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

Exhibit 99.2

Third 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. These forward-looking statements are not guarantees of future performance. Forward-looking statements, which can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “estimate,” “strategy,” “plan,” “would be,” “should,” “projected,” or “continue” or the negative thereof or other variations thereon or comparable terminology, are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those risks, trends and uncertainties are:

• Our ability to borrow on favorable terms;

• General economic and business conditions, which we believe 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 the 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;

• Risks associated with the leasing and operation of office properties, including risks that we may not be able to lease available space at favorable rental rates or in anticipated time frames, that tenants will not take occupancy or pay rent in accordance with their leases, or that operating costs may be greater than anticipated;

• Our ability to pay our distributions at their current rate;

• Governmental actions and initiatives;

• Environmental requirements;

• The impact of potential management changes;

• Our ability to acquire the option properties; and

• Those risks described in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2005, our Quarterly Report on Form 10-Q for the periods ended March 31, 2006, June 30, 2006, and September 30, 2006 and elsewhere in this report.

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, Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2006 filed on May 12, 2006, Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2006 filed on August 10, 2006 and the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2006 to be filed no later than November 14, 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 September 30, 2006

	Page
Corporate Profile
About the Company		3
History		3
Summary		3
Contact Information		4
Financial Information
Key Financial Data		5
Consolidated Balance Sheet		6
Consolidated Statement of Operations		7
Reconciliation of Funds from Operations (FFO) to Net Loss		8
Reconciliation of Net Operating Income (NOI) to Net Loss		8
Non-Cash Adjustments to NOI		10
Reconciliation of Adjusted Earnings Before Interest, Income Taxes, Depreciation and Amortization (Adjusted EBITDA) to Net Loss		11
Select Financial Analysis
Quarterly Equity Analysis		12
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		18
Tenant Improvements and Leasing Commissions		19
Option Properties Summary as of November 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.

As of September 30, 2006, we owned 13 commercial properties consisting of 24 institutional-grade office buildings indirectly through Republic Property Limited Partnership, our Operating Partnership, in which we had an approximate 88% economic interest at September 30, 2006. Our properties are characterized by (i) our tenant base, which includes several U.S. government agencies and nationally recognized corporations, (ii) the institutional quality and utility of our office parks and buildings and (iii) the substantial amount of space occupied on average by our tenants. As of September 30, 2006, approximately 21.1% and 47.2% of portfolio net rentable square feet was leased to U.S. government agencies and nationally recognized corporations, respectively. Our portfolio of 13 commercial properties contains an aggregate of approximately 2.4 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 twelve Class A office properties located in Northern Virginia. In addition, we hold options to acquire three office properties in the District of Columbia, representing, in the aggregate, an estimated 1.1 million net rentable square feet upon completion. Republic Square I is approximately 37% leased. The Portals III has received its Certificate of Substantial Completion and the garage has been leased. The remaining property, Republic Square II, 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 (the “IPO”) of common shares of beneficial interest (“common shares”) on December 20, 2005. The IPO resulted in the sale of 21,021,200 common shares, including 1,021,200 common 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.

Summary as of September 30, 2006

Corporate Headquarters	Washington, D.C.
Fiscal Year-End	12/31
Total Office Buildings	24
Total Net Rentable Square Feet	2,417,096
Geographic Focus	Greater Washington, D.C.
Common Shares and Units Issued and Outstanding	29,617,547
Distribution – Quarterly (1)	$0.206/share
Dividend Yield (2)	7.5%
Total Market Capitalization (3)	$671,561,000

(1)	Distribution of $0.206 per share represents the quarterly distribution for the quarter ended September 30, 2006. Distribution was announced on October 27, 2006 and will be paid on November 15, 2006 to shareholders of record on October 31, 2006.
(2)	The dividend yield is calculated by dividing four times the quarterly dividend by the price of our common shares. The price used was $11.02, the closing price on September 29, 2006.
(3)	Total Market Capitalization is the sum of the market value of our common shares and units as of September 30, 2006 and our total debt.

Page 3

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.

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 (1)

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

(1) Republic Property Trust is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding Republic Property Trust’s performance made by these analysts are theirs alone and do not represent opinions, forecasts or predictions of Republic Property Trust or its management. Republic Property Trust does not by its reference above or distribution imply its endorsement of or concurrence with such information, conclusions or recommendations.

Page 4

FINANCIAL INFORMATION

Key Financial Data

	As of			As of			As of			As of
	9/30/06			6/30/06			3/31/06			12/31/05
Portfolio Size:
Properties		13			12			10			10
Total Net Rentable Square Feet		2,417,096			2,235,942			1,991,071			1,991,056
Sq. Ft. Leased at End of Period		2,118,221			1,985,515			1,724,368			1,756,313
Percent Leased		87.6	%		88.8	%		86.6	%		88.2	%
Shares and Units
Common Shares Issued and Outstanding		26,057,528			26,051,937			26,043,064			25,017,524
Common Units Issued and Outstanding (1)		3,560,019			3,560,019			3,560,019			3,560,019
Combined Shares and Units		29,617,547			29,611,956			29,603,083			28,577,543
Quarterly Weighted Average Shares and Units – Basic and Diluted		29,608,224			29,604,304			29,545,771			28,577,543
Common Share Daily Closing Price ($’s):
At the End of the Quarter	$	11.02		$	9.88		$	11.77		$	12.00
High during the Quarter	$	11.34		$	12.25		$	12.65		$	12.14
Low during the Quarter	$	9.66		$	9.88		$	11.40		$	12.00
Market Capitalization:
($’s in thousands except ratios)
Market Value of Equity	$	326,385		$	292,566		$	348,428		$	342,931
Total Debt	$	345,176		$	292,211		$	231,847		$	231,894
Total Market Capitalization	$	671,561		$	584,777		$	580,275		$	574,825
Total Debt/Total Market Capitalization		51.4	%		50.0	%		40.0	%		40.3	%
Balance Sheet Data
($’s in thousands)
Total Assets	$	602,646		$	556,371		$	502,358		$	520,397
Gross Book Value of Real Estate Assets	$	587,381		$	537,741		$	470,386		$	468,090
Total Liabilities	$	380,765		$	326,610		$	266,317		$	294,987
Total Minority Interests	$	26,670		$	27,622		$	28,386		$	28,080
Total Stockholders’ Equity	$	195,211		$	202,139		$	207,655		$	197,330

	Quarter			Quarter			Quarter		Quarter
	Ended			Ended			Ended		Ended
	9/30/06			6/30/06			3/31/06		12/31/05
Statement of Operations Data
($’s in thousands)
Total Revenues	$	16,376		$	17,801		$	14,687	$	9,204
Net Income/(Loss)	$	(1,609	)	$	(178	)	$	61	$	(14,381	)

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

Page 5

Republic Property Trust
Condensed Consolidated Balance Sheets
As of September 30, 2006 and December 31, 2005

(Dollars in thousands)	September 30, 2006			December 31, 2005
ASSETS
Investment in real estate:
Land	$	102,100		$	83,600
Commercial office buildings and improvements		485,281			384,490
		587,381			468,090
Less: accumulated depreciation and amortization		(32,372	)		(19,486	)
		555,009			448,604
Cash and cash equivalents		9,314			23,127
Marketable securities		—			10,004
Restricted cash		6,454			9,386
Rents and other receivables		6,780			5,301
Prepaid expenses and other assets		25,089			23,975
Total assets	$	602,646		$	520,397
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Mortgage notes payable	$	345,176		$	231,894
Line of credit payable		—			—
Intangible lease liabilities		21,649			20,886
Taxes payable		642			16,604
Accounts payable and accrued liabilities		9,573			15,127
Acquisition payables		—			7,204
Tenant security deposits		2,452			2,267
Advance rents		1,273			1,005
Total liabilities		380,765			294,987
Minority interest — operating partnership		26,670			28,080
Shareholders’ Equity:
Preferred shares of beneficial interest, par value $0.01, 40 million shares authorized, none issued and outstanding in 2006 or 2005		—			—
Common shares of beneficial interest, par value $0.01, 200 million shares authorized, 26.1 million and 25.0 million shares issued and outstanding in 2006 and 2005, respectively		261			250
Additional paid-in capital		219,847			208,814
Accumulated deficit		(24,897	)		(11,734	)
Total Shareholders’ Equity		195,211			197,330
Total Liabilities and Shareholders’ Equity	$	602,646		$	520,397

Page 6

Republic Property Trust (The Company) and RKB Washington Property Fund I L.P. (The Predecessor)
Consolidated Statements of Operations
For the Fiscal Quarters Ended September 30, 2006 and 2005

	The Company			The Predecessor
	Fiscal Quarter ended September 30,
(Dollars in thousands except per share amounts)	2006			2005
Revenue:
Rental income	$	15,229		$	8,900
Management and development fees and associated reimbursements		1,147			—
Total operating revenue		16,376			8,900
Expenses:
Real estate taxes		1,418			758
Property operating costs		3,106			1,765
Depreciation and amortization		5,587			2,724
Management fees		—			793
Cost of management and development fees and associated reimbursements		910			—
General and administrative		2,434			85
Total operating expenses		13,455			6,125
Operating income		2,921			2,775
Other income and expense:
Interest income		146			54
Interest expense		(4,896	)		(4,793	)
Total other income and expense		(4,750	)		(4,739	)
Net loss before minority interest		(1,829	)		(1,964	)
Minority interest		220			—
Net loss	$	(1,609	)	$	(1,964	)
Basic and diluted loss per common share	$	(0.06	)
Weighted average common shares outstanding basic and diluted (in millions)		26.0
Distributions declared per common share	$	0.206

Page 7

Reconciliation of Funds From Operations (FFO) to Net Loss

	Quarter ended September 30,
(Dollars in thousands)	2006			2005
Net loss	$	(1,609	)	$	(1,964	)
Minority interest		(220	)		—
Real estate depreciation and amortization		5,375			2,724
Funds From Operations	$	3,546		$	760

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. 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. 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, FFO 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 GAAP 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 loss is provided above.

Reconciliation of Net Operating Income (NOI) to Net Loss

Quarter ended 9/30/2006

				Non-
	Comparable			Comparable
(Dollars in thousands)	Properties			Properties			Total
Revenue:
Rental income, tenant reimbursements and other	$	9,710		$	5,519		$	15,229
Property operating expenses:
Real estate taxes		(875	)		(543	)		(1,418	)
Property operating costs		(1,998	)		(1,108	)		(3,106	)
NOI	$	6,837		$	3,868			10,705
Management and development fees and associated reimbursements								1,147
Depreciation and amortization								(5,587	)
Cost of management and development fees and associated reimbursements								(910	)
General and administrative								(2,434	)
Operating income								2,921
Total other income and expense								(4,750	)
Net loss before minority interest								(1,829	)
Minority interest								220
Net loss							$	(1,609	)

Page 8

Quarter ended 9/30/2005

				Non-
	Comparable			Comparable
(Dollars in thousands)	Properties			Properties		Total
Revenue:
Rental income, tenant reimbursements and other	$	8,900		$	—	$	8,900
Property operating expenses:
Real estate taxes		(758	)		—		(758	)
Property operating costs		(1,765	)		—		(1,765	)
Net Operating Income (NOI)	$	6,377		$	—		6,377
Depreciation and amortization							(2,724	)
Management fees							(793	)
General and administrative							(85	)
Operating income							2,775
Total other income and expense							(4,739	)
Net loss before minority interest							(1,964	)
Minority interest							—
Net loss						$	(1,964	)

We define Comparable Properties as those that we have owned continuously since January 1, 2005. Properties acquired since that date are Non-Comparable. Specifically, Comparable Properties included above are: Republic Park 1-7, 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 Properties are the Republic Building, WillowWood I and II, and Republic Park 8, which we acquired on December 20, 2005, May 25, 2006, and September 6, 2006 respectively.

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 our properties and the value of our 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 GAAP net income, as an indication of our financial performance, as an alternative to GAAP 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 used by other companies. We consider net income to be the most comparable GAAP measure relative to NOI. A reconciliation between net loss and NOI is provided above.

Page 9

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 September 30, 2006

	Comparable			Non-Comparable
(Dollars in thousands)	Properties			Properties		Total
Straight-line rent adjustments — increase/(decrease) to NOI	$	159		$	78	$	237
Market rent adjustments — increase/(decrease) to NOI	$	(141	)	$	608	$	467

Quarter ended September 30, 2005

	Comparable			Non-Comparable
(Dollars in thousands)	Properties			Properties		Total
Straight-line rent adjustments — increase/(decrease) to NOI	$	197		$	—	$	197
Market rent adjustments — increase/(decrease) to NOI	$	(153	)	$	—	$	(153	)

Page 10

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

	Three months ended September 30,
(Dollars in thousands)	2006			2005
Net loss	$	(1,609	)	$	(1,964	)
Minority interest		(220	)		—
Interest expense		4,896			4,793
Income tax expense		—			—
Depreciation and amortization		5,587			2,724
Adjusted EBITDA	$	8,654		$	5,553

We present EBITDA, as net income 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 interest, 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 GAAP net income, as an indication of our financial performance, as an alternative to GAAP net cash flows from operating activities, or as a measure of our liquidity. Further, our calculation of Adjusted EBITDA may not be comparable to similarly titled measures used by other REITs. The most directly comparable GAAP measure for Adjusted EBITDA is net income. A reconciliation of Adjusted EBITDA to Net loss is provided above.

Page 11

SELECT FINANCIAL ANALYSIS

Equity Analysis

	2006			2005
	As of			As of
	September 30			December 31
Common Equity
Common Shares		26,057,528			25,017,524
Common Units (1)		3,560,019			3,560,019
Total		29,617,547			28,577,543
End of Quarter Common Share Price	$	11.02		$	12.00
Market Value of Common Shares/Units (Dollars in thousands)	$	326,385		$	342,931
Common Shares Trading Volume
Quarterly Average Daily Volume (Shares)		91,963			639,973
Average Daily Volume (Dollars in thousands)	$	961,921		$	7,680
As a Percentage of Weighted Average Common Shares		0.4	%		2.6	%
Common Share Daily Closing Price Range
Quarterly High	$	11.34		$	12.14
Quarterly Low	$	9.66		$	12.00
Quarterly Average	$	10.46		$	12.00
Weighted Average Shares and Units for Quarter
Common Shares Outstanding		26,048,205			25,017,524
Common Units (1)		3,560,019			3,560,019
Total Weighted Average Shares and Units		29,608,224			28,577,543
Capitalization (Dollars in thousands)
Market Value of Common Shares/Units	$	326,385		$	342,931
Total Equity Market Capitalization	$	326,385		$	342,931
Total Debt	$	345,176		$	231,894
Total Market Capitalization	$	671,561		$	574,825
Debt to Total Market Capitalization		51.4	%		40.3	%
Debt to Total Assets		57.3	%		44.6	%
Debt to Undepreciated Book Value of Real Estate Assets		58.8	%		49.5	%

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

Page 12

Debt Analysis

The following table sets forth certain information with respect to the indebtedness outstanding as of September 30, 2006.

	Interest			Principal		Annual Debt		Maturity		Balance at
(Dollars in thousands)	Rate (1)			Amount		Service (2)		Date (3)		Maturity
Property Debt
Corporate Pointe IV		7.3	%	$	9,385	$	815		5/2011	$	8,740
Pender Business Park		5.8	%		20,409		1,514		10/2009		19,386
Lakeside I and II		4.6	%		19,500		909		6/2008		19,500
WillowWood III and IV		4.5	%		40,000		1,825		6/2008		40,000
Corporate Oaks		6.0	%		6,507		529		1/2014		5,211
The Republic Building		5.7	%		102,975		5,523		7/2012		105,770
Republic Park 1-8		6.1	%		100,000		6,175		10/2016		96,551
WillowWood I and II		6.2	%		46,400		2,917		6/2016		46,400
Total Property Debt				$	345,176	$	20,207			$	341,558
Other Debt
Line of Credit (4)		6.8	%		—		—		5/2009		—
Total Debt				$	345,176	$	20,207			$	341,558

(1)	The weighted average stated interest rate of our debt is 5.8%
(2)	Annual debt service includes payments made for interest and principal where applicable.
(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)	Line of credit currently bears interest at the rate of LIBOR plus 1.4%. LIBOR at September 30, 2006 was 5.4%. We have the right to extend to May 2010.

Page 13

PORTFOLIO SUMMARY

Summary of Our Properties as of September 30, 2006

We own 13 Class A office properties (comprising 24 buildings), one of which is located in the District of Columbia and twelve of which are located in Northern Virginia. The following table provides summary information regarding our properties as of September 30, 2006:

														Annualized
		Number of							Percent					Rent Per
		Buildings		Year Built			Net Rentable		Leased			Annualized		Leased Square
Office Properties (1)	Location	at Property		(Renovated)			Square Feet (2)		(3)			Rent (4)		Foot (5)
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		17.46
Lakeside I and II	Chantilly, Virginia		2		1989, 1999			173,218		92.1	%		3,315		20.79
Pender Business Park	Fairfax, Virginia		4		2000			170,940		100.0	%		4,184		24.48
Presidents Park I	Herndon, Virginia		1		1999			200,531		83.2	%		4,351		26.07
Presidents Park II	Herndon, Virginia		1		2000			200,511		32.5	%		1,822		27.96
Presidents Park III	Herndon, Virginia		1		2001			200,135		92.7	%		4,042		21.78
The Republic Building	Washington, D.C.		1		1992			276,018		100.0	%		11,439		41.44
Republic Park 1-7 (6)	Herndon, Virginia		7		1998, 1999			349,854		91.8	%		7,681		23.91
Republic Park 8 (7)(8)	Herndon, Virginia		1		1999			181,154		70.2	%		2,578		24.53
WillowWood I (9)	Fairfax, Virginia		1		1988			120,513		96.3	%		2,940		26.73
WillowWood II	Fairfax, Virginia		1		1988			124,358		90.7	%		2,794		24.77
WillowWood III and IV (10)	Fairfax, Virginia		2		1998			278,979		99.0	%		7,008		26.15
Total/Weighted Average			24		1997			2,417,096		87.6	%	$	54,796	$	26.32

(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 September 30, 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)	Formerly known as Campus at Dulles Technology Center.
(7)	Formerly known as Dulles Park Technology Center.
(8)	Excludes any annualized rent associated with a lease to IBM for 22,058 net rentable square feet because the revenue commences November 2006.
(9)	Excludes any annualized rent associated with a lease amendment to 3001, Inc. for 6,043 net rentable square feet because the revenue commences December 2006.
(10)	Excludes any annualized rent associated with lease amendments to Zeta Associates for 2,500 and 5,534 net rentable square feet because the revenue commences November 2006 and December 2006, respectively.

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 9/30/2006			at 6/30/2006			at 3/31/06			at 12/31/05			at 9/30/05
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		92.1	%		92.1	%		85.7	%		85.7	%		85.7	%
Pender Business Park		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Presidents Park I		83.2	%		83.2	%		83.4	%		83.4	%		83.4	%
Presidents Park II		32.5	%		32.5	%		32.5	%		32.5	%		32.5	%
Presidents Park III		92.7	%		92.7	%		92.7	%		92.7	%		92.7	%
Republic Building (3)		100.0	%		100.0	%		100.0	%		100.0	%		N/A
Republic Park 1-7 (4)		91.8	%		91.8	%		86.9	%		96.1	%		98.6	%
Republic Park 8 (5)		70.2	%		N/A			N/A			N/A			N/A
WillowWood I (6)		96.3	%		96.3	%		N/A			N/A			N/A
WillowWood II (6)		90.7	%		90.7	%		N/A			N/A			N/A
WillowWood III & IV		97.0	%		97.0	%		95.4	%		95.4	%		95.6	%
Portfolio Weighted Average		87.6	%		88.8	%		86.6	%		88.2	%		86.9	%

(1)	Each property is 100% indirectly owned in fee simple by our Operating Partnership.
(2)	Includes leases or lease amendments that have been executed, regardless of whether or not occupancy has commenced.
(3)	Acquired on December 20, 2005.
(4)	Formerly known as Campus at Dulles Technology Center.
(5)	Formerly known as Dulles Park Technology Center which we acquired on September 6, 2006.
(6)	Acquired on May 25, 2006.

Tenant Diversification Analysis as of September 30, 2006

Our tenants include nationally recognized corporate firms and governmental agencies. The following table sets forth information as of September 30, 2006 regarding our tenants’ industry sectors according to the North American Industry Classification System (NAICS). Percentage is based on total square feet leased:

			Percentage of Total
	Net Rentable SF		Portfolio – Net
Industry	Under Lease		Rentable SF (1)
Professional, Scientific and Technical Services		874,781		36.2	%
Government		510,030		21.1	%
Information		246,837		10.2	%
Manufacturing		165,977		6.9	%
Finance and Insurance		121,519		5.0	%
Other (2)		199,077		8.2	%
Vacant		298,875		12.4	%
Totals:		2,417,096		100.0	%

(1)	Represents net rentable square feet under lease for a tenant (including lease or lease amendments that have been executed, regardless of whether or not occupancy has commenced) as a percentage of total net rentable square feet of our properties.
(2)	Includes industries representing less than 3% of total portfolio net rentable square feet.

Page 15

Top Ten Office Tenants as of September 30, 2006

As of September 30, 2006, our portfolio was leased to approximately 90 tenants, 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 September 30, 2006:

(Dollars in thousands)

						Percentage
				Net		of Total					Percentage of
		Lease		Rentable		Portfolio –					Total Portfolio –
		Expiration		SF Under		Net Rentable			Annualized		Annualized
Tenant/Industry	Property	(1)		Lease		SF (2)			Rent(3)		Rent(4)
GSA – Dept. of Justice (Government)	Republic Building		12/20/2014		235,746		9.8	%	$	9,687		17.7	%
GSA – FTS (5)	WillowWood III&IV		5/3/2009		92,992		3.8	%		2,408		4.4	%
(Government)	WillowWood I		3/9/2010		23,950		1.0	%		712		1.3	%
BAE Systems/DigitalNet (Professional Services)	Presidents Park III		10/31/2011		142,646		5.9	%		3,087		5.6	%
Cisco Systems, Inc. (Professional Services)	Republic Park 1-7		3/31/2016		108,858		4.5	%		2,857		5.2	%
Network Solutions (Information)	Presidents Park I		12/31/2012		104,860		4.3	%		2,849		5.2	%
Zeta Associates (6) (Professional Services)	WillowWood III&IV		8/15/2009		115,417		4.8	%		2,783		5.1	%
Datatrac Information (7)			1/3/2007		47,670		2.0	%		1,125		2.1	%
(Information)	Lakeside I&II		8/31/2008		40,600		1.7	%		749		1.4	%
GSA – Dept. of Interior (8)	Corporate Oaks		4/30/2013		60,767		2.5	%		1,243		2.3	%
(Government)	Republic Park 8		8/6/2011		13,730		0.6	%		397		0.7	%
webMethods, Inc. (Professional Services)	Pender Business Park		12/31/2007		61,450		2.5	%		1,614		2.9	%
CACI International, Inc. (Professional Services)	Corporate Pointe IV		11/30/2009		80,118		3.3	%		1,399		2.6	%
Totals:					1,128,804		46.7	%	$	30,910		56.5	%

(1)	Assumes the tenant does not exercise any renewal or termination options.
(2)	Represents net rentable square feet under lease for a tenant (including lease or lease amendments that have been executed, regardless of whether or not occupancy has commenced) 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 September 30, 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. Base rent does not include the exercise of a renewal or termination option.
(4)	Represents annualized rent for a tenant as a percentage of total annualized rent for our properties.
(5)	We have two leases with GSA – Federal Technology Services at our WillowWood properties.
(6)	Excludes any annualized rent associated with lease amendment to Zeta Associates for 2,500 and 5,534 net rentable square feet because the revenue commences November 2006 and December 2006, respectively.
(7)	We have two leases with Datatrac at our Lakeside property.
(8)	We have two leases with GSA – Department of Interior. One lease is at our Corporate Oaks property and the other is at our Republic Park 8 property.

Page 16

Office Lease Expiration Analysis by Year as of September 30, 2006

The following table sets forth a summary schedule of the lease expirations for leases in place as of September 30, 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)

					Percentage
			Net		of Total							Percentage
			Rentable		Portfolio –							of Total
	Number of		SF of		Net -							Portfolio –					Expiring
Year of Lease	Leases		Expiring		Rentable SF			Annualized		Annualized		Annualized			Expiring		Base
Expiration	Expiring		Leases (1)		(2)			Rent (3)		Rent/ SF (3)		Rent (4)			Base Rent (5)		Rent/SF (6)
Available				298,875		12.4	%
2006		9		65,816		2.7	%	$	2,078	$	31.57		3.8	%	$	2,213	$	33.62
2007		8		140,652		5.8	%		3,460		24.60		6.3	%		3,753		26.68
2008		13		176,410		7.3	%		3,717		21.07		6.8	%		4,166		23.62
2009 (7)		17		450,637		18.7	%		10,660		24.08		19.4	%		11,500		25.98
2010		16		259,129		10.7	%		6,351		24.51		11.6	%		7,923		31.94
2011 (8)(9)		15		352,196		14.6	%		7,706		20.93		14.1	%		8,579		26.47
2012		1		104,860		4.3	%		2,849		27.17		5.2	%		3,087		29.44
2013		4		99,058		4.1	%		2,573		25.97		4.7	%		2,861		28.88
2014		4		290,649		12.0	%		11,061		38.06		20.2	%		11,246		38.69
2015		3		69,956		2.9	%		1,484		21.21		2.7	%		1,789		25.57
2016		1		108,858		4.5	%		2,857		26.25		5.2	%		3,245		29.81
Total:		91		2,417,096		100.0	%	$	54,796	$	26.32		100.0	%	$	60,362	$	28.99

(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 September 30, 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 monthly base rent payable immediately prior to the expiration of the lease multiplied by 12.
(6)	Expiring Base Rent/Square Foot represents expiring base rent divided by net rentable square feet under lease.
(7)	Excludes any annualized rent associated with lease amendments to Zeta Associates for 2,500 and 5,534 net rentable square feet because the revenue commences November 2006 and December 2006, respectively.
(8)	Excludes any annualized rent associated with a lease to IBM for 22,058 net rentable square feet because the revenue commences November 2006.
(9)	Excludes any annualized rent associated with a lease amendment to 3001, Inc. for 6,043 net rentable square feet because the revenue commences December 2006.

Page 17

Office Lease Distribution Analysis by Tenant Size as of September 30, 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 September 30, 2006:

								Percentage of			Annualized				Percentage of
	Number		Percentage			Net Rentable		Total Portfolio –			Rent (3)				Total Portfolio
	of		of all			SF Under		Net Rentable SF			($ in		Annualized		– Annualized
SF Under Lease	Leases		Leases			Lease (1)		(2)			thousands)		Rent/ SF		Rent (4)
2,500 or less		18		19.8	%		22,355		0.9	%	$	540	$	24.16		1.0	%
2,501 – 10,000		26		28.5	%		121,485		5.0	%		2,981		24.54		5.4	%
10,001 – 20,000 (5)		16		17.6	%		232,515		9.6	%		5,967		26.35		10.9	%
20,001 – 40,000 (6)		13		14.3	%		345,219		14.3	%		8,730		27.01		15.9	%
40,001 – 100,000		13		14.3	%		689,120		28.5	%		15,317		22.23		28.0	%
Greater than 100,000 (7)		5		5.5	%		707,527		29.3	%		21,261		30.40		38.8	%
Total:		91		100.0	%		2,118,221		87.6	%	$	54,796	$	26.32		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 September 30, 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)	3001, Inc. leases a total of 11,157 net rentable square feet, which includes 6,043 net rentable square feet associated with a lease amendment. The annualized rent of 3001, Inc. excludes the expansion space of 6,043 net rentable square feet because the revenue commences December 2006.
(6)	Excludes any annualized rent associated with a lease to IBM for 22,058 net rentable square feet because the revenue commences November 2006.
(7)	Zeta Associates leases a total of 115,417 net rentable square feet, which includes 2,500 and 5,534 net rentable square feet associated with lease amendments. The annualized rent of Zeta Associates excludes the expansion spaces of 2,500 and 5,534 net rentable square feet because the revenue commences November 2006 and December 2006, respectively.

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)

	9 Months
	Ended		Year Ended		Year Ended
	September 30,		December 31,		December 31,
	2006		2005		2004
Capital expenditures	$	306	$	285	$	73
Average square feet (1)		2,123,932		1,724,153		1,056,844
Capital expenditures per square foot	$	0.14	$	0.17	$	0.07

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

Page 18

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:

	9 Months Ended		Year Ended		Year Ended
	September 30,		December 31,		December 31,
	2006		2005		2004
Renewals (1)
Number of leases		3		5		4
Square Feet		43,781		428,162		106,457
Tenant improvement costs per square foot (2)(3)(6)	$	4.90	$	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)	$	4.90	$	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		11		6		5
Square Feet		161,577		54,189		13,722
Tenant improvement costs per square foot (2)(3)	$	23.90	$	22.38	$	18.82
Leasing commission costs per square foot (2)(3)	$	5.83	$	10.85	$	2.89
Total tenant improvement and leasing commission costs per square foot (2)(3)	$	29.73	$	33.23	$	21.71
Total
Number of leases		15		11		9
Square Feet		224,573		482,351		120,179
Tenant improvement costs per square foot (2)(3)(6)	$	21.57	$	18.66	$	5.39
Leasing commission costs per square foot (2)(3)	$	5.13	$	4.47	$	3.65
Total tenant improvement and leasing commission costs per square foot (2)(3)(6)	$	26.70	$	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 November 1, 2006

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

Republic Square I

Republic Square I has all of its sign offs from the District of Columbia and is approved for occupancy. The parking garage is open for business and tenants have begun to build out and occupy their spaces. As of November 1, 2006, approximately 143,227 square feet, or 37% of the net rentable space, at Republic Square I had been leased to five tenants: National Cable & Telecommunications Association (“NCTA”), General Motors (“GM”), General Services Administration (U.S. Government — Department of Justice, office of the Trustee, “GSA”), National Association of Counties (“NACO”) and the University of Phoenix. The garage has been leased to Colonial Parking, Inc.

The Portals III

The Portals III has received its Certificate of Substantial Completion. The garage has been leased to District of Columbia Parking Associates and is open for business.

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