Republic Property Trust (RPB) 8-K Republic Property Trust Reports 2006 First Quarter Results

EXHIBIT 99.2

First Quarter 2006
Supplemental Operating and Financial Data

Unaudited

Forward-Looking Statements

This supplemental information contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act, which are based on our current expectations, estimates and projections about future events and financial trends affecting us. Forward-looking statements can be identified by the use of words such as “may,” “will,” “should,” “expect,” “estimate,” or other comparable terminology. Forward-looking statements are inherently subject to risks and uncertainties, many of which we cannot predict with accuracy and some of which we might not even anticipate. Accordingly, we can give no assurance that these expectations, estimates and projections will be achieved. Future events and actual results may differ materially from those discussed in the forward-looking statements.

Important factors that may affect these expectations, estimates, and projections include, but are not limited to:

§	Our ability to borrow on favorable terms;
§	General economic and business conditions, which will, among other things, affect office property demand and rents, tenant creditworthiness, interest rates and financing availability;
§	Adverse changes in the real estate markets including, among other things, increased competition with other companies;
§	Risks related to real estate acquisition and development, including, among other things, risks that development projects may not be completed on schedule, that tenants may not take occupancy or pay rent or that the development or operating costs may be greater than anticipated;
§	Our ability to satisfy and operate effectively under federal income tax rules relating to real estate investment trusts and partnerships;
§	Governmental actions and initiatives; and
§	Environmental requirements.

We undertake no obligation to update or supplement any forward-looking statements. For further information, please refer to our filings with the Securities and Exchange Commission, particularly “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 filed on March 28, 2006.

Non-GAAP Financial Measures

The Company has used non-GAAP financial measures as defined by SEC Regulation G in this supplemental information package. A reconciliation of each non-GAAP financial measure and the comparable GAAP financial measure can be found later in this package.

Page 1

Republic Property Trust
Index to Supplemental Unaudited Operating and Financial Data
As of and for the Fiscal Quarter Ended March 31, 2006

	Page
Corporate Profile
About the Company		3
History		3
Strategy		4
Summary		4
Board of Trustees		5
Executive Officers		5
Contact Information		6
Financial Information
Key Financial Data		7
Consolidated Balance Sheet		8
Consolidated Statement of Operations		9
Reconciliation of Net Income (Loss) to Funds from Operations (FFO)		10
Reconciliation of Net Operating Income (NOI) to Net Income		10
Non-Cash Adjustments to NOI		11
Reconciliation of Adjusted Earnings Before Interest, Income Taxes, Depreciation and Amortization (EBITDA) to Net Income (Loss)		12
Select Financial Analysis
Quarterly Equity Analysis		13
Quarterly Debt Analysis		13
Portfolio Summary
Summary of Our Properties		14
Historical Leasing Trends		15
Tenant Diversification Analysis		15
Top Ten Office Tenants		16
Office Lease Expiration Analysis by Year		17
Office Lease Distribution Analysis by Tenant Size		18
Capital Expenditures		19
Tenant Improvements and Leasing Commissions		19
Option Properties Summary as of May 1, 2006		20

Page 2

CORPORATE PROFILE

About the Company

We are a fully integrated, self-administered and self-managed real estate investment trust formed to own, operate, acquire and develop primarily Class A office properties, predominantly in the Washington, D.C. metropolitan, or Greater Washington, D.C., market. We also selectively seek fee-based development opportunities for all real estate classes in various geographic areas inside and outside of Greater Washington, D.C. Our Chairman of the Board of Trustees or our senior management team have been involved in the acquisition, management and development of more than 5 million square feet of Class A and institutional-grade office, office-oriented and mixed-use retail properties in Greater Washington, D.C.

As of March 31, 2006, we owned 10 commercial properties consisting of 21 institutional-grade office buildings indirectly through Republic Property Limited Partnership, our Operating Partnership, in which we had an approximate 88.0% economic interest at March 31, 2006. Our properties are characterized by our tenant base, which includes several U.S. government agencies and nationally recognized corporations, the institutional quality and utility of our office parks and buildings and the substantial amount of space occupied on average by our tenants. As of March 31, 2006, approximately 24.8% and 55.1% of our space under lease was leased to U.S. government agencies and nationally recognized corporations, respectively. Our portfolio of 10 commercial properties contains an aggregate of approximately 2 million net rentable square feet, with one Class A trophy office property located in the District of Columbia, approximately one half block from the White House, and nine Class A office properties located in Northern Virginia. In addition, we hold an option to acquire three office properties in the District of Columbia, representing an estimated 1.1 million net rentable square feet upon completion. Two of our option properties are currently under construction and the remaining property is an undeveloped parcel of land.

History

Republic Property Trust was incorporated as a Maryland real estate investment trust on July 19, 2005 and maintains its headquarters at 1280 Maryland Avenue, S.W., Suite 280, Washington, D.C. 20024. We completed our initial public offering of common shares (the “IPO”) on December 20, 2005. The IPO resulted in the sale of 21,021,200 common shares, including 1,021,200 shares sold pursuant to the partial exercise of the underwriters’ over-allotment option, at a price per share of $12.00, generating gross proceeds to the Company of $252.3 million. The aggregate proceeds to the Company, net of underwriters’ discounts, commissions and financial advisory fees but prior to other offering costs, were approximately $234.6 million.

Concurrent with the closing of the IPO, the Company entered into various formation transactions. The Company had no significant operations prior to the consummation of the IPO and the formation transactions on December 20, 2005.

Page 3

Strategy

Our primary business objectives are to own, develop, reposition, stabilize and operate a balanced portfolio of institutional-grade office properties that maximize cash flow available for distribution to our shareholders, and achieve long-term growth in our business in order to maximize shareholder value. At all times, we intend to manage and grow our business in such a manner as to maintain our qualification as a REIT. Our business and growth strategy consists of the following five elements:

Maximize Cash Flow at Our Properties.We seek to maximize cash flows for distribution by efficiently managing our operating expenses and by retaining and increasing the amount of square footage leased by our existing tenants. Further, we intend to manage our portfolio by maintaining a balanced lease schedule in each property so that the portfolio produces stable rental income.

Leverage Our Government Leasing Expertise and Relationships with Nationally Recognized Corporate Tenants to Increase the Performance of Our Portfolio.Our substantial in-house government leasing expertise enables us to attract and retain U.S. government agency and nationally recognized corporate tenants. As of March 31, 2006, our tenants on average occupied more than 35,000 net rentable square feet at our properties, and two of our 10 properties, comprising an aggregate of 140,885 net rentable square feet, are fully leased to single tenants.

Expand our Portfolio by Acquiring the Three Properties Upon Which We Have an Option.We are currently managing the construction of The Portals III and the Republic Square I properties and the development of Republic Square II in the District of Columbia. When completed, these three properties provide us with an opportunity to acquire an estimated 1.1 million net rentable square feet of office space, of which 890,000 square feet is currently under construction. Republic Square I has received its Certificate of Occupancy. At The Portals III, the completion of base building work along with inspection approvals is anticipated to occur in June 2006.

Selectively Pursue Opportunities to Acquire Institutional Quality Office Properties.We generally seek to acquire Greater Washington, D.C. office properties that provide us with the opportunity to increase: (1) cash flow available for distribution, and (2) value through efficiently managing operations, leasing and marketing efforts. We seek to create stable cash flow and, in some cases, to redevelop and reposition an asset to maximize returns and values.

Target Development Opportunities That We Believe Will Produce Attractive Returns.We believe a significant opportunity exists to maximize returns and achieve portfolio growth through the development and redevelopment of aging or market obsolete Class B and C office assets in Greater Washington, D.C., which is an office market with supply constraints. We also will selectively pursue fee-based development services for all real estate asset classes in order to achieve additional revenue and to secure future investment opportunities.

Summary as of March 31, 2006

Corporate Headquarters	Washington, D.C.
Fiscal Year-End	12/31
Total Properties	10
Total Net Rentable Square Feet	1,991,071
Geographic Focus	Greater Washington, D.C.
Common Shares and Units Issued Outstanding	29,603,083
Distribution – Quarterly(1)	$0.206/share
Dividend Yield	7.0%
Total Market Capitalization	$580,275,000

(1) Distribution of $0.206 per share represents the quarterly distribution for the quarter ended March 31, 2006. Distribution was announced on May 1, 2006 and will be paid on May 26, 2006 to shareholders of record on May 12, 2006.

Page 4

Board of Trustees

Chairperson,   Member,   Financial Expert
					Corporate Governance and
	Audit Committee		Compensation Committee		Nominating Committee
John S. Chalsty*
Steven A. Grigg
Mark R. Keller
Richard L. Kramer
Ronald J. Kramer*
Gregory H. Leisch*
Ronald D. Paul*

* signifies an independent member of the Board of Trustees

John S. Chalsty,Trustee

Chairman of Muirfield Capital Management

Steven A. Grigg,President, Chief Development Officer and Vice Chairman of the Board of Trustees

Mark R. Keller,Chief Executive Officer and Trustee

Richard L. Kramer,Chairman of the Board of Trustees

Ronald J. Kramer,Trustee

President and Director of Wynn Resorts, Limited

Gregory H. Leisch,Trustee

Chief Executive of Delta Associates

Ronald D. Paul,Trustee

Vice Chairman of the Board of Directors, President and Treasurer of Eagle Bancorp, Inc.

Chairman of the Board of Directors of EagleBank

President of Ronald D. Paul Companies and of RDP Management, Inc.

Executive Officers

Mark R. Keller,Chief Executive Officer and Trustee
Steven A. Grigg,President, Chief Development Officer and Vice Chairman of the Board of Trustees
Gary R. Siegel,Chief Operating Officer and General Counsel
Michael J. Green,Executive Vice President and Chief Financial Officer
Geoffrey N. Azaroff,Senior Vice President, Construction
Peter J. Cole,Senior Vice President, Development
Frank M. Pieruccini,Senior Vice President and Chief Accounting Officer
Andrew G. Pulliam,Vice President, Acquisitions
Michael C. Jones,Vice President, Leasing and Marketing

Page 5

Contact Information

Republic Property Trust
1280 Maryland Avenue, S.W.
Suite 280
Washington, D.C. 20024
Phone:  (202) 863-0300
Fax:      (202) 863-4049
Web:     www.rpbtrust.com

Stock Listing

The common shares of Republic Property Trust are listed on the New York Stock Exchange under the symbol RPB.

Corporate Counsel

Hogan & Hartson L.L.P.
Columbia Square
555 Thirteenth Street, N.W.
Washington, D.C. 20004

Independent Registered Public Accounting Firm

Ernst & Young LLP
8484 Westpark Drive
McLean, VA 22102

Transfer Agent and Registrar

LaSalle Bank, N.A.
135 South LaSalle Street
Suite 1960
Chicago, IL 60603

Research Coverage

Bear, Stearns & Co. Inc.
Ross L. Smotrich	(212) 272-8046
Jeffrey S. Langbaum	(212) 272-4201
George A. Hoglund, CFA	(212) 272-6272
Friedman, Billings, Ramsey & Co., Inc.
Wilkes Graham	(703) 312-9737
Lehman Brothers Inc.
David Harris	(212) 526-1790
David Toti	(212) 526-2002
Raymond James & Associates, Inc.
Paul D. Puryear	(727) 567-2253
Ken Avalos	(727) 567-2660

Page 6

FINANCIAL INFORMATION

Key Financial Data

	As of 3/31/06			As of 12/31/05
Portfolio Size:
Properties		10			10
Total Net Rentable Square Feet (1)		1,991,071			1,991,056
Sq. Ft. Leased at End of Period		1,724,368			1,756,313
Percent Leased		86.6	%		88.2	%
Shares and Units
Common Shares Issued and Outstanding		26,043,064			25,017,524
Common Units Issued and Outstanding (2)		3,560,019			3,560,019
Combined Shares and Units (2)		29,603,083			28,577,543
Weighted Average Shares and Units — Basic and Diluted (2)		29,545,771			28,577,543
Common Share Price ($’s):
At the End of the Quarter	$	11.77		$	12.00
High during the Quarter	$	12.65		$	12.14
Low during the Quarter	$	11.40		$	12.00
Market Capitalization:
($’s in thousands except ratios)
Market Value of Equity	$	348,428		$	342,931
Total Debt	$	231,847		$	231,894
Total Market Capitalization	$	580,275		$	574,825
Total Debt/Total Market Capitalization		40.0	%		40.3	%
Balance Sheet Data
($’s in thousands)
Total Assets	$	502,358		$	520,397
Gross Book Value of Real Estate Assets	$	470,386		$	468,090
Total Liabilities	$	266,317		$	294,987
Total Minority Interests	$	28,386		$	28,080
Total Stockholders’ Equity	$	207,655		$	197,330

	Quarter Ended		Quarter Ended
	3/31/06		12/31/05
Statement of Operations Data
($’s in thousands)
Total Revenues	$	14,687	$	9,204
Net Income/(Loss)	$	61	($	14,381	)

(1)	Change in total net rentable square feet due to re-measurement of tenant spaces.
(2)	Represents the amount of units not beneficially owned by Republic Property Trust.

Page 7

Republic Property Trust (The Company) and RKB Washington Property Fund I L.P. (The Predecessor)
Condensed Consolidated Balance Sheets
As of March 31, 2006 and December 31, 2005

	The Company			The Company
(Dollars in thousands)	March 31, 2006			December 31, 2005
ASSETS
Investment in real estate:
Land	$	83,600		$	83,600
Commercial office buildings and improvements		386,786			384,490
		470,386			468,090
Less: accumulated depreciation and amortization		(23,387	)		(19,486	)
		446,999			448,604
Cash and cash equivalents		10,382			23,127
Marketable securities		8,350			10,004
Restricted cash		5,920			9,386
Rents and other receivables		6,343			5,301
Prepaid expenses and other assets		24,364			23,975
Total Assets	$	502,358		$	520,397
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Mortgage notes payable	$	231,847		$	231,894
Intangible lease liabilities		20,213			20,886
Taxes payable		2,989			16,604
Accounts payable and accrued liabilities		8,150			15,127
Acquisition payables		—			7,204
Tenant security deposits		2,261			2,267
Advance rents		857			1,005
Total liabilities		266,317			294,987
Minority interest — operating partnership		28,386			28,080
Shareholders’ Equity:
Preferred stock, par value $0.01, 40 million shares authorized, none issued and outstanding in 2006 or 2005		—			—
Common stock, par value $0.01, 200 million shares authorized, 26.0 million and 25.0 million shares issued and outstanding in 2006 and 2005, respectively		260			250
Additional paid-in capital		219,771			208,814
Accumulated deficit		(12,376	)		(11,734	)
Total Shareholders’ Equity		207,655			197,330
Total Liabilities and Shareholders’ Equity	$	502,358		$	520,397

Page 8

Republic Property Trust (The Company) and RKB Washington Property Fund I L.P. (The Predecessor)
Consolidated Statements of Operations
For the Fiscal Quarters Ended March 31, 2006 and 2005

	The Company			The Predecessor
	Fiscal Quarter ended March 31,
(Dollars in thousands except per share amounts)	2006			2005
Revenue:
Rental income	$	13,325		$	8,691
Management and development fees and related reimbursements		1,362			—
Total operating revenue		14,687			8,691
Expenses:
Real estate taxes		1,290			770
Property operating costs		2,510			1,559
Depreciation and amortization		4,699			2,731
Management fees		—			766
General and administrative		3,198			125
Total operating expenses		11,697			5,951
Operating income		2,990			2,740
Other income and expense:
Interest income		314			26
Interest expense		(3,235	)		(4,460	)
Total other income and expense		(2,921	)		(4,434	)
Net income (loss) before minority interest		69			(1,694	)
Minority interest		(8	)		—
Net income (loss)	$	61		$	(1,694	)
Basic and diluted earnings per common share	$	0.00
Weighted average common shares outstanding basic and diluted		25,985,752
Distributions declared per common share	$	0.027

Page 9

Reconciliation of Net Income (Loss) to Funds from Operations (FFO)

	Quarter ended March 31,
(Dollars in thousands)	2006		2005
Net income (loss)	$	61	$	(1,694	)
Minority interest		8		—
Real estate depreciation and amortization		4,471		2,731
Funds From Operations	$	4,540	$	1,037

The Company calculates FFO pursuant to the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as net income or loss determined in accordance with GAAP, excluding extraordinary items as defined under GAAP and gains or losses from sales of previously depreciated operating real estate assets, plus specified non-cash items, such as real estate asset depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. The Company also adjusts for the minority interests in its operating partnership. Accordingly, the FFO disclosed represents the operating partnership’s FFO. FFO is used by management, investors and industry analysts as a supplemental measure of operating performance of equity REITs. The most directly comparable GAAP measure for FFO is GAAP net income (loss). Management believes that FFO is helpful to investors as a supplemental performance measure because it excludes the effect of depreciation, amortization and gains or losses from sales of real estate, all of which are based on historical costs, which implicitly assumes that the value of real estate diminishes predictably over time. Since real estate values historically rise or fall due to market conditions, these non-GAAP measures can facilitate comparisons of operating performance between periods and among other equity REITs. FFO does not represent cash generated from operating activities in accordance with GAAP and is not indicative of cash available to fund cash needs as disclosed in the Company’s Consolidated Statements of Cash Flows. FFO should not be considered as an alternative to net income as an indicator of the Company’s operating performance or as an alternative to cash flows as a measure of liquidity. A reconciliation of FFO to net income (loss) is provided above.

Reconciliation of Net Operating Income (NOI) to Net Income (Loss)

Quarter ended 3/31/2006

	Comparable			Non-Comparable
(Dollars in thousands)	Properties			Property			Total
Revenue:
Rental income, tenant reimbursements and other	$	9,667		$	3,658		$	13,325
Property operating expenses:
Real estate taxes		(880	)		(410	)		(1,290	)
Property operating costs		(1,968	)		(542	)		(2,510	)
Net Operating Income (NOI)	$	6,819		$	2,706			9,525
Management and development fees and related reimbursements								1,362
Depreciation and amortization								(4,699	)
General and administrative								(3,198	)
Operating income								2,990
Total other income and expense								(2,921	)
Net income before minority interest								69
Minority interest								(8	)
Net income							$	61

Page 10

Quarter ended 3/31/2005

	Comparable			Non-Comparable
(Dollars in thousands)	Properties			Property		Total
Revenue:
Rental income, tenant reimbursements and other	$	8,691		$	—	$	8,691
Property operating expenses:
Real estate taxes		(770	)		—		(770	)
Property operating costs		(1,559	)		—		(1,559	)
Net Operating Income (NOI)	$	6,362		$	—		6,362
Depreciation and amortization							(2,731	)
Management fees							(766	)
General and administrative							(125	)
Operating income							2,740
Total other income and expense							(4,434	)
Net loss before minority interest							(1,694	)
Minority interest							—
Net loss						$	(1,694	)

We define Comparable Properties as those which we have owned since January 1, 2005. Properties acquired since that date are Non-Comparable. Specifically, Comparable Properties included above are: Campus at Dulles Technology Center, Corporate Oaks, Corporate Point IV, Lakeside I and II, Pender Business Park, Presidents Park I, II, and III, and WillowWood III and IV. The Non-Comparable Property is the Republic Building, which we acquired on December 20, 2005.

NOI is defined as rental income, tenant reimbursements and other property revenue less real estate taxes and property operating costs. Property operating costs include bad debt expenses but exclude interest expense, management fees and depreciation and amortization. NOI is used by management in assessing the operating results of its properties and the value of its real estate assets. We believe NOI allows a better understanding of the core operating performance of a REIT’s real estate portfolio before considering depreciation and amortization, financing costs and general and administrative expenses. NOI should not be considered an alternative to net income (determined in accordance with GAAP), as an indication of our financial performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP), or as a measure of our liquidity. NOI measures presented by us may not be comparable to other similarly titled measures of other companies. We consider net income to be the most comparable GAAP measure relative to NOI. A reconciliation between net income (loss) and NOI is provided above.

Non-Cash Adjustments to NOI

NOI reflects the following impacts of FAS 13 (straight-line rent adjustments) and FAS 141 (market rent adjustments).

Quarter ended March 31, 2006

	Comparable			Non-Comparable
(Dollars in thousands)	Properties			Property		Total
Straight-line rent adjustments — increase/(decrease) to NOI	$	225		$	10	$	235
Market rent adjustments — increase/(decrease) to NOI	$	(154	)	$	500	$	346

Page 11

Quarter ended March 31, 2005

	Comparable			Non-Comparable
(Dollars in thousands)	Properties			Property		Total
Straight-line rent adjustments — increase/(decrease) to NOI	$	457		$	—	$	457
Market rent adjustments — increase/(decrease) to NOI	$	(157	)	$	—	$	(157	)

Reconciliation of Adjusted Earnings Before Interest, Income Taxes, Depreciation and Amortization (EBITDA) to Net Income (Loss)

	Three months ended March 31,
	2006		2005
(Dollars in thousands)
Net income (loss)	$	61	$	(1,694	)
Minority interest		8		—
Interest expense		3,235		4,460
Income tax expense		—		—
Depreciation and amortization		4,699		2,731
Adjusted EBITDA	$	8,003	$	5,497

We present EBITDA, as net income (loss) computed in accordance with GAAP adjusted to exclude interest expenses, income tax expenses and benefits, and depreciation and amortization expenses. We further adjust EBITDA to include minority interests, which relates to the interest in the Operating Partnership not owned by us (“Adjusted EBITDA”). We conduct all of our operations through our Operating Partnership. We believe that Adjusted EBITDA provides investors with an additional indicator of our Operating Partnership’s operating strength and performance. Adjusted EBITDA excludes the impact of costs and expenses that management believes are not characteristic of our underlying business operations. Adjusted EBITDA should not be considered an alternative to net income (determined in accordance with GAAP), as an indication of our financial performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP), or as a measure of our liquidity. Further, our calculation of Adjusted EBITDA may not be comparable to similarly titled measures of other REITs. The most directly comparable GAAP measure for Adjusted EBITDA is net income (loss). A reconciliation of Adjusted EBITDA to net income (loss) is provided above.

Page 12

SELECT FINANCIAL ANALYSIS

Equity Analysis

	2006			2005
	As of March 31			As of December 31
Common Equity
Common Shares		26,043,064			25,017,524
Common Units (1)		3,560,019			3,560,019
Total		29,603,083			28,577,543
End of Quarter Common Share Price	$	11.77		$	12.00
Market Value of Common Shares/Units (Dollars in thousands)	$	348,428		$	342,931
Common Shares Trading Volume
Average Daily Volume (Shares)		154,731			639,973
Average Daily Volume (Dollars in thousands)	$	1,854		$	7,680
As a Percentage of Weighted Average Common Shares		0.5	%		2.6	%
Common Share Price Range
Quarterly High	$	12.65		$	12.14
Quarterly Low	$	11.40		$	12.00
Quarterly Average	$	11.91		$	12.00
Weighted Average Shares:
Common Shares Outstanding		25,985,752			25,017,524
Common Units		3,560,019			3,560,019
Total Weighted Average Shares and Units		29,545,771			28,577,543
Capitalization (Dollars in thousands)
Market Value of Common Shares/Units	$	348,428		$	342,931
Total Equity Market Capitalization	$	348,428		$	342,931
Total Debt	$	231,847		$	231,894
Total Market Capitalization	$	580,275		$	574,825
Debt to Total Market Capitalization		40.0	%		40.3	%
Debt to Total Assets		46.2	%		44.6	%
Debt to Undepreciated Book Value of Real Estate Assets		49.3	%		49.5	%

(1) Represents the units not beneficially owned by Republic Property Trust.

Debt Analysis

The following table sets forth certain information with respect to the indebtedness outstanding as of March 31, 2006.

	Interest			Principal		Annual Debt		Maturity		Balance at
(Dollars in thousands)	Rate (1)			Amount		Service (2)		Date (3)		Maturity
Corporate Pointe IV:		7.3	%	$	9,441	$	815		5/2011	$	8,740
Pender Business Park:		5.8	%		20,558		1,514		10/2009		19,386
Lakeside I and II:		4.6	%		19,500		897		6/2008		19,500
WillowWood III and IV:		4.5	%		40,000		1,800		6/2008		40,000
Corporate Oaks		6.0	%		6,576		529		1/2014		5,211
The Republic Building:		5.7	%		102,772		5,447		7/2012		105,770
Presidents Park I, II and III (4)		5.8	%		33,000		1,924		6/2006		33,000
Total Debt				$	231,847	$	12,926			$	231,607

(1)	The weighted average stated interest rate of our debt is 5.5%.
(2)	Annual debt service includes payments made for principal and interest.
(3)	Maturity date represents the date on which the principal amount is due and payable, assuming no payment has been made in advance of the maturity date.
(4)	Loan bore interest at the rate of LIBOR plus 1%. LIBOR at March 31, 2006 was 4.8%. We repaid this loan on May 1, 2006, using funds from our line of credit.

Page 13

PORTFOLIO SUMMARY

Summary of Our Properties as of March 31, 2006

We own 10 Class A office properties (comprising 21 buildings), one of which is located in the District of Columbia and nine of which are located in Northern Virginia. The following table provides summary information regarding our properties as of March 31, 2006:

		Number of												Annualized Rent
		Buildings at		Year Built			Net Rentable		Percent			Annualized		Per Leased
Office Properties (1)	Location	Property		(Renovated)			Square Feet (2)		Leased (3)			Rent (4)		Square Foot (5)
													(Dollars in thousands)
Campus at Dulles Technology Center	Herndon, Virginia		7		1998, 1999			349,854		86.9	%	$	7,216	$	23.73
Corporate Oaks	Herndon, Virginia		1		1986 (1999	)		60,767		100.0	%		1,243		20.46
Corporate Pointe IV	Chantilly, Virginia		1		1998			80,118		100.0	%		1,399		17.47
Lakeside I and II	Chantilly, Virginia		2		1989, 1999			173,218		85.7	%		3,048		20.54
Pender Business Park	Fairfax, Virginia		4		2000			170,940		100.0	%		4,184		24.47
Presidents Park I	Herndon, Virginia		1		1999			200,531		83.4	%		4,358		26.06
Presidents Park II	Herndon, Virginia		1		2000			200,511		32.5	%		1,791		27.49
Presidents Park III	Herndon, Virginia		1		2001			200,135		92.7	%		4,034		21.74
The Republic Building	Washington, D.C.		1		1992			276,018		100.0	%		11,440		41.44
WillowWood III and IV (6)	Fairfax, Virginia		2		1998			278,979		95.4	%		6,688		26.12
Total/Weighted Average			21		1998			1,991,071		86.6	%	$	45,401	$	28.60

(1)	Each property is 100% indirectly owned in fee by our Operating Partnership.
(2)	Net rentable square feet includes retail and storage space, but excludes on-site parking and rooftop leases.
(3)	Includes leases or lease amendments that have been executed, regardless of whether or not occupancy has commenced.
(4)	Annualized rent represents base rent, as determined from the date of the most recent amendment to a lease agreement, or from the original date of an agreement if not amended, for all leases in place in which tenants are in occupancy at March 31, 2006 as follows: total base rent to be received during the entire term of each lease (assuming no exercise of early termination options), divided by the total number of months in the term for such leases, multiplied by 12. Base rent includes historical contractual increases and excludes percentage rents, additional rent payable by tenants (such as common area maintenance and real estate taxes), contingent rent escalations and parking rents.
(5)	Annualized rent per leased square foot represents annualized rent as computed above, divided by occupied net rentable square feet as of the same date.
(6)	Excludes any annualized rent associated with a lease amendment to Zeta Associates for 10,039 net rentable square feet because the revenue will not be recognized until June 2006.

Page 14

Historical Leasing Trends

The following table provides summary information regarding historical leasing trends at our properties:

	Percent			Percent			Percent			Percent			Percent
	Leased (2)			Leased (2)			Leased (2)			Leased (2)			Leased (2)
Office Properties (1)	at 3/31/06			at 12/31/05			at 9/30/05			at 6/30/2005			at 3/31/2005
Campus at Dulles Technology Center		86.9	%		96.1	%		98.6	%		98.6	%		98.6	%
Corporate Oaks		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Corporate Pointe IV		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Lakeside I & II		85.7	%		85.7	%		85.7	%		85.7	%		88.7	%
Pender Business Park		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Presidents Park I		83.4	%		83.4	%		83.4	%		76.2	%		17.9	%
Presidents Park II		32.5	%		32.5	%		32.5	%		22.9	%		22.9	%
Presidents Park III		92.7	%		92.7	%		92.7	%		92.7	%		92.7	%
Republic Building(3)		100.0	%		100.0	%		N/A			N/A			N/A
WillowWood III & IV		95.4	%		95.4	%		95.6	%		95.6	%		95.6	%
Portfolio Weighted Average		86.6	%		88.2	%		86.9	%		84.9	%		78.4	%

(1)	Each property is 100% indirectly owned in fee by our Operating Partnership.
(2)	Includes leases or lease amendments that have been executed, regardless of whether or not occupancy has commenced.
(3)	Acquired as of December 20, 2005.

Tenant Diversification Analysis as of March 31, 2006

Our tenants include nationally recognized corporate firms and governmental agencies. The following chart sets forth information as of March 31, 2006 regarding our tenants’ industry sectors according to the North American Industry Classification System (NAICS). Percentage is based on total square feet leased:

Page 15

Top Ten Office Tenants as of March 31, 2006

As of March 31, 2006, our portfolio was leased to approximately 46 tenants under 48 separate leases, many of which are nationally recognized corporate firms or governmental agencies. The following table sets forth information regarding the 10 largest tenants in our portfolio, based on annualized rent as of March 31, 2006(1):

(Dollars in thousands)

					Percentage of
			Net		Total Portfolio					Percentage of
		Lease	Rentable SF		– Net Rentable			Annualized		Total Portfolio
		Expiration	Under		SF Under			Rent		– Annualized
Tenant/Industry	Property	(1)	Lease		Lease (2)			(3)		Rent (4)
GSA — Dept. of Justice(Government)	Republic Building	12/20/2014		235,746		11.8	%	$	9,687		21.3	%
BAE Systems/DigitalNet(Professional Services)	Presidents Park III	10/31/2011		142,646		7.2	%		3,087		6.8	%
Cisco Systems, Inc.(Professional Services)	Campus at Dulles Technology Center	3/31/2016		108,858		5.5	%		2,856		6.3	%
Network Solutions (Information)	Presidents Park I	12/31/2013		104,860		5.3	%		2,849		6.3	%
Zeta Associates (5)(Professional Services)	WillowWood	8/15/2009		105,383		5.3	%		2,465		5.4	%
GSA — FTS(Government)	WillowWood	5/3/2009		92,992		4.7	%		2,408		5.3	%
Datatrac (6)(Information)	Lakeside	12/31/2006 8/31/2008		47,670 40,600		2.4 2.0	% %		1,125 749		2.5 1.6	% %
webMethods(Professional Services)	Pender Business Park	12/31/2007		61,450		3.1	%		1,614		3.6	%
CACI International, Inc.(Professional Services)	Corporate Pointe IV	11/30/2009		80,118		4.0	%		1,399		3.1	%
GSA — Dept. of Interior(Government)	Corporate Oaks	4/30/2010		60,767		3.1	%		1,243		2.7	%
Totals:				1,081,090		54.4	%	$	29,482		64.9	%

(1)	Assumes the exercise of no renewal options and the exercise of no termination options.
(2)	Represents net rentable square feet under lease for a tenant as a percentage of total net rentable square feet of our properties including lease or lease amendments that have been executed, regardless of whether or not occupancy has commenced.
(3)	Annualized rent represents base rent, as determined from the date of the most recent amendment to a lease agreement, or from the original date of an agreement if not amended, for all leases in place in which tenants are in occupancy at March 31, 2006 as follows: total base rent to be received during the entire term of each lease (assuming no exercise of early termination options), divided by the total number of months in the term for such leases, multiplied by 12. Base rent includes historical contractual increases and excludes percentage rents, additional rent payable by tenants (such as common area maintenance and real estate taxes), contingent rent escalations and parking rents.
(4)	Represents annualized rent for a tenant as a percentage of total annualized rent for our properties.
(5)	Excludes any annualized rent associated with a lease amendment to Zeta Associates for 10,039 net rentable square feet because the revenue will not be recognized until June 2006.
(6)	We have two leases with Datatrac at our Lakeside property.

Page 16

Office Lease Expiration Analysis by Year as of March 31, 2006

The following table sets forth a summary schedule of the lease expirations for leases in place as of March 31, 2006. Unless otherwise stated, the information in the table assumes that tenants exercise neither renewal options nor termination rights:

(Dollars in thousands except per square foot amounts)

			Net		Percentage of							Percentage
			Rentable		Total							of Total					Expiring
	Number		SF of		Portfolio –							Portfolio –					Base
Year of Lease	of Leases		Expiring		Net Rentable			Annualized		Annualized		Annualized			Expiring Base		Rent/SF
Expiration	Expiring		Leases (1)		SF (2)			Rent (3)		Rent/ SF (3)		Rent (4)			Rent (5)		(6)
Available (7)				266,703		13.4	%
2006		9		112,686		5.7	%	$	3,321	$	29.47		7.3	%	$	3,579	$	31.76
2007		4		129,381		6.5	%		3,183		24.60		7.0	%		3,390		26.20
2008		5		153,557		7.7	%		3,084		20.08		6.8	%		3,409		22.20
2009 (8)		8		325,192		16.3	%		7,502		23.80		16.5	%		8,089		25.67
2010		7		126,465		6.4	%		3,029		23.95		6.7	%		3,317		26.23
2011		5		219,126		11.0	%		4,871		22.23		10.7	%		5,439		24.82
2012		—		—		—	%		—		—		—	%		—		—
2013		4		199,939		10.0	%		5,316		26.59		11.7	%		5,826		29.14
2014		3		282,153		14.2	%		10,835		38.40		23.9	%		10,414		36.91
2015		2		67,011		3.4	%		1,404		20.95		3.1	%		1,661		24.79
2016		1		108,858		5.4	%		2,856		26.24		6.3	%		3,246		29.81
Total:		48		1,991,071		100.0	%	$	45,401	$	28.60		100.0	%	$	48,370	$	30.34

(1)	Includes retail and storage space, but excludes on-site parking and rooftop leases.
(2)	Represents net rentable square feet in a particular year as a percentage of total net rentable square feet of our properties.
(3)	Annualized rent represents base rent, as determined from the date of the most recent amendment to a lease agreement, or from the original date of an agreement if not amended, for all leases in place in which tenants are in occupancy at March 31, 2006 as follows: total base rent to be received during the entire term of each lease (assuming no exercise of early termination options), divided by the total number of months in the term for such leases, multiplied by 12. Base rent includes historical contractual increases and excludes percentage rents, additional rent payable by tenants (such as common area maintenance and real estate taxes), contingent rent escalations and parking rents.
(4)	Represents annualized rent for a tenant as a percentage of total annualized rent for our properties.
(5)	Expiring Base Rent represents the last 12 months of base rent payable immediately prior to the expiration of the lease.
(6)	Expiring Base Rent/Square Foot represents expiring base rent divided by net rentable square feet under lease.
(7)	Approximately 168,667 square feet of the total net rentable square feet available as of March 31, 2006 relates to space available at our Presidents Park I and II properties.
(8)	Excludes any annualized rent associated with a lease amendment to Zeta Associates for 10,039 net rentable square feet because the revenue will not be recognized until June 2006.

Page 17

Office Lease Distribution Analysis by Tenant Size as of March 31, 2006

The following table sets forth information relating to the distribution of leases at our properties, based on net rentable square feet under lease as of March 31, 2006:

						Net		Percentage of							Percentage of
						Rentable		Total Portfolio –			Annualized				Total Portfolio –
	Number		Percentage			SF Under		Net Rentable SF			Rent (3)		Annualized		Annualized Rent
SF Under Lease	of Leases		of all Leases			Lease (1)		Under Lease (2)			($ in thousands)		Rent/ SF		(4)
2,500 or less		6		12.5	%		4,655		0.3	%	$	138	$	29.65		0.3	%
2,501 – 10,000		7		14.6	%		28,394		1.4	%		670		26.39		1.5	%
10,001 – 20,000		10		20.8	%		141,003		7.1	%		3,727		26.43		8.2	%
20,001 – 40,000		9		18.8	%		250,979		12.6	%		6,759		26.93		14.9	%
40,001 – 100,000		11		22.9	%		601,844		30.2	%		13,163		22.59		29.0	%
Greater than 100,000 (5)		5		10.4	%		697,493		35.0	%		20,944		35.95		46.1	%
Total:		48		100.0	%		1,724,368		86.6	%	$	45,401	$	28.60		100.0	%

(1)	Net rentable square feet under lease includes retail and storage space, but excludes on-site parking and rooftop leases.
(2)	Represents net rentable square feet under lease for a tenant as a percentage of total net rentable square feet of our properties including lease or lease amendments that have been executed, regardless of whether or not occupancy has commenced.
(3)	Annualized rent represents base rent, as determined from the date of the most recent amendment to a lease agreement, or from the original date of an agreement if not amended, for all leases in place in which tenants are in occupancy at March 31, 2005 as follows: total base rent to be received during the entire term of each lease (assuming no exercise of early termination options), divided by the total number of months in the term for such leases, multiplied by 12. Base rent includes historical contractual increases and excludes percentage rents, additional rent payable by tenants (such as common area maintenance and real estate taxes), contingent rent escalations and parking rents.
(4)	Represents annualized rent for a tenant as a percentage of total annualized rent for our properties.
(5)	Zeta Associates occupies a total of 105,383 net rentable square feet, which includes 10,039 net rentable square feet expansion associated with a lease amendment. The annualized rent of Zeta Associates excludes the expansion space of 10,039 net rentable square feet because the revenue will not be recognized until June 2006.

Page 18

Capital Expenditures

The following table sets forth certain information regarding historical capital expenditures at our properties for the periods set forth below:

     (Dollars in thousands except per square foot amounts)

	Quarter Ended		Year Ended		Year Ended
	March 31, 2006		December 31, 2005		December 31, 2004
Capital expenditures	$	190	$	285	$	73
Average square feet (1)		1,991,071		1,724,153		1,056,844
Capital expenditures per square foot	$	0.10	$	0.17	$	0.07

(1) For any given period, represents the average square footage at our properties subject to capital expenditures.

Tenant Improvements and Leasing Commissions

     The following table sets forth certain information regarding tenant improvement (including tenant allowances) and leasing commission costs for tenants at our properties for the periods set forth below:

	Quarter Ended		Year Ended		Year Ended
	March 31, 2006		December 31, 2005		December 31, 2004
Renewals (1)
Number of leases		1		5		4
Square Feet		3,000		428,162		106,457
Tenant improvement costs per square foot (2)(3)(6)	$	—	$	18.19	$	3.65
Leasing commission costs per square foot (2)(3)	$	—	$	3.66	$	3.75
Total tenant improvement and leasing commission costs per square foot (2)(3)(6)	$	—	$	21.85	$	7.40
New leases – First Generation (4)
Number of leases		1		—		—
Square Feet		19,215		—		—
Tenant improvement costs per square foot (2)(3)	$	40.00	$	—	$	—
Leasing commission costs per square foot (2)(3)	$	10.87	$	—	$	—
Total tenant improvement and leasing commission costs per square foot (2)(3)	$	50.87	$	—	$	—
New leases – Second Generation (5)
Number of leases		2		6		5
Square Feet		114,899		54,189		13,722
Tenant improvement costs per square foot (2)(3)	$	30.18	$	22.38	$	18.82
Leasing commission costs per square foot (2)(3)	$	7.50	$	10.85	$	2.89
Total tenant improvement and leasing commission costs per square foot (2)(3)	$	37.68	$	33.23	$	21.71
Total
Number of leases		4		11		9
Square Feet		137,114		482,351		120.179
Tenant improvement costs per square foot (2)(3)(6)	$	33.10	$	18.66	$	5.39
Leasing commission costs per square foot (2)(3)	$	11.89	$	4.47	$	3.65
Total tenant improvement and leasing commission costs per square foot (2)(3)(6)	$	44.99	$	23.13	$	9.04

(1)	Excludes 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 were actually paid.
(3)	Tenant improvements and leasing commission costs exclude any commission paid to related parties.
(4)	First generation space is shell space that has not been improved. Includes retained tenants that have relocated or expanded into new shell space within our portfolio.
(5)	Second generation space is space that has been previously improved and/or occupied. Includes retained tenants that have relocated or expanded into additional space within our portfolio.
(6)	Department of Justice tenant improvement costs are included in 2005 (the year of acquisition), although the lease commenced in 2004.

Page 19

Option Properties Summary as of May 1, 2006

		Estimated Net
		Rentable Square Feet
Option Properties	Submarket	Upon Completion		Certificate of Occupancy
Republic Square I	Capitol Hill, Washington, D.C.		385,000	April 2006
The Portals III	Southwest, Washington, D.C.		505,000	June 2006 est.
Republic Square II	Capitol Hill, Washington, D.C.		202,000		N/A
Total Square Feet			1,092,000

Republic Square I

Building inspections for Republic Square I are complete and all approvals are in hand. As of May 1, 2006, approximately 92,625 square feet, or 24% of the net rentable space, at Republic Square I has been pre-leased to three tenants, which include National Cable & Telecommunications Association (“NCTA”), General Motors (“GM”) and General Services Administration (U.S. Government — Department of Justice, “GSA”). The weighted average starting rent for NCTA and GM is $32.87 per square foot on a triple net basis. The starting rent for the GSA is $46.44 on a full service basis. The weighted average tenant improvement allowance for all three leases is $47.47 per square foot. These leases have a weighted average term of approximately 10.5 years. The garage is under lease for 10 years to Colonial Parking, Inc. at a starting rent of 70% of gross parking receipts until the building surpasses 70% occupancy, at which time the minimum rent payable will be $1 million annually. The parking garage has been opened for business and GM has occupied their space.

The Portals III

The base building of The Portals III is nearing completion and is anticipated to deliver in June 2006. There have not been any leases executed at The Portals III. Touring activity remains strong.

Republic Square II

We expect Republic Square II to commence construction upon Republic Square I reaching stabilized occupancy or upon significant pre-leasing activity.

Page 20