Digital Realty Trust (DLR) 8-K Digital Realty Trust, Inc. Reports 2006 First Quarter Results

Exhibit 99.2

	PAGE
Corporate Data
Corporate Information	3
Ownership Structure	4
Consolidated Financial Information
Key Financial Data	5
Consolidated Balance Sheets	6
Consolidated Quarterly Statements of Operations	7
Funds From Operations and Adjusted Funds From Operations	8
Reconciliation of Earnings Before Interest, Taxes and Depreciation and Amortization	9
Run rate Net Operating Income for the three months ended March 31, 2006	10
Debt Summary	11
Debt Maturities	12
Portfolio Data
Properties Acquired	13
Occupancy Analysis	14
Major Tenants	15
Lease Expirations & Lease Distribution	16
Leasing Activity	17
Tenant Improvements and Leasing Commissions	18
Historical Capital Expenditures	19
Definitions
Management Statements on Non-GAAP Supplemental Measures	20

This supplemental package contains forward-looking statements within the meaning of the federal securities laws, including information related to run rate net operating income. Such statements are based on management’s beliefs and assumptions made based on information currently available to management. Such statements are subject to risks, uncertainties and assumptions and are not guarantees of future performance and may be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Some of the risks and uncertainties that may cause our actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the following: adverse economic or real estate developments in our markets or technology related real estate; general and local economic conditions; defaults on or non-renewal of leases by tenants; increased interest rates and operating costs; our inability to manage growth effectively; our failure to obtain necessary outside financing; decreased rental rates or increased vacancy rates; difficulties in identifying properties to acquire and completing acquisitions; our failure to successfully operate acquired properties and operations; our failure to successfully redevelop properties acquired for that purpose; our failure to maintain our status as a REIT; possible adverse changes to tax laws; environmental uncertainties and risks related to natural disasters; financial market fluctuations; changes in foreign currency exchange rates; and changes in real estate and zoning laws and increases in real property tax rates. The risks included here are not exhaustive, and additional factors could adversely affect our business and financial performance. We discussed a number of additional material risks in our annual report on Form 10-K for the year ended December 31, 2005 and other filings with the Securities and Exchange Commission. Those risks continue to be relevant to our performance and financial condition. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We expressly disclaim any responsibility to update forward-looking statements, whether as a result of new information, future events or otherwise.

Corporate Information

Corporate Profile

Digital Realty Trust, Inc. owns, acquires, repositions and manages technology-related real estate. The Company’s properties contain applications and operations critical to the day-to-day operations of technology industry tenants and corporate enterprise data center tenants. At March 31, 2006 the Company owned 46 properties containing approximately 8.1 million net rentable square feet, excluding 1.2 million square feet held for redevelopment. Digital Realty Trust’s property portfolio is located throughout the United States and in Europe. For additional information, please visit the company’s website at www.digitalrealtytrust.com.

Corporate Headquarters

560 Mission Street, Suite 2900

San Francisco, California 94105

Telephone: (415) 738-6500

Facsimile: (415) 738-6501

Web site: www.digitalrealtytrust.com

Senior Management

Richard A. Magnuson: Executive Chairman

Michael F. Foust: Chief Executive Officer

A. William Stein: Chief Financial Officer and Chief Investment Officer

Scott E. Peterson: Senior Vice President, Acquisitions

Christopher J. Crosby: Senior Vice President, Sales and Technical Services

Investor Relations

To request an Investor Relations package or be added to our e-mail distribution list, please visit our website:

www.digitalrealtytrust.com (Proceed to Information Request in the Investor Relations section)

Analyst Coverage

Credit Suisse	Merrill Lynch	KeyBanc Capital Markets
Jessica Tully	Steve Sakwa	To be announced.
(404) 897-2820	(212) 449-0335
JMP Securities	RBC Capital Markets	SmithBarney Citigroup
William Marks	Srikanth Nagarajan	Jonathan Litt
(415) 835-8944	(212) 428-2360	(212) 816-0231

Stock Listing Information

The stock of Digital Realty Trust, Inc. is traded primarily on the New York Stock Exchange under the following symbols:

Common Stock:	DLR
Series A Preferred Stock:	DLRPA
Series B Preferred Stock:	DLRPB

Note that symbols may vary by stock quote provider.

Common Stock Price Performance

The following summarizes recent activity of Digital Realty’s common stock (DLR):

	1st Quarter 2006			4th Quarter 2005			3rd Quarter 2005			2nd Quarter 2005			1st Quarter 2005
High Price *	$	28.59		$	24.70		$	19.97		$	17.49		$	14.81
Low Price *	$	22.29		$	17.73		$	16.80		$	13.67		$	12.50
Closing Price, end of quarter *	$	28.17		$	22.63		$	18.00		$	17.38		$	14.37
Average daily trading volume *		194,179			134,046			260,942			94,248			94,884
Indicated dividend per share **	$	1.06		$	1.06		$	0.98		$	0.98		$	0.98
Closing dividend yield, end of quarter		3.8	%		4.7	%		5.4	%		5.6	%		6.8	%
Closing shares and units outstanding end of quarter		59,052,653			59,016,949			58,826,122			52,942,731			52,942,731
Closing market value of shares and units outstanding (thousands), end of quarter		1,663,513			1,335,554			1,058,870			920,145			760,787

* New York Stock Exchange trades only

** On an annual basis

This Supplemental Operating and Financial Data package supplements the information provided in our quarterly and annual reports filed with the Securities and Exchange Commission. Additional information about us and our properties is also available at our website www.digitalrealtytrust.com.

3

Ownership Structure

As of March 31, 2006 (See note below)

Partner	# of Units (3)	% Ownership (1)
Digital Realty Trust, Inc.	31,429,296	53.2	%
GI Partners, LLC	19,669,175	33.3	%
Cambay Tele.com, LLC (4)	5,903,124	10.0	%
Wave Exchange, LLC (4)	32,722	0.1	%
Pacific-Bryan Partners, L.P. (5)	395,665	0.7	%
Directors, Executive Officers and Others	1,622,671	2.7	%
Total	59,052,653	100.0	%

Note: This ownership structure reflects 4,030,184 shares that GI Partners’ partners converted from common units of the Operating Partnership to shares of our common stock on March 29, 2006 and which they sold on April 3, 2006.

(1) Excludes shares issuable with respect to stock options that have been granted but have not yet been exercised, and also excludes shares issuable upon the redemption of Class C units which have not yet vested.

(2) Reflects limited partnership interests held by our officers and directors in the form of vested long-term incentive units and excludes shares issuable upon the redemption of Class C units which have not yet vested.

(3) The total number of units includes 31,429,296 shares of common stock and 27,623,357 common units and excludes shares issuable upon the redemption of Class C units which have not yet vested.

(4) These third-party contributors received the units (along with cash and the operating partnership assuming debt) in exchange for their interests in 200 Paul Avenue 1-4, 1100 Space Park Drive, the eXchange colocation business and other specified assets and liabilities.

(5) This third-party contributor received the units in exchange for a 10% minority interest in the 2323 Bryan Street property.

4

Key Financial Data

(Dollars in thousands, except per share data)

	For the three months ended or as of
	31-Mar-06			31-Dec-05			30-Sep-05			30-Jun-05			31-Mar-05
Shares and units at end of quarter
Common shares outstanding		31,429,296			27,363,408			27,304,691			21,421,300			21,421,300
Common units outstanding		27,623,357			31,653,541			31,521,431			31,521,431			31,521,431
Total shares and Operating Partnership units		59,052,653			59,016,949			58,826,122			52,942,731			52,942,731
Market Capitalization
Market value of common equity (1)	$	1,663,513		$	1,335,554		$	1,058,870		$	920,145		$	760,787
Stated value of preferred equity		166,750			166,750			166,750			103,500			103,500
Total debt at balance sheet carrying value		813,655			749,067			686,909			765,687			515,701
Total market capitalization including debt	$	2,643,918		$	2,251,371		$	1,912,529		$	1,789,332		$	1,379,988
Total debt/Total market capitalization including debt		30.8	%		33.3	%		35.9	%		42.8	%		37.4	%
Selected Balance Sheet Data
Investments in real estate (before depreciation)		1,289,226			1,258,510			1,173,332			1,099,699			889,803
Total assets		1,574,041			1,529,170			1,454,222			1,368,256			1,099,727
Total liabilities		935,039			880,228			792,538			856,617			579,393
Selected Operating Data
Total operating revenues		60,983			62,072			56,385			49,549			39,511
Total operating expenses		42,852			45,124			39,783			32,900			26,502
Interest expense		11,388			10,988			10,724			9,289			8,121
Net income		5,087			4,602			4,425			4,335			2,739
Net income available to common stockholders		1,642			1,157			1,326			2,136			1,468
Financial Ratios
EBITDA (2)		31,286			30,949			29,007			25,753			21,732
Adjusted EBITDA (3)		36,562			35,731			33,730			31,091			25,159
Cash interest expense (4)		10,244			9,607			9,947			8,086			7,416
Fixed charges (5)		15,113			14,521			15,019			12,266			10,525
Debt service coverage ratio (6)		3.6			3.7			3.4			3.8			3.4
Fixed charge coverage ratio (7)		2.4			2.5			2.2			2.5			2.4
Profitability measures
Net income per common share - basic	$	0.06		$	0.04		$	0.05		$	0.10		$	0.07
Net income per common share - diluted	$	0.06		$	0.04		$	0.05		$	0.10		$	0.07
Diluted Funds From Operations (FFO) per share (8)	$	0.36		$	0.36		$	0.35		$	0.37		$	0.30
Diluted Adjusted Funds From Operations (AFFO) per share (9)	$	0.28		$	0.26		$	0.26		$	0.31		$	0.24
Dividends per share and common unit	$	0.27		$	0.27		$	0.24		$	0.24		$	0.24
Diluted FFO payout ratio (10)		75.0	%		73.8	%		70.1	%		65.8	%		82.0	%
Diluted AFFO payout ratio (11)		96.4	%		101.5	%		93.6	%		79.9	%		100.0	%
Portfolio Statistics
Properties		46			44			38			33			26
Net rentable square feet, excluding redevelopment space		8,135,957			8,051,212			7,864,760			7,791,110			6,303,226
Square feet held for redevelopment (12)		1,196,538			1,146,538			731,663			707,920			107,563
Occupancy at end of quarter (13)		93.3	%		93.9	%		93.2	%		93.0	%		88.9	%

(1) The market value of common equity is based on the closing stock price at the end of the quarter and assumes 100% conversion of the limited partnership units in the operating partnership into shares of our common stock. Excludes shares issuable with respect to stock options that have been granted but have not yet been exercised and also excludes shares issuable upon the redemption of Class C units which have not yet vested.

(2) EBITDA is calculated as earnings before interest, taxes, depreciation and amortization. For a discussion of EBITDA, see page 20. For a reconciliation of net income available to common stockholders to EBITDA, see page 9.

(3) Adjusted EBITDA is EBITDA adjusted for preferred dividends and minority interests. For a discussion of Adjusted EBITDA, see page 20. For a reconciliation of net income available to common stockholders to Adjusted EBITDA, see page 9.

(4) Cash interest expense is interest expense per our statement of operations adjusted for noncash interest expense and includes capitalized interest.

(5) Fixed charges consist of cash interest expense, scheduled debt principal payments and preferred dividends.

(6) Debt service coverage ratio is Adjusted EBITDA divided by cash interest expense.

(7) Fixed charge coverage ratio is Adjusted EBITDA divided by fixed charges.

(8) For a definition and discussion of FFO see page 20. For a reconciliation of net income available to common stockholders to FFO, see page 8.

(9) For a definition and discussion of AFFO, see page 20. For a reconciliation of FFO to AFFO, see page 8.

(10) Diluted FFO payout ratio is dividend declared per common share and unit divided by diluted FFO per share and unit.

(11) Diluted AFFO payout ratio is dividend declared per common share and unit divided by diluted AFFO per share and unit.

(12) Redevelopment space requires significant capital investment in order to develop data center facilities that are ready for use. Most often this is shell space. However, in certain circumstances this may include partially built datacenter space that was not completed by previous ownership and requires a large capital investment in order to build out the space.

(13) Occupancy at end of quarter excludes space held for redevelopment. We completed a review of space held for development in the quarter ended September 30, 2005 and have not restated any occupancy statistics for March 31, 2005 and earlier periods. This will cause occupancy statistics for March 31, 2005 to not be comparable to occupancy statistics for later periods.

5

Consolidated Balance Sheets

(Dollars in thousands, except share data)

	March 31, 2006			December 31, 2005
	(unaudited)
ASSETS
Investments in real estate
Land	$	193,891		$	191,961
Acquired ground lease		2,871			1,477
Buildings and improvements		966,137			941,115
Tenant improvements		126,327			123,957
Investments in real estate		1,289,226			1,258,510
Accumulated depreciation and amortization		(74,200	)		(64,404	)
Net investments in real estate		1,215,026			1,194,106
Cash and cash equivalents		25,179			10,930
Accounts and other receivables, net		27,872			7,587
Deferred rent		28,933			25,094
Acquired above market leases, net		46,448			48,237
Acquired in place lease value and deferred leasing costs, net		194,467			201,141
Deferred financing costs, net		7,044			7,659
Restricted cash		18,045			22,123
Other assets		11,027			12,293
Total Assets	$	1,574,041		$	1,529,170
LIABILITIES AND STOCKHOLDERS’ EQUITY
Notes payable under line of credit	$	204,408		$	181,000
Mortgage loans		609,247			568,067
Accounts payable and other accrued liabilities		43,222			36,869
Accrued dividends and distributions		—			15,639
Acquired below market leases, net		64,971			67,177
Security deposits and prepaid rents		13,191			11,476
Total Liabilities		935,039			880,228
Commitments and contingencies		—			—
Minority interests in consolidated joint ventures		190			206
Minority interests in operating partnership		224,070			262,239
Stockholders’ equity:
Preferred Stock: $0.01 par value, 20,000,000 authorized:
Series A Cumulative Redeemable Preferred Stock, 8.50%, $103,500,000 liquidation preference ($25.00 per share), 4,140,000 issued and outstanding		99,297			99,297
Series B Cumulative Redeemable Preferred Stock, 7.875%, $63,250,000 liquidation preference ($25.00 per share), 2,530,000 issued and outstanding		60,502			60,502
Common Stock; $0.01 par value: 100,000,000 authorized, 31,429,296 and 27,363,408 shares issued and outstanding as of March 31, 2006 and December 31, 2005		314			274
Additional paid-in capital		285,747			252,562
Dividends in excess of earnings		(33,394	)		(27,782	)
Accumulated other comprehensive income, net		2,276			1,644
Total Stockholders’ Equity		414,742			386,497
Total Liabilities and Stockholders’ Equity	$	1,574,041		$	1,529,170

6

Consolidated Quarterly Statements of Operations

(unaudited and in thousands, except share data)

	Three Months Ended
	31-Mar-06			31-Dec-05			30-Sep-05			30-Jun-05			31-Mar-05
Operating Revenues:
Rental	$	49,242		$	48,859		$	45,065		$	37,604		$	32,691
Tenant reimbursements		11,573			11,781			11,040			8,113			6,520
Other		168			1,432			280			3,832			300
Total operating revenues		60,983			62,072			56,385			49,549			39,511
Operating Expenses:
Rental property operating and maintenance		12,196			13,909			12,385			9,718			7,145
Property taxes		7,057			7,035			6,241			4,910			3,681
Insurance		916			905			770			530			599
Depreciation and amortization		18,256			18,804			16,957			14,328			12,143
General and administrative		4,246			4,425			3,324			2,453			2,413
Other		181			46			106			961			521
Total operating expenses		42,852			45,124			39,783			32,900			26,502
Operating income		18,131			16,948			16,602			16,649			13,009
Other Income (Expenses):
Interest and other income		232			875			171			114			132
Interest expense		(11,388	)		(10,988	)		(10,724	)		(9,289	)		(8,121	)
Loss from early extinguishment of debt		(57	)		(896	)		—			—			(125	)
Income before minority interests		6,918			5,939			6,049			7,474			4,895
Minority interests in consolidated joint ventures		15			1			4			4			3
Minority interests in operating partnership		(1,846	)		(1,338	)		(1,628	)		(3,143	)		(2,159	)
Net income		5,087			4,602			4,425			4,335			2,739
Preferred stock dividends		(3,445	)		(3,445	)		(3,099	)		(2,199	)		(1,271	)
Net income available to common stockholders	$	1,642		$	1,157		$	1,326		$	2,136		$	1,468
Net income per common share - basic	$	0.06		$	0.04		$	0.05		$	0.10		$	0.07
Net income per common share - diluted	$	0.06		$	0.04		$	0.05		$	0.10		$	0.07
Weighted-average shares outstanding - basic		27,503,248			27,314,190			25,704,721			21,421,300			21,421,300
Weighted-average shares outstanding - diluted		28,354,597			27,656,496			26,004,324			21,584,913			21,535,485
Weighted-average fully diluted shares and units		59,873,798			59,248,243			57,525,755			53,106,344			53,056,916

7

Funds From Operations (FFO)

(unaudited and in thousands, except share data)

	Three Months Ended
	31-Mar-06		31-Dec-05		30-Sep-05		30-Jun-05		31-Mar-05
Reconciliation of net income available to common stockholders to FFO:
Net income available to common stockholders	$	1,642	$	1,157	$	1,326	$	2,136	$	1,468
Adjustments:
Minority interests in operating partnership		1,846		1,338		1,628		3,143		2,159
Real estate related depreciation and amortization		18,185		18,781		16,929		14,318		12,143
FFO available to common stockholders and unitholders	$	21,673	$	21,276	$	19,883	$	19,597	$	15,770
FFO per share:
Basic	$	0.37	$	0.36	$	0.35	$	0.37	$	0.30
Diluted	$	0.36	$	0.36	$	0.35	$	0.37	$	0.30
Weighted-average shares outstanding - basic		59,022		58,906		57,226		52,943		52,943
Weighted-average shares outstanding - diluted		59,874		59,248		57,526		53,106		53,057

Note:   For a definition and discussion of FFO, see page 20.

Adjusted Funds From Operations (AFFO)

(unaudited and in thousands)

	Three Months Ended
	31-Mar-06			31-Dec-05			30-Sep-05			30-Jun-05			31-Mar-05
Reconciliation of FFO to AFFO:
Funds from operations available to common stockholders and unitholders (FFO)	$	21,673		$	21,276		$	19,883		$	19,597		$	15,770
Adjustments:
Non real estate depreciation		71			23			28			10			—
Amortization of deferred financing costs		795			793			790			707			675
Non cash compensation		431			335			50			44			52
Loss from early extinguishment of debt		57			896			—			—			125
Straight line rents		(3,843	)		(4,172	)		(3,815	)		(2,483	)		(2,553	)
Above and below market rent amortization		(433	)		(632	)		(416	)		(230	)		(439	)
Capitalized leasing payroll		(764	)		(105	)		(549	)		(127	)		—
Recurring capital expenditures and tenant improvements		(904	)		(1,406	)		(240	)		(732	)		(519	)
Capitalized leasing commissions		(265	)		(1,535	)		(757	)		(579	)		(180	)
AFFO available to common stockholders and unitholders	$	16,818		$	15,473		$	14,974		$	16,207		$	12,931

Note:   For a definition and discussion of AFFO, see page 20. For a reconciliation of net income available to common stockholders to FFO, see above table.

8

Reconciliation of Earnings before interest, taxes, depreciation and amortization (EBITDA) (1)

(unaudited and in thousands)

	Three Months Ended
	31-Mar-06		31-Dec-05		30-Sep-05		30-Jun-05		31-Mar-05
Net income available to common stockholders	$	1,642	$	1,157	$	1,326	$	2,136	$	1,468
Interest		11,388		10,988		10,724		9,289		8,121
Depreciation and amortization		18,256		18,804		16,957		14,328		12,143
EBITDA		31,286		30,949		29,007		25,753		21,732
Minority interests		1,831		1,337		1,624		3,139		2,156
Preferred stock dividends		3,445		3,445		3,099		2,199		1,271
Adjusted EBITDA	$	36,562	$	35,731	$	33,730	$	31,091	$	25,159

(1) For the definition and discussion of EBITDA and Adjusted EBITDA, see page 20.

Financial Ratios

(unaudited and in thousands)

	31-Mar-06		31-Dec-05		30-Sep-05		30-Jun-05		31-Mar-05
Total interest expense per income statement	11,388		10,988		10,724		9,289		8,121
Less noncash interest	(1,144	)	(1,381	)	(777	)	(1,203	)	(705	)
Cash interest expense (a)	10,244		9,607		9,947		8,086		7,416
Scheduled debt principal payments and preferred dividends	4,869		4,914		5,072		4,180		3,109
Total fixed charges	15,113		14,521		15,019		12,266		10,525
Debt service coverage ratio based on GAAP interest expense (b)	3.2		3.3		3.1		3.3		3.1
Debt service coverage ratio based on cash interest expense (b)	3.6		3.7		3.4		3.8		3.4
Fixed charge coverage ratio based on GAAP interest expense (c)	2.2		2.2		2.1		2.3		2.2
Fixed charge coverage ratio based on cash interest expense (c)	2.4		2.5		2.2		2.5		2.4
Debt to total market capitalization including debt and preferred equity (d)	30.8	%	33.3	%	35.9	%	42.8	%	37.4	%
Debt plus preferred stock to total market capitalization including debt and preferred equity (e)	37.1	%	40.7	%	44.6	%	48.6	%	44.9	%
Pretax income to interest expense (f)	0.4		1.5		0.4		0.2		0.4

(a) Cash interest expense is interest expense less amortized deferred financing fees and includes interest that we capitalized. We consider cash interest expense to be a useful measure of interest as it excludes non-cash based interest expense.

(b) Adjusted EBITDA divided by interest expense.

(c) Adjusted EBITDA divided by fixed charges. Fixed charges include interest expense as per a above and scheduled debt principal payments and preferred dividends.

(d) Mortgage debt and other loans divided by mortgage debt and other loans plus the liquidation value of preferred stock and the market value of outstanding common stock and operating partnership units, assuming the conversion of operating partnership units into shares of our common stock.

(e) Same as (d), except numerator includes preferred stock.

(f) Calculated as income before minority interest and interest divided by interest expense.

9

Run-rate Net Operating Income (NOI)

For the three months ended March 31, 2006

(in thousands)

Rental revenues	$	49,242
Tenant reimbursements		11,573
Rental property operating and maintenance		(12,196	)
Property taxes		(7,057	)
Insurance		(916	)
NOI	$	40,646
Actual results of properties acquired during the quarter:
Rental revenues		(233	)
Tenant reimbursements		—
Rental property operating and maintenance		48
Property taxes		54
Insurance		4
Prorated full quarter of actual results of properties acquired during the quarter:
Rental revenues		396
Tenant reimbursements		—
Rental property operating and maintenance		(51	)
Property taxes		(58	)
Insurance		(4	)
Run-rate NOI	$	40,802
Reconciliation of net income available to common stockholders to NOI
Net income available to common stockholders	$	1,642
Other revenues		(168	)
Interest expense		11,388
Depreciation and amortization		18,256
General and administrative expenses		4,246
Loss from early extinguishment of debt		57
Other expenses		181
Interest and other income		(232	)
Minority interests in consolidated joint ventures		(15	)
Minority interests in operating partnership		1,846
Preferred stock dividends		3,445
NOI	$	40,646

Note:  For a definition and discussion of NOI and Run-rate NOI, see page 20.

10

Consolidated Debt Analysis

(in thousands)

	Maturity Date		Principal Balance as of March 31, 2006		% of Debt		Interest Rate as of March 31, 2006
Unhedged Floating Rate Debt
Unsecured line of credit	October 31, 2008	(1)	$	204,408	25.1	%	6.43	%
Fixed Rate Mortgage Debt
Secured Term Debt	November 11, 2014		$	152,391	18.7	%	5.65	%
350 East Cermak Road	June 9, 2008	(2)		100,000	12.3	%	7.03	%(4)
200 Paul Avenue 1-4	October 8, 2015			81,000	10.0	%	5.74	%
600 West Seventh Street	March 15, 2016			60,000	7.4	%	5.80	%
2323 Bryan Street	November 6, 2009			57,098	7.0	%	6.04	%
34551 Ardenwood Boulevard 1-4, 2334 Lundy Place, 2440 Marsh Lane	August 9, 2006	(3)		43,000	5.3	%	6.42	%(4)
7979 East Tufts Avenue	January 10, 2009			26,000	3.2	%	5.14	%
6 Braham Street	October 31, 2009			22,179	2.7	%	6.85	%
4055 Valley View Lane	January 1, 2009			21,015	2.6	%	6.20	%(4)
100 Technology Center Drive	April 1, 2009			20,000	2.4	%	6.70	%(4)
1125 Energy Park Drive	March 1, 2032			9,660	1.2	%	7.62	%
375 Riverside Parkway	November 25, 2006	(2)		8,775	1.1	%	6.85	%(4)
731 East Trade Street	July 1, 2020			5,991	0.7	%	8.22	%
Total Fixed Rate Debt			$	607,109	74.6	%
Loan premium—1125 Energy Park Drive and 731 East Trade Street				2,138	0.3	%
Total Consolidated Debt			$	813,655	100.0	%
Weighted average cost of debt (including interest rate swaps)							5.95	%

(1) A one-year extension option is available.

(2) Two one-year extensions are available.

(3) A 13-month extension and a one-year extension are available.

(4) Mortgage loans subject to interest rate swap agreements. The interest rates on the mortgage loans, adjusted for the interest rate swap agreements are as follows:

350 East Cermak Road	6.23	%
34551 Ardenwood Boulevard 1-4, 2334 Lundy Place, 2440 Marsh Lane	4.84	%
4055 Valley View Lane	4.95	%
100 Technology Center Drive	5.52	%
731 East Trade Street	8.22	%

Credit Facility

(in thousands)

	Maximum Available		Available as of March 31, 2006		Drawn as of March 31, 2006
Unsecured Credit Facility	$	350,000	$	76,300	$	204,408

11

Debt Maturities

(in thousands)

Property		2006		2007		2008		2009		2010		Thereafter		Total
Unsecured line of credit	(1)	$	—	$	—	$	204,408	$	—	$	—	$	—	$	204,408
Secured Term Debt	(2)		1,504		2,149		2,276		2,410		2,552		141,500		152,391
350 East Cermak Road	(3)		456		980		98,564		—		—		—		100,000
200 Paul Avenue 1-4			—		231		1,433		1,533		1,624		76,179		81,000
600 West Seventh Street			819		1,149		1,218		1,290		1,367		54,157		60,000
2323 Bryan Street	(4)		519		747		784		55,048		—		—		57,098
34551 Ardenwood Boulevard 1-4, 2334 Lundy Place, 2440 Marsh Lane			43,000		—		—		—		—		—		43,000
7979 East Tufts Avenue			—		—		—		26,000		—		—		26,000
6 Braham Street			1,636		2,084		2,231		16,228		—		—		22,179
4055 Valley View Lane			405		540		540		19,530		—		—		21,015
100 Technology Center Drive			—		—		—		20,000		—		—		20,000
1125 Energy Park Drive			91		114		120		132		143		9,060		9,660
375 Riverside Parkway	(3)		8,775		—		—		—		—		—		8,775
731 East Trade Street			109		174		189		204		235		5,080		5,991
Total		$	57,314	$	8,168	$	311,763	$	142,375	$	5,921	$	285,976	$	811,517

Weighted Average Term to Initial Maturity	5.3 Years
Weighted Average Term to Initial Maturity (assuming exercise of extension options)	6.0 Years

(1) A one-year extension option is available.

(2) This amount represents six mortgage loans secured by our interests in 36 NE 2nd Street, 3300 East Birch Street, 100 & 200 Quannapowitt Parkway, 300 Boulevard East, 4849 Alpha Road, and 11830 Webb Chapel Road. Each of these loans are cross-collateralized by the six properties.

(3) Two one-year extensions are available.

(4) A 13-month extension and a one-year extension are available.

Note: Above amounts assume no exercise of extensions and total excludes $2,138 of Loan Premiums.

12

Properties acquired

For the three months ended March 31, 2006

Property	Metropolitan Area	Date Acquired	Purchase Price (in millions)		Net Rentable Square Footage of Property	Total Square Footage Held for Redevelopment	Percentage of Total Rentable Square Footage of Property Occupied (1)		Major Tenant(s)
4025 Midway Road	Dallas	January 2006	$	16.2	49,947	50,000	0.0	%	N/A
Clonshaugh Industrial Estate (2)	Dublin, Ireland	February 2006	$	6.3	20,000	—	0.0	%	N/A
			$	22.5	69,947	50,000	0.0	%

(1) Excludes space held for redevelopment.

(2) In addition to the 20,000 net rentable square feet presented above, this property also contains 2.6 acres of land available for redevelopment under a lease expiring in 2981. The 20,000 net rentable square feet will be occupied by a leading U.S.-based Internet enterprise in the second quarter of 2006.

13

Occupancy Analysis

As of March 31, 2006

							Occupancy										Net rentable Square Feet as a % of				Gross Annualized Rent as a % of
Property	Acquisition date	Metropolitan Area	Net Rentable Square Feet	Redevelopment Space	Gross Annualized Rent ($000) (1)		As of 3/31/06 (2)		As of 12/31/05 (2)		As of 9/30/05 (2)		As of 6/30/05 (2)		As of 3/31/05		Property Type		Total Portfolio		Property Type		Total Portfolio
Internet Gateways
350 East Cermak Road	May-05	Chicago	870,183	263,208		19,656	92.2	%	92.2	%	92.2	%	82.6	%	N/A	%	31.2	%	10.7		26.9	%	11.4	%
200 Paul Avenue 1-4	Nov-04	San Francisco	490,050	37,630		14,083	94.2		95.8		93.8		93.7		83.4		17.6		6.0		19.4		8.1
2323 Bryan Street	Jan-02	Dallas	457,217	19,890		10,540	82.4		82.0		80.9		83.8		79.9		16.4		5.6		14.5		6.0
600 West Seventh Street	May-04	Los Angeles	430,403	59,319		9,993	97.3		90.8		83.0		82.3		79.7		15.4		5.3		13.7		5.8
6 Braham Street	Jul-02	London, England	63,233	—		4,958	100.0		100.0		100.0		100.0		100.0		2.3		0.8		6.8		2.9
600-780 S. Federal	Sep-05	Chicago	161,547	—		4,420	86.1		84.1		84.1		N/A		N/A		5.8		2.0		6.1		2.6
36 NE 2nd Street	Jan-02	Miami	162,140	—		3,645	81.2		81.2		81.2		81.2		81.2		5.8		2.0		5.0		2.1
1100 Space Park Drive	Nov-04	Silicon Valley	80,148	85,542		3,614	97.4		94.9		94.9		94.9		46.6		2.9		1.0		5.0		2.1
731 East Trade Street	Aug-05	Charlotte	40,879	—		1,066	100.0		100.0		100.0		N/A		N/A		1.5		0.5		1.5		0.6
113 North Myers	Aug-05	Charlotte	18,717	10,501		495	100.0		100.0		100.0		N/A		N/A		0.7		0.2		0.7		0.3
125 North Myers	Aug-05	Charlotte	12,150	13,242		262	85.8		85.8		85.8		N/A		N/A		0.4		0.1		0.4		0.2
			2,786,667	489,332		72,732	91.2		90.2		88.8		86.1		80.9		100.0		34.2		100.0		42.1
Data Centers
833 Chestnut Street	Mar-05	Philadelphia	535,098	119,660		8,417	75.5		91.5		91.3		93.3		91.5		16.0		6.6		14.0		4.9
300 Boulevard East	Nov-02	New York	311,950	—		7,754	99.7		87.4		87.4		87.4		87.4		9.3		3.8		12.8		4.5
2045 & 2055 LaFayette Street	May-04	Silicon Valley	300,000	—		5,940	100.0		100.0		100.0		100.0		100.0		9.0		3.7		9.8		3.4
11830 Webb Chapel Road	Aug-04	Dallas	365,648	—		5,665	93.3		93.3		90.5		90.5		90.6		10.9		4.5		9.4		3.3
150 South First Street	Sep-04	Silicon Valley	183,483	—		5,357	100.0		98.5		98.5		95.7		96.2		5.5		2.3		8.9		3.1
2334 Lundy Place	Dec-02	Silicon Valley	130,752	—		3,932	100.0		100.0		100.0		100.0		100.0		3.9		1.6		6.5		2.3
2401 Walsh Street	Jun-05	Silicon Valley	167,932	—		3,107	100.0		100.0		100.0		100.0		N/A		5.0		2.1		5.1		1.8
200 North Nash Street	Jun-05	Los Angeles	113,606	—		2,110	100.0		100.0		100.0		100.0		N/A		3.4		1.4		3.5		1.2
2403 Walsh Street	Jun-05	Silicon Valley	103,940	—		1,939	100.0		100.0		100.0		100.0		N/A		3.1		1.3		3.2		1.1
Paul van Vlissingenstraat 16	Aug-05	Amsterdam, Netherlands	112,472	—		1,681	62.0		62.0		62.0		N/A		N/A		3.3		1.4		2.8		1.0
4700 Old Ironsides Drive	Jun-05	Silicon Valley	90,139	—		1,668	100.0		100.0		100.0		100.0		N/A		2.7		1.1		2.8		1.0
8534 Concord Center Drive	Jun-05	Denver	82,229	—		1,567	100.0		100.0		100.0		100.0		N/A		2.5		1.0		2.6		0.9
3065 Gold Camp Drive	Oct-04	Sacramento	62,957	—		1,487	100.0		100.0		100.0		100.0		100.0		1.9		0.8		2.5		0.9
3015 Winona Avenue	Dec-04	Los Angeles	82,911	—		1,457	100.0		100.0		100.0		100.0		100.0		2.5		1.0		2.4		0.8
251 Exchange Place	Nov-05	Northern Virginia	70,982	—		1,374	100.0		100.0		N/A		N/A		N/A		2.1		0.9		2.3		0.8
2440 Marsh Lane	Jan-03	Dallas	135,250	—		1,352	100.0		100.0		100.0		100.0		100.0		4.0		1.7		2.2		0.8
1125 Energy Park Drive	Mar-05	Minneapolis/St. Paul	112,827	—		1,340	100.0		100.0		100.0		100.0		100.0		3.4		1.4		2.2		0.8
Chemin de l’Epinglier 2	Nov-05	Geneva, Switzerland	59,190	—		1,275	100.0		100.0		N/A		N/A		N/A		1.8		0.7		2.1		0.7
3300 East Birch Street	Aug-03	Los Angeles	68,807	—		1,265	100.0		100.0		100.0		100.0		100.0		2.1		0.8		2.1		0.7
375 Riverside Parkway	Jun-03	Atlanta	126,300	123,891		1,138	100.0		100.0		100.0		100.0		50.5		3.8		1.6		1.9		0.6
7520 Metro Center Drive	Dec-05	Austin	45,000	—		551	100.0		100.0		N/A		N/A		N/A		1.3		0.5		0.9		0.3
7500 Metro Center Drive	Dec-05	Austin	—	74,962		0.0	0.0		0.0		N/A		N/A		N/A		—		—		—		—
4025 Midway Road	Jan-06	Dallas	49,947	50,000		0.0	0.0		N/A		N/A		N/A		N/A		1.5		0.6		—		—
3 Corporate Place	Dec-05	New York	—	283,124		0.0	0.0		0.0		N/A		N/A		N/A		—		—		—		—
115 Second Avenue	Oct-05	Boston	12,500	55,569		0.0	0.0		0.0		N/A		N/A		N/A		0.4		0.2		—		—
Clonshaugh Industrial Estate	Feb-06	Dublin, Ireland	20,000	—		0.0	0.0		N/A		N/A		N/A		N/A		0.6		0.2		—		—
			3,343,920	707,206		60,376	91.6		94.9		94.4		95.9		89.1		100.0		41.2		100.0		34.9
Technology Manufacturing
34551 Ardenwood Boulevard 1-4	Jan-03	Silicon Valley	307,657	—		7,726	100.0		100.0		100.0		100.0		100.0		50.9		3.8		56.2		4.5
47700 Kato Road & 1055 Page Avenue	Sep-03	Silicon Valley	183,050	—		3,472	100.0		100.0		100.0		100.0		100.0		30.3		2.2		25.3		2.0
2010 East Centennial Circle	May-03	Phoenix	113,405	—		2,549	100.0		100.0		100.0		100.0		100.0		18.8		1.4		18.5		1.5
			604,112	—		13,747	100.0		100.0		100.0		100.0		100.0		100.0		7.4		100.0		8.0
Technology Office
100 & 200 Quannapowitt Parkway	Jun-04	Boston	388,000	—		7,203	100.0		100.0		100.0		100.0		100.0		27.7		4.8		27.7		4.2
7979 East Tufts Avenue	Oct-03	Denver	366,184	—		5,484	97.5		89.0		89.8		91.9		88.4		26.1		4.5		21.2		3.2
4055 Valley View Lane	Sep-03	Dallas	240,153	—		5,117	97.0		94.3		94.3		94.3		94.6		17.1		3.0		19.7		2.9
100 Technology Center Drive	Feb-04	Boston	197,000	—		3,743	100.0		100.0		100.0		100.0		100.0		14.1		2.4		14.4		2.2
4849 Alpha Road	Apr-04	Dallas	125,538	—		2,856	100.0		100.0		100.0		100.0		100.0		9.0		1.5		11.0		1.6
4650 Old Ironsides Drive	Jun-05	Silicon Valley	84,383	—		1,561	100.0		100.0		100.0		100.0		N/A		6.0		1.0		6.0		0.9
			1,401,258	—		25,964	98.8		96.1		96.4		96.9		95.8		100.0		17.2		100.0		15.0
Portfolio Total/Weighted Average			8,135,957	1,196,538	$	172,819	93.3	%	93.9	%	93.2	%	93.0	%	88.9	%	100.0	%	100.0	%	100.0	%	100.0	%

(1) Gross annualized rent represents the monthly contractual rent under existing leases as of March 31, 2006 multiplied by 12. In reporting periods prior to March 31, 2006 our calculation of annualized rent reduced the base rent by base stops. In this filing we have adjusted our definition and are now reporting gross annualized rent which is base rent multiplied by 12 at period end. Annualized rent will not be comparable to gross annualized rent.

(2) The March 31, 2006 occupancies excludes the redevelopment space in the column above. We completed a review of space held for development in the quarter ended September 30, 2005 and have not restated any occupancy statistics for March 31, 2005 and earlier periods. This will cause occupancy statistics for March 31, 2005 to not be comparable to occupancy statistics for later periods.

14

Major Tenants

as of March 31, 2006

	Tenant			Number of Locations	Total Occupied Square Feet (1)	Percentage of Net Rentable Square Feet		Gross Annualized Rent ($000) (2)		Percentage of Gross Annualized Rent		Weighted Average Remaining Lease Term in Months
1	Savvis Communications	(3	)	9	1,119,401	13.8	%	$	23,614	13.7	%	127
2	Qwest Communications International, Inc.			10	661,214	8.1	%		18,863	10.9	%	110
3	Comverse Network Systems			2	367,033	4.5	%		6,904	4.0	%	58
4	Verio, Inc.	(4	)	2	241,370	3.0	%		6,484	3.8	%	78
5	Equinix, Inc.			2	294,990	3.6	%		6,084	3.5	%	110
6	AT&T	(5	)	10	286,524	3.5	%		5,654	3.3	%	84
7	AboveNet, Inc.			6	154,255	1.9	%		5,245	3.0	%	148
8	Amgen	(6	)	1	131,386	1.6	%		5,170	3.0	%	61
9	Leslie & Godwin	(7	)	2	71,626	0.9	%		5,143	3.0	%	40
10	Thomas Jefferson University			1	179,659	2.2	%		3,821	2.2	%	54
11	Stone & Webster, Inc.	(8	)	1	197,000	2.4	%		3,743	2.2	%	84
12	Maxtor Corporation	(9	)	1	183,050	2.2	%		3,472	2.0	%	66
13	XO Communications			6	98,870	1.2	%		3,143	1.8	%	106
14	Siemens Subscriber Networks			1	125,538	1.5	%		2,856	1.7	%	49
15	VSNL			1	59,289	0.7	%		2,803	1.6	%	127
	Total/Weighted Average				4,171,205	51.1	%	$	102,999	59.7	%	98

(1) Occupied square footage is defined as leases that have commenced on or before March 31, 2006.

(2) Gross annualized rent represents the monthly contractual rent under existing leases as of March 31, 2006 multiplied by 12. In reporting periods prior to March 31, 2006 our calculation of annualized rent reduced the base rent by base stops. In this filing we have adjusted our definition and are now reporting gross annualized rent which is base rent multiplied by 12 at period end. Annualized rent will not be comparable to gross annualized rent.

(3) Microsoft subleases 300,000 net rentable square feet (approximately $5.9 million of annualized rent) of this space and has the right to become tenant if the primary lessor defaults.

(4) Verio is a wholly-owned subsidiary of Nippon Telegraph & Telephone.

(5) SBC finalized the acquisition of AT&T in December 2005.

(6) Amgen acquired Abgenix on April 3, 2006

(7) Leslie & Godwin is a United Kingdom subsidiary of AON Corporation.

(8) Stone & Webster is a subsidiary of The Shaw Group.

(9) Seagate Technology signed an agreement to acquire Maxtor in December 2005. This acquisition is expected to close in the third quarter of 2006.

15

Lease Expirations and Lease Distribution

Lease Expirations

As of March 31, 2006

Year	Number of Leases Expiring	Square Footage of Expiring Leases	Percentage of Net Rentable Square Feet		Gross Annualized Rent ($000) (1)		Percentage of Gross Annualized Rent		Gross Annualized Rent Per Occupied Square Foot		Gross Annualized Rent Per Occupied Square Foot at Expiration		Gross Annualized Rent at Expiration ($000)
Available		543,650	6.7	%	$	—	0.0	%
2006	40	148,958	1.8	%		2,898	1.7	%	$	19.46	$	19.60		2,920
2007	33	200,292	2.4	%		3,334	1.9	%		16.65		17.04		3,413
2008	63	243,852	3.0	%		7,698	4.4	%		31.57		32.82		8,004
2009	68	510,675	6.3	%		14,260	8.3	%		27.92		28.80		14,709
2010	75	965,714	11.9	%		24,278	14.0	%		25.14		27.18		26,247
2011	40	955,863	11.7	%		21,413	12.4	%		22.40		25.39		24,273
2012	12	134,747	1.7	%		3,148	1.8	%		23.36		25.96		3,498
2013	22	907,721	11.2	%		18,118	10.5	%		19.96		21.63		19,632
2014	28	554,081	6.8	%		11,200	6.5	%		20.21		23.60		13,079
2015	47	1,352,412	16.6	%		33,444	19.4	%		24.73		30.87		41,754
Thereafter	56	1,617,992	19.9	%		33,028	19.1	%		20.41		27.76		44,917
Portfolio Total / Weighted Average	484	8,135,957	100.0	%	$	172,819	100.0	%	$	22.76	$	26.66	$	202,446

Lease Distribution

As of March 31, 2006

Square Feet Under Lease	Number of Leases	Percentage of All Leases		Total Net Rentable Square Feet	Percentage of Net Rentable Square Feet		Gross Annualized Rent ($000) (1)		Percentage of Gross Annualized Rent
Available				543,650	6.7	%			0.0	%
2,500 or less	259	53.5	%	130,876	1.6	%		11,390	6.6	%
2,501 - 10,000	95	19.6	%	505,924	6.2	%		11,111	6.4	%
10,001 - 20,000	43	8.9	%	631,977	7.8	%		14,159	8.2	%
20,001 - 40,000	33	6.8	%	932,529	11.5	%		17,761	10.3	%
40,001 - 100,000	33	6.8	%	2,160,351	26.5	%		52,422	30.3	%
Greater than 100,000	21	4.4	%	3,230,650	39.7	%		65,976	38.2	%
Portfolio Total	484	100.0	%	8,135,957	100.0	%	$	172,819	100.0	%

(1) Gross annualized rent represents the monthly contractual rent under existing leases as of March 31, 2006 multiplied by 12. In reporting periods prior to March 31, 2006 our calculation of annualized rent reduced the base rent by base stops. In this filing we have adjusted our definition and are now reporting gross annualized rent which is base rent multiplied by 12 at period end. Annualized rent will not be comparable to gross annualized rent.

16

Leasing Activity

As of March 31, 2006

	For the Three Months Ended March 31, 2006		% Leased
Occupied Square Feet as of December 31, 2005	7,556,980			93.9	%
Q1 2006 Acquisitions:
4025 Midway Road	—			0.0	%
Clonshaugh Industrial Estate	—			0.0	%
Occupied Square Feet including Q1 2006 Acquisitions	7,556,980			92.9	%
Expirations	(65,587	)		(0.8	%)
New Leases	60,420			0.7	%
Renewals	—			0.0	%
Expansions	46,753			0.6	%
Remeasurements (1)	(6,259	)		(0.1	%)
Terminations	—			0.0	%
Occupied Square Feet as of March 31, 2006	7,592,307			93.3	%
GAAP Rent Growth (2)
Expiring Rate per Square Foot			$	18.30
New / Renewed Rate per Square Foot			$	40.20
Percentage Increase				119.6	%
Weighted Average Lease Term - New (in months)				61.8
Weighted Average Lease Term - Renewal (in months)				—

(1) Represents remeasuring of building to Building Owners and Managers Association (BOMA) standards.

(2) Represents estimated cash rent growth adjusted for straight-line rents in accordance with GAAP.

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Tenant Improvements and Leasing Commissions

	Three Months Ended										Full Year 2005
	3/31/2006		12/31/2005		9/30/2005		6/30/2005		3/31/2005
Renewals (1)
Number of renewals		—		2		3		1		3		9
Square Feet		—		8,086		8,109		4,517		12,295		33,007
Tenant improvement costs per square foot (2)	$	—	$	1.14	$	9.67	$	20.00	$	3.93	$	6.86
Leasing commission costs per square foot (2)		—		2.61		2.48		6.24		9.11		5.50
Total renewal lease costs per square foot	$	—	$	3.75	$	12.15	$	26.24	$	13.04	$	12.36
New Leases (3)
Number of non-redevelopment leases		46		16		23		18		6		63
Non-Redevelopment square feet		84,488		41,784		8,410		41,967		15,762		107,923
Non-Redevelopment tenant improvement costs per square foot (2)	$	20.64	$	10.37	$	32.86	$	5.10	$	13.01	$	10.46
Non-Redevelopment leasing commission costs per square foot (2)		8.78		26.28		21.38		8.58		4.54		15.84
Number of redevelopment leases		1		—		—		—		—		—
Redevelopment square feet		22,685		—		—		—		—		—
Redevelopment tenant improvement costs per square foot (2)(5)	$	255.62		—		—		—		—		—
Redevelopment leasing commission costs per square foot (2)	$	2.92		—		—		—		—		—
Total new lease costs per square foot	$	77.91	$	36.65	$	54.24	$	13.68	$	17.55	$	26.30
Total (4)
Number of leases		47		18		26		19		9		72
Square Feet		107,173		49,870		16,519		46,484		28,057		140,930
Tenant improvement costs per square foot (2)	$	70.38	$	8.87	$	21.47	$	6.55	$	9.03	$	9.62
Leasing commission costs per square foot (2)		7.54		22.44		12.10		8.35		6.54		13.42
Total costs per square foot	$	77.91	$	31.31	$	33.58	$	14.90	$	15.57	$	23.04

(1) Does not include retained tenants that have relocated to new space or expanded into new space.

(2) Assumes all tenant improvement and leasing commissions are paid in the calendar year in which the lease commences, which may be different than the year in which they are actually paid.

(3) Includes retained tenants that have relocated to new space or expanded into new space within our portfolio.

(4) Recent property acquisitions may make a period over period comparison difficult. For a list of the acquisition dates of our properties see page 14.

(5) Redevelopment Tenant Improvement costs include tenant-specific building improvements for square footage designated as space held for redevelopment.

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Historical Capital Expenditures

	Three Months Ended										Full Year 2005
	3/31/2006		12/31/2005		9/30/2005		6/30/2005		3/31/2005
Recurring capital expenditures (1) (2)	$	652,438	$	1,167,052	$	240,025	$	91,049	$	266,974	$	1,765,100
Non-recurring capital expenditures (2)	$	750,817	$	1,689,757	$	1,766,579	$	1,604,007	$	1,352,219	$	6,412,562
Total net rentable square feet at period end excluding redevelopment space		8,135,957		8,051,212		7,864,760		7,791,110		6,303,226		8,051,212
Recurring capital expenditures per square foot	$	0.08	$	0.14	$	0.03	$	0.01	$	0.04	$	0.22
Non-recurring capital expenditures per square foot	$	0.09	$	0.21	$	0.22	$	0.21	$	0.21	$	0.80

(1) Recurring capital expenditures represents non-incremental building improvements required to maintain current revenues. Recurring capital expenditures do not include acquisition capital that was taken into consideration when underwriting the purchase of a building or which are incurred to bring a building up to “operating standard”.

(2) Recent property acquisitions may make a period over period comparison difficult. For a list of the acquisition dates of our properties see page 14.

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Management Statements on Non-GAAP Supplemental Measures

Funds from Operations:

We calculate Funds from Operations, or FFO, in accordance with the standards established by the National Association of Real Estate Investment Trusts, or NAREIT. FFO represents net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of property, real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and joint ventures. Management uses FFO as a supplemental performance measure because, in excluding real estate related depreciation and amortization and gains and losses from property dispositions, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. We also believe that, as a widely recognized measure of the performance of REITs, FFO will be used by investors as a basis to compare our operating performance with that of other REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our results from operations, the utility of FFO as a measure of our performance is limited. Other REITs may not calculate FFO in accordance with the NAREIT definition and, accordingly, our FFO may not be comparable to such other REITs’ FFO. Accordingly, FFO should be considered only as a supplement to net income as a measure of our performance.

Adjusted Funds From Operations:

We present adjusted funds from operations, or AFFO, as a supplemental operating measure because, when compared year over year, it assesses our ability to fund dividend and distribution requirements from our operating activities. We also believe that, as a widely recognized measure of the operations of REITs, AFFO will be used by investors as a basis to assess our ability to fund dividend payments in comparison to other REITs. We calculate adjusted funds from operations, or AFFO, by adding to or subtracting from FFO (i) non-real estate depreciation, (ii) amortization of deferred financing costs (iii) noncash compensation (iv) loss from early extinguishment of debt (v) straight line rents (vi) fair value of lease revenue amortization (vii) capitalized leasing payroll (viii) recurring tenant improvements and (ix) capitalized leasing commissions. Other equity REITs may not calculate AFFO in a consistent manner. Accordingly, our AFFO may not be comparable to other equity REITs’ AFFO. AFFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our operations.

EBITDA and Adjusted EBITDA:

We believe that earnings before interest, income taxes, depreciation and amortization, or EBITDA and Adjusted EBITDA (as defined below), are useful supplemental performance measures because they allow investors to view our performance without the impact or noncash depreciation and amortization or the cost of debt and with respect to Adjusted EBITDA preferred dividends and minority interests. Adjusted EBITDA is EBITDA excluding minority interests and preferred stock dividends. In addition, we believe EBITDA and adjusted EBITDA are frequently used by securities analysts, investors and other interested parties in the evaluation of REITs. Because EBITDA and adjusted EBITDA are calculated before recurring cash charges including interest expense and income taxes, and are not adjusted for capital expenditures or other recurring cash requirements of our business, their utility as a measure of our performance is limited. Accordingly, EBITDA and Adjusted EBITDA should be considered only as supplements to net income (computed in accordance with GAAP) as a measure of our financial performance. Other equity REITs may calculate EBITDA and Adjusted EBITDA differently than we do; accordingly, our EBITDA and Adjusted EBITDA may not comparable to such other REITs’ EBITDA and Adjusted EBITDA.

NOI and Run-rate NOI:

Net Operating Income (NOI)

NOI represents rental revenue and tenant reimbursement revenue less rental property operating and maintenance, property taxes and insurance expenses (as reflected in statement of operations). NOI is commonly used by stockholders, company management and industry analysts as a measurement of operating performance of the company’s rental portfolio. However, because NOI excludes depreciation and amortization and captures neither the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our results from operations, the utility of NOI as a measure of our performance is limited. Other REITs may not calculate NOI in the same manner we do and, accordingly, our NOI may not be comparable to such other REITs’ NOI. Accordingly, NOI should be considered only as a supplement to net income as a measure of our performance.

Run-rate NOI:

Run-rate NOI represents NOI as defined above adjusted for new acquisitions to show an estimate of NOI as if the property had been owned for the entire quarter. Run-rate NOI may not be indicative of future performance. Actual performance is subject to risks, uncertainties and assumptions. See the discussion of forward-looking statements on page 2.

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