Filed Pursuant to Rule 424(b)(3)
Registration No. 333-127405
CB RICHARD ELLIS REALTY TRUST
Supplement No. 10 dated July 30, 2008
to the Prospectus dated April 25, 2008
This Supplement No. 10 supersedes and replaces Supplement No. 9 dated July 17, 2008 to our prospectus dated April 25, 2008. This supplement provides information that shall be deemed part of, and must be read in conjunction with, the prospectus. Capitalized terms used in this Supplement No. 10 have the same meanings in the prospectus unless otherwise stated herein. The terms “we,” “our,” “us” and CBRE REIT include CB Richard Ellis Realty Trust and its subsidiaries.
| Supplement No. 10 Page No. | Prospectus Page No. | |||
| 1 | 1 | |||
| 1 | 10-13, 104-108 | |||
| 2-10 | 91-97 | |||
| 10-11 | 40-41 | |||
| 11 | 42 | |||
| 12-14 | 43-45 | |||
| 15 | 162 | |||
| 16 | N/A |
Status of Our Current Offering
On October 24, 2006, we commenced an initial public offering of up to $2,000,000,000 in our common shares. As of June 30, 2008, we had accepted subscriptions from 8,626 investors and issued 38,911,634 common shares pursuant to this public offering, which includes 535,461 common shares issued pursuant to our dividend reinvestment plan, and received $388,848,606 in gross proceeds. We will offer our common shares in this offering until October 24, 2008, unless the offering is extended. We reserve the right to terminate this offering at any time. As of June 30, 2008, 45,634,077 common shares were issued and outstanding.
Fees Paid in Connection with Our Offering
For the three months ended March 31, 2008 and the year ended December 31, 2007, our Dealer Manager earned approximately $2,210,000 and $9,901,000 in selling commissions, respectively (of which $216,000 and $588,000 were payable as of March 31, 2008 and December 31, 2007, respectively), $959,000 and $3,436,000 in dealer manager fees, respectively (of which $144,000 and $234,000 were payable as of March 31, 2008 and December 31, 2007, respectively) and $319,000 and $1,658,000 in marketing support fees, respectively (of which $41,000 and $101,000 were payable as of March 31, 2008 and December 31, 2007, respectively). The Investment Advisor earned acquisition fees of $715,000 and $2,620,000 for the three months ended March 31, 2008 and the year ended December 31, 2007, respectively. In connection with services provided to the Investment Advisor, the Sub-Advisor, pursuant to a sub-advisory agreement, was paid $134,000 and $490,000 by the Investment Advisor for the three months ended March 31, 2008 and the year ended December 31, 2007, respectively. For the three months ended March 31, 2008 and the year ended December 31, 2007, the Investment Advisor earned investment management fees of $681,000 and $1,547,000, respectively (of which $246,000 and $217,000 were payable as of March 31, 2008 and December 31, 2007, respectively). The Investment Advisor waived investment management fees of $311,000 and $432,000 for the three months ended March 31, 2008 and the year ended December 31, 2007, respectively. In connection with services provided to the Investment Advisor, the Sub-Advisor, pursuant to a sub-advisory agreement, was paid $94,000 and $214,000 by the Investment Advisor for the three months ended March 31, 2008 and the year ended December 31, 2007, respectively. For the three months ended March 31, 2008 and the year ended December 31, 2007, CB Richard Ellis Group, Inc., an affiliate of the Investment Advisor, received property management fees of approximately $118,000 and $160,000, respectively (of which $86,000 and $50,000 were payable as of March 31, 2008 and December 31, 2007, respectively). CBRE Melody, an affiliate of the Investment Advisor, received no mortgage banking fees for the three months ended March 31, 2008 and approximately $36,000 for the year ended December 31, 2007. No leasing and brokerage fees were paid to the Investment Advisor or its affiliates for the three months ended March 31, 2008 and the year ended December 31, 2007.
This section contains certain information that supplements the information under the section “Real Estate Investments,” which begins on page 91 of our prospectus.
Properties
As of March 31, 2008, we owned 47 office and industrial properties located in seven states (California, Georgia, Illinois, Massachusetts, North Carolina, South Carolina and Texas) and in the United Kingdom, encompassing approximately 6,257,466 rentable square feet, as well as one undeveloped land parcel in Georgia. 18 of these properties were classified as real estate held for sale as of March 31, 2008. Occupancy for our consolidated properties was approximately 84.73% as of March 31, 2008. Our consolidated debt was $164,082,000 as of March 31, 2008. In addition, we have an approximately 5.07% ownership interest in an unconsolidated strategic partnership, or CBRE Asia Fund, that, as of March 31, 2008, owned interests in eight properties located in China and Japan. Four of these properties are under various stages of development and/or construction with the balance of the properties in operations.
The following table provides information relating to our consolidated properties as of March 31, 2008. These properties consisted of 39 industrial properties, encompassing 5,813,609 rentable square feet, and eight office properties, encompassing 443,857 rentable square feet. The weighted average occupancy for our industrial properties and office properties was approximately 83.64% and 99.11% as of March 31, 2008, respectively. The average effective annual rents for our industrial properties and office properties were approximately $18,757,000 and $9,360,000 as of March 31, 2008, respectively.
Location | Property | Property | Date Acquired | Year Built | Number of Properties | Approximate Total Acquisition Cost (1) | Net Rentable Sq. Ft. | Occupancy | ||||||||||
Domestic | ||||||||||||||||||
San Diego, CA | REMEC Corporate Campus | Office | 9/15/2004 | 1983 | 4 | $ | 26,667,000 | 132,685 | 100.0 | % | ||||||||
Taunton, MA | 300 Constitution Drive | Industrial | 11/3/2004 | 1998 | 1 | 19,805,000 | 330,000 | 100.0 | % | |||||||||
Alpharetta, GA | Deerfield Commons I | Office | 6/21/2005 | 2000 | 1 | 19,572,000 | 121,969 | 100.0 | % | |||||||||
Alpharetta, GA | Deerfield Commons II(2) | — | 6/21/2005 | — | — | 2,262,000 | — | — | ||||||||||
Richardson, TX | 660 North Dorothy | Industrial | 1/9/2006 | 1997 | 1 | 6,836,000 | 120,000 | 100.0 | % | |||||||||
Allen, TX | 505 Century | Industrial | 1/9/2006 | 1997 | 1 | 6,095,000 | 100,000 | 72.4 | % | |||||||||
Richardson, TX | 631 International | Industrial | 1/9/2006 | 1998 | 1 | 5,407,000 | 73,112 | 100.0 | % | |||||||||
Bolingbrook, IL | Bolingbrook Point III | Industrial | 8/29/2007 | 2006 | 1 | 18,170,000 | 185,045 | 100.0 | % | |||||||||
Spartanburg, SC | Fairforest Bldg. 5 | Industrial | 8/30/2007 | 2006 | 1 | 16,968,000 | 316,491 | 100.0 | % | |||||||||
Spartanburg, SC | Fairforest Bldg. 6(3) | Industrial | 8/30/2007 1/23/2008 | 2005 | 1 | 7,468,000 | 101,055 | 100.0 | % | |||||||||
Spartanburg, SC | Fairforest Bldg. 7 | Industrial | 8/30/2007 | 2006 | 1 | 5,626,000 | 101,459 | 0.0 | % | |||||||||
Spartanburg, SC | HJ Park Bldg. 1 | Industrial | 8/30/2007 | 2003 | 1 | 4,216,000 | 70,000 | 100.0 | % | |||||||||
Charleston, SC | North Rhett I | Industrial | 8/30/2007 | 1973 | 1 | 10,302,000 | 284,750 | 100.0 | % | |||||||||
Charleston, SC | North Rhett II | Industrial | 8/30/2007 | 2001 | 1 | 7,073,000 | 101,705 | 100.0 | % | |||||||||
Charleston, SC | North Rhett III(3) | Industrial | 8/30/2007 1/23/2008 | 2002 | 1 | 4,812,000 | 79,972 | 100.0 | % | |||||||||
Charleston, SC | North Rhett IV | Industrial | 8/30/2007 | 2005 | 1 | 17,060,000 | 316,040 | 100.0 | % | |||||||||
Charleston, SC | Jedburg Commerce Park | Industrial | 8/30/2007 | 2007 | 1 | 41,967,000 | 512,686 | 100.0 | % | |||||||||
Charleston, SC | Mount Holly Building | Industrial | 8/30/2007 | 2003 | 1 | 6,208,000 | 100,823 | 100.0 | % | |||||||||
Charleston, SC | Orangeburg Park Bldg. | Industrial | 8/30/2007 | 2003 | 1 | 5,474,000 | 101,055 | 100.0 | % | |||||||||
Charlotte, NC | Kings Mountain I(3) | Industrial | 8/30/2007 1/23/2008 | 1998 | 1 | 5,497,000 | 100,000 | 100.0 | % | |||||||||
Charlotte, NC | Kings Mountain II | Industrial | 8/30/2007 | 2002 | 1 | 11,311,000 | 301,400 | 100.0 | % | |||||||||
Winston-Salem, NC | Union Cross Bldg. I | Industrial | 8/30/2007 | 2005 | 1 | 6,585,000 | 100,853 | 100.0 | % | |||||||||
Winston-Salem, NC | Union Cross Bldg. II | Industrial | 8/30/2007 | 2005 | 1 | 17,216,000 | 316,130 | 100.0 | % | |||||||||
Lewisville, TX | Lakeside Office Center | Office | 3/5/2008 | 2006 | 1 | 17,949,000 | 98,750 | 96.0 | % | |||||||||
Charlotte, NC | Kings Mountain III | Industrial | 3/14/2008 | 2007 | 1 | 25,654,000 | 541,910 | 0.0 | % | |||||||||
Total | 27 | 316,200,000 | 4,607,890 | 85.35 | % | |||||||||||||
- 2 -
Location | Property | Property | Date Acquired | Year Built | Number of Properties | Approximate Total Acquisition Cost (1) | Net Rentable Sq. Ft. | Occupancy | ||||||||||
International | ||||||||||||||||||
Coventry, UK | 602 Central Blvd. | Office | 4/27/2007 | 2001 | 1 | 23,847,000 | 49,985 | 100.0 | % | |||||||||
Reading, UK | Thames Valley Five | Office | 3/20/2008 | 1998 | 1 | 29,335,000 | 40,468 | 100.0 | % | |||||||||
Total | 2 | 53,182,000 | 90,453 | 100.0 | % | |||||||||||||
Real Estate Held for Sale | ||||||||||||||||||
Spartanburg, SC | Fairforest Bldgs 1-4 | Industrial | 8/30/2007 | 1999-2001 | 4 | 20,947,000 | 355,794 | 100.0 | % | |||||||||
Spartanburg, SC | Highway 290 Commerce Pk Bldgs | Industrial | 8/30/2007 9/24/2007 11/1/2007 | 1993-1996 | 5 | 21,204,000 | 473,050 | 78.9 | % | |||||||||
Spartanburg, SC | Orchard Business Park 1 & 2 | Industrial | 8/30/2007 11/1/2007 | 1994 | 2 | 2,271,000 | 50,000 | 65.0 | % | |||||||||
Spartanburg, SC | Greenville/ Spartanburg Ind. Pk | Industrial | 8/30/2007 | 1990 | 1 | 3,581,000 | 67,375 | 100.0 | % | |||||||||
Spartanburg, SC | Community Cash Complex 1-5 | Industrial | 8/30/2007 | 1960-1984 | 5 | 8,648,000 | 552,904 | 70.5 | % | |||||||||
Spartanburg, SC | Cherokee Corporate Park | Industrial | 8/30/2007 | 2000 | 1 | 3,928,000 | 60,000 | 100.0 | % | |||||||||
Total | 18 | 60,579,000 | 1,559,123 | 82.02 | % | |||||||||||||
Grand Total | 47 | $ | 429,961,000 | 6,257,466 | 84.73 | % | ||||||||||||
(1) | Acquisition cost represents the purchase price inclusive of customary closing costs and acquisition fees (which is 1.0% of the contract purchase price). |
(2) | Represents ten acres of undeveloped land zoned for office use. |
(3) | Includes the purchase prices of adjacent land parcels acquired on January 23, 2008. |
Our geographic revenue concentrations from continuing operations for the three months ended March 31, 2008 and 2007 are as follows:
| Three Months Ended March 31, | ||||||
| 2008 | 2007 | |||||
Domestic | ||||||
California | 9.91 | % | 29.88 | % | ||
Georgia | 9.56 | 27.54 | ||||
Massachusetts | 7.30 | 22.55 | ||||
Texas | 9.07 | 20.03 | ||||
Illinois | 5.04 | — | ||||
North Carolina | 13.16 | — | ||||
South Carolina | 38.93 | — | ||||
Total Domestic | 92.97 | 100.00 | ||||
International | ||||||
UK | 7.03 | — | ||||
Total | 100.00 | % | 100.00 | % | ||
- 3 -
Our geographic long-lived asset concentrations from continuing operations as of March 31, 2008 and December 31, 2007 are as follows:
| March 31, 2008 | December 31, 2007 | |||||
Domestic | ||||||
California | 6.68 | % | 30.65 | % | ||
Massachusetts | 5.53 | 25.62 | ||||
Georgia | 4.73 | 23.29 | ||||
Texas | 10.30 | 20.44 | ||||
Illinois | 4.88 | — | ||||
North Carolina | 18.51 | — | ||||
South Carolina | 34.91 | — | ||||
Total Domestic | 85.54 | 100.00 | ||||
International | ||||||
UK | 14.46 | — | ||||
Total | 100.00 | % | 100.00 | % | ||
100% of the geographic revenue concentrations from discontinued operations and geographic asset concentrations from discontinued operations are attributable to buildings located in South Carolina as of and for the three months ended March 31, 2008. There were no discontinued operations for the three months ended March 31, 2007.
Recent Developments
Thames Valley Five Loan
Subsequent to our acquisition of Thames Valley Five, on May 30, 2008, we obtained a £7,500,000 loan ($14,861,000 assuming an exchange rate of $1.98/£1.00) from The Royal Bank of Scotland plc. The interest only loan is for a term of five years (with a two year extension option) and bears interest at a variable rate of interest based on the three month London Inter-Bank Offering Rate plus 1%, or 6.89% per annum as of May 30, 2008. In addition, we incurred financing costs of approximately £71,000 ($141,000) associated with obtaining this loan.
Acquisition of Enclave on the Lake
On July 1, 2008, we acquired, from unrelated third-parties, a fee interest in Enclave on the Lake, located at 1255 Enclave Parkway, in Houston, Texas. This property had a total acquisition cost of approximately $37,732,000, which includes customary closing costs and an acquisition fee of $372,500 which was paid to our Investment Advisor, and an estimated acquisition cap rate of approximately 7.2%.(1) The property consists of a 171,091 square foot, six-story office building with structured and surface parking lots completed in 1999. The office building is 100% leased to SBM Atlantia, Inc., a Netherlands based supplier of products and services to the oil and gas industry under a lease that expires in February 2012. The initial annual rent under the lease with SBM Atlantia, Inc. is $4,277,000. In connection with the acquisition of this property, we assumed a $18,790,000 fixed-rate mortgage loan that bears interest at a rate of 5.45% per annum and matures on May 1, 2011.
Acquisition of Albion Mills Retail Park
On July 11, 2008, we acquired, from an unrelated third-party, a fee interest in Albion Mills Retail Park located on Ings Road, Wakefield, United Kingdom. This property had a total acquisition cost of approximately £11,126,000 ($22,046,000 assuming an exchange rate of $1.9815/£1.00), which includes customary closing costs and an acquisition fee of $208,000 which was paid to our Investment Advisor, and an estimated acquisition cap rate of approximately 7.2%.(1) The property consists of a 55,294 square foot, two unit retail building and surface parking lot completed in 2000. The retail building is 100% leased to Wickes Building Supplies Ltd, one of the United Kingdom’s leading hardware and building supplies retailers, under a lease that expires in May 2030, and
- 4 -
DSG Retail Ltd. (d/b/a PC World), one of the largest retailers in the United Kingdom, under a lease that expires in September 2020. The initial annual rent under the lease with Wickes Building Supplies Ltd is $1,177,746 and the initial annual rent under the lease with DSG Retail Ltd. (d/b/a PC World) is $404,060.
Avion III and Avion IV
On July 25, 2008, we entered into a definitive purchase agreement with unrelated third parties, to acquire, subject to customary closing conditions, Avion III and IV, located at 14550 and 14560 Avion Parkway, in Chantilly, Virginia. The contract purchase price for Avion III and IV is $41,700,000 exclusive of transaction costs, financing fees and working capital reserves. We anticipate that the acquisition will be funded from the proceeds of our initial public offering. Each property consists of a three-story office building, with surface parking lots, completed in 2003. Avion III has 71,507 rentable square feet and is 100% leased to Lockheed Martin Corporation, a leading supplier of aerospace and defense products and services. Avion IV has 71,504 rentable square feet and is 100% leased to the U.S. General Services Administration. Both buildings have been improved to meet Sensitive Compartmentalized Information Facilities standards that include enhanced access control systems which meet specific security requirements for handling federal classified information. While we anticipate this acquisition will close during the third quarter of 2008, this agreement is subject to a number of contingencies and there can be no assurances that this acquisition will occur.
Joint Venture with Duke Realty Limited Partnership
On May 5, 2008, we entered into a contribution agreement with Duke Realty Limited Partnership, a subsidiary of Duke Realty Corporation (NYSE: DRE), to acquire, through a joint venture, $248,900,500 in industrial real property assets. We own an 80% interest and Duke owns a 20% interest in the joint venture. The portfolio consists of six bulk industrial built-to-suit, fully leased properties. One of the properties was contributed to the joint venture on June 12, 2008 and in connection with the closing we made a cash contribution of approximately $34,700,000 (excluding a working capital reserve of $240,000) to the Duke joint venture. The remaining five properties are under various stages of construction and are expected to be contributed to the joint venture during the remainder of 2008. Closing of the contribution of each of the remaining properties to the joint venture is subject to certain contingencies and there is no assurance that any of the properties will be contributed to the joint venture. It is anticipated that the total amount of properties (inclusive of those identified above) that may be contributed to the joint venture over a three-year period may be up to $800,000,000.
CBRE Asia Fund—Acquisition of Golden Rooster Lake Road
On June 17, 2008, CBRE Asia Fund acquired a 49% interest in a Chinese company that owns Golden Rooster Lake Road located in Suzhou, China. The property is a mixed-use property anticipated to include four high-rise serviced apartment towers and a shopping mall. The property is currently under development, with a projected total project cost of $197,000,000. The joint venture partner and developer is China Vanke, a public company listed on the Shenzhen stock exchange. CBRE Asia Fund acquired this interest for approximately $37,800,000.
(1) | Acquisition cap rate equals annualized in-place net operating income divided by total acquisition cost for the property. Annualized in-place net operating income equals, on an annualized cash basis as derived from leases in-place at the time we acquire the property, rental income and tenant reimbursements less property and related expenses (operating maintenance, management fees and real estate taxes) and excludes other non-property income and expenses, interest expense, depreciation and amortization and our company-level general and administrative expenses. |
- 5 -
Significant Tenants
We owned approximately 6,257,466 square feet of net rentable space as of March 31, 2008. The following table details the tenants with annual rents greater than 5% of total annual rents or who occupied more than 5% of the total rentable square feet as of March 31, 2008:
Market | Property | Tenant | Net Rentable Sq. Ft. | Annual Rents Statistics | Lease Expirations | ||||||||||||||
| Sq. Ft. | % of Portfolio | Annual Rents | % of Portfolio | ||||||||||||||||
Charleston, SC | Jedburg Commerce Park | American LaFrance LLC | 512,686 | 8.19 | % | $ | 2,994,086 | (1) | 10.65 | % | 07/2027 | (1) | |||||||
Reading, UK/ Atlanta, GA | Thames Valley Five/ Deerfield Commons I | Regus/HQ Global Workplace, Inc.(2) | 85,789 | 1.37 | 2,947,592 | 10.48 | 12/2013/ 05/2010 | | |||||||||||
San Diego, CA | REMEC Corporate Campus | REMEC | 132,685 | 2.12 | 2,307,271 | 8.20 | 04/2017 | ||||||||||||
Coventry, UK | 602 Central Blvd. | Capital Business Services | 49,985 | 0.80 | 1,534,755 | 5.46 | 02/2010 | ||||||||||||
Boston, MA | 300 Constitution Drive | Chadwick’s of Boston | 330,000 | 5.28 | 1,425,600 | 5.07 | 03/2013 | ||||||||||||
Winston-Salem, NC | Union Cross Bldg. II | EGL Eagle Global Logistics LP | 316,130 | 5.05 | 1,238,597 | 4.40 | 10/2009 | ||||||||||||
Spartanburg, SC | Fairforest Bldg. 5 | Echostar Satellite LLC | 316,491 | 5.06 | 1,177,347 | 4.19 | 02/2013 | ||||||||||||
Charleston, SC | North Rhett IV | Trans Hold Inc | 316,040 | 5.05 | 1,174,065 | 4.18 | 01/2022 | ||||||||||||
| — | |||||||||||||||||||
| 2,059,806 | 32.92 | % | $ | 14,799,313 | 52.63 | % | |||||||||||||
(1) | The lease term and annual rent provided under ALF’s lease is presented as of March 31, 2008. Effective July 23, 2008, ALF’s lease has been modified to provide for a lease term of five years and annual rent of approximately $2,809,500. |
(2) | HQ Global Workplace, Inc. is owned by Regus. |
On January 28, 2008, American LaFrance LLC, or ALF, the tenant in our Jedburg Commerce Park property, filed for Chapter 11 bankruptcy protection with the bankruptcy court for the District of Delaware. On May 23, 2008, an order was entered in ALF’s Chapter 11 case confirming its Plan of Reorganization, which became effective on July 23, 2008. In connection therewith, ALF’s lease with us was modified to reduce the remaining lease term from approximately 19 years to approximately five years and the current annual base rent from approximately $2,994,086 to $2,809,500. ALF has remained current on its rent obligations during the course of the Chapter 11 bankruptcy proceedings and the lease remains secured, in part, by a letter of credit. As of the date of this prospectus, ALF represents approximately 8.29% of our annualized rent with respect to our consolidated portfolio.
- 6 -
Tenant Lease Expirations
The following table sets forth a schedule of expiring leases for our consolidated properties by square footage and by annualized rental revenue as of March 31, 2008:
Year | Number of Leases | Expiring Square Feet | % of Portfolio | Annual Rental | % of Portfolio | ||||||||
Vacant | 955,317 | 15.27 | % | $ | — | — | % | ||||||
Month to Month | 9 | 359,645 | 5.75 | — | — | ||||||||
2008 | 5 | 216,147 | 3.45 | 743,218 | 2.64 | ||||||||
2009 | 10 | 609,519 | 9.74 | 2,968,250 | 10.55 | ||||||||
2010 | 21 | 511,605 | 8.17 | 4,431,198 | 15.76 | ||||||||
2011 | 6 | 197,966 | 3.16 | 1,039,167 | 3.70 | ||||||||
2012 | 7 | 208,400 | 3.33 | 993,239 | 3.53 | ||||||||
2013 | 3 | 756,959 | 12.10 | 5,083,404 | 18.08 | ||||||||
2014 | 2 | 102,372 | 1.63 | 470,117 | 1.67 | ||||||||
2015 | 7 | 709,942 | 11.35 | 2,709,403 | 9.63 | ||||||||
2016 | 2 | 198,414 | 3.17 | 1,009,019 | 3.59 | ||||||||
2017 | 2 | 200,201 | 3.21 | 3,235,639 | 11.51 | ||||||||
2019 | 1 | 301,400 | 4.82 | 822,587 | 2.93 | ||||||||
2020 | 1 | 100,853 | 1.61 | 444,399 | 1.58 | ||||||||
2022 | 1 | 316,040 | 5.05 | 1,174,065 | 4.18 | ||||||||
2027(1) | 1 | 512,686 | 8.19 | 2,994,085 | 10.65 | ||||||||
Total | 78 | 6,257,466 | 100.00 | % | $ | 28,117,790 | 100.00 | % | |||||
(1) | The above table reflects the lease term and annual rent provided under ALF’s lease as of March 31, 2008. Effective July 23, 2008, ALF’s lease has been modified to provide for a lease term of five years and annual rent of approximately $2,809,500. |
- 7 -
Rental Operations
We evaluate the performance of our segments based on net operating income, defined as: rental income and tenant reimbursements less property and related expenses (operating and maintenance, management fees and real estate taxes) and excludes other non-property income and expenses, interest expense, depreciation and amortization, and our company–level general and administrative expenses. The following tables compare the net operating income for the three months ended March 31, 2008 and for the years ended December 31, 2007, 2006 and 2005 (in thousands):
| Three Months Ended March 31, | Year Ended December 31, | |||||||||||||||
| 2008 | 2007 | 2006 | 2005 | |||||||||||||
Domestic Properties | ||||||||||||||||
Revenues: | ||||||||||||||||
Rental | $ | 5,327 | $ | 11,449 | $ | 6,630 | $ | 4,614 | ||||||||
Tenant Reimbursements | 1,035 | 2,377 | 1,830 | 872 | ||||||||||||
| 6,362 | 13,826 | 8,460 | 5,486 | |||||||||||||
Property and Related Expenses: | ||||||||||||||||
Operating and Maintenance | 451 | 1,011 | 860 | 367 | ||||||||||||
General and Administrative | 44 | 84 | 88 | 26 | ||||||||||||
Property Management Fee to Related Party | 62 | 122 | 41 | 7 | ||||||||||||
Property Taxes | 631 | 1,486 | 1,103 | 563 | ||||||||||||
| 1,188 | 2,703 | 2,092 | 963 | |||||||||||||
Net Operating Income | 5,174 | 11,123 | 6,368 | 4,523 | ||||||||||||
International Properties | ||||||||||||||||
Revenues: | ||||||||||||||||
Rental | 487 | 1,149 | — | — | ||||||||||||
Tenant Reimbursements | 34 | 12 | — | — | ||||||||||||
| 521 | 1,161 | — | — | |||||||||||||
Property and Related Expenses: | ||||||||||||||||
Operating and Maintenance | 32 | 19 | — | — | ||||||||||||
General and Administrative | — | 23 | — | — | ||||||||||||
Property Management Fee to Related Party | 2 | 7 | — | — | ||||||||||||
| 34 | 49 | — | — | |||||||||||||
Net Operating Income | 487 | 1,112 | — | — | ||||||||||||
Total Reportable Segments(1) | ||||||||||||||||
Revenues: | ||||||||||||||||
Rental | 5,814 | 12,598 | 6,630 | 4,614 | ||||||||||||
Tenant Reimbursements | 1,069 | 2,389 | 1,830 | 872 | ||||||||||||
| 6,883 | 14,987 | 8,460 | 5,486 | |||||||||||||
Property and Related Expenses: | ||||||||||||||||
Operating and Maintenance | 483 | 1,030 | 860 | 367 | ||||||||||||
General and Administrative | 44 | 107 | 88 | 26 | ||||||||||||
Property Management Fee to Related Party | 64 | 129 | 41 | 7 | ||||||||||||
Property Taxes | 631 | 1,486 | 1,103 | 563 | ||||||||||||
| 1,222 | 2,752 | 2,092 | 963 | |||||||||||||
Net Operating Income | 5,661 | 12,235 | 6,368 | 4,523 | ||||||||||||
Reconciliation of Non-GAAP Measure to Consolidated Net Loss | ||||||||||||||||
Total Segment Net Operating Income | 5,661 | 12,235 | 6,368 | 4,523 | ||||||||||||
Interest and Other Income | 796 | 2,855 | 255 | 460 | ||||||||||||
| 6,457 | 15,090 | 6,623 | 4,983 | |||||||||||||
Interest Expense | 2,406 | 5,049 | 1,784 | 1,195 | ||||||||||||
General and Administrative | 364 | 1,761 | 763 | 333 | ||||||||||||
Investment Management Fee to Related Party | 681 | 1,547 | 739 | 603 | ||||||||||||
Class C Fee to Related Party | — | — | 145 | 459 | ||||||||||||
Depreciation and Amortization | 3,151 | 8,050 | 4,618 | 2,478 | ||||||||||||
Loss From Continuing Operations Before Income Taxes, Minority Interest and Equity in Loss of Unconsolidated Entity | (145 | ) | (1,317 | ) | (1,426 | ) | (85 | ) | ||||||||
Minority Interest | 2 | 17 | (1,058 | ) | (7 | ) | ||||||||||
Provision for Income Taxes | (59 | ) | — | — | — | |||||||||||
Equity in Loss of Unconsolidated Entity | (96 | ) | (150 | ) | — | — | ||||||||||
Loss from Continuing Operations | (298 | ) | (1,450 | ) | (2,484 | ) | (92 | ) | ||||||||
Income from Discontinued Operation | 881 | 1,047 | — | — | ||||||||||||
Net Income (Loss) | $ | 583 | $ | (403 | ) | $ | (2,484 | ) | $ | (92 | ) | |||||
(1) | Total Reportable Segments net operating income is a Non-GAAP financial measure which may be useful as a supplemental measure for evaluating the relationship of each reporting segment to the combined total. This measure should not be looked upon as an alternative measure of operating performance to our US GAAP presentations provided. |
- 8 -
Non-GAAP Supplemental Financial Measure: Funds from Operations
Management uses Funds from Operations, or FFO, as a supplemental measure of REIT performance. We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts, or NAREIT, which may not be comparable to FFO reported by other REITs that do not compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently than we do. The revised White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding extraordinary items, as defined by GAAP, and gains and losses from sales of depreciable operating property, plus real estate related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets), and after adjustment for unconsolidated partnerships and joint ventures.
Because FFO excludes depreciation and amortization, gains and losses from property dispositions and extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates and operating costs. Management believes that FFO provides useful information to the investment community about our financial performance when compared to other REITs since FFO is generally recognized as the industry standard for reporting the operations of REITs.
FFO does not represent cash generated from operating activities in accordance with GAAP and should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of our financial performance or to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash distributions.
- 9 -
The following table presents our FFO for the three months ended March 31, 2008, December 31, 2007, September 30, 2007 and June 30, 2007 (in thousands):
| Three Months Ended | ||||||||||
| March 31, 2008 | December 31, 2007 | September 30, 2007 | June 30, 2007 | |||||||
Reconciliation of net income (loss) to funds from operations: | ||||||||||
Net Income (Loss) | $ 583 | $ (709 | ) | $ 434 | $ 4 | |||||
Adjustments: | ||||||||||
Minority interest | 5 | (6 | ) | 5 | (1 | ) | ||||
Real estate depreciation and amortization | 3,151 | 3,465 | 2,115 | 1,327 | ||||||
Funds from operations | $3,739 | $2,750 | $2,554 | $1,330 | ||||||
FFO per share (basic and diluted) | $0.11 | $0.10 | $0.11 | $0.09 | ||||||
This section supplements the information under the section “Distribution Policy,” which appears on page 40 of our prospectus.
The following table sets forth the distributions per common share declared by our board of trustees and dates of such distributions:
Quarter | Declared | Date of Distribution | ||
Fourth Quarter, 2004 | $0.08 | January 19, 2005 | ||
First Quarter, 2005 | $0.084 | April 19, 2005 | ||
Second Quarter, 2005 | $0.084 | July 20, 2005 | ||
Third Quarter, 2005 | $0.125 | October 20, 2005 | ||
Fourth Quarter, 2005 | $0.125 | January 20, 2006 | ||
First Quarter, 2006 | $0.125 | April 20, 2006 | ||
Second Quarter, 2006 | $0.125 | July 20, 2006 | ||
Third Quarter, 2006 | $0.125 | October 3, 2006 | ||
Fourth Quarter, 2006 | $0.125 | January 16, 2007 | ||
First Quarter, 2007 | $0.125 | April 20, 2007 | ||
Second Quarter, 2007 | $0.1375 | July 20, 2007 | ||
Third Quarter, 2007 | $0.1375 | October 19, 2007 | ||
Fourth Quarter, 2007 | $0.14375 | January 21, 2008 | ||
First Quarter, 2008 | $0.14375 | April 18, 2008 | ||
Second Quarter, 2008 | $0.14375 | July 18, 2008 | ||
Third Quarter, 2008 | $0.15 | October 20, 2008* |
| * | Anticipated payment date |
On June 10, 2008, our board of trustees approved a quarterly distribution to shareholders of $0.15 per common share for the third quarter 2008. The distribution will be calculated on a daily basis and paid on October 20, 2008 to shareholders of record during the period July 1, 2008 through and including September 30, 2008. The distribution represents an increase of $0.00625 over the second quarter 2008 distribution of $0.14375 per common share. On an annualized basis, this distribution amount represents a 6.0% yield based on the current $10.00 per share offering price of our common shares. However, no assurance can be made that distributions will be sustained at current levels.
Our 2004 distributions were funded 98% by cash flows provided by operating activities and 2% from uninvested proceeds of our private offering; our 2005 and 2006 distributions were funded 100% by cash flows
- 10 -
provided by operating activities; and our 2007 distributions were funded 80.57% by cash flows provided by operating activities and 19.43% from uninvested proceeds from the financings of our properties. Our first quarter 2008 distributions were funded 81.38% by cash flows provided by operating activities and 18.62% from uninvested proceeds from financings of our properties. We cannot assure you that we have sufficient cash available for future distributions at this level, or at all. See “Risk Factors,” which begins on page 18 of our prospectus.
This section updates the information under the section “Dilution,” which appears on page 42 of our prospectus.
Our net tangible book value as of March 31, 2008 was approximately $271,681,000, or $7.19 per share. If you invest in our common shares, your interest will be diluted to the extent of the difference between the price per share you pay and the net tangible book value per share immediately after this offering. Net tangible book value per share is calculated by subtracting our total liabilities from our total tangible assets, which is total assets less intangible assets, and dividing this amount by the number of common shares issued and outstanding. After giving effect to the sale by us of (i) $1,800,000,000 in common shares offered by our prospectus to the public, assuming a public offering price of $10.00 per share, and (ii) $200,000,000 in common shares offered pursuant to our dividend reinvestment plan, assuming a public offering price of $9.50 per share, our net tangible book value as of March 31, 2008 would have been $1,795,115,679, or $8.63 per share. This represents an immediate increase in the net tangible book value of $1.44, or 20.03%, per share to our existing shareholders and an immediate and substantial dilution in net tangible book value of $(1.31), or (13.18)%, per share to new investors. If you pay reduced selling commissions and fees or no fees, you will suffer less dilution. For example, if no selling commissions are paid on your purchase of shares then based on our net tangible book value at March 31, 2008, you will suffer dilution of up to approximately $(0.80) per share.
The following table illustrates this per share dilution:
Per share offering price of this offering before any expenses, commissions and other fees | $ | 10.00 | ||
Per share offering price of shares issuable pursuant to our dividend reinvestment plan before expenses | $ | 9.50 | ||
Weighted average per share offering price of total shares issuable pursuant to this offering and our dividend reinvestment plan before expenses, commissions and other fees | $ | 9.94 | ||
Net tangible book value of each common share at March 31, 2008 | $ | 7.19 | ||
Pro forma net tangible book value of each common share assuming the completion of this offering(1) | $ | 8.63 | ||
Pro forma increase in net tangible book value per common share to existing shareholders attributable to this offering | $ | 1.44 | ||
Pro forma decrease (dilution) in net tangible book value per common share to new investors | $ | (1.31 | ) |
(1) | This figure assumes that we received net proceeds of $1,801,000,000 from this offering, after deducting the payment of selling commissions, the dealer manager fee and the marketing support fee to the Dealer Manager and other organization and offering expenses. We do not pay selling commissions, the dealer manager fee and the marketing support fee for dividend reinvestment plan shares placed. |
The following table summarizes, on a pro forma basis as of March 31, 2008, the differences in the number of common shares purchased from us, the total consideration paid and the average price per share paid by our existing shareholders and by the new investors purchasing the common shares in this offering:
| Shares Issued(1) | Book Value of Total Consideration | Book Value of Consideration Per Share | ||||||||||||
| Number | Percent | Amount | Percent | |||||||||||
Existing shareholders | 37,788,751 | 18.2 | % | $ | 355,073,911 | 17.3 | % | $ | 9.40 | |||||
New shareholders | 170,231,643 | 81.8 | % | $ | 1,691,953,220 | 82.7 | % | $ | 9.94 | |||||
Total | 208,020,394 | 100.0 | % | $ | 2,047,027,131 | 100.0 | % | $ | 9.84 | |||||
(1) | Although the outstanding class A units of limited partnership of CBRE OP are convertible into our common shares on a one-for-one basis, we give no effect to the possible conversion of class A units of limited partnership of CBRE OP into common shares. |
- 11 -
Summary Selected Financial Data
This section updates the information under the section “Summary Selected Financial Data,” which begins on page 43 of our prospectus.
The following table sets forth summary selected financial and operating data on a consolidated basis for our company. You should read the following summary selected financial data in conjunction with our consolidated historical financial statements and the related notes and with “Management Discussion and Analysis of Financial Conditions and Results of Operations,” which are included in our prospectus and incorporated documents.
The summary historical consolidated balance sheet information as of March 31, 2008, December 31, 2007, 2006, 2005 and 2004 as well as the summary historical consolidated statement of operations information for the three months ended March 31, 2008 and March 31, 2007 and for the periods ended December 31, 2007, 2006, 2005 and 2004 have been derived from our historical consolidated financial statements.
Our unaudited summary selected pro-forma consolidated financial data is presented for the three months ended March 31, 2008 and as of and for the year ended December 31, 2007. Our unaudited summary selected pro-forma consolidated statements of operations data for the three months ended March 31, 2008 and year ended December 31, 2007 is based on our historical consolidated statements of operations and combined with the statements of revenues and certain expenses for the (i) 602 Central Blvd. property, which was acquired on April 27, 2007, (ii) the Bolingbrook Point III property, which was acquired on August 29, 2007, (iii) the Carolina Portfolio which was acquired on August 30, 2007, (iv) the Lakeside Office Center property, which was acquired on March 5, 2008, (v) the Thames Valley Five property, which was acquired on March 20, 2008, (vi) the Duke Buckeye Logistic Center property, which was acquired on June 12, 2008 and (vii) the Enclave on the Lake property, which was acquired on July 1, 2008. The unaudited summary selected pro forma consolidated balance sheet as of March 31, 2008 is presented as if the acquisitions of the Duke Buckeye Logistic Center property and the Enclave on the Lake property had taken place on March 31, 2008. Our unaudited pro-forma financial information is not necessarily indicative of what our actual financial position and results of operations would have been for the period indicated, nor does it purport to represent our future results of operations. For further discussion of the unaudited pro-forma consolidated financial statements, see our Current Report on Form 8-K/A, filed with the SEC on July 17, 2008, and which is incorporated by reference herein.
- 12 -
| Pro Forma Consolidated | Historical Consolidated | Pro Forma Consolidated | Historical Consolidated | |||||||||||||||||||||||||||||
| Three Months Ended March 31, | Three Months Ended March 31, | Year Ended December 31, | Year Ended December 31, | July 1, 2004 (Date of Commencement) to December 31, | ||||||||||||||||||||||||||||
| 2008 | 2008 | 2007 | 2007 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||||||||||||
| (in thousands except share data) | ||||||||||||||||||||||||||||||||
Statement of Operations Data: | ||||||||||||||||||||||||||||||||
Rental Revenues | $ | 7,741 | $ | 5,814 | $ | 1,683 | $ | 28,147 | $ | 12,598 | $ | 6,630 | $ | 4,614 | $ | 913 | ||||||||||||||||
Tenant Reimbursements | 1,297 | 1,069 | 485 | 3,887 | 2,389 | 1,830 | 872 | 120 | ||||||||||||||||||||||||
Total Revenue | 9,038 | 6,883 | 2,168 | 32,034 | 14,987 | 8,460 | 5,486 | 1,033 | ||||||||||||||||||||||||
Operating and Maintenance | 945 | 547 | 223 | 3,056 | 1,152 | 901 | 374 | 7 | ||||||||||||||||||||||||
Property Taxes | 836 | 631 | 295 | 3,213 | 1,486 | 1,103 | 563 | 113 | ||||||||||||||||||||||||
Interest | 2,716 | 2,406 | 446 | 9,315 | 5,049 | 1,784 | 1,195 | 117 | ||||||||||||||||||||||||
General and Administrative Expense | 440 | 408 | 223 | 2,059 | 1,875 | 851 | 359 | 123 | ||||||||||||||||||||||||
Management Fees to Related Party | 850 | 681 | 237 | 2,900 | 1,547 | 739 | 603 | 230 | ||||||||||||||||||||||||
Class C Fee to Related Party | — | — | — | — | — | 145 | 459 | 197 | ||||||||||||||||||||||||
Depreciation and Amortization | 4,233 | 3,151 | 1,143 | 15,357 | 8,050 | 4,618 | 2,478 | 334 | ||||||||||||||||||||||||
Organizational Expenses | — | — | — | — | — | — | — | 109 | ||||||||||||||||||||||||
Total Expenses | 10,020 | 7,824 | 2,567 | 35,900 | 19,159 | 10,141 | 6,031 | 1,230 | ||||||||||||||||||||||||
Interest and Other Income | 796 | 796 | 264 | 2,855 | 2,855 | 255 | 460 | 111 | ||||||||||||||||||||||||
Loss before Minority Interest | (186 | ) | (145 | ) | (135 | ) | (1,011 | ) | (1,317 | ) | (1,426 | ) | (85 | ) | (86 | ) | ||||||||||||||||
Minority Interest | 3 | 2 | 3 | 8 | 17 | (1,058 | ) | (7 | ) | (3 | ) | |||||||||||||||||||||
Provision for Income Taxes | (59 | ) | (59 | ) | — | — | — | — | — | — | ||||||||||||||||||||||
Equity in loss of Unconsolidated Entities | (13 | ) | (96 | ) | — | 8 | (150 | ) | — | — | — | |||||||||||||||||||||
Loss From Continuing Operations | (255 | ) | (298 | ) | (132 | ) | (995 | ) | (1,450 | ) | (2,484 | ) | (92 | ) | (89 | ) | ||||||||||||||||
Income From Discontinued Operations | 881 | — | 1,047 | — | — | — | ||||||||||||||||||||||||||
Net Income (Loss) | $ | 583 | $ | (132 | ) | $ | (403 | ) | $ | (2,484 | ) | $ | (92 | ) | $ | (89 | ) | |||||||||||||||
Per Share Data: | ||||||||||||||||||||||||||||||||
Basic and Diluted Loss Per Share From Continuing Operations | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.05 | ) | $ | (0.08 | ) | $ | (0.35 | ) | $ | (0.01 | ) | $ | (0.01 | ) | ||||||||
Basic and Diluted Income Per Share From Discontinued Operations | 0.03 | — | 0.06 | — | — | — | ||||||||||||||||||||||||||
Basic and Diluted Income (Loss) Per Share | $ | 0.02 | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.35 | ) | $ | (0.01 | ) | $ | (0.01 | ) | |||||||||||||||
Weighted Average Common Shares | ||||||||||||||||||||||||||||||||
Outstanding—Basic and Diluted | 34,027,925 | 34,027,925 | 8,987,691 | 18,545,418 | 18,545,418 | 7,010,722 | 6,967,762 | 6,893,961 | ||||||||||||||||||||||||
Dividends Declared Per Share | $ | 0.14 | $ | 0.14 | $ | 0.13 | $ | 0.54 | $ | 0.54 | $ | 0.50 | $ | 0.42 | $ | 0.08 | ||||||||||||||||
- 13 -
| Pro Forma Consolidated March 31, | Historical Consolidated March 31, | Historical Consolidated December 31, | ||||||||||||||||
| 2008 | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||
| (in thousands) | ||||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||
Investments in Real Estate, Net of Accumulated Depreciation and Amortization | $ | 356,397 | $ | 321,941 | $ | 252,351 | $ | 70,650 | $ | 57,163 | $ | 43,946 | ||||||
Investments in Unconsolidated Entities | 35,505 | 64 | 101 | — | — | — | ||||||||||||
Real Estate and Other Assets Held for Sale | 60,910 | 60,910 | 61,100 | — | — | — | ||||||||||||
Total Assets | 512,526 | 493,761 | 434,806 | 97,807 | 94,118 | 73,704 | ||||||||||||
Notes Payable | 134,401 | 116,121 | 116,876 | 34,975 | 34,975 | 13,250 | ||||||||||||
Loan Payable | 45,000 | 45,000 | 45,000 | — | — | — | ||||||||||||
Liabilities Related to Real Estate and Other Assets Held for Sale | 725 | 725 | 729 | — | — | — | ||||||||||||
Total Liabilities | 210,922 | 192,157 | 188,279 | 44,834 | 41,510 | 18,461 | ||||||||||||
Minority Interest | 1,464 | 1,464 | 1,495 | 1,629 | 242 | 245 | ||||||||||||
Shareholders’ Equity | 300,140 | 300,140 | 245,032 | 51,344 | 52,366 | 54,998 | ||||||||||||
Total Liabilities and Shareholders’ Equity | 512,526 | 493,761 | 434,806 | 97,807 | 94,118 | 73,704 | ||||||||||||
- 14 -
The consolidated financial statements and the related financial statement schedule of CB Richard Ellis Realty Trust and subsidiaries as of December 31, 2007 and 2006, and for each of the three years in the period ended December 31, 2007, incorporated in this Supplement No. 10 by reference from the CB Richard Ellis Realty Trust Annual Report on Form 10-K for the year ended December 31, 2007 and the effectiveness of CB Richard Ellis Realty Trust’s internal control over financial reporting as of December 31, 2007, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
The historical statement of revenues and direct operating expenses of the Bolingbrook Point III building for the year ended December 31, 2006, incorporated in this Supplement No. 10 by reference from our Current Report on Form 8-K/A dated July 1, 2008 and filed with the SEC on July 17, 2008, has been audited by Squar, Milner, Peterson, Miranda & Williamson, LLP, an independent registered public accounting firm, as stated in their report, which is incorporated herein by reference, and has been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
The combined statement of revenues and certain expenses of the Carolina Portfolio for the year ended December 31, 2006, incorporated in this Supplement No. 10 by reference from our Current Report on Form 8-K/A dated July 1, 2008 and filed with the SEC on July 17, 2008, has been audited by McGladrey & Pullen, LLP, an independent registered public accounting firm, as stated in their report (which report expresses an unqualified opinion and includes an explanatory paragraph related to the purpose of the statements), which is incorporated herein by reference, and has been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
The combined statement of revenues and certain expenses of the Carolina II Portfolio for the year ended December 31, 2006, incorporated in this Supplement No. 10 by reference from our Current Report on Form 8-K/A dated July 1, 2008 and filed with the SEC on July 17, 2008, has been audited by McGladrey & Pullen, LLP, an independent registered public accounting firm, as stated in their report, (which report expresses an unqualified opinion and includes an explanatory paragraph related to the purpose of the statements), which is incorporated herein by reference, and has been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
The historical statement of revenues and direct operating expenses of Lakeside Office Center for the year ended December 31, 2007, incorporated in this Supplement No. 10 by reference from our Current Report on Form 8-K/A dated July 1, 2008 and filed with the SEC on July 17, 2008, has been audited by Squar, Milner, Peterson, Miranda & Williamson, LLP, an independent registered public accounting firm, as stated in their report, which is incorporated herein by reference, and has been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
The historical statement of revenues and direct operating expenses of the Enclave on the Lake building for the year ended December 31, 2007, incorporated in this Supplement No. 10 by reference from our Current Report on Form 8-K/A dated July 1, 2008 and filed with the SEC on July 17, 2008, has been audited by Squar, Milner, Peterson, Miranda & Williamson, LLP, an independent registered public accounting firm, as stated in their report, which is incorporated herein by reference, and has been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
- 15 -
Incorporation of Certain Information by Reference
This Supplement No. 10 to our prospectus dated April 25, 2008 “incorporates by reference” certain information we file with the SEC, in accordance with the rules and regulations of the SEC, which means that we can disclose important information to you by referring you to those documents that are considered part of this Supplement No. 10. The following documents filed with the SEC are incorporated by reference into this Supplement No. 10:
| • | Our Annual Report on Form 10-K for the year ended December 31, 2007, filed on March 31, 2008; |
| • | Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, filed on May 15, 2008; |
| • | Our Current Report on Form 8-K, dated May 5, 2008, filed on May 6, 2008; |
| • | Our Current Report on Form 8-K/A, dated March 20, 2008, filed on May 12, 2008; |
| • | Our Current Report on Form 8-K/A, dated March 5, 2008, filed on May 12, 2008; |
| • | Our Current Report on Form 8-K, dated June 10, 2008, filed on June 16, 2008; |
| • | Our Current Report on Form 8-K, dated June 12, 2008, filed on June 16, 2008; |
| • | Our Current Report on Form 8-K, dated July 1, 2008, filed on July 3, 2008; |
| • | Our Current Report on Form 8-K/A, dated July 1, 2008, filed on July 17, 2008; and |
| • | Our Proxy Statement on Schedule 14A for our 2008 Annual Meeting of Shareholders, filed on April 28, 2008. |
You can obtain any of the documents incorporated by reference in this Supplement No. 10 from us, or from the SEC through the SEC’s website at the addresswww.sec.gov. We will furnish without charge to you, on written or oral request, a copy of any or all of the documents incorporated by reference, other than exhibits to such documents. You should direct any written requests for documents to CB Richard Ellis Realty Trust, 17 Hulfish Street, Suite 280, Princeton, New Jersey 08542, or call (609) 683-4900. Such documents may also be accessed on our website atwww.cbrerealtytrust.com. The information found on, or otherwise accessible through, our website is not incorporated information and does not form part of this supplement, our prospectus or any other report or document we file or furnish with the SEC.
- 16 -
