UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

(Mark One)

|ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended December 31, 2003
OR

|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission File No. 1-11918

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TRINET CORPORATE REALTY TRUST, INC.(Exact name of registrant as specified in its charter)

Maryland(State or other jurisdiction of
incorporation or organization)

94-3175659(I.R.S. Employer Identification Number)1114 Avenue of the Americas, 27th Floor
New York, NY(Address of principal executive offices)

10036(Zip code)


Registrant's telephone number, including area code:(212) 930-9400

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Securities
registered pursuant to Section 12(b) of the Act:NoneSecurities registered pursuant to Section 12(g) of the Act:None

Indicate
by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirement for the past 90 days.
Yes ý    No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12-b-2). Yes
o    No ý

The aggregate market value of the voting stock held by non-affiliates of the Registrant is $0.

As
of March 1, 2004, there were 100 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: NONE

THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL
INSTRUCTIONS I (1) AND (2) OF FORM 10-K AND IS THEREFORE FILING THIS FORM
WITH THE REDUCED DISCLOSURE FORMAT.



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TABLE OF CONTENTS

|           |  |                                                                                       |  | Page
|---------- |  | ------------------------------------------------------------------------------------- |  | ----
|PART I     |  |                                                                                      
|Item 1.    |  | Business                                                                              |  | 3   
|Item 2.    |  | Properties                                                                            |  | 4   
|Item 3.    |  | Legal Proceedings                                                                     |  | 5   
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                   |  | 5   
|PART II    |  |                                                                                      
|Item 5.    |  | Market for Registrant's Equity and Related Share Matters                              |  | 6   
|Item 6.    |  | Selected Financial Data                                                               |  | 6   
|Item 7.    |  | Management's Discussion and Analysis of Financial Condition and Results of Operations |  | 6   
|Item 7a.   |  | Quantitative and Qualitative Disclosures about Market Risk                            |  | 12  
|Item 8.    |  | Financial Statements and Supplemental Data                                            |  | 13  
|Item 9.    |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure  |  | 40  
|Item 9a.   |  | Controls and Procedures                                                               |  | 40  
|PART III   |  |                                                                                      
|Item 10.   |  | Directors and Executive Officers of the Registrant                                    |  | 40  
|Item 11.   |  | Executive Compensation                                                                |  | 40  
|Item 12.   |  | Security Ownership of Certain Beneficial Owners and Management                        |  | 40  
|Item 13.   |  | Certain Relationships and Related Transactions                                        |  | 40  
|Item 14.   |  | Principal Accountant Fees and Services                                                |  | 40  
|PART IV    |  |                                                                                      
|Item 15.   |  | Exhibits, Financial Statement Schedules and Reports on Form 8-K                       |  | 41  
|SIGNATURES |  | 43                                                                                   

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PART I

Item 1. Business

Explanatory Note for Purposes of the "Safe Harbor Provisions" of Section 21E of the Securities and Exchange Act of 1934, as amended

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended, which involve certain risks and uncertainties. Forward-looking statements are included with respect to, among other things, Trinet Corporate Realty Trust, Inc.'s, a Maryland
Corporation, (the "Company's") current business plan, business strategy and portfolio management. The Company's actual results or outcomes may differ materially from those anticipated. In assessing
all forward-looking statements, readers are urged to read carefully all cautionary statements contained in this Form 10-K.

Code of Conduct

iStar Financial Inc., a Maryland Corporation ("iStar Financial"), of which the Company is a wholly-owned subsidiary, has adopted a code of business conduct
for all of its employees and directors, including the chief executive officer, chief financial officer, other executive officers and personnel. A copy is available on iStar Financial's website at
www.istarfinancial.com. iStar Financial intends to post on its website material changes to or waivers from its code of conduct, if any, within two days of any such event. As of December 31,
2003, there were no such changes or waivers.

Overview

The Company is a wholly-owned subsidiary of iStar Financial. iStar Financial and its subsidiaries provide custom-tailored financing to high-end private and
corporate owners of real estate nationwide, including senior and junior mortgage debt, senior, mezzanine and subordinated capital, and corporate net lease financing. The Company typically provides
capital to corporations, as well as borrowers, who control facilities leased to single creditworthy tenants. The Company's net leased assets are generally mission-critical headquarters or distribution
facilities that are subject to long-term leases with rated corporate credit tenants, and which provide for all expenses at the property to be paid by the corporate tenant on a triple net
lease basis. Corporate tenant lease, or CTL, transactions have terms generally ranging from ten to 20 years and typically range in size from $20 million to $150 million. As of
December 31, 2003, the Company's investments consisted of 75 facilities, comprising 7.8 million square feet in 17 states and which were 83.23% leased. The five largest customers
collectively accounted for approximately 27.31% of the Company's annualized lease revenue, and the Company's largest single customer accounted for approximately 8.09% of the Company's annualized lease
revenue.

On
November 3, 1999, the Company's shareholders and the shareholders of iStar Financial approved the merger of the Company with a wholly-owned subsidiary of iStar Financial. The
shareholders of iStar Financial also approved: (1) the acquisition by iStar Financial, through a merger and contribution of interests, of 100.00% of the ownership interests in its former
external advisor; and (2) the change in form of its organization from a business trust to a corporation ("Incorporation Merger").

The
Company is engaged in a competitive business. In originating and acquiring assets, the Company competes with public and private companies, including finance companies, mortgage
banks, pension funds, savings and loan associations, insurance companies, institutional investors, investment banking firms and other lenders and industry participants, as well as individual
investors. Existing industry participants and potential new entrants compete with the Company for the available supply of investments suitable for origination or acquisition, as well as for debt and
equity capital. Certain of the Company's competitors are larger than the Company, have longer operating histories, may have access to greater capital and other resources, may have management personnel
with more experience than the officers of the Company, and may have advantages over the Company in conducting certain businesses and providing certain services.

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Investments and Dispositions

InvestmentsDuring 2003, the Company paid $1.0 million for a parking garage.

DispositionsDuring 2003, the Company disposed of eight CTL assets for net proceeds of approximately $37.3 million, and
realized a gain of approximately $4.9 million.

Item 2. Properties

The Company maintains an office at One Embarcadero Center San Francisco, CA 94111. Its telephone number, general facsimile number and web address are
(415) 391-4300, (415) 391-6259 and www.istarfinancial.com, respectively. The lease for the Company's office space expires in March 2008.

See
Item 8"Schedule IIICorporate Tenant Lease Assets and Accumulated Depreciation" for a detailed listing of CTL facilities held for investment.

Lease Expirations

As of December 31, 2003, lease expirations on the Company's CTL assets, including facilities owned by the Company's joint ventures, are as follows:

|Year of Lease Expiration |                                       | Number of
Leases
Expiring |     | Annualized In-Place
Operating
Lease Income (1) |        | % of In-Place
Operating
Lease Income |       | % of Total
Revenue (2) |      
|------------------------ | ------------------------------------- | ------------------------- | --- | ---------------------------------------------- | ------ | ------------------------------------ | ----- | ---------------------- | -----
|
|2004                     |                                       | 18                        |     | $                                              | 16,463 |                                      | 17.46 | %                      | 18.53
|2005                     |                                       | 15                        |     |                                                | 10,160 |                                      | 10.77 | %                      | 11.44
|2006                     |                                       | 24                        |     |                                                | 21,218 |                                      | 22.50 | %                      | 23.88
|2007                     |                                       | 12                        |     |                                                | 4,636  |                                      | 4.92  | %                      | 5.22 
|2008                     |                                       | 13                        |     |                                                | 10,196 |                                      | 10.81 | %                      | 11.48
|2009                     |                                       | 9                         |     |                                                | 10,174 |                                      | 10.79 | %                      | 11.45
|2010                     |                                       | 4                         |     |                                                | 3,153  |                                      | 3.34  | %                      | 3.55 
|2011                     |                                       | 6                         |     |                                                | 3,002  |                                      | 3.18  | %                      | 3.38 
|2012                     |                                       | 3                         |     |                                                | 1,963  |                                      | 2.08  | %                      | 2.21 
|2013                     |                                       | 1                         |     |                                                | 921    |                                      | 0.98  | %                      | 1.04 
|2014 and thereafter      |                                       | 7                         |     |                                                | 12,409 |                                      | 13.17 | %                      | 13.97
|                         |                                       |                           |     |                                                |        |                                      |       |                        |      
|                         | Total                                 |                           | 112 |                                                | $      | 94,295                               |       | 100.00                 | %    
|                         |                                       |                           |     |                                                |        |                                      |       |                        |      
|                         | Weighted average remaining lease term |                           |     | 5.01 years                                     |        |                                      |       |                        |      
|                         |                                       |                           |     |                                                |        |                                      |       |                        |      

Explanatory Notes:

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Asset Base

The following table sets forth the composition of the Company's investments as of December 31, 2003:

|Type                  |       | Number of
Facilities |    | Annualized In-Place
Operating
Lease Income (1) |        | % of In-Place
Operating
Lease Income |      
|--------------------- | ----- | -------------------- | -- | ---------------------------------------------- | ------ | ------------------------------------ | -----
|
|Office Facilities     |       | 52                   |    | $                                              | 71,955 |                                      | 76.31
|Industrial Facilities |       | 22                   |    |                                                | 20,990 |                                      | 22.26
|Parking Garage        |       | 1                    |    |                                                | 1,350  |                                      | 1.43 
|                      |       |                      |    |                                                |        |                                      |      
|                      | Total |                      | 75 |                                                | $      | 94,295                               |      
|                      |       |                      |    |                                                |        |                                      |      

Explanatory Note:

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Item 3. Legal Proceedings

The Company is not a party to any material litigation or legal proceedings, or to the best of its knowledge, any threatened litigation or legal proceedings which,
in the opinion of management, individually or in the aggregate, would have a material adverse effect on its results of operations or financial condition.

Item 4. Submission of Matters to a Vote of Security Holders

Omitted pursuant to General Instruction I(2)(c) of Form 10-K.

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PART II

Item 5. Market for Registrant's Equity and Related Share Matters

None.

Item 6. Selected Financial Data

Omitted pursuant to General Instruction I(2)(a) of Form 10-K.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

General

As a wholly-owned subsidiary of iStar Financial, the Company specializes in providing investment capital to major corporations and real estate owners nationwide
by structuring sale/leaseback transactions and acquiring CTL assets subject to existing long-term leases to creditworthy customers occupying office and industrial facilities. The Company
uses its corporate credit and real estate underwriting expertise to structure investments that it believes will generate attractive risk-adjusted returns. As of December 31, 2003,
the Company's portfolio consisted of 75 facilities principally subject to net leases to approximately 104 customers, comprising 7.8 million square feet in 17 states. Of the 75 total facilities,
there are nine facilities held in two joint venture partnerships.

On
November 4, 1999, iStar Financial, a Maryland corporation, acquired all of the Company's outstanding capital stock through a merger of the Company with and into a wholly-owned
subsidiary of iStar Financial, with the Company surviving as a wholly-owned subsidiary of iStar Financial. Prior to the merger, the Company elected to be taxed as a real estate investment trust
("REIT") under the Internal Revenue Code of 1986, as amended (the "Code"). iStar Financial has elected to be taxed as a REIT under the Code and the Company is presently treated as a qualified REIT
subsidiary.

During
the 12 months ended December 31, 2003, and 2002, respectively, the Company acquired an aggregate of approximately $1.0 million and $27.9 million in CTL
assets and disposed of CTL assets for net proceeds of approximately $37.3 million and $3.7 million.

During
the 12 months ended December 31, 2003, the Company disposed of 17 CTL assets by transferring them to iStar Financial at their respective carrying value. No gain or
loss resulted from these transfers.

During
the 12 months ended December 31, 2002, the Company disposed of 19 CTL assets and one structured finance asset by transferring them to iStar Financial at their
respective carrying amounts. In addition, the Company acquired three CTL assets transferred from iStar Financial at their respective carrying amounts.

Results of Operations

Year Ended December 31, 2003 Compared to Year Ended December 31, 2002

Interest incomeFor the 12 months ended December 31, 2003, interest income decreased by $3.3 million to
$429,000 from $3.8 million for the same period in 2002. The decrease is primarily due to the transfer of a $75.0 million lending investment to iStar Financial in the second quarter of
2002 (see Note 4 to the Company's Consolidated Financial Statements).

Operating lease incomeOperating lease income decreased by $853,000 to $90.6 million for the 12 months ended
December 31, 2003 from $91.5 million for the same period in 2002. Of this decrease, $8.5 million was from lower operating lease income due to vacancies on certain CTL assets. This
decrease is partially offset by $7.7 million from the transfer of CTL assets from iStar Financial in 2002 and the consolidation of one of the Company's CTL joint venture investments.

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Other incomeOther income generally consists of lease termination fees, project management fees, dividend income, unamortized
loan discounts, financial advisory fees, earnest deposit forfeitures, credit enhancement fees, bankruptcy claims and insurance proceeds. During the 12 months ended December 31, 2003,
other income consisted of lease termination fees of $1.5 million, dividend income of $489,000 and income from tenant bankruptcy claims of $265,000.

During
the year ended December 31, 2002, other income included lease termination fees of $2.8 million, financial advisory fees of $1.0 million, dividend income of
$563,000 and insurance claims of $431,000.

Interest expenseFor the 12 months ended December 31, 2003, interest expense decreased by $8.7 million to
$31.4 million from $40.1 million for the same period in 2002. This decrease is primarily the result of the transfer of a $75.0 million lending investment (and the related
indebtedness) to iStar Financial in the second quarter of 2002 (see Note 4 to the Company's Consolidated Financial Statements) and the assumption of an unsecured debt obligation in the first
quarter of 2003 by iStar
Financial. The decrease was partially offset by increased interest expense related to the consolidation of one of the Company's CTL joint venture investments.

Operating costscorporate tenant lease assetsFor the 12 months ended December 31, 2003, operating
costs increased by $2.6 million from $11.6 million to $14.2 million for the same period in 2002. This increase is related to the consolidation of one of the Company's CTL joint
venture investments and higher unrecoverable operating costs due to vacancies on certain CTL assets.

Depreciation and amortizationDepreciation and amortization increased by approximately $1.7 million to
$17.3 million for the 12 months ended December 31, 2003 from $15.6 million for the same period in 2002. This increase is primarily due to the consolidation of one of the
Company's CTL joint venture investments.

General and administrativeFor the 12 months ended December 31, 2003, general and administrative expenses
decreased by approximately $3.3 million to $3.4 million, compared to $6.7 million for the same period in 2002 due to a decrease of allocated shared costs from iStar Financial as a
result of reduced operations.

Loss on early extinguishment of debtDuring the 12 months ended December 31, 2003 and 2002, the Company did not incur
any losses on the early extinguishment of debt.

Equity in (loss) earnings from joint ventures and unconsolidated subsidiariesFor the 12 months ended
December 31, 2003, equity in (loss) earnings from joint ventures and unconsolidated subsidiaries decreased by $7.2 million to $(2.2) million from $5.0 million for the same period
in 2002. This decrease is primarily due to certain lease terminations and the consolidation of one of the Company's CTL joint venture investments (see Note 6 to the Company's Consolidated
Financial Statements).

Income from discontinued operationsFor the 12 months ended December 31, 2003 and 2002, operating income earned
by the Company on CTL assets sold (prior to their sale) and assets transferred to iStar Financial of $5.1 million and $29.9 million, respectively, is classified as "discontinued
operations," even though such income was recognized by the Company prior to the asset dispositions, transfers or classification as "Assets held for sale" on the Company's Consolidated Balance Sheets.

Gain from discontinued operationsDuring 2003, the Company disposed of eight CTL assets for net proceeds of
$37.3 million, and recognized a gain of approximately $4.9 million.

During
2002, the Company disposed of one CTL asset for net proceeds of $3.7 million, and recognized a gain of approximately $595,000. In addition, one of the Company's customers
exercised an option to terminate its lease on 50.00% of the land leased from the Company. In connection with this termination, the Company realized $17.5 million in cash lease termination
payments, offset by a

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$17.4 million
impairment change in connection with the termination, resulting in a net gain of approximately $123,000.

Year Ended December 31, 2002 Compared to Year Ended December 31, 2001

Omitted pursuant to General Instruction I(2)(a) of Form 10-K.

Liquidity and Capital Resources

Omitted pursuant to General Instruction I(2)(a) of Form 10-K.

Critical Accounting Policies

The Company's Consolidated Financial Statements include the accounts of the Company and all majority-owned and controlled subsidiaries. The preparation of
financial statements in accordance with generally accepted accounting principles in the United States of America ("GAAP") requires management to make estimates and assumptions in certain circumstances
that affect amounts reported in the accompanying consolidated financial statements. In preparing these financial statements, management has made its best estimates and judgments of certain amounts
included in the financial statements, giving due consideration to materiality. The Company does not believe that there is a great likelihood that materially different amounts would be reported related
to the accounting policies described below. However, application of these accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result,
actual results could differ from these estimates.

Management
has the obligation to ensure that its policies and methodologies are in accordance with GAAP. During 2003, management reviewed and evaluated its critical accounting policies
and believes
them to be appropriate. The Company's accounting policies are described in Note 3 to the Company's Consolidated Financial Statements. Management believes the more significant of these to be as
follows:

Revenue RecognitionThe most significant sources of the Company's revenue come from its CTL operations and lending operations.
For CTL assets, the Company recognizes income on the straight-line method, which effectively recognizes contractual lease payments to be received by the Company evenly over the term of the
lease. For its lending operations, the Company reflects income using the effective yield method, which recognizes periodic income over the expected term of the investment on a constant yield basis.
Management believes the Company's revenue recognition policies are appropriate to reflect the substance of the underlying transactions.

Allowance for doubtful accountsThe Company's accounting policy requires a reserve on the Company's accrued operating lease
income receivable balances and on the deferred operating lease income receivable balances. The reserve covers asset specific problems (e.g., bankruptcy) as they arise, as well as, a portfolio reserve
based on management's evaluation of the credit risks associated with these receivables.

Impairment of Long-Lived AssetsCTL assets represent "long-lived" assets for accounting purposes. The
Company periodically reviews long-lived assets to be held and used in its leasing operations for impairment in value whenever any events or changes in circumstances indicate that the
carrying amount of the assets may not be recoverable. In management's opinion, based on this analysis, CTL assets to be held and used are not carried at amounts in excess of their estimated
recoverable amounts.

Risk Management and Financial InstrumentsThe Company has historically utilized derivative financial instruments only as a
means to help to manage its interest rate risk exposure on a portion of its variable-rate debt obligations (i.e., as cash flow hedges). The instruments utilized are generally either
pay-fixed swaps or LIBOR-based interest rate caps which are widely used in the industry and typically with major financial institutions. The Company's accounting policies generally reflect
these instruments at their fair value with unrealized changes in fair value reflected in "Accumulated other comprehensive income

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(losses)"
on the Company's Consolidated Balance Sheets. Realized effects on the Company's cash flows are generally recognized currently in income.

Income taxesThe Company is taxed as a QRS under the Code. As a QRS, the Company is included in the consolidated tax return of
iStar Financial. TriNet Management Operating Company, Inc. ("TMOC"), the Company's REIT taxable subsidiary, is not consolidated for federal income tax purposes and is taxed a corporation.
Accordingly, except for the Company's taxable REIT subsidiaries, no provision has been made for federal income taxes in the accompanying Consolidated
Financial Statements. See Note 6 to the Company's Consolidated Financial Statements for a detailed discussion on the ownership structure and operations of TMOC. Prior to December 31,
2003, the entity was liquidated.

New Accounting Standards

In December 2003, the SEC issued Staff Accounting Bulletin No. 104 ("SAB 104"), "Revenue Recognition" which supercedes SAB 101, "Revenue Recognition
in Financial Statements." SAB 104's primary purpose is to rescind the accounting guidance contained in SAB 101 related to multiple element revenue arrangements, superceded as a result of the issuance
of EITF 00-21. The Company adopted the provisions of this statement immediately, as required, and it did not have a significant impact on the Company's Consolidated Financial Statements.

EITF
00-21, "Accounting for Revenue Arrangements with Multiple Deliverables," issued during the third quarter of 2003, provides guidance on revenue recognition for revenues
derived from a single contract that contain multiple products or services. EITF 00-21 also provides additional requirements to determine when these revenues may be recorded separately for
accounting purposes. The Company adopted EITF 00-21 on July 1, 2003, as required, and it did not have a significant impact on the Company's Consolidated Financial Statements.

In
May 2003, the FASB issued Statement of Financial Accounting Standards No. 150 ("SFAS No. 150"), "Accounting for Certain Financial Instruments With Characteristics
of Both Liabilities and Equity." This standard requires issuers to classify as liabilities the following three types of freestanding financial instruments: (1) mandatorily redeemable financial
instruments, (2) obligations to repurchase the issuer's equity shares by transferring assets; and (3) certain obligations to issue a variable number of shares. The FASB recently issued
FASB Staff Position ("FSP") 150-3, which defers the provisions of paragraphs 9 and 10 of SFAS No. 150 indefinitely as they apply to mandatorily redeemable noncontrolling interests
associated with finite-lived entities. The Company adopted the provisions of this statement, as required, on July 1, 2003, and it did not have a significant financial impact on the Company's
Consolidated Financial Statements.

In
January 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46"), "Consolidation of Variable Interest Entities," an interpretation of ARB 51. FIN 46 provides guidance
on identifying entities for which control is achieved through means other than through voting rights (a "variable interest entity" or "VIE"), and how to determine when and which business enterprise
should consolidate a VIE. In addition, FIN 46 requires that both the primary beneficiary and all other enterprises with a significant variable interest in a VIE make additional disclosures. The
transitional disclosure requirements took effect immediately and were required for all financial statements initially issued or modified after January 31, 2003. Immediate consolidation is
required for VIEs entered into or modified after February 1, 2003 in which the Company is deemed the primary beneficiary. For VIEs in which the Company entered into prior to February 1,
2003 the FASB recently issued FSP to defer FIN 46 for those older entities to the reporting period ending after March 15, 2004. The adoption of the additional
consolidation provisions of FIN 46 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In
December 2002, the FASB issued Statement of Financial Accounting Standards No. 148 ("SFAS No. 148"), "Accounting for Stock-Based
CompensationTransition and Disclosure," an amendment of FASB Statement No. 123 ("SFAS No. 123"). This statement provides alternative transition methods for a voluntary
change to the fair value basis of accounting for stock-based employee compensation. However,

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this
Statement does not permit the use of the original SFAS No. 123 prospective method of transition for changes to the fair value based method made in fiscal years beginning after
December 15, 2003. In addition, this Statement amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about
the method of accounting for stock-based employee compensation, description of transition method utilized and the effect of the method used on reported results. The Company adopted SFAS No. 148
with retroactive application to grants made subsequent to January 1, 2002 with no material effect on the Company's Consolidated Financial Statements.

In
November 2002, the FASB issued FASB Interpretation No. 45 ("FIN 45"), "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees
of Indebtedness of Others," an interpretation of FASB Statement of Financial Accounting Standards No. 5 ("SFAS No. 5"), "Accounting for Contingencies," Statement of Financial Accounting
Standards No. 57, "Related Party Disclosures," Statement of Financial Accounting Standards No. 107, "Disclosures about Fair Value of Financial Instruments" and rescinds FASB
Interpretation No. 34, "Disclosure of Indirect Guarantees of Indebtedness of Others, an Interpretation of SFAS No. 5." It requires that upon issuance of a guarantee, the guarantor must
recognize a liability for the fair value of the obligation it assumes under that guarantee regardless if the Company receives separately identifiable consideration (e.g., a premium). The disclosure
requirements are effective December 31, 2002. The adoption of FIN 45 did not have a material impact on the Company's Consolidated Financial Statements, nor is it expected to have a material
impact in the future.

In
September 2002, the FASB issued Statement of Financial Accounting Standards No. 147 ("SFAS No. 147"), "Acquisitions of Certain Financial Institutions," an
amendment of FASB Statements No. 72 and 144 and FASB Interpretation No. 9. SFAS No. 147 provides guidance on the accounting for the acquisitions of financial institutions, except
those acquisitions between two or more mutual enterprises. SFAS No. 147 removes acquisitions of financial institutions from the scope of both FASB No. 72, "Accounting for Certain
Acquisitions of Banking or Thrift Institutions," and FASB Interpretation No. 9, Applying APB Opinions No. 16 and 17, "When a Savings and Loan Association or a Similar Institution is
Acquired in a Business Combination Accounted for by the Purchase Method," and requires that those transactions be accounted for in accordance with SFAS No. 141 and SFAS No. 142. SFAS
No. 147 also amends SFAS No. 144 to include in its scope long-term, customer-relationship intangible assets of financial institutions such as depositor-relationship and
borrower-relationship intangible assets and credit cardholder intangible assets. The Company adopted the provisions of this
statement, as required, on October 1, 2002, and it did not have a significant financial impact on the Company's Consolidated Financial Statements.

In
June 2002, the FASB issued Statement of Financial Accounting Standards No. 146 ("SFAS No. 146"), "Accounting for Exit or Disposal Activities," to address
significant issues regarding the recognition, measurement, and reporting of costs that are associated with exit and disposal activities, including restructuring activities that are currently accounted
for pursuant to the guidance that the Emerging Issues Task Force ("EITF") has set forth in EITF Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." The scope of SFAS No. 146 also includes: (1) costs related to terminating a contract that is not a
capital lease; and (2) termination benefits received by employees involuntarily terminated under the terms of a one-time benefit arrangement that is not an on-going
benefit arrangement or an individual deferred-compensation contract. The Company adopted the provisions of SFAS 146 on December 31, 2002, as required, and it did not have a material
effect on the Company's Consolidated Financial Statements.

In
April 2002, the FASB issued Statement of Financial Accounting Standards No. 145 ("SFAS No. 145"), "Rescission of FASB Statements No. 4, 44, and 64,
Amendment of FASB Statement No. 13, and Technical Corrections." SFAS No. 145 rescinds both FASB Statements No. 4 ("SFAS No. 4"), "Reporting Gains and Losses from
Extinguishment of Debt," and the amendment to SFAS No. 4, FASB Statement

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No. 64
("SFAS No. 64"), "Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements." Through this rescission, SFAS No. 145 eliminates the requirement (in both
SFAS No. 4 and SFAS No. 64) that gains and losses from the extinguishment of debt be aggregated and, if material, classified as an extraordinary item, net of the related income tax
effect. An entity is not prohibited from classifying such gains and losses as extraordinary items, so long as they meet the criteria in paragraph 20 of Accounting Principles Board Opinion
No. 30 ("APB 30"), "Reporting the Results of OperationsReporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events
and Transactions"; however, due to the nature of the Company's operations, such treatment may not be available to the Company. Any gains or losses on extinguishments of debt that were previously
classified as extraordinary items in prior periods presented that do not meet the criteria in APB 30 for classification as an extraordinary item will be reclassified to income from continuing
operations. The provisions of SFAS No. 145 are effective for financial statements issued for fiscal years beginning after May 15, 2002. The Company adopted the provisions of this
statement, as required, on January 1, 2003. For the year ended December 31, 2001, the Company reclassified $1.6 million from "Extraordinary loss from early extinguishment of debt"
into "Loss on early extinguishment of debt" in continuing operations on the Company's Consolidated Statements of Operations.

In
October 2001, the FASB issued Statement of Financial Accounting Standards No. 144 ("SFAS No. 144"), "Accounting for the Impairment or Disposal of
Long-Lived Assets." SFAS No. 144 provides guidance on the recognition of impairment losses on long-lived assets to be held and used or to be disposed of, and also
broadens the definition of what constitutes a
discontinued operation and how the results of a discontinued operation are to be measured and presented. SFAS No. 144 requires that current operations prior to the disposition of CTL assets and
prior period results of such operations be presented in discontinued operations in the Company's Consolidated Statements of Operations. The provisions of SFAS No. 144 are effective for
financial statements issued for fiscal years beginning after December 15, 2001, and must be applied at the beginning of a fiscal year. The Company adopted the provisions of this statement on
January 1, 2002, as required, and it did not have a significant financial impact on the Company.

In
July 2001, the FASB issued Statement of Financial Accounting Standards No. 141 ("SFAS No. 141"), "Business Combinations" and Statement of Financial Accounting
Standards No. 142 ("SFAS No. 142"), "Goodwill and Other Intangible Assets." SFAS No. 141 requires the purchase method of accounting to be used for all business combinations
initiated after June 30, 2001. SFAS No. 141 also addresses the initial recognition and measurement of goodwill and other intangible assets acquired in business combinations and requires
intangible assets to be recognized apart from goodwill if certain tests are met. SFAS No. 142 requires that goodwill not be amortized but instead be measured for impairment at least annually,
or when events indicate that there may be an impairment. The Company adopted the provisions of both statements for transactions initiated after June 30, 2001, as required, and the adoption did
not have a significant impact on the Company.

In
July 2001, the SEC released Staff Accounting Bulletin No. 102 ("SAB 102"), "Selected Loan Loss Allowance and Documentation Issues." SAB 102 summarizes certain of the
SEC's views on the development, documentation and application of a systematic methodology for determining allowances for loan and lease losses. Adoption of SAB 102 by the Company did not have a
significant impact on the Company.

In
September 2000, the FASB issued Statement of Financial Accounting Standards No. 140 ("SFAS No. 140"), "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities." This statement is applicable for transfers of assets and extinguishments of liabilities occurring after June 30, 2001. The Company adopted the provisions of
this statement as required for all transactions entered into on or after April 1, 2001. The adoption of SFAS No. 140 did not have a significant impact on the Company.

11

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Item 7a. Quantitative and Qualitative Disclosures About Market Risk

Market Risks

Market risk is the exposure to loss resulting from changes in interest rates, foreign currency exchange rates, commodity prices and equity prices. In pursuing its
business plan, the primary market risk to which the Company is exposed is interest rate risk. The Company's operating results will depend in part on the interest expense incurred in connection with
its variable-rate interest bearing liabilities.

Interest
rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political conditions, and other factors
beyond the control of the Company. As more fully discussed in Note 3 to the Company's Consolidated Financial Statements, the Company hedges to limit the effects of changes in interest rates on
its operations by engaging in interest rate caps and swaps.

While
a REIT, or its qualified REIT subsidiary, may freely utilize certain types of derivative instruments to hedge interest rate risk on its liabilities, the use of derivatives for
other purposes could generate income which is not qualified income for purposes of maintaining REIT status. As a qualified REIT subsidiary, the Company may only engage in such instruments to hedge
such risk on a limited basis and does not enter into derivative contracts for speculative purposes.

There
can be no assurance that the Company's profitability will not be adversely affected during any period as a result of changing interest rates. In addition, hedging transactions
using derivative instruments involve certain additional risks such as counterparty credit risk, legal enforceability of hedging contracts and the risk that unanticipated and significant changes in
interest rates will cause a significant loss of basis in the contract. With regard to loss of basis in a hedging contract, indices upon which contracts are based may be more or less variable than the
indices upon which the hedged liabilities are based, thereby making the hedge less effective. The counterparties to these contractual arrangements are major financial institutions with which the
Company and its affiliates may also have other financial relationships. The Company is potentially exposed to credit loss in the event of nonperformance by these counterparties. However, because of
their high credit ratings, the Company does not anticipate that any of the counterparties will fail to meet their obligations. There can be no assurance that the Company will be able to adequately
protect against the foregoing risks and that the Company will ultimately realize an economic benefit from any hedging contract it enters into which exceeds the related costs incurred in connection
with engaging in such hedges.

The
following table quantifies the potential changes in net investment income and net fair value of financial instruments should interest rates increase or decrease 50, 100 or 200 basis
points, assuming no change in the shape of the yield curve (i.e., relative interest rates). Net investment income is calculated as revenue from loans and other lending investments and operating leases
(as of December 31, 2003), less related interest expense and operating costs on CTL assets, for the year ended December 31, 2003. Net fair value of financial instruments is calculated as
the sum of the value of derivative instruments and the present value of cash in-flows generated from interest-earning assets, less cash out-flows in respect of interest-bearing
liabilities as of December 31, 2003. The base
interest rate scenario assumes the one-month LIBOR rate of 1.12% as of December 31, 2003. Actual results could differ significantly from those estimated in the table.

Estimated Percentage Change In

|Change in Interest Rates |  | Net Investment
Income |    | Net Fair Value of
Financial Instruments(1) |   
|------------------------ |  | --------------------- | -- | ------------------------------------------ | --
|100 Basis Points        |  | 2.60                  | %  | (2.71                                      | )%
|50 Basis Points         |  | 1.30                  | %  | (1.32                                      | )%
|Base Interest Rate       |  | 0.00                  | %  | 0.00                                       | % 
|+100 Basis Points        |  | (2.60                 | )% | 2.46                                       | % 
|+200 Basis Points        |  | (5.20                 | )% | 4.69                                       | % 

Explanatory Note:

---

12

---

Item 8. Financial Statements and Supplemental Data

Index
to Financial Statements

|                                        |                                                                                                                              | Page
|--------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------- | ----
|Financial Statements:                   |                                                                                                                              |     
|                                        | Report of Independent Auditors                                                                                               |     
|                                        | Consolidated Balance Sheets at December 31, 2003 and 2002                                                                    |     
|                                        | Consolidated Statements of Operations for each of the three years in the period ended December 31, 2003                      |     
|                                        | Consolidated Statements of Changes in Shareholder's Equity for each of the three years in the period ended December 31, 2003 |     
|                                        | Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2003                      |     
|                                        | Notes to Consolidated Financial Statements                                                                                   |     
|Financial Statement Schedule:           |                                                                                                                              |     
|For the period ended December 31, 2003: |                                                                                                                              |     
|                                        | Schedule IIICorporate Tenant Lease Assets and Accumulated Depreciation                                                      |     

All
other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

Financial
statements of three companies or joint ventures accounted for under the equity method have been omitted because the Company's proportionate share of the income from continuing
operations before income taxes is less than 20.00% of the respective consolidated amount and the investments in and advances to each company are less than 20.00% of consolidated total assets.

13

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Report of Independent Auditors

To the Board of Directors and Shareholder
of TriNet Corporate Realty Trust, Inc.

In
our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of TriNet Corporate Realty Trust, Inc.
and its subsidiaries (the "Company") at December 31, 2003 and 2002, and the results of their operations and their cash flows for each of the three years in the period ended December 31,
2003 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index
presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial
statement schedule are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits.
We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

PricewaterhouseCoopers
LLP
New York, NY
February 20, 2004, except for Note 12, which is as of March 12, 2004

14

---



TriNet Corporate Realty Trust, Inc.        (A wholly-owned subsidiary of iStar Financial Inc.)        Consolidated Balance Sheets        (In thousands, except share and per
share data)

|                                                                                                                                    |                                            | As of December 31, |        
|----------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------------------ | -------
|
|ASSETS                                                                                                                              |                                           
|Loans and other lending investments, net                                                                                            |                                            | $                  |       
|Corporate tenant lease assets, net                                                                                                  |                                            |                    | 747,746
|Investments in and advances to joint ventures and unconsolidated subsidiaries                                                       |                                            |                    | 19,993 
|Assets held for sale                                                                                                                |                                            |                    |       
|Cash and cash equivalents                                                                                                           |                                            |                    | 12,594 
|Accrued interest and operating lease income receivable                                                                              |                                            |                    | 2,339  
|Deferred operating lease income receivable                                                                                          |                                            |                    | 15,936 
|Deferred expenses and other assets                                                                                                  |                                            |                    | 39,189 
|                                                                                                                                    |                                            |                    |        
|                                                                                                                                    | Total assets                               |                    | $      
|                                                                                                                                    |                                            |                    |        
|LIABILITIES AND SHAREHOLDER'S EQUITY                                                                                                |                                           
|Liabilities:                                                                                                                        |                                            |                    |        
|Accounts payable, accrued expenses and other liabilities                                                                            |                                            | $                  | 33,457 
|Debt obligations                                                                                                                    |                                            |                    | 415,084
|                                                                                                                                    |                                            |                    |        
|                                                                                                                                    | Total liabilities                          |                    |        
|                                                                                                                                    |                                            |                    |        
|Commitments and contingencies                                                                                                       |                                            |                    |       
|Minority interest in consolidated entities                                                                                          |                                            |                    | 2,496  
|Shareholder's equity:                                                                                                               |                                            |                    |        
|Common stock, $0.01 par value, 100 shares authorized: 100 shares issued and outstanding at December 31, 2003 and 2002, respectively |                                            |                    |       
|Additional paid-in capital                                                                                                          |                                            |                    | 427,271
|Retained earnings                                                                                                                   |                                            |                    |       
|Accumulated other comprehensive income (losses) (See Note 9)                                                                        |                                            |                    | (215   
|Common stock of iStar Financial (parent) held in treasury (at cost)                                                                 |                                            |                    | (40,296
|                                                                                                                                    |                                            |                    |        
|                                                                                                                                    | Total shareholder's equity                 |                    |        
|                                                                                                                                    |                                            |                    |        
|                                                                                                                                    | Total liabilities and shareholder's equity |                    | $      
|                                                                                                                                    |                                            |                    |        

The
accompanying notes are an integral part of the financial statements.

15

---



TriNet Corporate Realty Trust, Inc.        (A wholly-owned subsidiary of iStar Financial Inc.)        Consolidated Statements of Operations        (In thousands, except per
share data)

|                                                                                                                                   |                                               | For the Year Ended December 31, |       
|---------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------- | ------------------------------- | ------
|
|Revenue:                                                                                                                           |                                               |                                 |       
|                                                                                                                                   | Interest income                               |                                 | $     
|                                                                                                                                   | Operating lease income                        |                                 |       
|                                                                                                                                   | Other income                                  |                                 |       
|                                                                                                                                   |                                               |                                 |       
|                                                                                                                                   |                                               | Total revenue                   |       
|                                                                                                                                   |                                               |                                 |       
|Costs and expenses:                                                                                                                |                                               |                                 |       
|                                                                                                                                   | Interest expense                              |                                 |       
|                                                                                                                                   | Operating costscorporate tenant lease assets |                                 |       
|                                                                                                                                   | Depreciation and amortization                 |                                 |       
|                                                                                                                                   | General and administrative                    |                                 |       
|                                                                                                                                   | Loss on early extinguishment of debt          |                                 |       
|                                                                                                                                   |                                               |                                 |       
|                                                                                                                                   |                                               | Total costs and expenses        |       
|                                                                                                                                   |                                               |                                 |       
|Net income before equity in (loss) earnings from joint ventures and unconsolidated subsidiaries, minority interest and other items |                                               |                                 | 27,031
|Equity in (loss) earnings from joint ventures and unconsolidated subsidiaries                                                      |                                               |                                 | (2,176
|Minority interest in consolidated entities                                                                                         |                                               |                                 | (160  
|Cumulative effect of change in accounting principle (See Note 3)                                                                   |                                               |                                 |      
|                                                                                                                                   |                                               |                                 |       
|Net income from continuing operations                                                                                              |                                               |                                 | 24,695
|Income from discontinued operations                                                                                                |                                               |                                 | 5,072 
|Gain from discontinued operations                                                                                                  |                                               |                                 | 4,902 
|                                                                                                                                   |                                               |                                 |       
|Net income                                                                                                                         |                                               | $                               | 34,669
|                                                                                                                                   |                                               |                                 |       

---

The accompanying notes are an integral part of the financial statements.

16

---



TriNet Corporate Realty Trust, Inc.        (A wholly-owned subsidiary of iStar Financial Inc.)        Consolidated Statements of Changes in Shareholder's Equity        (In
thousands)

|                                                              |  | Additional
Paid-In
Capital |          | Retained
Earnings
(Deficit) |   | Accumulated
Other
Comprehensive
Income
(Losses) |   | Treasury
Stock |        | Total |  
|------------------------------------------------------------- |  | -------------------------- | -------- | --------------------------- | - | ----------------------------------------------- | - | -------------- | ------ | ----- | -
|Balance at December 31, 2000                                  |  | $                          | 890,271  |                             | $ | 62,651                                          |   | $              |       |       | $
|Contribution from iStar Financial                             |  |                            | 97,045   |                             |   |                                                |   |                |       |       |  
|Non-cash distribution of assets to iStar Financial            |  |                            | (217,746 | )                           |   | (61,208                                         | ) |                |       |       |  
|Dividends paid to iStar Financial                             |  |                            | (17,601  | )                           |   | (98,869                                         | ) |                |       |       |  
|Dividends received on iStar Financial shares held in treasury |  |                            |         |                             |   | 6,940                                           |   |                |       |       |  
|Net income for the period                                     |  |                            |         |                             |   | 90,486                                          |   |                |       |       |  
|Cumulative effect of change in accounting principle           |  |                            |         |                             |   |                                                |   |                | (1,517 | )     |  
|Change in accumulated other comprehensive income              |  |                            |         |                             |   |                                                |   |                | 2,239  |       |  
|                                                              |  |                            |          |                             |   |                                                 |   |                |        |       |  
|Balance at December 31, 2001                                  |  | $                          | 751,969  |                             | $ |                                                |   | $              | 722    |       | $
|Contribution from iStar Financial                             |  |                            | 30,550   |                             |   |                                                |   |                |       |       |  
|Non-cash distribution of assets to iStar Financial            |  |                            | (270,155 | )                           |   | (12,870                                         | ) |                |       |       |  
|Dividends paid to iStar Financial                             |  |                            | (32,505  | )                           |   | (54,447                                         | ) |                |       |       |  
|Dividends received on iStar Financial shares held in treasury |  |                            |         |                             |   | 5,734                                           |   |                |       |       |  
|Net income for the period                                     |  |                            |         |                             |   | 61,583                                          |   |                |       |       |  
|Change in accumulated other comprehensive income              |  |                            |         |                             |   |                                                |   |                | (7,494 | )     |  
|                                                              |  |                            |          |                             |   |                                                 |   |                |        |       |  
|Balance at December 31, 2002                                  |  | $                          | 479,859  |                             | $ |                                                |   | $              | (6,772 | )     | $
|Non-cash distribution of assets to iStar Financial            |  |                            | (149,222 | )                           |   |                                                |   |                |       |       |  
|Debt obligation assumed by iStar Financial                    |  |                            | 128,135  |                             |   |                                                |   |                |       |       |  
|Dividends paid to iStar Financial                             |  |                            | (31,501  | )                           |   | (40,699                                         | ) |                |       |       |  
|Dividends received on iStar Financial shares held in treasury |  |                            |         |                             |   | 6,030                                           |   |                |       |       |  
|Net income for the period                                     |  |                            |         |                             |   | 34,669                                          |   |                |       |       |  
|Change in accumulated other comprehensive income              |  |                            |         |                             |   |                                                |   |                | 6,557  |       |  
|                                                              |  |                            |          |                             |   |                                                 |   |                |        |       |  
|Balance at December 31, 2003                                  |  | $                          | 427,271  |                             | $ |                                                |   | $              | (215   | )     | $
|                                                              |  |                            |          |                             |   |                                                 |   |                |        |       |  

The accompanying notes are an integral part of the financial statements.

17

---



TriNet Corporate Realty Trust, Inc.        (A wholly-owned subsidiary of iStar Financial Inc.)        Consolidated Statements of Cash Flows        (In thousands)

|                                                                                    |                                                                                 | For the Year Ended December 31,                                                 |       
|----------------------------------------------------------------------------------- | ------------------------------------------------------------------------------- | ------------------------------------------------------------------------------- | ------
|
|Cash flows from operating activities:                                               |                                                                                 |                                                                                 |       
|Net income                                                                          |                                                                                 | $                                                                               | 34,669
|Adjustments to reconcile net income to cash flows provided by operating activities: |                                                                                 |                                                                                 |       
|                                                                                    | Minority interest in consolidated entities                                      |                                                                                 |       
|                                                                                    | Depreciation and amortization                                                   |                                                                                 |       
|                                                                                    | Depreciation and amortization from discontinued operations                      |                                                                                 |       
|                                                                                    | Amortization of discounts/premiums                                              |                                                                                 |       
|                                                                                    | Amortization of deferred financing fees                                         |                                                                                 |       
|                                                                                    | Equity in earnings from joint ventures and unconsolidated subsidiaries          |                                                                                 |       
|                                                                                    | Distributions from operations of joint ventures                                 |                                                                                 |       
|                                                                                    | Deferred operating lease income receivable                                      |                                                                                 |       
|                                                                                    | Gain from discontinued operations                                               |                                                                                 |       
|                                                                                    | Loss on early extinguishment of debt                                            |                                                                                 |       
|                                                                                    | Cumulative effect of a change in accounting principle                           |                                                                                 |       
|                                                                                    | Changes in assets and liabilities:                                              |                                                                                 |       
|                                                                                    |                                                                                 | Decrease (increase) in accrued interest and operating lease income receivable   |       
|                                                                                    |                                                                                 | Increase in deferred expenses and other assets                                  |       
|                                                                                    |                                                                                 | (Decrease) increase in accounts payable, accrued expenses and other liabilities |       
|                                                                                    |                                                                                 |                                                                                 |       
|                                                                                    |                                                                                 | Cash flows provided by operating activities                                     |       
|                                                                                    |                                                                                 |                                                                                 |       
|Cash flows from investing activities:                                               |                                                                                 |                                                                                 |       
|                                                                                    | New investment originations                                                     |                                                                                 |       
|                                                                                    | Net proceeds from sale of corporate tenant lease assets                         |                                                                                 |       
|                                                                                    | Net proceeds from discontinued operations                                       |                                                                                 |       
|                                                                                    | Repayments of and principal collections on loans and other lending investments  |                                                                                 |       
|                                                                                    | Investments in and advances to unconsolidated joint ventures                    |                                                                                 |       
|                                                                                    | Distributions from unconsolidated joint ventures                                |                                                                                 |       
|                                                                                    | Capital improvements for build-to-suit projects                                 |                                                                                 |       
|                                                                                    | Capital improvement projects on corporate tenant lease assets                   |                                                                                 |       
|                                                                                    | Other capital expenditures on corporate tenant lease assets                     |                                                                                 |       
|                                                                                    |                                                                                 |                                                                                 |       
|                                                                                    |                                                                                 | Cash flows provided by (used in) investing activities                           |       
|                                                                                    |                                                                                 |                                                                                 |       
|Cash flows from financing activities:                                               |                                                                                 |                                                                                 |       
|                                                                                    | Borrowings under revolving credit facility                                      |                                                                                 |       
|                                                                                    | Repayments under revolving credit facility                                      |                                                                                 |       
|                                                                                    | Borrowings under term loans                                                     |                                                                                 |       
|                                                                                    | Repayments under term loans                                                     |                                                                                 |       
|                                                                                    | Repayments under unsecured notes                                                |                                                                                 |       
|                                                                                    | (Increase) decrease in restricted cash held in connection with debt obligations |                                                                                 |       
|                                                                                    | Prepayment penalty on early extinguishment of debt                              |                                                                                 |       
|                                                                                    | Payments for deferred financing costs                                           |                                                                                 |       
|                                                                                    | Distributions to minority interest in consolidated entities                     |                                                                                 |       
|                                                                                    | Contribution from iStar Financial                                               |                                                                                 |       
|                                                                                    | Dividends paid to iStar Financial                                               |                                                                                 |       
|                                                                                    | Dividends received on iStar Financial shares held in treasury                   |                                                                                 |       
|                                                                                    |                                                                                 |                                                                                 |       
|                                                                                    |                                                                                 | Cash flows (used in) financing activities                                       |       
|                                                                                    |                                                                                 |                                                                                 |       
|Increase (decrease) in cash and cash equivalents                                    |                                                                                 |                                                                                 | 375   
|Cash and cash equivalents at beginning of period                                    |                                                                                 |                                                                                 | 12,219
|                                                                                    |                                                                                 |                                                                                 |       
|Cash and cash equivalents at end of period                                          |                                                                                 | $                                                                               | 12,594
|                                                                                    |                                                                                 |                                                                                 |       
|Supplemental disclosure of cash flow information:                                   |                                                                                 |                                                                                 |       
|                                                                                    | Cash paid during the period for interest, net of capitalized interest           |                                                                                 | $     
|                                                                                    |                                                                                 |                                                                                 |       

---

The accompanying notes are an integral part of the financial statements.

18

---



TriNet Corporate Realty Trust, Inc.        (A wholly-owned subsidiary of iStar Financial Inc.)        Notes to Consolidated Financial Statements

Note 1Business and Organization

BusinessTriNet Corporate Realty Trust, Inc., a Maryland Corporation (the "Company"), is a wholly-owned subsidiary of
iStar Financial Inc., a Maryland Corporation ("iStar Financial"). iStar Financial and its subsidiaries provide custom-tailored financing to high-end private and corporate owners of
real estate nationwide, including senior and junior mortgage debt, senior, mezzanine and subordinated corporate capital, and corporate net lease financing. The Company typically provides capital to
corporations, as well as borrowers, who control facilities leased to single creditworthy tenants. The Company's net leased assets are generally mission-critical headquarters or distribution facilities
that are subject to long-term leases with rated corporate credit tenants, and which provide for all expenses at the property to be paid by the corporate tenant on a triple net lease basis.
Corporate tenant lease ("CTL") transactions have terms generally ranging from ten to 20 years and typically range in size from $20 million to $150 million. As of
December 31, 2003, the Company's portfolio consisted of 75 facilities principally subject to net leases to approximately 104 customers, comprising 7.8 million square feet in 17 states.
Of the 75 total facilities, there are nine facilities held in two unconsolidated joint ventures.

OrganizationThe Company became a wholly-owned subsidiary of iStar Financial through a merger on November 4, 1999. As a
wholly-owned subsidiary of iStar Financial, a real estate investment trust ("REIT"), the Company operates as a qualified real estate investment trust subsidiary ("QRS") under the Internal Revenue Code
of 1986, as amended (the "Code").

Note 2Basis of Presentation

The accompanying audited Consolidated Financial Statements have been prepared in conformity with generally accepted accounting principles in the United States of
America ("GAAP") for complete financial statements. The Consolidated Financial Statements include the accounts of the Company, its wholly-owned subsidiary corporations and partnerships, and its
majority-owned and controlled partnership.

Certain
other investments in partnerships or joint ventures which the Company does not control are accounted for under the equity method (see Notes 5 and 6). All significant intercompany
balances and transactions have been eliminated in consolidation.

Note 3Summary of Significant Accounting Policies

Loans and other lending investments, netAs described in Note 4, "Loans and Other Lending Investments," includes
corporate/partnership loans. Management considers its investments in this category to be either held-to-maturity or available-for-sale. Items classified
as held-to-maturity are reflected at amortized historical cost. Items classified as available-for-sale are reported at fair value, with unrealized gains
and losses included in "Accumulated other comprehensive income (losses)" on the Company's Consolidated Balance Sheets and are not included in the Company's net income.

Corporate tenant lease assets and depreciationCTL assets are generally recorded at cost less accumulated depreciation.
Certain improvements and replacements are capitalized when they extend the useful life, increase capacity or improve the efficiency of the asset. Repairs and maintenance items are expensed as
incurred. Depreciation is computed using the straight-line method of cost recovery over estimated useful lives of 40.0 years for facilities, five years for furniture and equipment,
the shorter of the remaining lease term or expected life for tenant improvements and the remaining life of the facility for facility improvements.

19

---

CTL
assets to be disposed of are reported at the lower of their carrying amount or fair value less cost to sell. The Company also periodically reviews long-lived assets to be
held and used for an impairment in value whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. In management's opinion, CTL assets to be
held and used are not carried at amounts in excess of their estimated recoverable amounts.

In
accordance with the adoption of Statement of Financial Accounting Standards No. 141 ("SFAS No. 141"), "Business Combinations," regarding the Company's acquisition of
facilities, purchase costs will be allocated to the tangible and intangible assets and liabilities acquired based on their estimated fair values. The value of the tangible assets, consisting of land,
buildings and tenant improvements, will be determined as if vacant, that is, at replacement cost. Intangible assets including the above-market or below-market value of leases, the value of
in-place leases and the value of customer relationships will be recorded at their relative fair values.

Above-market
and below-market in-place lease values for owned CTL assets will be recorded based on the present value (using a discount rate reflecting the risks associated
with the leases acquired) of the difference between: (1) the contractual amounts to be paid pursuant to the leases negotiated and in-place at the time of acquisition of the
facilities; and (2) management's estimate of fair market lease rates for the facility or equivalent facility, measured over a period equal to the remaining non-cancelable term of
the lease. The capitalized above-market (or below-market) lease value will be amortized as a reduction of (or, increase to) operating lease income over the remaining non-cancelable term of
each lease plus any renewal periods with fixed rental terms that are considered to be below-market.

The
total amount of other intangible assets will be allocated to in-place lease values and customer relationship intangible values based on management's evaluation of the
specific characteristics of each customer's lease and the Company's overall relationship with each customer. Characteristics to be considered in allocating these values include the nature and extent
of the existing relationship with the customer, prospects for developing new business with the customer, the customer's credit quality and the expectation of lease renewals among other factors.
Factors considered by management's analysis include the estimated carrying costs of the facility during a hypothetical expected lease-up period, current market conditions and costs to
execute similar leases. Management will also consider information obtained about a property in connection with its pre-acquisition due diligence. Estimated carrying costs will include real
estate taxes, insurance, other property operating costs and estimates of lost operating lease income at market rates during the hypothetical expected lease-up periods, based on
management's assessment of specific market conditions. Management will estimate costs to execute leases including commissions and legal costs to the extent that such costs are not already incurred
with a new lease that has been negotiated in connection with the purchase of the facility. Management's estimates will be used to determine these values. These intangible assets are included in
"Deferred expenses and other assets" on the Company's Consolidated Balance Sheets.

The
value of above-market or below-market in-place leases will be amortized to expense over the remaining initial term of each lease. The value of customer relationship
intangibles will be amortized to expense over the initial and renewal terms of the leases, but no amortization period for intangible assets will exceed the remaining depreciable life of the building.
In the event that a customer terminates its lease, the unamortized portion of each intangible, including market rate adjustments, lease origination costs, in-place lease values and
customer relationship values, would be charged to expense.

20

---

Capitalized interestThe Company capitalizes interest costs incurred during the construction period on qualified
build-to-suit projects for corporate tenants, including investments in joint ventures accounted for under the equity method. No interest was capitalized during the
12 months ended December 31, 2003 and approximately $70,000 was capitalized during the 12 months ended December 31, 2002.

Cash and cash equivalentsCash and cash equivalents include all cash held in banks or invested in money market funds with
original maturity terms of less than 90 days.

Non-cash activityOn March 3, 2003, a remarketing agent purchased all of the outstanding 6.75% Dealer
Remarketable Securities and agreed to amend the notes to substitute iStar Financial as the obligor. The remarketing agent subsequently exchanged these notes with iStar Financial for newly issued iStar
Financial notes. The 6.75% Dealer Remarketable Securities were immediately retired after this exchange and the liability was effectively eliminated through a contribution from iStar Financial to the
Company of approximately $128.1 million.

During
the 12 months ended December 31, 2003, the Company disposed of 17 CTL assets and their related liabilities by transferring them to iStar Financial at their
respective carrying values.

The
following is a summary of the effects of these transactions on the Company's consolidated financial position for the 12 months ended December 31, 2003:

Carrying value of:Assets

$
159,536Liabilities


(10,314
)Non-cash distribution of net assets to iStar Financial

$
149,222


Revenue recognitionThe Company's revenue recognition policies are as follows:

Loans and other lending investments:The Company classifies loans and other lending investments as either
held-to-maturity or available-for-sale. The Company reflects held-to-maturity investments at amortized cost less acquisition
premiums or discounts, deferred loan fees and undisbursed loan funds. Unrealized gains and losses on available-for-sale investments are included in "Accumulated other
comprehensive income (losses)" on the Company's Consolidated Balance Sheets and are not included in the Company's net income. On occasion, the Company may acquire loans at small premiums or discounts
based on the credit characteristics of such loans. These premiums or discounts are recognized as yield adjustments over the lives of the related loans. Loan origination or exit fees, as well as direct
loan origination costs, are also deferred and recognized over the lives of the related loans as a yield adjustment. If loans with premiums, discounts, loan origination or exit fees are prepaid, the
Company immediately recognizes the unamortized portion as a decrease or increase in the prepayment gain or loss. Interest income is recognized using the effective interest method applied on a
loan-by-loan basis.

Leasing investments:Operating lease revenue is recognized on the straight-line method of accounting from the
later of the date of the origination of the lease or the date of acquisition of the facility subject to existing leases. Accordingly, contractual lease payment increases are recognized evenly over the
term of the lease. The cumulative difference between lease revenue recognized under this method and

21

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contractual
lease payment terms is recorded as "Deferred operating lease income receivable" on the Company's Consolidated Balance Sheets.

Allowance for doubtful accountsThe Company's accounting policy requires a reserve on the Company's accrued operating lease
income receivable balances and on the deferred operating lease income receivable balances. The reserve covers asset specific problems (e.g., bankruptcy) as they arise, as well as, a portfolio reserve
based on management's evaluation of the credit risks associated with these receivables.

Accounting for derivative instruments and hedging activityIn accordance with Statement of Financial Accounting Standards
No. 133 ("SFAS No. 133"), "Accounting for Derivative Instruments and Hedging Activities" as amended by Statement of Financial Accounting Standards No. 137 "Accounting for
Derivative Instruments and Hedging ActivityDeferral of the Effective date of FASB 133," Statement of Financial Accounting Standards No. 138 "Accounting for Certain Derivative
Instruments and Certain Hedging Activitiesan Amendment of FASB Statement 133" and Statement of Financial Accounting Standards No. 149 "Amendment of Statement 133 on Derivative
Instruments and Hedging Activities," the Company recognizes all derivatives as either assets or liabilities in the statement of financial position and measures those instruments at fair value. If
certain conditions are met, a derivative may be specifically designated as: (1) a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm
commitment; (2) a hedge of the exposure to variable cash flows of a forecasted transaction; or (3) in certain circumstances, a hedge of a foreign currency exposure.

Upon
adoption, on January 1, 2001, the Company recognized a charge to net income of approximately $269,000 and an additional charge of $1.5 million to "Accumulated other
comprehensive income (losses)," on the Company's Consolidated Balance Sheets representing the cumulative effect of change in accounting principle.

Income taxesThe Company is taxed as a QRS under the Code. As a QRS, the Company is included in the consolidated tax return of
iStar Financial. TriNet Management Operating Company, Inc. ("TMOC"), the Company's REIT taxable subsidiary, is not consolidated for federal income tax purposes and is taxed as a corporation.
Accordingly, except for the Company's taxable REIT subsidiaries, no provision has been made for federal income taxes in the accompanying Consolidated Financial Statements. Prior to December 31,
2003, the entity was liquidated.

Interest rate risk managementThe Company has entered into various interest rate protection agreements that, together with a
swap agreement, fix the interest rate on a portion of the Company's LIBOR-based borrowings. The related cost of these agreements is amortized over their respective lives and such amortization is
recorded as "Interest expense" on the Company's Consolidated Statements of Operations. The Company enters into interest rate risk management arrangements with financial institutions meeting certain
minimum financial criteria, and the related credit risk of non-performance by counterparties is not considered to be significant.

Credit risk concentrationThe Company underwrites the credit of prospective customers and may require them to provide some
form of additional credit support such as corporate guarantees, letters of credit and/or cash security deposits. Although the Company's assets are geographically diverse and its customers operate in a
variety of industries, to the extent the Company has a significant concentration of

22

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operating
lease revenue from any single customer, the inability of that customer to make its payments could have an adverse effect on the Company.

Earnings per shareEarnings per share is not calculated for any of the three years in the period ended December 31,
2003 since all 100 shares outstanding are held by iStar Financial.

ReclassificationsCertain prior year amounts have been reclassified in the Consolidated Financial Statements and the related
notes to conform to the 2003 presentation.

Use of estimatesThe preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues
and expenses during the reporting periods. Actual results could differ from those estimates.

New accounting standardsIn December 2003, the SEC issued Staff Accounting Bulletin No. 104 ("SAB 104"),
"Revenue Recognition" which supercedes SAB 101, "Revenue Recognition in Financial Statements." SAB 104's primary purpose is to rescind the accounting guidance contained in SAB 101 related to multiple
element revenue arrangements, superceded as a result of the issuance of EITF 00-21. The Company adopted the provisions of this statement immediately, as required, and it did not have a
significant impact on the Company's Consolidated Financial Statements.

EITF
00-21, "Accounting for Revenue Arrangements with Multiple Deliverables," issued during the third quarter of 2003, provides guidance on revenue recognition for revenues
derived from a single contract that contain multiple products or services. EITF 00-21 also provides additional requirements to determine when these revenues may be recorded separately for
accounting purposes. The Company adopted EITF 00-21 on July 1, 2003, as required, and it did not have a significant impact on the Company's Consolidated Financial Statements.

In
May 2003, the FASB issued Statement of Financial Accounting Standards No. 150 ("SFAS No. 150"), "Accounting for Certain Financial Instruments With Characteristics
of Both Liabilities and Equity." This standard requires issuers to classify as liabilities the following three types of freestanding financial
instruments: (1) mandatorily redeemable financial instruments, (2) obligations to repurchase the issuer's equity shares by transferring assets; and (3) certain obligations to
issue a variable number of shares. The FASB recently issued FASB Staff Position ("FSP") 150-3, which defers the provisions of paragraphs 9 and 10 of SFAS No. 150 indefinitely as
they apply to mandatorily redeemable noncontrolling interests associated with finite-lived entities. The Company adopted the provisions of this statement, as required, on July 1, 2003, and it
did not have a significant financial impact on the Company's Consolidated Financial Statements.

In
January 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46"), "Consolidation of Variable Interest Entities," an interpretation of ARB 51. FIN 46 provides guidance
on identifying entities for which control is achieved through means other than through voting rights (a "variable interest entity" or "VIE"), and how to determine when and which business enterprise
should consolidate a VIE. In addition, FIN 46 requires that both the primary beneficiary and all other enterprises with a significant variable interest in a VIE make additional disclosures. The
transitional disclosure requirements took effect immediately and were required for all financial statements initially issued or modified after January 31, 2003. Immediate

23

---

consolidation
is required for VIEs entered into or modified after February 1, 2003 in which the Company is deemed the primary beneficiary. For VIEs in which the Company entered into prior to
February 1, 2003, the FASB recently issued FSP to defer FIN 46 for those older entities to the reporting period ending after March 15, 2004. The adoption of the additional consolidation
provisions of FIN 46 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In
December 2002, the FASB issued Statement of Financial Accounting Standards No. 148 ("SFAS No. 148"), "Accounting for Stock-Based
CompensationTransition and Disclosure," an amendment of FASB Statement No. 123 ("SFAS No. 123"). This statement provides alternative transition methods for a voluntary
change to the fair value basis of accounting for stock-based employee compensation. However, this Statement does not permit the use of the original SFAS No. 123 prospective method of transition
for changes to fair value based method made in fiscal years beginning after December 15, 2003. In addition, this Statement amends the disclosure requirements of SFAS No. 123 to require
prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation, description of transition method utilized and the effect of
the method used on reported results. The new interim disclosure provisions are effective for the first interim period beginning after December 15, 2002. The Company adopted SFAS No. 148
with retroactive application to January 1, 2002 with no material effect on the Company's Consolidated Financial Statements.

In
November 2002, the FASB issued FASB Interpretation No. 45 ("FIN 45"), "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees
of Indebtedness of Others," an interpretation of Statement of Financial Accounting Standards No. 5 ("SFAS No. 5"), "Accounting for Contingencies," Statement of Financial Accounting
Standards No. 57, "Related Party Disclosures," Statement of Financial Accounting Standards No. 107, "Disclosures about Fair Value of Financial Instruments" and rescinds FASB
Interpretation No. 34, "Disclosure of Indirect Guarantees of Indebtedness of Others, an Interpretation of SFAS No. 5." It requires that upon issuance of a
guarantee, the guarantor must recognize a liability for the fair value of the obligation it assumes under that guarantee regardless if the Company receives separately identifiable consideration (e.g.,
a premium). The new disclosure requirements became effective December 31, 2002. The adoption of FIN 45 did not have a material impact on the Company's Consolidated Financial Statements, nor is
it expected to have a material impact in the future.

In
September 2002, the FASB issued Statement of Financial Accounting Standards No. 147 ("SFAS No. 147"), "Acquisitions of Certain Financial Institutions," an
amendment of FASB Statements No. 72 and 144 and FASB Interpretation No. 9. SFAS No. 147 provides guidance on the accounting for the acquisitions of financial institutions, except
those acquisitions between two or more mutual enterprises. SFAS No. 147 removes acquisitions of financial institutions from the scope of both FASB No. 72, "Accounting for Certain
Acquisitions of Banking or Thrift Institutions," and FASB Interpretation No. 9, Applying APB Opinions No. 16 and 17, "When a Savings and Loan Association or a Similar Institution is
Acquired in a Business Combination Accounted for by the Purchase Method," and requires that those transactions be accounted for in accordance with SFAS No. 141 and SFAS No. 142. SFAS
No. 147 also amends SFAS No. 144 to include in its scope long-term, customer-relationship intangible assets of financial institutions such as depositor-relationship and
borrower-relationship intangible assets and credit cardholder intangible assets. The Company adopted the provisions of this statement, as required, on October 1, 2002, and it did not have a
significant financial impact on the Company's Consolidated Financial Statements.

24

---

In
June 2002, the FASB issued Statement of Financial Accounting Standards No. 146 ("SFAS No. 146"), "Accounting for Exit or Disposal Activities," to address
significant issues regarding the recognition, measurement, and reporting of costs that are associated with exit and disposal activities, including restructuring activities that are currently accounted
for pursuant to the guidance that the Emerging Issues Task Force ("EITF") has set forth in EITF Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." The scope of SFAS No. 146 also includes: (1) costs related to terminating a contract that is not a
capital lease; and (2) termination benefits received by employees involuntarily terminated under the terms of a one-time benefit arrangement that is not an on-going
benefit arrangement or an individual deferred-compensation contract. The Company adopted the provisions of SFAS No. 146 on December 31, 2002, as required, and it did not have a material
effect on the Company's Consolidated Financial Statements.

In
April 2002, the FASB issued Statement of Financial Accounting Standards No. 145 ("SFAS No. 145"), "Rescission of FASB Statements No. 4, 44, and 64,
Amendment of FASB Statement No. 13, and Technical Corrections." SFAS No. 145 rescinds both FASB Statements No. 4 ("SFAS No. 4"), "Reporting Gains and Losses from
Extinguishment of Debt," and the amendment to SFAS No. 4, FASB Statement No. 64 ("SFAS No. 64"), "Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements."
Through this rescission, SFAS No. 145 eliminates the requirement (in both SFAS No. 4 and SFAS No. 64) that gains and losses from the extinguishment of debt be aggregated and, if
material, classified as an extraordinary item, net of the related income tax effect. An entity is not prohibited from classifying such gains and losses as extraordinary items, so long as they meet the
criteria in
paragraph 20 of Accounting Principles Board Opinion No. 30 ("APB 30"), "Reporting the Results of OperationsReporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions"; however, due to the nature of the Company's operations, such treatment may not be available to the Company. Any gains or
losses on extinguishments of debt that were previously classified as extraordinary items in prior periods presented that do not meet the criteria in APB 30 for classification as an extraordinary item
will be reclassified to income from continuing operations. The provisions of SFAS No. 145 are effective for financial statements issued for fiscal years beginning after May 15, 2002. The
Company adopted the provisions of this statement, as required, on January 1, 2003. For the year ended December 31, 2001, the Company reclassified $1.6 million from "Extraordinary
loss on early extinguishment of debt" into "Loss on early extinguishment of debt" in continuing operations on the Company's Consolidated Statements of Operations.

In
October 2001, the FASB issued Statement of Financial Accounting Standards No. 144 ("SFAS No. 144"), "Accounting for the Impairment or Disposal of
Long-Lived Assets." SFAS No. 144 provides new guidance on the recognition of impairment losses on long-lived assets to be held and used or to be disposed of, and also
broadens the definition of what constitutes a discontinued operation and how the results of a discontinued operation are to be measured and presented. SFAS No. 144 requires that current
operations prior to the disposition of CTL assets and prior period results of such operations be presented in discontinued operations in the Company's Consolidated Statements of Operations. The
provisions of SFAS No. 144 are effective for financial statements issued for fiscal years beginning after December 15, 2001, and must be applied at the beginning of a fiscal year. The
Company adopted the provisions of this statement on January 1, 2002, as required, and it did not have a significant financial impact on the Company.

25

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In
July 2001, the FASB issued SFAS No. 141 and Statement of Financial Accounting Standards No. 142 ("SFAS No. 142"), "Goodwill and Other Intangible Assets."
SFAS No. 141 requires the purchase method of accounting to be used for all business combinations initiated after June 30, 2001. SFAS No. 141 also addresses the initial recognition
and measurement of goodwill and other intangible assets acquired in business combinations and requires intangible assets to be recognized apart from goodwill if certain tests are met. SFAS
No. 142 requires that goodwill not be amortized but instead be measured for impairment at least annually, or when events indicate that there may be an impairment. The Company adopted the
provisions of both statements for transactions initiated after June 30, 2001, as required, and the adoption did not have a significant impact on the Company.

In
July 2001, the SEC released Staff Accounting Bulletin No. 102 ("SAB 102"), "Selected Loan Loss Allowance and Documentation Issues." SAB 102 summarizes certain of the
SEC's views on the development, documentation and application of a systematic methodology for determining allowances for loan and lease losses. Adoption of SAB 102 by the Company did not have a
significant impact on the Company.

In
September 2000, the FASB issued Statement of Financial Accounting Standards No. 140 ("SFAS No. 140"), "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities." This statement is applicable for transfers of assets and extinguishments of liabilities occurring after June 30, 2001. The Company adopted the provisions of
this statement as required for all transactions entered into on or after April 1, 2001. The adoption of SFAS No. 140 did not have a significant impact on the Company.

Note 4Loans and Other Lending Investments

On March 30, 2003, $2.0 million of convertible debt securities of a real estate company that trades on the Mexican Stock Exchange were reflected as
part of the Company's loans and lending investments as a result of the consolidation of TMOC (see Note 6) which held such investment. On June 30, 2003, the note was fully repaid.

On
July 6, 2001, the Company financed a $75.0 million term preferred investment in a publicly-traded real estate company with a $50.0 million term loan bearing
interest at LIBOR + 2.50%. The investment had a maturity of July 2006, including a one-year extension at the Company's option. The Company's investment carried an
initial current yield of 10.50%, with annual increases of 0.50% in each of the next two years. In addition, the Company's investment was convertible into the customer's common stock at a strike price
of $25.00 per share. During the second quarter of 2002, the asset was transferred to iStar Financial at its carrying value of $86.7 million.

Note 5Corporate Tenant Lease Assets

During the 12 months ended December 31, 2003 and 2002, respectively, the Company acquired an aggregate of approximately $1.0 million and
$27.9 million in CTL assets and disposed of CTL assets for net proceeds of approximately $37.3 million and $3.7 million.

During
the 12 months ended December 31, 2003 and 2002, respectively, the Company disposed of 17 and 19 CTL assets at their respective carrying value by transferring them to
iStar Financial.

26

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In
addition, during 2002, the Company acquired three CTL assets transferred from iStar Financial at their respective carrying amounts. No gain or loss resulted from these transfers.

The
Company's investments in CTL assets, at cost, were as follows (in thousands):

December 31,
2003

December 31,
2002Facilities and improvements

$
627,824

$
722,764Land and land improvements


182,898


246,107Less: accumulated depreciation


(62,976
)

(54,554
)Corporate tenant lease assets, net

$
747,746

$
914,317


The
Company's CTL assets are leased to customers with initial expiration dates from 2004 to 2023. Future operating lease payments under non-cancellable leases, excluding
customer reimbursements of expenses, in effect at December 31, 2003, are approximately as follows (in thousands):

Year

Amount2004

$
78,9962005


68,0342006


55,0252007


39,2332008


32,854Thereafter


173,138


The
Company receives reimbursements from customers for certain facility operating expenses including common area costs, insurance and real estate taxes. Customer expense reimbursements
for the 12 months ended December 31, 2003, 2002 and 2001 were approximately $17.8 million, $17.5 million and $17.4 million, respectively, and are included as a
reduction of "Operating costscorporate tenant lease assets" on the Company's Consolidated Statements of Operations.

The
Company is subject to expansion option agreements with one existing customer which could require the Company to fund and to construct up to 126,100 square feet of additional adjacent
space on which the Company would receive additional operating lease income under the terms of the option agreements. In addition, upon exercise of such expansion option agreements, the corporate
tenant would be required to simultaneously extend its existing lease terms for an additional six years.

During
the 12 months ended December 31, 2003, the Company sold eight CTL assets for net proceeds of approximately $37.3 million, and realized a gain of approximately
$4.9 million.

The
results of operations from CTL assets sold, transferred or held for sale in the current and prior periods are classified as "Income from discontinued operations" on the Company's
Consolidated Statements of Operations even though such income was actually recognized by the Company prior to the asset sale. Gains from the sale of CTL assets are classified as "Gain from
discontinued operations" on the Company's Consolidated Statements of Operations.

On
September 30, 2002, one of the Company's customers exercised an option to terminate its lease on 50.00% of the land leased from the Company. In connection with this
termination, the Company realized

27

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$17.5 million
in cash lease termination payments, offset by a $17.4 million impairment charge in connection with the termination, resulting in a net gain of approximately $123,000. In
the fourth quarter of 2002, the customer completed a recapitalization transaction that significantly enhanced its credit. In connection with this recapitalization, the Company agreed to amend the
customer's lease, effective October 1, 2002. In the lease amendment, the Company received $12.5 million in cash as prepaid lease payments and the customer agreed to fixed minimum
increases on future lease payments. In exchange, the Company agreed to reduce the customer's lease obligations for a period not to exceed nine quarters. Following the reduction period, the customer is
required to make additional lease payments over a 10-year period sufficient to reimburse the Company for a portion of the temporary reduction in lease payments. During the second quarter
of 2003, this asset that was classified as "Asset held for sale" on the Company's Consolidated Balance Sheets and was transferred to iStar Financial at its carrying value.

On
May 30, 2002, the Company sold one CTL asset for net proceeds of $3.7 million, and realized a gain of approximately $595,000. As of December 31, 2002, there were
two CTL assets with a combined book value of $28.5 million classified as "Assets held for sale" on the Company's Consolidated Balance Sheets.

Note 6Joint Ventures, Unconsolidated Subsidiaries and Minority Interest

Income or loss generated from the Company's joint venture investments and unconsolidated subsidiaries is included in "Equity in (loss) earnings from joint
ventures and unconsolidated subsidiaries" on the Company's Consolidated Statements of Operations.

The
Company's ownership percentages, its investments in and advances to unconsolidated joint ventures and subsidiaries, the Company's pro rata share of its ventures' third-party,
non-recourse debt as of December 31, 2003 and its respective income (loss) for the year ended December 31, 2003 are presented below (in thousands):

|                               |           |       |       |   |     | JV Income
(Loss) for the
Year Ended
December 31,
2003 |  | Pro Rata
Share of
Third-Party
Non-Recourse
Debt(1) |        | Third-Party Debt
|------------------------------ | --------- | ----- | ----- | - | --- | ----------------------------------------------------- |  | -------------------------------------------------- | ------ | ----------------
|
|Unconsolidated Joint
Ventures: |           |       |       |   |     |                                                       |  |                                                    |        |                 
|                               | Sunnyvale |       | 44.70 | % | $   | 11,815                                                |  | $                                                  | 1,740  |                 
|                               | CTC I     |       | 50.00 | % |     | 8,178                                                 |  |                                                    | (3,903 | )               
|Unconsolidated
Subsidiaries:   |           |       |       |   |     |                                                       |  |                                                    |        |                 
|TMOC                           |           | 95.00 | %     |   | N/A |                                                       |  | (13                                                | )      |                 
|                               |           |       |       |   |     |                                                       |  |                                                    |        |                 
|                               | Total     |       |       |   | $   | 19,993                                                |  | $                                                  | (2,176 | )               
|                               |           |       |       |   |     |                                                       |  |                                                    |        |                 

Explanatory Notes:

---

28

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Investments in and advances to unconsolidated joint ventures:At December 31, 2003, the Company had investments in two
unconsolidated joint ventures: (1) TriNet Sunnyvale Partners, L.P. ("Sunnyvale"), whose external partners are John D. O'Donnell, Trustee, John W. Hopkins, and Donald S. Grant, Trustee; and
(2) Corporate Technology Centre Associates LLC ("CTC I"), whose external member is Corporate Technology Centre Partners LLC. These ventures were formed for the purpose of operating, acquiring
and, in certain cases, developing CTL facilities.

On
November 3, 2003, the primary customer at the CTC I joint venture that was a tenant under four leases, filed a plan of reorganization under Chapter 11 of the U.S. Bankruptcy
Code. On December 19, 2003, the U.S. Bankruptcy Court for the District of Delaware approved their plan of reorganization at which time all four of their leases were terminated. The plan of
reorganization became effective on January 2, 2004, and the company exited from Chapter 11, at which time CTC I received termination payments for all four leases. At the same time, the customer
entered into a new three-year lease at one of the four buildings it previously occupied.

At
December 31, 2003, the ventures comprised nine net leased facilities. The Company's combined investment in these joint ventures at December 31, 2003 was
$20.0 million. The joint ventures' carrying value for the nine facilities owned at December 31, 2003 was $153.1 million. In aggregate, the joint ventures had total assets of
$178.3 million and total liabilities of $147.5 million as of December 31, 2003, and a net loss of $(5.1) million for the 12 months ended December 31, 2003.
The Company accounts for these investments under the equity method because the Company's joint venture partners have certain participating rights giving them shared control over the ventures.

On
July 2, 2002, the Company paid approximately $27.9 million in cash to the former member of TriNet Milpitas Associates ("Milpitas") joint venture in exchange for its
50.00% ownership interest. Pursuant to the terms of the joint venture agreement, the former external member had the right to convert its interest into 984,476 shares of common stock of iStar Financial
at any time during the period February 1, 2002 through January 31, 2003. On May 2, 2002, the former Milpitas external member exercised this right. Upon the external member's
exercise of its conversion right, the Company had the option to acquire the partner's interest for cash, instead of shares, for a payment equal to the value of 984,476 shares of common stock of iStar
Financial multiplied by the ten-day average
closing stock price as of the transaction date. The Company made such election and, as of July 2, 2002, owns 100.00% of Milpitas, and therefore consolidates these assets for accounting
purposes. The Company accounted for the acquisition of the external interest using the purchase method.

On
April 1, 2002, the former Sierra Land Ventures ("Sierra") joint venture partner assigned its 50.00% ownership interest in Sierra to the Company. There were no cash or shares
exchanged in this transaction. As of April 1, 2002, the Company owns 100.00% of the CTL asset previously held by Sierra and therefore consolidates this asset for accounting purposes.

Effective
September 29, 2000, iStar Sunnyvale Partners, LP, which is wholly owned by Sunnyvale, entered into an interest rate cap agreement limiting the venture's exposure to
interest rate movements on its $24.0 million LIBOR-based mortgage loan to an interest rate of 9.00% through November 9, 2003. On September 29, 2003, in connection with the
extension of the ventures' debt, the venture extended the cap through November 9, 2004. Currently, the limited partners of Sunnyvale have the option to convert their

29

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partnership
interest into cash; however, the Company may elect to deliver 297,728 shares of common stock of iStar Financial in lieu of cash.

Investments in and advances to unconsolidated subsidiaries:The Company had an investment in TMOC, an entity originally
formed to make a $2.0 million investment in the convertible debt securities of a real estate company that trades on the Mexican Stock Exchange. Prior to March 29, 2003, the Company owned
95.00% of the outstanding voting and non-voting common stock (representing 1.00% voting power and 95.00% of the economic interest) in TMOC. The owners of the remaining TMOC stock were two
executives of the Company. On March 29, 2003, the Company purchased the remaining 5.00% interest from the executives for approximately $2,000, an amount that was equal to the current carrying
value, which was less than their original investment. Following the purchase the Company owned 100.00% of TMOC and therefore consolidated the entity for accounting purposes. On June 30, 2003,
the $2.0 million investment was fully repaid and prior to December 31, 2003 the entity was liquidated.

Minority Interest:The Company holds a 98.00% interest in TriNet Property Partners, L.P with the external partners holding
the remaining 2.00% interest. As of August 1999, the external partners have the option to convert their partnership interest into cash; however, the Company may elect to deliver 72,819 shares
of common stock of iStar Financial in lieu of cash. The Company consolidates this partnership for financial statement purposes and records the minority interest of the external partner in "Minority
interest in consolidated entities" on the Company's Consolidated Balance Sheets.

Note 7Debt Obligations

As of December 31, 2003 and 2002, the Company has debt obligations under various arrangements with financial institutions as follows (in thousands):

|                       |                                          | Carrying Value as of |         |         |   |        
|---------------------- | ---------------------------------------- | -------------------- | ------- | ------- | - | -------
|
|Secured term loans:    |                                          |                      |         |         |   |        
|                       | Secured by corporate tenant lease assets |                      | $       | 193,000 |   | $      
|                       | Secured by corporate tenant lease assets |                      |         | 85,552  |   |        
|                       |                                          |                      |         |         |   |        
|                       | Total term loans                         |                      |         | 278,552 |   |        
|                       | Less: debt discount                      |                      |         | (128    | ) |        
|                       |                                          |                      |         |         |   |        
|                       | Total secured term loans                 |                      |         | 278,424 |   |        
|Unsecured notes(3):    |                                          |                      |         |         |   |        
|                       | 6.75% Dealer Remarketable Securities(4)  |                      |         |        |   |        
|                       | 7.70% Notes                              |                      |         | 100,000 |   |        
|                       | 7.95% Notes                              |                      |         | 50,000  |   |        
|                       |                                          |                      |         |         |   |        
|                       | Total unsecured notes                    |                      |         | 150,000 |   |        
|                       | Less: debt discount(5)                   |                      |         | (13,340 | ) |        
|                       |                                          |                      |         |         |   |        
|                       | Total unsecured notes                    |                      |         | 136,660 |   |        
|                       |                                          |                      |         |         |   |        
|Total debt obligations |                                          | $                    | 415,084 |         | $ | 543,470
|                       |                                          |                      |         |         |   |        

Explanatory Notes:

---

30

---

On March 3, 2003, a remarketing agent purchased all of the outstanding 6.75% Dealer Remarketable Securities and agreed to amend the notes
to substitute iStar Financial as the obligor. The remarketing
agent subsequently exchanged these notes with iStar Financial for newly issued iStar Financial notes. The 6.75% Dealer Remarketable Securities were immediately retired after this exchange and the
liability was effectively eliminated through a contribution from iStar Financial to the Company.

On
July 2, 2002 the Company purchased the remaining interest in the Milpitas joint venture from the former Milpitas external member for $27.9 million. Upon purchase of the
interest, the Milpitas venture became fully consolidated for accounting purposes and approximately $79.1 million of secured term debt is reflected on the Company's Consolidated Balance Sheets.

On
July 27, 2001, the Company repaid the unsecured revolving credit facility. iStar Financial replaced this subsidiary facility with a $300.0 million unsecured revolving
credit facility with a group of leading financial institutions.

On
July 6, 2001, the Company financed a $75.0 million structured finance asset with a $50.0 million term loan bearing interest at LIBOR + 2.50%. The
loan had a maturity of July 2006, including a one-year extension at the Company's option. The Company's investment carried an initial current yield of 10.50%, with annual increases
of 0.50% in each of the next two years. In addition, the Company's investment was convertible into the customer's common stock at a strike price of $25.00 per share. During the second quarter of 2002,
this asset was transferred to iStar Financial along with the associated liability.

On
June 14, 2001, the Company closed $193.0 million of term loan financing secured by 15 CTL assets. The variable-rate loan bears interest at
LIBOR + 1.85% (not to exceed 10.00% in aggregate) and has two one-year extensions at the Company's option. The Company used these proceeds to repay a $77.8 million
secured term loan maturing in June 2001 and to pay down a portion of its revolving credit facilities.

On
May 15, 2001, the Company repaid its $100.0 million 7.30% unsecured notes. These notes were senior unsecured obligations of the Company and ranked equally with the
Company's other senior unsecured and unsubordinated indebtedness.

The
Company has entered into an interest rate swap agreement which, together with an existing LIBOR interest rate cap agreement struck at 7.75%, effectively fixes the interest rate on
$75.0 million of the Company's LIBOR-based borrowings at 5.58% plus the applicable margin through December 1, 2004. The actual borrowing cost to the Company with respect to indebtedness
covered by the protection agreements will depend upon the applicable margin over LIBOR for such indebtedness, which will be determined by the terms of the relevant debt instruments. The Company has
also entered into a LIBOR interest rate cap struck at 7.75% in the notional amount of $35.0 million, which expires in December 2004.

31

---

During
the years ended December 31, 2001, the Company incurred an extraordinary loss of approximately $1.6 million, respectively, as a result of the early retirement of
certain debt obligations. On January 1, 2003, in accordance with SFAS No. 145, these costs were reclassified from "Extraordinary loss on early extinguishments of debt" into income from
continuing operations.

As
of December 31, 2003, future expected/scheduled maturities of outstanding long-term debt obligations are as follows (in thousands)(1):

2004

$
2005


80,8042006


243,0002007


2,8522008


Thereafter


101,896Total principal maturities


428,552Net unamortized debt discounts


(13,468
)Total debt obligations

$
415,084


Explanatory Note:

---

Note 8Stock Option Plans and Employee Benefits

Impact of MergerThe Company's stock incentive plans were terminated effective with the merger, at which time each holder of a
stock option, with the exception of the Company's directors and certain senior executives, elected to receive one of the following for each stock option: (1) cash equal to the difference
between the market price and the exercise price of the stock option, whether vested or unvested; or (2) a number of options to purchase iStar Financial common stock on substantially the same
terms, in each case giving effect to the 1.15 exchange ratio. Unvested options were exchanged for unvested iStar Financial options and resumed the same vesting schedules.

Employee BenefitsEffective January 1, 1994, the Company implemented the TriNet Corporate Realty Trust, Inc.
Savings and Retirement Plan, which is a voluntary, defined contribution plan. On November 4, 1999, as a result of the merger with iStar Financial, all participants became part of the iStar
Financial Inc. Savings and Retirement Plan.

Note 9Comprehensive Income

In June 1997, the FASB issued Statement of Financial Accounting Standards No. 130 ("SFAS No. 130"), "Reporting Comprehensive Income"
effective for fiscal years beginning after December 15, 1997. The statement changes the reporting of certain items currently reported as changes in the shareholder's equity section of the
balance sheet and establishes standards for the reporting and display of comprehensive income and its components in a full set of general-purpose financial statements. SFAS No. 130 requires
that all components of comprehensive income shall be reported in the financial statements in the period in which they are recognized. Furthermore, a total amount for comprehensive

32

---

income
shall be displayed in the financial statements. The Company has adopted this standard effective January 1, 1998. Total comprehensive income was $41.2 million, $54.1 million
and $91.2 million for the years ended December 31, 2003, 2002 and 2001 respectively. The primary component of comprehensive income other than net income was the adoption and continued
application of SFAS No. 133 to the Company's cash flow hedges and changes in the fair value of the Company's available-for-sale investment.

For
the years ended December 31, 2003, 2002 and 2001, the change in the fair market value of the Company's unrealized gains (losses) on available-for-sale investments and cash
flow hedges was an increase of $6.6 million, a decrease of $7.5 million and an increase of $722,000, respectively, and was recorded as an adjustment to other comprehensive income. The
reconciliation to other comprehensive income is as follows (in thousands):

|                            |                                                                                                  | For the Year Ended December 31, |       
|--------------------------- | ------------------------------------------------------------------------------------------------ | ------------------------------- | ------
|
|Net income                  |                                                                                                  | $                               | 34,669
|Other comprehensive income: |                                                                                                  |                                 |       
|                            | Unrealized gains (losses) on available-for-sale investments                                      |                                 |       
|                            | Cumulative effect of change in accounting principle (SFAS No. 133) on other comprehensive income |                                 |       
|                            | Unrealized gains (losses) on cash flow hedges                                                    |                                 |       
|                            |                                                                                                  |                                 |       
|Comprehensive income        |                                                                                                  | $                               | 41,226
|                            |                                                                                                  |                                 |       

Unrealized
gains (losses) on available-for-sale investments and cash flow hedges are recorded as adjustments to shareholder's equity through "Accumulated other
comprehensive income (losses)" on the Company's Consolidated Balance Sheets and are not included in net income unless realized.

As
of December 31, 2003 and 2002, accumulated other comprehensive income reflected in the Company's shareholder's equity is comprised of the following:

|                                                   |  | As of
December 31, |       
|-------------------------------------------------- |  | ------------------ | ------
|
|Unrealized gains on available-for-sale investments |  | $                  | 3,560 
|Unrealized losses on cash flow hedges              |  |                    | (3,775
|                                                   |  |                    |       
|Accumulated other comprehensive income (losses)    |  | $                  | (215  
|                                                   |  |                    |       

Over
time, the unrealized gains and losses held in other comprehensive income will be reclassified to earnings in the same period(s) in which the hedged items are recognized in earnings.
The current balance held in other comprehensive income is expected to be reclassified into earnings over the lives of the current hedging instruments, or for the realized losses on forecasted debt
transactions, over the related term of the debt obligation, as applicable. The Company expects that $2.9 million will be reclassified into earnings as an increase in interest expense over the
next 12 months.

33

---

Note 10Fair Values of Financial Instruments

SFAS No. 107, "Disclosures About Fair Value of Financial Instruments" ("SFAS No. 107"), requires the disclosure of the estimated fair values of
financial instruments. The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or
liquidation sale. Quoted market prices, if available, are utilized as estimates of the fair values of financial instruments. Because no quoted market prices exist for a significant part of the
Company's financial instruments, the fair values of such instruments have been derived based on management's assumptions, the amount and timing of future cash flows and estimated discount rates. The
estimation methods for individual classifications of financial instruments are described more fully below. Different assumptions could significantly affect these estimates. Accordingly, the net
realizable values could be materially different from the estimates presented below. The provisions of SFAS No. 107 do not require the disclosure of the fair value of non-financial
instruments, including intangible assets or the Company's CTL assets.

In
addition, the estimates are only indicative of the value of individual financial instruments and should not be considered an indication of the fair value of the Company as an
operating business.

Short-term financial instrumentsThe carrying values of short-term financial instruments including
cash and cash equivalents and short-term investments approximate the fair values of these instruments. These financial instruments generally expose the Company to limited credit risk and
have no stated maturities, or have an average maturity of less than 90 days and carry interest rates which approximate market.

Loans and other lending investmentsFor the Company's interests in loans and other lending investments, the fair values were
estimated by discounting the future contractual cash flows (excluding participation interests in the sale or refinancing proceeds of the underlying collateral) using estimated current market rates at
which similar loans would be made to borrowers with similar credit ratings for the same remaining maturities.

Marketable securitiesSecurities held for investment, securities available for sale, loans held for sale, trading account
instruments, long-term debt and trust preferred securities traded actively in the secondary market have been valued using quoted market prices.

Other financial instrumentsThe carrying value of other financial instruments including, restricted cash, accrued interest
receivable, accounts payable, accrued expenses and other liabilities approximate the fair values of the instruments.

Debt obligationsA portion of the Company's existing debt obligations bear interest at fixed margins over LIBOR. Such margins
or spreads may be higher or lower than those at which the Company could currently replace the related financing arrangements. Other obligations of the Company bear interest at fixed rates, which may
differ from prevailing market interest rates. As a result, the fair values of the Company's debt obligations were estimated by discounting current debt balances from December 31, 2003 and 2002
to maturity using estimated current market rates at which the Company could enter into similar financing arrangements.

Interest rate protection agreementsThe fair value of interest rate protection agreements such as interest rate caps, floors,
collars and swaps used for hedging purposes is the estimated amount the

34

---

Company
would receive or pay to terminate these agreements at the reporting date, taking into account current interest rates and current creditworthiness of the respective counterparties.

The
book and fair values of financial instruments as of December 31, 2003 and 2002 were (in thousands):

|                       |                                     | 2003 |   | 2002    |  
|---------------------- | ----------------------------------- | ---- | - | ------- | -
|
|Financial assets:      |                                     |      |   |         |  
|                       | Loans and other lending investments |      | $ |        |  
|Financial liabilities: |                                     |      |   |         |  
|                       | Debt obligations                    |      | $ | 415,084 |  
|                       | Interest rate protection agreements |      |   | (3,227  | )

Note 11Quarterly Financial Information (unaudited)

The following table sets forth the selected quarterly financial data for the Company (in thousands):

|                            |  | Quarter Ended
|--------------------------- |  | -------------
|
|2003:                       |  |              
|Revenue                     |  | $            
|Net income                  |  |              
|Net income per common share |  |              
|2002:                       |  |              
|Revenue                     |  | $            
|Net income                  |  |              
|Net income per common share |  |              

Note 12Subsequent Events

Debt ActivityOn March 10, 2004, the Company repaid its $193 million term loan financing secured by 15 CTL
assets which had an original maturity of July 2004.

35

---

TriNet Corporate Realty Trust, Inc.
(A wholly-owned subsidiary of iStar Financial Inc.)
Schedule IIICorporate Tenant Lease Assets and Accumulated Depreciation
As of December 31, 2003
(Dollars in thousands)

|                   |  |    |  |   |        |  |   |       |  |   |        | Gross Amount Carried at
Close of Period |   |       |   |   |       | 
|------------------ |  | -- |  | - | ------ |  | - | ----- |  | - | ------ | --------------------------------------- | - | ----- | - | - | ----- | 
|
|
|
|OFFICE FACILITIES: |  |    |  |   |        |  |   |       |  |   |        |                                         |   |       |   |   |       | 
|Tempe              |  | AZ |  | $ |       |  | $ | 1,033 |  | $ | 6,652  |                                         | $ |      |   | $ | 1,033 | 
|Tempe              |  | AZ |  |   |       |  |   | 1,033 |  |   | 6,652  |                                         |   | 205   |   |   | 1,033 | 
|Tempe              |  | AZ |  |   |       |  |   | 1,033 |  |   | 6,652  |                                         |   |      |   |   | 1,033 | 
|Tempe              |  | AZ |  |   | 3,534  |  |   | 701   |  |   | 4,339  |                                         |   |      |   |   | 701   | 
|Anaheim            |  | CA |  |   | 12,879 |  |   | 3,512 |  |   | 13,379 |                                         |   | 45    |   |   | 3,512 | 
|Cupertino          |  | CA |  |   | 17,093 |  |   | 7,994 |  |   | 19,037 |                                         |   | 2     |   |   | 7,994 | 
|Fremont            |  | CA |  |   |       |  |   | 880   |  |   | 4,846  |                                         |   | 1     |   |   | 880   | 
|Milpitas           |  | CA |  |   | 8,516  |  |   | 9,526 |  |   | 11,655 |                                         |   | 785   |   |   | 9,526 | 
|Milpitas           |  | CA |  |   | 5,418  |  |   | 4,139 |  |   | 5,064  |                                         |   | 529   |   |   | 4,139 | 
|Milpitas           |  | CA |  |   | 19,939 |  |   | 9,802 |  |   | 12,116 |                                         |   | 115   |   |   | 9,802 | 
|Mountain View      |  | CA |  |   |       |  |   | 5,798 |  |   | 12,720 |                                         |   | (1    | ) |   | 5,798 | 
|Redondo Beach      |  | CA |  |   | 8,331  |  |   | 2,598 |  |   | 9,212  |                                         |   |      |   |   | 2,598 | 
|Englewood          |  | CO |  |   |       |  |   | 2,967 |  |   | 15,008 |                                         |   | 7     |   |   | 2,967 | 
|Englewood          |  | CO |  |   |       |  |   | 8,536 |  |   | 27,428 |                                         |   | 7,596 |   |   | 8,536 | 
|Westminster        |  | CO |  |   |       |  |   | 307   |  |   | 3,524  |                                         |   | 1     |   |   | 307   | 
|Westminster        |  | CO |  |   |       |  |   | 616   |  |   | 7,290  |                                         |   | 1     |   |   | 616   | 
|Jacksonville       |  | FL |  |   |       |  |   | 1,384 |  |   | 3,911  |                                         |   |      |   |   | 1,384 | 
|Alpharetta         |  | GA |  |   |       |  |   | 905   |  |   | 6,744  |                                         |   | 18    |   |   | 905   | 
|Lisle              |  | IL |  |   |       |  |   | 6,153 |  |   | 14,993 |                                         |   |      |   |   | 6,153 | 
|Vernon Hills       |  | IL |  |   | 8,999  |  |   | 1,400 |  |   | 12,597 |                                         |   |      |   |   | 1,400 | 
|New Orleans        |  | LA |  |   |       |  |   | 1,427 |  |   | 24,252 |                                         |   | 1,905 |   |   | 1,427 | 
|New Orleans        |  | LA |  |   | 52,439 |  |   | 1,665 |  |   | 16,653 |                                         |   | 2,539 |   |   | 1,665 | 
|Andover            |  | MA |  |   |       |  |   | 1,787 |  |   | 8,486  |                                         |   |      |   |   | 1,787 | 
|Braintree          |  | MA |  |   |       |  |   | 792   |  |   | 4,929  |                                         |   | 44    |   |   | 792   | 
|Braintree          |  | MA |  |   |       |  |   | 2,225 |  |   | 7,403  |                                         |   | 148   |   |   | 2,225 | 
|Canton             |  | MA |  |   |       |  |   | 742   |  |   | 3,155  |                                         |   | 103   |   |   | 742   | 
|Canton             |  | MA |  |   |       |  |   | 1,409 |  |   | 3,890  |                                         |   | 41    |   |   | 1,409 | 
|Canton             |  | MA |  |   |       |  |   | 1,077 |  |   | 2,746  |                                         |   | 80    |   |   | 1,077 | 
|Foxborough         |  | MA |  |   | 2,852  |  |   | 1,218 |  |   | 3,756  |                                         |   | 1     |   |   | 1,218 | 

36

---

TriNet Corporate Realty Trust, Inc.
(A wholly-owned subsidiary of iStar Financial Inc.)
Schedule IIICorporate Tenant Lease Assets and Accumulated Depreciation (Continued)
As of December 31, 2003
(Dollars in thousands)

|            |  |    |  |         |  |         |  |         |  |        |  | Gross Amount Carried at
Close of Period |  |         |  |         |  |       
|----------- |  | -- |  | ------- |  | ------- |  | ------- |  | ------ |  | --------------------------------------- |  | ------- |  | ------- |  | ------
|
|
|
|Mansfield   |  | MA |  | 719     |  | 584     |  | 1,443   |  | 42     |  | 584                                     |  | 1,485   |  | 2,069   |  | 153   
|Norwell     |  | MA |  |        |  | 1,140   |  | 1,658   |  | 32     |  | 1,140                                   |  | 1,690   |  | 2,830   |  | 175   
|Norwell     |  | MA |  | 1,797   |  | 506     |  | 2,277   |  | 522    |  | 506                                     |  | 2,799   |  | 3,305   |  | 369   
|Rockland    |  | MA |  |        |  | 2,011   |  | 11,761  |  | 83     |  | 2,011                                   |  | 11,844  |  | 13,855  |  | 1,229 
|Westborough |  | MA |  | 7,265   |  | 1,651   |  | 10,758  |  |       |  | 1,651                                   |  | 10,758  |  | 12,409  |  | 1,121 
|Lanham      |  | MD |  | 10,435  |  | 2,486   |  | 12,047  |  | 164    |  | 2,486                                   |  | 12,211  |  | 14,697  |  | 1,271 
|Arden Hills |  | MN |  |        |  | 719     |  | 6,541   |  | 236    |  | 719                                     |  | 6,777   |  | 7,496   |  | 703   
|Roseville   |  | MN |  | 3,533   |  | 1,113   |  | 4,452   |  | 157    |  | 1,113                                   |  | 4,609   |  | 5,722   |  | 480   
|Memphis     |  | TN |  | 17,387  |  | 2,702   |  | 25,129  |  |       |  | 2,702                                   |  | 25,129  |  | 27,831  |  | 2,618 
|Irving      |  | TX |  |        |  | 1,364   |  | 10,628  |  | 1,007  |  | 2,371                                   |  | 10,628  |  | 12,999  |  | 1,107 
|Irving      |  | TX |  |        |  | 1,804   |  | 5,815   |  | 547    |  | 1,804                                   |  | 6,362   |  | 8,166   |  | 633   
|Irving      |  | TX |  | 17,307  |  | 3,363   |  | 21,376  |  |       |  | 3,363                                   |  | 21,376  |  | 24,739  |  | 2,227 
|Richardson  |  | TX |  |        |  | 1,233   |  | 15,160  |  | 36     |  | 1,233                                   |  | 15,196  |  | 16,429  |  | 1,296 
|Richardson  |  | TX |  |        |  | 2,932   |  | 31,235  |  | 1      |  | 2,932                                   |  | 31,236  |  | 34,168  |  | 3,254 
|Richardson  |  | TX |  |        |  | 1,230   |  | 5,660   |  | 256    |  | 1,230                                   |  | 5,916   |  | 7,146   |  | 598   
|Reston      |  | VA |  |        |  | 4,436   |  | 22,362  |  | 1,859  |  | 4,436                                   |  | 24,221  |  | 28,657  |  | 2,354 
|Milwaukee   |  | WI |  | 10,833  |  | 1,875   |  | 13,914  |  |       |  | 1,875                                   |  | 13,914  |  | 15,789  |  | 1,449 
|            |  |    |  |         |  |         |  |         |  |        |  |                                         |  |         |  |         |  |       
|Subtotal    |  |    |  | 209,276 |  | 113,808 |  | 481,305 |  | 19,107 |  | 114,815                                 |  | 499,405 |  | 614,220 |  | 50,508
|            |  |    |  |         |  |         |  |         |  |        |  |                                         |  |         |  |         |  |       

37

---

TriNet Corporate Realty Trust, Inc.
(A wholly-owned subsidiary of iStar Financial Inc.)
Schedule IIICorporate Tenant Lease Assets and Accumulated Depreciation (Continued)
As of December 31, 2003
(Dollars in thousands)

|                                    |  |    |  |   |         |  |   |         |  |   |         | Gross Amount Carried at
Close of Period |   |        |  |   |         | 
|----------------------------------- |  | -- |  | - | ------- |  | - | ------- |  | - | ------- | --------------------------------------- | - | ------ |  | - | ------- | 
|
|
|
|INDUSTRIAL FACILITIES:              |  |    |  |   |         |  |   |         |  |   |         |                                         |   |        |  |   |         | 
|Milpitas                            |  | CA |  |   | 6,537   |  |   | 5,051   |  |   | 6,170   |                                         |   | 328    |  |   | 5,051   | 
|Milpitas                            |  | CA |  |   | 8,572   |  |   | 6,856   |  |   | 8,378   |                                         |   |       |  |   | 6,856   | 
|Milpitas                            |  | CA |  |   | 2,213   |  |   | 2,633   |  |   | 3,219   |                                         |   | 279    |  |   | 2,633   | 
|Milpitas                            |  | CA |  |   | 3,676   |  |   | 4,120   |  |   | 5,033   |                                         |   |       |  |   | 4,120   | 
|Milpitas                            |  | CA |  |   | 2,664   |  |   | 3,044   |  |   | 3,716   |                                         |   | 590    |  |   | 3,044   | 
|Milpitas                            |  | CA |  |   | 9,227   |  |   | 4,095   |  |   | 8,323   |                                         |   | 567    |  |   | 4,095   | 
|Milpitas                            |  | CA |  |   | 9,815   |  |   | 5,617   |  |   | 6,877   |                                         |   | 618    |  |   | 5,617   | 
|Milpitas                            |  | CA |  |   |        |  |   | 4,880   |  |   | 12,367  |                                         |   | 1,498  |  |   | 4,880   | 
|Milpitas                            |  | CA |  |   | 7,530   |  |   | 4,600   |  |   | 5,627   |                                         |   | 201    |  |   | 4,600   | 
|Milpitas                            |  | CA |  |   | 3,057   |  |   | 3,000   |  |   | 3,669   |                                         |   |       |  |   | 3,000   | 
|San Jose                            |  | CA |  |   |        |  |   | 9,676   |  |   | 23,288  |                                         |   | 661    |  |   | 9,676   | 
|South Bend                          |  | IN |  |   |        |  |   | 140     |  |   | 4,640   |                                         |   |       |  |   | 140     | 
|Wichita                             |  | KS |  |   |        |  |   | 213     |  |   | 3,189   |                                         |   |       |  |   | 213     | 
|Randolph                            |  | MA |  |   | 2,247   |  |   | 615     |  |   | 3,471   |                                         |   |       |  |   | 615     | 
|Philadelphia                        |  | PA |  |   |        |  |   | 620     |  |   | 1,765   |                                         |   |       |  |   | 620     | 
|Farmers Branch                      |  | TX |  |   | 6,935   |  |   | 1,314   |  |   | 8,903   |                                         |   | 18     |  |   | 1,314   | 
|Richardson                          |  | TX |  |   | 6,803   |  |   | 858     |  |   | 8,556   |                                         |   | 1      |  |   | 858     | 
|                                    |  |    |  |   |         |  |   |         |  |   |         |                                         |   |        |  |   |         | 
|Subtotal                            |  |    |  |   | 69,276  |  |   | 57,332  |  |   | 117,191 |                                         |   | 4,761  |  |   | 57,332  | 
|                                    |  |    |  |   |         |  |   |         |  |   |         |                                         |   |        |  |   |         | 
|LAND:                               |  |    |  |   |         |  |   |         |  |   |         |                                         |   |        |  |   |         | 
|Concord                             |  | MA |  |   |        |  |   | 1,267   |  |   |        |                                         |   |       |  |   | 1,267   | 
|Irving                              |  | TX |  |   |        |  |   | 5,243   |  |   |        |                                         |   |       |  |   | 5,243   | 
|                                    |  |    |  |   |         |  |   |         |  |   |         |                                         |   |        |  |   |         | 
|Subtotal                            |  |    |  |   |        |  |   | 6,510   |  |   |        |                                         |   |       |  |   | 6,510   | 
|                                    |  |    |  |   |         |  |   |         |  |   |         |                                         |   |        |  |   |         | 
|PARKING GARAGE:                     |  |    |  |   |         |  |   |         |  |   |         |                                         |   |        |  |   |         | 
|New Orleans                         |  | LA |  |   |        |  |   | 4,241   |  |   | 6,462   |                                         |   | 4      |  |   | 4,241   | 
|                                    |  |    |  |   |         |  |   |         |  |   |         |                                         |   |        |  |   |         | 
|Total corporate tenant lease assets |  |    |  | $ | 278,552 |  | $ | 181,891 |  | $ | 604,958 |                                         | $ | 23,872 |  | $ | 182,898 | 
|                                    |  |    |  |   |         |  |   |         |  |   |         |                                         |   |        |  |   |         | 

38

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TriNet Corporate Realty Trust, Inc.
(A wholly-owned subsidiary of iStar Financial Inc.)
Notes to Schedule III
December 31, 2003
(Dollars in thousands)

1. Reconciliation of Corporate Tenant Lease Assets:

The following table reconciles CTL assets from January 1, 2001 to December 31, 2003:

|                                   |  | 2003 |          | 2002 |   | 2001      |  
|---------------------------------- |  | ---- | -------- | ---- | - | --------- | -
|Balance at January 1               |  | $    | 968,871  |      | $ | 1,183,674 |  
|Additions                          |  |      | 6,523    |      |   | 176,702   |  
|Dispositions                       |  |      | (164,672 | )    |   | (346,486  | )
|Assets classified as held for sale |  |      |         |      |   | (45,019   | )
|                                   |  |      |          |      |   |           |  
|Balance at December 31             |  | $    | 810,722  |      | $ | 968,871   |  
|                                   |  |      |          |      |   |           |  

2. Reconciliation of Accumulated Depreciation:

The following table reconciles Accumulated Depreciation from January 1, 2001 to December 31, 2003:

|                                   |  | 2003 |         | 2002 |   | 2001    |  
|---------------------------------- |  | ---- | ------- | ---- | - | ------- | -
|Balance at January 1               |  | $    | (54,554 | )    | $ | (46,890 | )
|Additions                          |  |      | (17,339 | )    |   | (19,342 | )
|Dispositions                       |  |      | 8,917   |      |   | 11,482  |  
|Assets classified as held for sale |  |      |        |      |   | 196     |  
|                                   |  |      |         |      |   |         |  
|Balance at December 31             |  | $    | (62,976 | )    | $ | (54,554 | )
|                                   |  |      |         |      |   |         |  

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9a. Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's Securities and
Exchange Act of 1934 (the "Exchange Act") reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is
accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Within
the 90-day period prior to the date of this report, the Company carried out an evaluation, under the supervision of members of management, including its Chief
Executive Officer and Chief Financial Officer, of the effectiveness of Act Rule 13a-14. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that the Company's disclosure controls and procedures are effective to timely alert them to material information relating to the Company (including its consolidated subsidiaries) required to be
included in the Company's Exchange Act filings.

There
have been no significant changes during the last fiscal quarter in the Company's internal controls or in other factors that could significantly affect internal controls.

PART III

Item 10. Directors and Executive Officers of the Registrant

Omitted pursuant to General Instruction I(2)(c) of Form 10-K.

Item 11. Executive Compensation

Omitted pursuant to General Instruction I(2)(c) of Form 10-K.

Item 12. Security Ownership of Certain Beneficial Owners and Management

Omitted pursuant to General Instruction I(2)(c) of Form 10-K.

Item 13. Certain Relationships and Related Transactions

Omitted pursuant to General Instruction I(2)(c) of Form 10-K.

Item 14. Principal Accountants Fees and Services

In connection with the audit of the Company's financial statements for the years ended December 31, 2003 and 2002, the principal accountant,
PricewaterhouseCoopers LLP, was paid fees of approximately $123,000 and $106,000, respectively. PricewaterhouseCoopers LLP is also the independent auditor for
iStar Financial. Information regarding the fees of PricewaterhouseCoopers LLP with respect to services provided to iStar Financial may be found in its 2004 annual proxy statement.

The
Company does not have an audit committee.

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PART IV

Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K



41

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INDEX TO EXHIBITS

|Exhibit
Number |  | Document Description                                                                                                                                                                                                 
|-------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1            |  | Amended and Restated Charter.(1)                                                                                                                                                                                     
|3.2            |  | Amended and Restated Bylaws.(1)                                                                                                                                                                                      
|4.1            |  | Definitive Indenture, dated as of May 22, 1996.(2)                                                                                                                                                                   
|4.2            |  | Definitive Supplemental Indenture No. 1, dated as of May 22, 1996, relating to the 7.30% Notes due 2001 and the 7.95% Notes due 2006.(2)                                                                             
|4.3            |  | Definitive Supplemental Indenture No. 2, dated as of July 14, 1997, relating to the 7.70% Notes due 2017 and including the form of the 7.70% Notes due 2006.(3)                                                      
|4.4            |  | Remarketing Agreement, dated February 27, 1998.(4)                                                                                                                                                                   
|4.5            |  | Senior Debt Securities Indenture, dated February 27, 1998(4)                                                                                                                                                         
|4.6            |  | Supplemental Indenture No. 1, dated February 27, 1998(4)                                                                                                                                                             
|10.1           |  | Interest Rate Protection Agreement dated December 6, 1994, between TriNet Essential Facilities XII, Inc. and Morgan Guaranty Trust Company of New York.(5)                                                           
|10.2           |  | Amended and Restated Agreement of Limited Partnership between TriNet Corporate Realty Trust, Inc. and the O'Donnell Revocable Trust, the Donald S. Grant Revocable Trust and John W. Hopkins, dated June 26, 1996.(6)
|10.3           |  | Agreement of Limited Partnership of TriNet Property Partners, L.P. (5)                                                                                                                                               
|10.4           |  | Registration Rights Agreement between TriNet Corporate Realty Trust, Inc. and Ronald A. Davis, Joseph P. Keller, Dean M. Boylan, Stephen G. Mack and Lewis L. Whitman dated December 31, 1997. (5)                   
|21.1           |  | Subsidiaries of the Company.                                                                                                                                                                                         
|31.0           |  | Certifications pursuant to Section 302 of the Sarbanes-Oxley Act.                                                                                                                                                    
|32.0           |  | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act.                                                                                                                                                    

Explanatory Notes:

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SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO  SECTION 15 OF THE SECURITIES AND EXCHANGE ACT OF 1934 BY REGISTRANTS WHICH  HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT

No annual report covering the registrant's last fiscal year has been sent to security holders, nor has any proxy soliciting material been sent to security
holders.

42

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.

|                     |  | TRINET CORPORATE REALTY TRUST, INC.Registrant                                             
|-------------------- |  | ------------------------------------------------------------------------------------------
|Date: March 15, 2004 |  | /s/JAY SUGARMANJay Sugarman Chairman of the Board of Directors and Chief
Executive Officer
|Date: March 15, 2004 |  | /s/CATHERINE D. RICECatherine D. Rice Chief Financial Officer                             

Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

|                     |  |                                                                 
|-------------------- |  | ----------------------------------------------------------------
|Date: March 15, 2004 |  | /s/JAY SUGARMANJay Sugarman Chief Executive Officer and
Director
|Date: March 15, 2004 |  | /s/WILLIS ANDERSEN JR.Willis Andersen Jr. Director              
|Date: March 15, 2004 |  | /s/ROBERT W. HOLMAN, JR.Robert W. Holman, Jr. Director          
|Date: March 15, 2004 |  | /s/ROBIN JOSEPHSRobin Josephs Director                          
|Date: March 15, 2004 |  | /s/MATTHEW J. LUSTIGMatthew J. Lustig Director                  
|Date: March 15, 2004 |  | /s/JOHN G. MCDONALDJohn G. McDonald Director                    
|Date: March 15, 2004 |  | /s/GEORGE R. PUSKARGeorge R. Puskar Director                    
|Date: March 15, 2004 |  | /s/JEFFREY WEBERJeffrey Weber Director                          

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