	%		11.42
2007		716,490		15.1	%		8,969,858		17.5	%		12.52
2008		460,884		9.7	%		5,623,502		11.0	%		12.20
2009		733,866		15.5	%		7,450,105		14.5	%		10.15
2010		733,853		15.5	%		8,136,839		15.9	%		11.09
2011		440,484		9.3	%		4,820,684		9.4	%		10.94
2012		258,387		5.5	%		2,482,730		4.8	%		9.61
2013		125,916		2.7	%		2,753,716		5.4	%		21.87
2014		213,377		4.5	%		3,179,136		6.2	%		14.90
2015		132,883		2.8	%		2,035,404		4.0	%		15.32
2016		226,355		4.8	%		1,910,639		3.7	%		8.44
2023		39,177		0.8	%		195,885		0.4	%		5.00
		4,733,179		100.0	%	$	51,258,458		100.0	%	$	11.64

-18-

Quarterly Supplemental Disclosure
March 31, 2006

FIRST POTOMAC REALTY TRUST
NORFOLK MARKET

												Annual Rent
		Square								Annual Base		per Leased
Norfolk	Buildings	Feet		% of Total			% Leased			Rent		SF
1000 Lucas Way	2		182,175		6.2	%		91.5	%	$	1,390,595	$	8.35
1400 Cavalier Boulevard	3		299,963		10.3	%		100.0	%		1,280,463		4.27
1434 Crossways Boulevard	2		220,501		7.5	%		100.0	%		2,447,394		11.10
2000 Gateway Boulevard	1		421,100		14.4	%		0.0	%		—		—
Coast Guard Building	1		61,992		2.1	%		100.0	%		920,934		14.86
Crossways Commerce Center I	1		348,615		11.9	%		100.0	%		1,970,890		5.65
Crossways Commerce Center II	2		147,736		5.1	%		100.0	%		1,513,918		10.25
Crossways I	1		143,398		4.9	%		85.1	%		1,759,726		14.42
Crossways II	1		85,004		2.9	%		100.0	%		898,873		10.57
Diamond Hill Distribution Center	4		712,550		24.4	%		99.8	%		2,991,624		4.21
Greenbrier Technology Center II	1		79,684		2.7	%		99.0	%		1,084,700		13.75
Norfolk Business Center	1		90,682		3.1	%		92.9	%		772,958		9.18
Norfolk Commerce Park II	1		128,147		4.4	%		100.0	%		1,496,187		11.68
Total	21		2,921,547		100.0	%		84.0	%	$	18,528,263	$	7.55

LEASE EXPIRATIONS

								% of
	SF of							Annual
	Expiring		% of			Annual Base		Base			Revenue per
Year of Lease Expiration	Leases		Total SF			Rent		Rent			SF
Vacant		466,476		16.0	%	$	—		0.0	%	$	—
MTM		48,000		1.6	%		268,944		1.5	%		5.60
2006		541,914		18.5	%		2,753,190		14.9	%		5.08
2007		345,688		11.8	%		2,436,759		13.2	%		7.05
2008		465,253		15.9	%		3,304,348		17.8	%		7.10
2009		358,541		12.3	%		3,503,938		18.9	%		9.77
2010		39,428		1.3	%		644,544		3.5	%		16.35
2011		515,075		17.6	%		4,140,955		22.3	%		8.04
2012		27,889		1.0	%		406,018		2.2	%		14.56
2013		47,448		1.6	%		647,665		3.5	%		13.65
2014		5,835		0.2	%		87,525		0.5	%		15.00
2017		60,000		2.1	%		334,374		1.8	%		5.57
Total		2,921,547		100	%		18,528,263		100	%	$	7.55

-19-

Quarterly Supplemental Disclosure
March 31, 2006

FIRST POTOMAC REALTY TRUST
BALTIMORE MARKET

		Square								Annual Base		Annual Rent per
Baltimore	Buildings	Feet		% of Total			% Leased			Rent		Leased SF
6600 Business Parkway	1		172,200		21.1	%		100.0	%	$	1,036,304	$	6.02
Deer Park	4		171,140		21.0	%		81.9	%		1,226,103		8.75
Gateway West	4		110,147		13.5	%		77.9	%		894,241		10.42
Owings Mills Business Center	4		87,148		10.7	%		93.8	%		1,095,530		13.40
Rumsey Center	4		134,654		16.5	%		70.8	%		1,033,370		10.84
Snowden Center	4		140,438		17.2	%		90.5	%		1,855,960		14.60
Total	21		815,727		100.0	%		86.1	%	$	7,141,508	$	10.17

LEASE EXPIRATIONS

	SF of Expiring		% of			Annual Base		% of Annual			Revenue per
Year of Lease Expiration	Leases		Total SF			Rent		Base Rent			SF
Vacant		113,314		13.9	%	$	—		0.0	%	$	—
MTM		25,737		3.2	%		342,780		4.8	%		13.32
2006		67,693		8.3	%		721,880		10.1	%		10.66
2007		73,712		9.0	%		936,039		13.1	%		12.70
2008		101,844		12.5	%		1,182,609		16.6	%		11.61
2009		62,622		7.7	%		582,180		8.2	%		9.30
2010		71,207		8.7	%		810,086		11.3	%		11.38
2011		61,990		7.6	%		651,625		9.1	%		10.51
2012		16,638		2.0	%		232,024		3.2	%		13.95
2015		220,970		27.1	%		1,682,286		23.6	%		7.61
Total		815,727		100.0	%	$	7,141,508		100.0	%	$	10.17

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Quarterly Supplemental Disclosure
March 31, 2006

FIRST POTOMAC REALTY TRUST
RICHMOND MARKET

												Annual Rent
		Square								Annual		per Leased
	Buildings	Feet		% of Total			% Leased			Base Rent		SF
Virginia Center	1		119,324		15.9	%		89.0	%	$	1,307,725	$	12.31
River’s Bend Center	4		492,400		65.5	%		93.1	%		2,761,263	$	6.02
Northridge I, II	2		140,390		18.6	%		100.0	%		807,341	$	5.75
Grand Total	7		752,114		100.0	%		93.8	%	$	4,876,329	$	6.92

LEASE EXPIRATIONS

	SF of Expiring		% of			Annual		% of Annual			Revenue per
Year of Lease Expiration	Leases		Total SF			Base Rent		Base Rent			SF
Vacant		46,952		6.2	%	$	—		0.0	%	$	—
2006		63,739		8.5	%		275,127		5.6	%		4.32
2007		123,425		16.4	%		859,753		17.6	%		6.97
2008		152,002		20.2	%		1,038,626		21.3	%		6.83
2009		18,172		2.4	%		239,238		4.9	%		13.17
2010		138,726		18.4	%		1,053,132		21.6	%		7.59
2011		167,487		22.3	%		1,122,451		23.0	%		6.70
2012		23,797		3.2	%		140,402		2.9	%		5.90
2014		4,454		0.6	%		73,981		1.5	%		16.61
2015		13,360		1.8	%		73,620		1.5	%		5.51
Total		752,114		100.0	%	$	4,876,329		100.0	%	$	6.92

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MANAGEMENT STATEMENTS ON NON-GAAP SUPPLEMENTAL MEASURES

Investors in and analysts following the real estate industry utilize funds from operations (“FFO”), net operating income (“NOI”), EBITDA and adjusted funds from operations (“AFFO”), variously defined, as supplemental performance measures.

While the Company believes net income available to common stockholders as defined by GAAP is the most appropriate measure, it considers FFO, NOI, EBITDA, and AFFO appropriate supplemental measures given their wide use by and relevance to investors and analysts. FFO, reflecting the assumption that real estate asset values rise or fall with market conditions, principally adjusts for the effects of GAAP depreciation/amortization of real estate assets. NOI provides a measure of rental operations and does not factor in depreciation/amortization and non-property specific expenses such as general and administrative expenses. EBITDA provides a further tool to evaluate the ability to incur and service debt and to fund dividends and other cash needs. AFFO provides a further tool to evaluate the ability to fund dividends. In addition, FFO, NOI, EBITDA and AFFO are commonly used in various ratios, pricing multiples/yields and returns and valuation calculations used to measure financial position, performance and value.

Net Operating Income

Management believes that NOI is a useful supplemental measure of the Company’s operating performance. The Company defines NOI as operating revenues (rental income, tenant reimbursements, and other income) less property and related expenses (property expenses, real estate taxes, and insurance). Other real estate investment trust (“REITs”) may use different methodologies for calculating NOI, and accordingly, the Company’s NOI may not be comparable to other REITs.

Because NOI excludes general and administrative expenses, interest expense, depreciation and amortization, gains and losses from property dispositions, discontinued operations, and extraordinary items, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing perspective not immediately apparent from net income. The Company uses NOI to evaluate its operating performance since NOI allows the Company to evaluate the impact that factors such as occupancy levels, lease structure, lease rates, and tenant base have on the Company’s results, margins and returns. In addition, management believes that NOI provides useful information to the investment community about the Company’s financial and operating performance when compared to other REITs since NOI is generally recognized as a standard measure of performance in the real estate industry.

However, NOI should not be viewed as an alternative measure of the Company’s financial performance since it does not reflect general and administrative expenses, interest expense, depreciation and amortization costs, the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company’s properties.

EBITDA

Management believes that EBITDA is a useful supplemental measure of the Company’s operating performance. EBITDA is defined as earnings before interest, taxes, depreciation and amortization.

Management considers EBITDA to be an appropriate supplemental performance measure since it represents earnings prior to the impact of depreciation, amortization, gain (loss) from property dispositions and loss on early retirement of debt. This calculation facilitates the review of income from operations without considering the effect of non-cash depreciation and amortization or the cost of debt.

Funds From Operations

Management believes that FFO is a useful supplemental measure of the Company’s operating performance. As defined by the National Association of Real Estate Investment Trusts, or NAREIT, FFO represents net income (loss) before minority interest (computed in accordance with GAAP), including gains (or losses) from debt restructuring and excluding gain on sale of property, plus real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and joint ventures. Other REITs may use different methodologies for calculating FFO and, accordingly, the Company’s FFO may not be comparable to other REITs.

Management considers FFO a useful additional measure of performance for an equity REIT because it facilitates an understanding of the operating performance of its properties without giving effect to real estate depreciation and amortization, which assumes that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, we believe that FFO provides a more meaningful and accurate indication of our performance. In addition, management believes that FFO provides useful information to the investment community about the Company’s financial performance when compared to other REITs since FFO is generally recognized as the industry standard for reporting the operations of REITs.

However, FFO should not be viewed as an alternative measure of the Company’s operating performance since it does not reflect either depreciation and amortization costs or the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company’s properties, which are significant economic costs that could materially impact the Company’s results of operations.

Adjusted Funds From Operations

Management believes that AFFO is a useful measure of the Company’s liquidity. The Company computes AFFO by adding to FFO equity based compensation expense and the non-cash amortization of deferred financing costs and non-real estate depreciation, and then subtracting cash paid for any recurring tenant improvements, leasing commissions, and recurring capital expenditures, and eliminating the net effect of straight-line rents, deferred market rent and debt fair value amortization. First generation costs exclude non-recurring tenant improvements, leasing commissions and capital expenditures that were taken into consideration when underwriting the purchase of a property or incurred to bring the property to operating standard for its intended use. The Company also excludes development related expenditures. AFFO provides an additional perspective on the Company’s ability to fund cash needs and make distributions to shareholders by adjusting for the effect of these non-cash items included in FFO, as well as recurring capital expenditures and leasing costs. However, other REITs may use different methodologies for calculating AFFO and, accordingly, the Company’s AFFO may not be comparable to other REITs.

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