##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-K


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934    
|          
|           |  | For the fiscal year ended December 31, 2005                                                 
|          
|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 Number 1-12846





PROLOGIS


(Exact name of registrant as specified in its charter)


|                                                                                           |  |                                                                       
|------------------------------------------------------------------------------------------ |  | ----------------------------------------------------------------------
|Maryland                                                                                   |  | 74-2604728                                                            
|(State or other jurisdiction of
    incorporation or organization)                         |  | (I.R.S. employer
    identification no.)                              
|                                                                                          
|4545 Airport Way
    Denver, CO 80239(Address of principal executive offices and zip code) |  | (303) 567-5000(Registrants telephone number, including area
    code)

Securities registered pursuant to Section 12(b) of the
Act:


|                                                                                                      |  |                                          
|----------------------------------------------------------------------------------------------------- |  | -----------------------------------------
|Title of Each Class                                                                                   |  | Name of Each Exchange on Which Registered
|                                                                                                      |  |                                          
|Common Shares of Beneficial Interest, par value $0.01 per
    share                                   |  | New York Stock Exchange                  
|Series F Cumulative Redeemable Preferred Shares of
    Beneficial Interest, par value $0.01 per share |  | New York Stock Exchange                  
|Series G Cumulative Redeemable Preferred Shares of
    Beneficial Interest par value $0.01 per share  |  | New York Stock Exchange                  

Securities registered pursuant to Section 12(g) of the
Act: NONE


þ o


o þ


þ o


S-K 10-K 10-K. þ o


12b-2


þ o o


12b-2 o þ






DOCUMENTS INCORPORATED BY REFERENCE












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TABLE OF CONTENTS


|                                                                         |     |             |  |                                                                                                                      |                                                                        |  |    |    | 
|------------------------------------------------------------------------ | --- | ----------- |  | -------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------- |  | -- | -- | 
|Item                                                                     |     | Description |  | Page                                                                                                                
|                                                                         |     |             |  |                                                                                                                     
|PART I                                                                  
|                                                                         | 1.  |             |  | Business                                                                                                             |                                                                        |  | 3  |   
|                                                                         |     |             |  |                                                                                                                      | ProLogis                                                               |  |    | 3  | 
|                                                                         |     |             |  |                                                                                                                      | Our Operating Segments                                                 |  |    | 4  | 
|                                                                         |     |             |  |                                                                                                                      | Operating Segments  Property
    Operations                           |  |    | 4  | 
|                                                                         |     |             |  |                                                                                                                      | Operating Segments  Fund
    Management                               |  |    | 6  | 
|                                                                         |     |             |  |                                                                                                                      | Operating Segments  CDFS
    Business                                 |  |    | 8  | 
|                                                                         |     |             |  |                                                                                                                      | Our Management                                                         |  |    | 12 | 
|                                                                         |     |             |  |                                                                                                                      | Environmental Matters                                                  |  |    | 15 | 
|                                                                         |     |             |  |                                                                                                                      | Insurance Coverage                                                     |  |    | 15 | 
|                                                                         | 1A. |             |  | Risk Factors                                                                                                         |                                                                        |  | 15 |   
|                                                                         | 1B. |             |  | Unresolved Staff Comments                                                                                            |                                                                        |  | 23 |   
|                                                                         | 2.  |             |  | Properties                                                                                                           |                                                                        |  | 23 |   
|                                                                         |     |             |  |                                                                                                                      | Geographic Distribution                                                |  |    | 23 | 
|                                                                         |     |             |  |                                                                                                                      | Properties                                                             |  |    | 23 | 
|                                                                         |     |             |  |                                                                                                                      | Unconsolidated Investees                                               |  |    | 28 | 
|                                                                         | 3.  |             |  | Legal Proceedings                                                                                                    |                                                                        |  | 29 |   
|                                                                         | 4.  |             |  | Submission of Matters to a Vote of Security
    Holders                                                              |                                                                        |  | 29 |   
|                                                                        
|PART II                                                                 
|                                                                         | 5.  |             |  | Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities |                                                                        |  | 29 |   
|                                                                         |     |             |  |                                                                                                                      | Market Information and Holders                                         |  |    | 29 | 
|                                                                         |     |             |  |                                                                                                                      | Distributions and Dividends                                            |  |    | 30 | 
|                                                                         |     |             |  |                                                                                                                      | Securities Authorized for Issuance Under
    Equity Compensation Plans |  |    | 30 | 
|                                                                         |     |             |  |                                                                                                                      | Other Shareholder Matters                                              |  |    | 31 | 
|                                                                         | 6.  |             |  | Selected Financial Data                                                                                              |                                                                        |  | 32 |   
|                                                                         | 7.  |             |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations                            |                                                                        |  | 35 |   
|                                                                         |     |             |  |                                                                                                                      | Managements Overview                                                  |  |    | 35 | 
|                                                                         |     |             |  |                                                                                                                      | Critical Accounting Policies                                           |  |    | 37 | 
|                                                                         |     |             |  |                                                                                                                      | Results of Operations                                                  |  |    | 39 | 
|                                                                         |     |             |  |                                                                                                                      | Environmental Matters                                                  |  |    | 49 | 
|                                                                         |     |             |  |                                                                                                                      | Liquidity and Capital Resources                                        |  |    | 49 | 
|                                                                         |     |             |  |                                                                                                                      | New Accounting Pronouncements                                          |  |    | 55 | 
|                                                                         |     |             |  |                                                                                                                      | Funds from Operations                                                  |  |    | 55 | 
|                                                                         | 7A. |             |  | Quantitative and Qualitative Disclosure
    About Market Risk                                                        |                                                                        |  | 58 |   
|                                                                         | 8.  |             |  | Financial Statements and Supplementary
    Data                                                                      |                                                                        |  | 59 |   
|                                                                         | 9.  |             |  | Changes in and Disagreements with
    Accountants on Accounting and Financial Disclosure                             |                                                                        |  | 60 |   
|                                                                         | 9A. |             |  | Controls and Procedures                                                                                              |                                                                        |  | 60 |   
|                                                                         | 9B. |             |  | Other Information                                                                                                    |                                                                        |  | 61 |   
|                                                                        
|PART III                                                                
|                                                                         | 10. |             |  | Directors and Executive Officers of the
    Registrant                                                               |                                                                        |  | 61 |   
|                                                                         | 11. |             |  | Executive Compensation                                                                                               |                                                                        |  | 61 |   
|                                                                         | 12. |             |  | Security Ownership of Certain Beneficial
    Owners and Management and Related Stockholder Matters                   |                                                                        |  | 61 |   
|                                                                         | 13. |             |  | Certain Relationships and Related
    Transactions                                                                   |                                                                        |  | 61 |   
|                                                                         | 14. |             |  | Principal Accounting Fees and Services                                                                               |                                                                        |  | 61 |   
|                                                                        
|PART IV                                                                 
|                                                                         | 15. |             |  | Exhibits, Financial Statement Schedules                                                                              |                                                                        |  | 61 |   
|Statement re: Computation of Ratio of Earnings to Fixed Charges         
|Statement re: Computation of Ratio of Earnings to Combined Fixed Charges
|Subsidiaries                                                            
|Consent of KPMG LLP                                                     
|Certification of Chief Executive Officer                                
|Certification of Chief Financial Officer                                
|Certification of Chief Executive Officer Pursuant to Section 906        
|Certification of Chief Financial Officer Pursuant to Section 906        



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PART I







|        |         
|------- | --------
|Item 1. | Business




ProLogis


®




10-K, 10-Q, 8-K




| |                                      
| | -------------------------------------
| | Business Strategy and Global Presence



3



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Our Operating Segments









| |                                             
| | --------------------------------------------
| | Operating Segments  Property
    Operations





| |            
| | -----------
| | Investments



4



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| |   |                                                                                                                                                                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In connection with the Catellus Merger, we added 205 industrial
    distribution properties aggregating 38.6 million square
    feet, representing an investment of $2.9 billion and all of
    our 29 retail properties aggregating 1.1 million square
    feet representing an investment of $288.3 million.
|
| |  | We acquired 25 industrial distribution properties, aggregating
    7.2 million square feet representing an investment of
    $453.9 million, through various individual and/or portfolio
    acquisitions.                                                                                                    







| |                      
| | ---------------------
| | Results of Operations





| |                
| | ---------------
| | Market Presence





| |            
| | -----------
| | Competition





| |                    
| | -------------------
| | Property Management



5



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| |          
| | ---------
| | Customers





| |          
| | ---------
| | Employees





| |             
| | ------------
| | Future Plans










| |                                         
| | ----------------------------------------
| | Operating Segments  Fund
    Management







| |   |                                                                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | allows us, as the manager of the property funds, to maintain the
    market presence and customer relationships that are the key
    drivers of the ProLogis Operating System;                                                                                        
|
| |  | allows us to realize a portion of the development profits from
    our CDFS business activities by contributing our stabilized
    development properties to property funds (profits are recognized
    to the extent of third party investment in the property fund);

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| |   |                                                                                            
| | - | -------------------------------------------------------------------------------------------
| |  | provides diversified sources of capital;                                                   
|
| |  | allows us to earn fees and incentives for providing services to
    the property funds; and
|
| |  | allows us to maintain a long-term ownership position in the
    properties.                



| |            
| | -----------
| | Investments







| |   |                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In September 2005, we purchased the remaining 80% ownership
    interest in ProLogis North American Properties Fund XII,
    one of the property funds that we acquired in 2004, adding the
    properties to our property operations segment.                                                                                                                                                                  
|
| |  | During 2005, we contributed 42 properties aggregating
    12.6 million square feet to the property funds.                                                                                                                                                                                                                                                                                                       
|
| |  | On a combined basis, the property funds acquired 18 properties
    from third parties, aggregating 3.0 million square feet.                                                                                                                                                                                                                                                                                     
|
| |  | We formed the ProLogis Japan Properties Fund II, which had
    no investments at December 31, 2005.                                                                                                                                                                                                                                                                                                             
|
| |  | In February 2006, we finalized and announced the creation of a
    new property fund, the North American Industrial Fund, with
    several institutional investors, which will primarily own
    recently developed industrial distribution properties in major
    distribution markets throughout the United States and Canada.                                                                               
|
| |  | On January 4, 2006, we purchased the remaining 80%
    ownership interests in each of ProLogis North American
    Properties Funds II, III and IV from our fund partner,
    an affiliate of Arcapita Bank B.S.C.(c)(Arcapita)
    and in March 2006, we contributed substantially all of the
    assets and associated liabilities we obtained in this
    acquisition to the North American Industrial Fund.



| |                      
| | ---------------------
| | Results of Operations





| |                
| | ---------------
| | Market Presence



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| |            
| | -----------
| | Competition





| |                    
| | -------------------
| | Property Management





| |          
| | ---------
| | Customers





| |          
| | ---------
| | Employees





| |             
| | ------------
| | Future Plans








| |                                   
| | ----------------------------------
| | Operating Segments  CDFS Business



8



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| |            
| | -----------
| | Investments





| |   |                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | North America: 32 properties in Canada, Mexico and the United
    States, for a combined total of 8.9 million square feet,
    with a total expected cost of $363.0 million (approximately
    20.6% of the total);
|
| |  | Europe: 25 properties in six countries, for a combined total of
    7.4 million square feet, with a total expected cost of
    $622.6 million (approximately 35.3% of the total); and                              
|
| |  | Asia: 15 properties in China and Japan, for a combined total of
    6.9 million square feet, with a total expected cost of
    $776.7 million (approximately 44.1% of the total).                                  











| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | We started the development of 101 properties aggregating
    29.1 million square feet with a total expected cost at
    completion of $2.1 billion. These projects were either
    completed during 2005 or are under development at
    December 31, 2005, as discussed above.                                                                                                                                                                                 
|
| |  | We completed the development of 87 properties aggregating
    23.6 million square feet at a total cost of
    $1.4 billion. These projects were either under development
    at December 31, 2004 or development began in 2005.                                                                                                                                                                                                                                 
|
| |  | We contributed or disposed of 50 properties aggregating
    13.7 million square feet that were developed or acquired by
    us in the CDFS business segment. These transactions generated
    net proceeds of $1.1 billion.                                                                                                                                                                                                                                     
|
| |  | Through the Catellus Merger we acquired:
    (i) 2,538 acres of land for future development of
    industrial distribution properties, retail properties and other
    mixed-use developments; (ii) several development projects
    with a total expected investment of $104.6 million that
    were under construction; (iii) investments in several CDFS
    joint ventures; and (iv) $188.0 million of notes
    receivable related to previous asset sales.
|
| |  | We acquired 2,321 acres of land for future development
    through other individual acquisitions. We disposed of
    177.3 acres of land parcels that no longer fit our
    development plans for total proceeds of $92.8 million.                                                                                                                                                                                                                              



| |                      
| | ---------------------
| | Results of Operations



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| |                
| | ---------------
| | Market Presence





| |            
| | -----------
| | Competition











| |          
| | ---------
| | Customers



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| |          
| | ---------
| | Employees





| |                                
| | -------------------------------
| | Seasonal Nature of the Business





| |             
| | ------------
| | Future Plans

state-of






 


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










| |      
| | -----
| | Other






Our Management




| |                  
| | -----------------
| | Senior Management







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S-K,






| |                           
| | --------------------------
| | ProLogis Operating System





| |                                          
| | -----------------------------------------
| | Capital Management and Capital Deployment







| |                 
| | ----------------
| | Customer Service



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| |                            
| | ---------------------------
| | Executive Committee Members

Jeffrey H. Schwartz


Walter C. Rakowich


Ted R. Antenucci


Dessa M. Bokides


Ming Z. Mei


Steven K. Meyer*


Masato Miki


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Edward S. Nekritz*


Robert J. Watson*


Mike Yamada







|  |                                                                                                 
|- | ------------------------------------------------------------------------------------------------
|* | These individuals are designated as Executive Officers under
    Item 401 of
    Regulation S-K.




Environmental Matters







Insurance Coverage







Item 1A.     Risk Factors




General Real Estate Risks


General economic conditions and other events or occurrences
that affect areas in which our properties are geographically
concentrated, such as California, may impact financial
results.




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Real property investments are subject to risks that could
adversely affect our business.






| |   |                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------
| |  | changes in the general economic climate;                                                                                     
|
| |  | local conditions, such as an oversupply of distribution space or
    a reduction in demand for distribution space in an area;
|
| |  | the attractiveness of our properties to potential customers;                                                                 
|
| |  | competition from other available properties;                                                                                 
|
| |  | our ability to provide adequate maintenance of, and insurance
    on, our properties;                                        
|
| |  | our ability to control rents and variable operating costs;                                                                   
|
| |  | governmental regulations, including zoning, usage and tax laws
    and changes in these laws; and                            
|
| |  | potential liability under, and changes in, environmental, zoning
    and other laws.                                         

Our investments are concentrated in the industrial sector and
our business would be adversely affected by an economic downturn
in that sector.




Our real estate development strategies may not be
successful.






| |   |                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the risk that development opportunities explored by us may be
    abandoned and the related investment will be impaired;                                                               
|
| |  | the risk that we may not be able to obtain, or may experience
    delays in obtaining, all necessary zoning, building, occupancy
    and other governmental permits and authorizations;

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the risk that we may not be able to obtain land on which to
    develop, especially in Asia;                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | the risk that construction costs of a property may exceed the
    original estimates or that construction may not be concluded on
    schedule, making the project less profitable than originally
    estimated or not profitable at all; including the possibility of
    contract default, the effects of local weather conditions, the
    possibility of local or national strikes and the possibility of
    shortages in materials, building supplies or energy and fuel for
    equipment; and
|
| |  | the risk that occupancy levels and the rents that can be charged
    for a completed project will not be met, making the project
    unprofitable.                                                                                                                                                                                                                                                                                                                                                    

Our business strategy associated with contributing properties
to funds we manage or disposing of properties to third parties
may not be successful.




Our growth will depend on future acquisitions of distribution
properties, which involves risks that could adversely affect our
operating results and the value of our securities.




Our operating results and distributable cash flow will depend
on the continued generation of lease revenues from customers.




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Our ability to renew leases or re-lease space on favorable
terms as leases expire significantly affects our business.


month-to month-to


The fact that real estate investments are not as liquid as
other types of assets may reduce economic returns to
investors.




Our insurance coverage does not include all potential
losses.




We are exposed to various environmental risks that may result
in unanticipated losses that could affect our operating results
and financial condition.




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Risks Related to Financing and Capital


Our operating results and financial condition could be
adversely affected if we do not continue to have access to
capital on favorable terms.




19



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Our operating results and financial condition could be
adversely affected if we are unable to make required payments on
our debt or are unable to refinance our debt on favorable
terms.




Covenants in our credit agreements could limit our
flexibility and adversely affect our financial condition.




Federal Income Tax Risks


Failure to qualify as a REIT could adversely affect our cash
flows.






Potential adverse effect of REIT distribution requirements
could adversely affect our financial condition.




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Prohibited transaction income could result from certain
property transfers.




Liabilities recorded for pre-existing tax audits may not be
sufficient.




Uncertainties relating to Catellus estimate of its
earnings and profits attributable to C-corporation
taxable years may have an adverse effect on our distributable
cash flow.




There are potential deferred and contingent tax liabilities
that could affect our operating results or financial
condition.




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built-in built-in


Other Risks


We are dependent on key personnel.




Share prices may be affected by market interest rates.




The depreciation in the value of the foreign currency in
countries where we have a significant investment may adversely
affect our results of operations and financial position.




We are subject to governmental regulations and actions that
affect operating results and financial condition.




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|         |                          
|-------- | -------------------------
|Item 1B. | Unresolved Staff Comments








|        |           
|------- | ----------
|Item 2. | Properties








Geographic Distribution







Properties




|                                                                                                                                      |                                     |                           |  |  |            |          |  |         |            |   |              |  |       |                 |  |   |         |  |  |   |        | 
|------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------- | ------------------------- |  |  | ---------- | -------- |  | ------- | ---------- | - | ------------ |  | ----- | --------------- |  | - | ------- |  |  | - | ------ | 
|                                                                                                                                      |                                     |                           |  |  |            | Rentable |  |         | Investment |   |              | 
|                                                                                                                                      |                                     | No. of                    |  |  | Percentage |          |  | Square  |            |   | Before       |  |       |                
|                                                                                                                                      |                                     | Bldgs.                    |  |  | Leased(1)  |          |  | Footage |            |   | Depreciation |  |       | Encumbrances(2) | 
|                                                                                                                                      |                                     |                           |  |  |            |          |  |         |            |   |              |  |       |                 | 
|Operating properties owned in the property operations segment
    at December 31, 2005 (dollars and square footage in
    thousands): |                                     |                           |  |  |            |          |  |         |            |   |              |  |       |                 |  |   |         |  |  |  
|                                                                                                                                      | Industrial distribution properties: |                           |  |  |            |          |  |         |            |   |              |  |       |                 |  |   |         |  |  |   |       
|                                                                                                                                      | North America(3):                   |                           |  |  |            |          |  |         |            |   |              |  |       |                 |  |   |         |  |  |   |       
|                                                                                                                                      | United States:                      |                           |  |  |            |          |  |         |            |   |              |  |       |                 |  |   |         |  |  |   |       
|                                                                                                                                      |                                     | Atlanta, Georgia          |  |  | 84         |          |  |         | 91.83      | % |              |  | 9,499 |                 |  | $ | 328,089 |  |  | $ | 34,867 | 
|                                                                                                                                      |                                     | Austin, Texas             |  |  | 25         |          |  |         | 100.00     | % |              |  | 1,583 |                 |  |   | 62,760  |  |  |   |       | 
|                                                                                                                                      |                                     | Charlotte, North Carolina |  |  | 30         |          |  |         | 95.82      | % |              |  | 3,801 |                 |  |   | 120,913 |  |  |   | 40,393 | 
|                                                                                                                                      |                                     | Chattanooga, Tennessee    |  |  | 4          |          |  |         | 99.25      | % |              |  | 1,076 |                 |  |   | 16,278  |  |  |   |       | 

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|                        |                                            |                        |  |     |            |          |  |         |            |   |              |        |         |                 |  |           |           |  |  |         |           | 
|----------------------- | ------------------------------------------ | ---------------------- |  | --- | ---------- | -------- |  | ------- | ---------- | - | ------------ | ------ | ------- | --------------- |  | --------- | --------- |  |  | ------- | --------- | 
|                        |                                            |                        |  |     |            | Rentable |  |         | Investment |   |              |       
|                        |                                            | No. of                 |  |     | Percentage |          |  | Square  |            |   | Before       |        |         |                
|                        |                                            | Bldgs.                 |  |     | Leased(1)  |          |  | Footage |            |   | Depreciation |        |         | Encumbrances(2) | 
|                        |                                            |                        |  |     |            |          |  |         |            |   |              |        |         |                 | 
|                        | Chicago, Illinois                          |                        |  | 88  |            |          |  | 89.75   | %          |   |              | 17,030 |         |                 |  | 847,031   |           |  |  | 204,813 |          
|                        | Cincinnati, Ohio                           |                        |  | 44  |            |          |  | 94.42   | %          |   |              | 5,469  |         |                 |  | 157,032   |           |  |  | 39,773  |          
|                        | Columbus, Ohio                             |                        |  | 31  |            |          |  | 82.24   | %          |   |              | 5,350  |         |                 |  | 192,168   |           |  |  | 25,287  |          
|                        | Dallas/ Fort Worth, Texas                  |                        |  | 124 |            |          |  | 89.87   | %          |   |              | 16,231 |         |                 |  | 626,717   |           |  |  | 119,728 |          
|                        | Denver, Colorado                           |                        |  | 36  |            |          |  | 92.05   | %          |   |              | 5,722  |         |                 |  | 259,942   |           |  |  | 72,589  |          
|                        | El Paso, Texas                             |                        |  | 16  |            |          |  | 74.22   | %          |   |              | 2,166  |         |                 |  | 63,006    |           |  |  | 979     |          
|                        | Ft. Lauderdale/ Miami, Florida             |                        |  | 13  |            |          |  | 100.00  | %          |   |              | 1,217  |         |                 |  | 71,348    |           |  |  | 7,200   |          
|                        | Houston, Texas                             |                        |  | 92  |            |          |  | 85.75   | %          |   |              | 8,224  |         |                 |  | 260,375   |           |  |  | 43,823  |          
|                        | I-81 Corridor, Pennsylvania                |                        |  | 11  |            |          |  | 93.08   | %          |   |              | 2,799  |         |                 |  | 154,155   |           |  |  | 12,081  |          
|                        | Indianapolis, Indiana                      |                        |  | 43  |            |          |  | 92.01   | %          |   |              | 4,716  |         |                 |  | 162,182   |           |  |  |        |          
|                        | Las Vegas, Nevada                          |                        |  | 18  |            |          |  | 98.14   | %          |   |              | 2,276  |         |                 |  | 105,022   |           |  |  | 11,862  |          
|                        | Los Angeles/ Orange County, California     |                        |  | 92  |            |          |  | 89.19   | %          |   |              | 19,056 |         |                 |  | 1,456,978 |           |  |  | 491,308 |          
|                        | Louisville, Kentucky                       |                        |  | 9   |            |          |  | 88.61   | %          |   |              | 2,256  |         |                 |  | 72,502    |           |  |  | 19,393  |          
|                        | Memphis, Tennessee                         |                        |  | 43  |            |          |  | 77.42   | %          |   |              | 6,770  |         |                 |  | 182,571   |           |  |  |        |          
|                        | Nashville, Tennessee                       |                        |  | 38  |            |          |  | 98.77   | %          |   |              | 4,093  |         |                 |  | 107,767   |           |  |  | 6,703   |          
|                        | New Jersey                                 |                        |  | 41  |            |          |  | 79.49   | %          |   |              | 8,213  |         |                 |  | 488,962   |           |  |  | 42,600  |          
|                        | Orlando, Florida                           |                        |  | 21  |            |          |  | 95.08   | %          |   |              | 1,937  |         |                 |  | 80,731    |           |  |  | 6,581   |          
|                        | Phoenix, Arizona                           |                        |  | 38  |            |          |  | 99.99   | %          |   |              | 3,107  |         |                 |  | 137,894   |           |  |  | 14,882  |          
|                        | Portland, Oregon                           |                        |  | 25  |            |          |  | 94.96   | %          |   |              | 1,975  |         |                 |  | 104,069   |           |  |  | 21,389  |          
|                        | Reno, Nevada                               |                        |  | 24  |            |          |  | 96.09   | %          |   |              | 3,001  |         |                 |  | 117,051   |           |  |  |        |          
|                        | Salt Lake City, Utah                       |                        |  | 7   |            |          |  | 87.08   | %          |   |              | 1,686  |         |                 |  | 48,230    |           |  |  |        |          
|                        | San Antonio, Texas                         |                        |  | 51  |            |          |  | 93.08   | %          |   |              | 4,087  |         |                 |  | 123,725   |           |  |  |        |          
|                        | San Diego, California                      |                        |  | 13  |            |          |  | 90.68   | %          |   |              | 188    |         |                 |  | 24,813    |           |  |  |        |          
|                        | San Francisco (Central Valley), California |                        |  | 19  |            |          |  | 92.34   | %          |   |              | 4,076  |         |                 |  | 177,961   |           |  |  | 28,315  |          
|                        | San Francisco (East Bay), California       |                        |  | 59  |            |          |  | 97.84   | %          |   |              | 5,100  |         |                 |  | 310,150   |           |  |  | 105,120 |          
|                        | San Francisco (South Bay), California      |                        |  | 84  |            |          |  | 85.50   | %          |   |              | 5,516  |         |                 |  | 449,858   |           |  |  | 81,845  |          
|                        | Seattle, Washington                        |                        |  | 9   |            |          |  | 100.00  | %          |   |              | 1,036  |         |                 |  | 45,963    |           |  |  | 359     |          
|                        | St. Louis, Missouri                        |                        |  | 13  |            |          |  | 93.66   | %          |   |              | 1,252  |         |                 |  | 41,199    |           |  |  | 5,432   |          
|                        | Tampa, Florida                             |                        |  | 56  |            |          |  | 93.56   | %          |   |              | 3,559  |         |                 |  | 139,484   |           |  |  | 9,610   |          
|                        | Washington D.C./ Baltimore, Maryland       |                        |  | 41  |            |          |  | 84.08   | %          |   |              | 5,405  |         |                 |  | 259,540   |           |  |  | 35,522  |          
|                        | Other                                      |                        |  | 3   |            |          |  | 92.88   | %          |   |              | 437    |         |                 |  | 18,853    |           |  |  |        |          
|Mexico:                 |                                            |                        |  |     |            |          |  |         |            |   |              |        |         |                 |  |           |           |  |  |        
|                        | Juarez                                     |                        |  | 13  |            |          |  | 72.91   | %          |   |              | 1,237  |         |                 |  | 44,921    |           |  |  |        |          
|                        | Monterrey                                  |                        |  | 5   |            |          |  | 64.99   | %          |   |              | 509    |         |                 |  | 17,192    |           |  |  |        |          
|                        | Reynosa                                    |                        |  | 14  |            |          |  | 93.54   | %          |   |              | 1,596  |         |                 |  | 68,954    |           |  |  |        |          
|                        |                                            |                        |  |     |            |          |  |         |            |   |              |        |         |                 | 
|                        |                                            | Subtotal North America |  |     | 1,377      |          |  |         | 89.71      | % |              |        | 173,251 |                 |  |           | 7,946,386 |  |  |         | 1,482,454 | 
|                        |                                            |                        |  |     |            |          |  |         |            |   |              |        |         |                 | 
|Europe (18 markets)(4): |                                            |                        |  |     |            |          |  |         |            |   |              |        |         |                 |  |           |           |  |  |        
|                        | Czech Republic                             |                        |  | 2   |            |          |  | 49.13   | %          |   |              | 282    |         |                 |  | 14,599    |           |  |  |        |          
|                        | France                                     |                        |  | 10  |            |          |  | 60.66   | %          |   |              | 2,377  |         |                 |  | 119,976   |           |  |  |        |          
|                        | Germany                                    |                        |  | 5   |            |          |  | 45.46   | %          |   |              | 835    |         |                 |  | 64,418    |           |  |  |        |          
|                        | Hungary                                    |                        |  | 1   |            |          |  | 0.00    | %          |   |              | 197    |         |                 |  | 8,176     |           |  |  |        |          

24



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##### Table of Contents



|                     |                |                                                                                              |    |    |            |          |       |         |            |   |              |       |         |                 |         |         |           |   |        |   |           | 
|-------------------- | -------------- | -------------------------------------------------------------------------------------------- | -- | -- | ---------- | -------- | ----- | ------- | ---------- | - | ------------ | ----- | ------- | --------------- | ------- | ------- | --------- | - | ------ | - | --------- | 
|                     |                |                                                                                              |    |    |            | Rentable |       |         | Investment |   |              |      
|                     |                | No. of                                                                                       |    |    | Percentage |          |       | Square  |            |   | Before       |       |         |                
|                     |                | Bldgs.                                                                                       |    |    | Leased(1)  |          |       | Footage |            |   | Depreciation |       |         | Encumbrances(2) |        
|                     |                |                                                                                              |    |    |            |          |       |         |            |   |              |       |         |                 |        
|                     | Italy          |                                                                                              |    | 3  |            |          |       | 50.29   | %          |   |              | 675   |         |                 |         | 37,410  |           |   |        |  |          
|                     | Poland         |                                                                                              |    | 10 |            |          |       | 59.77   | %          |   |              | 2,260 |         |                 |         | 91,341  |           |   |        |  |          
|                     | Spain          |                                                                                              |    | 2  |            |          |       | 100.00  | %          |   |              | 512   |         |                 |         | 29,802  |           |   |        |  |          
|                     | United Kingdom |                                                                                              |    | 15 |            |          |       | 50.51   | %          |   |              | 3,464 |         |                 |         | 312,705 |           |   |        |  |          
|                     |                |                                                                                              |    |    |            |          |       |         |            |   |              |       |         |                 |        
|                     |                | Subtotal Europe:                                                                             |    |    | 48         |          |       |         | 55.76      | % |              |       | 10,602  |                 |         |         | 678,427   |   |        |   |          | 
|                     |                |                                                                                              |    |    |            |          |       |         |            |   |              |       |         |                 |        
|Asia (4 markets)(5): |                |                                                                                              |    |    |            |          |       |         |            |   |              |       |         |                 |         |         |           |   |        |  
|                     | China          |                                                                                              |    | 4  |            |          |       | 75.25   | %          |   |              | 689   |         |                 |         | 22,927  |           |   |        |  |          
|                     | Japan          |                                                                                              |    | 2  |            |          |       | 89.86   | %          |   |              | 859   |         |                 |         | 71,568  |           |   |        |  |          
|                     | Singapore      |                                                                                              |    | 1  |            |          |       | 100.00  | %          |   |              | 150   |         |                 |         | 11,598  |           |   |        |  |          
|                     |                |                                                                                              |    |    |            |          |       |         |            |   |              |       |         |                 |        
|                     |                | Subtotal Asia                                                                                |    |    | 7          |          |       |         | 84.83      | % |              |       | 1,698   |                 |         |         | 106,093   |   |        |   |          | 
|                     |                |                                                                                              |    |    |            |          |       |         |            |   |              |       |         |                 |        
|                     |                | Total industrial distribution properties                                                     |    |    | 1,432      |          |       |         | 87.72      | % |              |       | 185,551 |                 |         | $       | 8,730,906 |   |        | $ | 1,482,454 | 
|                     |                |                                                                                              |    |    |            |          |       |         |            |   |              |       |         |                 |        
|Retail properties    |                |                                                                                              | 29 |    |            |          | 92.17 | %       |            |   | 1,112        |       |         | $               | 288,253 |         |           | $ | 31,516 |  
|                     |                |                                                                                              |    |    |            |          |       |         |            |   |              |       |         |                 |        
|                     |                | Total operating properties owned in the property operations
    segment at December 31, 2005 |    |    | 1,461      |          |       |         | 87.75      | % |              |       | 186,663 |                 |         | $       | 9,019,159 |   |        | $ | 1,513,970 | 
|                     |                |                                                                                              |    |    |            |          |       |         |            |   |              |       |         |                 |        

|                                                                                                                                   |                                        |               |  |                              |            |  |          |        |  |  |         |   |                |            |  |       |         |  |   |        |  |  |   |        | 
|---------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------- | ------------- |  | ---------------------------- | ---------- |  | -------- | ------ |  |  | ------- | - | -------------- | ---------- |  | ----- | ------- |  | - | ------ |  |  | - | ------ | 
|                                                                                                                                   |                                        |               |  | Properties Under Development |           
|                                                                                                                                   |                                        | Land Held for |  |                              |            | 
|                                                                                                                                   |                                        | Development   |  |                              |            |  | Rentable |        |  | 
|                                                                                                                                   |                                        |               |  |                              | No. of     |  |          | Square |  |  |         |   | Total Expected |           
|                                                                                                                                   |                                        | Acreage       |  |                              | Investment |  |          | Bldgs. |  |  | Footage |   |                | Investment |  |       | Cost(6) | 
|                                                                                                                                   |                                        |               |  |                              |            |  |          |        |  |  |         |   |                |            |  |       |         | 
|Land held for development and properties under development at
    December 31, 2005 (dollars and square footage in
    thousands): |                                        |               |  |                              |            |  |          |        |  |  |         |   |                |            |  |       |         |  |   |        |  |  |   |       
|North America:                                                                                                                     |                                        |               |  |                              |            |  |          |        |  |  |         |   |                |            |  |       |         |  |   |        |  |  |   |       
|United States:                                                                                                                     |                                        |               |  |                              |            |  |          |        |  |  |         |   |                |            |  |       |         |  |   |        |  |  |   |       
|                                                                                                                                   | Atlanta, Georgia                       |               |  | 372.7                        |            |  | $        | 24,562 |  |  |         | 2 |                |            |  | 1,780 |         |  | $ | 37,281 |  |  | $ | 52,087 | 
|                                                                                                                                   | Austin, Texas                          |               |  | 3.0                          |            |  |          | 12,037 |  |  |         |  |                |            |  |      |         |  |   |       |  |  |   |       | 
|                                                                                                                                   | Charlotte, North Carolina              |               |  | 44.2                         |            |  |          | 5,633  |  |  |         | 2 |                |            |  | 355   |         |  |   | 6,265  |  |  |   | 14,164 | 
|                                                                                                                                   | Chicago, Illinois                      |               |  | 531.8                        |            |  |          | 65,367 |  |  |         | 1 |                |            |  | 806   |         |  |   | 15,352 |  |  |   | 25,141 | 
|                                                                                                                                   | Cincinnati, Ohio                       |               |  | 86.1                         |            |  |          | 7,837  |  |  |         |  |                |            |  |      |         |  |   |       |  |  |   |       | 
|                                                                                                                                   | Columbus, Ohio                         |               |  | 129.3                        |            |  |          | 5,419  |  |  |         | 1 |                |            |  | 513   |         |  |   | 12,228 |  |  |   | 16,604 | 
|                                                                                                                                   | Dallas/ Fort Worth, Texas              |               |  | 588.7                        |            |  |          | 39,938 |  |  |         |  |                |            |  |      |         |  |   |       |  |  |   |       | 
|                                                                                                                                   | Denver, Colorado                       |               |  | 348.1                        |            |  |          | 19,894 |  |  |         |  |                |            |  |      |         |  |   |       |  |  |   |       | 
|                                                                                                                                   | El Paso, Texas                         |               |  | 80.8                         |            |  |          | 4,671  |  |  |         |  |                |            |  |      |         |  |   |       |  |  |   |       | 
|                                                                                                                                   | Houston, Texas                         |               |  | 138.8                        |            |  |          | 10,493 |  |  |         | 2 |                |            |  | 489   |         |  |   | 14,114 |  |  |   | 19,215 | 
|                                                                                                                                   | I-81 Corridor, Pennsylvania            |               |  | 336.5                        |            |  |          | 34,826 |  |  |         | 1 |                |            |  | 936   |         |  |   | 14,418 |  |  |   | 26,407 | 
|                                                                                                                                   | Indianapolis, Indiana                  |               |  | 92.7                         |            |  |          | 5,021  |  |  |         |  |                |            |  |      |         |  |   |       |  |  |   |       | 
|                                                                                                                                   | Las Vegas, Nevada                      |               |  | 13.2                         |            |  |          | 2,044  |  |  |         |  |                |            |  |      |         |  |   |       |  |  |   |       | 
|                                                                                                                                   | Los Angeles/ Orange County, California |               |  | 163.5                        |            |  |          | 59,974 |  |  |         | 2 |                |            |  | 706   |         |  |   | 9,424  |  |  |   | 31,979 | 
|                                                                                                                                   | Louisville, Kentucky                   |               |  | 64.9                         |            |  |          | 4,337  |  |  |         | 1 |                |            |  | 483   |         |  |   | 12,300 |  |  |   | 16,504 | 
|                                                                                                                                   | Memphis, Tennessee                     |               |  | 215.6                        |            |  |          | 12,433 |  |  |         |  |                |            |  |      |         |  |   |       |  |  |   |       | 

25



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|                           |                |                                      |                                                                                                                            |                              |            |         |          |         |        |           |         |    |                |            |  |       |         |        |  |         |        |         |  |         |        |           | 
|-------------------------- | -------------- | ------------------------------------ | -------------------------------------------------------------------------------------------------------------------------- | ---------------------------- | ---------- | ------- | -------- | ------- | ------ | --------- | ------- | -- | -------------- | ---------- |  | ----- | ------- | ------ |  | ------- | ------ | ------- |  | ------- | ------ | --------- | 
|                           |                |                                      |                                                                                                                            | Properties Under Development |           
|                           |                | Land Held for                        |                                                                                                                            |                              |            |        
|                           |                | Development                          |                                                                                                                            |                              |            |         | Rentable |         |        |          
|                           |                |                                      |                                                                                                                            |                              | No. of     |         |          | Square  |        |           |         |    | Total Expected |           
|                           |                | Acreage                              |                                                                                                                            |                              | Investment |         |          | Bldgs.  |        |           | Footage |    |                | Investment |  |       | Cost(6) |       
|                           |                |                                      |                                                                                                                            |                              |            |         |          |         |        |           |         |    |                |            |  |       |         |       
|                           |                | New Jersey                           |                                                                                                                            |                              | 315.1      |         |          |         | 73,571 |           |         |    | 1              |            |  |       | 108     |        |  |         | 824    |         |  |         | 6,357  |          
|                           |                | Orlando, Florida                     |                                                                                                                            |                              |           |         |          |         |       |           |         |    | 3              |            |  |       | 378     |        |  |         | 8,452  |         |  |         | 19,351 |          
|                           |                | Portland, Oregon                     |                                                                                                                            |                              | 55.0       |         |          |         | 11,483 |           |         |    | 3              |            |  |       | 326     |        |  |         | 8,798  |         |  |         | 22,611 |          
|                           |                | Reno, Nevada                         |                                                                                                                            |                              | 6.2        |         |          |         | 577    |           |         |    |               |            |  |       |        |        |  |         |       |         |  |         |       |          
|                           |                | Salt Lake City, Utah                 |                                                                                                                            |                              | 9.6        |         |          |         | 216    |           |         |    |               |            |  |       |        |        |  |         |       |         |  |         |       |          
|                           |                | San Antonio, Texas                   |                                                                                                                            |                              | 26.0       |         |          |         | 1,679  |           |         |    | 3              |            |  |       | 357     |        |  |         | 13,680 |         |  |         | 15,809 |          
|                           |                | San Francisco, California            |                                                                                                                            |                              | 1,235.8    |         |          |         | 95,172 |           |         |    |               |            |  |       |        |        |  |         |       |         |  |         |       |          
|                           |                | Seattle, Washington                  |                                                                                                                            |                              | 10.6       |         |          |         | 2,219  |           |         |    |               |            |  |       |        |        |  |         |       |         |  |         |       |          
|                           |                | Tampa, Florida                       |                                                                                                                            |                              | 56.7       |         |          |         | 4,375  |           |         |    |               |            |  |       |        |        |  |         |       |         |  |         |       |          
|                           |                | Washington D.C./ Baltimore, Maryland |                                                                                                                            |                              | 128.5      |         |          |         | 11,312 |           |         |    | 3              |            |  |       | 227     |        |  |         | 6,171  |         |  |         | 17,373 |          
|                           | Mexico:        |                                      |                                                                                                                            |                              |            |         |          |         |        |           |         |    |                |            |  |       |         |        |  |         |        |         |  |         |       
|                           |                | Juarez                               |                                                                                                                            |                              | 26.4       |         |          |         | 5,445  |           |         |    |               |            |  |       |        |        |  |         |       |         |  |         |       |          
|                           |                | Monterrey                            |                                                                                                                            |                              | 237.8      |         |          |         | 28,384 |           |         |    | 1              |            |  |       | 67      |        |  |         | 1,521  |         |  |         | 3,322  |          
|                           |                | Reynosa                              |                                                                                                                            |                              | 38.2       |         |          |         | 4,914  |           |         |    | 3              |            |  |       | 369     |        |  |         | 2,973  |         |  |         | 15,353 |          
|Canada:                    |                |                                      |                                                                                                                            |                              |            |         |          |         |        |           |         |    |                |            |  |       |         |        |  |         |        |         |  |        
|                           |                | Toronto                              |                                                                                                                            |                              | 79.5       |         |          |         | 30,737 |           |         |    | 3              |            |  |       | 986     |        |  |         | 33,004 |         |  |         | 60,718 |          
|                           |                |                                      |                                                                                                                            |                              |            |         |          |         |        |           |         |    |                |            |  |       |         |       
|                           |                |                                      | Subtotal North America                                                                                                     |                              |            | 5,435.3 |          |         |        | 584,570   |         |    |                | 32         |  |       |         | 8,886  |  |         |        | 196,805 |  |         |        | 362,995   | 
|                           |                |                                      |                                                                                                                            |                              |            |         |          |         |        |           |         |    |                |            |  |       |         |       
|Europe (24 total markets): |                |                                      |                                                                                                                            |                              |            |         |          |         |        |           |         |    |                |            |  |       |         |        |  |         |        |         |  |        
|                           | Belgium        |                                      |                                                                                                                            | 20.6                         |            |         |          | 4,222   |        |           |         | 3  |                |            |  | 587   |         |        |  | 12,509  |        |         |  | 34,878  |       
|                           | Czech Republic |                                      |                                                                                                                            | 10.4                         |            |         |          | 3,001   |        |           |         |   |                |            |  |      |         |        |  |        |        |         |  |        |       
|                           | France         |                                      |                                                                                                                            | 243.6                        |            |         |          | 27,089  |        |           |         | 1  |                |            |  | 435   |         |        |  | 6,940   |        |         |  | 22,302  |       
|                           | Germany        |                                      |                                                                                                                            | 56.5                         |            |         |          | 25,098  |        |           |         | 3  |                |            |  | 402   |         |        |  | 21,125  |        |         |  | 31,262  |       
|                           | Hungary        |                                      |                                                                                                                            | 46.3                         |            |         |          | 7,348   |        |           |         |   |                |            |  |      |         |        |  |        |        |         |  |        |       
|                           | Italy          |                                      |                                                                                                                            | 80.4                         |            |         |          | 26,575  |        |           |         | 3  |                |            |  | 843   |         |        |  | 35,437  |        |         |  | 45,451  |       
|                           | Netherlands    |                                      |                                                                                                                            | 15.1                         |            |         |          | 6,364   |        |           |         |   |                |            |  |      |         |        |  |        |        |         |  |        |       
|                           | Poland         |                                      |                                                                                                                            | 230.0                        |            |         |          | 40,917  |        |           |         | 3  |                |            |  | 1,135 |         |        |  | 13,150  |        |         |  | 45,437  |       
|                           | Spain          |                                      |                                                                                                                            | 43.1                         |            |         |          | 20,153  |        |           |         |   |                |            |  |      |         |        |  |        |        |         |  |        |       
|                           | United Kingdom |                                      |                                                                                                                            | 328.0                        |            |         |          | 203,645 |        |           |         | 12 |                |            |  | 4,045 |         |        |  | 259,092 |        |         |  | 443,241 |       
|                           |                |                                      |                                                                                                                            |                              |            |         |          |         |        |           |         |    |                |            |  |       |         |       
|                           |                |                                      | Subtotal Europe                                                                                                            |                              |            | 1,074.0 |          |         |        | 364,412   |         |    |                | 25         |  |       |         | 7,447  |  |         |        | 348,253 |  |         |        | 622,571   | 
|                           |                |                                      |                                                                                                                            |                              |            |         |          |         |        |           |         |    |                |            |  |       |         |       
|Asia (8 total markets):    |                |                                      |                                                                                                                            |                              |            |         |          |         |        |           |         |    |                |            |  |       |         |        |  |         |        |         |  |        
|                           | China          |                                      |                                                                                                                            | 26.4                         |            |         |          | 7,996   |        |           |         | 7  |                |            |  | 1,387 |         |        |  | 9,122   |        |         |  | 40,779  |       
|                           | Japan          |                                      |                                                                                                                            | 32.0                         |            |         |          | 88,064  |        |           |         | 8  |                |            |  | 5,527 |         |        |  | 330,165 |        |         |  | 735,871 |       
|                           |                |                                      |                                                                                                                            |                              |            |         |          |         |        |           |         |    |                |            |  |       |         |       
|                           |                |                                      | Subtotal Asia                                                                                                              |                              |            | 58.4    |          |         |        | 96,060    |         |    |                | 15         |  |       |         | 6,914  |  |         |        | 339,287 |  |         |        | 776,650   | 
|                           |                |                                      |                                                                                                                            |                              |            |         |          |         |        |           |         |    |                |            |  |       |         |       
|                           |                |                                      | Total land held for development and properties under
    development in the CDFS business segment at December 31,
    2005 |                              |            | 6,567.7 |          |         | $      | 1,045,042 |         |    |                | 72         |  |       |         | 23,247 |  |         | $      | 884,345 |  |         | $      | 1,762,216 | 
|                           |                |                                      |                                                                                                                            |                              |            |         |          |         |        |           |         |    |                |            |  |       |         |       

26



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|                                            |        |                   |           |            | 
|------------------------------------------- | ------ | ----------------- | --------- | ---------- | 
|                                            |        | Investment Before |          
|                                            |        | Depreciation      |          
|                                            |        |                   |          
|                                            |        | (In thousands)    |          
|Industrial distribution properties(3)(4)(5) |        | $                 | 8,730,906 |           
|Retail properties                           |        |                   | 288,253   |           
|Office properties(7)                        |        |                   | 254,573   |           
|Land subject to ground leases and other(8)  |        |                   | 538,095   |           
|Properties under development                |        |                   | 884,345   |           
|Land held for development                   |        |                   | 1,045,042 |           
|Other investments(9)                        |        |                   | 133,916   |           
|                                            |        |                   |          
|                                            | Totals |                   | $         | 11,875,130 | 
|                                            |        |                   |          






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represents the percentage leased at December 31, 2005.
    Operating properties at December 31, 2005 include recently
    completed development properties that may be in the initial
    lease-up phase,
    including properties aggregating 17.1 million square feet
    that were completed in 2005. The inclusion of properties in the
    initial lease-up phase
    can reduce the overall leased percentage.                                                                                                                                                                                                                                                                                                      
|   
|(2) | Certain properties are pledged as security under our secured
    debt and assessment bonds at December 31, 2005. For
    purposes of this table, the total principal balance of a debt
    issuance that is secured by a pool of properties is allocated
    among the properties in the pool based on each propertys
    investment balance. In addition to the amounts reflected here,
    we also have $129.6 million of encumbrances related to
    other real estate assets not included in the property operations
    segment. See Schedule III  Real Estate and
    Accumulated Depreciation to our Consolidated Financial
    Statements in Item 8 for additional identification of the
    properties pledged.
|   
|(3) | In North America, includes 71 properties aggregating
    17.9 million square feet at total investment of
    $681.9 million that were developed or acquired in the CDFS
    business segment and are pending contribution to a property fund
    or sale to a third party.                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|(4) | In Europe, includes 46 properties aggregating 9.8 million
    square feet at a total investment of $643.3 million that
    were developed or acquired in the CDFS business segment and are
    pending contribution to a property fund or sale to a third party.                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(5) | In Asia, all properties were developed or acquired in the CDFS
    business segment and are pending contribution to a property fund.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(6) | Represents the total expected cost at completion for properties
    under development, including the cost of land, fees, permits,
    payments to contractors, architectural and engineering fees and
    interest, project management costs and other appropriate costs
    to be capitalized during construction, rather than actual costs
    incurred to date.                                                                                                                                                                                                                                                                                                                                                        
|   
|(7) | Represents 24 office properties in North America aggregating
    1.8 million square feet that are 84.1% leased. All
    properties were acquired in the Catellus Merger.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|(8) | Amounts represent investments of $424.5 million in land
    subject to ground leases, one hotel property representing an
    $83.8 million investment and an investment of
    $29.8 million in railway depots, all of which were acquired
    in the Catellus Merger.                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|(9) | Other investments primarily include: (i) restricted funds
    that are held in escrow pending the completion of tax-deferred
    exchange transactions involving operating properties;
    (ii) earnest money deposits associated with potential
    acquisitions; (iii) costs incurred during the
    pre-acquisition due diligence process; (iv) costs incurred
    during the pre-construction phase related to future development
    projects; and (v) costs related to our corporate office
    buildings.                                                                                                                                                                                                          

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##### Table of Contents






Unconsolidated Investees






| |               
| | --------------
| | Property Funds



|               |                                                |                      |  |     |         |          |  |         |    |     |            |        |         |               |  |        |       |   |  |           |           | 
|-------------- | ---------------------------------------------- | -------------------- |  | --- | ------- | -------- |  | ------- | -- | --- | ---------- | ------ | ------- | ------------- |  | ------ | ----- | - |  | --------- | --------- | 
|               |                                                |                      |  |     |         | Rentable |  |         |    |     |           
|               |                                                | No. of               |  |     | No. of  |          |  | Square  |    |     | Percentage |        |         | Entitys      | 
|               |                                                | Bldgs.               |  |     | Markets |          |  | Footage |    |     | Leased(1)  |        |         | Investment(2) | 
|               |                                                |                      |  |     |         |          |  |         |    |     |            |        |         |               | 
|North America: |                                                |                      |  |     |         |          |  |         |    |     |            |        |         |               |  |        |       |   |  |          
|               | ProLogis California                            |                      |  | 81  |         |          |  | 1       |    |     |            | 14,211 |         |               |  | 97.10  | %     |   |  | 691,761   |          
|               | ProLogis North American Properties Fund I      |                      |  | 36  |         |          |  | 16      |    |     |            | 9,406  |         |               |  | 93.89  | %     |   |  | 378,646   |          
|               | ProLogis North American Properties Fund II(3)  |                      |  | 27  |         |          |  | 13      |    |     |            | 4,477  |         |               |  | 96.69  | %     |   |  | 237,648   |          
|               | ProLogis North American Properties Fund III(3) |                      |  | 34  |         |          |  | 15      |    |     |            | 4,380  |         |               |  | 96.89  | %     |   |  | 212,744   |          
|               | ProLogis North American Properties Fund IV(3)  |                      |  | 17  |         |          |  | 10      |    |     |            | 3,475  |         |               |  | 97.29  | %     |   |  | 143,059   |          
|               | ProLogis North American Properties Fund V      |                      |  | 138 |         |          |  | 29      |    |     |            | 32,898 |         |               |  | 98.61  | %     |   |  | 1,394,530 |          
|               | ProLogis North American Properties Fund VI     |                      |  | 22  |         |          |  | 7       |    |     |            | 8,648  |         |               |  | 95.31  | %     |   |  | 509,569   |          
|               | ProLogis North American Properties Fund VII    |                      |  | 29  |         |          |  | 8       |    |     |            | 6,055  |         |               |  | 93.92  | %     |   |  | 385,633   |          
|               | ProLogis North American Properties Fund VIII   |                      |  | 24  |         |          |  | 9       |    |     |            | 3,064  |         |               |  | 96.06  | %     |   |  | 190,131   |          
|               | ProLogis North American Properties Fund IX     |                      |  | 20  |         |          |  | 7       |    |     |            | 3,439  |         |               |  | 90.18  | %     |   |  | 192,762   |          
|               | ProLogis North American Properties Fund X      |                      |  | 29  |         |          |  | 9       |    |     |            | 4,191  |         |               |  | 73.76  | %     |   |  | 218,535   |          
|               | ProLogis North American Properties Fund XI     |                      |  | 14  |         |          |  | 3       |    |     |            | 4,316  |         |               |  | 97.96  | %     |   |  | 229,374   |          
|               |                                                |                      |  |     |         |          |  |         |    |     |            |        |         |               | 
|               |                                                | Total North America  |  |     | 471     |          |  |         | 35 | (4) |            |        | 98,560  |               |  |        | 95.69 | % |  |           | 4,784,392 | 
|Europe:        |                                                |                      |  |     |         |          |  |         |    |     |            |        |         |               |  |        |       |   |  |          
|               | ProLogis European Properties Fund              |                      |  | 263 |         |          |  | 27      |    |     |            | 53,984 |         |               |  | 96.34  | %     |   |  | 3,944,844 |          
|Asia:          |                                                |                      |  |     |         |          |  |         |    |     |            |        |         |               |  |        |       |   |  |          
|               | ProLogis Japan Properties Fund I               |                      |  | 18  |         |          |  | 3       |    |     |            | 7,225  |         |               |  | 100.00 | %     |   |  | 1,185,879 |          
|               |                                                |                      |  |     |         |          |  |         |    |     |            |        |         |               | 
|               |                                                | Total Property Funds |  |     | 752     |          |  |         | 65 |     |            |        | 159,769 |               |  |        | 96.11 | % |  | $         | 9,915,115 | 
|               |                                                |                      |  |     |         |          |  |         |    |     |            |        |         |               | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The percentage occupancy presented is the leased percentage
    occupancy at December 31, 2005.                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(2) | Investment represents 100% of the carrying value of the
    properties, before depreciation, of each entity at
    December 31, 2005, except with respect to ProLogis North
    American Properties Fund XI. We acquired our ownership
    interest in this entity in August 2004, and therefore, in
    accordance with purchase accounting, the investment represents
    100% of the fair value of the operating properties owned by
    these entities, adjusted for subsequent activity.

28



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##### Table of Contents





|    |                                                                                                                                                                                                                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | On January 4, 2006, we purchased the remaining 80%
    ownership interests in these property funds and subsequently
    contributed substantially all the assets and associated
    liabilities to the newly formed North American Industrial Fund.
    See Note 21 to our Consolidated Financial Statements in
    Item 8.
|   
|(4) | Represents the total number of markets in North America on a
    combined basis.                                                                                                                                                                                                                                           



| |                    
| | -------------------
| | CDFS joint ventures








|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings








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






PART II







|        |                                                                                                                 
|------- | ----------------------------------------------------------------------------------------------------------------
|Item 5. | Market for Registrants Common Equity, Related
    Stockholder Matters and Issuer Purchases of Equity Securities




Market Information and Holders




|      |                                 |           |   |          |  |                    |   |       |  |  |   |       | 
|----- | ------------------------------- | --------- | - | -------- |  | ------------------ | - | ----- |  |  | - | ----- | 
|      |                                 | High Sale |   | Low Sale |  | Per Common        
|      |                                 | Price     |   | Price    |  | Share Distribution
|      |                                 |           |   |          |  |                   
|2004: |                                 |           |   |          |  |                    |   |       |  |  |   |      
|      | First Quarter                   |           | $ | 36.00    |  |                    | $ | 30.80 |  |  | $ | 0.365 | 
|      | Second Quarter                  |           |   | 36.39    |  |                    |   | 27.62 |  |  |   | 0.365 | 
|      | Third Quarter                   |           |   | 36.95    |  |                    |   | 32.74 |  |  |   | 0.365 | 
|      | Fourth Quarter                  |           |   | 43.33    |  |                    |   | 35.30 |  |  |   | 0.365 | 
|2005: |                                 |           |   |          |  |                    |   |       |  |  |   |      
|      | First Quarter                   |           |   | 43.50    |  |                    |   | 36.67 |  |  |   | 0.37  | 
|      | Second Quarter                  |           |   | 42.34    |  |                    |   | 36.50 |  |  |   | 0.37  | 
|      | Third Quarter                   |           |   | 46.41    |  |                    |   | 40.12 |  |  |   | 0.37  | 
|      | Fourth Quarter                  |           |   | 47.61    |  |                    |   | 39.81 |  |  |   | 0.37  | 
|2006: |                                 |           |   |          |  |                    |   |       |  |  |   |      
|      | First Quarter (through March 6) |           | $ | 53.60    |  |                    | $ | 46.29 |  |  | $ | 0.40  | 



29



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##### Table of Contents






Distributions and Dividends








|                          |  |              |      |      |  |   |      | 
|------------------------- |  | ------------ | ---- | ---- |  | - | ---- | 
|                          |  | Years Ended 
|                          |  | December 31,
|                          |  |             
|                          |  | 2005         |      | 2004
|                          |  |              |      |     
|Series C Preferred Shares |  | $            | 4.27 |      |  | $ | 4.27 | 
|Series F Preferred Shares |  | $            | 1.69 |      |  | $ | 1.69 | 
|Series G Preferred Shares |  | $            | 1.69 |      |  | $ | 1.69 | 








Securities Authorized for Issuance Under Equity Compensation
Plans




30



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##### Table of Contents






Other Shareholder Matters




| |                                 
| | --------------------------------
| | Other Issuances of Common Shares







| |                   
| | ------------------
| | Common Share Plans





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|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data





|                                                                    |                                                                    |                          |   |           |         |  |   |           |         |  |      |           |         |      |   |           |         |  |   |           |         | 
|------------------------------------------------------------------- | ------------------------------------------------------------------ | ------------------------ | - | --------- | ------- |  | - | --------- | ------- |  | ---- | --------- | ------- | ---- | - | --------- | ------- |  | - | --------- | ------- | 
|                                                                    |                                                                    | Years Ended December 31, |  
|                                                                    |                                                                    |                          |  
|                                                                    |                                                                    | 2005(1)                  |   |           | 2004    |  |   | 2003      |         |  | 2002 |           |         | 2001 |  
|                                                                    |                                                                    |                          |   |           |         |  |   |           |         |  |      |           |         |      |  
|Operating Data:                                                     |                                                                    |                          |   |           |         |  |   |           |         |  |      |           |         |      |   |           |         |  |   |          
|                                                                    | Total revenues                                                     |                          | $ | 1,868,041 |         |  | $ | 1,869,206 |         |  | $    | 1,473,289 |         |      | $ | 1,502,272 |         |  | $ | 1,244,098 |        
|                                                                    | Total expenses                                                     |                          | $ | 1,425,678 |         |  | $ | 1,511,923 |         |  | $    | 1,137,670 |         |      | $ | 1,144,293 |         |  | $ | 895,797   |        
|                                                                    | Operating income                                                   |                          | $ | 442,363   |         |  | $ | 357,283   |         |  | $    | 335,619   |         |      | $ | 357,979   |         |  | $ | 348,301   |        
|                                                                    | Interest expense                                                   |                          | $ | 178,369   |         |  | $ | 152,551   |         |  | $    | 154,427   |         |      | $ | 151,864   |         |  | $ | 162,493   |        
|                                                                    | Earnings from continuing operations                                |                          | $ | 317,842   |         |  | $ | 228,200   |         |  | $    | 243,543   |         |      | $ | 241,268   |         |  | $ | 119,355   |        
|                                                                    | Discontinued operations(2)                                         |                          | $ | 78,321    |         |  | $ | 4,595     |         |  | $    | 7,132     |         |      | $ | 7,613     |         |  | $ | 8,789     |        
|                                                                    | Net earnings                                                       |                          | $ | 396,163   |         |  | $ | 232,795   |         |  | $    | 250,675   |         |      | $ | 248,881   |         |  | $ | 128,144   |        
|                                                                    | Net earnings attributable to common shares                         |                          | $ | 370,747   |         |  | $ | 202,813   |         |  | $    | 212,367   |         |      | $ | 216,166   |         |  | $ | 86,038    |        
|                                                                    | Net earnings per share attributable to common shares 
    Basic:  |                          |   |           |         |  |   |           |         |  |      |           |         |      |   |           |         |  |   |           |        
|                                                                    |                                                                    | Continuing operations    |   | $         | 1.44    |  |   | $         | 1.09    |  |      | $         | 1.14    |      |   | $         | 1.18    |  |   | $         | 0.45    | 
|                                                                    |                                                                    | Discontinued operations  |   |           | 0.38    |  |   |           | 0.02    |  |      |           | 0.04    |      |   |           | 0.04    |  |   |           | 0.05    | 
|                                                                    |                                                                    |                          |   |           |         |  |   |           |         |  |      |           |         |      |  
|                                                                    | Net earnings per share attributable to common shares 
    Basic   |                          | $ | 1.82      |         |  | $ | 1.11      |         |  | $    | 1.18      |         |      | $ | 1.22      |         |  | $ | 0.50      |        
|                                                                    |                                                                    |                          |   |           |         |  |   |           |         |  |      |           |         |      |  
|Net earnings per share attributable to common shares 
    Diluted: |                                                                    |                          |   |           |         |  |   |           |         |  |      |           |         |      |   |           |         |  |   |          
|                                                                    |                                                                    | Continuing operations    |   | $         | 1.39    |  |   | $         | 1.06    |  |      | $         | 1.12    |      |   | $         | 1.16    |  |   | $         | 0.44    | 
|                                                                    |                                                                    | Discontinued operations  |   |           | 0.37    |  |   |           | 0.02    |  |      |           | 0.04    |      |   |           | 0.04    |  |   |           | 0.05    | 
|                                                                    |                                                                    |                          |   |           |         |  |   |           |         |  |      |           |         |      |  
|                                                                    | Net earnings per share attributable to common shares 
    Diluted |                          | $ | 1.76      |         |  | $ | 1.08      |         |  | $    | 1.16      |         |      | $ | 1.20      |         |  | $ | 0.49      |        
|                                                                    |                                                                    |                          |   |           |         |  |   |           |         |  |      |           |         |      |  
|                                                                    | Weighted average common shares outstanding:                        |                          |   |           |         |  |   |           |         |  |      |           |         |      |   |           |         |  |   |           |        
|                                                                    |                                                                    | Basic                    |   |           | 203,337 |  |   |           | 182,226 |  |      |           | 179,245 |      |   |           | 177,813 |  |   |           | 172,755 | 
|                                                                    |                                                                    | Diluted                  |   |           | 213,713 |  |   |           | 191,801 |  |      |           | 187,222 |      |   |           | 184,869 |  |   |           | 175,197 | 
|Common Share Distributions:                                         |                                                                    |                          |   |           |         |  |   |           |         |  |      |           |         |      |   |           |         |  |   |          
|                                                                    | Common share cash distributions paid                               |                          | $ | 297,379   |         |  | $ | 266,135   |         |  | $    | 258,187   |         |      | $ | 252,270   |         |  | $ | 237,691   |        
|                                                                    | Common share distributions paid per share                          |                          | $ | 1.48      |         |  | $ | 1.46      |         |  | $    | 1.44      |         |      | $ | 1.42      |         |  | $ | 1.38      |        

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|                                                    |                                                    |                                                            |                                  |         |         |         |          |         |         |         |          |         |         |         |          |         |         |         |          |         |         |         |  
|--------------------------------------------------- | -------------------------------------------------- | ---------------------------------------------------------- | -------------------------------- | ------- | ------- | ------- | -------- | ------- | ------- | ------- | -------- | ------- | ------- | ------- | -------- | ------- | ------- | ------- | -------- | ------- | ------- | ------- | -
|                                                    |                                                    | Years Ended December 31,                                   |                                 
|                                                    |                                                    |                                                            |                                 
|                                                    |                                                    | 2005(1)                                                    |                                  |         | 2004    |         |          | 2003    |         |         | 2002     |         |         | 2001    |         
|                                                    |                                                    |                                                            |                                  |         |         |         |          |         |         |         |          |         |         |         |         
|FFO(3):                                             |                                                    |                                                            |                                  |         |         |         |          |         |         |         |          |         |         |         |          |         |         |         |          |        
|                                                    | Reconciliation of net earnings to FFO:             |                                                            |                                  |         |         |         |          |         |         |         |          |         |         |         |          |         |         |         |          |         |        
|                                                    | Net earnings attributable to common shares         |                                                            | $                                | 370,747 |         |         | $        | 202,813 |         |         | $        | 212,367 |         |         | $        | 216,166 |         |         | $        | 86,038  |        
|                                                    |                                                    | Add (deduct) NAREIT defined adjustments:                   |                                  |         |         |         |          |         |         |         |          |         |         |         |          |         |         |         |          |         |         |        
|                                                    |                                                    | Our direct adjustments                                     |                                  |         | 192,224 |         |          |         | 152,108 |         |          |         | 122,376 |         |          |         | 132,546 |         |          |         | 121,316 |        
|                                                    |                                                    | Items attributable to discontinued operations              |                                  |         | (82,477 | )       |          |         | 4,633   |         |          |         | 6,177   |         |          |         | 6,039   |         |          |         | 5,709   |        
|                                                    |                                                    | Our share of reconciling items of unconsolidated investees |                                  |         | 51,518  |         |          |         | 39,738  |         |          |         | 30,228  |         |          |         | 39,531  |         |          |         | 68,367  |        
|                                                    |                                                    |                                                            |                                  |         |         |         |          |         |         |         |          |         |         |         |         
|                                                    |                                                    |                                                            | Total NAREIT defined adjustments |         |         | 161,265 |          |         |         | 196,479 |          |         |         | 158,781 |          |         |         | 178,116 |          |         |         | 195,392 |  
|                                                    |                                                    |                                                            |                                  |         |         |         |          |         |         |         |          |         |         |         |         
|                                                    | Subtotal  NAREIT defined FFO                      |                                                            |                                  | 532,012 |         |         |          | 399,292 |         |         |          | 371,148 |         |         |          | 394,282 |         |         |          | 281,430 |        
|Add (deduct) our defined adjustments:               |                                                    |                                                            |                                  |         |         |         |          |         |         |         |          |         |         |         |          |         |         |         |          |        
|                                                    |                                                    | Our direct adjustments                                     |                                  |         | (2,020  | )       |          |         | 2,102   |         |          |         | 18,379  |         |          |         | 16,917  |         |          |         | 3,742   |        
|                                                    |                                                    | Items attributable to discontinued operations              |                                  |         | (213    | )       |          |         | (1,075  | )       |          |         |        |         |          |         |        |         |          |         |        |        
|                                                    |                                                    | Our share of reconciling items of unconsolidated investees |                                  |         | 693     |         |          |         | 84      |         |          |         | 11,218  |         |          |         | (18,150 | )       |          |         | (3,969  | )      
|                                                    |                                                    |                                                            |                                  |         |         |         |          |         |         |         |          |         |         |         |         
|                                                    |                                                    |                                                            | Total our defined adjustments    |         |         | (1,540  | )        |         |         | 1,111   |          |         |         | 29,597  |          |         |         | (1,233  | )        |         |         | (227    | )
|                                                    |                                                    |                                                            |                                  |         |         |         |          |         |         |         |          |         |         |         |         
|                                                    | FFO attributable to common shares as defined by us |                                                            | $                                | 530,472 |         |         | $        | 400,403 |         |         | $        | 400,745 |         |         | $        | 393,049 |         |         | $        | 281,203 |        
|                                                    |                                                    |                                                            |                                  |         |         |         |          |         |         |         |          |         |         |         |         
|Cash Flow Data:                                     |                                                    |                                                            |                                  |         |         |         |          |         |         |         |          |         |         |         |          |         |         |         |          |        
|Net cash provided by operating activities           |                                                    | $                                                          | 498,190                          |         |         | $       | 558,853  |         |         | $       | 366,559  |         |         | $       | 441,374  |         |         | $       | 378,744  |        
|Net cash provided by (used in) investing activities |                                                    | $                                                          | (2,286,958                       | )       |         | $       | (690,016 | )       |         | $       | (115,094 | )       |         | $       | (158,707 | )       |         | $       | 68,480   |        
|Net cash provided by (used in) financing activities |                                                    | $                                                          | 1,743,955                        |         |         | $       | 36,189   |         |         | $       | (30,771  | )       |         | $       | (199,847 | )       |         | $       | (477,105 | )      

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|                    |                                                                                 |              |   |            |      |  |   |           |  |  |      |           |  |      |   |           |  |  |   |           | 
|------------------- | ------------------------------------------------------------------------------- | ------------ | - | ---------- | ---- |  | - | --------- |  |  | ---- | --------- |  | ---- | - | --------- |  |  | - | --------- | 
|                    |                                                                                 | December 31, |  
|                    |                                                                                 |              |  
|                    |                                                                                 | 2005(1)      |   |            | 2004 |  |   | 2003      |  |  | 2002 |           |  | 2001 |  
|                    |                                                                                 |              |   |            |      |  |   |           |  |  |      |           |  |      |  
|Financial Position: |                                                                                 |              |   |            |      |  |   |           |  |  |      |           |  |      |   |           |  |  |   |          
|                    | Real estate owned, excluding land held for development, before
    depreciation |              | $ | 10,830,088 |      |  | $ | 5,737,730 |  |  | $    | 5,342,884 |  |      | $ | 5,008,707 |  |  | $ | 4,387,456 | 
|                    | Land held for development                                                       |              | $ | 1,045,042  |      |  | $ | 596,001   |  |  | $    | 511,163   |  |      | $ | 386,820   |  |  | $ | 200,737   | 
|                    | Investments in and advances to unconsolidated investees                         |              | $ | 1,049,743  |      |  | $ | 908,513   |  |  | $    | 677,293   |  |      | $ | 809,286   |  |  | $ | 1,308,856 | 
|                    | Total assets                                                                    |              | $ | 13,114,096 |      |  | $ | 7,097,799 |  |  | $    | 6,367,466 |  |      | $ | 5,911,380 |  |  | $ | 5,557,984 | 
|                    | Total debt                                                                      |              | $ | 6,677,880  |      |  | $ | 3,413,961 |  |  | $    | 2,990,669 |  |      | $ | 2,731,978 |  |  | $ | 2,578,340 | 
|                    | Total liabilities                                                               |              | $ | 7,567,429  |      |  | $ | 3,929,033 |  |  | $    | 3,270,757 |  |      | $ | 2,994,571 |  |  | $ | 2,838,225 | 
|                    | Minority interest                                                               |              | $ | 58,644     |      |  | $ | 66,273    |  |  | $    | 37,777    |  |      | $ | 42,467    |  |  | $ | 45,639    | 
|                    | Total shareholders equity                                                      |              | $ | 5,488,023  |      |  | $ | 3,102,493 |  |  | $    | 3,058,932 |  |      | $ | 2,874,342 |  |  | $ | 2,674,120 | 
|                    | Number of common shares outstanding                                             |              |   | 243,781    |      |  |   | 185,789   |  |  |      | 180,183   |  |      |   | 178,146   |  |  |   | 175,888   | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | On September 15, 2005, we completed the Catellus Merger
    with an aggregate purchase price of $5.3 billion. See
    Note 3 to our Consolidated Financial Statements in
    Item 8 for additional information.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(2) | Discontinued operations includes losses related to temperature
    controlled distribution assets of $25.2 million and
    $36.7 million in 2005 and 2004, respectively, and income
    attributable to assets disposed of and net gains recognized on
    the disposition of assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(3) | Funds from operations (FFO) is a
    non-U.S.generally
    accepted accounting principle (GAAP) measure that is
    commonly used in the real estate industry. The most directly
    comparable GAAP measure to FFO is net earnings. Although the
    National Association of Real Estate Investment Trusts
    (NAREIT) has published a definition of FFO,
    modifications to the NAREIT calculation of FFO are common among
    REITs, as companies seek to provide financial measures that
    meaningfully reflect their business. FFO, as we define it, is
    presented as a supplemental financial measure. FFO is not used
    by us as, nor should it be considered to be, an alternative to
    net earnings computed under GAAP as an indicator of our
    operating performance or as an alternative to cash from
    operating activities computed under GAAP as an indicator of our
    ability to fund our cash needs.



| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | FFO is not meant to represent a comprehensive system of
    financial reporting and does not present, nor do we intend it to
    present, a complete picture of our financial condition and
    operating performance. We believe net earnings computed under
    GAAP remains the primary measure of performance and that FFO is
    only meaningful when it is used in conjunction with net earnings
    computed under GAAP. Further, we believe that our consolidated
    financial statements, prepared in accordance with GAAP, provide
    the most meaningful picture of our financial condition and our
    operating performance.                                                                                                                                                 
|
| |  | At the same time that NAREIT created and defined its FFO concept
    for the REIT industry, it also recognized that management
    of each of its member companies has the responsibility and
    authority to publish financial information that it regards as
    useful to the financial community. We believe that
    financial analysts, potential investors and shareholders who
    review our operating results are best served by a defined FFO
    measure that includes other adjustments to net earnings computed
    under GAAP in addition to those included in the NAREIT defined
    measure of FFO. Our FFO measure is discussed in
    Item 7. Managements Discussion and Analysis of
    Financial Condition and Results of Operations  Funds
    From Operations.

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations






Managements Overview












| |                            
| | ---------------------------
| | Property Operations Segment



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | We earn rent from our customers under long-term operating
    leases, including reimbursements of certain operating costs, in
    our industrial distribution and retail properties that we own
    directly in North America, Europe and Asia. We expect to grow
    our revenue through increases in properties owned and increases
    in occupancy rates and rental rates in both our industrial
    distribution and retail properties. Our strategy is to achieve
    these increases primarily through the acquisition of industrial
    distribution properties, continued focus on our customers
    global needs for distribution space in the three continents in
    which we operate and use of the ProLogis Operating System.



| |                        
| | -----------------------
| | Fund Management Segment



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | We recognize our proportionate share of the earnings or losses
    from our investments in unconsolidated property funds operating
    in North America, Europe and Asia. Along with the income
    recognized under the equity method, we include fees and
    incentives earned for services performed on behalf of the
    property funds (primarily property management and asset
    management services) and interest earned on advances to the
    property funds, if any. We also earn certain other fees for
    services provided to the property funds, such as acquisition,
    financing and development fees. We expect growth in income
    recognized to come from newly created property funds, as
    discussed below, and growth in existing property funds. The
    growth in the existing property funds is expected

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| |  |                                                                                                                                                                                                                                                           
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | to come primarily from additional properties the funds will
    acquire, generally from us, and increased rental revenues in the
    property funds due, in part, to our leasing and property
    management efforts from our property operations segment.



| |                      
| | ---------------------
| | CDFS Business Segment



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | We recognize income primarily from the contributions of
    developed and repositioned properties to the property funds and
    from dispositions to third parties. In addition, we earn fees
    from our customers or other third parties for development
    activities that we provide on their behalf, recognize interest
    income on notes receivable related to asset dispositions,
    recognize net gains from the disposition of land parcels that no
    longer fit into our development plans and recognize our
    proportionate share of the income generated by development joint
    ventures in which we have an investment. We expect increases in
    this segment to come primarily from the continued development of
    high-quality industrial distribution properties in our key
    markets in North America, Europe and Asia, resulting in the
    contribution to property funds or sale to third parties. In
    addition, we expect to increase our land and other commercial
    development activities for development fees and sales to third
    parties.



| |                
| | ---------------
| | Summary of 2005







| |                                        
| | ---------------------------------------
| | Key Transactions in 2005 and early 2006



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| |   |                                                                                                                                                                                                                                                                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | On September 30, 2005, we acquired the remaining 80%
    ownership interest in ProLogis North American Properties
    Fund XII. The acquisition resulted in an aggregate property
    value of $283.2 million being added to our direct-owned
    portfolio in the property operations segment.                                                                                      
|
| |  | On October 6, 2005, we closed a $2.6 billion global
    credit facility that increases our flexibility to borrow in
    multiple currencies (Global Line) and has a
    four-year maturity.                                                                                                                                                                                        
|
| |  | In November 2005, we completed the issuance of
    $900.0 million of senior notes in a private offering under
    Section 4(2) of the Securities Act of 1933. The proceeds
    were used to repay borrowings under the short-term bridge
    facility discussed above.                                                                                                               
|
| |  | We formed a new property fund, ProLogis Japan Properties
    Fund II, in which we own a 20% interest. Our fund partner
    has committed total capital of $600.0 million, none of
    which was funded at December 31, 2005.                                                                                                                                                         
|
| |  | We made the strategic decision to exit certain markets that we
    no longer view as target markets (Kansas City, Oklahoma City and
    Tulsa). We recognized gains of $86.4 million in the third
    and fourth quarters of 2005, primarily related to the
    disposition of 64 operating properties from the property
    operations segment, primarily in these markets.         
|
| |  | We completed the disposition of our temperature-controlled
    distribution business in France. We recognized cumulative
    translation losses and an impairment loss of $26.9 million
    in 2005 related to these operations.                                                                                                                                                     
|
| |  | Our Board approved an increase in our annual distribution in
    2006 to $1.60 per common share, from $1.48 per common
    share, or an increase of 8.1%. The common share distribution is
    declared quarterly and may be adjusted at the discretion of the
    Board.                                                                                                            
|
| |  | In February 2006, we finalized and announced the formation of a
    new open-end property fund, the North American Industrial Fund,
    with several institutional investors, which will primarily own
    recently developed industrial distribution properties in major
    distribution markets throughout the United States and Canada.                                          
|
| |  | On January 4, 2006, we purchased the remaining 80%
    ownership interests in each of ProLogis North American
    Properties Funds II, III and IV from our fund partner,
    an affiliate of Arcapita and in March 2006, we contributed
    substantially all of the assets and associated liabilities we
    obtained in this acquisition to the North American Industrial
    Fund.




Critical Accounting Policies






| |                    
| | -------------------
| | Revenue Recognition



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| |                      
| | ---------------------
| | Business Combinations





| |              
| | -------------
| | Consolidation





| |                                         
| | ----------------------------------------
| | Capitalization of Costs and Depreciation





| |                                
| | -------------------------------
| | Impairment of Long-Lived Assets



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| |             
| | ------------
| | Income Taxes

built-in





Results of Operations






| |                      
| | ---------------------
| | Portfolio Information



|                            |        |              |       |        |  |            |         |         |  |            |       |        |  |  |         |         |  |  |       |       |  |  |         |         | 
|--------------------------- | ------ | ------------ | ----- | ------ |  | ---------- | ------- | ------- |  | ---------- | ----- | ------ |  |  | ------- | ------- |  |  | ----- | ----- |  |  | ------- | ------- | 
|                            |        | December 31,
|                            |        |             
|                            |        | 2005         |       | 2004   |  | 2003      
|                            |        |              |       |        |  |           
|                            |        | Number of    |       | Square |  | Number of  |         | Square  |  | Number of  |       | Square
|Reportable Business Segment |        | Properties   |       | Feet   |  | Properties |         | Feet    |  | Properties |       | Feet  
|                            |        |              |       |        |  |            |         |         |  |            |       |       
|Property operations         |        |              | 1,461 |        |  |            | 186,663 |         |  |            | 1,228 |        |  |  | 133,630 |         |  |  | 1,252 |       |  |  | 133,141 |        
|Fund management(1)          |        |              | 752   |        |  |            | 159,769 |         |  |            | 708   |        |  |  | 149,141 |         |  |  | 485   |       |  |  | 97,219  |        
|CDFS business(2)            |        |              | 23    |        |  |            | 3,283   |         |  |            | 10    |        |  |  | 1,538   |         |  |  |      |       |  |  |        |        
|                            |        |              |       |        |  |            |         |         |  |            |       |        |  |  |         |         |  |  |       |       |  |  |         |        
|                            | Totals |              |       | 2,236  |  |            |         | 349,715 |  |            |       | 1,946  |  |  |         | 284,309 |  |  |       | 1,737 |  |  |         | 230,360 | 
|                            |        |              |       |        |  |            |         |         |  |            |       |        |  |  |         |         |  |  |       |       |  |  |         |        

39



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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes industrial distribution properties owned by the
    property funds, in which our ownership interests ranged from
    11.3% to 50.0% at December 31, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(2) | Represents operating industrial distribution properties and
    excludes eight properties under development aggregating
    2.4 million square feet, owned by the CDFS joint ventures,
    in which our weighted ownership interest was 50% at
    December 31, 2005. In addition, these amounts do not
    include our 72 properties aggregating 23.2 million
    square feet currently under development or our operating
    properties that were developed or acquired in this segment, but
    which are currently included in the property operations segment
    pending contribution.





| |                    
| | -------------------
| | Same Store Analysis







| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Net operating income generated by the same store portfolio
    (defined for the same store analysis as rental income, excluding
    termination and renegotiation fees, less rental expenses)
    increased 1.5% in 2005 over 2004. For 2004, the net operating
    income of the same store portfolio applicable to that period
    increased by 0.2% over 2003.                                                                                                                            
|
| |  | The same store portfolios rental rates, associated with
    leasing activity for space that has been previously leased by
    us, decreased in 2005 by 1.5%. For 2004, the same store
    portfolios rental rates decreased 5.8% from 2003. The
    negative trend in rental rates started to reverse in the third
    and fourth quarters of 2005 when we had positive same store rent
    growth of 1.0% and 1.3%, respectively, for the first time since
    the second quarter of 2002.
|
| |  | Average occupancy in the same store portfolio increased 2.2% in
    2005 over 2004. This compares to a 1.2% increase in average
    occupancy in 2004 over 2003.                                                                                                                                                                                                                                                                                                                             
|
| |  | Same store rental income increased 2.0% in 2005 over 2004 and
    rental expenses increased 3.9% in 2005 over 2004. In 2004, same
    store rental income increased 0.3% while rental expenses
    increased 0.8%, both over 2003.                                                                                                                                                                                                                                                           

period-to


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| |                    
| | -------------------
| | Operational Outlook







41



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| |                            
| | ---------------------------
| | Property Operations Segment



|                      |                                   |                          |         |         |      |   |         |         |  |   |         |         | 
|--------------------- | --------------------------------- | ------------------------ | ------- | ------- | ---- | - | ------- | ------- |  | - | ------- | ------- | 
|                      |                                   | Years Ended December 31, |        
|                      |                                   |                          |        
|                      |                                   | 2005                     |         |         | 2004 |   |         | 2003    | 
|                      |                                   |                          |         |         |      |   |         |         | 
|Rental income(1)(2)   |                                   | $                        | 608,168 |         |      | $ | 527,064 |         |  | $ | 525,778 |        
|Rental expenses(1)(3) |                                   |                          | 168,982 |         |      |   | 136,641 |         |  |   | 130,911 |        
|                      |                                   |                          |         |         |      |   |         |         | 
|                      | Total property operations segment |                          | $       | 439,186 |      |   | $       | 390,423 |  |   | $       | 394,867 | 
|                      |                                   |                          |         |         |      |   |         |         | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Amounts in 2005 include the results of the properties acquired
    in the Catellus Merger from September 16 through
    December 31, 2005. Amounts do not include rental income and
    rental expenses associated with the properties that are
    presented as discontinued operations in our financial
    statements, as follows (see Note 7 to our Consolidated
    Financial Statements in Item 8):



| |   |                                                                                             
| | - | --------------------------------------------------------------------------------------------
| |  | Rental income of $14.3 million in 2005; $19.9 million
    in 2004 and $20.2 million in 2003.
|
| |  | Rental expenses of $3.7 million in 2005; $5.8 million
    in 2004 and $5.9 million in 2003. 



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The number and composition of operating properties that we own
    throughout the periods and the timing of contributions impact
    rental income for each period. Rental income includes net
    termination and renegotiation fees of $1.1 million in 2005,
    $2.4 million in 2004 and $4.5 million in 2003. In
    certain leasing situations, we find it advantageous to negotiate
    lease terminations with a customer, particularly when the
    customer is experiencing financial difficulties or when we
    believe we can re-lease the space at rates that, when combined
    with the termination fee, provide a total return in excess of
    what was being earned under the original lease terms. We cannot
    predict the level of such fees that will be earned in the future
    or whether we will be successful in re-leasing, in a timely
    manner, the vacant space associated with the lease terminations.



| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Rental expense recoveries from customers, a component of rental
    income, were $121.8 million in 2005, $97.5 million in
    2004 and $95.9 million in 2003.                                                                                                                                                                                                                                                                                                                                      
|
| |  | Including discontinued operations, rental income, excluding
    termination and renegotiation fees and rental expense
    recoveries, was $499.6 million in 2005, $447.1 million
    in 2004 and $445.6 million in 2003. The increase in rental
    income in 2005 over prior periods is due primarily to the
    Catellus Merger and other acquisitions and also due to increased
    rental income in the same store properties due to increased
    occupancy, partially offset by dispositions.



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | The number and composition of operating properties that we own
    throughout the periods presented impact rental expenses for each
    period. Rental expenses are presented before any recoveries from
    customers, which are a component of rental income. When a
    property is contributed to a property fund, we begin reporting
    our share of the earnings of the property under the equity
    method along with fee income earned for services provided to the
    property funds in the fund management segment, and no longer
    report the operations of the property as part of rental income
    and rental expenses. However, the overhead costs incurred by us
    to provide the management services to the property fund continue
    to be reported as part of rental expenses.

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| |                        
| | -----------------------
| | Fund Management Segment





|                               |                                             |                          |         |        |      |   |        |        |  |   |        |        | 
|------------------------------ | ------------------------------------------- | ------------------------ | ------- | ------ | ---- | - | ------ | ------ |  | - | ------ | ------ | 
|                               |                                             | Years Ended December 31, |        
|                               |                                             |                          |        
|                               |                                             | 2005                     |         |        | 2004 |   |        | 2003   | 
|                               |                                             |                          |         |        |      |   |        |        | 
|Income from property funds(1): |                                             |                          |         |        |      |   |        |        |  |   |        |       
|                               | ProLogis North American properties funds(2) |                          | $       | 56,348 |      |   | $      | 48,037 |  |   | $      | 39,038 | 
|                               | ProLogis European Properties Fund(3)        |                          |         | 44,002 |      |   |        | 37,886 |  |   |        | 30,190 | 
|                               | ProLogis Japan Properties Fund I(4)         |                          |         | 12,662 |      |   |        | 7,754  |  |   |        | 2,221  | 
|                               |                                             |                          |         |        |      |   |        |        | 
|Total fund management segment  |                                             | $                        | 113,012 |        |      | $ | 93,677 |        |  | $ | 71,449 |       
|                               |                                             |                          |         |        |      |   |        |        | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The earnings from the property funds includes fees and
    incentives earned by us for providing services to the property
    funds of $66.9 million in 2005, $50.8 million in 2004
    and $44.2 million in 2003. Fees earned for providing
    services to the property funds for other than property
    management and asset management services can fluctuate from year
    to year. The costs of the property management function for the
    properties owned by the property funds are reported in the
    property operations segment and the costs of the fund management
    function are included in general and administrative expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(2) | This represents the income earned by us from our investments in
    property funds in North America, including our proportionate
    share of the earnings or losses of the property funds and
    property management and other fees and incentives. We had
    interests in 12, 13, and six funds at December 31,
    2005, 2004 and 2003, respectively. We had ownership interest in
    13 property funds during 2005 and 2004 and in six property funds
    in 2003, with ownership interests ranging from 11.3% to 50.0%.
    With respect to the income from these funds, fluctuations
    between years in the amount that we recognize under the equity
    method are generally due to the number of property funds, the
    number of properties owned by the property funds, occupancy
    levels and the amount of termination and renegotiation fees
    earned by the property funds. These property funds on a combined
    basis owned 471, 465 and 283 properties at December 31,
    2005, 2004 and 2003, respectively. In January 2006, we purchased
    the remaining 80% ownership interests in three of the property
    funds and subsequently contributed substantially all of the
    assets and associated liabilities to the newly formed North
    American Industrial Fund (see Note 21 to our Consolidated
    Financial Statements in Item 8).
|   
|(3) | ProLogis European Properties Fund has continued to acquire
    properties, primarily from us, and increase its portfolio size
    since it began operations in 1999. This property fund owned 263,
    230 and 197 properties at December 31, 2005, 2004 and 2003,
    respectively. Our ownership interest in ProLogis European
    Properties Fund was 21.0% at December 31, 2005, 21.8% at
    December 31, 2004 and 21.9% at December 31, 2003. The
    fluctuations in income recognized from our ownership interest in
    this property fund are primarily the result of the following
    factors: (i) the size of the portfolio and occupancy levels
    in each period; (ii) increases in the fees earned for
    services provided to the property fund due to the increase in
    the number of properties managed; (iii) higher interest
    costs associated with the higher debt levels that primarily
    result from the use of debt to acquire the additional                                                                                                                                                                                                                                                                                                                                                                                               

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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | properties; (iv) decreases in our ownership interest in
    each year; and (v) variances in the average foreign
    currency exchange rate at which we translate our share of the
    net earnings of the property fund to U.S. dollars.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(4) | ProLogis Japan Properties Fund I has increased its
    portfolio to 18 properties aggregating 7.2 million square
    feet at December 31, 2005 from 13 properties aggregating
    3.9 million square feet at December 31, 2004 and from
    five properties aggregating 1.6 million square feet at
    December 31, 2003. Our ownership interest in ProLogis Japan
    Properties Fund I has been 20.0% since inception. The
    increases in the amounts recognized under the equity method from
    our ownership in this property fund correspond with the growth
    in the portfolio over the three years. In 2005, we formed a
    second fund in Japan that did not have any operations or assets
    in 2005 (see Note 5 to our Consolidated Financial
    Statements in Item 8).



| |              
| | -------------
| | CDFS Business







44



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|                                                            |                                               |                             |                                           |           |         |        |        |            |         |        |        |          |         |   | 
|----------------------------------------------------------- | --------------------------------------------- | --------------------------- | ----------------------------------------- | --------- | ------- | ------ | ------ | ---------- | ------- | ------ | ------ | -------- | ------- | - | 
|                                                            |                                               | Years Ended December 31,    |                                          
|                                                            |                                               |                             |                                          
|                                                            |                                               | 2005                        |                                           |           | 2004    |        |        | 2003       |        
|                                                            |                                               |                             |                                           |           |         |        |        |            |        
|CDFS transactions:                                          |                                               |                             |                                           |           |         |        |        |            |         |        |        |         
|                                                            | Disposition proceeds, prior to deferral(1)    |                             | $                                         | 1,190,264 |         |        | $      | 1,322,084  |         |        | $      | 894,853  |        
|                                                            | Contingent proceeds realized                  |                             |                                           |          |         |        |        | 5,871      |         |        |        |         |        
|                                                            | Proceeds deferred and not recognized(2)       |                             |                                           | (52,770   | )       |        |        | (43,433    | )       |        |        | (20,991  | )      
|                                                            | Recognition of previously deferred amounts(2) |                             |                                           | 2,963     |         |        |        | 4,143      |         |        |        | 27,116   |        
|                                                            | Cost of CDFS dispositions(1)                  |                             |                                           | (917,782  | )       |        |        | (1,111,698 | )       |        |        | (774,452 | )      
|                                                            |                                               |                             |                                           |           |         |        |        |            |        
|                                                            |                                               | Net gains                   |                                           |           | 222,675 |        |        |            | 176,967 |        |        |          | 126,526 |  
|Development management and other income(3)                  |                                               |                             | 25,464                                    |           |         |        | 2,698  |            |         |        | 2,349  |         
|Interest income on notes receivable(4)                      |                                               |                             | 6,781                                     |           |         |        |       |            |         |        |       |         
|Income from CDFS joint ventures(5)                          |                                               |                             | 5,671                                     |           |         |        | 189    |            |         |        | 730    |         
|Other expenses and charges(6)                               |                                               |                             | (7,983                                    | )         |         |        | (5,519 | )          |         |        | (4,808 | )       
|                                                            |                                               |                             |                                           |           |         |        |        |            |        
|                                                            |                                               | Total CDFS business segment |                                           | $         | 252,608 |        |        | $          | 174,335 |        |        | $        | 124,797 |  
|                                                            |                                               |                             |                                           |           |         |        |        |            |        
|CDFS transactions recognized as discontinued operations(7): |                                               |                             |                                           |           |         |        |        |            |         |        |        |         
|                                                            | Disposition proceeds                          |                             | $                                         | 100,494   |         |        | $      | 240,983    |         |        | $      |         |        
|                                                            | Cost of dispositions                          |                             |                                           | (89,878   | )       |        |        | (208,264   | )       |        |        |         |        
|                                                            |                                               |                             |                                           |           |         |        |        |            |        
|                                                            |                                               |                             | Net CDFS gains in discontinued operations |           | $       | 10,616 |        |            | $       | 32,719 |        |          | $       |  | 
|                                                            |                                               |                             |                                           |           |         |        |        |            |        






|    |                                                                                        
|--- | ---------------------------------------------------------------------------------------
|(1) | The disposition proceeds and costs of dispositions related to
    the following assets:



| |   |                                                                        
| | - | -----------------------------------------------------------------------
| |  | 2005: 177 acres of land; 12.6 million square feet of
    buildings;    
|
| |  | 2004: 180 acres of land; 17.2 million square feet of
    buildings; and
|
| |  | 2003: 208 acres of land; 14.2 million square feet of
    buildings.    



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | When we contribute a property to a property fund in which we
    have an ownership interest, we do not recognize a portion of the
    proceeds in the computation of the gain resulting from the
    contribution. The amount of the proceeds that cannot be
    recognized is determined based on our continuing ownership
    interest in the contributed property that arises due to our
    ownership interest in the property fund that acquires the
    property. We defer this portion of the proceeds by recognizing a
    reduction to our investment in the respective property fund. We
    adjust our proportionate share of earnings or losses that we
    recognize under the equity method from the property fund in
    later periods to reflect the property funds depreciation
    expense as if the depreciation expense was computed on our lower
    basis in the contributed property rather than on the property
    funds basis in the contributed property. If a loss results
    when a property is contributed to a property fund, the entire
    loss is recognized.



| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | When a property that we originally contributed to a property
    fund is disposed of to a third party by the property fund, we
    recognize in earnings the net amount of proceeds we had
    previously deferred in the period that the disposition to the
    third party occurs, in addition to our proportionate share of
    the net gain or loss recognized by the property fund. Further,
    during periods when our ownership interest in a property fund
    decreases, we recognize gains to the extent that previously
    deferred proceeds are recognized to coincide with our new
    ownership interest in the property fund. Our ownership interests
    in ProLogis North American Properties Fund V and ProLogis
    European Properties Fund decreases from time to time. When this
    occurs, previously deferred proceeds are recognized as gains in
    the period the ownership decrease occurs, unless it is a
    temporary decline. Of the total for 2003, $25.9 million
    related to a partial redemption of our investment in ProLogis
    European Properties Fund.

45



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|    |                                                                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | Amounts include fees we earned for the performance of
    development activities. The increase in 2005 is due primarily to
    development activities acquired in the Catellus Merger and
    increased development activity in Europe.                                                                                                               
|   
|(4) | Amounts include interest income earned on notes receivable
    related to property sales. The increase in 2005 is due primarily
    to notes receivable acquired in the Catellus Merger.                                                                                                                                                              
|   
|(5) | Represents the income we recognized under the equity method from
    our investments in CDFS joint ventures. The increase in 2005 is
    due primarily to earnings recognized in our investments in joint
    ventures acquired in connection with the Catellus Merger. See
    Note 5 to our Consolidated Financial Statements in
    Item 8.        
|   
|(6) | Includes land holding costs of $3.8 million,
    $2.7 million and $2.9 million in 2005, 2004 and 2003,
    respectively, and a charge for previously capitalized pursuit
    costs related to potential CDFS business segment projects of
    $4.2 million, $2.8 million and $1.9 million in
    2005, 2004 and 2003, respectively.                   
|   
|(7) | Eight CDFS business properties aggregating 1.1 million
    square feet and ten CDFS business properties aggregating
    2.3 million square feet that were sold to third parties in
    2005 and 2004 respectively, met the criteria to be presented as
    discontinued operations. See Note 7 to our Consolidated
    Financial Statements in Item 8.







| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In North America, we observed the early signs of economic
    recovery in 2004 and throughout 2005 and we believe continued
    improvement could provide increased CDFS business opportunities.
    During 2005, we started development in Toronto, Canada and
    believe this market, along with our existing markets in the
    United States and Mexico, will provide future opportunities
    within the CDFS business segment in North America. In addition,
    as part of the Catellus Merger, we acquired 2,538 acres of
    land for future potential development in North America in our
    existing markets and also acquired interests in several entities
    that engage in land and commercial development activities in
    North America, all of which we believe will provide additional
    CDFS business opportunities.
|
| |  | In Europe, we believe the continued demand for
    state-of-the-art
    industrial distribution properties resulted in improved leasing
    activity in 2004 and 2005. Such factors could continue to
    provide opportunities for us in the CDFS business segment
    including additional fees for the development of projects for
    third parties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | In Asia, we believe demand for
    state-of-the-art
    industrial distribution properties will continue to provide
    opportunities for us in the CDFS business segment. In Japan, the
    CDFS business opportunities available to us will be limited if
    we are unable to acquire adequate land parcels for development.
    In China, we are positioning ourselves to meet what we believe
    will be significant future demand for distribution space due to
    the expected growth in manufacturing and consumer demand for
    goods. We started our first development in South Korea in 2006.                                                                                                                                                                                                                                   



| |                                     
| | ------------------------------------
| | Other Components of Operating Income



| |                                    
| | -----------------------------------
| | General and Administrative Expenses



46



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##### Table of Contents







| |                              
| | -----------------------------
| | Depreciation and Amortization





| |                         
| | ------------------------
| | Merger Integration Costs





| |                    
| | -------------------
| | Relocation Expenses





| |                 
| | ----------------
| | Interest Expense





| |                                                        
| | -------------------------------------------------------
| | Foreign Currency Exchange Gains (Expenses/ Losses), Net



47



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| |             
| | ------------
| | Income Taxes









| |                        
| | -----------------------
| | Discontinued Operations







48



---



##### Table of Contents






Environmental Matters







Liquidity and Capital Resources




| |         
| | --------
| | Overview







12-month






49



---



##### Table of Contents







| |   |                                                                                                                                                                                                                                                                                       
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Acquisitions of land for future development in the CDFS business
    segment;                                                                                                                                                                                                         
|
| |  | Acquisitions of properties in the CDFS business segment;                                                                                                                                                                                                                              
|
| |  | Development of properties or additional investment in joint
    ventures in the CDFS business segment;                                                                                                                                                                                
|
| |  | Acquisition of the 80% ownership interests in each of ProLogis
    North American Properties Funds II, III and IV, as
    discussed below;                                                                                                                                            
|
| |  | Direct acquisitions of operating properties and/or portfolios of
    operating properties in key distribution markets for direct,
    long-term investment in the property operations segment; and                                                                                    
|
| |  | Scheduled principal and interest payments and repayment of debt
    that is scheduled to mature, including the Bridge Facility
    outstanding at December 31, 2005 and additional borrowings
    incurred in 2006. See Note 8 to our Consolidated Financial
    Statements in Item 8.





| |   |                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | property operations;                                                                                                                                  
|
| |  | proceeds from the contributions of properties to property funds
    (existing property funds and property funds that may be formed
    in the future);
|
| |  | proceeds from the sale of certain office and hotel properties
    acquired in the Catellus Merger;                                                    
|
| |  | proceeds from the disposition of land parcels and properties to
    third parties;                                                                    
|
| |  | utilization of the Global Line or other lines of credit;                                                                                              
|
| |  | assumption of debt in connection with acquisitions; and                                                                                               
|
| |  | proceeds from the issuance of equity or debt securities,
    including sales under various common share plans.                                        









50



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  










| |                                      
| | -------------------------------------
| | Cash Provided by Operating Activities





| |                                             
| | --------------------------------------------
| | Cash Investing and Cash Financing Activities





| |   |                                                                                                                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Used $1.3 billion of cash (net of Catellus cash on
    the merger date) as partial consideration related to the
    Catellus Merger in 2005.                                                                                                                                                                  
|
| |  | Investments in real estate (both acquisition and development
    expenditures), as well as recurring capital expenditures, tenant
    improvements and lease commissions on previously leased space
    required cash of $2.6 billion in 2005, $1.7 billion in
    2004 and $1.2 billion in 2003, respectively.
|
| |  | Invested net cash in unconsolidated investees of
    $10.2 million and $52.2 million in 2005 and 2004,
    respectively and received net cash of $35.2 million in 2003.                                                                                                                                        
|
| |  | Generated net cash from contributions and dispositions of
    properties and land parcels of $1.5 billion in 2005,
    $1.4 billion in 2004 and $835.2 million in 2003.                                                                                                                                        

51



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| |   |                                                                                           
| | - | ------------------------------------------------------------------------------------------
| |  | Cash payment of $333.5 million, net, in 2004 associated
    with the Keystone transaction.





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Received net proceeds from borrowings on credit facilities,
    short-term borrowings and senior notes of $2.2 billion,
    $631.4 million and $406.1 million in 2005, 2004 and
    2003, respectively. As discussed earlier, the proceeds in 2005
    were used primarily for the cash consideration for the Catellus
    Merger.                                                                                                          
|
| |  | Made payments on debt of approximately $225.4 million,
    $312.5 million and $224.8 million in 2005, 2004 and
    2003, respectively. The 2005 amount includes $106.4 million
    of debt assumed in the Catellus Merger.                                                                                                                                                                                                                  
|
| |  | Redeemed preferred shares in 2004 for $125.0 million and in
    2003 for $175.0 million and received net proceeds from
    issuance of preferred shares of $241.8 million in 2003.                                                                                                                                                                                                                                                          
|
| |  | Distributions paid to holders of common shares were
    $297.4 million, $266.1 million and $258.2 million
    in 2005, 2004 and 2003, respectively. Minority interest
    redemptions and distributions were $14.0 million,
    $7.7 million and $9.3 million in 2005, 2004 and 2003,
    respectively. Dividends paid on preferred shares were
    $25.4 million, $25.7 million and $31.2 million in
    2005, 2004 and 2003, respectively.
|
| |  | Generated net proceeds from sales and issuance of common shares
    of $45.6 million, $146.8 million and
    $42.3 million in 2005, 2004 and 2003, respectively.                                                                                                                                                                                                                                                                            
|
| |  | Generated net proceeds from settlement of derivative contracts
    in 2005 of $31.5 million.                                                                                                                                                                                                                                                                                                                                                



| |                     
| | --------------------
| | Borrowing Capacities



52



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| |                               
| | ------------------------------
| | Off-Balance Sheet Arrangements



| |                                                                
| | ---------------------------------------------------------------
| | Liquidity and Capital Resources of Our Unconsolidated Investees



|                                               |                      |              |         |             |         |          |                  |         |     |     |             |  |  |  |      |  | 
|---------------------------------------------- | -------------------- | ------------ | ------- | ----------- | ------- | -------- | ---------------- | ------- | --- | --- | ----------- |  |  |  | ---- |  | 
|                                               |                      |              |         |             |         | Weighted |                  |         |    
|                                               |                      |              |         | Third Party |         |          | Average Interest |         |     | Our |            
|                                               |                      | Total Assets |         |             | Debt(2) |          |                  | Rate %  |     |     | Ownership % | 
|                                               |                      |              |         |             |         |          |                  |         |     |     |             | 
|ProLogis California                            |                      | $            | 621.6   |             |         | $        | 329.9            |         |     |     | 5.1         |  |  |  | 50.0 | 
|ProLogis North American Properties Fund I      |                      |              | 339.0   |             |         |          | 242.3            |         |     |     | 5.1         |  |  |  | 41.3 | 
|ProLogis North American Properties Fund II(1)  |                      |              | 221.7   |             |         |          | 165.0            |         |     |     | 6.7         |  |  |  | 20.0 | 
|ProLogis North American Properties Fund III(1) |                      |              | 198.9   |             |         |          | 150.2            |         |     |     | 7.0         |  |  |  | 20.0 | 
|ProLogis North American Properties Fund IV(1)  |                      |              | 135.8   |             |         |          | 103.2            |         |     |     | 6.7         |  |  |  | 20.0 | 
|ProLogis North American Properties Fund V(2)   |                      |              | 1,515.0 |             |         |          | 727.3            |         |     |     | 5.2         |  |  |  | 11.3 | 
|ProLogis North American Properties Fund VI     |                      |              | 518.2   |             |         |          | 307.0            |         |     |     | 5.4         |  |  |  | 20.0 | 
|ProLogis North American Properties Fund VII    |                      |              | 389.4   |             |         |          | 229.2            |         |     |     | 5.5         |  |  |  | 20.0 | 
|ProLogis North American Properties Fund VIII   |                      |              | 196.1   |             |         |          | 112.0            |         |     |     | 5.3         |  |  |  | 20.0 | 
|ProLogis North American Properties Fund IX     |                      |              | 195.7   |             |         |          | 123.0            |         |     |     | 5.7         |  |  |  | 20.0 | 
|ProLogis North American Properties Fund X      |                      |              | 220.7   |             |         |          | 135.0            |         |     |     | 5.7         |  |  |  | 20.0 | 
|ProLogis North American Properties Fund XI     |                      |              | 234.5   |             |         |          | 66.6             |         |     |     | 4.5         |  |  |  | 20.0 | 
|ProLogis European Properties Fund              |                      |              | 4,052.0 |             |         |          | 1,991.2          |         |     |     | 4.7         |  |  |  | 21.0 | 
|ProLogis Japan Properties Fund I               |                      |              | 1,230.1 |             |         |          | 535.1            |         |     |     | 1.5         |  |  |  | 20.0 | 
|                                               |                      |              |         |             |         |          |                  |         |     |     |             | 
|                                               | Total property funds |              | $       | 10,068.7    |         |          | $                | 5,217.0 | (3) |     |             |  |  |  |      |  | 
|                                               |                      |              |         |             |         |          |                  |         |     |     |             | 






|    |                                                                                                                                                                                                                                                                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | On January 4, 2006, we purchased the remaining 80%
    ownership interests in ProLogis North American Properties
    Funds II, III and IV and subsequently contributed
    substantially all of the assets and associated liabilities to
    the newly formed North American Industrial Fund. See
    Note 21 to our Consolidated Financial Statements in
    Item 8.       
|   
|(2) | As of December 31, 2005, we had guaranteed
    $12.5 million of borrowings of ProLogis North American
    Properties Fund V outstanding on a term loan that matures
    March 31, 2006. We have not guaranteed any other debt of
    the unconsolidated property funds.                                                                                                     
|   
|(3) | The approximate principal payments due on the third party debt
    of the property funds during each of the years in the five year
    period ending December 31, 2010 and thereafter are as
    follows: 2006  $18.3 million; 2007 
    $734.7 million; 2008  $529.2 million;
    2009  $1,060.3 million; 2010 
    $1,172.1 million; and thereafter $1,702.4 million.

53



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| |                        
| | -----------------------
| | Contractual Obligations



| |                                  
| | ---------------------------------
| | Long-Term Contractual Obligations



|                                                         |        |                        |       |           |        |   |        |       |  |        |       |       |           |         |       |       |  |   |       |       | 
|-------------------------------------------------------- | ------ | ---------------------- | ----- | --------- | ------ | - | ------ | ----- |  | ------ | ----- | ----- | --------- | ------- | ----- | ----- |  | - | ----- | ----- | 
|                                                         |        | Payments Due By Period |      
|                                                         |        |                        |      
|                                                         |        |                        |       | Less than |        |   | 1 to 3 |       |  | 3 to 5 |       |       | More than |        
|                                                         |        | Total                  |       |           | 1 Year |   |        | Years |  |        | Years |       |           | 5 Years |      
|                                                         |        |                        |       |           |        |   |        |       |  |        |       |       |           |         |      
|Long-term debt obligations                               |        | $                      | 4,363 |           |        | $ | 355    |       |  | $      | 1,244 |       |           | $       | 1,031 |       |  | $ | 1,733 |      
|Interest on long-term debt obligations                   |        |                        | 1,570 |           |        |   | 264    |       |  |        | 613   |       |           |         | 278   |       |  |   | 415   |      
|Unfunded commitments on development projects(1)          |        |                        | 878   |           |        |   | 878    |       |  |        |      |       |           |         |      |       |  |   |      |      
|Unfunded commitments to unconsolidated investees(2)      |        |                        | 162   |           |        |   | 162    |       |  |        |      |       |           |         |      |       |  |   |      |      
|Short-term borrowings                                    |        |                        | 390   |           |        |   | 390    |       |  |        |      |       |           |         |      |       |  |   |      |      
|Amounts due on credit facilities(3)                      |        |                        | 1,850 |           |        |   |       |       |  |        |      |       |           |         | 1,850 |       |  |   |      |      
|Interest on lines of credit and short-term borrowings(3) |        |                        | 273   |           |        |   | 68     |       |  |        | 163   |       |           |         | 42    |       |  |   |      |      
|                                                         |        |                        |       |           |        |   |        |       |  |        |       |       |           |         |      
|                                                         | Totals |                        | $     | 9,486     |        |   | $      | 2,117 |  |        | $     | 2,020 |           |         | $     | 3,201 |  |   | $     | 2,148 | 
|                                                         |        |                        |       |           |        |   |        |       |  |        |       |       |           |         |      






|    |                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | We had properties under development at December 31, 2005
    with a total expected investment of $1.8 billion. The
    unfunded commitments presented include all costs necessary to
    place the property into service, including the costs of tenant
    improvements and marketing and leasing costs, not only those
    costs that we are obligated to fund under construction contracts.
|   
|(2) | At December 31, 2005, we were committed to make additional
    equity contributions to ProLogis European Properties Fund of
    135.4 million euro (the currency equivalent of
    approximately $161.8 million at December 31, 2005).
    The total commitment is included in the earliest time period as
    there is no schedule for when the commitment will be funded.                   
|   
|(3) | The maturity date of the credit agreements assumes that we
    exercise our options to extend.                                                                                                                                                                                                                                                                                                



| |                  
| | -----------------
| | Other Commitments







| |                                       
| | --------------------------------------
| | Distribution and Dividend Requirements



54



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| |                                 
| | --------------------------------
| | Derivative Financial Instruments








New Accounting Pronouncements







Funds from Operations










| |                                                                                                                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) historical cost accounting for real estate assets in
    accordance with GAAP assumes, through depreciation charges, that
    the value of real estate assets diminishes predictably over
    time. NAREIT stated in its White Paper on FFO since real
    estate asset values have historically risen or fallen with

55



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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | market conditions, many industry investors have considered
    presentations of operating results for real estate companies
    that use historical cost accounting to be insufficient by
    themselves. Consequently, NAREITs definition of FFO
    reflects the fact that real estate, as an asset class, generally
    appreciates over time and depreciation charges required by GAAP
    do not reflect the underlying economic realities.                                                                                                                                                                              
|
| | (b) REITs were created as a legal form of organization in
    order to encourage public ownership of real estate as an asset
    class through investment in firms that were in the business of
    long-term ownership and management of real estate. The
    exclusion, in NAREITs definition of FFO, of gains and
    losses from the sales of previously depreciated operating real
    estate assets allows investors and analysts to readily identify
    the operating results of the long-term assets that form the core
    of a REITs activity and assists in comparing those
    operating results between periods.







| |                                                                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) deferred income tax benefits and deferred income tax
    expenses recognized by our subsidiaries;                                                                                                                                                    
|
| | (ii) certain foreign currency exchange gains and losses
    resulting from certain debt transactions between us and our
    foreign consolidated subsidiaries and our foreign unconsolidated
    investees;                                              
|
| | (iii) foreign currency exchange gains and losses from the
    remeasurement (based on current foreign currency exchange rates)
    of certain third party debt of our foreign consolidated
    subsidiaries and our foreign unconsolidated investees; and
|
| | (iv) mark-to-market
    adjustments associated with derivative financial instruments
    utilized to manage foreign currency risks.                                                                                                                      







56



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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Depreciation and amortization of real estate assets are economic
    costs that are excluded from FFO. FFO is limited, as it does not
    reflect the cash requirements that may be necessary for future
    replacements of the real estate assets. Further, the
    amortization of capital expenditures and leasing costs necessary
    to maintain the operating performance of distribution properties
    are not reflected in FFO.                                                                                         
|
| |  | Gains or losses from property dispositions represent changes in
    the value of the disposed properties. By excluding these gains
    and losses, FFO does not capture realized changes in the value
    of disposed properties arising from changes in market conditions.                                                                                                                                                                                                                                                       
|
| |  | The deferred income tax benefits and expenses that are excluded
    from our defined FFO measure result from the creation of a
    deferred income tax asset or liability that may have to be
    settled at some future point. Our defined FFO measure does not
    currently reflect any income or expense that may result from
    such settlement.                                                                                                                                                                            
|
| |  | The foreign currency exchange gains and losses that are excluded
    from our defined FFO measure are generally recognized based on
    movements in foreign currency exchange rates through a specific
    point in time. The ultimate settlement of our foreign
    currency-denominated net assets is indefinite as to timing and
    amount. Our FFO measure is limited in that it does not reflect
    the current period changes in these net assets that result from
    periodic foreign currency exchange rate movements.





|     |                                                            |                                                                                                                             |                                |         |         |         |   |         |         |       |   |         |         |       | 
|---- | ---------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------- | ------------------------------ | ------- | ------- | ------- | - | ------- | ------- | ----- | - | ------- | ------- | ----- | 
|     |                                                            | Years Ended December 31,                                                                                                    |                               
|     |                                                            |                                                                                                                             |                               
|     |                                                            | 2005                                                                                                                        |                                |         | 2004    |         |   | 2003    |        
|     |                                                            |                                                                                                                             |                                |         |         |         |   |         |        
|FFO: |                                                            |                                                                                                                             |                                |         |         |         |   |         |         |       |   |        
|     | Reconciliation of net earnings to FFO:                     |                                                                                                                             |                                |         |         |         |   |         |         |       |   |         |        
|     | Net earnings attributable to common shares                 |                                                                                                                             | $                              | 370,747 |         |         | $ | 202,813 |         |       | $ | 212,367 |        
|     |                                                            | Add (deduct) NAREIT defined adjustments:                                                                                    |                                |         |         |         |   |         |         |       |   |         |         |      
|     |                                                            | Real estate related depreciation and amortization                                                                           |                                |         | 192,224 |         |   |         | 158,344 |       |   |         | 150,908 |      
|     |                                                            | Adjustment to gains recognized on dispositions of certain
    non-CDFS business assets and investment in property fund, net |                                |         |        |         |   |         | (6,236  | )     |   |         | (28,532 | )    
|     | Reconciling items attributable to discontinued operations: |                                                                                                                             |                                |         |         |         |   |         |         |       |   |         |        
|     |                                                            | Gains recognized on dispositions of non-CDFS business assets, net                                                           |                                |         | (86,444 | )       |   |         | (1,718  | )     |   |         |        |      
|     |                                                            | Real estate related depreciation and amortization                                                                           |                                |         | 3,967   |         |   |         | 6,351   |       |   |         | 6,177   |      
|     |                                                            |                                                                                                                             |                                |         |         |         |   |         |        
|     |                                                            |                                                                                                                             | Totals discontinued operations |         |         | (82,477 | ) |         |         | 4,633 |   |         |         | 6,177 | 

57



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|                                                              |                                                                                      |                                                  |         |         |         |   |         |         |         |   |         |         |         | 
|------------------------------------------------------------- | ------------------------------------------------------------------------------------ | ------------------------------------------------ | ------- | ------- | ------- | - | ------- | ------- | ------- | - | ------- | ------- | ------- | 
|                                                              |                                                                                      | Years Ended December 31,                         |        
|                                                              |                                                                                      |                                                  |        
|                                                              |                                                                                      | 2005                                             |         |         | 2004    |   |         | 2003    |        
|                                                              |                                                                                      |                                                  |         |         |         |   |         |         |        
|Our share of reconciling items from unconsolidated investees: |                                                                                      |                                                  |         |         |         |   |         |         |         |   |         |        
|                                                              | Real estate related depreciation and amortization                                    |                                                  |         | 57,766  |         |   |         | 42,635  |         |   |         | 46,413  |        
|                                                              | FFO adjustment to gain recognized on disposition of CDFS
    business segment assets |                                                  |         |        |         |   |         |        |         |   |         | (1,823  | )      
|                                                              | Losses (gains) on dispositions of non-CDFS business assets,
    net                  |                                                  |         | (1,114  | )       |   |         | 601     |         |   |         | (12,322 | )      
|                                                              | Other amortization items                                                             |                                                  |         | (5,134  | )       |   |         | (3,498  | )       |   |         | (2,040  | )      
|                                                              |                                                                                      |                                                  |         |         |         |   |         |         |        
|                                                              |                                                                                      | Totals unconsolidated investees                  |         |         | 51,518  |   |         |         | 39,738  |   |         |         | 30,228  | 
|                                                              |                                                                                      |                                                  |         |         |         |   |         |         |        
|                                                              |                                                                                      | Totals NAREIT defined adjustments                |         |         | 161,265 |   |         |         | 196,479 |   |         |         | 158,781 | 
|                                                              |                                                                                      |                                                  |         |         |         |   |         |         |        
|Subtotals  NAREIT defined FFO                                |                                                                                      |                                                  | 532,012 |         |         |   | 399,292 |         |         |   | 371,148 |        
|Add (deduct) our defined adjustments:                         |                                                                                      |                                                  |         |         |         |   |         |         |         |   |         |        
|                                                              | Foreign currency exchange losses (gains), net                                        |                                                  |         | (14,065 | )       |   |         | (16,590 | )       |   |         | 7,764   |        
|                                                              | Deferred income tax expense                                                          |                                                  |         | 12,045  |         |   |         | 18,692  |         |   |         | 10,615  |        
|                                                              | Reconciling items attributable to discontinued operations:                           |                                                  |         |         |         |   |         |         |         |   |         |         |        
|                                                              |                                                                                      | Assets disposed of  deferred income tax benefit |         |         | (213    | ) |         |         | (1,075  | ) |         |         |        | 
|Our share of reconciling items from unconsolidated investees: |                                                                                      |                                                  |         |         |         |   |         |         |         |   |         |        
|                                                              | Foreign currency exchange losses, net                                                |                                                  |         | 298     |         |   |         | 443     |         |   |         | 11,721  |        
|                                                              | Deferred income tax expense (benefit)                                                |                                                  |         | 395     |         |   |         | (359    | )       |   |         | (503    | )      
|                                                              |                                                                                      |                                                  |         |         |         |   |         |         |        
|                                                              |                                                                                      | Totals unconsolidated investees                  |         |         | 693     |   |         |         | 84      |   |         |         | 11,218  | 
|                                                              |                                                                                      |                                                  |         |         |         |   |         |         |        
|                                                              |                                                                                      | Totals our defined adjustments                   |         |         | (1,540  | ) |         |         | 1,111   |   |         |         | 29,597  | 
|                                                              |                                                                                      |                                                  |         |         |         |   |         |         |        
|FFO attributable to common shares as defined by us            |                                                                                      | $                                                | 530,472 |         |         | $ | 400,403 |         |         | $ | 400,745 |        
|                                                              |                                                                                      |                                                  |         |         |         |   |         |         |        




Item 7A.     Quantitative and
Qualitative Disclosure About Market Risk








| |                   
| | ------------------
| | Interest Rate Risk



58



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| |                      
| | ---------------------
| | Foreign Currency Risk









| |                                    
| | -----------------------------------
| | Fair Value of Financial Instruments








|        |                                            
|------- | -------------------------------------------
|Item 8. | Financial Statements and Supplementary Data



59



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








|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures

13a-15(e)




| |                                                                     
| | --------------------------------------------------------------------
| | Managements Report on Internal Control over Financial
    Reporting

13a-15(f) 15d-15(f)










| |                                             
| | --------------------------------------------
| | Limitations of the Effectiveness of Controls



60



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##### Table of Contents








|         |                  
|-------- | -----------------
|Item 9B. | Other Information






PART III







|         |                                                   
|-------- | --------------------------------------------------
|Item 10. | Directors and Executive Officers of the Registrant

Trustees and Officers









|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation








|         |                                                                                                   
|-------- | --------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management and Related Stockholder Matters








|         |                                               
|-------- | ----------------------------------------------
|Item 13. | Certain Relationships and Related Transactions








|         |                                       
|-------- | --------------------------------------
|Item 14. | Principal Accounting Fees and Services






PART IV







|         |                                        
|-------- | ---------------------------------------
|Item 15. | Exhibits, Financial Statement Schedules





| |                                        
| | ---------------------------------------
| | (a) Financial Statements and Schedules:



| |                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------
| | 1.     Financial Statements:                                                                                                                 
|
| | See Index to Consolidated Financial Statements and
    Schedule III on page 63 of this report, which is
    incorporated herein by reference.

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| |                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2. Financial Statement Schedules:                                                                                                                                             
|
| | Schedule III  Real Estate and Accumulated
    Depreciation                                                                                                                   
|
| | All other schedules have been omitted since the required
    information is presented in the consolidated financial
    statements and the related notes or is not applicable.



| |                                                                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) Exhibits: The Exhibits required by Item 601
    of Regulation S-K
    are listed in the Index to Exhibits on pages 154 to 158 of
    this report, which is incorporated herein by reference.
|
| | (c) Financial Statements: See Index to Consolidated
    Financial Statements and Schedule III on page 51 of
    this report, which is incorporated by reference.                                

62



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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
SCHEDULE III


|          |                                                                              |      |  |     | 
|--------- | ---------------------------------------------------------------------------- | ---- |  | --- | 
|          |                                                                              | Page | 
|          |                                                                              |      | 
|ProLogis: |                                                                              |      |  |    
|          | Reports of Independent Registered Public
    Accounting Firm                 |      |  | 64  | 
|          | Consolidated Statements of Earnings                                          |      |  | 66  | 
|          | Consolidated Balance Sheets                                                  |      |  | 67  | 
|          | Consolidated Statements of
    Shareholders Equity and Comprehensive Income |      |  | 68  | 
|          | Consolidated Statements of Cash Flows                                        |      |  | 69  | 
|          | Notes to Consolidated Financial
    Statements                               |      |  | 70  | 
|          | Report of Independent Registered Public
    Accounting Firm                  |      |  | 121 | 
|          | Schedule III  Real Estate
    and Accumulated Depreciation                  |      |  | 122 | 

63



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM












Internal Control  Integrated
Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO),




| |         
| | --------
| | KPMG LLP





64



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM






Internal Control 
Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).








Internal
Control  Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission
(COSO). Internal Control  Integrated
Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO).








| |         
| | --------
| | KPMG LLP





65



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PROLOGIS





CONSOLIDATED STATEMENTS OF EARNINGS


Years Ended December 31, 2005, 2004 and 2003


(In thousands, except per share data)


|                                                                                                                |                                                                                   |                          |                               |           |        |           |         |           |        |           |         |          |   |           |  
|--------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | ------------------------ | ----------------------------- | --------- | ------ | --------- | ------- | --------- | ------ | --------- | ------- | -------- | - | --------- | -
|                                                                                                                |                                                                                   | 2005                     |                               |           | 2004   |           |         | 2003      |       
|                                                                                                                |                                                                                   |                          |                               |           |        |           |         |           |       
|Revenues:                                                                                                       |                                                                                   |                          |                               |           |        |           |         |           |        |           |         |         
|                                                                                                                | Rental income                                                                     |                          | $                             | 635,186   |        |           | $       | 527,065   |        |           | $       | 525,778  |  
|                                                                                                                | CDFS dispositions proceeds                                                        |                          |                               | 1,140,457 |        |           |         | 1,288,665 |        |           |         | 900,978  |  
|                                                                                                                | Property management and other fees and incentives                                 |                          |                               | 66,934    |        |           |         | 50,778    |        |           |         | 44,184   |  
|                                                                                                                | Development management and other income                                           |                          |                               | 25,464    |        |           |         | 2,698     |        |           |         | 2,349    |  
|                                                                                                                |                                                                                   |                          |                               |           |        |           |         |           |       
|                                                                                                                |                                                                                   |                          | Total revenues                |           |        | 1,868,041 |         |           |        | 1,869,206 |         |          |   | 1,473,289 |  
|                                                                                                                |                                                                                   |                          |                               |           |        |           |         |           |       
|Expenses:                                                                                                       |                                                                                   |                          |                               |           |        |           |         |           |        |           |         |         
|                                                                                                                | Rental expenses                                                                   |                          |                               | 176,119   |        |           |         | 136,642   |        |           |         | 130,911  |  
|                                                                                                                | Cost of CDFS dispositions                                                         |                          |                               | 917,782   |        |           |         | 1,111,698 |        |           |         | 774,452  |  
|                                                                                                                | General and administrative                                                        |                          |                               | 107,164   |        |           |         | 84,861    |        |           |         | 65,907   |  
|                                                                                                                | Depreciation and amortization                                                     |                          |                               | 199,377   |        |           |         | 166,409   |        |           |         | 158,792  |  
|                                                                                                                | Merger integration expenses                                                       |                          |                               | 12,152    |        |           |         |          |        |           |         |         |  
|                                                                                                                | Relocation expenses                                                               |                          |                               | 4,451     |        |           |         | 6,794     |        |           |         |         |  
|                                                                                                                | Other expenses                                                                    |                          |                               | 8,633     |        |           |         | 5,519     |        |           |         | 7,608    |  
|                                                                                                                |                                                                                   |                          |                               |           |        |           |         |           |       
|                                                                                                                |                                                                                   |                          | Total expenses                |           |        | 1,425,678 |         |           |        | 1,511,923 |         |          |   | 1,137,670 |  
|                                                                                                                |                                                                                   |                          |                               |           |        |           |         |           |       
|Operating income                                                                                                |                                                                                   |                          | 442,363                       |           |        |           | 357,283 |           |        |           | 335,619 |         
|Other income (expense):                                                                                         |                                                                                   |                          |                               |           |        |           |         |           |        |           |         |         
|                                                                                                                | Earnings from unconsolidated property funds                                       |                          |                               | 46,078    |        |           |         | 42,899    |        |           |         | 27,265   |  
|                                                                                                                | Earnings (losses) from CDFS joint ventures and other
    unconsolidated investees |                          |                               | 6,421     |        |           |         | (801      | )      |           |         | (12,231  | )
|                                                                                                                | Interest expense                                                                  |                          |                               | (178,369  | )      |           |         | (152,551  | )      |           |         | (154,427 | )
|                                                                                                                | Interest income on long-term notes receivable                                     |                          |                               | 6,781     |        |           |         |          |        |           |         |         |  
|                                                                                                                | Other interest and other income                                                   |                          |                               | 10,724    |        |           |         | 5,721     |        |           |         | 1,883    |  
|                                                                                                                |                                                                                   |                          |                               |           |        |           |         |           |       
|                                                                                                                |                                                                                   |                          | Total other income (expense)  |           |        | (108,365  | )       |           |        | (104,732  | )       |          |   | (137,510  | )
|                                                                                                                |                                                                                   |                          |                               |           |        |           |         |           |       
|Earnings before minority interest                                                                               |                                                                                   |                          | 333,998                       |           |        |           | 252,551 |           |        |           | 198,109 |         
|Minority interest                                                                                               |                                                                                   |                          | 5,243                         |           |        |           | 4,875   |           |        |           | 4,959   |         
|                                                                                                                |                                                                                   |                          |                               |           |        |           |         |           |       
|Earnings before certain net gains                                                                               |                                                                                   |                          | 328,755                       |           |        |           | 247,676 |           |        |           | 193,150 |         
|Gains recognized on dispositions of certain non-CDFS business
    assets and investments in property funds, net |                                                                                   |                          |                              |           |        |           | 9,400   |           |        |           | 76,354  |         
|Foreign currency exchange gains (expenses/losses), net                                                          |                                                                                   |                          | 15,979                        |           |        |           | 14,686  |           |        |           | (10,587 | )       
|                                                                                                                |                                                                                   |                          |                               |           |        |           |         |           |       
|Earnings before income taxes                                                                                    |                                                                                   |                          | 344,734                       |           |        |           | 271,762 |           |        |           | 258,917 |         
|Income taxes:                                                                                                   |                                                                                   |                          |                               |           |        |           |         |           |        |           |         |         
|                                                                                                                | Current income tax expense                                                        |                          |                               | 14,847    |        |           |         | 24,870    |        |           |         | 4,759    |  
|                                                                                                                | Deferred income tax expense                                                       |                          |                               | 12,045    |        |           |         | 18,692    |        |           |         | 10,615   |  
|                                                                                                                |                                                                                   |                          |                               |           |        |           |         |           |       
|                                                                                                                |                                                                                   |                          | Total income taxes            |           |        | 26,892    |         |           |        | 43,562    |         |          |   | 15,374    |  
|                                                                                                                |                                                                                   |                          |                               |           |        |           |         |           |       
|Earnings from continuing operations                                                                             |                                                                                   |                          | 317,842                       |           |        |           | 228,200 |           |        |           | 243,543 |         
|Discontinued operations:                                                                                        |                                                                                   |                          |                               |           |        |           |         |           |        |           |         |         
|                                                                                                                | Income attributable to disposed assets                                            |                          |                               | 6,411     |        |           |         | 6,998     |        |           |         | 7,132    |  
|                                                                                                                | Losses related to temperature-controlled distribution assets                      |                          |                               | (25,150   | )      |           |         | (36,671   | )      |           |         |         |  
|                                                                                                                | Gains recognized on dispositions, net:                                            |                          |                               |           |        |           |         |           |        |           |         |          |  
|                                                                                                                |                                                                                   | Non-CDFS business assets |                               |           | 86,444 |           |         |           | 1,549  |           |         |          |  |          
|                                                                                                                |                                                                                   | CDFS business assets     |                               |           | 10,616 |           |         |           | 32,719 |           |         |          |  |          
|                                                                                                                |                                                                                   |                          |                               |           |        |           |         |           |       
|                                                                                                                |                                                                                   |                          | Total discontinued operations |           |        | 78,321    |         |           |        | 4,595     |         |          |   | 7,132     |  
|                                                                                                                |                                                                                   |                          |                               |           |        |           |         |           |       
|Net earnings                                                                                                    |                                                                                   |                          | 396,163                       |           |        |           | 232,795 |           |        |           | 250,675 |         
|Less preferred share dividends                                                                                  |                                                                                   |                          | 25,416                        |           |        |           | 25,746  |           |        |           | 30,485  |         
|Less excess of redemption values over carrying values of
    preferred shares redeemed                          |                                                                                   |                          |                              |           |        |           | 4,236   |           |        |           | 7,823   |         
|                                                                                                                |                                                                                   |                          |                               |           |        |           |         |           |       
|Net earnings attributable to common shares                                                                      |                                                                                   | $                        | 370,747                       |           |        | $         | 202,813 |           |        | $         | 212,367 |         
|                                                                                                                |                                                                                   |                          |                               |           |        |           |         |           |       
|Weighted average common shares outstanding  Basic                                                              |                                                                                   |                          | 203,337                       |           |        |           | 182,226 |           |        |           | 179,245 |         
|                                                                                                                |                                                                                   |                          |                               |           |        |           |         |           |       
|Weighted average common shares outstanding  Diluted                                                            |                                                                                   |                          | 213,713                       |           |        |           | 191,801 |           |        |           | 187,222 |         
|                                                                                                                |                                                                                   |                          |                               |           |        |           |         |           |       
|Net earnings per share attributable to common shares 
    Basic:                                               |                                                                                   |                          |                               |           |        |           |         |           |        |           |         |         
|                                                                                                                | Continuing operations                                                             |                          | $                             | 1.44      |        |           | $       | 1.09      |        |           | $       | 1.14     |  
|                                                                                                                | Discontinued operations                                                           |                          |                               | 0.38      |        |           |         | 0.02      |        |           |         | 0.04     |  
|                                                                                                                |                                                                                   |                          |                               |           |        |           |         |           |       
|Net earnings per share attributable to common shares 
    Basic                                                |                                                                                   | $                        | 1.82                          |           |        | $         | 1.11    |           |        | $         | 1.18    |         
|                                                                                                                |                                                                                   |                          |                               |           |        |           |         |           |       
|Net earnings per share attributable to common shares                                                           |                                                                                   |                          |                               |           |        |           |         |           |        |           |         |         
|Diluted:                                                                                                        |                                                                                   |                          |                               |           |        |           |         |           |        |           |         |         
|                                                                                                                | Continuing operations                                                             |                          | $                             | 1.39      |        |           | $       | 1.06      |        |           | $       | 1.12     |  
|                                                                                                                | Discontinued operations                                                           |                          |                               | 0.37      |        |           |         | 0.02      |        |           |         | 0.04     |  
|                                                                                                                |                                                                                   |                          |                               |           |        |           |         |           |       
|Net earnings per share attributable to common shares 
    Diluted                                              |                                                                                   | $                        | 1.76                          |           |        | $         | 1.08    |           |        | $         | 1.16    |         
|                                                                                                                |                                                                                   |                          |                               |           |        |           |         |           |       
|Distributions per common share                                                                                  |                                                                                   | $                        | 1.48                          |           |        | $         | 1.46    |           |        | $         | 1.44    |         
|                                                                                                                |                                                                                   |                          |                               |           |        |           |         |           |       



66



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PROLOGIS





CONSOLIDATED BALANCE SHEETS


(In thousands, except share data)


|                                                        |                                                                                                                                                                                    |                                            |            |           |            |   |           |           |           | 
|------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ---------- | --------- | ---------- | - | --------- | --------- | --------- | 
|                                                        |                                                                                                                                                                                    | December 31,                               |           
|                                                        |                                                                                                                                                                                    |                                            |           
|                                                        |                                                                                                                                                                                    | 2005                                       |            |           | 2004       |  
|                                                        |                                                                                                                                                                                    |                                            |            |           |            |  
|ASSETS                                                 
|Real estate                                             |                                                                                                                                                                                    | $                                          | 11,875,130 |           |            | $ | 6,333,731 |          
|                                                        | Less accumulated depreciation                                                                                                                                                      |                                            |            | 1,118,547 |            |   |           | 989,221   |          
|                                                        |                                                                                                                                                                                    |                                            |            |           |            |  
|                                                        |                                                                                                                                                                                    |                                            | 10,756,583 |           |            |   | 5,344,510 |          
|Investments in and advances to unconsolidated investees |                                                                                                                                                                                    |                                            | 1,049,743  |           |            |   | 908,513   |          
|Cash and cash equivalents                               |                                                                                                                                                                                    |                                            | 191,716    |           |            |   | 236,529   |          
|Accounts and notes receivable                           |                                                                                                                                                                                    |                                            | 327,214    |           |            |   | 92,015    |          
|Other assets                                            |                                                                                                                                                                                    |                                            | 788,840    |           |            |   | 401,564   |          
|Discontinued operations  assets held for sale          |                                                                                                                                                                                    |                                            |           |           |            |   | 114,668   |          
|                                                        |                                                                                                                                                                                    |                                            |            |           |            |  
|                                                        |                                                                                                                                                                                    | Total assets                               |            | $         | 13,114,096 |   |           | $         | 7,097,799 | 
|                                                        |                                                                                                                                                                                    |                                            |            |           |            |  
|                                                       
|LIABILITIES AND SHAREHOLDERS EQUITY                   
|Liabilities:                                            |                                                                                                                                                                                    |                                            |            |           |            |   |           |          
|                                                        | Debt                                                                                                                                                                               |                                            | $          | 6,677,880 |            |   | $         | 3,413,961 |          
|                                                        | Accounts payable and accrued expenses                                                                                                                                              |                                            |            | 332,339   |            |   |           | 255,841   |          
|                                                        | Other liabilities                                                                                                                                                                  |                                            |            | 557,210   |            |   |           | 196,240   |          
|                                                        | Discontinued operations  assets held for sale                                                                                                                                     |                                            |            |          |            |   |           | 62,991    |          
|                                                        |                                                                                                                                                                                    |                                            |            |           |            |  
|                                                        |                                                                                                                                                                                    | Total liabilities                          |            |           | 7,567,429  |   |           |           | 3,929,033 | 
|                                                        |                                                                                                                                                                                    |                                            |            |           |            |  
|Minority interest                                       |                                                                                                                                                                                    |                                            | 58,644     |           |            |   | 66,273    |          
|Shareholders equity:                                   |                                                                                                                                                                                    |                                            |            |           |            |   |           |          
|                                                        | Series C preferred shares at stated liquidation preference
    of $50.00 per share; $0.01 par value;
    2,000,000 shares issued and outstanding at
    December 31, 2005 and 2004 |                                            |            | 100,000   |            |   |           | 100,000   |          
|                                                        | Series F preferred shares at stated liquidation preference
    of $25.00 per share; $0.01 par value;
    5,000,000 shares issued and outstanding at
    December 31, 2005 and 2004 |                                            |            | 125,000   |            |   |           | 125,000   |          
|                                                        | Series G preferred shares at stated liquidation preference
    of $25.00 per share; $0.01 par value;
    5,000,000 shares issued and outstanding at
    December 31, 2005 and 2004 |                                            |            | 125,000   |            |   |           | 125,000   |          
|                                                        | Common shares; $0.01 par value; 243,781,142 shares
    issued and outstanding at December 31, 2005 and
    185,788,783 shares issued and outstanding at
    December 31, 2004      |                                            |            | 2,438     |            |   |           | 1,858     |          
|                                                        | Additional paid-in capital                                                                                                                                                         |                                            |            | 5,606,017 |            |   |           | 3,249,576 |          
|                                                        | Accumulated other comprehensive income                                                                                                                                             |                                            |            | 149,586   |            |   |           | 194,445   |          
|                                                        | Distributions in excess of net earnings                                                                                                                                            |                                            |            | (620,018  | )          |   |           | (693,386  | )        
|                                                        |                                                                                                                                                                                    |                                            |            |           |            |  
|                                                        |                                                                                                                                                                                    | Total shareholders equity                 |            |           | 5,488,023  |   |           |           | 3,102,493 | 
|                                                        |                                                                                                                                                                                    |                                            |            |           |            |  
|                                                        |                                                                                                                                                                                    | Total liabilities and shareholders equity |            | $         | 13,114,096 |   |           | $         | 7,097,799 | 
|                                                        |                                                                                                                                                                                    |                                            |            |           |            |  



67



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PROLOGIS





CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY


AND COMPREHENSIVE INCOME


Years Ended December 31, 2005, 2004 and 2003


(In thousands)


|                                                                           |                                                                                   |      |           |           |      |   |           |          |   |   |           |          |  
|-------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | ---- | --------- | --------- | ---- | - | --------- | -------- | - | - | --------- | -------- | -
|                                                                           |                                                                                   | 2005 |           |           | 2004 |   |           | 2003     |  
|                                                                           |                                                                                   |      |           |           |      |   |           |          |  
|Common shares  number of shares at beginning of year                      |                                                                                   |      | 185,789   |           |      |   | 180,183   |          |   |   | 178,146   |         
|                                                                           | Issuance of common shares in connection with the Catellus Merger                  |      |           | 55,889    |      |   |           |         |   |   |           |         |  
|                                                                           | Issuances of common shares under common share plans                               |      |           | 2,092     |      |   |           | 5,590    |   |   |           | 2,321    |  
|                                                                           | Repurchases of common shares                                                      |      |           |          |      |   |           |         |   |   |           | (388     | )
|                                                                           | Conversions of limited partnership units                                          |      |           | 11        |      |   |           | 16       |   |   |           | 104      |  
|                                                                           |                                                                                   |      |           |           |      |   |           |          |  
|Common shares  number of shares at end of year                            |                                                                                   |      | 243,781   |           |      |   | 185,789   |          |   |   | 180,183   |         
|                                                                           |                                                                                   |      |           |           |      |   |           |          |  
|Common shares  par value at beginning of year                             |                                                                                   | $    | 1,858     |           |      | $ | 1,802     |          |   | $ | 1,781     |         
|                                                                           | Issuance of common shares in connection with the Catellus Merger                  |      |           | 559       |      |   |           |         |   |   |           |         |  
|                                                                           | Issuances of common shares under common share plans                               |      |           | 21        |      |   |           | 56       |   |   |           | 23       |  
|                                                                           | Repurchases of common shares                                                      |      |           |          |      |   |           |         |   |   |           | (3       | )
|                                                                           | Conversions of limited partnership units                                          |      |           |          |      |   |           |         |   |   |           | 1        |  
|                                                                           |                                                                                   |      |           |           |      |   |           |          |  
|Common shares  par value at end of year                                   |                                                                                   | $    | 2,438     |           |      | $ | 1,858     |          |   | $ | 1,802     |         
|                                                                           |                                                                                   |      |           |           |      |   |           |          |  
|Preferred shares at stated liquidation preference at beginning
    of year |                                                                                   | $    | 350,000   |           |      | $ | 475,000   |          |   | $ | 400,000   |         
|                                                                           | Redemption of Series E preferred shares                                           |      |           |          |      |   |           |         |   |   |           | (50,000  | )
|                                                                           | Redemption of Series D preferred shares                                           |      |           |          |      |   |           | (125,000 | ) |   |           | (125,000 | )
|                                                                           | Issuance of Series F preferred shares                                             |      |           |          |      |   |           |         |   |   |           | 125,000  |  
|                                                                           | Issuance of Series G preferred shares                                             |      |           |          |      |   |           |         |   |   |           | 125,000  |  
|                                                                           |                                                                                   |      |           |           |      |   |           |          |  
|Preferred shares at stated liquidation preference at end of year           |                                                                                   | $    | 350,000   |           |      | $ | 350,000   |          |   | $ | 475,000   |         
|                                                                           |                                                                                   |      |           |           |      |   |           |          |  
|Additional paid-in capital at beginning of year                            |                                                                                   | $    | 3,249,576 |           |      | $ | 3,073,959 |          |   | $ | 3,021,686 |         
|                                                                           | Issuance of common shares in connection with the Catellus Merger                  |      |           | 2,285,029 |      |   |           |         |   |   |           |         |  
|                                                                           | Issuances of common shares under common share plans                               |      |           | 43,126    |      |   |           | 148,248  |   |   |           | 44,116   |  
|                                                                           | Repurchases of common shares                                                      |      |           |          |      |   |           |         |   |   |           | (9,715   | )
|                                                                           | Conversions of limited partnership units                                          |      |           | 150       |      |   |           | 869      |   |   |           | 355      |  
|                                                                           | Excess of redemption values over carrying values of preferred
    shares redeemed |      |           |          |      |   |           | 4,236    |   |   |           | 7,823    |  
|                                                                           | Cost of issuing preferred shares                                                  |      |           |          |      |   |           | (473     | ) |   |           | (8,233   | )
|                                                                           | Cost of issuing common shares                                                     |      |           | (1,395    | )    |   |           | (157     | ) |   |           | (74      | )
|                                                                           | Change in receivable from timing differences on equity
    transactions           |      |           | 2,494     |      |   |           | (1,365   | ) |   |           | (1,736   | )
|                                                                           | Sales of share-based compensation awards to unconsolidated
    investees          |      |           |          |      |   |           |         |   |   |           | 319      |  
|                                                                           | Cost of share-based compensation awards                                           |      |           | 27,037    |      |   |           | 24,259   |   |   |           | 19,418   |  
|                                                                           |                                                                                   |      |           |           |      |   |           |          |  
|Additional paid-in capital at end of year                                  |                                                                                   | $    | 5,606,017 |           |      | $ | 3,249,576 |          |   | $ | 3,073,959 |         
|                                                                           |                                                                                   |      |           |           |      |   |           |          |  
|Accumulated other comprehensive income at beginning of year                |                                                                                   | $    | 194,445   |           |      | $ | 138,235   |          |   | $ | 35,119    |         
|                                                                           | Foreign currency translation adjustments                                          |      |           | (70,076   | )    |   |           | 63,276   |   |   |           | 101,157  |  
|                                                                           | Unrealized gains (losses) on derivative contracts, net                            |      |           | 25,217    |      |   |           | (7,066   | ) |   |           | 1,959    |  
|                                                                           |                                                                                   |      |           |           |      |   |           |          |  
|Accumulated other comprehensive income at end of year                      |                                                                                   | $    | 149,586   |           |      | $ | 194,445   |          |   | $ | 138,235   |         
|                                                                           |                                                                                   |      |           |           |      |   |           |          |  
|Distributions in excess of net earnings at beginning of year               |                                                                                   | $    | (693,386  | )         |      | $ | (630,064  | )        |   | $ | (584,244  | )       
|                                                                           | Net earnings                                                                      |      |           | 396,163   |      |   |           | 232,795  |   |   |           | 250,675  |  
|                                                                           | Preferred share dividends                                                         |      |           | (25,416   | )    |   |           | (25,746  | ) |   |           | (30,485  | )
|                                                                           | Excess of redemption values over carrying values of preferred
    shares redeemed |      |           |          |      |   |           | (4,236   | ) |   |           | (7,823   | )
|                                                                           | Common share distributions                                                        |      |           | (297,379  | )    |   |           | (266,135 | ) |   |           | (258,187 | )
|                                                                           |                                                                                   |      |           |           |      |   |           |          |  
|Distributions in excess of net earnings at end of year                     |                                                                                   | $    | (620,018  | )         |      | $ | (693,386  | )        |   | $ | (630,064  | )       
|                                                                           |                                                                                   |      |           |           |      |   |           |          |  
|Total shareholders equity at end of year                                  |                                                                                   | $    | 5,488,023 |           |      | $ | 3,102,493 |          |   | $ | 3,058,932 |         
|                                                                           |                                                                                   |      |           |           |      |   |           |          |  
|Comprehensive income attributable to common shares:                        |                                                                                   |      |           |           |      |   |           |          |   |   |           |         
|                                                                           | Net earnings                                                                      |      | $         | 396,163   |      |   | $         | 232,795  |   |   | $         | 250,675  |  
|                                                                           | Preferred share dividends                                                         |      |           | (25,416   | )    |   |           | (25,746  | ) |   |           | (30,485  | )
|                                                                           | Excess of redemption values over carrying values of preferred
    shares redeemed |      |           |          |      |   |           | (4,236   | ) |   |           | (7,823   | )
|                                                                           | Foreign currency translation adjustments                                          |      |           | (70,076   | )    |   |           | 63,276   |   |   |           | 101,157  |  
|                                                                           | Gains (losses) on derivative contracts, net                                       |      |           | 25,217    |      |   |           | (7,066   | ) |   |           | 1,959    |  
|                                                                           |                                                                                   |      |           |           |      |   |           |          |  
|Comprehensive income attributable to common shares                         |                                                                                   | $    | 325,888   |           |      | $ | 259,023   |          |   | $ | 315,483   |         
|                                                                           |                                                                                   |      |           |           |      |   |           |          |  



68



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PROLOGIS





CONSOLIDATED STATEMENTS OF CASH FLOWS


Years Ended December 31, 2005, 2004 and 2003


(In thousands)


|                                                     |                                                                                                 |                                                                                                         |         |            |            |   |         |            |          |   |         |            |          |  
|---------------------------------------------------- | ----------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------- | ------- | ---------- | ---------- | - | ------- | ---------- | -------- | - | ------- | ---------- | -------- | -
|                                                     |                                                                                                 | 2005                                                                                                    |         |            | 2004       |   |         | 2003       |         
|                                                     |                                                                                                 |                                                                                                         |         |            |            |   |         |            |         
|Operating activities:                                |                                                                                                 |                                                                                                         |         |            |            |   |         |            |          |   |         |           
|                                                     | Net earnings                                                                                    |                                                                                                         | $       | 396,163    |            |   | $       | 232,795    |          |   | $       | 250,675    |         
|                                                     | Minority interest share in earnings                                                             |                                                                                                         |         | 5,243      |            |   |         | 4,875      |          |   |         | 4,959      |         
|                                                     | Adjustments to reconcile net earnings to net cash provided by
    operating activities:         |                                                                                                         |         |            |            |   |         |            |          |   |         |            |         
|                                                     |                                                                                                 | Straight-lined rents                                                                                    |         |            | (11,323    | ) |         |            | (9,654   | ) |         |            | (7,236   | )
|                                                     |                                                                                                 | Cost of share-based compensation awards                                                                 |         |            | 23,928     |   |         |            | 19,544   |   |         |            | 15,453   |  
|                                                     |                                                                                                 | Depreciation and amortization                                                                           |         |            | 204,378    |   |         |            | 174,606  |   |         |            | 164,969  |  
|                                                     |                                                                                                 | Cumulative translation losses and impairment charge on assets
    held for sale                         |         |            | 26,864     |   |         |            | 50,582   |   |         |            |         |  
|                                                     |                                                                                                 | Equity in earnings from unconsolidated investees                                                        |         |            | (52,499    | ) |         |            | (42,098  | ) |         |            | (15,034  | )
|                                                     |                                                                                                 | Distributions from and changes in operating receivables of
    unconsolidated investees                 |         |            | 89,633     |   |         |            | 76,518   |   |         |            | 38,607   |  
|                                                     |                                                                                                 | Amortization of deferred loan costs and net premium on debt                                             |         |            | 1,521      |   |         |            | 5,741    |   |         |            | 5,892    |  
|                                                     |                                                                                                 | Gains recognized on dispositions of non-CDFS business assets and
    investments in property funds, net |         |            | (86,444    | ) |         |            | (10,949  | ) |         |            | (76,354  | )
|                                                     |                                                                                                 | Adjustments to foreign currency exchange amounts recognized                                             |         |            | (11,316    | ) |         |            | (10,477  | ) |         |            | 13,083   |  
|                                                     |                                                                                                 | Provision for deferred income taxes                                                                     |         |            | 12,045     |   |         |            | 18,692   |   |         |            | 10,615   |  
|                                                     | Increase in accounts and notes receivable and other assets                                      |                                                                                                         |         | (84,933    | )          |   |         | (68,424    | )        |   |         | (62,646    | )       
|                                                     | Increase (decrease) in accounts payable and accrued expenses and
    other liabilities          |                                                                                                         |         | (15,070    | )          |   |         | 117,102    |          |   |         | 23,576     |         
|                                                     |                                                                                                 |                                                                                                         |         |            |            |   |         |            |         
|                                                     |                                                                                                 | Net cash provided by operating activities                                                               |         |            | 498,190    |   |         |            | 558,853  |   |         |            | 366,559  |  
|                                                     |                                                                                                 |                                                                                                         |         |            |            |   |         |            |         
|Investing activities:                                |                                                                                                 |                                                                                                         |         |            |            |   |         |            |          |   |         |           
|                                                     | Real estate investments                                                                         |                                                                                                         |         | (2,479,818 | )          |   |         | (1,654,988 | )        |   |         | (1,167,925 | )       
|                                                     | Tenant improvements and lease commissions on previously leased
    space                        |                                                                                                         |         | (53,919    | )          |   |         | (46,693    | )        |   |         | (41,036    | )       
|                                                     | Recurring capital expenditures                                                                  |                                                                                                         |         | (26,989    | )          |   |         | (24,561    | )        |   |         | (22,789    | )       
|                                                     | Cash used in Catellus Merger in 2005 and Keystone Transaction in
    2004, net of cash acquired |                                                                                                         |         | (1,292,644 | )          |   |         | (510,560   | )        |   |         |           |         
|                                                     | Cash received associated with the Keystone Transaction                                          |                                                                                                         |         |           |            |   |         | 177,106    |          |   |         |           |         
|                                                     | Proceeds from dispositions of real estate assets                                                |                                                                                                         |         | 1,516,614  |            |   |         | 1,405,420  |          |   |         | 835,172    |         
|                                                     | Proceeds from dispositions of investments in unconsolidated
    investees                       |                                                                                                         |         |           |            |   |         | 13,209     |          |   |         | 246,242    |         
|                                                     | Proceeds from repayments of notes receivable                                                    |                                                                                                         |         | 59,991     |            |   |         |           |          |   |         |           |         
|                                                     | Net cash amounts (invested in/ advanced to) received from
    unconsolidated investees          |                                                                                                         |         | (10,193    | )          |   |         | (52,233    | )        |   |         | 35,242     |         
|                                                     | Adjustments to cash balances resulting from a reporting change                                  |                                                                                                         |         |           |            |   |         | 3,284      |          |   |         |           |         
|                                                     |                                                                                                 |                                                                                                         |         |            |            |   |         |            |         
|                                                     |                                                                                                 | Net cash used in investing activities                                                                   |         |            | (2,286,958 | ) |         |            | (690,016 | ) |         |            | (115,094 | )
|                                                     |                                                                                                 |                                                                                                         |         |            |            |   |         |            |         
|Financing activities:                                |                                                                                                 |                                                                                                         |         |            |            |   |         |            |          |   |         |           
|                                                     | Net proceeds from sales and issuances of common shares under
    various common share plans     |                                                                                                         |         | 45,641     |            |   |         | 146,782    |          |   |         | 42,329     |         
|                                                     | Repurchases of common shares, net of costs                                                      |                                                                                                         |         |           |            |   |         |           |          |   |         | (9,715     | )       
|                                                     | Net proceeds from sales of preferred shares                                                     |                                                                                                         |         |           |            |   |         |           |          |   |         | 241,767    |         
|                                                     | Redemptions of preferred shares                                                                 |                                                                                                         |         |           |            |   |         | (125,000   | )        |   |         | (175,000   | )       
|                                                     | Distributions paid on common shares                                                             |                                                                                                         |         | (297,379   | )          |   |         | (266,135   | )        |   |         | (258,187   | )       
|                                                     | Minority interest redemptions and distributions                                                 |                                                                                                         |         | (13,953    | )          |   |         | (7,685     | )        |   |         | (9,341     | )       
|                                                     | Dividends paid on preferred shares                                                              |                                                                                                         |         | (25,416    | )          |   |         | (25,746    | )        |   |         | (31,214    | )       
|                                                     | Debt and equity issuance costs paid                                                             |                                                                                                         |         | (8,112     | )          |   |         | (4,507     | )        |   |         | (10,426    | )       
|                                                     | Repayment of debt assumed in Catellus Merger                                                    |                                                                                                         |         | (106,356   | )          |   |         |           |          |   |         |           |         
|                                                     | Net proceeds from lines of credit and short-term borrowings                                     |                                                                                                         |         | 1,348,023  |            |   |         | 210,784    |          |   |         | 75,149     |         
|                                                     | Proceeds from issuance of senior notes and secured debt                                         |                                                                                                         |         | 890,011    |            |   |         | 420,573    |          |   |         | 331,000    |         
|                                                     | Payments on senior notes, secured debt and assessment bonds                                     |                                                                                                         |         | (119,067   | )          |   |         | (312,465   | )        |   |         | (224,756   | )       
|                                                     | Purchases of derivative contracts                                                               |                                                                                                         |         | (965       | )          |   |         | (412       | )        |   |         | (2,377     | )       
|                                                     | Proceeds from settlement of derivative contracts                                                |                                                                                                         |         | 31,528     |            |   |         |           |          |   |         |           |         
|                                                     |                                                                                                 |                                                                                                         |         |            |            |   |         |            |         
|                                                     |                                                                                                 | Net cash provided by (used in) financing activities                                                     |         |            | 1,743,955  |   |         |            | 36,189   |   |         |            | (30,771  | )
|                                                     |                                                                                                 |                                                                                                         |         |            |            |   |         |            |         
|Net increase (decrease) in cash and cash equivalents |                                                                                                 |                                                                                                         | (44,813 | )          |            |   | (94,974 | )          |          |   | 220,694 |           
|Cash and cash equivalents, beginning of year         |                                                                                                 |                                                                                                         | 236,529 |            |            |   | 331,503 |            |          |   | 110,809 |           
|                                                     |                                                                                                 |                                                                                                         |         |            |            |   |         |            |         
|Cash and cash equivalents, end of year               |                                                                                                 | $                                                                                                       | 191,716 |            |            | $ | 236,529 |            |          | $ | 331,503 |           
|                                                     |                                                                                                 |                                                                                                         |         |            |            |   |         |            |         





69



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PROLOGIS





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS







|   |                         
|-- | ------------------------
|1. | Description of Business:





|   |                                            
|-- | -------------------------------------------
|2. | Summary of Significant Accounting Policies:

Basis of Presentation and Consolidation.






| |                                                                                                               
| | --------------------------------------------------------------------------------------------------------------
| | (i) manage
    day-to-day operations;                                                                         
|
| | (ii) refinance debt and acquire and sell properties without
    the consent of any other partner or owner; and
|
| | (iii) not be replaced by any other owner or partner.                                                          

Use of Estimates.




| |                  
| | -----------------
| | Long-Lived Assets

Real Estate Assets.




70



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)









Business Combinations, Goodwill and Intangible Assets.




| |   |                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the fair value of the buildings on an as-if-vacant basis. The
    fair value allocated to land is generally based on relevant
    market data;                                                                                                                         
|
| |  | the market value of above and below market leases based upon our
    best estimate of current market rents. The value of each lease
    is recorded in either other assets or other liabilities, as
    appropriate;                                                   
|
| |  | the value of costs to obtain tenants, primarily leasing
    commissions. These costs are recorded in other assets;                                                                                                                                                     
|
| |  | the value of debt based on quoted market rates for the same or
    similar issues, or by discounting future cash flows using rates
    currently available for debt with similar terms and maturities.
    Any discount or premium is included in the principal amount;
|
| |  | the value of any management contracts by discounting future
    expected cash flows under these contracts; and                                                                                                                                                         
|
| |  | the value of all other assumed assets and liabilities based on
    the best information available.                                                                                                                                                                     





| |   |                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------
| |  | Above and below market leases are charged to rental income over
    the average term of the acquired lease.        
|
| |  | Leasing commissions are charged to amortization expense over the
    average remaining estimated life of the lease.
|
| |  | Debt discount or premium is charged to interest expense over the
    remaining term of the related debt.           
|
| |  | Management contracts are charged to expense over the remaining
    term of the contract.                           

71



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







Investments in Unconsolidated Investees.




Impairment of Long-Lived Assets.


Assets Held for Sale and Discontinued Operations.




Cash and Cash Equivalents.




72



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)





Notes Receivable.


Tax Increment Financing Agreement.


Minority Interest.




Preferred Share Redemptions.


Costs of Raising Capital.


Financial Instruments.




73



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







Foreign Operations.








74



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







|                                                                                            |                                                             |                          |        |        |        |   |        |        |        |   |         |        |         |  
|------------------------------------------------------------------------------------------- | ----------------------------------------------------------- | ------------------------ | ------ | ------ | ------ | - | ------ | ------ | ------ | - | ------- | ------ | ------- | -
|                                                                                            |                                                             | Years Ended December 31, |       
|                                                                                            |                                                             |                          |       
|                                                                                            |                                                             | 2005                     |        |        | 2004   |   |        | 2003   |       
|                                                                                            |                                                             |                          |        |        |        |   |        |        |       
|Gains (losses) from remeasurement of third party and certain
    intercompany debt, net(1)  |                                                             | $                        | 11,316 |        |        | $ | 11,075 |        |        | $ | (10,391 | )     
|Gains (losses) from the settlement of third party and certain
    intercompany debt, net(1) |                                                             |                          | (4,418 | )      |        |   | 4,065  |        |        |   | 2,421   |       
|Transaction gains (losses), net                                                             |                                                             |                          | (638   | )      |        |   | 144    |        |        |   | 75      |       
|Derivative financial instruments(2):                                                        |                                                             |                          |        |        |        |   |        |        |        |   |         |       
|                                                                                            | Expense associated with contracts settled during the period |                          |        | (1,028 | )      |   |        | (2,048 | )      |   |         | (2,897 | )      
|                                                                                            | Mark-to-market gains, net                                   |                          |        |       |        |   |        | 1,450  |        |   |         | 205    |        
|                                                                                            | Gains realized at settlement of contracts, net(1)           |                          |        | 10,747 |        |   |        |       |        |   |         |       |        
|                                                                                            |                                                             |                          |        |        |        |   |        |        |       
|                                                                                            |                                                             | Totals                   |        | $      | 15,979 |   |        | $      | 14,686 |   |         | $      | (10,587 | )
|                                                                                            |                                                             |                          |        |        |        |   |        |        |       






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | At the time certain debt balances are settled, remeasurement
    gains or losses that have been recognized in results of
    operations as unrealized are reversed and the cumulative foreign
    currency exchange gain or loss realized with respect to the
    settled balance is recognized in results of operations as a
    realized gain or loss. During 2005, the loss on settlement of an
    intercompany loan was mitigated by using several consecutive
    derivative instruments. These contracts settled in 2005,
    resulting in a realized gain of $6.1 million.
|   
|(2) | We enter into foreign currency put option contracts related to
    our operations in Europe and Japan. These put option contracts
    do not qualify for hedge accounting treatment and are
    marked-to-market
    through results of operations at the end of each period. Upon
    expiration of the contract, the
    mark-to-market
    adjustment is reversed, the total cost of the contract is
    expensed and any proceeds received are recognized as a gain.                                                                                                          



| |                     
| | --------------------
| | Revenue Recognition.

Rental and other income.


Gains or Losses on Disposition of Real Estate.




75



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)









Rental Expenses. on-site


REIT Organization Status and Income Taxes.






Share-Based Compensation.


76



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)









|                                                      |                       |                          |   |         |  |      |   |         |  |  |   |         | 
|----------------------------------------------------- | --------------------- | ------------------------ | - | ------- |  | ---- | - | ------- |  |  | - | ------- | 
|                                                      |                       | Years Ended December 31,
|                                                      |                       |                         
|                                                      |                       | 2005                     |   | 2004    |  | 2003
|                                                      |                       |                          |   |         |  |     
|Net earnings attributable to common shares:           |                       |                          |   |         |  |      |   |         |  |  |   |        
|                                                      | As reported           |                          | $ | 370,747 |  |      | $ | 202,813 |  |  | $ | 212,367 | 
|                                                      | Pro forma             |                          | $ | 373,074 |  |      | $ | 206,429 |  |  | $ | 215,571 | 
|Net earnings attributable to common shares per share: |                       |                          |   |         |  |      |   |         |  |  |   |        
|                                                      | As reported  Basic   |                          | $ | 1.82    |  |      | $ | 1.11    |  |  | $ | 1.18    | 
|                                                      | As reported  Diluted |                          | $ | 1.76    |  |      | $ | 1.08    |  |  | $ | 1.16    | 
|                                                      | Pro forma  Basic     |                          | $ | 1.83    |  |      | $ | 1.13    |  |  | $ | 1.20    | 
|                                                      | Pro forma  Diluted   |                          | $ | 1.77    |  |      | $ | 1.10    |  |  | $ | 1.18    | 





|                             |  |                          |  |            |  |           
|---------------------------- |  | ------------------------ |  | ---------- |  | ----------
|                             |  | Years Ended December 31,
|                             |  |                         
|                             |  | 2005                     |  | 2004       |  | 2003      
|                             |  |                          |  |            |  |           
|Risk-free interest rate      |  | 4.33%                    |  | 3.82%      |  | 3.53%     
|Dividend yield               |  | 3.92%                    |  | 4.27%      |  | 4.18%     
|Volatility                   |  | 20.33%                   |  | 20.52%     |  | 20.14%    
|Weighted average option life |  | 5.9 years                |  | 6.25 years |  | 6.25 years

Environmental costs.


New Accounting Pronouncements. 04-5,


77



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)





04-5






|      |  |   |        | 
|----- |  | - | ------ | 
|2006  |  | $ | 6,899  | 
|2007  |  |   | 5,763  | 
|2008  |  |   | 3,830  | 
|2009  |  |   | 1,864  | 
|      |  |   |       
|Total |  | $ | 18,356 | 
|      |  |   |       

Reclassifications.




|   |                          
|-- | -------------------------
|3. | Mergers and Acquisitions:



| |                                 
| | --------------------------------
| | Catellus Development Corporation



78



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)











|                                                             |                                            |   |           |           | 
|------------------------------------------------------------ | ------------------------------------------ | - | --------- | --------- | 
|Cash consideration paid for Catellus common shares exchanged |                                            | $ | 1,285,140 |          
|Fair value of our common shares issued                       |                                            |   | 2,285,588 |          
|                                                             |                                            |   |          
|                                                             | Catellus Merger consideration              |   |           | 3,570,728 | 
|Catellus Merger costs                                        |                                            |   | 37,358    |          
|                                                             |                                            |   |          
|                                                             | Purchase price, net of assumed liabilities |   |           | 3,608,086 | 
|Fair value of liabilities assumed, including debt            |                                            |   | 1,729,214 |          
|                                                             |                                            |   |          
|                                                             | Purchase price                             |   | $         | 5,337,300 | 
|                                                             |                                            |   |          







79



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







|                              |                                                                  |                                            |   |            |           | 
|----------------------------- | ---------------------------------------------------------------- | ------------------------------------------ | - | ---------- | --------- | 
|Allocation of purchase price: |                                                                  |                                            |   |           
|                              | Industrial properties, improvements and improved land            |                                            | $ | 2,866,934  |          
|                              | Retail properties, improvements and improved land                |                                            |   | 288,253    |          
|                              | Land subject to ground leases and other                          |                                            |   | 963,188    |          
|                              | Properties under development, including value of land            |                                            |   | 63,760     |          
|                              | Land held for development                                        |                                            |   | 285,188    |          
|                              | Other investments                                                |                                            |   | 55,138     |          
|                              |                                                                  |                                            |  
|                              |                                                                  | Total real estate assets                   |   |            | 4,522,461 | 
|                              | Investments in and advances to unconsolidated investees          |                                            |   | 180,626    |          
|                              | Cash and cash equivalents                                        |                                            |   | 29,854     |          
|                              | Accounts and notes receivable                                    |                                            |   | 260,814    |          
|                              | Other assets                                                     |                                            |   | 190,651    |          
|                              | Goodwill                                                         |                                            |   | 152,894    |          
|                              |                                                                  |                                            |  
|                              |                                                                  | Total assets acquired                      |   |            | 5,337,300 | 
|                              | Debt assumed                                                     |                                            |   | (1,328,007 | )        
|                              | Accounts payable, accrued expenses and other liabilities assumed |                                            |   | (401,207   | )        
|                              |                                                                  |                                            |  
|                              |                                                                  | Purchase price, net of assumed liabilities |   | $          | 3,608,086 | 
|                              |                                                                  |                                            |  



|                                                                   |  |              |         |  |      |   |         | 
|------------------------------------------------------------------ |  | ------------ | ------- |  | ---- | - | ------- | 
|                                                                   |  | Year Ended   |        
|                                                                   |  | December 31, |        
|                                                                   |  |              |        
|                                                                   |  | 2005         |         |  | 2004 |  
|                                                                   |  |              |         |  |      |  
|Total revenues                                                     |  | $            | 2,141.5 |  |      | $ | 2,628.7 | 
|Operating income                                                   |  | $            | 477.8   |  |      | $ | 395.5   | 
|Net earnings attributable to common shares                         |  | $            | 368.6   |  |      | $ | 181.3   | 
|Weighted average common shares outstanding  basic                 |  |              | 242.7   |  |      |   | 237.3   | 
|Weighted average common shares outstanding  diluted               |  |              | 253.1   |  |      |   | 246.9   | 
|Net earnings per share attributable to common shares 
    basic   |  | $            | 1.52    |  |      | $ | 0.76    | 
|Net earnings per share attributable to common shares 
    diluted |  | $            | 1.48    |  |      | $ | 0.75    | 



| |                                                           
| | ----------------------------------------------------------
| | ProLogis North American Properties Fund II, III and
    IV



80



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







| |                                            
| | -------------------------------------------
| | ProLogis North American Properties Fund XII





| |         
| | --------
| | Keystone





81



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







|   |             
|-- | ------------
|4. | Real Estate:



| |                   
| | ------------------
| | Real Estate Assets



|                                                        |                            |                          |           |           |            |  |         |           |           | 
|------------------------------------------------------- | -------------------------- | ------------------------ | --------- | --------- | ---------- |  | ------- | --------- | --------- | 
|                                                        |                            | December 31,             |          
|                                                        |                            |                          |          
|                                                        |                            | 2005                     |           |           | 2004       | 
|                                                        |                            |                          |           |           |            | 
|Industrial operating properties(1):                     |                            |                          |           |           |            |  |         |          
|                                                        | Improved land              |                          | $         | 1,774,923 |            |  | $       | 816,943   |          
|                                                        | Buildings and improvements |                          |           | 6,955,983 |            |  |         | 4,230,471 |          
|Retail operating properties(2):                         |                            |                          |           |           |            |  |         |          
|                                                        | Improved land              |                          |           | 66,848    |            |  |         |          |          
|                                                        | Buildings and improvements |                          |           | 221,405   |            |  |         |          |          
|Land subject to ground leases and other(3)              |                            |                          | 792,668   |           |            |  |        |          
|Properties under development, including cost of land(4) |                            |                          | 884,345   |           |            |  | 575,703 |          
|Land held for development(5)                            |                            |                          | 1,045,042 |           |            |  | 596,001 |          
|Other investments(6)                                    |                            |                          | 133,916   |           |            |  | 114,613 |          
|                                                        |                            |                          |           |           |            | 
|                                                        |                            | Total real estate assets |           |           | 11,875,130 |  |         |           | 6,333,731 | 
|Less accumulated depreciation                           |                            |                          | 1,118,547 |           |            |  | 989,221 |          
|                                                        |                            |                          |           |           |            | 
|                                                        |                            | Net real estate assets   |           | $         | 10,756,583 |  |         | $         | 5,344,510 | 
|                                                        |                            |                          |           |           |            | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | At December 31, 2005 and 2004, we had 1,432 and
    1,228 industrial operating properties consisting of
    185.6 million square feet and 133.6 million square
    feet, respectively. Of these properties, 205 properties
    consisting of 38.6 million square feet were acquired in the
    Catellus Merger (see Note 3).                                                                                                                                                                                    
|   
|(2) | At December 31, 2005, we had 29 retail operating
    properties consisting of 1.1 million square feet, all of
    which were acquired in the Catellus Merger (see Note 3).                                                                                                                                                                                                                                                                                                                                      
|   
|(3) | Amounts represent $424.5 million of land subject to ground
    leases, an investment of $254.6 million in 24 office
    properties aggregating 1.8 million square feet, an
    $83.8 million hotel property and $29.8 million of
    railway depots, all of which were acquired in the Catellus
    Merger (see Note 3).                                                                                                                                                                                        
|   
|(4) | Properties under development consisted of 72 properties
    aggregating 23.2 million square feet at December 31,
    2005 and 58 properties aggregating 15.1 million square
    feet at December 31, 2004. Our total expected investment
    upon completion of these properties is approximately
    $1.8 billion at December 31, 2005.                                                                                                                                                                        
|   
|(5) | Land held for future development consisted of 6,568 acres
    at December 31, 2005, of which 2,370 acres were
    acquired in the Catellus Merger (see Note 3), and
    2,991 acres at December 31, 2004.                                                                                                                                                                                                                                                                                                       
|   
|(6) | Other investments primarily include: (i) restricted funds
    that are held in escrow pending the completion of tax-deferred
    exchange transactions involving operating properties;
    (ii) earnest money deposits associated with potential
    acquisitions; (iii) costs incurred during the
    pre-acquisition due diligence process; (iv) costs incurred
    during the pre-construction phase related to future development
    projects; and (v) costs related to our corporate office
    buildings.

82



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)









|     |  |            |    |           |  |                |       |              |  |   |         |  |  |   |        | 
|---- |  | ---------- | -- | --------- |  | -------------- | ----- | ------------ |  | - | ------- |  |  | - | ------ | 
|     |  | Number     |    | Aggregate |  |                |       |             
|     |  | of         |    | Square    |  | Aggregate      |       |             
|     |  | Properties |    | Feet      |  | Purchase Price |       | Debt Assumed
|     |  |            |    |           |  |                |       |             
|2005 |  |            | 13 |           |  |                | 3,783 |              |  | $ | 170,744 |  |  | $ | 19,919 | 
|2004 |  |            | 22 |           |  |                | 4,774 |              |  | $ | 195,703 |  |  |   |       | 
|2003 |  |            | 38 |           |  |                | 6,330 |              |  | $ | 193,301 |  |  | $ | 7,199  | 





| |                           
| | --------------------------
| | Operating Lease Agreements



|           |  |   |           | 
|---------- |  | - | --------- | 
|2006       |  | $ | 632,600   | 
|2007       |  |   | 538,331   | 
|2008       |  |   | 449,786   | 
|2009       |  |   | 340,940   | 
|2010       |  |   | 261,705   | 
|Thereafter |  |   | 626,658   | 
|           |  |   |          
|           |  | $ | 2,850,020 | 
|           |  |   |          





83



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







|   |                          
|-- | -------------------------
|5. | Unconsolidated Investees:



| |                                  
| | ---------------------------------
| | Summary of Investments and Income



|                                        |        |              |         |           |      |   |         |         | 
|--------------------------------------- | ------ | ------------ | ------- | --------- | ---- | - | ------- | ------- | 
|                                        |        | December 31, |        
|                                        |        |              |        
|                                        |        | 2005         |         |           | 2004 |  
|                                        |        |              |         |           |      |  
|Property funds                          |        | $            | 755,320 |           |      | $ | 839,675 |        
|CDFS joint ventures and other investees |        |              | 294,423 |           |      |   | 68,838  |        
|                                        |        |              |         |           |      |  
|                                        | Totals |              | $       | 1,049,743 |      |   | $       | 908,513 | 
|                                        |        |              |         |           |      |  



|                                                                                 |                                          |                          |                                                         |                          |        |        |        |      |        |        |        |   |         |         |        | 
|-------------------------------------------------------------------------------- | ---------------------------------------- | ------------------------ | ------------------------------------------------------- | ------------------------ | ------ | ------ | ------ | ---- | ------ | ------ | ------ | - | ------- | ------- | ------ | 
|                                                                                 |                                          | Years Ended December 31, |                                                        
|                                                                                 |                                          |                          |                                                        
|                                                                                 |                                          | 2005                     |                                                         |                          | 2004   |        |        | 2003 |       
|                                                                                 |                                          |                          |                                                         |                          |        |        |        |      |       
|Earnings (losses) from unconsolidated investees (including
    interest income): |                                          |                          |                                                         |                          |        |        |        |      |        |        |        |  
|                                                                                 | Property funds:                          |                          |                                                         |                          |        |        |        |      |        |        |        |   |        
|                                                                                 |                                          | North America            |                                                         | $                        | 24,224 |        |        | $    | 25,532 |        |        | $ | 19,471  |        
|                                                                                 |                                          | Europe                   |                                                         |                          | 13,938 |        |        |      | 12,550 |        |        |   | 6,416   |        
|                                                                                 |                                          | Asia                     |                                                         |                          | 7,916  |        |        |      | 4,817  |        |        |   | 1,378   |        
|                                                                                 |                                          |                          |                                                         |                          |        |        |        |      |       
|                                                                                 |                                          |                          | Total property funds                                    |                          |        | 46,078 |        |      |        | 42,899 |        |   |         | 27,265  |       
|                                                                                 |                                          |                          |                                                         |                          |        |        |        |      |       
|                                                                                 | CDFS joint ventures and other investees: |                          |                                                         |                          |        |        |        |      |        |        |        |   |        
|                                                                                 |                                          | North America            |                                                         | $                        | 4,178  |        |        | $    | (2,079 | )      |        | $ | (2,216  | )      
|                                                                                 |                                          | Europe(1)                |                                                         |                          | 1,186  |        |        |      | 1,201  |        |        |   | (10,015 | )      
|                                                                                 |                                          | Asia                     |                                                         |                          | 1,057  |        |        |      | 77     |        |        |   |        |        
|                                                                                 |                                          |                          |                                                         |                          |        |        |        |      |       
|                                                                                 |                                          |                          | Total CDFS joint ventures and other investees           |                          |        | 6,421  |        |      |        | (801   | )      |   |         | (12,231 | )     
|                                                                                 |                                          |                          |                                                         |                          |        |        |        |      |       
|                                                                                 |                                          |                          |                                                         | Total equity in earnings |        | $      | 52,499 |      |        | $      | 42,098 |   |         | $       | 15,034 | 
|                                                                                 |                                          |                          |                                                         |                          |        |        |        |      |       
|Property management and other fees and incentives:                               |                                          |                          |                                                         |                          |        |        |        |      |        |        |        |  
|                                                                                 |                                          | North America            |                                                         | $                        | 32,124 |        |        | $    | 22,505 |        |        | $ | 19,567  |        
|                                                                                 |                                          | Europe                   |                                                         |                          | 30,064 |        |        |      | 25,336 |        |        |   | 23,774  |        
|                                                                                 |                                          | Asia                     |                                                         |                          | 4,746  |        |        |      | 2,937  |        |        |   | 843     |        
|                                                                                 |                                          |                          |                                                         |                          |        |        |        |      |       
|                                                                                 |                                          |                          | Total property management and other fees and incentives |                          | $      | 66,934 |        |      | $      | 50,778 |        |   | $       | 44,184  |       
|                                                                                 |                                          |                          |                                                         |                          |        |        |        |      |       






|    |                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | As of January 1, 2004, we began presenting our investments
    in TCL Holding S.A. and CSI/ Frigo LLC on a consolidated basis
    as a result of adopting FIN 46R. These entities owned and
    operated a

84



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







| |                                                                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | temperature-controlled distribution business in Europe. A
    majority of the loss we recognized in 2003 was due to our share
    of an impairment loss of $38.3 million recognized by these
    entities.



| |               
| | --------------
| | Property Funds



85



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







|                                                                                                 |  |            |     |               |             |  |            |      |  |                 |      |   |  |      |      |   |      |   |         |  |  |   |         | 
|------------------------------------------------------------------------------------------------ |  | ---------- | --- | ------------- | ----------- |  | ---------- | ---- |  | --------------- | ---- | - |  | ---- | ---- | - | ---- | - | ------- |  |  | - | ------- | 
|                                                                                                 |  | Number of  |     |               |             |  | Ownership  |      |  | Investment in   |     
|                                                                                                 |  | properties |     |               |             |  | percentage |      |  | and advances to |     
|                                                                                                 |  | owned      |     |               | Square feet |  |            |      |  |                 |      |  
|Fund Names                                                                                       |  | 2005       |     |               | 2005        |  |            | 2005 |  |                 | 2004 |   |  | 2005 |      |   | 2004 |  
|                                                                                                 |  |            |     |               |             |  |            |      |  |                 |      |   |  |      |      |   |      |  
|                                                                                                 |  |            |     | (In millions) |             |  |            |      |  |                 |      |   | 
|ProLogis California (ProLogis California I LLC)(1)                                               |  |            | 81  |               |             |  | 14.2       |      |  |                 | 50.0 | % |  |      | 50.0 | % |      | $ | 115,743 |  |  | $ | 117,579 | 
|ProLogis North American Properties Fund I (ProLogis North
    American Properties Fund I LLC)(1) |  |            | 36  |               |             |  | 9.4        |      |  |                 | 41.3 | % |  |      | 41.3 | % |      |   | 33,241  |  |  |   | 35,707  | 
|ProLogis North American Properties Fund II (ProLogis First
    U.S. Properties LP)(1)(2)         |  |            | 27  |               |             |  | 4.5        |      |  |                 | 20.0 | % |  |      | 20.0 | % |      |   | 5,155   |  |  |   | 5,864   | 
|ProLogis North American Properties Fund III (ProLogis
    Second U.S. Properties LP)(1)(2)       |  |            | 34  |               |             |  | 4.4        |      |  |                 | 20.0 | % |  |      | 20.0 | % |      |   | 4,650   |  |  |   | 4,908   | 
|ProLogis North American Properties Fund IV (ProLogis Third
    U.S. Properties LP)(1)(2)         |  |            | 17  |               |             |  | 3.5        |      |  |                 | 20.0 | % |  |      | 20.0 | % |      |   | 2,605   |  |  |   | 3,022   | 
|ProLogis North American Properties Fund V(3)                                                     |  |            | 138 |               |             |  | 32.9       |      |  |                 | 11.3 | % |  |      | 11.5 | % |      |   | 53,104  |  |  |   | 65,878  | 
|ProLogis North American Properties Fund VI (Allagash
    Property Trust)(1)                      |  |            | 22  |               |             |  | 8.6        |      |  |                 | 20.0 | % |  |      | 20.0 | % |      |   | 42,227  |  |  |   | 45,721  | 
|ProLogis North American Properties Fund VII (Brazos
    Property Trust)(1)                       |  |            | 29  |               |             |  | 6.1        |      |  |                 | 20.0 | % |  |      | 20.0 | % |      |   | 32,543  |  |  |   | 34,861  | 
|ProLogis North American Properties Fund VIII (Cimmaron
    Property Trust)(1)                    |  |            | 24  |               |             |  | 3.1        |      |  |                 | 20.0 | % |  |      | 20.0 | % |      |   | 15,602  |  |  |   | 18,032  | 
|ProLogis North American Properties Fund IX (Deerfield
    Property Trust)(1)                     |  |            | 20  |               |             |  | 3.4        |      |  |                 | 20.0 | % |  |      | 20.0 | % |      |   | 14,274  |  |  |   | 16,409  | 
|ProLogis North American Properties Fund X (Elkhorn Property
    Trust)(1)                        |  |            | 29  |               |             |  | 4.2        |      |  |                 | 20.0 | % |  |      | 20.0 | % |      |   | 15,968  |  |  |   | 17,876  | 
|ProLogis North American Properties Fund XI (KPJV, LLP)(1)                                        |  |            | 14  |               |             |  | 4.3        |      |  |                 | 20.0 | % |  |      | 20.0 | % |      |   | 33,094  |  |  |   | 35,886  | 
|ProLogis North American Properties Fund XII (Keystone New
    Jersey Associates, LLC)(1)(4)      |  |            |    |               |             |  |           |      |  |                 |     |   |  |      | 20.0 | % |      |   |        |  |  |   | 41,401  | 
|ProLogis European Properties Fund(5)                                                             |  |            | 263 |               |             |  | 54.0       |      |  |                 | 21.0 | % |  |      | 21.8 | % |      |   | 283,435 |  |  |   | 321,548 | 
|ProLogis Japan Properties Fund I (PLD/ RECO Japan TMK
    Property Trust)(1)(6)                  |  |            | 18  |               |             |  | 7.2        |      |  |                 | 20.0 | % |  |      | 20.0 | % |      |   | 103,679 |  |  |   | 74,983  | 
|                                                                                                 |  |            |     |               |             |  |            |      |  |                 |      |   |  |      |      |   |      |  
|Totals                                                                                           |  |            | 752 |               |             |  | 159.8      |      |  |                 |      |   |  |      |      |   |      | $ | 755,320 |  |  | $ | 839,675 | 
|                                                                                                 |  |            |     |               |             |  |            |      |  |                 |      |   |  |      |      |   |      |  






|    |                                                                                                                                                                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | We have one fund partner in each of these property funds.                                                                                                                                                                                                                                                                                 
|   
|(2) | On January 4, 2006, we purchased the remaining 80%
    ownership interests in each of these property funds and
    subsequently contributed substantially all the assets and
    associated liabilities into a newly formed fund, the ProLogis
    North American Industrial Fund (the North American
    Industrial Fund)(see Note 21).
|   
|(3) | We refer to the combined entities in which we have ownership
    interests (ProLogis-Macquarie Fund and the management company,
    as discussed below) as one property fund named ProLogis North
    American Properties Fund V.                                                                                                         



| |   |                                                                                                                                                                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Ownership interests of the ProLogis-Macquarie Fund at
    December 31, 2005 are held directly or indirectly by us,
    Macquarie ProLogis Trust (MPR), a publicly traded
    listed property trust in Australia and Macquarie Bank Limited
    (Macquarie Bank);

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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Our effective ownership interest in the ProLogis-Macquarie Fund
    was 11.3% at December 31, 2005 based on our 10.7% direct
    ownership interest in the ProLogis-Macquarie Fund and our 0.6%
    weighted ownership interest in two entities that collectively
    own 89.3% of the ProLogis-Macquarie Fund. Our effective
    ownership interest in the ProLogis-Macquarie Fund was 11.5% at
    December 31, 2004 and 14.0% at December 31, 2003;
|
| |  | We and a United States subsidiary of Macquarie Bank each have a
    50% ownership interest in a company that was formed to act as
    manager of the ProLogis-Macquarie Fund;                                                                                                                                                                                                                                                                         
|
| |  | We reduced our ownership interest in the ProLogis-Macquarie Fund
    in June 2004 by exchanging a portion of our investment into
    units of MPR as allowed under certain formation agreements. Upon
    receipt of the units of MPR, we sold them in the public market.
    The sale generated net proceeds of $13.2 million and
    resulted in a net gain of $3.3 million;                                                                        
|
| |  | At December 31, 2005, we had guaranteed $12.5 million
    of borrowings of ProLogis North American Properties Fund V
    outstanding on a term loan that matures March 31, 2006 at
    which time it will be repaid by the fund; we had also guaranteed
    $68.8 million of borrowings at December 31, 2004; and                                                                                                                                     
|
| |  | We are committed to offer to contribute certain existing
    industrial distribution properties in the United States and
    Mexico (with an estimated aggregate value of
    $350.0 million) to ProLogis North American Properties
    Fund V prior to offering for contribution or sale to any
    third party, subject to certain conditions, through
    December 31, 2006.                                                                       



|    |                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------
|(4) | On September 30, 2005, we acquired the remaining 80%
    ownership interest in this property fund (see Note 3).
|   
|(5) | ProLogis European Properties Fund:                                                                             



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | We and 21 third parties, primarily institutional investors, own
    units in the property fund. ProLogis European Properties Fund
    has equity commitments from nine investors through subscription
    agreements aggregating
    636.6 million
    (the currency equivalent of approximately $761.1 million at
    December 31, 2005) of which
    200.8 million
    (the currency equivalent of approximately $240.0 million at
    December 31, 2005) was unfunded at December 31, 2005.
    The subscription agreements expire on August 29, 2006;
|
| |  | At December 31, 2005, we were committed to make additional
    equity contributions to ProLogis European Properties Fund of
    135.4 million
    (the currency equivalent of approximately $161.8 million as
    of December 31, 2005);                                                                                                                                                                                                                                                                                                                  
|
| |  | We are committed to offer to contribute all of the properties
    that we develop and stabilize in specified markets in Europe to
    ProLogis European Properties Fund as long as the fund has
    capital to invest, subject to the property meeting certain
    leasing and other criteria; and                                                                                                                                                                                                                                                         
|
| |  | In 2003, we recognized a gain on the partial redemption of our
    investment in the ProLogis European Properties Fund of
    $74.7 million, including a foreign currency exchange gain
    of $47.9 million resulting from the repatriation of the
    cash redemption proceeds to the United States. These gains are
    included in gains recognized on dispositions of certain non-CDFS
    business assets and investments in property funds in our
    consolidated statements of earnings.                                                          



|    |                                  
|--- | ---------------------------------
|(6) | ProLogis Japan Properties Fund I:



| |   |                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The total capital commitment by our fund partner to the property
    fund is $300.0 million, which was fully satisfied as of
    December 31, 2005.



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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)











|                                                   |  |               |         |        |  |      |         |       |  |   |         |   |  |   |          |  
|-------------------------------------------------- |  | ------------- | ------- | ------ |  | ---- | ------- | ----- |  | - | ------- | - |  | - | -------- | -
|                                                   |  | 2005         
|                                                   |  |              
|                                                   |  | North America |         | Europe |  | Asia |         | Total
|                                                   |  |               |         |        |  |      |         |      
|Revenues                                           |  | $             | 489.9   |        |  | $    | 368.6   |       |  | $ | 70.7    |   |  | $ | 929.2    |  
|Net earnings                                       |  | $             | 99.3    |        |  | $    | 54.0    |       |  | $ | 32.9    |   |  | $ | 186.2    |  
|Total assets                                       |  | $             | 4,786.6 |        |  | $    | 4,052.0 |       |  | $ | 1,230.1 |   |  | $ | 10,068.7 |  
|Amounts due to ProLogis                            |  | $             | 9.0     |        |  | $    | 15.7    |       |  | $ | 71.3    |   |  | $ | 96.0     |  
|Third party debt(1)                                |  | $             | 2,690.7 |        |  | $    | 1,991.2 |       |  | $ | 535.1   |   |  | $ | 5,217.0  |  
|Total liabilities                                  |  | $             | 2,921.0 |        |  | $    | 2,409.6 |       |  | $ | 639.8   |   |  | $ | 5,970.4  |  
|Equity                                             |  | $             | 1,864.1 |        |  | $    | 1,637.9 |       |  | $ | 590.3   |   |  | $ | 4,092.3  |  
|Our weighted average ownership at end of period(2) |  |               | 23.5    | %      |  |      | 21.0    | %     |  |   | 20.0    | % |  |   | 22.1     | %
|Our investment balance(3)                          |  | $             | 368.2   |        |  | $    | 283.4   |       |  | $ | 103.7   |   |  | $ | 755.3    |  
|Deferred proceeds, net of amortization             |  | $             | 77.7    |        |  | $    | 105.5   |       |  | $ | 44.1    |   |  | $ | 227.3    |  

|                                                   |  |               |         |        |  |      |         |       |  |   |       |   |  |   |         |  
|-------------------------------------------------- |  | ------------- | ------- | ------ |  | ---- | ------- | ----- |  | - | ----- | - |  | - | ------- | -
|                                                   |  | 2004         
|                                                   |  |              
|                                                   |  | North America |         | Europe |  | Asia |         | Total
|                                                   |  |               |         |        |  |      |         |      
|Revenues                                           |  | $             | 364.6   |        |  | $    | 310.9   |       |  | $ | 40.2  |   |  | $ | 715.7   |  
|Net earnings                                       |  | $             | 98.9    |        |  | $    | 50.9    |       |  | $ | 20.7  |   |  | $ | 170.5   |  
|Total assets                                       |  | $             | 4,847.8 |        |  | $    | 3,968.3 |       |  | $ | 766.3 |   |  | $ | 9,582.4 |  
|Amounts due to ProLogis                            |  | $             | 30.6    |        |  | $    | 18.6    |       |  | $ | 40.0  |   |  | $ | 89.2    |  
|Third party debt(1)                                |  | $             | 2,639.0 |        |  | $    | 1,920.7 |       |  | $ | 327.0 |   |  | $ | 4,886.7 |  
|Total liabilities                                  |  | $             | 2,757.8 |        |  | $    | 2,315.1 |       |  | $ | 516.3 |   |  | $ | 5,589.2 |  
|Equity                                             |  | $             | 2,034.8 |        |  | $    | 1,649.3 |       |  | $ | 250.0 |   |  | $ | 3,934.1 |  
|Our weighted average ownership at end of period(2) |  |               | 23.8    | %      |  |      | 21.8    | %     |  |   | 20.0  | % |  |   | 21.6    | %
|Our investment balance(3)                          |  | $             | 443.2   |        |  | $    | 321.5   |       |  | $ | 75.0  |   |  | $ | 839.7   |  
|Deferred proceeds, net of amortization             |  | $             | 73.6    |        |  | $    | 90.8    |       |  | $ | 17.0  |   |  | $ | 181.4   |  






|    |                                                                                                                                                                                                                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Of the total third party debt of the property funds, we had
    guaranteed $12.5 million and $68.8 million of debt at
    December 31, 2005 and 2004, respectively.                                                                                                                                                       
|   
|(2) | Represents the weighted average of the ownership interests in
    all property funds at December 31, based on each
    entitys contribution to total assets, before depreciation,
    net of other liabilities.                                                                                                          
|   
|(3) | The difference between our percentage ownership interest of the
    property funds equity and our investment balance results
    from three types of transactions: (i) deferring a portion
    of the proceeds from a contribution of one of our properties to
    a property fund as a result of our continued ownership

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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







| |                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------
| | in the property; (ii) recording additional costs associated
    with our investment in the property fund; and
    (iii) advances to the property funds.



| |                                        
| | ---------------------------------------
| | CDFS joint ventures and other investees



|                     |                  |                             |                           |         |        |         |         |        |        |        |        | 
|-------------------- | ---------------- | --------------------------- | ------------------------- | ------- | ------ | ------- | ------- | ------ | ------ | ------ | ------ | 
|                     |                  | 2005                        |                           |         | 2004   |        
|                     |                  |                             |                           |         |        |        
|CDFS joint ventures: |                  |                             |                           |         |        |         |         |       
|                     | United States(1) |                             | $                         | 113,008 |        |         | $       | 10,477 |       
|                     | Europe(2)        |                             |                           | 12,238  |        |         |         | 9,207  |       
|                     | China(3)         |                             |                           | 57,165  |        |         |         | 20,803 |       
|                     |                  |                             |                           |         |        |        
|                     |                  |                             | Total CDFS joint ventures |         | $      | 182,411 |         |        | $      | 40,487 |       
|                     |                  |                             |                           |         |        |        
|Other investees:     |                  |                             |                           |         |        |         |         |       
|                     |                  | Operating joint ventures(4) |                           | $       | 84,731 |         |         | $      |       |       
|                     |                  | Other                       |                           |         | 27,281 |         |         |        | 28,351 |       
|                     |                  |                             |                           |         |        |        
|                     |                  |                             | Total other investees     |         | $      | 112,012 |         |        | $      | 28,351 |       
|                     |                  |                             |                           |         |        |        
|                     |                  |                             |                           | Total   |        | $       | 294,423 |        |        | $      | 68,838 | 
|                     |                  |                             |                           |         |        |        






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes investments acquired in connection with the Catellus
    Merger, consisting of a 50% interest in one multi-use
    development entity and two residential development entities:
    SAMS Venture, LLC, Serrano Associates, LLC and Parkway Company,
    LLC. Also includes investments in entities that are developing
    industrial distribution properties.                                                                                              
|   
|(2) | Includes investments in joint ventures which own land for future
    development of industrial distribution properties.                                                                                                                                                                                                                                                                                                                                              
|   
|(3) | Includes investments in joint ventures that own operating
    industrial distribution properties that were acquired from third
    parties or developed by the joint venture, and that also develop
    industrial distribution properties, all in China in partnership
    with various government entities of China.                                                                                                                                               
|   
|(4) | Includes investments acquired in connection with the Catellus
    Merger, consisting primarily of a 25.16% interest in
    International Rivercenter, an entity that owns and operates a
    hotel property and a 38.75% interest in New Orleans Rivercenter,
    an entity that owns and operates the parking lot adjacent to the
    hotel property; and a 66.67% interest in Torrance Investment
    Company, an entity that owns and operates an office property.

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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







|   |                                    
|-- | -----------------------------------
|6. | Other Assets and Other Liabilities:



|                                            |        |      |         |         |      |   |         |         | 
|------------------------------------------- | ------ | ---- | ------- | ------- | ---- | - | ------- | ------- | 
|                                            |        | 2005 |         |         | 2004 |  
|                                            |        |      |         |         |      |  
|Goodwill                                    |        | $    | 229,444 |         |      | $ | 78,005  |        
|Leasing commissions and above market leases |        |      | 202,419 |         |      |   | 88,720  |        
|Value Added Tax receivable                  |        |      | 161,237 |         |      |   | 117,729 |        
|Non-qualified savings plan assets           |        |      | 43,895  |         |      |   | 17,402  |        
|Fixed assets                                |        |      | 25,037  |         |      |   | 19,650  |        
|Other                                       |        |      | 126,808 |         |      |   | 80,058  |        
|                                            |        |      |         |         |      |  
|                                            | Totals |      | $       | 788,840 |      |   | $       | 401,564 | 
|                                            |        |      |         |         |      |  



|                                      |        |      |         |         |      |   |        |         | 
|------------------------------------- | ------ | ---- | ------- | ------- | ---- | - | ------ | ------- | 
|                                      |        | 2005 |         |         | 2004 |  
|                                      |        |      |         |         |      |  
|Accrued income taxes                  |        | $    | 157,010 |         |      | $ | 16,395 |        
|Deferred income taxes                 |        |      | 98,067  |         |      |   | 10,188 |        
|Value Added Tax payable               |        |      | 59,335  |         |      |   | 55,996 |        
|Tenant security deposits              |        |      | 51,889  |         |      |   | 38,536 |        
|Nonqualified savings plan liabilities |        |      | 44,315  |         |      |   | 17,402 |        
|Below market leases                   |        |      | 25,528  |         |      |   |       |        
|Tax indemnifications                  |        |      | 28,383  |         |      |   | 19,706 |        
|Other                                 |        |      | 92,683  |         |      |   | 38,017 |        
|                                      |        |      |         |         |      |  
|                                      | Totals |      | $       | 557,210 |      |   | $      | 196,240 | 
|                                      |        |      |         |         |      |  



|           |       |              |        |               |        |   |        |        | 
|---------- | ----- | ------------ | ------ | ------------- | ------ | - | ------ | ------ | 
|           |       |              |        | Net Charge to |       
|           |       | Amortization |        |               | Rental |  
|           |       | Expense      |        |               | Income |  
|           |       |              |        |               |        |  
|2006       |       | $            | 32,279 |               |        | $ | 4,035  |       
|2007       |       |              | 28,546 |               |        |   | 12,021 |       
|2008       |       |              | 20,328 |               |        |   | 11,523 |       
|2009       |       |              | 5,243  |               |        |   | 5,474  |       
|2010       |       |              | 2,868  |               |        |   | 5,403  |       
|Thereafter |       |              | 19,291 |               |        |   | 29,880 |       
|           |       |              |        |               |        |  
|           | Total |              | $      | 108,555       |        |   | $      | 68,336 | 
|           |       |              |        |               |        |  

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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







|   |                         
|-- | ------------------------
|7. | Discontinued Operations:



|                                       |  |      |      |   |      |   |      |      |  |   |      |  
|-------------------------------------- |  | ---- | ---- | - | ---- | - | ---- | ---- |  | - | ---- | -
|                                       |  | 2005 |      |   | 2004 |   |      | 2003 | 
|                                       |  |      |      |   |      |   |      |      | 
|Rental income                          |  | $    | 14.3 |   |      | $ | 19.9 |      |  | $ | 20.2 |  
|Rental expenses                        |  |      | (3.7 | ) |      |   | (5.8 | )    |  |   | (5.9 | )
|Depreciation and amortization          |  |      | (4.0 | ) |      |   | (6.3 | )    |  |   | (6.2 | )
|Interest expense                       |  |      | (0.2 | ) |      |   | (0.8 | )    |  |   | (1.0 | )
|                                       |  |      |      |   |      |   |      |      | 
|Income attributable to disposed assets |  | $    | 6.4  |   |      | $ | 7.0  |      |  | $ | 7.1  |  
|                                       |  |      |      |   |      |   |      |      | 



|                          |                                |      |   |       |  |  |   |       | 
|------------------------- | ------------------------------ | ---- | - | ----- |  |  | - | ----- | 
|                          |                                | 2005 |   | 2004 
|                          |                                |      |   |      
|CDFS business assets:     |                                |      |   |       |  |  |   |      
|                          | Number of properties           |      |   | 8     |  |  |   | 10    | 
|                          | Net proceeds from dispositions |      | $ | 100.5 |  |  | $ | 241.0 | 
|                          | Net gain from dispositions     |      | $ | 10.6  |  |  | $ | 32.7  | 
|Non-CDFS business assets: |                                |      |   |       |  |  |   |      
|                          | Number of properties           |      |   | 64    |  |  |   | 10    | 
|                          | Net proceeds from dispositions |      | $ | 344.4 |  |  | $ | 23.1  | 
|                          | Net gain from dispositions     |      | $ | 86.4  |  |  | $ | 1.5   | 



 


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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







|             |                                            |                                   |                   |            |        |         |        | 
|------------ | ------------------------------------------ | --------------------------------- | ----------------- | ---------- | ------ | ------- | ------ | 
|Assets:      |                                            |                                   |                   |           
|             | Property, plant and equipment              |                                   | $                 | 214,695    |       
|             | Accumulated depreciation and amortization  |                                   |                   | (160,649   | )     
|             |                                            |                                   |                  
|             |                                            | Net property, plant and equipment |                   |            | 54,046 |        
|             | Cash, accounts receivable and other assets |                                   |                   | 60,622     |       
|             |                                            |                                   |                  
|             |                                            |                                   | Total assets      |            |        | 114,668 |       
|             |                                            |                                   |                  
|Liabilities: |                                            |                                   |                   |           
|             | Third party debt                           |                                   |                   | 186        |       
|             | Accounts payable                           |                                   |                   | 21,591     |       
|             | Deferred income tax liability              |                                   |                   | 14,354     |       
|             | Other liabilities                          |                                   |                   | 26,860     |       
|             |                                            |                                   |                  
|             |                                            |                                   | Total liabilities |            |        | 62,991  |       
|             |                                            |                                   |                  
|             |                                            |                                   |                   | Net assets |        | $       | 51,677 | 
|             |                                            |                                   |                  



|   |      
|-- | -----
|8. | Debt:



|                                                    |        |      |           |           |      |   |           |           | 
|--------------------------------------------------- | ------ | ---- | --------- | --------- | ---- | - | --------- | --------- | 
|                                                    |        | 2005 |           |           | 2004 |  
|                                                    |        |      |           |           |      |  
|Unsecured lines of credit and short-term borrowings |        | $    | 2,240,054 |           |      | $ | 960,002   |          
|Senior Notes                                        |        |      | 2,759,675 |           |      |   | 1,962,316 |          
|Secured debt                                        |        |      | 1,643,586 |           |      |   | 484,892   |          
|Assessment bonds                                    |        |      | 34,565    |           |      |   | 6,751     |          
|                                                    |        |      |           |           |      |  
|                                                    | Totals |      | $         | 6,677,880 |      |   | $         | 3,413,961 | 
|                                                    |        |      |           |           |      |  



| |                                                    
| | ---------------------------------------------------
| | Unsecured Lines of Credit and Short-Term Borrowings

12-month


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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







|                                                                                       |  |                          |         |      |  |      |         |   |  |   |         |  
|-------------------------------------------------------------------------------------- |  | ------------------------ | ------- | ---- |  | ---- | ------- | - |  | - | ------- | -
|                                                                                       |  | Years Ended December 31,
|                                                                                       |  |                         
|                                                                                       |  | 2005                     |         | 2004 |  | 2003
|                                                                                       |  |                          |         |      |  |     
|Weighted average daily interest rate                                                   |  |                          | 2.77    | %    |  |      | 2.08    | % |  |   | 2.21    | %
|Borrowings outstanding at December 31                                                  |  | $                        | 1,850.1 |      |  | $    | 912.3   |   |  | $ | 699.5   |  
|Weighted average daily borrowings                                                      |  | $                        | 1,278.2 |      |  | $    | 930.0   |   |  | $ | 620.0   |  
|Maximum borrowings outstanding at any month end                                        |  | $                        | 1,850.1 |      |  | $    | 1,036.5 |   |  | $ | 756.2   |  
|Aggregate borrowing capacity of all lines of credit at
    December 31                 |  | $                        | 2,589.9 |      |  | $    | 1,832.2 |   |  | $ | 1,533.0 |  
|Outstanding letters of credit under the lines of credit                                |  | $                        | 98.0    |      |  | $    | 35.3    |   |  | $ | 19.2    |  
|Aggregate remaining capacity available to us on all lines of
    credit at December 31 |  | $                        | 641.8   |      |  | $    | 884.6   |   |  | $ | 814.3   |  







93



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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







| |             
| | ------------
| | Senior Notes



|                        |                              |           |         |           |        |  |       |  | 
|----------------------- | ---------------------------- | --------- | ------- | --------- | ------ |  | ----- |  | 
|                        |                              | Principal |         |           | Coupon | 
|Maturity Date           |                              | Balance   |         |           | Rate   | 
|                        |                              |           |         |           |        | 
|July 15, 2006(1)        |                              | $         | 250,000 |           |        |  | 7.05% | 
|November 20, 2007(1)    |                              |           | 135,000 |           |        |  | 7.25% | 
|April 15, 2008(1)       |                              |           | 250,000 |           |        |  | 7.10% | 
|May 15, 2008(2)         |                              |           | 75,000  |           |        |  | 7.95% | 
|March 1, 2009(3)        |                              |           | 75,000  |           |        |  | 8.72% | 
|May 15, 2009(4)         |                              |           | 37,500  |           |        |  | 7.88% | 
|November 20, 2009(1)    |                              |           | 25,000  |           |        |  | 7.30% | 
|November 15, 2010(1)(5) |                              |           | 500,000 |           |        |  | 5.25% | 
|April 13, 2011(1)(6)    |                              |           | 418,425 |           |        |  | 4.38% | 
|March 1, 2013(1)        |                              |           | 300,000 |           |        |  | 5.50% | 
|February 1, 2015(7)     |                              |           | 100,000 |           |        |  | 7.81% | 
|March 1, 2015(8)        |                              |           | 50,000  |           |        |  | 9.34% | 
|November 15, 2015(1)(5) |                              |           | 400,000 |           |        |  | 5.63% | 
|May 15, 2016(9)         |                              |           | 50,000  |           |        |  | 8.65% | 
|July 1, 2017(1)         |                              |           | 100,000 |           |        |  | 7.63% | 
|                        |                              |           |         |           |        | 
|                        | Total par value              |           | $       | 2,765,925 |        |  |       |  | 
|                        | Less: discount               |           |         | 6,250     |        |  |       |  | 
|                        |                              |           |         |           |        | 
|                        | Total principal balance, net |           | $       | 2,759,675 |        |  |       |  | 
|                        |                              |           |         |           |        | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Principal due at maturity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(2) | Annual principal payments of $25.0 million began on
    May 15, 2005 and are due on May 15th of each year
    through 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(3) | Annual principal payments of $18.75 million began on
    March 1, 2003 and are due on March 1st of each
    year through 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(4) | Annual principal payments of $9.375 million began on
    May 15, 2004 and are due on May 15th of each year
    through 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(5) | On November 2, 2005, in a private placement, we issued
    $500.0 million 5.3% senior notes due November 2010
    (2010 Notes) and $400.0 million
    5.6% senior notes due November 2015 (2015
    Notes). We received net proceeds of $890.0 million
    that were used to repay borrowings under the Bridge Facility. In
    connection with the issuance of the 2010 Notes and 2015 Notes,
    we entered into several interest rate swap contracts to fix a
    portion of the interest rate associated with the notes.
    Including the discount and the impact of the swaps, the
    effective interest rates are approximately 5.2% for the 2010
    Notes and 5.3% for the 2015 Notes. We have agreed to file a
    registration statement with the Securities and Exchange
    Commission with respect to an exchange offer for the notes or,
    under certain circumstances, a shelf registration statement with
    respect to resale of the notes.
|   
|(6) | On April 13, 2004, we issued
    350.0 million
    senior notes (the currency equivalent of approximately
    $420.6 million as of April 13, 2004) which require
    annual interest payments. The effective annual interest rate is
    4.41%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

94



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







|    |                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------
|(7) | Beginning on February 1, 2010, and through February 1,
    2015, requires annual principal payments ranging from
    $10.0 million to $20.0 million.
|   
|(8) | Beginning on March 1, 2010, and through March 1, 2015,
    requires annual principal payments ranging from
    $5.0 million to $12.5 million.       
|   
|(9) | Beginning on May 15, 2010, and through May 15, 2016,
    requires annual principal payments ranging from
    $5.0 million to $12.5 million.         









| |             
| | ------------
| | Secured Debt





|                  |                       |          |      |          |         |  |     |           |         |   |          |           |  |   |         |  | 
|----------------- | --------------------- | -------- | ---- | -------- | ------- |  | --- | --------- | ------- | - | -------- | --------- |  | - | ------- |  | 
|                  |                       |          |      |          |         |  |     | Balloon   |        
|                  |                       |          |      | Periodic |         |  |     |           | Payment |  
|                  |                       | Interest |      |          | Payment |  |     | Principal |         |   | Due at   |          
|Maturity Date     |                       | Rate(1)  |      |          | Date    |  |     | Balance   |         |   | Maturity |          
|                  |                       |          |      |          |         |  |     |           |         |   |          |          
|March 1, 2007     |                       |          | 7.08 | %        |         |  | (2) |           |         | $ | 136,397  |           |  | $ | 134,431 | 
|November 11, 2008 |                       |          | 5.96 | %        |         |  | (2) |           |         |   | 74,891   |           |  | $ | 68,132  | 
|November 11, 2008 |                       |          | 6.01 | %        |         |  | (2) |           |         |   | 344,750  |           |  | $ | 312,820 | 
|April 1, 2012     |                       |          | 7.05 | %        |         |  | (2) |           |         |   | 275,958  |           |  | $ | 207,398 | 
|August 1, 2015    |                       |          | 5.47 | %        |         |  | (2) |           |         |   | 137,962  |           |  | $ | 111,690 | 
|April 12, 2016    |                       |          | 7.25 | %        |         |  | (2) |           |         |   | 218,756  |           |  | $ | 150,373 | 
|April 1, 2024     |                       |          | 7.58 | %        |         |  | (2) |           |         |   | 198,959  |           |  | $ | 127,187 | 
|Various           |                       |          | (3   | )        |         |  | (3) |           |         |   | 255,913  |           |  |   | (3)     | 
|                  |                       |          |      |          |         |  |     |           |         |   |          |          
|                  | Total secured debt(4) |          |      |          |         |  |     |           |         |   | $        | 1,643,586 |  |   |         |  | 
|                  |                       |          |      |          |         |  |     |           |         |   |          |          






|    |                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------
|(1) | The weighted average annual interest rate for the total mortgage
    notes was 7.00% at December 31, 2005.

95



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







|    |                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Monthly amortization with a balloon payment due at maturity.                                                                                                                                
|   
|(3) | Includes 32 mortgage notes with interest rates ranging from
    3.76% to 9.68%, maturing from 2006 to 2018, primarily requiring
    monthly amortization with a balloon payment at maturity.
|   
|(4) | The mortgage notes are secured by 367 real estate properties
    with an aggregate undepreciated cost of $2.9 billion at
    December 31, 2005.                                             



| |                 
| | ----------------
| | Assessment Bonds





| |               
| | --------------
| | Debt Covenants





| |                          
| | -------------------------
| | Long-Term Debt Maturities



|                                 |                      |   |           |           | 
|-------------------------------- | -------------------- | - | --------- | --------- | 
|2006                             |                      | $ | 355,446   |          
|2007                             |                      |   | 369,730   |          
|2008                             |                      |   | 756,080   |          
|2009                             |                      |   | 117,863   |          
|2010                             |                      |   | 561,590   |          
|2011 and thereafter              |                      |   | 2,201,926 |          
|                                 |                      |   |          
|                                 | Total principal due  |   |           | 4,362,635 | 
|Add: original issue premium, net |                      |   | 75,191    |          
|                                 |                      |   |          
|                                 | Total carrying value |   | $         | 4,437,826 | 
|                                 |                      |   |          

96



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







| |                 
| | ----------------
| | Interest Expense



|                                    |                      |                          |         |         |      |   |         |         |  |   |         |         | 
|----------------------------------- | -------------------- | ------------------------ | ------- | ------- | ---- | - | ------- | ------- |  | - | ------- | ------- | 
|                                    |                      | Years Ended December 31, |        
|                                    |                      |                          |        
|                                    |                      | 2005                     |         |         | 2004 |   |         | 2003    | 
|                                    |                      |                          |         |         |      |   |         |         | 
|Gross interest expense(1)           |                      | $                        | 240,733 |         |      | $ | 183,946 |         |  | $ | 184,590 |        
|(Premium) discount recognized, net  |                      |                          | (3,743  | )       |      |   | 252     |         |  |   | 371     |        
|Amortization of deferred loan costs |                      |                          | 5,264   |         |      |   | 5,741   |         |  |   | 5,891   |        
|                                    |                      |                          |         |         |      |   |         |         | 
|                                    |                      |                          | 242,254 |         |      |   | 189,939 |         |  |   | 190,852 |        
|Less: capitalized amounts           |                      |                          | 63,885  |         |      |   | 37,388  |         |  |   | 36,425  |        
|                                    |                      |                          |         |         |      |   |         |         | 
|                                    | Net interest expense |                          | $       | 178,369 |      |   | $       | 152,551 |  |   | $       | 154,427 | 
|                                    |                      |                          |         |         |      |   |         |         | 






|    |                                                                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes the stated interest on the debt instrument plus
    applicable fees. The amount of interest paid in cash, net of
    amounts capitalized, for the years ended December 31, 2005,
    2004 and 2003 was $168.0 million, $134.9 million and
    $146.8 million, respectively.



|   |                   
|-- | ------------------
|9. | Minority Interest:





|                                                |  |               |       |           |  |                  |        |  |  |  |           |       
|----------------------------------------------- |  | ------------- | ----- | --------- |  | ---------------- | ------ |  |  |  | --------- | ------
|                                                |  |               |       |           |  | Limited         
|                                                |  | Real Estate   |       |           |  | Partnership     
|                                                |  | Assets        |       |           |  | Units           
|                                                |  | (before       |       | Our       |  | Held by Minority
|                                                |  | depreciation) |       | Ownership |  | Interest Holder 
|                                                |  |               |       |           |  |                 
|ProLogis Limited Partnership-I(1)               |  | $             | 223.4 | (2)       |  |                  | 68.65% |  |  |  | 4,520,532 | (3)(4)
|ProLogis Limited Partnership-III(1)             |  | $             | 35.0  |           |  |                  | 94.99% |  |  |  | 78,678    | (3)(5)
|ProLogis Limited Partnership-IV(1)              |  | $             | 83.8  |           |  |                  | 98.98% |  |  |  | 49,587    | (3)(5)
|Meridian Realty Partners Limited Partnership(1) |  | $             | 11.1  |           |  |                  | 95.67% |  |  |  | 9,903     | (6)   
|ProLogis Fraser, L.P.                           |  | $             | 168.0 |           |  |                  | 89.08% |  |  |  | 751,878   | (3)   






|    |                                                                                                                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Each outstanding limited partnership unit is entitled to receive
    cumulative preferential quarterly cash distributions equal to
    the quarterly distributions paid on common shares.                                                                                                                                           
|   
|(2) | These properties cannot be sold, prior to the occurrence of
    certain events, without the consent of the limited partners,
    other than in tax-deferred exchanges. The partnership agreement
    provides that a minimum level of debt must be maintained within
    the Partnership, which can include intercompany debt to us.
|   
|(3) | Each limited partnership unit is convertible into one common
    share.                                                                                                                                                                                                                                                             
|   
|(4) | Irving F. Lyons, III, our Vice Chairman and former Chief
    Investment Officer, owned some of the outstanding limited
    partnership units in this partnership. See Note 16.                                                                                                                                                      
|   
|(5) | All of the outstanding limited partnership units are owned by
    Jeffrey H. Schwartz, our Chief Executive Officer. See
    Note 16.                                                                                                                                                                                                
|   
|(6) | Each limited partnership unit is convertible into 1.1 common
    shares, plus $2.00.                                                                                                                                                                                                                                                

97



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







|    |                      
|--- | ---------------------
|10. | Shareholders Equity:



| |                  
| | -----------------
| | Shares Authorized





| |              
| | -------------
| | Common Shares







| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 1999 Dividend Reinvestment and Share Purchase Plan, as
    amended (the 1999 Dividend Reinvestment Plan):
    Allows holders of common shares to automatically reinvest
    distributions and certain holders and persons who are not
    holders of common shares to purchase a limited number of
    additional common shares by making optional cash payments,
    without payment of any brokerage commission or service charge.
    Common shares that are acquired under the 1999 Dividend
    Reinvestment Plan, either through reinvestment of distributions
    or through optional cash payments, are acquired at a price
    ranging from 98% to 100% of the market price of such common
    shares, as we determine.
|
| |  | Continuous Equity Offering Plan: Allows us to sell up to
    7,400,000 common shares through two designated agents who
    earn a fee of between 2.0% and 2.25% of the gross proceeds.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | Long-term incentive plan (the Incentive Plan) and
    Share Option Plan for Outside Trustees (the Outside
    Trustees Plan): Certain employees and members of the
    Board participate in these share-based compensation plans that
    provide compensation, generally in the form of common shares.
    There are an aggregate of 22,600,000 common shares (190,000
    of which are allocated to our 401(k) Plan and Trust) that
    have been made available for award under the Incentive Plan and
    an aggregate of 500,000 common shares that have been made
    available under the Outside Trustees Plan. See Note 13 for
    additional information on these plans.                                             
|
| |  | ProLogis Trust Employee Share Purchase Plan (the
    Employee Share Plan): Certain of our employees
    may purchase common shares, through payroll deductions only, at
    a discounted price of 85% of the market price of the common
    shares. The aggregate fair value of common shares that an
    individual employee can acquire in a calendar year under the
    Employee Share Plan is $25,000. Subject to certain provisions,
    the aggregate number of common shares that may be issued under
    the Employee Share Plan may not exceed 5,000,000. We began
    issuing common shares under the Employee Share Plan in January
    2002.                                                                        

98



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







|                                |       |        |       |       |          |   |        |        |  |  |          |       |  |        |        |         |          |  |       |       |  |   |        |        | 
|------------------------------- | ----- | ------ | ----- | ----- | -------- | - | ------ | ------ |  |  | -------- | ----- |  | ------ | ------ | ------- | -------- |  | ----- | ----- |  | - | ------ | ------ | 
|                                |       | 2005   |       |       | 2004     |   |        | 2003   | 
|                                |       |        |       |       |          |   |        |        | 
|                                |       | Shares |       |       | Proceeds |   |        | Shares |  |  | Proceeds |       |  | Shares |        |         | Proceeds | 
|                                |       |        |       |       |          |   |        |        |  |  |          |       |  |        |        |         |          | 
|1999 Dividend Reinvestment Plan |       |        | 412   |       |          | $ | 16,197 |        |  |  | 1,021    |       |  | $      | 35,410 |         |          |  | 991   |       |  | $ | 26,283 |       
|Continuous Equity Offering Plan |       |        | 225   |       |          |   | 8,267  |        |  |  | 1,430    |       |  |        | 53,321 |         |          |  |      |       |  |   |       |       
|Incentive Plan                  |       |        | 1,425 |       |          |   | 17,664 |        |  |  | 3,096    |       |  |        | 58,444 |         |          |  | 1,296 |       |  |   | 17,130 |       
|Employee Share Plan             |       |        | 30    |       |          |   | 1,019  |        |  |  | 43       |       |  |        | 1,129  |         |          |  | 34    |       |  |   | 726    |       
|                                |       |        |       |       |          |   |        |        |  |  |          |       |  |        |        |         |          | 
|                                | Total |        |       | 2,092 |          |   | $      | 43,147 |  |  |          | 5,590 |  |        | $      | 148,304 |          |  |       | 2,321 |  |   | $      | 44,139 | 
|                                |       |        |       |       |          |   |        |        |  |  |          |       |  |        |        |         |          | 







| |                 
| | ----------------
| | Preferred Shares





|                          |  |                  |           |             |  |          |       |                  |  |            |       |  |  |   |                |  |  |  |          | 
|------------------------- |  | ---------------- | --------- | ----------- |  | -------- | ----- | ---------------- |  | ---------- | ----- |  |  | - | -------------- |  |  |  | -------- | 
|                          |  |                  |           |             |  |          |       | Dividend         |  |           
|                          |  |                  |           | Stated      |  |          |       | Equivalent Based |  | Optional  
|                          |  | Number of Shares |           | Liquidation |  | Dividend |       | on Liquidation   |  | Redemption
|                          |  | Outstanding      |           | Preference  |  | Rate     |       | Preference       |  | Date      
|                          |  |                  |           |             |  |          |       |                  |  |           
|Series C Preferred Shares |  |                  | 2,000,000 |             |  | $        | 50.00 |                  |  |            | 8.54% |  |  | $ | 4.27 per share |  |  |  | 11/13/26 | 
|Series F Preferred Shares |  |                  | 5,000,000 |             |  | $        | 25.00 |                  |  |            | 6.75% |  |  | $ | 1.69 per share |  |  |  | 11/28/08 | 
|Series G Preferred Shares |  |                  | 5,000,000 |             |  | $        | 25.00 |                  |  |            | 6.75% |  |  | $ | 1.69 per share |  |  |  | 12/30/08 | 

99



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)









| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | All of the 10,000,000 Series D Preferred Shares were
    redeemed (5,000,000 on December 1, 2003 and 5,000,000 on
    January 12, 2004). The 2003 redemption was at the price of
    $25.00 per share, plus $0.3355 in accrued and unpaid
    dividends for a total redemption value (including accrued
    dividends) of $126.7 million. The 2004 redemption was at
    the price of $25.00 per share, plus $0.066 in accrued and
    unpaid dividends for a total redemption value (including accrued
    dividends) of $125.3 million. We recognized a charge of
    $4.2 million in both 2004 and 2003 representing the excess
    of the redemption values over the carrying values of the
    Series D Preferred Shares redeemed in each period.
|
| |  | All of the 2,000,000 outstanding Series E Preferred Shares
    were redeemed on July 1, 2003 at the price of
    $25.00 per share, plus $0.3685 in accrued and unpaid
    dividends. The total redemption value (including accrued
    dividends) was $50.7 million. We recognized a charge of
    $3.6 million in 2003 representing the excess of the
    redemption value over the carrying value of the Series E
    Preferred Shares redeemed.                                                                                                                                                                                                                                                                                                    



| |                       
| | ----------------------
| | Ownership Restrictions







|    |                             
|--- | ----------------------------
|11. | Distributions and Dividends:



| |                           
| | --------------------------
| | Common Share Distributions





100



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







|                  |                    |                          |   |      |      |  |   |      |      |  |   |      |      | 
|----------------- | ------------------ | ------------------------ | - | ---- | ---- |  | - | ---- | ---- |  | - | ---- | ---- | 
|                  |                    | Years Ended December 31, |  
|                  |                    |                          |  
|                  |                    | 2005                     |   |      | 2004 |  |   | 2003 |     
|                  |                    |                          |   |      |      |  |   |      |     
|Per common share: |                    |                          |   |      |      |  |   |      |      |  |   |     
|                  | Ordinary income    |                          | $ | 0.99 |      |  | $ | 0.94 |      |  | $ | 1.09 |     
|                  | Qualified dividend |                          |   | 0.07 |      |  |   |     |      |  |   | 0.14 |     
|                  | Capital gains      |                          |   | 0.15 |      |  |   | 0.17 |      |  |   | 0.05 |     
|                  | Return of capital  |                          |   | 0.27 |      |  |   | 0.35 |      |  |   | 0.16 |     
|                  |                    |                          |   |      |      |  |   |      |     
|                  |                    | Total                    |   | $    | 1.48 |  |   | $    | 1.46 |  |   | $    | 1.44 | 
|                  |                    |                          |   |      |      |  |   |      |     



| |                          
| | -------------------------
| | Preferred Share Dividends



|               |  |                          |      |  |      |   |      |      |  |   |      | 
|-------------- |  | ------------------------ | ---- |  | ---- | - | ---- | ---- |  | - | ---- | 
|               |  | Years Ended December 31, |     
|               |  |                          |     
|               |  | 2005                     |      |  | 2004 |   |      | 2003 | 
|               |  |                          |      |  |      |   |      |      | 
|Series C(1)    |  | $                        | 4.27 |  |      | $ | 4.27 |      |  | $ | 4.27 | 
|Series D(2)(3) |  | $                        |     |  |      | $ |     |      |  | $ | 1.98 | 
|Series E(4)    |  | $                        |     |  |      | $ |     |      |  | $ | 1.09 | 
|Series F(5)    |  | $                        | 1.69 |  |      | $ | 1.69 |      |  | $ | 0.15 | 
|Series G(6)    |  | $                        | 1.69 |  |      | $ | 1.69 |      |  | $ |     | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | For federal income tax purposes, $3.49 of the 2005 dividend,
    $3.62 of the 2004 dividend and $3.65 of the 2003 dividend are
    estimated to represent ordinary income to the holders, $0.24 of
    the 2005 dividend and $0.45 of the 2003 dividend are estimated
    to represent qualified dividends, with the remaining portions of
    each dividend estimated to represent capital gains.                                                                                                                                                                                                                                                                                                                                         
|   
|(2) | For federal income tax purposes, of the $1.98 per share
    dividend paid in 2003, $1.69 is estimated to represent ordinary
    income to the holders, $0.21 is estimated to represent qualified
    dividends, with the remaining portion estimated to represent
    capital gains.                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(3) | As discussed earlier, we redeemed all of our 10,000,000
    outstanding Series D Preferred Shares in 2003 and 2004. The
    total redemption value included accrued and unpaid dividends of
    $0.066 per share. For 2003, the total dividends paid on the
    5,000,000 shares redeemed in that year were $1.82 per
    share, of which $1.48 was declared and paid prior to the
    redemption and $0.34 represented accrued and unpaid dividends
    that were included in the redemption value. Of the dividend
    declared and paid in 2003 of $1.48 per share, $1.26 is
    estimated to be ordinary income to the holders, $0.16 is
    estimated to be qualified dividends and $0.06 is estimated to
    represent capital gains.

101



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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | As discussed earlier, we redeemed all of our 2,000,000
    outstanding Series E Preferred Shares in 2003. The total
    dividends paid on the redeemed shares in 2003 were
    $1.46 per share, of which $1.09 was declared and paid prior
    to the redemption and $0.37 represented accrued and unpaid
    dividends that were included in the redemption value. Of the
    dividend declared and paid in 2003 of $1.09 per share,
    $0.93 is estimated to represent ordinary income to the holders,
    $0.12 is estimated to be qualified dividends and $0.04 is
    estimated to represent capital gains.
|   
|(5) | The Series F Preferred Shares were issued on
    November 28, 2003. We estimate $1.38 of the 2005 dividend,
    $1.43 of the 2004 dividend and $0.13 of the 2003 dividend are
    estimated to represent ordinary income to the holders, $0.09 of
    the 2005 dividend and $0.02 of the 2003 dividend are estimated
    to represent qualified dividends with the remainder estimated to
    represent capital gains.                                                                                                                                                                                           
|   
|(6) | The Series G Preferred Shares were issued on
    December 30, 2003. We estimate $1.38 of the 2005 dividend
    and $1.43 of the 2004 dividend are estimated to represent
    ordinary income to the holders, $0.09 of the 2005 dividend is
    estimated to represent qualified dividends, with the remainder
    estimated to represent capital gains.                                                                                                                                                                                                                                                          







|    |                           
|--- | --------------------------
|12. | Earnings Per Common Share:



102



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







|                                                                   |                                                                                    |                          |         |       |      |   |         |       |  |   |         |       | 
|------------------------------------------------------------------ | ---------------------------------------------------------------------------------- | ------------------------ | ------- | ----- | ---- | - | ------- | ----- |  | - | ------- | ----- | 
|                                                                   |                                                                                    | Years Ended December 31, |        
|                                                                   |                                                                                    |                          |        
|                                                                   |                                                                                    | 2005                     |         |       | 2004 |   |         | 2003  | 
|                                                                   |                                                                                    |                          |         |       |      |   |         |       | 
|Net earnings attributable to common shares                         |                                                                                    | $                        | 370,747 |       |      | $ | 202,813 |       |  | $ | 212,367 |      
|                                                                   | Minority interest share in earnings                                                |                          |         | 5,243 |      |   |         | 4,875 |  |   |         | 4,959 | 
|                                                                   |                                                                                    |                          |         |       |      |   |         |       | 
|Adjusted net earnings attributable to common shares                |                                                                                    | $                        | 375,990 |       |      | $ | 207,688 |       |  | $ | 217,326 |      
|                                                                   |                                                                                    |                          |         |       |      |   |         |       | 
|Weighted average common shares outstanding  Basic                 |                                                                                    |                          | 203,337 |       |      |   | 182,226 |       |  |   | 179,245 |      
|                                                                   | Incremental weighted average effect of conversion of limited
    partnership units |                          |         | 5,540 |      |   |         | 5,035 |  |   |         | 4,773 | 
|                                                                   | Incremental weighted average effect of potentially dilutive
    instruments(1)     |                          |         | 4,836 |      |   |         | 4,540 |  |   |         | 3,204 | 
|                                                                   |                                                                                    |                          |         |       |      |   |         |       | 
|Weighted average common shares outstanding  Diluted               |                                                                                    |                          | 213,713 |       |      |   | 191,801 |       |  |   | 187,222 |      
|                                                                   |                                                                                    |                          |         |       |      |   |         |       | 
|Net earnings per share attributable to common shares 
    Basic   |                                                                                    | $                        | 1.82    |       |      | $ | 1.11    |       |  | $ | 1.18    |      
|                                                                   |                                                                                    |                          |         |       |      |   |         |       | 
|Net earnings per share attributable to common shares 
    Diluted |                                                                                    | $                        | 1.76    |       |      | $ | 1.08    |       |  | $ | 1.16    |      
|                                                                   |                                                                                    |                          |         |       |      |   |         |       | 






|    |                                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Total weighted average potentially dilutive instruments
    outstanding were 10,783,000, 11,356,000 and 10,937,000 for 2005,
    2004 and 2003, respectively. Of the total potentially dilutive
    instruments, 103,000, 553,000 and 503,000 were antidilutive for
    2005, 2004 and 2003, respectively.



|    |                        
|--- | -----------------------
|13. | Long-Term Compensation:



| |                                         
| | ----------------------------------------
| | Incentive Plan and Outside Trustees Plan





| |              
| | -------------
| | Share Options



103



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)









|                      |             |           |         |                   |           |                 |                 |           |            |  |     |     |  | 
|--------------------- | ----------- | --------- | ------- | ----------------- | --------- | --------------- | --------------- | --------- | ---------- |  | --- | --- |  | 
|                      |             |           |         |                   |           |                 |                 | Weighted 
|                      |             |           |         |                   |           |                 |                 | Average  
|                      |             |           |         |                   |           |                 |                 | Remaining
|                      |             | Number of |         |                   |           | Expiration      |                 | Life (in 
|                      |             | Options   |         | Exercise Price(1) |           | Date            |                 | Years)   
|                      |             |           |         |                   |           |                 |                 |          
|Outside Trustees Plan |             |           | 145,000 |                   |           | $19.75 - $43.80 |                 | 2009-2015 |            |  | 6.4 |    
|Share options:        |             |           |         |                   |           |                 |                 |           |            |  |     |    
|                      | 1997 grants |           |         | 157,464           |           |                 | $21.22          |           | 2007       |  |     | 1.7 | 
|                      | 1998 grants |           |         | 693,017           |           |                 | $20.94 - $21.09 |           | 2008       |  |     | 2.8 | 
|                      | 1999 grants |           |         | 675,333           |           |                 | $17.19 - $18.62 |           | 2009       |  |     | 3.7 | 
|                      | 2000 grants |           |         | 665,663           |           |                 | $21.75 - $24.25 |           | 2010       |  |     | 4.7 | 
|                      | 2001 grants |           |         | 796,794           |           |                 | $20.67 - $22.02 |           | 2011       |  |     | 5.7 | 
|                      | 2002 grants |           |         | 1,224,636         |           |                 | $21.89 - $24.75 |           | 2007, 2012 |  |     | 6.4 | 
|                      | 2003 grants |           |         | 1,504,470         |           |                 | $24.90 - $31.26 |           | 2013       |  |     | 7.7 | 
|                      | 2004 grants |           |         | 1,884,500         |           |                 | $29.41 - $41.50 |           | 2014       |  |     | 8.7 | 
|                      | 2005 grants |           |         | 1,126,943         |           |                 | $40.86 - $45.46 |           | 2015       |  |     | 9.9 | 
|                      |             |           |         |                   |           |                 |                 |           |            |  |     |    
|                      |             | Total     |         |                   | 8,873,820 |                 |                 |           |            |  |     |     |  | 
|                      |             |           |         |                   |           |                 |                 |           |            |  |     |    






|    |                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------
|(1) | The exercise price is equal to the average of the high and low
    market prices on the date of grant for each issuance.

104



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







|                             |           |           |           |            |          |   |           |             |          |         |           |  |  |   |       |  | 
|---------------------------- | --------- | --------- | --------- | ---------- | -------- | - | --------- | ----------- | -------- | ------- | --------- |  |  | - | ----- |  | 
|                             |           |           |           | Weighted   |          |   |           |             | Weighted |        
|                             |           |           |           | Average    |          |   | Number of |             |          | Average |          
|                             |           | Number of |           |            | Exercise |   |           | Options     |          |         | Exercise  | 
|                             |           | Options   |           |            | Price    |   |           | Exercisable |          |         | Price     | 
|                             |           |           |           |            |          |   |           |             |          |         |           | 
|Balance at December 31, 2002 |           |           | 9,317,330 |            |          | $ | 22.08     |             |          |         | 5,098,573 |  |  | $ | 21.39 | 
|                             |           |           |           |            |          |   |           |             |          |         |           | 
|                             | Granted   |           |           | 1,991,055  |          |   | $         | 29.95       |          |         |           |  |  |   |       |  | 
|                             | Exercised |           |           | (989,730   | )        |   | $         | 21.83       |          |         |           |  |  |   |       |  | 
|                             | Forfeited |           |           | (442,117   | )        |   | $         | 22.74       |          |         |           |  |  |   |       |  | 
|                             |           |           |           |            |          |   |           |             |          |         |           | 
|Balance at December 31, 2003 |           |           | 9,876,538 |            |          | $ | 23.72     |             |          |         | 5,489,352 |  |  | $ | 21.63 | 
|                             |           |           |           |            |          |   |           |             |          |         |           | 
|                             | Granted   |           |           | 2,107,771  |          |   | $         | 34.98       |          |         |           |  |  |   |       |  | 
|                             | Exercised |           |           | (2,751,569 | )        |   | $         | 22.30       |          |         |           |  |  |   |       |  | 
|                             | Forfeited |           |           | (329,822   | )        |   | $         | 26.16       |          |         |           |  |  |   |       |  | 
|                             |           |           |           |            |          |   |           |             |          |         |           | 
|Balance at December 31, 2004 |           |           | 8,902,918 |            |          | $ | 26.73     |             |          |         | 4,147,949 |  |  | $ | 22.47 | 
|                             |           |           |           |            |          |   |           |             |          |         |           | 
|                             | Granted   |           |           | 1,157,315  |          |   | $         | 44.96       |          |         |           |  |  |   |       |  | 
|                             | Exercised |           |           | (1,007,766 | )        |   | $         | 25.33       |          |         |           |  |  |   |       |  | 
|                             | Forfeited |           |           | (178,647   | )        |   | $         | 30.73       |          |         |           |  |  |   |       |  | 
|                             |           |           |           |            |          |   |           |             |          |         |           | 
|Balance at December 31, 2005 |           |           | 8,873,820 |            |          | $ | 29.19     |             |          |         | 4,975,866 |  |  | $ | 24.23 | 
|                             |           |           |           |            |          |   |           |             |          |         |           | 



| |                       
| | ----------------------
| | Restricted Share Units





| |                   
| | ------------------
| | Performance Shares





105



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)









| |                          
| | -------------------------
| | Dividend Equivalent Units





| |                                           
| | ------------------------------------------
| | Summary of Activity of RSUs, PSAs and DEUs



|                             |           |           |           |                  |   |           |       |  |  |  |           |  | 
|---------------------------- | --------- | --------- | --------- | ---------------- | - | --------- | ----- |  |  |  | --------- |  | 
|                             |           |           |           |                  |   | Number of
|                             |           | Number of |           | Weighted Average |   | Shares   
|                             |           | Shares    |           | Original Value   |   | Vested   
|                             |           |           |           |                  |   |          
|Balance at December 31, 2002 |           |           | 2,236,977 |                  |   | $         | 22.58 |  |  |  | 1,330,148 | 
|                             |           |           |           |                  |   |           |       |  |  |  |           | 
|                             | Granted   |           |           | 823,489          |   |           |       |  |  |  |           |  | 
|                             | Exercised |           |           | (449,481         | ) |           |       |  |  |  |           |  | 
|                             | Forfeited |           |           | (34,879          | ) |           |       |  |  |  |           |  | 
|                             |           |           |           |                  |   |           |       |  |  |  |           | 
|Balance at December 31, 2003 |           |           | 2,576,106 |                  |   | $         | 25.67 |  |  |  | 1,513,218 | 
|                             |           |           |           |                  |   |           |       |  |  |  |           | 
|                             | Granted   |           |           | 547,470          |   |           |       |  |  |  |           |  | 
|                             | Exercised |           |           | (439,115         | ) |           |       |  |  |  |           |  | 
|                             | Forfeited |           |           | (39,298          | ) |           |       |  |  |  |           |  | 
|                             |           |           |           |                  |   |           |       |  |  |  |           | 
|Balance at December 31, 2004 |           |           | 2,645,163 |                  |   | $         | 29.51 |  |  |  | 1,683,925 | 
|                             |           |           |           |                  |   |           |       |  |  |  |           | 
|                             | Granted   |           |           | 828,398          |   |           |       |  |  |  |           |  | 
|                             | Exercised |           |           | (579,917         | ) |           |       |  |  |  |           |  | 
|                             | Forfeited |           |           | (14,818          | ) |           |       |  |  |  |           |  | 
|                             |           |           |           |                  |   |           |       |  |  |  |           | 
|Balance at December 31, 2005 |           |           | 2,878,826 |                  |   | $         | 34.43 |  |  |  | 1,713,104 | 
|                             |           |           |           |                  |   |           |       |  |  |  |           | 



|             |  |  |           | 
|------------ |  |  | --------- | 
|2006         |  |  | 430,035   | 
|2007         |  |  | 326,857   | 
|2008         |  |  | 209,884   | 
|2009         |  |  | 61,446    | 
|2010         |  |  | 137,500   | 
|             |  |  |           | 
|Total shares |  |  | 1,165,722 | 
|             |  |  |           | 



106



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







|                           |  |   |        | 
|-------------------------- |  | - | ------ | 
|2006                       |  | $ | 18,457 | 
|2007                       |  |   | 12,280 | 
|2008                       |  |   | 6,209  | 
|2009                       |  |   | 3,174  | 
|2010                       |  |   | 1,250  | 
|                           |  |   |       
|Total compensation expense |  | $ | 41,370 | 
|                           |  |   |       



| |            
| | -----------
| | Other Plans







|    |            
|--- | -----------
|14. | Relocation:





107



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







|    |              
|--- | -------------
|15. | Income Taxes:



| |              
| | -------------
| | Current Taxes







| |               
| | --------------
| | Deferred Taxes





| |   |                                                                                                                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | temporary differences between our financial reporting basis and
    the tax basis of our assets and liabilities relating to our TRSs,                                                                                                                                                           
|
| |  | estimated fair values in excess of the tax basis on certain
    properties
    (built-in-gain)
    resulting from the conversion of former TRSs to a qualified REIT
    subsidiary (QRS) (see below) and certain assets
    acquired in connection with the Catellus Merger (see below), and
|
| |  | net operating loss carryforwards for Federal income tax
    purposes, which expire in 2019 through 2024.                                                                                                                                                                                        

built-in built-in built-in built-in built-in




| |                           
| | --------------------------
| | Indemnification Agreements



108



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)









|    |                            
|--- | ---------------------------
|16. | Related Party Transactions:



| |                                            
| | -------------------------------------------
| | Transactions with the Chairman of the Board







| |                                                    
| | ---------------------------------------------------
| | Transactions with Other Trustee and Senior Officers

Partnership-I.


Partnership-III Partnership-IV Partnership-IIIs Partnership-IVs


109



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







|    |                       
|--- | ----------------------
|17. | Financial Instruments:



| |                                 
| | --------------------------------
| | Derivative Financial Instruments









|                                      |                   |                  |      |        |                  |   |      |               |   |   |      |        |  
|------------------------------------- | ----------------- | ---------------- | ---- | ------ | ---------------- | - | ---- | ------------- | - | - | ---- | ------ | -
|                                      |                   | Foreign Currency |      |        | Foreign Currency |   |      | Interest Rate |  
|                                      |                   | Put Options(1)   |      |        | Forwards(2)      |   |      | Swaps(3)      |  
|                                      |                   |                  |      |        |                  |   |      |               |  
|Notional amounts at December 31, 2002 |                   | $                | 56.1 |        |                  | $ |     |               |   | $ |     |       
|                                      | New contracts     |                  |      | 110.9  |                  |   |      | 47.4          |   |   |      | 94.7   |  
|                                      | Settled contracts |                  |      | (109.1 | )                |   |      |              |   |   |      |       |  
|                                      |                   |                  |      |        |                  |   |      |               |  
|Notional amounts at December 31, 2003 |                   |                  | 57.9 |        |                  |   | 47.4 |               |   |   | 94.7 |       
|                                      | New contracts     |                  |      | 19.6   |                  |   |      | 71.8          |   |   |      | 190.9  |  
|                                      | Settled contracts |                  |      | (77.5  | )                |   |      | (119.2        | ) |   |      | (235.6 | )
|                                      |                   |                  |      |        |                  |   |      |               |  
|Notional amounts at December 31, 2004 |                   |                  |     |        |                  |   |     |               |   |   | 50.0 |       
|                                      | New contracts     |                  |      | 98.0   |                  |   |      | 669.5         |   |   |      | 650.0  |  
|                                      | Settled contracts |                  |      | (98.0  | )                |   |      | (669.5        | ) |   |      | (700.0 | )
|                                      |                   |                  |      |        |                  |   |      |               |  
|Notional amounts at December 31, 2005 |                   | $                |     |        |                  | $ |     |               |   | $ |     |       
|                                      |                   |                  |      |        |                  |   |      |               |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The foreign currency put option contracts are paid in full at
    execution and are related to our operations in Europe and Japan.
    The put option contracts provide us with the option to exchange
    euro, pound sterling and yen for U.S. dollars at a fixed
    exchange rate such that, if the euro, pound sterling or yen were
    to depreciate against the U.S. dollar to predetermined
    levels as set by the contracts, we could exercise our options
    and mitigate our foreign currency exchange losses. The notional
    amounts of the put option contracts represent the
    U.S. dollar equivalent of put option contracts with
    notional amounts of
    28.4 million,
    £7.7 million and ¥874.4 million at
    December 31, 2003.



| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | These contracts generally do not qualify for hedge accounting
    treatment and are
    marked-to-market
    through results of operations at the end of each period. Upon
    expiration of the contract, the
    mark-to-market
    adjustment is reversed, the total cost of the contract is
    expensed and any proceeds are recognized as a gain. We
    recognized net gains of $3.6 million in 2005 and net
    expense of $0.6 million

110



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







| |  |                                                                                                                                                                                                                                                               
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | and $2.7 million in 2004 and 2003, respectively, on various
    put option contracts. The amounts recognized include no
    mark-to-market gains in
    2005 and $1.5 million and $0.2 million of
    mark-to-market gains in
    2004 and 2003, respectively.



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The 2003 and 2004 foreign currency forward contracts were
    designated as a net investment hedge of certain of our
    investments in Europe and allowed us to sell euro at a fixed
    exchange rate to the U.S. dollar. These contracts qualified
    for hedge accounting treatment and we recognized the total
    increase in value of the contracts of $1.7 million in other
    comprehensive income in shareholders equity in 2004 upon
    settlement of the contracts. The value of these contracts will
    remain in other comprehensive income until the investment is
    substantially sold.



| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | During 2005, we entered into and settled several foreign
    currency forward contracts that allowed us to sell pound
    sterling at a fixed exchange rate to the U.S. dollar. These
    contracts were designed to manage the foreign currency
    fluctuations of an intercompany loan denominated in pound
    sterling. These contracts were not designated as hedges, were
    marked-to-market
    through the results of operations and were primarily offset by
    the remeasurement losses recognized on the intercompany loan. We
    recognized a net gain of $6.1 million during 2005 from the
    settlement of these contracts.



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | In 2003 and 2004, we entered into forward-starting interest rate
    swap contracts with an aggregate notional amount of
    $185.6 million related to the anticipated issuance of debt.
    The contracts, designated as cash flow hedges, allowed us to fix
    a portion of the interest rate associated with the seven-year
    Euro Notes that were issued in April 2004 (see Note 8).
    These contracts qualified for hedge accounting treatment. We
    recognized a total decrease in value of $5.6 million in
    other comprehensive income in shareholders equity upon
    settlement of the contracts that is being reclassified to
    interest expense as interest payments are made on the Euro Notes.



| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In July 2004, we entered into two forward-starting interest rate
    swap contracts, each with a notional amount of
    $50.0 million, related to the anticipated issuance of debt.
    One contract was terminated in August 2004 and we recognized
    $0.3 million of expense upon termination. As of
    December 31, 2004, the anticipated transaction had not been
    completed. We recognized a
    mark-to-market
    adjustment of $1.1 million in other comprehensive income in
    shareholders equity at December 31, 2004 representing
    the decrease in value of the outstanding contract. During 2005,
    we entered into several contracts with a notional amount of
    $650.0 million associated with the same anticipated debt
    issuance. All of these contracts were designated as cash flow
    hedges and qualified for hedge accounting treatment, which
    allowed us to fix a portion of the interest rate associated with
    the $500.0 million five-year and $400.0 million
    ten-year senior notes issued in November 2005 (see Note 8).
    All of the contracts were settled during 2005 and we recognized
    the net increase in value of $20.7 million associated with
    these contracts in other comprehensive income as of
    December 31, 2005. The amount in other comprehensive income
    related to these contracts is being reclassified to interest
    expense as interest payments are made on the senior notes.
|
| |  | We reclassified a net amount of $0.3 million, related to
    the above forward-starting interest rate swap contracts, from
    other comprehensive income as an increase to interest expense
    during 2005 and we will reclassify a total of $1.6 million
    as a decrease to interest expense during 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             



| |                                    
| | -----------------------------------
| | Fair Value of Financial Instruments



111



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)











|                                   |                             |                                         |           |           |            |   |           |           |           |   |            |         |         |   |           |         |         | 
|---------------------------------- | --------------------------- | --------------------------------------- | --------- | --------- | ---------- | - | --------- | --------- | --------- | - | ---------- | ------- | ------- | - | --------- | ------- | ------- | 
|                                   |                             | December 31,                            |          
|                                   |                             |                                         |          
|                                   |                             | 2005                                    |           |           | 2004       |  
|                                   |                             |                                         |           |           |            |  
|                                   |                             | Carrying                                |           |           |            |   | Carrying  |           |           |  
|                                   |                             | Value                                   |           |           | Fair Value |   |           | Value     |           |   | Fair Value |        
|                                   |                             |                                         |           |           |            |   |           |           |           |   |            |        
|Senior Notes                       |                             | $                                       | 2,759,675 |           |            | $ | 2,866,796 |           |           | $ | 1,962,316  |         |         | $ | 2,140,647 |        
|Secured debt and assessment bonds: |                             |                                         |           |           |            |   |           |           |           |   |            |         |         |   |           |        
|                                   | Secured debt                |                                         | $         | 1,643,586 |            |   | $         | 1,686,157 |           |   | $          | 484,892 |         |   | $         | 534,560 |        
|                                   | Assessment bonds            |                                         |           | 34,565    |            |   |           | 36,513    |           |   |            | 6,751   |         |   |           | 7,318   |        
|                                   |                             |                                         |           |           |            |   |           |           |           |   |            |        
|                                   |                             | Total secured debt and assessment bonds |           | $         | 1,678,151  |   |           | $         | 1,722,670 |   |            | $       | 491,643 |   |           | $       | 541,878 | 
|                                   |                             |                                         |           |           |            |   |           |           |           |   |            |        
|Derivative financial instruments:  |                             |                                         |           |           |            |   |           |           |           |   |            |         |         |   |           |        
|                                   | Interest rate swap contract |                                         | $         |          |            |   | $         |          |           |   | $          | (1,101  | )       |   | $         | (1,101  | )      



|    |                               
|--- | ------------------------------
|18. | Commitments and Contingencies:



| |                      
| | ---------------------
| | Environmental Matters





112



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)









| |                              
| | -----------------------------
| | Off-Balance Sheet Liabilities











113



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







|    |                   
|--- | ------------------
|19. | Business Segments:





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Property operations  representing the direct
    long-term ownership, management and leasing of industrial
    distribution and retail properties. Each operating property is
    considered to be an individual operating segment having similar
    economic characteristics that are combined within the reportable
    segment based upon geographic location. Our operations in the
    property operations business segment are in North America (the
    United States and Mexico), Europe (properties are located in
    eight countries and were primarily developed or acquired in the
    CDFS business segment and are generally pending contribution to
    a property fund) and Asia (properties are located in China,
    Japan and Singapore and were primarily developed or acquired in
    the CDFS business segment and are pending contribution to a
    property fund).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | Fund management  representing the long-term
    investment management of unconsolidated property funds and the
    properties they own, to maximize returns to us and our fund
    partners. Along with the income recognized under the equity
    method from our investments in the property funds, we include
    fees and incentives earned for services performed on behalf of
    the property funds (primarily property management and asset
    management services) and interest earned on advances to the
    property funds, if any. We utilize our leasing and property
    management expertise in our property operations segment for
    managing the properties owned by property funds in this segment,
    and we report the costs as part of rental expenses in the
    property operations segment. Each investment in a property fund
    is considered to be an individual operating segment having
    similar economic characteristics that are combined within the
    reportable segment based upon geographic location. Our
    operations in the fund managment segment are in North America
    (the United States and Mexico), Europe (in 11 countries-Belgium,
    the Czech Republic, France, Germany, Hungary, Italy, the
    Netherlands, Poland, Spain, Sweden, and the United Kingdom), and
    Asia (Japan).                                                                                                                                                                                                                                                                                                       
|
| |  | CDFS business  primarily encompasses our development
    of properties that generally are either contributed to an
    unconsolidated property fund, in which we have an ownership
    interest and act as manager, or sold to third parties.
    Additionally, we acquire properties with the intent to
    rehabilitate and/or reposition the property in the CDFS business
    segment prior to being contributed to a property fund. We engage
    in commercial mixed-use development activities generally with
    the intention of selling the land or completed projects to third
    parties. We also have investments in several unconsolidated
    entities that perform development activities and we include our
    proportionate share of their earnings or losses in this segment.
    Additionally, we include fees earned for development activities
    on behalf of customers or third parties, interest income earned
    on notes receivable related to asset sales and gains or losses
    on the disposition of land parcels when our development plans no
    longer include the parcels. The separate activities in this
    segment are considered to be individual operating segments
    having similar economic characteristics that are combined within
    the reportable segment based upon geographic location. Our CDFS
    business segment operations are in North America (the United
    States, Canada and Mexico), in ten countries in Europe (Belgium,
    the Czech Republic, France, Germany, Hungary, Italy, the
    Netherlands, Poland, Spain, and the United Kingdom) and in Asia
    (China and Japan).

114



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)













|             |                         |                          |                                   |   |         |         |  |      |         |         |  |   |         |         | 
|------------ | ----------------------- | ------------------------ | --------------------------------- | - | ------- | ------- |  | ---- | ------- | ------- |  | - | ------- | ------- | 
|             |                         | Years Ended December 31, |                                  
|             |                         |                          |                                  
|             |                         | 2005                     |                                   |   | 2004    |         |  | 2003 |        
|             |                         |                          |                                   |   |         |         |  |      |        
|Revenues(1): |                         |                          |                                   |   |         |         |  |      |         |         |  |  
|             | Property operations(2): |                          |                                   |   |         |         |  |      |         |         |  |   |        
|             |                         | North America            |                                   | $ | 584,621 |         |  | $    | 512,527 |         |  | $ | 520,901 |        
|             |                         | Europe                   |                                   |   | 10,643  |         |  |      | 9,068   |         |  |   | 3,375   |        
|             |                         | Asia                     |                                   |   | 12,904  |         |  |      | 5,469   |         |  |   | 1,502   |        
|             |                         |                          |                                   |   |         |         |  |      |        
|             |                         |                          | Total property operations segment |   |         | 608,168 |  |      |         | 527,064 |  |   |         | 525,778 | 
|             |                         |                          |                                   |   |         |         |  |      |        
|             | Fund management(3):     |                          |                                   |   |         |         |  |      |         |         |  |   |        
|             |                         | North America            |                                   |   | 56,348  |         |  |      | 48,037  |         |  |   | 39,038  |        
|             |                         | Europe                   |                                   |   | 44,002  |         |  |      | 37,886  |         |  |   | 30,190  |        
|             |                         | Asia                     |                                   |   | 12,662  |         |  |      | 7,754   |         |  |   | 2,221   |        
|             |                         |                          |                                   |   |         |         |  |      |        
|             |                         |                          | Total fund management segment     |   |         | 113,012 |  |      |         | 93,677  |  |   |         | 71,449  | 
|             |                         |                          |                                   |   |         |         |  |      |        

115



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##### Table of Contents



PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)





|                      |                         |                          |                                   |                                    |         |           |           |         |         |           |           |         |         |         |           | 
|--------------------- | ----------------------- | ------------------------ | --------------------------------- | ---------------------------------- | ------- | --------- | --------- | ------- | ------- | --------- | --------- | ------- | ------- | ------- | --------- | 
|                      |                         | Years Ended December 31, |                                  
|                      |                         |                          |                                  
|                      |                         | 2005                     |                                   |                                    | 2004    |           |           | 2003    |        
|                      |                         |                          |                                   |                                    |         |           |           |         |        
|                      | CDFS business(4):       |                          |                                   |                                    |         |           |           |         |         |           |           |         |        
|                      |                         | North America            |                                   |                                    | 287,064 |           |           |         | 398,056 |           |           |         | 382,400 |        
|                      |                         | Europe                   |                                   |                                    | 383,252 |           |           |         | 675,895 |           |           |         | 365,266 |        
|                      |                         | Asia                     |                                   |                                    | 502,386 |           |           |         | 217,413 |           |           |         | 155,661 |        
|                      |                         |                          |                                   |                                    |         |           |           |         |        
|                      |                         |                          | Total CDFS business segment       |                                    |         | 1,172,702 |           |         |         | 1,291,364 |           |         |         | 903,327 |          
|                      |                         |                          |                                   |                                    |         |           |           |         |        
|                      |                         |                          |                                   | Total segment revenue              |         |           | 1,893,882 |         |         |           | 1,912,105 |         |         |         | 1,500,554 | 
|                      | Other  North America   |                          |                                   | 27,018                             |         |           |           |        |         |           |           |        |        
|                      | Reconciling item(5)     |                          |                                   | (52,859                            | )       |           |           | (42,899 | )       |           |           | (27,265 | )      
|                      |                         |                          |                                   |                                    |         |           |           |         |        
|                      |                         |                          |                                   | Total revenues                     |         | $         | 1,868,041 |         |         | $         | 1,869,206 |         |         | $       | 1,473,289 | 
|                      |                         |                          |                                   |                                    |         |           |           |         |        
|Net operating income: |                         |                          |                                   |                                    |         |           |           |         |         |           |           |        
|                      | Property operations(6): |                          |                                   |                                    |         |           |           |         |         |           |           |         |        
|                      |                         | North America            |                                   | $                                  | 423,116 |           |           | $       | 383,097 |           |           | $       | 391,621 |        
|                      |                         | Europe                   |                                   |                                    | 5,374   |           |           |         | 2,984   |           |           |         | 1,749   |        
|                      |                         | Asia                     |                                   |                                    | 10,696  |           |           |         | 4,342   |           |           |         | 1,497   |        
|                      |                         |                          |                                   |                                    |         |           |           |         |        
|                      |                         |                          | Total property operations segment |                                    |         | 439,186   |           |         |         | 390,423   |           |         |         | 394,867 |          
|                      |                         |                          |                                   |                                    |         |           |           |         |        
|                      | Fund management(7):     |                          |                                   |                                    |         |           |           |         |         |           |           |         |        
|                      |                         | North America            |                                   |                                    | 56,348  |           |           |         | 48,037  |           |           |         | 39,038  |        
|                      |                         | Europe                   |                                   |                                    | 44,002  |           |           |         | 37,886  |           |           |         | 30,190  |        
|                      |                         | Asia                     |                                   |                                    | 12,662  |           |           |         | 7,754   |           |           |         | 2,221   |        
|                      |                         |                          |                                   |                                    |         |           |           |         |        
|                      |                         |                          | Total fund management segment     |                                    |         | 113,012   |           |         |         | 93,677    |           |         |         | 71,449  |          
|                      |                         |                          |                                   |                                    |         |           |           |         |        
|                      | CDFS business(8)(9):    |                          |                                   |                                    |         |           |           |         |         |           |           |         |        
|                      |                         | North America            |                                   |                                    | 70,250  |           |           |         | 46,467  |           |           |         | 48,931  |        
|                      |                         | Europe                   |                                   |                                    | 71,329  |           |           |         | 93,032  |           |           |         | 47,946  |        
|                      |                         | Asia                     |                                   |                                    | 111,029 |           |           |         | 34,836  |           |           |         | 27,920  |        
|                      |                         |                          |                                   |                                    |         |           |           |         |        
|                      |                         |                          | Total CDFS business segment       |                                    |         | 252,608   |           |         |         | 174,335   |           |         |         | 124,797 |          
|                      |                         |                          |                                   |                                    |         |           |           |         |        
|                      |                         |                          |                                   | Total segment net operating income |         |           | 804,806   |         |         |           | 658,435   |         |         |         | 591,113   | 
|                      | Other  North America   |                          |                                   | 19,880                             |         |           |           |        |         |           |           |        |        

116



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)





|                   |                                                   |                          |                                         |          |          |         |  |          |          |         |  |          |          |         | 
|------------------ | ------------------------------------------------- | ------------------------ | --------------------------------------- | -------- | -------- | ------- |  | -------- | -------- | ------- |  | -------- | -------- | ------- | 
|                   |                                                   | Years Ended December 31, |                                        
|                   |                                                   |                          |                                        
|                   |                                                   | 2005                     |                                         |          | 2004     |         |  | 2003     |         
|                   |                                                   |                          |                                         |          |          |         |  |          |         
|Reconciling items: |                                                   |                          |                                         |          |          |         |  |          |          |         |  |         
|                   | Income (loss) from other unconsolidated investees |                          |                                         | 751      |          |         |  | (990     | )        |         |  | (12,961  | )       
|                   | General and administrative expenses               |                          |                                         | (107,164 | )        |         |  | (82,147  | )        |         |  | (65,907  | )       
|                   | Depreciation and amortization expense             |                          |                                         | (199,377 | )        |         |  | (166,409 | )        |         |  | (158,792 | )       
|                   | Relocation expenses                               |                          |                                         | (4,451   | )        |         |  | (6,794   | )        |         |  |         |         
|                   | Merger integration expenses                       |                          |                                         | (12,152  | )        |         |  |         |          |         |  |         |         
|                   | Other expenses                                    |                          |                                         | (650     | )        |         |  |         |          |         |  | (2,800   | )       
|                   | Interest expense                                  |                          |                                         | (178,369 | )        |         |  | (152,551 | )        |         |  | (154,427 | )       
|                   | Interest and other income                         |                          |                                         | 10,724   |          |         |  | 3,007    |          |         |  | 1,883    |         
|                   |                                                   |                          |                                         |          |          |         |  |          |         
|                   |                                                   | Total reconciling items  |                                         |          | (490,688 | )       |  |          | (405,884 | )       |  |          | (393,004 | )      
|                   |                                                   |                          |                                         |          |          |         |  |          |         
|                   |                                                   |                          | Total earnings before minority interest |          | $        | 333,998 |  |          | $        | 252,551 |  |          | $        | 198,109 | 
|                   |                                                   |                          |                                         |          |          |         |  |          |         

|                          |                       |                                   |                      |           |           |            |   |           |           |           | 
|------------------------- | --------------------- | --------------------------------- | -------------------- | --------- | --------- | ---------- | - | --------- | --------- | --------- | 
|                          |                       | December 31,                      |                     
|                          |                       |                                   |                     
|                          |                       | 2005                              |                      |           | 2004      |           
|                          |                       |                                   |                      |           |           |           
|Assets (10):              |                       |                                   |                      |           |           |            |   |          
|Property operations (11): |                       |                                   |                      |           |           |            |   |          
|                          | North America(12)     |                                   | $                    | 7,530,062 |           |            | $ | 3,652,547 |          
|                          | Europe                |                                   |                      | 673,342   |           |            |   | 380,273   |          
|                          | Asia                  |                                   |                      | 106,069   |           |            |   | 181,631   |          
|                          |                       |                                   |                      |           |           |           
|                          |                       | Total property operations segment |                      |           | 8,309,473 |            |   |           | 4,214,451 |          
|                          |                       |                                   |                      |           |           |           
|Fund management (13):     |                       |                                   |                      |           |           |            |   |          
|                          | North America         |                                   |                      | 368,206   |           |            |   | 443,143   |          
|                          | Europe                |                                   |                      | 283,435   |           |            |   | 321,548   |          
|                          | Asia                  |                                   |                      | 103,679   |           |            |   | 74,984    |          
|                          |                       |                                   |                      |           |           |           
|                          |                       | Total fund management segment     |                      |           | 755,320   |            |   |           | 839,675   |          
|                          |                       |                                   |                      |           |           |           
|CDFS business:            |                       |                                   |                      |           |           |            |   |          
|                          | North America         |                                   |                      | 1,142,319 |           |            |   | 408,000   |          
|                          | Europe(12)            |                                   |                      | 1,062,338 |           |            |   | 912,028   |          
|                          | Asia                  |                                   |                      | 535,190   |           |            |   | 253,304   |          
|                          |                       |                                   |                      |           |           |           
|                          |                       | Total CDFS business segment       |                      |           | 2,739,847 |            |   |           | 1,573,332 |          
|                          |                       |                                   |                      |           |           |           
|                          |                       |                                   | Total segment assets |           |           | 11,804,640 |   |           |           | 6,627,458 | 
|                          |                       |                                   |                      |           |           |           
|                          | Other  North America |                                   |                      | 901,281   |           |            |   |          |          

117



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)





|                   |                                                               |                         |              |         |         |            |  |         |         |           | 
|------------------ | ------------------------------------------------------------- | ----------------------- | ------------ | ------- | ------- | ---------- |  | ------- | ------- | --------- | 
|                   |                                                               | December 31,            |             
|                   |                                                               |                         |             
|                   |                                                               | 2005                    |              |         | 2004    |           
|                   |                                                               |                         |              |         |         |           
|Reconciling items: |                                                               |                         |              |         |         |            |  |        
|                   | Investments in and advances to other unconsolidated investees |                         |              | 27,281  |         |            |  | 28,351  |        
|                   | Cash and cash equivalents                                     |                         |              | 191,716 |         |            |  | 236,529 |        
|                   | Accounts and notes receivable                                 |                         |              | 38,864  |         |            |  | 455     |        
|                   | Other assets                                                  |                         |              | 150,314 |         |            |  | 90,338  |        
|                   | Discontinued operations  assets held for sale                |                         |              |        |         |            |  | 114,668 |        
|                   |                                                               |                         |              |         |         |           
|                   |                                                               | Total reconciling items |              |         | 408,175 |            |  |         | 470,341 |          
|                   |                                                               |                         |              |         |         |           
|                   |                                                               |                         | Total assets |         | $       | 13,114,096 |  |         | $       | 7,097,799 | 
|                   |                                                               |                         |              |         |         |           






| |     |                                                                                                                                                                                                                                                                                                                                                                                                              
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Includes revenues attributable to the United States for the
    years ended December 31, 2005, 2004 and 2003 of
    $875.4 million, $922.7 million and
    $900.0 million, respectively.                                                                                                                                                                                                                     
|
| | (2) | Includes industrial and retail property rental income.                                                                                                                                                                                                                                                                                                                                                       
|
| | (3) | Includes fund management revenues and our share of the income or
    loss recognized under the equity method from our investment in
    the property funds along with interest earned on advances to the
    property funds, if any.                                                                                                                                                                         
|
| | (4) | Includes proceeds received on CDFS property dispositions, fees
    earned from customers and third parties for development
    activities plus interest income on notes receivable related to
    asset dispositions.                                                                                                                                                                                        
|
| | (5) | Amount represents income from unconsolidated property funds and
    interest income from notes receivable.                                                                                                                                                                                                                                                                                                   
|
| | (6) | Includes rental income less rental expenses of our industrial
    and retail properties. Included in rental expenses are the costs
    of managing the properties owned by the property funds.                                                                                                                                                                                                               
|
| | (7) | Includes fund management revenues and our share of the income or
    loss recognized under the equity method from our investment in
    the property funds along with interest earned on advances to the
    property funds, if any.                                                                                                                                                                         
|
| | (8) | Includes net gains or losses associated with CDFS property
    dispositions, fees earned from customers and third parties for
    development activities plus interest income on notes receivable
    related to asset dispositions.                                                                                                                                                                         
|
| | (9) | Excludes proceeds of $260.5 million and $241.0 million
    for the years ended December 31, 2005 and 2004,
    respectively and a net gain of $10.6 million and
    $32.7 million for the years ended December 31, 2005
    and 2004, respectively, associated with properties sold to third
    parties and presented as discontinued operations in our
    consolidated statements of earnings. See Note 7.



|     |                                                                                                                                                                                                                                                                  
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Includes long-lived assets attributable to the United States as
    of December 31, 2005 and 2004 of $8.8 billion and
    $4.3 billion, respectively.                                                                                                            
|    
|(11) | Includes properties that were developed or acquired in the CDFS
    business segment that have not yet been contributed or sold of
    $1.4 billion and $0.9 billion for the years ended
    December 31, 2005 and 2004, respectively.                           
|    
|(12) | Goodwill of $173.2 million and $21.8 million as of
    December 31, 2005 and 2004, respectively was attributable
    to the property operations segment and $56.2 million as of
    December 31, 2005 and 2004 was attributable to the CDFS
    business segment.
|    
|(13) | Represents our investment in and advances to the property funds.                                                                                                                                                                                                 

118



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)







|    |                                    
|--- | -----------------------------------
|20. | Supplemental Cash Flow Information:





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | We received $74.5 million, $115.5 million and
    $55.8 million of equity interests in property funds from
    the contribution of properties to these property funds during
    2005, 2004 and 2003, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | Limited partnership units aggregating $0.1 million,
    $0.9 million and $0.4 million were converted into
    common shares in 2005, 2004 and 2003, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| |  | During 2005, 2004, and 2003, we capitalized portions of the
    total cost of our share-based compensation awards of
    $3.1 million, $4.7 million and $5.0 million,
    respectively, to the investment basis of our real estate assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | As partial consideration for certain property contributions, we
    received: (i) $32.6 million, $23.4 million and
    $24.9 million in the form of notes receivable from ProLogis
    North American Properties Fund V in 2005, 2004 and 2003,
    respectively, (all of which has been paid); (ii) a
    $21.4 million note receivable from ProLogis Japan
    Properties Fund I in December 2003, which was repaid in
    January 2004; (iii) a $50.9 million note from a third
    party (all of which was outstanding at December 31, 2004
    and was repaid during 2005); and (iv) the assumption of an
    outstanding mortgage note in the amount of $14.5 million
    from ProLogis North American Properties Fund VII.
|
| |  | During 2005, we assumed $35.0 million of secured debt in
    connection with the acquisition of properties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      





|    |                   
|--- | ------------------
|21. | Subsequent Events:









119



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PROLOGIS


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)









|    |                                               
|--- | ----------------------------------------------
|22. | Selected Quarterly Financial Data (Unaudited):



|      |                                                                       |                     |   |         |          |  |   |               |  |  |              |         |  |  |   |         | 
|----- | --------------------------------------------------------------------- | ------------------- | - | ------- | -------- |  | - | ------------- |  |  | ------------ | ------- |  |  | - | ------- | 
|      |                                                                       | Three Months Ended, |  
|      |                                                                       |                     |  
|      |                                                                       | March 31,           |   |         | June 30, |  |   | September 30, |  |  | December 31, |        
|      |                                                                       |                     |   |         |          |  |   |               |  |  |              |        
|2005: |                                                                       |                     |   |         |          |  |   |               |  |  |              |         |  |  |   |        
|      | Total revenues                                                        |                     | $ | 431,888 |          |  | $ | 469,577       |  |  | $            | 532,029 |  |  | $ | 434,547 | 
|      |                                                                       |                     |   |         |          |  |   |               |  |  |              |        
|      | Operating income                                                      |                     | $ | 96,091  |          |  | $ | 120,107       |  |  | $            | 120,539 |  |  | $ | 105,626 | 
|      |                                                                       |                     |   |         |          |  |   |               |  |  |              |        
|      | Earnings from continuing operations                                   |                     | $ | 69,548  |          |  | $ | 95,393        |  |  | $            | 91,012  |  |  | $ | 61,889  | 
|      |                                                                       |                     |   |         |          |  |   |               |  |  |              |        
|      | Net earnings attributable to common shares                            |                     | $ | 55,074  |          |  | $ | 77,169        |  |  | $            | 129,402 |  |  | $ | 109,102 | 
|      |                                                                       |                     |   |         |          |  |   |               |  |  |              |        
|      | Net earnings per share attributable to common shares 
    Basic(1)   |                     | $ | 0.30    |          |  | $ | 0.41          |  |  | $            | 0.66    |  |  | $ | 0.45    | 
|      |                                                                       |                     |   |         |          |  |   |               |  |  |              |        
|      | Net earnings per share attributable to common shares 
    Diluted(1) |                     | $ | 0.29    |          |  | $ | 0.40          |  |  | $            | 0.63    |  |  | $ | 0.43    | 
|      |                                                                       |                     |   |         |          |  |   |               |  |  |              |        
|2004: |                                                                       |                     |   |         |          |  |   |               |  |  |              |         |  |  |   |        
|      | Total revenues                                                        |                     | $ | 301,794 |          |  | $ | 619,339       |  |  | $            | 425,446 |  |  | $ | 522,627 | 
|      |                                                                       |                     |   |         |          |  |   |               |  |  |              |        
|      | Operating income                                                      |                     | $ | 75,679  |          |  | $ | 101,018       |  |  | $            | 98,795  |  |  | $ | 81,791  | 
|      |                                                                       |                     |   |         |          |  |   |               |  |  |              |        
|      | Earnings from continuing operations                                   |                     | $ | 44,698  |          |  | $ | 78,900        |  |  | $            | 55,875  |  |  | $ | 48,727  | 
|      |                                                                       |                     |   |         |          |  |   |               |  |  |              |        
|      | Net earnings attributable to common shares                            |                     | $ | 43,498  |          |  | $ | 79,295        |  |  | $            | 79,758  |  |  | $ | 262     | 
|      |                                                                       |                     |   |         |          |  |   |               |  |  |              |        
|      | Net earnings per share attributable to common shares 
    Basic(1)   |                     | $ | 0.24    |          |  | $ | 0.44          |  |  | $            | 0.44    |  |  | $ |        | 
|      |                                                                       |                     |   |         |          |  |   |               |  |  |              |        
|      | Net earnings per share attributable to common shares 
    Diluted(1) |                     | $ | 0.23    |          |  | $ | 0.42          |  |  | $            | 0.42    |  |  | $ |        | 
|      |                                                                       |                     |   |         |          |  |   |               |  |  |              |        






|    |                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Quarterly earnings per common share amounts may not total to the
    annual amounts due to rounding and to the change in the number
    of common shares outstanding.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM












| |         
| | --------
| | KPMG LLP





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PROLOGIS


SCHEDULE III  REAL ESTATE AND
ACCUMULATED DEPRECIATION


December 31, 2005


|                                    |                                         |                                               |  |         |    |                          |  |                   |  |                                |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |   |                        | 
|----------------------------------- | --------------------------------------- | --------------------------------------------- |  | ------- | -- | ------------------------ |  | ----------------- |  | ------------------------------ |  | ------ | ------ | ------------ |  | ---------- | ------- | --------------- |  | ------------- | ------ |  |  | ------ | ------ |  |  | ------ | ------- |  |  | ------ | ------- |  |  | ------- | ------- | - | ---------------------- | 
|                                    |                                         |                                               |  |         |    |                          |  |                   |  | Gross Amounts At Which Carried |  |        |        |             
|                                    |                                         |                                               |  |         |    | Initial Cost to ProLogis |  |                   |  | as of December 31, 2005        |  |        |        |             
|                                    |                                         |                                               |  |         |    |                          |  | Costs Capitalized |  |                                |  |        |        | Date of     
|                                    |                                         | No. of                                        |  | Encum-  |    |                          |  | Building &        |  | Subsequent to                  |  |        |        | Building &   |  |            |         | Accumulated     |  | Construction/
|Description                         |                                         | Bldgs.                                        |  | brances |    | Land                     |  | Improvements      |  | Acquisition                    |  | Land   |        | Improvements |  | Total(a,b) |         | Depreciation(c) |  | Acquisition  
|                                    |                                         |                                               |  |         |    |                          |  |                   |  |                                |  |        |        |              |  |            |         |                 |  |              
|                                    |                                         | (In thousands of U.S. dollars, as applicable)
|Operating Properties(d):            |                                         |                                               |  |         |    |                          |  |                   |  |                                |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|Industrial Distribution Properties: |                                         |                                               |  |         |    |                          |  |                   |  |                                |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|North America:                      |                                         |                                               |  |         |    |                          |  |                   |  |                                |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|United States:                      |                                         |                                               |  |         |    |                          |  |                   |  |                                |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|Atlanta, Georgia                    |                                         |                                               |  |         |    |                          |  |                   |  |                                |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                    | Atlanta NE Distribution Center          |                                               |  | 8       |    |                          |  | (e)               |  |                                |  | 5,582  |        |              |  | 3,047      |         |                 |  | 26,611        |        |  |  | 6,276  |        |  |  | 28,964 |         |  |  | 35,240 |         |  |  | (9,694  | )       |   | 1996, 1997            
|                                    | Atlanta West Distribution Center(d)     |                                               |  | 21      |    |                          |  |                   |  |                                |  | 7,166  |        |              |  | 37,024     |         |                 |  | 16,477        |        |  |  | 6,988  |        |  |  | 53,679 |         |  |  | 60,667 |         |  |  | (20,494 | )       |   | 1994, 1996, 2005      
|                                    | Breckenridge Distribution Center(d)     |                                               |  | 1       |    |                          |  |                   |  |                                |  | 1,440  |        |              |  |           |         |                 |  | 6,010         |        |  |  | 1,440  |        |  |  | 6,010  |         |  |  | 7,450  |         |  |  |        |         |   | 2001                  
|                                    | Carter-Pacific Business Center          |                                               |  | 3       |    |                          |  |                   |  |                                |  | 556    |        |              |  | 3,151      |         |                 |  | 1,181         |        |  |  | 556    |        |  |  | 4,332  |         |  |  | 4,888  |         |  |  | (1,799  | )       |   | 1995                  
|                                    | Cedars Distribution Center              |                                               |  | 1       |    |                          |  |                   |  |                                |  | 1,366  |        |              |  | 7,739      |         |                 |  | 2,994         |        |  |  | 1,692  |        |  |  | 10,407 |         |  |  | 12,099 |         |  |  | (2,458  | )       |   | 1999                  
|                                    | Douglas Hill Distribution Center        |                                               |  | 4       |    |                          |  |                   |  |                                |  | 11,677 |        |              |  | 46,825     |         |                 |  |              |        |  |  | 11,677 |        |  |  | 46,825 |         |  |  | 58,502 |         |  |  | (370    | )       |   | 2005                  
|                                    | International Airport Industrial Center |                                               |  | 9       |    |                          |  | (e)               |  |                                |  | 2,939  |        |              |  | 14,146     |         |                 |  | 7,216         |        |  |  | 2,971  |        |  |  | 21,330 |         |  |  | 24,301 |         |  |  | (7,692  | )       |   | 1994, 1995            
|                                    | LaGrange Distribution Center            |                                               |  | 1       |    |                          |  |                   |  |                                |  | 174    |        |              |  | 986        |         |                 |  | 655           |        |  |  | 174    |        |  |  | 1,641  |         |  |  | 1,815  |         |  |  | (716    | )       |   | 1994                  
|                                    | McDonough Distribution Center           |                                               |  | 1       |    |                          |  |                   |  |                                |  | 1,507  |        |              |  | 19,000     |         |                 |  | 3             |        |  |  | 1,507  |        |  |  | 19,003 |         |  |  | 20,510 |         |  |  | (3,294  | )       |   | 2002                  
|                                    | Northeast Industrial Center             |                                               |  | 4       |    |                          |  |                   |  |                                |  | 1,109  |        |              |  | 6,283      |         |                 |  | 2,260         |        |  |  | 1,050  |        |  |  | 8,602  |         |  |  | 9,652  |         |  |  | (3,713  | )       |   | 1996                  
|                                    | Northmont Industrial Center             |                                               |  | 1       |    |                          |  |                   |  |                                |  | 566    |        |              |  | 3,209      |         |                 |  | 969           |        |  |  | 566    |        |  |  | 4,178  |         |  |  | 4,744  |         |  |  | (1,646  | )       |   | 1994                  
|                                    | Olympic Industrial Center               |                                               |  | 2       |    |                          |  |                   |  |                                |  | 698    |        |              |  | 3,956      |         |                 |  | 2,786         |        |  |  | 757    |        |  |  | 6,683  |         |  |  | 7,440  |         |  |  | (2,253  | )       |   | 1996                  
|                                    | Peachtree Commerce Business Center      |                                               |  | 4       |    |                          |  | (e)               |  |                                |  | 707    |        |              |  | 4,004      |         |                 |  | 1,561         |        |  |  | 707    |        |  |  | 5,565  |         |  |  | 6,272  |         |  |  | (2,226  | )       |   | 1994                  
|                                    | Piedmont Court Distribution Center      |                                               |  | 2       |    |                          |  |                   |  |                                |  | 885    |        |              |  | 5,013      |         |                 |  | 2,384         |        |  |  | 885    |        |  |  | 7,397  |         |  |  | 8,282  |         |  |  | (2,889  | )       |   | 1997                  
|                                    | Plaza Industrial Center                 |                                               |  | 1       |    |                          |  |                   |  |                                |  | 66     |        |              |  | 372        |         |                 |  | 164           |        |  |  | 66     |        |  |  | 536    |         |  |  | 602    |         |  |  | (215    | )       |   | 1995                  
|                                    | Pleasantdale Industrial Center          |                                               |  | 2       |    |                          |  |                   |  |                                |  | 541    |        |              |  | 3,184      |         |                 |  | 1,064         |        |  |  | 541    |        |  |  | 4,248  |         |  |  | 4,789  |         |  |  | (1,677  | )       |   | 1995                  
|                                    | Riverside Distribution Center           |                                               |  | 3       |    |                          |  |                   |  |                                |  | 2,533  |        |              |  | 13,336     |         |                 |  | 2,469         |        |  |  | 2,556  |        |  |  | 15,782 |         |  |  | 18,338 |         |  |  | (3,647  | )       |   | 1999                  
|                                    | South Royal Distribution Center         |                                               |  | 1       |    |                          |  |                   |  |                                |  | 356    |        |              |  | 2,019      |         |                 |  | 55            |        |  |  | 356    |        |  |  | 2,074  |         |  |  | 2,430  |         |  |  |        |         |   | 2002                  
|                                    | Tradeport Distribution Center           |                                               |  | 3       |    |                          |  |                   |  |                                |  | 1,464  |        |              |  | 4,563      |         |                 |  | 6,985         |        |  |  | 1,479  |        |  |  | 11,533 |         |  |  | 13,012 |         |  |  | (4,379  | )       |   | 1994, 1996            
|                                    | Weaver Distribution Center              |                                               |  | 2       |    |                          |  |                   |  |                                |  | 935    |        |              |  | 5,182      |         |                 |  | 1,459         |        |  |  | 935    |        |  |  | 6,641  |         |  |  | 7,576  |         |  |  | (2,654  | )       |   | 1995                  
|                                    | Westfork Industrial Center              |                                               |  | 10      |    |                          |  |                   |  |                                |  | 2,483  |        |              |  | 14,115     |         |                 |  | 2,882         |        |  |  | 2,484  |        |  |  | 16,996 |         |  |  | 19,480 |         |  |  | (6,159  | )       |   | 1995                  
|                                    |                                         |                                               |  |         |    |                          |  |                   |  |                                |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                    |                                         | Total Atlanta, Georgia                        |  |         | 84 |                          |  |                   |  |                                |  |        | 44,750 |              |  |            | 197,154 |                 |  |               | 86,185 |  |  |        | 45,663 |  |  |        | 282,426 |  |  |        | 328,089 |  |  |         | (77,975 | ) |                        | 
|                                    |                                         |                                               |  |         |    |                          |  |                   |  |                                |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|Austin, Texas                       |                                         |                                               |  |         |    |                          |  |                   |  |                                |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                    | Corridor Park Corporate Center          |                                               |  | 6       |    |                          |  |                   |  |                                |  | 1,652  |        |              |  | 1,681      |         |                 |  | 15,107        |        |  |  | 2,114  |        |  |  | 16,326 |         |  |  | 18,440 |         |  |  | (6,205  | )       |   | 1995, 1996            
|                                    | Montopolis Distribution Center          |                                               |  | 1       |    |                          |  |                   |  |                                |  | 580    |        |              |  | 3,384      |         |                 |  | 1,266         |        |  |  | 580    |        |  |  | 4,650  |         |  |  | 5,230  |         |  |  | (2,093  | )       |   | 1994                  
|                                    | Rutland Distribution Center             |                                               |  | 2       |    |                          |  |                   |  |                                |  | 460    |        |              |  | 2,617      |         |                 |  | 541           |        |  |  | 462    |        |  |  | 3,156  |         |  |  | 3,618  |         |  |  | (1,324  | )       |   | 1993                  
|                                    | Southpark Corporate Center              |                                               |  | 5       |    |                          |  |                   |  |                                |  | 1,137  |        |              |  |           |         |                 |  | 8,601         |        |  |  | 1,137  |        |  |  | 8,601  |         |  |  | 9,738  |         |  |  | (3,327  | )       |   | 1994, 1995            
|                                    | Walnut Creek Corporate Center(d)        |                                               |  | 11      |    |                          |  |                   |  |                                |  | 2,366  |        |              |  | 2,920      |         |                 |  | 20,448        |        |  |  | 2,423  |        |  |  | 23,311 |         |  |  | 25,734 |         |  |  | (7,760  | )       |   | 1994, 1995, 1996, 1999
|                                    |                                         |                                               |  |         |    |                          |  |                   |  |                                |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                    |                                         | Total Austin, Texas                           |  |         | 25 |                          |  |                   |  |                                |  |        | 6,195  |              |  |            | 10,602  |                 |  |               | 45,963 |  |  |        | 6,716  |  |  |        | 56,044  |  |  |        | 62,760  |  |  |         | (20,709 | ) |                        | 
|                                    |                                         |                                               |  |         |    |                          |  |                   |  |                                |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  

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|                                                                      |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |   |                              | 
|--------------------------------------------------------------------- | -------------------------------------- | --------------------------------------------- |  | ----------------- | -- | ------------------------------ |  | ------------ |  | ------------- |  | ------ | ------ | ------------ |  | ---------- | ------ | --------------- |  | ------------- | ------ |  |  | ------ | ------ |  |  | ------ | ------- |  |  | ------ | ------- |  |  | ------- | ------- | - | ---------------------------- | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                        |                                               |  |                   |    | Gross Amounts At Which Carried |  |             
|                                                                      |                                        | Initial Cost to ProLogis                      |  |                   |    | as of December 31, 2005        |  |             
|                                                                      |                                        |                                               |  | Costs Capitalized |    |                                |  |              |  | Date of      
|                                                                      |                                        | No. of                                        |  | Encum-            |    |                                |  | Building &   |  | Subsequent to |  |        |        | Building &   |  |            |        | Accumulated     |  | Construction/
|Description                                                           |                                        | Bldgs.                                        |  | brances           |    | Land                           |  | Improvements |  | Acquisition   |  | Land   |        | Improvements |  | Total(a,b) |        | Depreciation(c) |  | Acquisition  
|                                                                      |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |              
|                                                                      |                                        | (In thousands of U.S. dollars, as applicable)
|Charlotte, North Carolina                                             |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      | Barringer Industrial Center            |                                               |  | 3                 |    |                                |  |              |  |               |  | 308    |        |              |  | 1,746      |        |                 |  | 808           |        |  |  | 309    |        |  |  | 2,553  |         |  |  | 2,862  |         |  |  | (1,084  | )       |   | 1994                        
|                                                                      | Bond Distribution Center               |                                               |  | 2                 |    |                                |  |              |  |               |  | 905    |        |              |  | 5,126      |        |                 |  | 1,653         |        |  |  | 905    |        |  |  | 6,779  |         |  |  | 7,684  |         |  |  | (2,603  | )       |   | 1994                        
|                                                                      | Carowinds Distribution Center          |                                               |  | 1                 |    |                                |  |              |  |               |  | 3,600  |        |              |  | 20,400     |        |                 |  |              |        |  |  | 3,600  |        |  |  | 20,400 |         |  |  | 24,000 |         |  |  | (4,562  | )       |   | 1999                        
|                                                                      | Charlotte Commerce Center              |                                               |  | 10                |    |                                |  | (e)          |  |               |  | 4,341  |        |              |  | 24,954     |        |                 |  | 7,241         |        |  |  | 4,341  |        |  |  | 32,195 |         |  |  | 36,536 |         |  |  | (13,745 | )       |   | 1994                        
|                                                                      | Charlotte Distribution Center          |                                               |  | 9                 |    |                                |  | (e)          |  |               |  | 4,578  |        |              |  |           |        |                 |  | 26,063        |        |  |  | 6,096  |        |  |  | 24,545 |         |  |  | 30,641 |         |  |  | (8,518  | )       |   | 1995, 1996, 1997, 1998      
|                                                                      | Charlotte Distribution Center South(d) |                                               |  | 1                 |    |                                |  |              |  |               |  | 309    |        |              |  |           |        |                 |  | 4,612         |        |  |  | 1,082  |        |  |  | 3,839  |         |  |  | 4,921  |         |  |  |        |         |   | 2001                        
|                                                                      | Interstate North Business Park         |                                               |  | 2                 |    |                                |  |              |  |               |  | 535    |        |              |  | 3,030      |        |                 |  | 1,037         |        |  |  | 534    |        |  |  | 4,068  |         |  |  | 4,602  |         |  |  | (1,341  | )       |   | 1997                        
|                                                                      | Northpark Distribution Center          |                                               |  | 2                 |    |                                |  | (e)          |  |               |  | 1,183  |        |              |  | 6,707      |        |                 |  | 1,777         |        |  |  | 1,184  |        |  |  | 8,483  |         |  |  | 9,667  |         |  |  | (2,639  | )       |   | 1994, 1998                  
|                                                                      |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      |                                        | Total Charlotte, North Carolina               |  |                   | 30 |                                |  |              |  |               |  |        | 15,759 |              |  |            | 61,963 |                 |  |               | 43,191 |  |  |        | 18,051 |  |  |        | 102,862 |  |  |        | 120,913 |  |  |         | (34,492 | ) |                              | 
|                                                                      |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|Chattanooga, Tennessee                                                |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      | Stone Fort Distribution Center         |                                               |  | 4                 |    |                                |  |              |  |               |  | 2,063  |        |              |  | 11,688     |        |                 |  | 2,527         |        |  |  | 2,063  |        |  |  | 14,215 |         |  |  | 16,278 |         |  |  | (5,212  | )       |   | 1994                        
|                                                                      |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      |                                        | Total Chattanooga, Tennessee                  |  |                   | 4  |                                |  |              |  |               |  |        | 2,063  |              |  |            | 11,688 |                 |  |               | 2,527  |  |  |        | 2,063  |  |  |        | 14,215  |  |  |        | 16,278  |  |  |         | (5,212  | ) |                              | 
|                                                                      |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|Chicago, Illinois                                                     |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      | Addison Distribution Center            |                                               |  | 1                 |    |                                |  |              |  |               |  | 646    |        |              |  | 3,662      |        |                 |  | 701           |        |  |  | 640    |        |  |  | 4,369  |         |  |  | 5,009  |         |  |  | (1,540  | )       |   | 1997                        
|                                                                      | Alsip Distribution Center              |                                               |  | 2                 |    |                                |  |              |  |               |  | 2,093  |        |              |  | 11,859     |        |                 |  | 7,857         |        |  |  | 2,548  |        |  |  | 19,261 |         |  |  | 21,809 |         |  |  | (8,485  | )       |   | 1997, 1999                  
|                                                                      | Bedford Park Industrial Center(d)      |                                               |  | 2                 |    |                                |  |              |  |               |  | 1,717  |        |              |  | 9,665      |        |                 |  | 869           |        |  |  | 1,717  |        |  |  | 10,534 |         |  |  | 12,251 |         |  |  |        |         |   | 2004, 2005                  
|                                                                      | Bensenville Distribution Center        |                                               |  | 2                 |    |                                |  |              |  |               |  | 1,668  |        |              |  | 9,448      |        |                 |  | 5,060         |        |  |  | 1,668  |        |  |  | 14,508 |         |  |  | 16,176 |         |  |  | (6,144  | )       |   | 1997                        
|                                                                      | Bloomingdale 100 Business Center(d)    |                                               |  | 1                 |    |                                |  |              |  |               |  | 359    |        |              |  |           |        |                 |  | 8,365         |        |  |  | 1,629  |        |  |  | 7,095  |         |  |  | 8,724  |         |  |  |        |         |   | 2001                        
|                                                                      | Bolingbrook Distribution Center(d)     |                                               |  | 3                 |    |                                |  |              |  |               |  | 5,430  |        |              |  | 30,766     |        |                 |  | 1,650         |        |  |  | 5,429  |        |  |  | 32,417 |         |  |  | 37,846 |         |  |  | (6,354  | )       |   | 1999, 2003                  
|                                                                      | Bridgeview Distribution Center         |                                               |  | 4                 |    |                                |  |              |  |               |  | 1,302  |        |              |  | 7,378      |        |                 |  | 1,679         |        |  |  | 1,303  |        |  |  | 9,056  |         |  |  | 10,359 |         |  |  | (3,204  | )       |   | 1996                        
|                                                                      | Des Plaines Distribution Center        |                                               |  | 3                 |    |                                |  |              |  |               |  | 2,158  |        |              |  | 12,232     |        |                 |  | 4,436         |        |  |  | 2,158  |        |  |  | 16,668 |         |  |  | 18,826 |         |  |  | (5,865  | )       |   | 1995, 1996                  
|                                                                      | Elk Grove Distribution Center          |                                               |  | 20                |    |                                |  | (e)          |  |               |  | 7,689  |        |              |  | 43,568     |        |                 |  | 11,671        |        |  |  | 7,688  |        |  |  | 55,240 |         |  |  | 62,928 |         |  |  | (17,557 | )       |   | 1995, 1996, 1997, 1998, 1999
|                                                                      | Elmhurst Distribution Center           |                                               |  | 1                 |    |                                |  |              |  |               |  | 713    |        |              |  | 4,043      |        |                 |  | 823           |        |  |  | 713    |        |  |  | 4,866  |         |  |  | 5,579  |         |  |  | (1,435  | )       |   | 1997                        
|                                                                      | Glendale Heights Distribution Center   |                                               |  | 3                 |    |                                |  |              |  |               |  | 3,903  |        |              |  | 22,119     |        |                 |  | 1,010         |        |  |  | 3,903  |        |  |  | 23,129 |         |  |  | 27,032 |         |  |  | (5,365  | )       |   | 1999                        
|                                                                      | Glenview Distribution Center           |                                               |  | 2                 |    |                                |  | (e)          |  |               |  | 1,156  |        |              |  | 6,550      |        |                 |  | 1,235         |        |  |  | 1,156  |        |  |  | 7,785  |         |  |  | 8,941  |         |  |  | (2,339  | )       |   | 1996, 1999                  
|                                                                      | Gurnee Distribution Center(d)          |                                               |  | 2                 |    |                                |  | (e)          |  |               |  | 1,847  |        |              |  | 10,466     |        |                 |  | 220           |        |  |  | 1,847  |        |  |  | 10,686 |         |  |  | 12,533 |         |  |  |        |         |   | 2005                        
|                                                                      | I-294 Distribution Center(d)           |                                               |  | 2                 |    |                                |  |              |  |               |  | 2,123  |        |              |  |           |        |                 |  | 15,165        |        |  |  | 2,123  |        |  |  | 15,165 |         |  |  | 17,288 |         |  |  |        |         |   | 2005                        
|                                                                      | Itasca Distribution Center             |                                               |  | 3                 |    |                                |  |              |  |               |  | 1,613  |        |              |  | 9,143      |        |                 |  | 994           |        |  |  | 1,613  |        |  |  | 10,137 |         |  |  | 11,750 |         |  |  | (2,983  | )       |   | 1996, 1997, 1998            
|                                                                      | Lombard Distribution Center            |                                               |  | 1                 |    |                                |  |              |  |               |  | 1,170  |        |              |  | 6,630      |        |                 |  | 289           |        |  |  | 1,170  |        |  |  | 6,919  |         |  |  | 8,089  |         |  |  | (1,605  | )       |   | 1999                        
|                                                                      | Minooka Distribution Center(d)         |                                               |  | 2                 |    |                                |  | (e)          |  |               |  | 15,900 |        |              |  | 41,927     |        |                 |  | 22,589        |        |  |  | 15,900 |        |  |  | 64,516 |         |  |  | 80,416 |         |  |  | (405    | )       |   | 2005                        
|                                                                      | Mitchell Distribution Center           |                                               |  | 1                 |    |                                |  | (e)          |  |               |  | 1,236  |        |              |  | 7,004      |        |                 |  | 1,847         |        |  |  | 1,236  |        |  |  | 8,851  |         |  |  | 10,087 |         |  |  | (3,359  | )       |   | 1996                        
|                                                                      | North Avenue Distribution Center       |                                               |  | 2                 |    |                                |  |              |  |               |  | 3,201  |        |              |  |           |        |                 |  | 8,988         |        |  |  | 2,047  |        |  |  | 10,142 |         |  |  | 12,189 |         |  |  | (2,983  | )       |   | 1997, 1998                  
|                                                                      | Northlake Distribution Center          |                                               |  | 1                 |    |                                |  |              |  |               |  | 372    |        |              |  | 2,106      |        |                 |  | 708           |        |  |  | 372    |        |  |  | 2,814  |         |  |  | 3,186  |         |  |  | (849    | )       |   | 1996                        
|                                                                      | OHare Cargo Distribution Center(d)    |                                               |  | 3                 |    |                                |  |              |  |               |  | 6,246  |        |              |  |           |        |                 |  | 21,092        |        |  |  | 8,605  |        |  |  | 18,733 |         |  |  | 27,338 |         |  |  | (3,927  | )       |   | 1997, 2002                  
|                                                                      | Pleasant Prairie Distribution Center   |                                               |  | 1                 |    |                                |  |              |  |               |  | 1,314  |        |              |  | 7,450      |        |                 |  | 2,330         |        |  |  | 1,315  |        |  |  | 9,779  |         |  |  | 11,094 |         |  |  | (1,765  | )       |   | 1999                        
|                                                                      | ProLogis Park 57(d)                    |                                               |  | 1                 |    |                                |  |              |  |               |  | 686    |        |              |  | 3,885      |        |                 |  | 1,170         |        |  |  | 686    |        |  |  | 5,055  |         |  |  | 5,741  |         |  |  |        |         |   | 2004                        

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|                                                                      |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |         |              |  |            |         |                 |  |               |         |  |  |        |         |  |  |         |         |  |  |         |         |  |  |        |         |   |            | 
|--------------------------------------------------------------------- | -------------------------------------- | --------------------------------------------- |  | ----------------- | -- | ------------------------------ |  | ------------ |  | ------------- |  | ------ | ------- | ------------ |  | ---------- | ------- | --------------- |  | ------------- | ------- |  |  | ------ | ------- |  |  | ------- | ------- |  |  | ------- | ------- |  |  | ------ | ------- | - | ---------- | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                        |                                               |  |                   |    | Gross Amounts At Which Carried |  |             
|                                                                      |                                        | Initial Cost to ProLogis                      |  |                   |    | as of December 31, 2005        |  |             
|                                                                      |                                        |                                               |  | Costs Capitalized |    |                                |  |              |  | Date of      
|                                                                      |                                        | No. of                                        |  | Encum-            |    |                                |  | Building &   |  | Subsequent to |  |        |         | Building &   |  |            |         | Accumulated     |  | Construction/
|Description                                                           |                                        | Bldgs.                                        |  | brances           |    | Land                           |  | Improvements |  | Acquisition   |  | Land   |         | Improvements |  | Total(a,b) |         | Depreciation(c) |  | Acquisition  
|                                                                      |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |         |              |  |            |         |                 |  |              
|                                                                      |                                        | (In thousands of U.S. dollars, as applicable)
|                                                                      | Remington Lakes Distribution Center(d) |                                               |  | 1                 |    |                                |  |              |  |               |  | 2,761  |         |              |  |           |         |                 |  | 14,344        |         |  |  | 2,761  |         |  |  | 14,344  |         |  |  | 17,105  |         |  |  |       |         |   | 2001      
|                                                                      | Romeoville Distribution Center         |                                               |  | 6                 |    |                                |  | (e)          |  |               |  | 23,731 |         |              |  | 96,764     |         |                 |  | 386           |         |  |  | 23,731 |         |  |  | 97,150  |         |  |  | 120,881 |         |  |  | (2,362 | )       |   | 1999, 2005
|                                                                      | South Holland Distribution Center      |                                               |  | 2                 |    |                                |  |              |  |               |  | 1,156  |         |              |  | 6,550      |         |                 |  | 851           |         |  |  | 1,156  |         |  |  | 7,401   |         |  |  | 8,557   |         |  |  | (1,790 | )       |   | 1999      
|                                                                      | West Chicago Distribution Center(d)    |                                               |  | 1                 |    |                                |  |              |  |               |  | 3,125  |         |              |  | 12,499     |         |                 |  |              |         |  |  | 3,125  |         |  |  | 12,499  |         |  |  | 15,624  |         |  |  |       |         |   | 2005      
|                                                                      | Woodale Distribution Center            |                                               |  | 1                 |    |                                |  |              |  |               |  | 263    |         |              |  | 1,490      |         |                 |  | 380           |         |  |  | 263    |         |  |  | 1,870   |         |  |  | 2,133   |         |  |  | (587   | )       |   | 1997      
|                                                                      | Woodridge Distribution Center          |                                               |  | 14                |    |                                |  | (e)          |  |               |  | 49,508 |         |              |  | 198,032    |         |                 |  |              |         |  |  | 49,508 |         |  |  | 198,032 |         |  |  | 247,540 |         |  |  | (1,926 | )       |   | 2005      
|                                                                      |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |         |              |  |            |         |                 |  |               |         |  |  |        |         |  |  |         |         |  |  |         |         |  |  |        |         |  
|                                                                      |                                        | Total Chicago, Illinois                       |  |                   | 88 |                                |  |              |  |               |  |        | 145,086 |              |  |            | 565,236 |                 |  |               | 136,709 |  |  |        | 148,010 |  |  |         | 699,021 |  |  |         | 847,031 |  |  |        | (82,829 | ) |            | 
|                                                                      |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |         |              |  |            |         |                 |  |               |         |  |  |        |         |  |  |         |         |  |  |         |         |  |  |        |         |  
|Cincinnati, Ohio                                                      |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |         |              |  |            |         |                 |  |               |         |  |  |        |         |  |  |         |         |  |  |         |         |  |  |        |         |  
|                                                                      | Airpark Distribution Center            |                                               |  | 2                 |    |                                |  | (e)          |  |               |  | 1,128  |         |              |  |           |         |                 |  | 11,675        |         |  |  | 1,715  |         |  |  | 11,088  |         |  |  | 12,803  |         |  |  | (3,759 | )       |   | 1996      
|                                                                      | Capital Distribution Center I          |                                               |  | 4                 |    |                                |  | (e)          |  |               |  | 1,750  |         |              |  | 9,922      |         |                 |  | 3,630         |         |  |  | 1,750  |         |  |  | 13,552  |         |  |  | 15,302  |         |  |  | (5,167 | )       |   | 1994      
|                                                                      | Capital Distribution Center II         |                                               |  | 5                 |    |                                |  | (e)          |  |               |  | 1,953  |         |              |  | 11,067     |         |                 |  | 3,730         |         |  |  | 1,953  |         |  |  | 14,797  |         |  |  | 16,750  |         |  |  | (6,060 | )       |   | 1994      
|                                                                      | Capital Industrial Center I            |                                               |  | 10                |    |                                |  | (e)          |  |               |  | 1,039  |         |              |  | 5,885      |         |                 |  | 4,146         |         |  |  | 1,104  |         |  |  | 9,966   |         |  |  | 11,070  |         |  |  | (4,002 | )       |   | 1994, 1995
|                                                                      | Constitution Distribution Center       |                                               |  | 1                 |    |                                |  |              |  |               |  | 1,465  |         |              |  | 8,301      |         |                 |  | 521           |         |  |  | 1,465  |         |  |  | 8,822   |         |  |  | 10,287  |         |  |  | (1,980 | )       |   | 1999      
|                                                                      | Dues Drive Distribution Center         |                                               |  | 1                 |    |                                |  |              |  |               |  | 921    |         |              |  | 5,218      |         |                 |  | 1,677         |         |  |  | 921    |         |  |  | 6,895   |         |  |  | 7,816   |         |  |  | (24    | )       |   | 2003      
|                                                                      | Empire Distribution Center             |                                               |  | 3                 |    |                                |  | (e)          |  |               |  | 529    |         |              |  | 2,995      |         |                 |  | 2,013         |         |  |  | 529    |         |  |  | 5,008   |         |  |  | 5,537   |         |  |  | (1,816 | )       |   | 1995      
|                                                                      | Enterprise Distribution Center(d)      |                                               |  | 1                 |    |                                |  |              |  |               |  | 1,275  |         |              |  | 7,222      |         |                 |  | 34            |         |  |  | 1,275  |         |  |  | 7,256   |         |  |  | 8,531   |         |  |  |       |         |   | 2005      
|                                                                      | Fairfield Business Center(d)           |                                               |  | 1                 |    |                                |  |              |  |               |  | 348    |         |              |  | 1,971      |         |                 |  | 445           |         |  |  | 381    |         |  |  | 2,383   |         |  |  | 2,764   |         |  |  |       |         |   | 2004      
|                                                                      | Fairfield Commerce Center(d)           |                                               |  | 1                 |    |                                |  |              |  |               |  | 1,558  |         |              |  | 8,831      |         |                 |  | 948           |         |  |  | 1,558  |         |  |  | 9,779   |         |  |  | 11,337  |         |  |  |       |         |   | 2004      
|                                                                      | Fairfield Distribution Center          |                                               |  | 1                 |    |                                |  |              |  |               |  | 586    |         |              |  | 3,319      |         |                 |  | 945           |         |  |  | 586    |         |  |  | 4,264   |         |  |  | 4,850   |         |  |  | (10    | )       |   | 2002      
|                                                                      | Kentucky Drive Business Center         |                                               |  | 4                 |    |                                |  |              |  |               |  | 553    |         |              |  | 3,134      |         |                 |  | 1,691         |         |  |  | 553    |         |  |  | 4,825   |         |  |  | 5,378   |         |  |  | (1,969 | )       |   | 1997      
|                                                                      | Mosteller Distribution Center(d)       |                                               |  | 1                 |    |                                |  |              |  |               |  | 473    |         |              |  | 2,678      |         |                 |  | 968           |         |  |  | 483    |         |  |  | 3,636   |         |  |  | 4,119   |         |  |  |       |         |   | 2004      
|                                                                      | Park I-275 Distribution Center(d)      |                                               |  | 1                 |    |                                |  |              |  |               |  | 3,238  |         |              |  |           |         |                 |  | 12,529        |         |  |  | 3,238  |         |  |  | 12,529  |         |  |  | 15,767  |         |  |  |       |         |   | 2005      
|                                                                      | Production Distribution Center         |                                               |  | 2                 |    |                                |  |              |  |               |  | 717    |         |              |  | 2,717      |         |                 |  | 2,701         |         |  |  | 824    |         |  |  | 5,311   |         |  |  | 6,135   |         |  |  | (1,496 | )       |   | 1994, 1998
|                                                                      | Sharonville Distribution Center        |                                               |  | 3                 |    |                                |  | (e)          |  |               |  | 1,761  |         |              |  |           |         |                 |  | 12,212        |         |  |  | 2,424  |         |  |  | 11,549  |         |  |  | 13,973  |         |  |  | (2,590 | )       |   | 1997, 1998
|                                                                      | Springdale Commerce Center             |                                               |  | 3                 |    |                                |  |              |  |               |  | 421    |         |              |  | 2,384      |         |                 |  | 1,808         |         |  |  | 421    |         |  |  | 4,192   |         |  |  | 4,613   |         |  |  | (1,657 | )       |   | 1996      
|                                                                      |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |         |              |  |            |         |                 |  |               |         |  |  |        |         |  |  |         |         |  |  |         |         |  |  |        |         |  
|                                                                      |                                        | Total Cincinnati, Ohio                        |  |                   | 44 |                                |  |              |  |               |  |        | 19,715  |              |  |            | 75,644  |                 |  |               | 61,673  |  |  |        | 21,180  |  |  |         | 135,852 |  |  |         | 157,032 |  |  |        | (30,530 | ) |            | 
|                                                                      |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |         |              |  |            |         |                 |  |               |         |  |  |        |         |  |  |         |         |  |  |         |         |  |  |        |         |  
|Columbus, Ohio                                                        |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |         |              |  |            |         |                 |  |               |         |  |  |        |         |  |  |         |         |  |  |         |         |  |  |        |         |  
|                                                                      | Brookham Distribution Center           |                                               |  | 2                 |    |                                |  |              |  |               |  | 5,964  |         |              |  | 23,858     |         |                 |  |              |         |  |  | 5,964  |         |  |  | 23,858  |         |  |  | 29,822  |         |  |  | (232   | )       |   | 2005      
|                                                                      | Canal Pointe Distribution Center       |                                               |  | 1                 |    |                                |  |              |  |               |  | 1,237  |         |              |  | 7,013      |         |                 |  | 91            |         |  |  | 1,237  |         |  |  | 7,104   |         |  |  | 8,341   |         |  |  | (1,575 | )       |   | 1999      
|                                                                      | Capital Park South Distribution Center |                                               |  | 3                 |    |                                |  | (e)          |  |               |  | 1,588  |         |              |  |           |         |                 |  | 23,269        |         |  |  | 1,981  |         |  |  | 22,876  |         |  |  | 24,857  |         |  |  | (7,316 | )       |   | 1996      
|                                                                      | Charter Street Distribution Center     |                                               |  | 1                 |    |                                |  | (e)          |  |               |  | 1,245  |         |              |  | 7,055      |         |                 |  | 113           |         |  |  | 1,245  |         |  |  | 7,168   |         |  |  | 8,413   |         |  |  | (1,613 | )       |   | 1999      
|                                                                      | Columbus West Industrial Center(d)     |                                               |  | 4                 |    |                                |  | (e)          |  |               |  | 1,112  |         |              |  | 6,299      |         |                 |  | 2,128         |         |  |  | 1,112  |         |  |  | 8,427   |         |  |  | 9,539   |         |  |  | (2,319 | )       |   | 1995, 2004
|                                                                      | Corporate Park West(d)                 |                                               |  | 3                 |    |                                |  | (e)          |  |               |  | 1,079  |         |              |  | 6,117      |         |                 |  | 2,585         |         |  |  | 1,079  |         |  |  | 8,702   |         |  |  | 9,781   |         |  |  | (1,653 | )       |   | 1996, 2004
|                                                                      | Fisher Distribution Center             |                                               |  | 1                 |    |                                |  |              |  |               |  | 1,197  |         |              |  | 6,785      |         |                 |  | 2,380         |         |  |  | 1,197  |         |  |  | 9,165   |         |  |  | 10,362  |         |  |  | (3,880 | )       |   | 1995      

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|                                                                      |                                         |                                               |  |                   |     |                                |  |              |  |               |  |        |         |              |  |            |         |                 |  |               |         |  |  |        |        |  |  |         |         |  |  |         |         |  |  |         |         |   |                                                            | 
|--------------------------------------------------------------------- | --------------------------------------- | --------------------------------------------- |  | ----------------- | --- | ------------------------------ |  | ------------ |  | ------------- |  | ------ | ------- | ------------ |  | ---------- | ------- | --------------- |  | ------------- | ------- |  |  | ------ | ------ |  |  | ------- | ------- |  |  | ------- | ------- |  |  | ------- | ------- | - | ---------------------------------------------------------- | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                         |                                               |  |                   |     | Gross Amounts At Which Carried |  |             
|                                                                      |                                         | Initial Cost to ProLogis                      |  |                   |     | as of December 31, 2005        |  |             
|                                                                      |                                         |                                               |  | Costs Capitalized |     |                                |  |              |  | Date of      
|                                                                      |                                         | No. of                                        |  | Encum-            |     |                                |  | Building &   |  | Subsequent to |  |        |         | Building &   |  |            |         | Accumulated     |  | Construction/
|Description                                                           |                                         | Bldgs.                                        |  | brances           |     | Land                           |  | Improvements |  | Acquisition   |  | Land   |         | Improvements |  | Total(a,b) |         | Depreciation(c) |  | Acquisition  
|                                                                      |                                         |                                               |  |                   |     |                                |  |              |  |               |  |        |         |              |  |            |         |                 |  |              
|                                                                      |                                         | (In thousands of U.S. dollars, as applicable)
|                                                                      | Foreign Trade Center I                  |                                               |  | 5                 |     |                                |  |              |  |               |  | 6,527  |         |              |  | 36,989     |         |                 |  | 4,991         |         |  |  | 6,990  |        |  |  | 41,517  |         |  |  | 48,507  |         |  |  | (9,368  | )       |   | 1999                                                      
|                                                                      | McCormick Distribution Center           |                                               |  | 5                 |     |                                |  |              |  |               |  | 1,664  |         |              |  | 9,429      |         |                 |  | 4,260         |         |  |  | 1,664  |        |  |  | 13,689  |         |  |  | 15,353  |         |  |  | (5,193  | )       |   | 1994                                                      
|                                                                      | New World Distribution Center           |                                               |  | 1                 |     |                                |  |              |  |               |  | 207    |         |              |  | 1,173      |         |                 |  | 1,846         |         |  |  | 207    |        |  |  | 3,019   |         |  |  | 3,226   |         |  |  | (1,371  | )       |   | 1994                                                      
|                                                                      | South Park Distribution Center          |                                               |  | 2                 |     |                                |  |              |  |               |  | 3,344  |         |              |  | 15,182     |         |                 |  | 110           |         |  |  | 3,343  |        |  |  | 15,293  |         |  |  | 18,636  |         |  |  | (1,509  | )       |   | 1999, 2005                                                
|                                                                      | Westbelt Business Center                |                                               |  | 2                 |     |                                |  | (e)          |  |               |  | 465    |         |              |  | 2,635      |         |                 |  | 1,064         |         |  |  | 466    |        |  |  | 3,698   |         |  |  | 4,164   |         |  |  | (1,157  | )       |   | 1998                                                      
|                                                                      | Wingate Distribution Center             |                                               |  | 1                 |     |                                |  |              |  |               |  | 152    |         |              |  | 859        |         |                 |  | 156           |         |  |  | 152    |        |  |  | 1,015   |         |  |  | 1,167   |         |  |  | (342    | )       |   | 1994                                                      
|                                                                      |                                         |                                               |  |                   |     |                                |  |              |  |               |  |        |         |              |  |            |         |                 |  |               |         |  |  |        |        |  |  |         |         |  |  |         |         |  |  |         |         |  
|                                                                      |                                         | Total Columbus, Ohio                          |  |                   | 31  |                                |  |              |  |               |  |        | 25,781  |              |  |            | 123,394 |                 |  |               | 42,993  |  |  |        | 26,637 |  |  |         | 165,531 |  |  |         | 192,168 |  |  |         | (37,528 | ) |                                                            | 
|                                                                      |                                         |                                               |  |                   |     |                                |  |              |  |               |  |        |         |              |  |            |         |                 |  |               |         |  |  |        |        |  |  |         |         |  |  |         |         |  |  |         |         |  
|Dallas/ Fort Worth, Texas                                             |                                         |                                               |  |                   |     |                                |  |              |  |               |  |        |         |              |  |            |         |                 |  |               |         |  |  |        |        |  |  |         |         |  |  |         |         |  |  |         |         |  
|                                                                      | Alliance Distribution Center            |                                               |  | 1                 |     |                                |  | (e)          |  |               |  | 3,653  |         |              |  | 14,613     |         |                 |  |              |         |  |  | 3,653  |        |  |  | 14,613  |         |  |  | 18,266  |         |  |  | (132    | )       |   | 2005                                                      
|                                                                      | Arlington Corporate Center(d)           |                                               |  | 2                 |     |                                |  |              |  |               |  | 2,135  |         |              |  |           |         |                 |  | 10,113        |         |  |  | 2,150  |        |  |  | 10,098  |         |  |  | 12,248  |         |  |  |        |         |   | 2001                                                      
|                                                                      | Carter Industrial Center                |                                               |  | 1                 |     |                                |  |              |  |               |  | 334    |         |              |  |           |         |                 |  | 2,364         |         |  |  | 334    |        |  |  | 2,364   |         |  |  | 2,698   |         |  |  | (880    | )       |   | 1996                                                      
|                                                                      | Centerport Distribution Center          |                                               |  | 1                 |     |                                |  |              |  |               |  | 1,250  |         |              |  | 7,082      |         |                 |  | 343           |         |  |  | 1,250  |        |  |  | 7,425   |         |  |  | 8,675   |         |  |  | (1,665  | )       |   | 1999                                                      
|                                                                      | Dallas Corporate Center                 |                                               |  | 10                |     |                                |  | (e)          |  |               |  | 5,161  |         |              |  |           |         |                 |  | 31,731        |         |  |  | 5,460  |        |  |  | 31,432  |         |  |  | 36,892  |         |  |  | (9,660  | )       |   | 1996, 1997, 1998, 1999                                    
|                                                                      | Enterprise Distribution Center          |                                               |  | 3                 |     |                                |  |              |  |               |  | 2,719  |         |              |  | 15,410     |         |                 |  | 143           |         |  |  | 2,720  |        |  |  | 15,552  |         |  |  | 18,272  |         |  |  | (3,462  | )       |   | 1999                                                      
|                                                                      | Freeport Distribution Center            |                                               |  | 4                 |     |                                |  |              |  |               |  | 1,393  |         |              |  | 5,549      |         |                 |  | 4,788         |         |  |  | 1,442  |        |  |  | 10,288  |         |  |  | 11,730  |         |  |  | (2,987  | )       |   | 1996, 1997, 1998                                          
|                                                                      | Great Southwest Distribution Center     |                                               |  | 40                |     |                                |  | (e)          |  |               |  | 39,773 |         |              |  | 175,231    |         |                 |  | 12,603        |         |  |  | 38,293 |        |  |  | 189,314 |         |  |  | 227,607 |         |  |  | (24,870 | )       |   | 1994, 1995, 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2005
|                                                                      | Great Southwest Industrial Center I     |                                               |  | 2                 |     |                                |  | (e)          |  |               |  | 234    |         |              |  | 1,326      |         |                 |  | 1,182         |         |  |  | 308    |        |  |  | 2,434   |         |  |  | 2,742   |         |  |  | (960    | )       |   | 1995                                                      
|                                                                      | Lone Star Distribution Center           |                                               |  | 1                 |     |                                |  |              |  |               |  | 512    |         |              |  | 2,896      |         |                 |  | 382           |         |  |  | 511    |        |  |  | 3,279   |         |  |  | 3,790   |         |  |  | (1,128  | )       |   | 1996                                                      
|                                                                      | Mesquite Distribution Center(d)         |                                               |  | 1                 |     |                                |  |              |  |               |  | 3,117  |         |              |  |           |         |                 |  | 11,388        |         |  |  | 3,117  |        |  |  | 11,388  |         |  |  | 14,505  |         |  |  |        |         |   | 2005                                                      
|                                                                      | Northgate Distribution Center           |                                               |  | 13                |     |                                |  | (e)          |  |               |  | 14,258 |         |              |  | 67,459     |         |                 |  | 5,945         |         |  |  | 15,231 |        |  |  | 72,431  |         |  |  | 87,662  |         |  |  | (9,381  | )       |   | 1994, 1996, 1999, 2005                                    
|                                                                      | Pinnacle Park Distribution Center(d)(f) |                                               |  | 1                 |     |                                |  |              |  |               |  | 5,058  |         |              |  |           |         |                 |  | 19,308        |         |  |  | 3,881  |        |  |  | 20,485  |         |  |  | 24,366  |         |  |  | (1,995  | )       |   | 2001                                                      
|                                                                      | Plano Distribution Center               |                                               |  | 7                 |     |                                |  | (e)          |  |               |  | 3,915  |         |              |  | 22,186     |         |                 |  | 1,499         |         |  |  | 3,915  |        |  |  | 23,685  |         |  |  | 27,600  |         |  |  | (5,249  | )       |   | 1999                                                      
|                                                                      | Redbird Distribution Center             |                                               |  | 2                 |     |                                |  |              |  |               |  | 1,095  |         |              |  | 6,212      |         |                 |  | 1,442         |         |  |  | 1,097  |        |  |  | 7,652   |         |  |  | 8,749   |         |  |  | (1,948  | )       |   | 1994, 1999                                                
|                                                                      | Royal Commerce Center                   |                                               |  | 4                 |     |                                |  | (e)          |  |               |  | 1,975  |         |              |  | 11,190     |         |                 |  | 2,877         |         |  |  | 1,974  |        |  |  | 14,068  |         |  |  | 16,042  |         |  |  | (4,464  | )       |   | 1997                                                      
|                                                                      | Royal Distribution Center               |                                               |  | 1                 |     |                                |  |              |  |               |  | 811    |         |              |  | 4,598      |         |                 |  | 342           |         |  |  | 811    |        |  |  | 4,940   |         |  |  | 5,751   |         |  |  | (723    | )       |   | 2001                                                      
|                                                                      | Stemmons Distribution Center            |                                               |  | 1                 |     |                                |  |              |  |               |  | 272    |         |              |  | 1,544      |         |                 |  | 622           |         |  |  | 272    |        |  |  | 2,166   |         |  |  | 2,438   |         |  |  | (792    | )       |   | 1995                                                      
|                                                                      | Stemmons Industrial Center              |                                               |  | 11                |     |                                |  |              |  |               |  | 1,820  |         |              |  | 11,705     |         |                 |  | 3,884         |         |  |  | 1,820  |        |  |  | 15,589  |         |  |  | 17,409  |         |  |  | (5,413  | )       |   | 1994, 1995, 1996, 1999                                    
|                                                                      | Trinity Mills Distribution Center       |                                               |  | 7                 |     |                                |  | (e)          |  |               |  | 4,453  |         |              |  | 27,346     |         |                 |  | 1,947         |         |  |  | 4,406  |        |  |  | 29,340  |         |  |  | 33,746  |         |  |  | (7,824  | )       |   | 1996, 1999, 2001                                          
|                                                                      | Valwood Business Center                 |                                               |  | 4                 |     |                                |  |              |  |               |  | 1,884  |         |              |  | 10,676     |         |                 |  | 1,345         |         |  |  | 1,884  |        |  |  | 12,021  |         |  |  | 13,905  |         |  |  | (1,773  | )       |   | 2001                                                      
|                                                                      | Valwood Distribution Center             |                                               |  | 7                 |     |                                |  |              |  |               |  | 4,430  |         |              |  | 25,101     |         |                 |  | 2,093         |         |  |  | 4,430  |        |  |  | 27,194  |         |  |  | 31,624  |         |  |  | (6,106  | )       |   | 1999                                                      
|                                                                      |                                         |                                               |  |                   |     |                                |  |              |  |               |  |        |         |              |  |            |         |                 |  |               |         |  |  |        |        |  |  |         |         |  |  |         |         |  |  |         |         |  
|                                                                      |                                         | Total Dallas/ Fort Worth, Texas               |  |                   | 124 |                                |  |              |  |               |  |        | 100,252 |              |  |            | 410,124 |                 |  |               | 116,341 |  |  |        | 98,959 |  |  |         | 527,758 |  |  |         | 626,717 |  |  |         | (91,412 | ) |                                                            | 
|                                                                      |                                         |                                               |  |                   |     |                                |  |              |  |               |  |        |         |              |  |            |         |                 |  |               |         |  |  |        |        |  |  |         |         |  |  |         |         |  |  |         |         |  

125



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##### Table of Contents





|                                                                      |                                     |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |         |         |  |  |         |         |  |  |        |         |   |                              | 
|--------------------------------------------------------------------- | ----------------------------------- | --------------------------------------------- |  | ----------------- | -- | ------------------------------ |  | ------------ |  | ------------- |  | ------ | ------ | ------------ |  | ---------- | ------- | --------------- |  | ------------- | ------ |  |  | ------ | ------ |  |  | ------- | ------- |  |  | ------- | ------- |  |  | ------ | ------- | - | ---------------------------- | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                     |                                               |  |                   |    | Gross Amounts At Which Carried |  |             
|                                                                      |                                     | Initial Cost to ProLogis                      |  |                   |    | as of December 31, 2005        |  |             
|                                                                      |                                     |                                               |  | Costs Capitalized |    |                                |  |              |  | Date of      
|                                                                      |                                     | No. of                                        |  | Encum-            |    |                                |  | Building &   |  | Subsequent to |  |        |        | Building &   |  |            |         | Accumulated     |  | Construction/
|Description                                                           |                                     | Bldgs.                                        |  | brances           |    | Land                           |  | Improvements |  | Acquisition   |  | Land   |        | Improvements |  | Total(a,b) |         | Depreciation(c) |  | Acquisition  
|                                                                      |                                     |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |              
|                                                                      |                                     | (In thousands of U.S. dollars, as applicable)
|Denver, Colorado                                                      |                                     |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |         |         |  |  |         |         |  |  |        |         |  
|                                                                      | Denver Business Center(d)(g)        |                                               |  | 6                 |    |                                |  |              |  |               |  | 1,864  |        |              |  | 9,450      |         |                 |  | 9,765         |        |  |  | 1,865  |        |  |  | 19,214  |         |  |  | 21,079  |         |  |  | (6,167 | )       |   | 1992, 1994, 1996, 2001, 2002
|                                                                      | Havana Distribution Center          |                                               |  | 1                 |    |                                |  |              |  |               |  | 401    |        |              |  | 2,281      |         |                 |  | 771           |        |  |  | 401    |        |  |  | 3,052   |         |  |  | 3,453   |         |  |  | (1,517 | )       |   | 1993                        
|                                                                      | Moline Distribution Center          |                                               |  | 1                 |    |                                |  |              |  |               |  | 327    |        |              |  | 1,850      |         |                 |  | 756           |        |  |  | 327    |        |  |  | 2,606   |         |  |  | 2,933   |         |  |  | (1,005 | )       |   | 1994                        
|                                                                      | Moncrieff Distribution Center       |                                               |  | 1                 |    |                                |  |              |  |               |  | 314    |        |              |  | 2,493      |         |                 |  | 953           |        |  |  | 315    |        |  |  | 3,445   |         |  |  | 3,760   |         |  |  | (1,532 | )       |   | 1992                        
|                                                                      | Pagosa Distribution Center          |                                               |  | 1                 |    |                                |  |              |  |               |  | 406    |        |              |  | 2,322      |         |                 |  | 876           |        |  |  | 406    |        |  |  | 3,198   |         |  |  | 3,604   |         |  |  | (1,435 | )       |   | 1993                        
|                                                                      | ProLogis Park 70(d)                 |                                               |  | 1                 |    |                                |  |              |  |               |  | 2,128  |        |              |  |           |         |                 |  | 7,063         |        |  |  | 2,128  |        |  |  | 7,063   |         |  |  | 9,191   |         |  |  |       |         |   | 2005                        
|                                                                      | Stapleton Business Center           |                                               |  | 12                |    |                                |  | (e)          |  |               |  | 34,634 |        |              |  | 139,256    |         |                 |  |              |        |  |  | 34,634 |        |  |  | 139,256 |         |  |  | 173,890 |         |  |  | (1,344 | )       |   | 2005                        
|                                                                      | Upland Distribution Center I(d)     |                                               |  | 7                 |    |                                |  |              |  |               |  | 1,427  |        |              |  | 5,710      |         |                 |  | 14,436        |        |  |  | 1,450  |        |  |  | 20,123  |         |  |  | 21,573  |         |  |  | (6,495 | )       |   | 1992, 1994, 1995, 2003      
|                                                                      | Upland Distribution Center II       |                                               |  | 6                 |    |                                |  |              |  |               |  | 2,456  |        |              |  | 13,946     |         |                 |  | 4,057         |        |  |  | 2,489  |        |  |  | 17,970  |         |  |  | 20,459  |         |  |  | (7,584 | )       |   | 1993, 1994                  
|                                                                      |                                     |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |         |         |  |  |         |         |  |  |        |         |  
|                                                                      |                                     | Total Denver, Colorado                        |  |                   | 36 |                                |  |              |  |               |  |        | 43,957 |              |  |            | 177,308 |                 |  |               | 38,677 |  |  |        | 44,015 |  |  |         | 215,927 |  |  |         | 259,942 |  |  |        | (27,079 | ) |                              | 
|                                                                      |                                     |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |         |         |  |  |         |         |  |  |        |         |  
|El Paso, Texas                                                        |                                     |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |         |         |  |  |         |         |  |  |        |         |  
|                                                                      | Billy the Kid Distribution Center   |                                               |  | 1                 |    |                                |  |              |  |               |  | 273    |        |              |  | 1,547      |         |                 |  | 745           |        |  |  | 273    |        |  |  | 2,292   |         |  |  | 2,565   |         |  |  | (943   | )       |   | 1994                        
|                                                                      | Goodyear Distribution Center        |                                               |  | 1                 |    |                                |  |              |  |               |  | 511    |        |              |  | 2,899      |         |                 |  | 559           |        |  |  | 511    |        |  |  | 3,458   |         |  |  | 3,969   |         |  |  | (1,179 | )       |   | 1991                        
|                                                                      | Northwestern Corporate Center(d)(h) |                                               |  | 5                 |    |                                |  |              |  |               |  | 1,184  |        |              |  |           |         |                 |  | 20,832        |        |  |  | 2,617  |        |  |  | 19,399  |         |  |  | 22,016  |         |  |  | (5,103 | )       |   | 1992, 1993, 1994, 1997, 2003
|                                                                      | Pan American Distribution Center    |                                               |  | 1                 |    |                                |  |              |  |               |  | 196    |        |              |  | 1,110      |         |                 |  | 521           |        |  |  | 196    |        |  |  | 1,631   |         |  |  | 1,827   |         |  |  | (32    | )       |   | 2002                        
|                                                                      | Vista Corporate Center              |                                               |  | 4                 |    |                                |  |              |  |               |  | 1,945  |        |              |  |           |         |                 |  | 11,711        |        |  |  | 1,945  |        |  |  | 11,711  |         |  |  | 13,656  |         |  |  | (4,304 | )       |   | 1994, 1995, 1996            
|                                                                      | Vista Del Sol Industrial Center     |                                               |  | 4                 |    |                                |  | (e)          |  |               |  | 996    |        |              |  |           |         |                 |  | 17,977        |        |  |  | 2,055  |        |  |  | 16,918  |         |  |  | 18,973  |         |  |  | (5,658 | )       |   | 1995, 1997, 1998            
|                                                                      |                                     |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |         |         |  |  |         |         |  |  |        |         |  
|                                                                      |                                     | Total El Paso, Texas                          |  |                   | 16 |                                |  |              |  |               |  |        | 5,105  |              |  |            | 5,556   |                 |  |               | 52,345 |  |  |        | 7,597  |  |  |         | 55,409  |  |  |         | 63,006  |  |  |        | (17,219 | ) |                              | 
|                                                                      |                                     |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |         |         |  |  |         |         |  |  |        |         |  
|Fort Lauderdale/ Miami, Florida                                       |                                     |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |         |         |  |  |         |         |  |  |        |         |  
|                                                                      | Airport West Distribution Center    |                                               |  | 2                 |    |                                |  |              |  |               |  | 1,253  |        |              |  | 3,825      |         |                 |  | 3,275         |        |  |  | 1,974  |        |  |  | 6,379   |         |  |  | 8,353   |         |  |  | (1,820 | )       |   | 1995, 1998                  
|                                                                      | CenterPort Distribution Center      |                                               |  | 3                 |    |                                |  |              |  |               |  | 2,083  |        |              |  | 11,806     |         |                 |  | 581           |        |  |  | 2,083  |        |  |  | 12,387  |         |  |  | 14,470  |         |  |  | (2,943 | )       |   | 1999                        
|                                                                      | Copans Distribution Center          |                                               |  | 2                 |    |                                |  |              |  |               |  | 504    |        |              |  | 2,857      |         |                 |  | 530           |        |  |  | 504    |        |  |  | 3,387   |         |  |  | 3,891   |         |  |  | (1,119 | )       |   | 1997, 1998                  
|                                                                      | Dade Distribution Center(d)         |                                               |  | 1                 |    |                                |  |              |  |               |  | 2,589  |        |              |  | 14,670     |         |                 |  |              |        |  |  | 2,589  |        |  |  | 14,670  |         |  |  | 17,259  |         |  |  |       |         |   | 2005                        
|                                                                      | North Andrews Distribution Center   |                                               |  | 1                 |    |                                |  |              |  |               |  | 698    |        |              |  | 3,956      |         |                 |  | 101           |        |  |  | 698    |        |  |  | 4,057   |         |  |  | 4,755   |         |  |  | (1,518 | )       |   | 1994                        
|                                                                      | Port Lauderdale Distribution Center |                                               |  | 2                 |    |                                |  |              |  |               |  | 896    |        |              |  |           |         |                 |  | 8,341         |        |  |  | 2,205  |        |  |  | 7,032   |         |  |  | 9,237   |         |  |  | (1,601 | )       |   | 1997                        
|                                                                      | ProLogis Park I-595                 |                                               |  | 2                 |    |                                |  | (e)          |  |               |  | 1,998  |        |              |  | 11,326     |         |                 |  | 59            |        |  |  | 1,998  |        |  |  | 11,385  |         |  |  | 13,383  |         |  |  | (1,126 | )       |   | 2003                        
|                                                                      |                                     |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |         |         |  |  |         |         |  |  |        |         |  
|                                                                      |                                     | Total Fort Lauderdale/ Miami, Florida         |  |                   | 13 |                                |  |              |  |               |  |        | 10,021 |              |  |            | 48,440  |                 |  |               | 12,887 |  |  |        | 12,051 |  |  |         | 59,297  |  |  |         | 71,348  |  |  |        | (10,127 | ) |                              | 
|                                                                      |                                     |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |         |         |  |  |         |         |  |  |        |         |  
|Houston, Texas                                                        |                                     |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |         |         |  |  |         |         |  |  |        |         |  
|                                                                      | Blalock Distribution Center         |                                               |  | 2                 |    |                                |  |              |  |               |  | 595    |        |              |  | 3,370      |         |                 |  | 928           |        |  |  | 595    |        |  |  | 4,298   |         |  |  | 4,893   |         |  |  | (63    | )       |   | 2002                        
|                                                                      | Brittmore Distribution Center       |                                               |  | 2                 |    |                                |  |              |  |               |  | 1,838  |        |              |  | 10,417     |         |                 |  | 884           |        |  |  | 1,838  |        |  |  | 11,301  |         |  |  | 13,139  |         |  |  | (2,985 | )       |   | 1999                        
|                                                                      | Crosstimbers Distribution Center    |                                               |  | 1                 |    |                                |  |              |  |               |  | 359    |        |              |  | 2,035      |         |                 |  | 794           |        |  |  | 359    |        |  |  | 2,829   |         |  |  | 3,188   |         |  |  | (1,078 | )       |   | 1994                        
|                                                                      | Hempstead Distribution Center       |                                               |  | 3                 |    |                                |  |              |  |               |  | 1,013  |        |              |  | 5,740      |         |                 |  | 1,597         |        |  |  | 1,013  |        |  |  | 7,337   |         |  |  | 8,350   |         |  |  | (3,016 | )       |   | 1994                        
|                                                                      | Hobby Business Park                 |                                               |  | 1                 |    |                                |  |              |  |               |  | 721    |        |              |  | 2,885      |         |                 |  |              |        |  |  | 721    |        |  |  | 2,885   |         |  |  | 3,606   |         |  |  | (28    | )       |   | 2005                        
|                                                                      | I-10 Central Distribution Center    |                                               |  | 2                 |    |                                |  |              |  |               |  | 181    |        |              |  | 1,023      |         |                 |  | 341           |        |  |  | 180    |        |  |  | 1,365   |         |  |  | 1,545   |         |  |  | (634   | )       |   | 1994                        
|                                                                      | I-10 Central Service Center         |                                               |  | 1                 |    |                                |  |              |  |               |  | 58     |        |              |  | 330        |         |                 |  | 164           |        |  |  | 58     |        |  |  | 494     |         |  |  | 552     |         |  |  | (238   | )       |   | 1994                        

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|                                                                      |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |   |                                          | 
|--------------------------------------------------------------------- | -------------------------------------- | --------------------------------------------- |  | ----------------- | -- | ------------------------------ |  | ------------ |  | ------------- |  | ------ | ------ | ------------ |  | ---------- | ------- | --------------- |  | ------------- | ------ |  |  | ------ | ------ |  |  | ------ | ------- |  |  | ------ | ------- |  |  | ------- | ------- | - | ---------------------------------------- | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                        |                                               |  |                   |    | Gross Amounts At Which Carried |  |             
|                                                                      |                                        | Initial Cost to ProLogis                      |  |                   |    | as of December 31, 2005        |  |             
|                                                                      |                                        |                                               |  | Costs Capitalized |    |                                |  |              |  | Date of      
|                                                                      |                                        | No. of                                        |  | Encum-            |    |                                |  | Building &   |  | Subsequent to |  |        |        | Building &   |  |            |         | Accumulated     |  | Construction/
|Description                                                           |                                        | Bldgs.                                        |  | brances           |    | Land                           |  | Improvements |  | Acquisition   |  | Land   |        | Improvements |  | Total(a,b) |         | Depreciation(c) |  | Acquisition  
|                                                                      |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |              
|                                                                      |                                        | (In thousands of U.S. dollars, as applicable)
|                                                                      | Kempwood Business Center               |                                               |  | 4                 |    |                                |  |              |  |               |  | 1,746  |        |              |  | 9,894      |         |                 |  | 1,595         |        |  |  | 1,745  |        |  |  | 11,490 |         |  |  | 13,235 |         |  |  | (2,127  | )       |   | 2001                                    
|                                                                      | Perimeter Distribution Center          |                                               |  | 2                 |    |                                |  |              |  |               |  | 813    |        |              |  | 4,604      |         |                 |  | 835           |        |  |  | 813    |        |  |  | 5,439  |         |  |  | 6,252  |         |  |  | (1,328  | )       |   | 1999                                    
|                                                                      | Pine Forest Business Center            |                                               |  | 18                |    |                                |  | (e)          |  |               |  | 4,859  |        |              |  | 27,557     |         |                 |  | 5,323         |        |  |  | 4,859  |        |  |  | 32,880 |         |  |  | 37,739 |         |  |  | (12,782 | )       |   | 1993, 1994, 1995                        
|                                                                      | Pine North Distribution Center         |                                               |  | 2                 |    |                                |  |              |  |               |  | 847    |        |              |  | 4,800      |         |                 |  | 560           |        |  |  | 847    |        |  |  | 5,360  |         |  |  | 6,207  |         |  |  | (1,418  | )       |   | 1999                                    
|                                                                      | Pine Timbers Distribution Center       |                                               |  | 2                 |    |                                |  |              |  |               |  | 2,956  |        |              |  | 16,750     |         |                 |  | 2,196         |        |  |  | 2,956  |        |  |  | 18,946 |         |  |  | 21,902 |         |  |  | (5,074  | )       |   | 1999                                    
|                                                                      | Pinemont Distribution Center           |                                               |  | 2                 |    |                                |  |              |  |               |  | 642    |        |              |  | 3,636      |         |                 |  | 528           |        |  |  | 641    |        |  |  | 4,165  |         |  |  | 4,806  |         |  |  | (1,088  | )       |   | 1999                                    
|                                                                      | Post Oak Business Center               |                                               |  | 15                |    |                                |  | (e)          |  |               |  | 3,005  |        |              |  | 15,378     |         |                 |  | 6,337         |        |  |  | 3,005  |        |  |  | 21,715 |         |  |  | 24,720 |         |  |  | (9,137  | )       |   | 1993, 1994, 1996                        
|                                                                      | Post Oak Distribution Center           |                                               |  | 7                 |    |                                |  | (e)          |  |               |  | 2,115  |        |              |  | 12,017     |         |                 |  | 4,891         |        |  |  | 2,041  |        |  |  | 16,982 |         |  |  | 19,023 |         |  |  | (8,076  | )       |   | 1993, 1994                              
|                                                                      | South Loop Distribution Center         |                                               |  | 5                 |    |                                |  |              |  |               |  | 1,051  |        |              |  | 5,964      |         |                 |  | 3,224         |        |  |  | 1,052  |        |  |  | 9,187  |         |  |  | 10,239 |         |  |  | (4,091  | )       |   | 1994                                    
|                                                                      | Southland Distribution Center          |                                               |  | 1                 |    |                                |  |              |  |               |  | 1,209  |        |              |  | 6,849      |         |                 |  | 430           |        |  |  | 1,209  |        |  |  | 7,279  |         |  |  | 8,488  |         |  |  | (106    | )       |   | 2002                                    
|                                                                      | Southwest Freeway Industrial Center    |                                               |  | 1                 |    |                                |  |              |  |               |  | 84     |        |              |  | 476        |         |                 |  | 206           |        |  |  | 84     |        |  |  | 682    |         |  |  | 766    |         |  |  | (335    | )       |   | 1994                                    
|                                                                      | Sugarland Corporate Center(d)          |                                               |  | 3                 |    |                                |  |              |  |               |  | 2,535  |        |              |  |           |         |                 |  | 14,073        |        |  |  | 2,535  |        |  |  | 14,073 |         |  |  | 16,608 |         |  |  |        |         |   | 2005                                    
|                                                                      | West by Northwest Industrial Center(d) |                                               |  | 17                |    |                                |  |              |  |               |  | 4,421  |        |              |  | 8,382      |         |                 |  | 38,650        |        |  |  | 4,528  |        |  |  | 46,925 |         |  |  | 51,453 |         |  |  | (15,522 | )       |   | 1993, 1994, 1995, 1996, 1997, 1998, 2003
|                                                                      | White Street Distribution Center       |                                               |  | 1                 |    |                                |  |              |  |               |  | 469    |        |              |  | 2,656      |         |                 |  | 539           |        |  |  | 469    |        |  |  | 3,195  |         |  |  | 3,664  |         |  |  | (1,203  | )       |   | 1995                                    
|                                                                      |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      |                                        | Total Houston, Texas                          |  |                   | 92 |                                |  |              |  |               |  |        | 31,517 |              |  |            | 144,763 |                 |  |               | 84,095 |  |  |        | 31,548 |  |  |        | 228,827 |  |  |        | 260,375 |  |  |         | (70,329 | ) |                                          | 
|                                                                      |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|I-81 Corridor, Pennsylvania                                           |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      | Harrisburg Distribution Center         |                                               |  | 1                 |    |                                |  |              |  |               |  | 2,243  |        |              |  | 12,572     |         |                 |  | 222           |        |  |  | 2,243  |        |  |  | 12,794 |         |  |  | 15,037 |         |  |  | (584    | )       |   | 2004                                    
|                                                                      | Harrisburg Industrial Center           |                                               |  | 1                 |    |                                |  |              |  |               |  | 782    |        |              |  | 6,190      |         |                 |  | 588           |        |  |  | 782    |        |  |  | 6,778  |         |  |  | 7,560  |         |  |  | (653    | )       |   | 2002                                    
|                                                                      | Kraft Distribution Center              |                                               |  | 1                 |    |                                |  |              |  |               |  | 2,457  |        |              |  | 13,920     |         |                 |  | 70            |        |  |  | 2,457  |        |  |  | 13,990 |         |  |  | 16,447 |         |  |  | (3,113  | )       |   | 1999                                    
|                                                                      | Lehigh Valley Distribution Center      |                                               |  | 6                 |    |                                |  |              |  |               |  | 9,387  |        |              |  | 52,723     |         |                 |  | 751           |        |  |  | 9,390  |        |  |  | 53,471 |         |  |  | 62,861 |         |  |  | (2,458  | )       |   | 2004                                    
|                                                                      | Middleton Distribution Center          |                                               |  | 1                 |    |                                |  | (e)          |  |               |  | 4,190  |        |              |  | 23,478     |         |                 |  | 145           |        |  |  | 4,190  |        |  |  | 23,623 |         |  |  | 27,813 |         |  |  | (1,089  | )       |   | 2004                                    
|                                                                      | Northport Industrial Center            |                                               |  | 1                 |    |                                |  |              |  |               |  | 395    |        |              |  | 21,707     |         |                 |  | 2,335         |        |  |  | 1,869  |        |  |  | 22,568 |         |  |  | 24,437 |         |  |  | (2,079  | )       |   | 2002                                    
|                                                                      |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      |                                        | Total I-81 Corridor, Pennsylvania             |  |                   | 11 |                                |  |              |  |               |  |        | 19,454 |              |  |            | 130,590 |                 |  |               | 4,111  |  |  |        | 20,931 |  |  |        | 133,224 |  |  |        | 154,155 |  |  |         | (9,976  | ) |                                          | 
|                                                                      |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|Indianapolis, Indiana                                                 |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      | Airport Business Center                |                                               |  | 2                 |    |                                |  |              |  |               |  | 600    |        |              |  | 3,406      |         |                 |  | 5,652         |        |  |  | 934    |        |  |  | 8,724  |         |  |  | 9,658  |         |  |  | (1,881  | )       |   | 1999                                    
|                                                                      | Eastside Distribution Center           |                                               |  | 2                 |    |                                |  |              |  |               |  | 1,204  |        |              |  | 6,820      |         |                 |  | 943           |        |  |  | 1,275  |        |  |  | 7,692  |         |  |  | 8,967  |         |  |  | (1,991  | )       |   | 1995, 1999                              
|                                                                      | Logo Court Distribution Center         |                                               |  | 1                 |    |                                |  |              |  |               |  | 3,352  |        |              |  | 18,678     |         |                 |  | 167           |        |  |  | 3,352  |        |  |  | 18,845 |         |  |  | 22,197 |         |  |  | (871    | )       |   | 2004                                    
|                                                                      | North by Northeast Distribution Center |                                               |  | 1                 |    |                                |  |              |  |               |  | 1,058  |        |              |  |           |         |                 |  | 7,049         |        |  |  | 1,059  |        |  |  | 7,048  |         |  |  | 8,107  |         |  |  | (2,296  | )       |   | 1995                                    
|                                                                      | Park 100 Industrial Center             |                                               |  | 25                |    |                                |  |              |  |               |  | 10,751 |        |              |  | 60,928     |         |                 |  | 13,673        |        |  |  | 10,643 |        |  |  | 74,709 |         |  |  | 85,352 |         |  |  | (27,005 | )       |   | 1994, 1995, 1999                        
|                                                                      | Park Fletcher Distribution Center      |                                               |  | 9                 |    |                                |  |              |  |               |  | 2,687  |        |              |  | 15,224     |         |                 |  | 5,042         |        |  |  | 2,785  |        |  |  | 20,168 |         |  |  | 22,953 |         |  |  | (7,333  | )       |   | 1994, 1995, 1996                        
|                                                                      | Shadeland Industrial Center            |                                               |  | 3                 |    |                                |  |              |  |               |  | 428    |        |              |  | 2,431      |         |                 |  | 2,089         |        |  |  | 428    |        |  |  | 4,520  |         |  |  | 4,948  |         |  |  | (1,632  | )       |   | 1995                                    
|                                                                      |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      |                                        | Total Indianapolis, Indiana                   |  |                   | 43 |                                |  |              |  |               |  |        | 20,080 |              |  |            | 107,487 |                 |  |               | 34,615 |  |  |        | 20,476 |  |  |        | 141,706 |  |  |        | 162,182 |  |  |         | (43,009 | ) |                                          | 
|                                                                      |                                        |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  

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|                                                                      |                                                |                                               |  |                   |    |                                |  |              |  |               |  |         |         |              |  |            |         |                 |  |               |        |  |  |         |         |  |  |         |         |  |  |         |           |  |  |        |         |   |                              | 
|--------------------------------------------------------------------- | ---------------------------------------------- | --------------------------------------------- |  | ----------------- | -- | ------------------------------ |  | ------------ |  | ------------- |  | ------- | ------- | ------------ |  | ---------- | ------- | --------------- |  | ------------- | ------ |  |  | ------- | ------- |  |  | ------- | ------- |  |  | ------- | --------- |  |  | ------ | ------- | - | ---------------------------- | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                                |                                               |  |                   |    | Gross Amounts At Which Carried |  |             
|                                                                      |                                                | Initial Cost to ProLogis                      |  |                   |    | as of December 31, 2005        |  |             
|                                                                      |                                                |                                               |  | Costs Capitalized |    |                                |  |              |  | Date of      
|                                                                      |                                                | No. of                                        |  | Encum-            |    |                                |  | Building &   |  | Subsequent to |  |         |         | Building &   |  |            |         | Accumulated     |  | Construction/
|Description                                                           |                                                | Bldgs.                                        |  | brances           |    | Land                           |  | Improvements |  | Acquisition   |  | Land    |         | Improvements |  | Total(a,b) |         | Depreciation(c) |  | Acquisition  
|                                                                      |                                                |                                               |  |                   |    |                                |  |              |  |               |  |         |         |              |  |            |         |                 |  |              
|                                                                      |                                                | (In thousands of U.S. dollars, as applicable)
|Las Vegas, Nevada                                                     |                                                |                                               |  |                   |    |                                |  |              |  |               |  |         |         |              |  |            |         |                 |  |               |        |  |  |         |         |  |  |         |         |  |  |         |           |  |  |        |         |  
|                                                                      | Black Mountain Distribution Center             |                                               |  | 2                 |    |                                |  |              |  |               |  | 1,108   |         |              |  |           |         |                 |  | 7,296         |        |  |  | 1,205   |         |  |  | 7,199   |         |  |  | 8,404   |           |  |  | (2,132 | )       |   | 1997                        
|                                                                      | Cameron Business Center                        |                                               |  | 1                 |    |                                |  | (e)          |  |               |  | 1,634   |         |              |  | 9,256      |         |                 |  | 209           |        |  |  | 1,634   |         |  |  | 9,465   |         |  |  | 11,099  |           |  |  | (2,147 | )       |   | 1999                        
|                                                                      | Hughes Airport Center                          |                                               |  | 1                 |    |                                |  |              |  |               |  | 876     |         |              |  |           |         |                 |  | 3,279         |        |  |  | 910     |         |  |  | 3,245   |         |  |  | 4,155   |           |  |  | (1,143 | )       |   | 1994                        
|                                                                      | Las Vegas Corporate Center(d)                  |                                               |  | 8                 |    |                                |  | (i)          |  |               |  | 5,996   |         |              |  |           |         |                 |  | 30,191        |        |  |  | 6,108   |         |  |  | 30,079  |         |  |  | 36,187  |           |  |  | (7,773 | )       |   | 1994, 1995, 1996, 1997, 2005
|                                                                      | Placid Street Distribution Center              |                                               |  | 1                 |    |                                |  | (e)          |  |               |  | 2,620   |         |              |  | 14,848     |         |                 |  | 52            |        |  |  | 2,620   |         |  |  | 14,900  |         |  |  | 17,520  |           |  |  | (3,343 | )       |   | 1999                        
|                                                                      | South Arville Center                           |                                               |  | 1                 |    |                                |  |              |  |               |  | 1,440   |         |              |  | 8,160      |         |                 |  | 186           |        |  |  | 1,440   |         |  |  | 8,346   |         |  |  | 9,786   |           |  |  | (1,874 | )       |   | 1999                        
|                                                                      | West One Business Center                       |                                               |  | 4                 |    |                                |  |              |  |               |  | 2,468   |         |              |  | 13,985     |         |                 |  | 1,418         |        |  |  | 2,469   |         |  |  | 15,402  |         |  |  | 17,871  |           |  |  | (5,118 | )       |   | 1996                        
|                                                                      |                                                |                                               |  |                   |    |                                |  |              |  |               |  |         |         |              |  |            |         |                 |  |               |        |  |  |         |         |  |  |         |         |  |  |         |           |  |  |        |         |  
|                                                                      |                                                | Total Las Vegas, Nevada                       |  |                   | 18 |                                |  |              |  |               |  |         | 16,142  |              |  |            | 46,249  |                 |  |               | 42,631 |  |  |         | 16,386  |  |  |         | 88,636  |  |  |         | 105,022   |  |  |        | (23,530 | ) |                              | 
|                                                                      |                                                |                                               |  |                   |    |                                |  |              |  |               |  |         |         |              |  |            |         |                 |  |               |        |  |  |         |         |  |  |         |         |  |  |         |           |  |  |        |         |  
|Los Angeles/ Orange County, California                                |                                                |                                               |  |                   |    |                                |  |              |  |               |  |         |         |              |  |            |         |                 |  |               |        |  |  |         |         |  |  |         |         |  |  |         |           |  |  |        |         |  
|                                                                      | Anaheim Industrial Center                      |                                               |  | 13                |    |                                |  | (e)          |  |               |  | 32,275  |         |              |  | 59,983     |         |                 |  |              |        |  |  | 32,275  |         |  |  | 59,983  |         |  |  | 92,258  |           |  |  | (582   | )       |   | 2005                        
|                                                                      | California Commerce Center                     |                                               |  | 1                 |    |                                |  | (e)          |  |               |  | 4,201   |         |              |  | 7,802      |         |                 |  |              |        |  |  | 4,201   |         |  |  | 7,802   |         |  |  | 12,003  |           |  |  | (76    | )       |   | 2005                        
|                                                                      | Crossroads Business Park                       |                                               |  | 7                 |    |                                |  | (e)          |  |               |  | 51,661  |         |              |  | 95,951     |         |                 |  |              |        |  |  | 51,661  |         |  |  | 95,951  |         |  |  | 147,612 |           |  |  | (933   | )       |   | 2005                        
|                                                                      | Fullerton Industrial Center                    |                                               |  | 2                 |    |                                |  | (e)          |  |               |  | 8,238   |         |              |  | 15,300     |         |                 |  |              |        |  |  | 8,238   |         |  |  | 15,300  |         |  |  | 23,538  |           |  |  | (149   | )       |   | 2005                        
|                                                                      | Industry Distribution Center                   |                                               |  | 7                 |    |                                |  | (e)(i)       |  |               |  | 50,268  |         |              |  | 93,355     |         |                 |  |              |        |  |  | 50,268  |         |  |  | 93,355  |         |  |  | 143,623 |           |  |  | (908   | )       |   | 2005                        
|                                                                      | Inland Empire Distribution Center(d)           |                                               |  | 7                 |    |                                |  | (e)          |  |               |  | 52,379  |         |              |  | 84,275     |         |                 |  | 29,412        |        |  |  | 53,036  |         |  |  | 113,030 |         |  |  | 166,066 |           |  |  | (3,138 | )       |   | 1999, 2005                  
|                                                                      | Kaiser Distribution Center(d)                  |                                               |  | 7                 |    |                                |  | (e)(i)       |  |               |  | 120,885 |         |              |  | 225,594    |         |                 |  | 5             |        |  |  | 120,885 |         |  |  | 225,599 |         |  |  | 346,484 |           |  |  | (1,908 | )       |   | 2005                        
|                                                                      | Los Angeles Industrial Center                  |                                               |  | 2                 |    |                                |  | (e)          |  |               |  | 3,778   |         |              |  | 7,016      |         |                 |  |              |        |  |  | 3,778   |         |  |  | 7,016   |         |  |  | 10,794  |           |  |  | (68    | )       |   | 2005                        
|                                                                      | Mid Counties Industrial Center(d)              |                                               |  | 11                |    |                                |  | (e)          |  |               |  | 35,477  |         |              |  | 67,816     |         |                 |  | 90            |        |  |  | 35,477  |         |  |  | 67,906  |         |  |  | 103,383 |           |  |  | (574   | )       |   | 2005                        
|                                                                      | Mill Street Spec Distribution Center           |                                               |  | 1                 |    |                                |  |              |  |               |  | 1,232   |         |              |  | 31,842     |         |                 |  |              |        |  |  | 1,232   |         |  |  | 31,842  |         |  |  | 33,074  |           |  |  |       |         |   | 2005                        
|                                                                      | Orange Industrial Center                       |                                               |  | 4                 |    |                                |  | (e)          |  |               |  | 11,152  |         |              |  | 20,835     |         |                 |  |              |        |  |  | 11,152  |         |  |  | 20,835  |         |  |  | 31,987  |           |  |  | (201   | )       |   | 2005                        
|                                                                      | Rancho Cucamonga Distribution Center           |                                               |  | 6                 |    |                                |  | (e)(i)       |  |               |  | 51,283  |         |              |  | 95,241     |         |                 |  | 1             |        |  |  | 51,283  |         |  |  | 95,242  |         |  |  | 146,525 |           |  |  | (926   | )       |   | 2005                        
|                                                                      | Redlands Commerce Center(d)                    |                                               |  | 1                 |    |                                |  |              |  |               |  | 14,173  |         |              |  |           |         |                 |  | 15,548        |        |  |  | 14,173  |         |  |  | 15,548  |         |  |  | 29,721  |           |  |  |       |         |   | 2005                        
|                                                                      | Santa Ana Distribution Center                  |                                               |  | 2                 |    |                                |  | (e)          |  |               |  | 4,318   |         |              |  | 8,019      |         |                 |  |              |        |  |  | 4,318   |         |  |  | 8,019   |         |  |  | 12,337  |           |  |  | (78    | )       |   | 2005                        
|                                                                      | South Bay Distribution Center                  |                                               |  | 2                 |    |                                |  | (e)          |  |               |  | 9,907   |         |              |  | 18,398     |         |                 |  |              |        |  |  | 9,907   |         |  |  | 18,398  |         |  |  | 28,305  |           |  |  | (179   | )       |   | 2005                        
|                                                                      | Transpark Inland Empire Distribution Center(d) |                                               |  | 1                 |    |                                |  |              |  |               |  | 13,774  |         |              |  |           |         |                 |  | 21,036        |        |  |  | 13,774  |         |  |  | 21,036  |         |  |  | 34,810  |           |  |  |       |         |   | 2005                        
|                                                                      | Tustin Industrial Center                       |                                               |  | 3                 |    |                                |  | (e)          |  |               |  | 7,619   |         |              |  | 14,150     |         |                 |  |              |        |  |  | 7,619   |         |  |  | 14,150  |         |  |  | 21,769  |           |  |  | (137   | )       |   | 2005                        
|                                                                      | Vernon Distribution Center                     |                                               |  | 15                |    |                                |  | (e)          |  |               |  | 25,439  |         |              |  | 47,250     |         |                 |  |              |        |  |  | 25,439  |         |  |  | 47,250  |         |  |  | 72,689  |           |  |  | (460   | )       |   | 2005                        
|                                                                      |                                                |                                               |  |                   |    |                                |  |              |  |               |  |         |         |              |  |            |         |                 |  |               |        |  |  |         |         |  |  |         |         |  |  |         |           |  |  |        |         |  
|                                                                      |                                                | Total Los Angeles/ Orange County, California  |  |                   | 92 |                                |  |              |  |               |  |         | 498,059 |              |  |            | 892,827 |                 |  |               | 66,092 |  |  |         | 498,716 |  |  |         | 958,262 |  |  |         | 1,456,978 |  |  |        | (10,317 | ) |                              | 
|                                                                      |                                                |                                               |  |                   |    |                                |  |              |  |               |  |         |         |              |  |            |         |                 |  |               |        |  |  |         |         |  |  |         |         |  |  |         |           |  |  |        |         |  

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|                                                                      |                                         |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |         |         |  |  |         |         |  |  |         |         |   |                                          | 
|--------------------------------------------------------------------- | --------------------------------------- | --------------------------------------------- |  | ----------------- | -- | ------------------------------ |  | ------------ |  | ------------- |  | ------ | ------ | ------------ |  | ---------- | ------- | --------------- |  | ------------- | ------ |  |  | ------ | ------ |  |  | ------- | ------- |  |  | ------- | ------- |  |  | ------- | ------- | - | ---------------------------------------- | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                         |                                               |  |                   |    | Gross Amounts At Which Carried |  |             
|                                                                      |                                         | Initial Cost to ProLogis                      |  |                   |    | as of December 31, 2005        |  |             
|                                                                      |                                         |                                               |  | Costs Capitalized |    |                                |  |              |  | Date of      
|                                                                      |                                         | No. of                                        |  | Encum-            |    |                                |  | Building &   |  | Subsequent to |  |        |        | Building &   |  |            |         | Accumulated     |  | Construction/
|Description                                                           |                                         | Bldgs.                                        |  | brances           |    | Land                           |  | Improvements |  | Acquisition   |  | Land   |        | Improvements |  | Total(a,b) |         | Depreciation(c) |  | Acquisition  
|                                                                      |                                         |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |              
|                                                                      |                                         | (In thousands of U.S. dollars, as applicable)
|Louisville, Kentucky                                                  |                                         |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |         |         |  |  |         |         |  |  |         |         |  
|                                                                      | Airpark Commerce Center                 |                                               |  | 4                 |    |                                |  |              |  |               |  | 1,583  |        |              |  | 8,971      |         |                 |  | 5,260         |        |  |  | 1,584  |        |  |  | 14,230  |         |  |  | 15,814  |         |  |  | (5,468  | )       |   | 1998                                    
|                                                                      | Cedar Grove Distribution Center         |                                               |  | 1                 |    |                                |  | (e)          |  |               |  | 3,775  |        |              |  | 15,098     |         |                 |  |              |        |  |  | 3,775  |        |  |  | 15,098  |         |  |  | 18,873  |         |  |  | (147    | )       |   | 2005                                    
|                                                                      | Commerce Crossings Distribution Center  |                                               |  | 1                 |    |                                |  | (e)          |  |               |  | 1,912  |        |              |  | 7,649      |         |                 |  |              |        |  |  | 1,912  |        |  |  | 7,649   |         |  |  | 9,561   |         |  |  | (74     | )       |   | 2005                                    
|                                                                      | I-65 Meyer Distribution Center(d)(j)    |                                               |  |                  |    |                                |  |              |  |               |  | 1,378  |        |              |  |           |         |                 |  | 5,383         |        |  |  | 1,378  |        |  |  | 5,383   |         |  |  | 6,761   |         |  |  |        |         |   | 2004                                    
|                                                                      | Louisville Distribution Center          |                                               |  | 2                 |    |                                |  |              |  |               |  | 680    |        |              |  | 3,402      |         |                 |  | 4,584         |        |  |  | 689    |        |  |  | 7,977   |         |  |  | 8,666   |         |  |  | (2,357  | )       |   | 1995, 1998                              
|                                                                      | Riverport Distribution Center           |                                               |  | 1                 |    |                                |  | (e)          |  |               |  | 1,515  |        |              |  | 8,585      |         |                 |  | 2,727         |        |  |  | 1,515  |        |  |  | 11,312  |         |  |  | 12,827  |         |  |  | (2,016  | )       |   | 1999                                    
|                                                                      |                                         |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |         |         |  |  |         |         |  |  |         |         |  
|                                                                      |                                         | Total Louisville, Kentucky                    |  |                   | 9  |                                |  |              |  |               |  |        | 10,843 |              |  |            | 43,705  |                 |  |               | 17,954 |  |  |        | 10,853 |  |  |         | 61,649  |  |  |         | 72,502  |  |  |         | (10,062 | ) |                                          | 
|                                                                      |                                         |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |         |         |  |  |         |         |  |  |         |         |  
|Memphis, Tennessee                                                    |                                         |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |         |         |  |  |         |         |  |  |         |         |  
|                                                                      | Airport Distribution Center             |                                               |  | 18                |    |                                |  |              |  |               |  | 6,536  |        |              |  | 36,998     |         |                 |  | 10,036        |        |  |  | 6,536  |        |  |  | 47,034  |         |  |  | 53,570  |         |  |  | (16,388 | )       |   | 1995, 1996, 1999                        
|                                                                      | Centerpointe Distribution Center        |                                               |  | 3                 |    |                                |  |              |  |               |  | 2,497  |        |              |  | 14,151     |         |                 |  | 1,364         |        |  |  | 2,497  |        |  |  | 15,515  |         |  |  | 18,012  |         |  |  | (2,970  | )       |   | 2001                                    
|                                                                      | Delp Distribution Center                |                                               |  | 10                |    |                                |  |              |  |               |  | 4,886  |        |              |  | 27,687     |         |                 |  | 6,981         |        |  |  | 4,887  |        |  |  | 34,667  |         |  |  | 39,554  |         |  |  | (11,906 | )       |   | 1995, 1997, 1999                        
|                                                                      | Fred Jones Distribution Center          |                                               |  | 1                 |    |                                |  |              |  |               |  | 125    |        |              |  | 707        |         |                 |  | 240           |        |  |  | 125    |        |  |  | 947     |         |  |  | 1,072   |         |  |  | (405    | )       |   | 1994                                    
|                                                                      | Memphis Distribution Center             |                                               |  | 1                 |    |                                |  |              |  |               |  | 480    |        |              |  | 2,723      |         |                 |  | 297           |        |  |  | 481    |        |  |  | 3,019   |         |  |  | 3,500   |         |  |  | (5      | )       |   | 2002                                    
|                                                                      | Olive Branch Distribution Center        |                                               |  | 2                 |    |                                |  |              |  |               |  | 2,892  |        |              |  | 16,389     |         |                 |  | 1,890         |        |  |  | 2,892  |        |  |  | 18,279  |         |  |  | 21,171  |         |  |  | (4,264  | )       |   | 1999                                    
|                                                                      | Raines Distribution Center              |                                               |  | 1                 |    |                                |  |              |  |               |  | 1,635  |        |              |  | 9,264      |         |                 |  | 3,852         |        |  |  | 1,635  |        |  |  | 13,116  |         |  |  | 14,751  |         |  |  | (5,340  | )       |   | 1998                                    
|                                                                      | Southpark Distribution Center           |                                               |  | 1                 |    |                                |  |              |  |               |  | 859    |        |              |  | 4,866      |         |                 |  | 452           |        |  |  | 859    |        |  |  | 5,318   |         |  |  | 6,177   |         |  |  | (9      | )       |   | 2003                                    
|                                                                      | Southwide Industrial Center             |                                               |  | 4                 |    |                                |  |              |  |               |  | 725    |        |              |  | 4,105      |         |                 |  | 1,188         |        |  |  | 724    |        |  |  | 5,294   |         |  |  | 6,018   |         |  |  | (1,145  | )       |   | 1999                                    
|                                                                      | Stateline Distribution Center(d)        |                                               |  | 1                 |    |                                |  |              |  |               |  | 2,597  |        |              |  |           |         |                 |  | 11,762        |        |  |  | 2,597  |        |  |  | 11,762  |         |  |  | 14,359  |         |  |  |        |         |   | 2005                                    
|                                                                      | Willow Lake Distribution Center         |                                               |  | 1                 |    |                                |  |              |  |               |  | 613    |        |              |  | 3,474      |         |                 |  | 300           |        |  |  | 613    |        |  |  | 3,774   |         |  |  | 4,387   |         |  |  | (906    | )       |   | 1999                                    
|                                                                      |                                         |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |         |         |  |  |         |         |  |  |         |         |  
|                                                                      |                                         | Total Memphis, Tennessee                      |  |                   | 43 |                                |  |              |  |               |  |        | 23,845 |              |  |            | 120,364 |                 |  |               | 38,362 |  |  |        | 23,846 |  |  |         | 158,725 |  |  |         | 182,571 |  |  |         | (43,338 | ) |                                          | 
|                                                                      |                                         |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |         |         |  |  |         |         |  |  |         |         |  
|Nashville, Tennessee                                                  |                                         |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |         |         |  |  |         |         |  |  |         |         |  
|                                                                      | Bakertown Distribution Center           |                                               |  | 2                 |    |                                |  |              |  |               |  | 463    |        |              |  | 2,626      |         |                 |  | 655           |        |  |  | 463    |        |  |  | 3,281   |         |  |  | 3,744   |         |  |  | (1,233  | )       |   | 1995                                    
|                                                                      | I-40 Industrial Center                  |                                               |  | 4                 |    |                                |  |              |  |               |  | 1,711  |        |              |  | 9,698      |         |                 |  | 1,293         |        |  |  | 1,712  |        |  |  | 10,990  |         |  |  | 12,702  |         |  |  | (3,314  | )       |   | 1995, 1996, 1999                        
|                                                                      | Interchange City Distribution Center(d) |                                               |  | 17                |    |                                |  | (e)          |  |               |  | 8,107  |        |              |  | 38,553     |         |                 |  | 13,429        |        |  |  | 8,861  |        |  |  | 51,228  |         |  |  | 60,089  |         |  |  | (9,761  | )       |   | 1994, 1995, 1996, 1997, 1998, 2001, 2003
|                                                                      | Space Park South Distribution Center    |                                               |  | 15                |    |                                |  |              |  |               |  | 3,499  |        |              |  | 19,830     |         |                 |  | 7,903         |        |  |  | 3,500  |        |  |  | 27,732  |         |  |  | 31,232  |         |  |  | (11,442 | )       |   | 1994                                    
|                                                                      |                                         |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |         |         |  |  |         |         |  |  |         |         |  
|                                                                      |                                         | Total Nashville, Tennessee                    |  |                   | 38 |                                |  |              |  |               |  |        | 13,780 |              |  |            | 70,707  |                 |  |               | 23,280 |  |  |        | 14,536 |  |  |         | 93,231  |  |  |         | 107,767 |  |  |         | (25,750 | ) |                                          | 
|                                                                      |                                         |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |         |         |  |  |         |         |  |  |         |         |  
|New Jersey                                                            |                                         |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |         |         |  |  |         |         |  |  |         |         |  
|                                                                      | Bellmawr Distribution Center            |                                               |  | 1                 |    |                                |  |              |  |               |  | 212    |        |              |  | 1,197      |         |                 |  | 375           |        |  |  | 211    |        |  |  | 1,573   |         |  |  | 1,784   |         |  |  | (363    | )       |   | 1999                                    
|                                                                      | Brunswick Distribution Center           |                                               |  | 2                 |    |                                |  |              |  |               |  | 870    |        |              |  | 4,928      |         |                 |  | 2,071         |        |  |  | 870    |        |  |  | 6,999   |         |  |  | 7,869   |         |  |  | (3,043  | )       |   | 1997                                    
|                                                                      | Chester Distribution Center             |                                               |  | 1                 |    |                                |  |              |  |               |  | 548    |        |              |  | 5,320      |         |                 |  |              |        |  |  | 548    |        |  |  | 5,320   |         |  |  | 5,868   |         |  |  | (2,653  | )       |   | 2002                                    
|                                                                      | Clearview Distribution Center           |                                               |  | 1                 |    |                                |  |              |  |               |  | 2,232  |        |              |  | 12,648     |         |                 |  | 525           |        |  |  | 2,232  |        |  |  | 13,173  |         |  |  | 15,405  |         |  |  | (4,249  | )       |   | 1996                                    
|                                                                      | Clifton Business Center                 |                                               |  | 1                 |    |                                |  |              |  |               |  | 2,014  |        |              |  | 11,276     |         |                 |  |              |        |  |  | 2,014  |        |  |  | 11,276  |         |  |  | 13,290  |         |  |  | (110    | )       |   | 2005                                    
|                                                                      | Cranbury Business Park(d)               |                                               |  | 1                 |    |                                |  |              |  |               |  | 566    |        |              |  |           |         |                 |  | 5,796         |        |  |  | 566    |        |  |  | 5,796   |         |  |  | 6,362   |         |  |  |        |         |   | 2004                                    
|                                                                      | Exit 10 Distribution Center             |                                               |  | 6                 |    |                                |  |              |  |               |  | 22,738 |        |              |  | 127,342    |         |                 |  |              |        |  |  | 22,738 |        |  |  | 127,342 |         |  |  | 150,080 |         |  |  | (1,237  | )       |   | 2005                                    
|                                                                      | Exit 8A Distribution Center(d)          |                                               |  | 2                 |    |                                |  | (e)          |  |               |  | 20,558 |        |              |  | 44,103     |         |                 |  | 23,747        |        |  |  | 20,558 |        |  |  | 67,850  |         |  |  | 88,408  |         |  |  | (432    | )       |   | 2005                                    
|                                                                      | Kilmer Distribution Center              |                                               |  | 4                 |    |                                |  | (e)          |  |               |  | 2,526  |        |              |  | 14,313     |         |                 |  | 2,468         |        |  |  | 2,525  |        |  |  | 16,782  |         |  |  | 19,307  |         |  |  | (5,414  | )       |   | 1996                                    

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|                                                                      |                                          |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |   |                  | 
|--------------------------------------------------------------------- | ---------------------------------------- | --------------------------------------------- |  | ----------------- | -- | ------------------------------ |  | ------------ |  | ------------- |  | ------ | ------ | ------------ |  | ---------- | ------- | --------------- |  | ------------- | ------ |  |  | ------ | ------ |  |  | ------ | ------- |  |  | ------ | ------- |  |  | ------- | ------- | - | ---------------- | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                          |                                               |  |                   |    | Gross Amounts At Which Carried |  |             
|                                                                      |                                          | Initial Cost to ProLogis                      |  |                   |    | as of December 31, 2005        |  |             
|                                                                      |                                          |                                               |  | Costs Capitalized |    |                                |  |              |  | Date of      
|                                                                      |                                          | No. of                                        |  | Encum-            |    |                                |  | Building &   |  | Subsequent to |  |        |        | Building &   |  |            |         | Accumulated     |  | Construction/
|Description                                                           |                                          | Bldgs.                                        |  | brances           |    | Land                           |  | Improvements |  | Acquisition   |  | Land   |        | Improvements |  | Total(a,b) |         | Depreciation(c) |  | Acquisition  
|                                                                      |                                          |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |              
|                                                                      |                                          | (In thousands of U.S. dollars, as applicable)
|                                                                      | Meadowland Distribution Center           |                                               |  | 5                 |    |                                |  |              |  |               |  | 12,526 |        |              |  | 80,205     |         |                 |  |              |        |  |  | 12,526 |        |  |  | 80,205 |         |  |  | 92,731 |         |  |  | (8,295  | )       |   | 2002, 2005      
|                                                                      | Meadowland Industrial Center             |                                               |  | 8                 |    |                                |  | (e)          |  |               |  | 5,676  |        |              |  | 32,167     |         |                 |  | 14,576        |        |  |  | 5,675  |        |  |  | 46,744 |         |  |  | 52,419 |         |  |  | (21,199 | )       |   | 1996, 1997, 1998
|                                                                      | Mt. Laurel Distribution Center           |                                               |  | 3                 |    |                                |  |              |  |               |  | 826    |        |              |  | 4,679      |         |                 |  | 1,238         |        |  |  | 826    |        |  |  | 5,917  |         |  |  | 6,743  |         |  |  | (1,270  | )       |   | 1999            
|                                                                      | National Distribution Center             |                                               |  | 2                 |    |                                |  |              |  |               |  | 513    |        |              |  | 2,908      |         |                 |  | 1,260         |        |  |  | 513    |        |  |  | 4,168  |         |  |  | 4,681  |         |  |  | (1,722  | )       |   | 1998            
|                                                                      | Pennsauken Distribution Center           |                                               |  | 3                 |    |                                |  |              |  |               |  | 376    |        |              |  | 2,132      |         |                 |  | 369           |        |  |  | 384    |        |  |  | 2,493  |         |  |  | 2,877  |         |  |  | (610    | )       |   | 1999            
|                                                                      | Port Reading Business Park(d)            |                                               |  | 1                 |    |                                |  |              |  |               |  | 4,138  |        |              |  |           |         |                 |  | 17,000        |        |  |  | 4,138  |        |  |  | 17,000 |         |  |  | 21,138 |         |  |  |        |         |   | 2005            
|                                                                      |                                          |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      |                                          | Total New Jersey                              |  |                   | 41 |                                |  |              |  |               |  |        | 76,319 |              |  |            | 343,218 |                 |  |               | 69,425 |  |  |        | 76,324 |  |  |        | 412,638 |  |  |        | 488,962 |  |  |         | (50,597 | ) |                  | 
|                                                                      |                                          |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|Orlando, Florida                                                      |                                          |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      | 33rd Street Industrial Center            |                                               |  | 9                 |    |                                |  |              |  |               |  | 1,980  |        |              |  | 11,237     |         |                 |  | 3,201         |        |  |  | 1,980  |        |  |  | 14,438 |         |  |  | 16,418 |         |  |  | (5,391  | )       |   | 1994, 1995, 1996
|                                                                      | Chancellor Distribution Center           |                                               |  | 1                 |    |                                |  |              |  |               |  | 380    |        |              |  | 2,156      |         |                 |  | 1,204         |        |  |  | 380    |        |  |  | 3,360  |         |  |  | 3,740  |         |  |  | (1,405  | )       |   | 1994            
|                                                                      | Consulate Distribution Center            |                                               |  | 3                 |    |                                |  | (e)          |  |               |  | 4,148  |        |              |  | 23,617     |         |                 |  | 799           |        |  |  | 4,147  |        |  |  | 24,417 |         |  |  | 28,564 |         |  |  | (5,518  | )       |   | 1999            
|                                                                      | La Quinta Distribution Center            |                                               |  | 1                 |    |                                |  |              |  |               |  | 354    |        |              |  | 2,006      |         |                 |  | 1,651         |        |  |  | 354    |        |  |  | 3,657  |         |  |  | 4,011  |         |  |  | (1,225  | )       |   | 1994            
|                                                                      | Orlando Central Park                     |                                               |  | 3                 |    |                                |  |              |  |               |  | 1,378  |        |              |  |           |         |                 |  | 9,957         |        |  |  | 1,871  |        |  |  | 9,464  |         |  |  | 11,335 |         |  |  | (2,497  | )       |   | 1997, 1998      
|                                                                      | Orlando Corporate Center(d)              |                                               |  | 2                 |    |                                |  |              |  |               |  | 1,214  |        |              |  |           |         |                 |  | 7,125         |        |  |  | 1,182  |        |  |  | 7,157  |         |  |  | 8,339  |         |  |  |        |         |   | 2004            
|                                                                      | Princeton Oaks Distribution Center       |                                               |  | 1                 |    |                                |  | (e)          |  |               |  | 900    |        |              |  | 5,100      |         |                 |  | 22            |        |  |  | 900    |        |  |  | 5,122  |         |  |  | 6,022  |         |  |  | (1,144  | )       |   | 1999            
|                                                                      | Titusville Industrial Center             |                                               |  | 1                 |    |                                |  |              |  |               |  | 283    |        |              |  | 1,603      |         |                 |  | 416           |        |  |  | 283    |        |  |  | 2,019  |         |  |  | 2,302  |         |  |  | (677    | )       |   | 1994            
|                                                                      |                                          |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      |                                          | Total Orlando, Florida                        |  |                   | 21 |                                |  |              |  |               |  |        | 10,637 |              |  |            | 45,719  |                 |  |               | 24,375 |  |  |        | 11,097 |  |  |        | 69,634  |  |  |        | 80,731  |  |  |         | (17,857 | ) |                  | 
|                                                                      |                                          |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|Phoenix, Arizona                                                      |                                          |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      | 24th Street Industrial Center            |                                               |  | 2                 |    |                                |  |              |  |               |  | 503    |        |              |  | 2,852      |         |                 |  | 1,392         |        |  |  | 560    |        |  |  | 4,187  |         |  |  | 4,747  |         |  |  | (1,842  | )       |   | 1994            
|                                                                      | Alameda Distribution Center              |                                               |  | 4                 |    |                                |  | (e)          |  |               |  | 4,692  |        |              |  | 20,466     |         |                 |  | 1,612         |        |  |  | 4,692  |        |  |  | 22,078 |         |  |  | 26,770 |         |  |  | (2,729  | )       |   | 1992, 1998, 2005
|                                                                      | Black Canyon Business Center             |                                               |  | 2                 |    |                                |  |              |  |               |  | 472    |        |              |  | 2,677      |         |                 |  | 1,278         |        |  |  | 472    |        |  |  | 3,955  |         |  |  | 4,427  |         |  |  | (857    | )       |   | 1999            
|                                                                      | Buckeye Road Industrial Center           |                                               |  | 2                 |    |                                |  |              |  |               |  | 1,236  |        |              |  | 4,988      |         |                 |  |              |        |  |  | 1,236  |        |  |  | 4,988  |         |  |  | 6,224  |         |  |  | (48     | )       |   | 2005            
|                                                                      | Hohokam 10 Industrial Center             |                                               |  | 6                 |    |                                |  |              |  |               |  | 4,258  |        |              |  | 7,467      |         |                 |  | 12,458        |        |  |  | 4,260  |        |  |  | 19,923 |         |  |  | 24,183 |         |  |  | (6,178  | )       |   | 1996, 1999      
|                                                                      | I-10 West Business Center                |                                               |  | 3                 |    |                                |  |              |  |               |  | 263    |        |              |  | 1,525      |         |                 |  | 643           |        |  |  | 262    |        |  |  | 2,169  |         |  |  | 2,431  |         |  |  | (932    | )       |   | 1993            
|                                                                      | Kyrene Commons Distribution Center       |                                               |  | 3                 |    |                                |  |              |  |               |  | 2,369  |        |              |  | 5,475      |         |                 |  | 519           |        |  |  | 1,093  |        |  |  | 7,270  |         |  |  | 8,363  |         |  |  | (2,389  | )       |   | 1992, 1998, 1999
|                                                                      | Kyrene Commons South Distribution Center |                                               |  | 2                 |    |                                |  |              |  |               |  | 1,096  |        |              |  |           |         |                 |  | 5,232         |        |  |  | 1,163  |        |  |  | 5,165  |         |  |  | 6,328  |         |  |  | (1,497  | )       |   | 1998            
|                                                                      | Martin Van Buren Distribution Center     |                                               |  | 6                 |    |                                |  |              |  |               |  | 572    |        |              |  | 3,285      |         |                 |  | 1,524         |        |  |  | 572    |        |  |  | 4,809  |         |  |  | 5,381  |         |  |  | (2,102  | )       |   | 1993, 1994      
|                                                                      | Papago Distribution Center               |                                               |  | 3                 |    |                                |  |              |  |               |  | 4,828  |        |              |  | 20,017     |         |                 |  | 295           |        |  |  | 4,828  |        |  |  | 20,312 |         |  |  | 25,140 |         |  |  | (1,268  | )       |   | 1994, 2005      
|                                                                      | Pima Distribution Center                 |                                               |  | 1                 |    |                                |  |              |  |               |  | 306    |        |              |  | 1,742      |         |                 |  | 1,150         |        |  |  | 306    |        |  |  | 2,892  |         |  |  | 3,198  |         |  |  | (1,168  | )       |   | 1993            
|                                                                      | Roosevelt Distribution Center            |                                               |  | 1                 |    |                                |  | (e)          |  |               |  | 1,766  |        |              |  | 7,065      |         |                 |  |              |        |  |  | 1,766  |        |  |  | 7,065  |         |  |  | 8,831  |         |  |  | (69     | )       |   | 2005            
|                                                                      | University Dr Distribution Center        |                                               |  | 1                 |    |                                |  |              |  |               |  | 683    |        |              |  | 2,735      |         |                 |  |              |        |  |  | 683    |        |  |  | 2,735  |         |  |  | 3,418  |         |  |  | (27     | )       |   | 2005            
|                                                                      | Watkins Distribution Center              |                                               |  | 1                 |    |                                |  |              |  |               |  | 242    |        |              |  | 1,375      |         |                 |  | 470           |        |  |  | 243    |        |  |  | 1,844  |         |  |  | 2,087  |         |  |  | (663    | )       |   | 1995            
|                                                                      | Wilson Drive Distribution Center         |                                               |  | 1                 |    |                                |  | (e)          |  |               |  | 1,273  |        |              |  | 5,093      |         |                 |  |              |        |  |  | 1,273  |        |  |  | 5,093  |         |  |  | 6,366  |         |  |  | (50     | )       |   | 2005            
|                                                                      |                                          |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      |                                          | Total Phoenix, Arizona                        |  |                   | 38 |                                |  |              |  |               |  |        | 24,559 |              |  |            | 86,762  |                 |  |               | 26,573 |  |  |        | 23,409 |  |  |        | 114,485 |  |  |        | 137,894 |  |  |         | (21,819 | ) |                  | 
|                                                                      |                                          |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  

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|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |       |        |              |  |            |        |                 |  |               |        |  |  |       |        |  |  |        |         |  |  |        |         |  |  |         |         |   |                  | 
|--------------------------------------------------------------------- | ------------------------------------------- | --------------------------------------------- |  | ----------------- | -- | ------------------------------ |  | ------------ |  | ------------- |  | ----- | ------ | ------------ |  | ---------- | ------ | --------------- |  | ------------- | ------ |  |  | ----- | ------ |  |  | ------ | ------- |  |  | ------ | ------- |  |  | ------- | ------- | - | ---------------- | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                             |                                               |  |                   |    | Gross Amounts At Which Carried |  |             
|                                                                      |                                             | Initial Cost to ProLogis                      |  |                   |    | as of December 31, 2005        |  |             
|                                                                      |                                             |                                               |  | Costs Capitalized |    |                                |  |              |  | Date of      
|                                                                      |                                             | No. of                                        |  | Encum-            |    |                                |  | Building &   |  | Subsequent to |  |       |        | Building &   |  |            |        | Accumulated     |  | Construction/
|Description                                                           |                                             | Bldgs.                                        |  | brances           |    | Land                           |  | Improvements |  | Acquisition   |  | Land  |        | Improvements |  | Total(a,b) |        | Depreciation(c) |  | Acquisition  
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |       |        |              |  |            |        |                 |  |              
|                                                                      |                                             | (In thousands of U.S. dollars, as applicable)
|Portland, Oregon                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |       |        |              |  |            |        |                 |  |               |        |  |  |       |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      | Argyle Distribution Center                  |                                               |  | 3                 |    |                                |  |              |  |               |  | 946   |        |              |  | 5,388      |        |                 |  | 1,023         |        |  |  | 946   |        |  |  | 6,411  |         |  |  | 7,357  |         |  |  | (2,709  | )       |   | 1993            
|                                                                      | Clackamas Distribution Center(d)            |                                               |  | 1                 |    |                                |  |              |  |               |  | 1,064 |        |              |  |           |        |                 |  | 3,786         |        |  |  | 1,064 |        |  |  | 3,786  |         |  |  | 4,850  |         |  |  |        |         |   | 2005            
|                                                                      | Columbia Distribution Center                |                                               |  | 2                 |    |                                |  |              |  |               |  | 550   |        |              |  | 3,121      |        |                 |  | 948           |        |  |  | 550   |        |  |  | 4,069  |         |  |  | 4,619  |         |  |  | (1,541  | )       |   | 1994            
|                                                                      | PDX Corporate Center East                   |                                               |  | 2                 |    |                                |  | (i)          |  |               |  | 1,785 |        |              |  |           |        |                 |  | 7,049         |        |  |  | 2,100 |        |  |  | 6,734  |         |  |  | 8,834  |         |  |  | (1,998  | )       |   | 1997            
|                                                                      | PDX Corporate Center North                  |                                               |  | 7                 |    |                                |  | (i)          |  |               |  | 2,405 |        |              |  |           |        |                 |  | 11,585        |        |  |  | 2,544 |        |  |  | 11,446 |         |  |  | 13,990 |         |  |  | (4,164  | )       |   | 1995, 1996      
|                                                                      | Southshore Corporate Center                 |                                               |  | 4                 |    |                                |  | (e)          |  |               |  | 9,695 |        |              |  | 38,836     |        |                 |  |              |        |  |  | 9,695 |        |  |  | 38,836 |         |  |  | 48,531 |         |  |  | (378    | )       |   | 2005            
|                                                                      | Wilsonville Corporate Center                |                                               |  | 6                 |    |                                |  |              |  |               |  | 2,963 |        |              |  |           |        |                 |  | 12,925        |        |  |  | 2,965 |        |  |  | 12,923 |         |  |  | 15,888 |         |  |  | (4,835  | )       |   | 1995, 1996      
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |       |        |              |  |            |        |                 |  |               |        |  |  |       |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      |                                             | Total Portland, Oregon                        |  |                   | 25 |                                |  |              |  |               |  |       | 19,408 |              |  |            | 47,345 |                 |  |               | 37,316 |  |  |       | 19,864 |  |  |        | 84,205  |  |  |        | 104,069 |  |  |         | (15,625 | ) |                  | 
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |       |        |              |  |            |        |                 |  |               |        |  |  |       |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|Reno, Nevada                                                          |                                             |                                               |  |                   |    |                                |  |              |  |               |  |       |        |              |  |            |        |                 |  |               |        |  |  |       |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      | Golden Valley Distribution Center           |                                               |  | 3                 |    |                                |  |              |  |               |  | 2,975 |        |              |  | 13,686     |        |                 |  | 10,654        |        |  |  | 4,451 |        |  |  | 22,864 |         |  |  | 27,315 |         |  |  | (2,775  | )       |   | 1996, 1998, 2005
|                                                                      | Meredith Kleppe Business Center             |                                               |  | 5                 |    |                                |  |              |  |               |  | 1,573 |        |              |  | 8,949      |        |                 |  | 2,804         |        |  |  | 1,573 |        |  |  | 11,753 |         |  |  | 13,326 |         |  |  | (4,728  | )       |   | 1993            
|                                                                      | Packer Way Business Center                  |                                               |  | 3                 |    |                                |  |              |  |               |  | 458   |        |              |  | 2,604      |        |                 |  | 973           |        |  |  | 458   |        |  |  | 3,577  |         |  |  | 4,035  |         |  |  | (1,579  | )       |   | 1993            
|                                                                      | Packer Way Distribution Center              |                                               |  | 2                 |    |                                |  |              |  |               |  | 506   |        |              |  | 2,879      |        |                 |  | 1,435         |        |  |  | 506   |        |  |  | 4,314  |         |  |  | 4,820  |         |  |  | (1,957  | )       |   | 1993            
|                                                                      | Spice Island Distribution Center            |                                               |  | 1                 |    |                                |  |              |  |               |  | 435   |        |              |  | 2,466      |        |                 |  | 2,097         |        |  |  | 435   |        |  |  | 4,563  |         |  |  | 4,998  |         |  |  | (1,156  | )       |   | 1996            
|                                                                      | Vista Industrial Center                     |                                               |  | 10                |    |                                |  |              |  |               |  | 9,566 |        |              |  | 40,036     |        |                 |  | 12,955        |        |  |  | 9,567 |        |  |  | 52,990 |         |  |  | 62,557 |         |  |  | (10,313 | )       |   | 1994, 1995, 2001
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |       |        |              |  |            |        |                 |  |               |        |  |  |       |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      |                                             | Total Reno, Nevada                            |  |                   | 24 |                                |  |              |  |               |  |       | 15,513 |              |  |            | 70,620 |                 |  |               | 30,918 |  |  |       | 16,990 |  |  |        | 100,061 |  |  |        | 117,051 |  |  |         | (22,508 | ) |                  | 
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |       |        |              |  |            |        |                 |  |               |        |  |  |       |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|Salt Lake City, Utah                                                  |                                             |                                               |  |                   |    |                                |  |              |  |               |  |       |        |              |  |            |        |                 |  |               |        |  |  |       |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      | Centennial Distribution Center              |                                               |  | 2                 |    |                                |  |              |  |               |  | 1,149 |        |              |  |           |        |                 |  | 9,059         |        |  |  | 1,149 |        |  |  | 9,059  |         |  |  | 10,208 |         |  |  | (3,194  | )       |   | 1995            
|                                                                      | Clearfield Distribution Center              |                                               |  | 2                 |    |                                |  |              |  |               |  | 2,500 |        |              |  | 14,165     |        |                 |  | 1,747         |        |  |  | 2,481 |        |  |  | 15,931 |         |  |  | 18,412 |         |  |  | (5,689  | )       |   | 1995            
|                                                                      | Crossroads Corporate Center(d)              |                                               |  | 1                 |    |                                |  |              |  |               |  | 284   |        |              |  |           |        |                 |  | 6,128         |        |  |  | 926   |        |  |  | 5,486  |         |  |  | 6,412  |         |  |  |        |         |   | 2005            
|                                                                      | Salt Lake International Distribution Center |                                               |  | 2                 |    |                                |  |              |  |               |  | 1,367 |        |              |  | 2,792      |        |                 |  | 9,039         |        |  |  | 1,364 |        |  |  | 11,834 |         |  |  | 13,198 |         |  |  | (4,285  | )       |   | 1994, 1996      
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |       |        |              |  |            |        |                 |  |               |        |  |  |       |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      |                                             | Total Salt Lake City, Utah                    |  |                   | 7  |                                |  |              |  |               |  |       | 5,300  |              |  |            | 16,957 |                 |  |               | 25,973 |  |  |       | 5,920  |  |  |        | 42,310  |  |  |        | 48,230  |  |  |         | (13,168 | ) |                  | 
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |       |        |              |  |            |        |                 |  |               |        |  |  |       |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|San Antonio, Texas                                                    |                                             |                                               |  |                   |    |                                |  |              |  |               |  |       |        |              |  |            |        |                 |  |               |        |  |  |       |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      | 10711 Distribution Center                   |                                               |  | 2                 |    |                                |  |              |  |               |  | 582   |        |              |  | 3,301      |        |                 |  | 1,526         |        |  |  | 582   |        |  |  | 4,827  |         |  |  | 5,409  |         |  |  | (2,147  | )       |   | 1994            
|                                                                      | City Park East Distribution Center          |                                               |  | 3                 |    |                                |  |              |  |               |  | 1,002 |        |              |  | 5,676      |        |                 |  | 766           |        |  |  | 1,002 |        |  |  | 6,442  |         |  |  | 7,444  |         |  |  | (10     | )       |   | 2003            
|                                                                      | Coliseum Distribution Center                |                                               |  | 1                 |    |                                |  |              |  |               |  | 428   |        |              |  | 923        |        |                 |  | 3,917         |        |  |  | 465   |        |  |  | 4,803  |         |  |  | 5,268  |         |  |  | (2,175  | )       |   | 1994            
|                                                                      | Distribution Drive Center                   |                                               |  | 1                 |    |                                |  |              |  |               |  | 473   |        |              |  | 2,680      |        |                 |  | 922           |        |  |  | 473   |        |  |  | 3,602  |         |  |  | 4,075  |         |  |  | (1,839  | )       |   | 1992            
|                                                                      | Downtown Distribution Center                |                                               |  | 1                 |    |                                |  |              |  |               |  | 241   |        |              |  | 1,364      |        |                 |  | 644           |        |  |  | 241   |        |  |  | 2,008  |         |  |  | 2,249  |         |  |  | (816    | )       |   | 1994            
|                                                                      | I-10 Central Distribution Center            |                                               |  | 1                 |    |                                |  |              |  |               |  | 223   |        |              |  | 1,275      |        |                 |  | 327           |        |  |  | 240   |        |  |  | 1,585  |         |  |  | 1,825  |         |  |  | (762    | )       |   | 1992            
|                                                                      | I-35 Business Center                        |                                               |  | 4                 |    |                                |  |              |  |               |  | 663   |        |              |  | 3,773      |        |                 |  | 1,706         |        |  |  | 662   |        |  |  | 5,480  |         |  |  | 6,142  |         |  |  | (2,505  | )       |   | 1993            
|                                                                      | Landmark One Distribution Center            |                                               |  | 1                 |    |                                |  |              |  |               |  | 341   |        |              |  | 1,933      |        |                 |  | 682           |        |  |  | 473   |        |  |  | 2,483  |         |  |  | 2,956  |         |  |  | (1,005  | )       |   | 1994            

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|                                                                      |                                       |                                                  |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |   |                              | 
|--------------------------------------------------------------------- | ------------------------------------- | ------------------------------------------------ |  | ----------------- | -- | ------------------------------ |  | ------------ |  | ------------- |  | ------ | ------ | ------------ |  | ---------- | ------- | --------------- |  | ------------- | ------ |  |  | ------ | ------ |  |  | ------ | ------- |  |  | ------ | ------- |  |  | ------- | ------- | - | ---------------------------- | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                       |                                                  |  |                   |    | Gross Amounts At Which Carried |  |             
|                                                                      |                                       | Initial Cost to ProLogis                         |  |                   |    | as of December 31, 2005        |  |             
|                                                                      |                                       |                                                  |  | Costs Capitalized |    |                                |  |              |  | Date of      
|                                                                      |                                       | No. of                                           |  | Encum-            |    |                                |  | Building &   |  | Subsequent to |  |        |        | Building &   |  |            |         | Accumulated     |  | Construction/
|Description                                                           |                                       | Bldgs.                                           |  | brances           |    | Land                           |  | Improvements |  | Acquisition   |  | Land   |        | Improvements |  | Total(a,b) |         | Depreciation(c) |  | Acquisition  
|                                                                      |                                       |                                                  |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |              
|                                                                      |                                       | (In thousands of U.S. dollars, as applicable)   
|                                                                      | Macro Distribution Center             |                                                  |  | 4                 |    |                                |  |              |  |               |  | 1,929  |        |              |  | 10,937     |         |                 |  | 1,957         |        |  |  | 1,929  |        |  |  | 12,894 |         |  |  | 14,823 |         |  |  | (1,059  | )       |   | 1993, 2002                  
|                                                                      | Perrin Creek Corporate Center(d)      |                                                  |  | 9                 |    |                                |  |              |  |               |  | 3,261  |        |              |  |           |         |                 |  | 21,913        |        |  |  | 3,109  |        |  |  | 22,065 |         |  |  | 25,174 |         |  |  | (3,591  | )       |   | 1995, 1996, 2003, 2004, 2005
|                                                                      | San Antonio Distribution Center I     |                                                  |  | 13                |    |                                |  |              |  |               |  | 2,154  |        |              |  | 12,247     |         |                 |  | 7,834         |        |  |  | 2,154  |        |  |  | 20,081 |         |  |  | 22,235 |         |  |  | (9,003  | )       |   | 1992, 1993, 1994            
|                                                                      | San Antonio Distribution Center II    |                                                  |  | 3                 |    |                                |  |              |  |               |  | 945    |        |              |  |           |         |                 |  | 6,509         |        |  |  | 885    |        |  |  | 6,569  |         |  |  | 7,454  |         |  |  | (2,596  | )       |   | 1994                        
|                                                                      | San Antonio Distribution Center III   |                                                  |  | 6                 |    |                                |  |              |  |               |  | 1,709  |        |              |  | 9,684      |         |                 |  | 4,440         |        |  |  | 1,709  |        |  |  | 14,124 |         |  |  | 15,833 |         |  |  | (5,348  | )       |   | 1996                        
|                                                                      | Woodlake Distribution Center          |                                                  |  | 2                 |    |                                |  |              |  |               |  | 248    |        |              |  | 1,405      |         |                 |  | 1,185         |        |  |  | 248    |        |  |  | 2,590  |         |  |  | 2,838  |         |  |  | (906    | )       |   | 1994                        
|                                                                      |                                       |                                                  |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      |                                       | Total San Antonio, Texas                         |  |                   | 51 |                                |  |              |  |               |  |        | 14,199 |              |  |            | 55,198  |                 |  |               | 54,328 |  |  |        | 14,172 |  |  |        | 109,553 |  |  |        | 123,725 |  |  |         | (33,762 | ) |                              | 
|                                                                      |                                       |                                                  |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|San Diego, California                                                 |                                       |                                                  |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      | San Diego Industrial Center           |                                                  |  | 13                |    |                                |  |              |  |               |  | 8,685  |        |              |  | 16,128     |         |                 |  |              |        |  |  | 8,685  |        |  |  | 16,128 |         |  |  | 24,813 |         |  |  | (158    | )       |   | 2005                        
|                                                                      |                                       |                                                  |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      |                                       | Total San Diego, California                      |  |                   | 13 |                                |  |              |  |               |  |        | 8,685  |              |  |            | 16,128  |                 |  |               |       |  |  |        | 8,685  |  |  |        | 16,128  |  |  |        | 24,813  |  |  |         | (158    | ) |                              | 
|                                                                      |                                       |                                                  |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|San Francisco (Central Valley), California                            |                                       |                                                  |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      | Central Valley Distribution Center(d) |                                                  |  | 4                 |    |                                |  |              |  |               |  | 6,935  |        |              |  | 34,316     |         |                 |  | 2,677         |        |  |  | 6,936  |        |  |  | 36,992 |         |  |  | 43,928 |         |  |  | (6,048  | )       |   | 1999, 2002, 2003            
|                                                                      | Central Valley Industrial Center      |                                                  |  | 4                 |    |                                |  | (e)(i)       |  |               |  | 11,418 |        |              |  | 48,726     |         |                 |  | 5,719         |        |  |  | 11,868 |        |  |  | 53,995 |         |  |  | 65,863 |         |  |  | (6,673  | )       |   | 1999, 2002, 2005            
|                                                                      | Manteca Distribution Center           |                                                  |  | 1                 |    |                                |  | (e)          |  |               |  | 9,280  |        |              |  | 27,841     |         |                 |  |              |        |  |  | 9,280  |        |  |  | 27,841 |         |  |  | 37,121 |         |  |  | (271    | )       |   | 2005                        
|                                                                      | Patterson Pass Business Center        |                                                  |  | 5                 |    |                                |  |              |  |               |  | 2,496  |        |              |  | 4,885      |         |                 |  | 9,298         |        |  |  | 2,496  |        |  |  | 14,183 |         |  |  | 16,679 |         |  |  | (4,695  | )       |   | 1993, 1997, 1998            
|                                                                      | Sacramento Business Center            |                                                  |  | 4                 |    |                                |  |              |  |               |  | 1,218  |        |              |  | 3,654      |         |                 |  |              |        |  |  | 1,218  |        |  |  | 3,654  |         |  |  | 4,872  |         |  |  | (36     | )       |   | 2005                        
|                                                                      | Tracy Distribution Center(d)          |                                                  |  | 1                 |    |                                |  |              |  |               |  | 2,802  |        |              |  | 6,539      |         |                 |  | 157           |        |  |  | 2,802  |        |  |  | 6,696  |         |  |  | 9,498  |         |  |  |        |         |   | 2004                        
|                                                                      |                                       |                                                  |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      |                                       | Total San Francisco (Central Valley), California |  |                   | 19 |                                |  |              |  |               |  |        | 34,149 |              |  |            | 125,961 |                 |  |               | 17,851 |  |  |        | 34,600 |  |  |        | 143,361 |  |  |        | 177,961 |  |  |         | (17,723 | ) |                              | 
|                                                                      |                                       |                                                  |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|San Francisco (East Bay), California                                  |                                       |                                                  |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      | Alvarado Business Center              |                                                  |  | 10                |    |                                |  | (e)          |  |               |  | 20,739 |        |              |  | 62,595     |         |                 |  |              |        |  |  | 20,739 |        |  |  | 62,595 |         |  |  | 83,334 |         |  |  | (605    | )       |   | 2005                        
|                                                                      | Barrington Business Center            |                                                  |  | 3                 |    |                                |  |              |  |               |  | 1,741  |        |              |  | 9,863      |         |                 |  | 1,180         |        |  |  | 1,740  |        |  |  | 11,044 |         |  |  | 12,784 |         |  |  | (2,547  | )       |   | 1999                        
|                                                                      | East Bay Industrial Center            |                                                  |  | 1                 |    |                                |  |              |  |               |  | 531    |        |              |  | 3,009      |         |                 |  | 488           |        |  |  | 531    |        |  |  | 3,497  |         |  |  | 4,028  |         |  |  | (1,481  | )       |   | 1994                        
|                                                                      | Eigenbrodt Way Distribution Center    |                                                  |  | 1                 |    |                                |  | (e)          |  |               |  | 393    |        |              |  | 2,228      |         |                 |  | 407           |        |  |  | 393    |        |  |  | 2,635  |         |  |  | 3,028  |         |  |  | (1,103  | )       |   | 1993                        
|                                                                      | Hayward Commerce Center               |                                                  |  | 4                 |    |                                |  |              |  |               |  | 1,933  |        |              |  | 10,955     |         |                 |  | 1,623         |        |  |  | 1,934  |        |  |  | 12,577 |         |  |  | 14,511 |         |  |  | (4,959  | )       |   | 1993                        
|                                                                      | Hayward Commerce Park                 |                                                  |  | 9                 |    |                                |  |              |  |               |  | 2,764  |        |              |  | 15,661     |         |                 |  | 4,214         |        |  |  | 2,763  |        |  |  | 19,876 |         |  |  | 22,639 |         |  |  | (8,488  | )       |   | 1994                        
|                                                                      | Hayward Distribution Center           |                                                  |  | 6                 |    |                                |  | (e)          |  |               |  | 2,906  |        |              |  | 19,165     |         |                 |  | 3,469         |        |  |  | 3,327  |        |  |  | 22,213 |         |  |  | 25,540 |         |  |  | (9,450  | )       |   | 1993                        
|                                                                      | Hayward Industrial Center             |                                                  |  | 13                |    |                                |  | (e)          |  |               |  | 4,481  |        |              |  | 25,393     |         |                 |  | 4,360         |        |  |  | 4,481  |        |  |  | 29,753 |         |  |  | 34,234 |         |  |  | (12,204 | )       |   | 1993                        
|                                                                      | Livermore Distribution Center         |                                                  |  | 4                 |    |                                |  | (e)          |  |               |  | 8,992  |        |              |  | 26,976     |         |                 |  |              |        |  |  | 8,992  |        |  |  | 26,976 |         |  |  | 35,968 |         |  |  | (262    | )       |   | 2005                        
|                                                                      | Oakland Industrial Center(d)          |                                                  |  | 3                 |    |                                |  | (e)          |  |               |  | 8,234  |        |              |  | 24,704     |         |                 |  |              |        |  |  | 8,234  |        |  |  | 24,704 |         |  |  | 32,938 |         |  |  | (179    | )       |   | 2005                        
|                                                                      | Regatta Business Park                 |                                                  |  | 2                 |    |                                |  | (e)          |  |               |  | 7,688  |        |              |  | 23,063     |         |                 |  |              |        |  |  | 7,688  |        |  |  | 23,063 |         |  |  | 30,751 |         |  |  | (224    | )       |   | 2005                        
|                                                                      | San Leandro Distribution Center       |                                                  |  | 3                 |    |                                |  | (e)          |  |               |  | 1,387  |        |              |  | 7,862      |         |                 |  | 1,146         |        |  |  | 1,387  |        |  |  | 9,008  |         |  |  | 10,395 |         |  |  | (3,787  | )       |   | 1993                        
|                                                                      |                                       |                                                  |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  
|                                                                      |                                       | Total San Francisco (East Bay), California       |  |                   | 59 |                                |  |              |  |               |  |        | 61,789 |              |  |            | 231,474 |                 |  |               | 16,887 |  |  |        | 62,209 |  |  |        | 247,941 |  |  |        | 310,150 |  |  |         | (45,289 | ) |                              | 
|                                                                      |                                       |                                                  |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |         |         |  

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##### Table of Contents





|                                                                      |                                   |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |         |  |  |        |         |  |  |         |         |  |  |         |         |   |                        | 
|--------------------------------------------------------------------- | --------------------------------- | --------------------------------------------- |  | ----------------- | -- | ------------------------------ |  | ------------ |  | ------------- |  | ------ | ------ | ------------ |  | ---------- | ------- | --------------- |  | ------------- | ------ |  |  | ------ | ------- |  |  | ------ | ------- |  |  | ------- | ------- |  |  | ------- | ------- | - | ---------------------- | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                   |                                               |  |                   |    | Gross Amounts At Which Carried |  |             
|                                                                      |                                   | Initial Cost to ProLogis                      |  |                   |    | as of December 31, 2005        |  |             
|                                                                      |                                   |                                               |  | Costs Capitalized |    |                                |  |              |  | Date of      
|                                                                      |                                   | No. of                                        |  | Encum-            |    |                                |  | Building &   |  | Subsequent to |  |        |        | Building &   |  |            |         | Accumulated     |  | Construction/
|Description                                                           |                                   | Bldgs.                                        |  | brances           |    | Land                           |  | Improvements |  | Acquisition   |  | Land   |        | Improvements |  | Total(a,b) |         | Depreciation(c) |  | Acquisition  
|                                                                      |                                   |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |              
|                                                                      |                                   | (In thousands of U.S. dollars, as applicable)
|San Francisco (South Bay), California                                 |                                   |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |         |  |  |        |         |  |  |         |         |  |  |         |         |  
|                                                                      | Bayside Business Center           |                                               |  | 2                 |    |                                |  | (i)          |  |               |  | 2,088  |        |              |  |           |         |                 |  | 4,851         |        |  |  | 2,089  |         |  |  | 4,850  |         |  |  | 6,939   |         |  |  | (1,946  | )       |   | 1996                  
|                                                                      | Bayside Corporate Center          |                                               |  | 7                 |    |                                |  | (i)          |  |               |  | 4,365  |        |              |  |           |         |                 |  | 18,072        |        |  |  | 4,364  |         |  |  | 18,073 |         |  |  | 22,437  |         |  |  | (7,764  | )       |   | 1995, 1996            
|                                                                      | Bayside Plaza I                   |                                               |  | 12                |    |                                |  | (i)          |  |               |  | 5,212  |        |              |  | 18,008     |         |                 |  | 2,726         |        |  |  | 5,216  |         |  |  | 20,730 |         |  |  | 25,946  |         |  |  | (8,461  | )       |   | 1993                  
|                                                                      | Bayside Plaza II                  |                                               |  | 2                 |    |                                |  | (i)          |  |               |  | 634    |        |              |  |           |         |                 |  | 3,302         |        |  |  | 634    |         |  |  | 3,302  |         |  |  | 3,936   |         |  |  | (1,691  | )       |   | 1994                  
|                                                                      | Gateway Corporate Center          |                                               |  | 11                |    |                                |  | (i)          |  |               |  | 7,575  |        |              |  | 24,746     |         |                 |  | 6,482         |        |  |  | 7,574  |         |  |  | 31,229 |         |  |  | 38,803  |         |  |  | (13,395 | )       |   | 1993, 1996            
|                                                                      | Mowry Business Center             |                                               |  | 4                 |    |                                |  |              |  |               |  | 5,933  |        |              |  |           |         |                 |  | 19,440        |        |  |  | 7,816  |         |  |  | 17,557 |         |  |  | 25,373  |         |  |  | (4,987  | )       |   | 1997, 1998            
|                                                                      | Overlook Distribution Center      |                                               |  | 1                 |    |                                |  |              |  |               |  | 1,573  |        |              |  | 8,915      |         |                 |  | 29            |        |  |  | 1,573  |         |  |  | 8,944  |         |  |  | 10,517  |         |  |  | (2,016  | )       |   | 1999                  
|                                                                      | Pacific Commons Industrial Center |                                               |  | 7                 |    |                                |  | (e)(i)       |  |               |  | 30,107 |        |              |  | 90,416     |         |                 |  |              |        |  |  | 30,107 |         |  |  | 90,416 |         |  |  | 120,523 |         |  |  | (895    | )       |   | 2005                  
|                                                                      | Pacific Industrial Center         |                                               |  | 6                 |    |                                |  | (e)          |  |               |  | 21,676 |        |              |  | 65,083     |         |                 |  |              |        |  |  | 21,676 |         |  |  | 65,083 |         |  |  | 86,759  |         |  |  | (633    | )       |   | 2005                  
|                                                                      | Shoreline Business Center         |                                               |  | 8                 |    |                                |  | (i)          |  |               |  | 4,328  |        |              |  | 16,101     |         |                 |  | 1,607         |        |  |  | 4,327  |         |  |  | 17,709 |         |  |  | 22,036  |         |  |  | (7,055  | )       |   | 1993                  
|                                                                      | Shoreline Business Center II      |                                               |  | 2                 |    |                                |  | (i)          |  |               |  | 922    |        |              |  |           |         |                 |  | 5,259         |        |  |  | 922    |         |  |  | 5,259  |         |  |  | 6,181   |         |  |  | (2,410  | )       |   | 1995                  
|                                                                      | Spinnaker Business Center         |                                               |  | 12                |    |                                |  | (i)          |  |               |  | 7,043  |        |              |  | 25,220     |         |                 |  | 3,941         |        |  |  | 7,042  |         |  |  | 29,162 |         |  |  | 36,204  |         |  |  | (11,722 | )       |   | 1993                  
|                                                                      | Thornton Business Center          |                                               |  | 5                 |    |                                |  |              |  |               |  | 3,988  |        |              |  | 11,706     |         |                 |  | 6,646         |        |  |  | 3,988  |         |  |  | 18,352 |         |  |  | 22,340  |         |  |  | (6,603  | )       |   | 1993, 1996            
|                                                                      | Trimble Distribution Center       |                                               |  | 5                 |    |                                |  |              |  |               |  | 2,836  |        |              |  | 16,067     |         |                 |  | 2,961         |        |  |  | 2,836  |         |  |  | 19,028 |         |  |  | 21,864  |         |  |  | (7,737  | )       |   | 1994                  
|                                                                      |                                   |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |         |  |  |        |         |  |  |         |         |  |  |         |         |  
|                                                                      |                                   | Total San Francisco (South Bay), California   |  |                   | 84 |                                |  |              |  |               |  |        | 98,280 |              |  |            | 276,262 |                 |  |               | 75,316 |  |  |        | 100,164 |  |  |        | 349,694 |  |  |         | 449,858 |  |  |         | (77,315 | ) |                        | 
|                                                                      |                                   |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |         |  |  |        |         |  |  |         |         |  |  |         |         |  
|Seattle, Washington                                                   |                                   |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |         |  |  |        |         |  |  |         |         |  |  |         |         |  
|                                                                      | Andover East Business Center      |                                               |  | 2                 |    |                                |  |              |  |               |  | 535    |        |              |  | 3,033      |         |                 |  | 516           |        |  |  | 535    |         |  |  | 3,549  |         |  |  | 4,084   |         |  |  | (1,409  | )       |   | 1994                  
|                                                                      | Fife Corporate Center             |                                               |  | 3                 |    |                                |  |              |  |               |  | 4,059  |        |              |  |           |         |                 |  | 11,050        |        |  |  | 4,209  |         |  |  | 10,900 |         |  |  | 15,109  |         |  |  | (3,512  | )       |   | 1996                  
|                                                                      | Kent Corporate Center             |                                               |  | 2                 |    |                                |  | (i)          |  |               |  | 2,882  |        |              |  | 1,987      |         |                 |  | 9,761         |        |  |  | 3,276  |         |  |  | 11,354 |         |  |  | 14,630  |         |  |  | (4,322  | )       |   | 1995                  
|                                                                      | Van Dorens Distribution Center   |                                               |  | 2                 |    |                                |  | (i)          |  |               |  | 2,473  |        |              |  |           |         |                 |  | 9,667         |        |  |  | 3,111  |         |  |  | 9,029  |         |  |  | 12,140  |         |  |  | (3,231  | )       |   | 1995, 1997            
|                                                                      |                                   |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |         |  |  |        |         |  |  |         |         |  |  |         |         |  
|                                                                      |                                   | Total Seattle, Washington                     |  |                   | 9  |                                |  |              |  |               |  |        | 9,949  |              |  |            | 5,020   |                 |  |               | 30,994 |  |  |        | 11,131  |  |  |        | 34,832  |  |  |         | 45,963  |  |  |         | (12,474 | ) |                        | 
|                                                                      |                                   |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |         |  |  |        |         |  |  |         |         |  |  |         |         |  
|St. Louis, Missouri                                                   |                                   |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |         |  |  |        |         |  |  |         |         |  |  |         |         |  
|                                                                      | Earth City Industrial Center      |                                               |  | 8                 |    |                                |  | (e)          |  |               |  | 3,375  |        |              |  | 19,144     |         |                 |  | 6,375         |        |  |  | 3,375  |         |  |  | 25,519 |         |  |  | 28,894  |         |  |  | (8,419  | )       |   | 1997, 1998            
|                                                                      | Hazelwood Distribution Center     |                                               |  | 2                 |    |                                |  | (e)          |  |               |  | 847    |        |              |  | 4,802      |         |                 |  | 531           |        |  |  | 847    |         |  |  | 5,333  |         |  |  | 6,180   |         |  |  | (1,326  | )       |   | 1997, 1999            
|                                                                      | Westport Distribution Center      |                                               |  | 3                 |    |                                |  | (e)          |  |               |  | 761    |        |              |  | 4,310      |         |                 |  | 1,054         |        |  |  | 761    |         |  |  | 5,364  |         |  |  | 6,125   |         |  |  | (1,629  | )       |   | 1997                  
|                                                                      |                                   |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |         |  |  |        |         |  |  |         |         |  |  |         |         |  
|                                                                      |                                   | Total St. Louis, Missouri                     |  |                   | 13 |                                |  |              |  |               |  |        | 4,983  |              |  |            | 28,256  |                 |  |               | 7,960  |  |  |        | 4,983   |  |  |        | 36,216  |  |  |         | 41,199  |  |  |         | (11,374 | ) |                        | 
|                                                                      |                                   |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |         |  |  |        |         |  |  |         |         |  |  |         |         |  
|Tampa, Florida                                                        |                                   |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |         |  |  |        |         |  |  |         |         |  |  |         |         |  
|                                                                      | Adamo Distribution Center         |                                               |  | 6                 |    |                                |  |              |  |               |  | 2,105  |        |              |  | 11,930     |         |                 |  | 1,427         |        |  |  | 2,105  |         |  |  | 13,357 |         |  |  | 15,462  |         |  |  | (2,278  | )       |   | 1995, 2001            
|                                                                      | Commerce Park Distribution Center |                                               |  | 4                 |    |                                |  |              |  |               |  | 811    |        |              |  | 4,597      |         |                 |  | 1,308         |        |  |  | 811    |         |  |  | 5,905  |         |  |  | 6,716   |         |  |  | (2,571  | )       |   | 1994                  
|                                                                      | Eastwood Distribution Center      |                                               |  | 1                 |    |                                |  |              |  |               |  | 122    |        |              |  | 690        |         |                 |  | 122           |        |  |  | 122    |         |  |  | 812    |         |  |  | 934     |         |  |  | (336    | )       |   | 1994                  
|                                                                      | Lakeland Distribution Center      |                                               |  | 1                 |    |                                |  |              |  |               |  | 938    |        |              |  | 5,313      |         |                 |  | 889           |        |  |  | 938    |         |  |  | 6,202  |         |  |  | 7,140   |         |  |  | (2,435  | )       |   | 1994                  
|                                                                      | Orchid Lake Industrial Center     |                                               |  | 1                 |    |                                |  |              |  |               |  | 41     |        |              |  | 235        |         |                 |  | 27            |        |  |  | 41     |         |  |  | 262    |         |  |  | 303     |         |  |  | (99     | )       |   | 1994                  
|                                                                      | Plant City Distribution Center    |                                               |  | 1                 |    |                                |  |              |  |               |  | 206    |        |              |  | 1,169      |         |                 |  | 262           |        |  |  | 206    |         |  |  | 1,431  |         |  |  | 1,637   |         |  |  | (531    | )       |   | 1994                  
|                                                                      | Sabal Park Distribution Center    |                                               |  | 8                 |    |                                |  | (e)          |  |               |  | 3,180  |        |              |  | 10,364     |         |                 |  | 13,538        |        |  |  | 3,516  |         |  |  | 23,566 |         |  |  | 27,082  |         |  |  | (5,596  | )       |   | 1996, 1997, 1998, 2002
|                                                                      | Silo Bend Distribution Center     |                                               |  | 4                 |    |                                |  |              |  |               |  | 2,887  |        |              |  | 16,358     |         |                 |  | 3,303         |        |  |  | 2,887  |         |  |  | 19,661 |         |  |  | 22,548  |         |  |  | (7,203  | )       |   | 1994                  

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|                                                                      |                                     |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |        |         |   |            | 
|--------------------------------------------------------------------- | ----------------------------------- | --------------------------------------------- |  | ----------------- | -- | ------------------------------ |  | ------------ |  | ------------- |  | ------ | ------ | ------------ |  | ---------- | ------- | --------------- |  | ------------- | ------ |  |  | ------ | ------ |  |  | ------ | ------- |  |  | ------ | ------- |  |  | ------ | ------- | - | ---------- | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                     |                                               |  |                   |    | Gross Amounts At Which Carried |  |             
|                                                                      |                                     | Initial Cost to ProLogis                      |  |                   |    | as of December 31, 2005        |  |             
|                                                                      |                                     |                                               |  | Costs Capitalized |    |                                |  |              |  | Date of      
|                                                                      |                                     | No. of                                        |  | Encum-            |    |                                |  | Building &   |  | Subsequent to |  |        |        | Building &   |  |            |         | Accumulated     |  | Construction/
|Description                                                           |                                     | Bldgs.                                        |  | brances           |    | Land                           |  | Improvements |  | Acquisition   |  | Land   |        | Improvements |  | Total(a,b) |         | Depreciation(c) |  | Acquisition  
|                                                                      |                                     |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |              
|                                                                      |                                     | (In thousands of U.S. dollars, as applicable)
|                                                                      | Silo Bend Industrial Center         |                                               |  | 1                 |    |                                |  |              |  |               |  | 525    |        |              |  | 2,975      |         |                 |  | 731           |        |  |  | 525    |        |  |  | 3,706  |         |  |  | 4,231  |         |  |  | (1,407 | )       |   | 1994      
|                                                                      | Tampa East Distribution Center      |                                               |  | 10                |    |                                |  |              |  |               |  | 2,700  |        |              |  | 15,302     |         |                 |  | 2,601         |        |  |  | 2,541  |        |  |  | 18,062 |         |  |  | 20,603 |         |  |  | (7,234 | )       |   | 1994      
|                                                                      | Tampa East Industrial Center        |                                               |  | 2                 |    |                                |  |              |  |               |  | 332    |        |              |  | 1,880      |         |                 |  | 470           |        |  |  | 332    |        |  |  | 2,350  |         |  |  | 2,682  |         |  |  | (951   | )       |   | 1994      
|                                                                      | Tampa West Distribution Center      |                                               |  | 14                |    |                                |  |              |  |               |  | 3,053  |        |              |  | 17,173     |         |                 |  | 3,670         |        |  |  | 3,100  |        |  |  | 20,796 |         |  |  | 23,896 |         |  |  | (8,369 | )       |   | 1994, 1995
|                                                                      | Tampa West Industrial Center        |                                               |  | 3                 |    |                                |  |              |  |               |  | 355    |        |              |  | (9         | )       |                 |  | 5,904         |        |  |  | 636    |        |  |  | 5,614  |         |  |  | 6,250  |         |  |  | (1,784 | )       |   | 1996, 1998
|                                                                      |                                     |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |        |         |  
|                                                                      |                                     | Total Tampa, Florida                          |  |                   | 56 |                                |  |              |  |               |  |        | 17,255 |              |  |            | 87,977  |                 |  |               | 34,252 |  |  |        | 17,760 |  |  |        | 121,724 |  |  |        | 139,484 |  |  |        | (40,794 | ) |            | 
|                                                                      |                                     |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |        |         |  
|Washington D.C./ Baltimore, Maryland                                  |                                     |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |        |         |  
|                                                                      | Airport Commons Distribution Center |                                               |  | 2                 |    |                                |  | (e)          |  |               |  | 2,320  |        |              |  |           |         |                 |  | 9,840         |        |  |  | 2,360  |        |  |  | 9,800  |         |  |  | 12,160 |         |  |  | (3,032 | )       |   | 1997      
|                                                                      | Ardmore Distribution Center         |                                               |  | 3                 |    |                                |  |              |  |               |  | 1,431  |        |              |  | 8,110      |         |                 |  | 1,368         |        |  |  | 1,432  |        |  |  | 9,477  |         |  |  | 10,909 |         |  |  | (3,707 | )       |   | 1994      
|                                                                      | Ardmore Industrial Center           |                                               |  | 2                 |    |                                |  |              |  |               |  | 984    |        |              |  | 5,581      |         |                 |  | 1,175         |        |  |  | 984    |        |  |  | 6,756  |         |  |  | 7,740  |         |  |  | (2,790 | )       |   | 1994      
|                                                                      | Concorde Industrial Center          |                                               |  | 4                 |    |                                |  | (e)          |  |               |  | 1,538  |        |              |  | 8,717      |         |                 |  | 2,183         |        |  |  | 1,538  |        |  |  | 10,900 |         |  |  | 12,438 |         |  |  | (4,114 | )       |   | 1995      
|                                                                      | De Soto Business Park               |                                               |  | 5                 |    |                                |  |              |  |               |  | 1,774  |        |              |  | 10,055     |         |                 |  | 4,660         |        |  |  | 1,774  |        |  |  | 14,715 |         |  |  | 16,489 |         |  |  | (6,210 | )       |   | 1996      
|                                                                      | Edgewood Distribution Center(d)     |                                               |  | 1                 |    |                                |  |              |  |               |  | 4,244  |        |              |  | 12,732     |         |                 |  |              |        |  |  | 4,244  |        |  |  | 12,732 |         |  |  | 16,976 |         |  |  |       |         |   | 2005      
|                                                                      | Eisenhower Industrial Center        |                                               |  | 3                 |    |                                |  | (e)          |  |               |  | 1,240  |        |              |  | 7,025      |         |                 |  | 1,991         |        |  |  | 1,240  |        |  |  | 9,016  |         |  |  | 10,256 |         |  |  | (3,721 | )       |   | 1994      
|                                                                      | Fleet Distribution Center           |                                               |  | 8                 |    |                                |  | (e)          |  |               |  | 3,198  |        |              |  | 18,121     |         |                 |  | 2,648         |        |  |  | 3,115  |        |  |  | 20,852 |         |  |  | 23,967 |         |  |  | (7,626 | )       |   | 1996      
|                                                                      | Gateway Distribution Center         |                                               |  | 2                 |    |                                |  |              |  |               |  | 192    |        |              |  |           |         |                 |  | 4,373         |        |  |  | 832    |        |  |  | 3,733  |         |  |  | 4,565  |         |  |  | (850   | )       |   | 1998      
|                                                                      | Hampton Central Distribution Center |                                               |  | 2                 |    |                                |  |              |  |               |  | 1,769  |        |              |  |           |         |                 |  | 10,226        |        |  |  | 2,252  |        |  |  | 9,743  |         |  |  | 11,995 |         |  |  | (2,818 | )       |   | 1996, 1997
|                                                                      | Hickory Ridge Distribution Center   |                                               |  | 2                 |    |                                |  |              |  |               |  | 15,988 |        |              |  | 47,964     |         |                 |  |              |        |  |  | 15,988 |        |  |  | 47,964 |         |  |  | 63,952 |         |  |  | (394   | )       |   | 2005      
|                                                                      | Meadowridge Distribution Center     |                                               |  | 1                 |    |                                |  | (e)          |  |               |  | 1,757  |        |              |  |           |         |                 |  | 6,124         |        |  |  | 1,902  |        |  |  | 5,979  |         |  |  | 7,881  |         |  |  | (1,315 | )       |   | 1998      
|                                                                      | Patapsco Distribution Center        |                                               |  | 1                 |    |                                |  |              |  |               |  | 270    |        |              |  | 1,528      |         |                 |  | 1,325         |        |  |  | 270    |        |  |  | 2,853  |         |  |  | 3,123  |         |  |  | (1,145 | )       |   | 1995      
|                                                                      | Sunnyside Industrial Center         |                                               |  | 3                 |    |                                |  |              |  |               |  | 1,541  |        |              |  | 8,733      |         |                 |  | 2,287         |        |  |  | 1,541  |        |  |  | 11,020 |         |  |  | 12,561 |         |  |  | (4,290 | )       |   | 1994      
|                                                                      | White Oak Distribution Center       |                                               |  | 1                 |    |                                |  |              |  |               |  | 3,986  |        |              |  | 24,107     |         |                 |  | 7             |        |  |  | 3,986  |        |  |  | 24,114 |         |  |  | 28,100 |         |  |  | (2,363 | )       |   | 2002      
|                                                                      | Winchester Distribution Center      |                                               |  | 1                 |    |                                |  |              |  |               |  | 3,286  |        |              |  | 13,142     |         |                 |  |              |        |  |  | 3,286  |        |  |  | 13,142 |         |  |  | 16,428 |         |  |  | (128   | )       |   | 2005      
|                                                                      |                                     |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |        |         |  
|                                                                      |                                     | Total Washington D.C./ Baltimore, Maryland    |  |                   | 41 |                                |  |              |  |               |  |        | 45,518 |              |  |            | 165,815 |                 |  |               | 48,207 |  |  |        | 46,744 |  |  |        | 212,796 |  |  |        | 259,540 |  |  |        | (44,503 | ) |            | 
|                                                                      |                                     |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |        |         |  
|Other                                                                 |                                     |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |        |         |  
|                                                                      | Shawnee Distribution Center         |                                               |  | 1                 |    |                                |  |              |  |               |  | 2,858  |        |              |  | 11,432     |         |                 |  |              |        |  |  | 2,858  |        |  |  | 11,432 |         |  |  | 14,290 |         |  |  | (111   | )       |   | 2005      
|                                                                      | Topeka Distribution Center          |                                               |  | 1                 |    |                                |  |              |  |               |  | 108    |        |              |  | 430        |         |                 |  |              |        |  |  | 108    |        |  |  | 430    |         |  |  | 538    |         |  |  | (4     | )       |   | 2005      
|                                                                      | Valley Industrial Center            |                                               |  | 1                 |    |                                |  |              |  |               |  | 363    |        |              |  |           |         |                 |  | 3,662         |        |  |  | 362    |        |  |  | 3,663  |         |  |  | 4,025  |         |  |  | (955   | )       |   | 1997      
|                                                                      |                                     |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |        |         |  
|                                                                      |                                     | Total Other                                   |  |                   | 3  |                                |  |              |  |               |  |        | 3,329  |              |  |            | 11,862  |                 |  |               | 3,662  |  |  |        | 3,328  |  |  |        | 15,525  |  |  |        | 18,853  |  |  |        | (1,070  | ) |            | 
|                                                                      |                                     |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |        |  |  |        |        |  |  |        |         |  |  |        |         |  |  |        |         |  

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|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |        |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |   |                                    | 
|--------------------------------------------------------------------- | ------------------------------------------- | --------------------------------------------- |  | ----------------- | -- | ------------------------------ |  | ------------ |  | ------------- |  | --------- | ------ | ------------ |  | ---------- | ------ | --------------- |  | ------------- | ------ |  |  | --------- | ------ |  |  | --------- | ------- |  |  | --------- | ------- |  |  | ---------- | ------ | - | ---------------------------------- | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                             |                                               |  |                   |    | Gross Amounts At Which Carried |  |             
|                                                                      |                                             | Initial Cost to ProLogis                      |  |                   |    | as of December 31, 2005        |  |             
|                                                                      |                                             |                                               |  | Costs Capitalized |    |                                |  |              |  | Date of      
|                                                                      |                                             | No. of                                        |  | Encum-            |    |                                |  | Building &   |  | Subsequent to |  |           |        | Building &   |  |            |        | Accumulated     |  | Construction/
|Description                                                           |                                             | Bldgs.                                        |  | brances           |    | Land                           |  | Improvements |  | Acquisition   |  | Land      |        | Improvements |  | Total(a,b) |        | Depreciation(c) |  | Acquisition  
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |        |                 |  |              
|                                                                      |                                             | (In thousands of U.S. dollars, as applicable)
|Mexico:                                                               |                                             |                                               |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |        |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|Juarez                                                                |                                             |                                               |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |        |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      | Del Norte Industrial Center                 |                                               |  | 1                 |    |                                |  |              |  |               |  | 1,041     |        |              |  | 7,827      |        |                 |  | 863           |        |  |  | 1,382     |        |  |  | 8,349     |         |  |  | 9,731     |         |  |  | (9         | )      |   | 2002                              
|                                                                      | Independencia Industrial Center(d)          |                                               |  | 2                 |    |                                |  |              |  |               |  | 3,214     |        |              |  |           |        |                 |  | 4,680         |        |  |  | 3,214     |        |  |  | 4,680     |         |  |  | 7,894     |         |  |  |           |        |   | 2005                              
|                                                                      | Los Aztecas Industrial Center               |                                               |  | 1                 |    |                                |  |              |  |               |  | 148       |        |              |  | 837        |        |                 |  | 417           |        |  |  | 33        |        |  |  | 1,369     |         |  |  | 1,402     |         |  |  | (316       | )      |   | 1999                              
|                                                                      | Ramon Rivera Industrial Center              |                                               |  | 1                 |    |                                |  |              |  |               |  | 445       |        |              |  |           |        |                 |  | 3,320         |        |  |  | 2,246     |        |  |  | 1,519     |         |  |  | 3,765     |         |  |  | (319       | )      |   | 2000                              
|                                                                      | Rio Bravo Industrial Center                 |                                               |  | 1                 |    |                                |  |              |  |               |  | 349       |        |              |  | 1,979      |        |                 |  | 318           |        |  |  | 410       |        |  |  | 2,236     |         |  |  | 2,646     |         |  |  | (393       | )      |   | 2001                              
|                                                                      | Salvacar Industrial Center(d)               |                                               |  | 7                 |    |                                |  |              |  |               |  | 3,991     |        |              |  |           |        |                 |  | 15,492        |        |  |  | 4,602     |        |  |  | 14,881    |         |  |  | 19,483    |         |  |  | (1,539     | )      |   | 1998, 1999, 2000, 2001, 2002, 2005
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |        |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      |                                             | Total Juarez, Mexico                          |  |                   | 13 |                                |  |              |  |               |  |           | 9,188  |              |  |            | 10,643 |                 |  |               | 25,090 |  |  |           | 11,887 |  |  |           | 33,034  |  |  |           | 44,921  |  |  |            | (2,576 | ) |                                    | 
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |        |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|Monterrey                                                             |                                             |                                               |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |        |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      | Monterrey Industrial Park(d)                |                                               |  | 5                 |    |                                |  |              |  |               |  | 4,049     |        |              |  | 3,785      |        |                 |  | 9,358         |        |  |  | 4,219     |        |  |  | 12,973    |         |  |  | 17,192    |         |  |  | (3,055     | )      |   | 1997, 1998, 2005                  
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |        |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      |                                             | Total Monterrey, Mexico                       |  |                   | 5  |                                |  |              |  |               |  |           | 4,049  |              |  |            | 3,785  |                 |  |               | 9,358  |  |  |           | 4,219  |  |  |           | 12,973  |  |  |           | 17,192  |  |  |            | (3,055 | ) |                                    | 
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |        |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|Reynosa                                                               |                                             |                                               |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |        |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      | Colonial Industrial Center(d)               |                                               |  | 2                 |    |                                |  |              |  |               |  | 943       |        |              |  | 1,574      |        |                 |  | 3,081         |        |  |  | 671       |        |  |  | 4,927     |         |  |  | 5,598     |         |  |  |           |        |   | 1999, 2000                        
|                                                                      | Del Norte Industrial Center                 |                                               |  | 2                 |    |                                |  |              |  |               |  | 809       |        |              |  |           |        |                 |  | 6,891         |        |  |  | 1,065     |        |  |  | 6,635     |         |  |  | 7,700     |         |  |  | (2,107     | )      |   | 1998                              
|                                                                      | Del Norte Industrial Center II(d)           |                                               |  | 1                 |    |                                |  |              |  |               |  | 1,131     |        |              |  |           |        |                 |  | 6,114         |        |  |  | 1,131     |        |  |  | 6,114     |         |  |  | 7,245     |         |  |  |           |        |   | 2005                              
|                                                                      | Pharr Bridge Industrial Center(d)           |                                               |  | 2                 |    |                                |  |              |  |               |  | 2,347     |        |              |  |           |        |                 |  | 8,793         |        |  |  | 2,347     |        |  |  | 8,793     |         |  |  | 11,140    |         |  |  |           |        |   | 2004, 2005                        
|                                                                      | Reynosa Industrial Center(d)                |                                               |  | 5                 |    |                                |  |              |  |               |  | 1,569     |        |              |  | 1,038      |        |                 |  | 11,457        |        |  |  | 1,857     |        |  |  | 12,207    |         |  |  | 14,064    |         |  |  | (3,155     | )      |   | 1997, 1998, 1999                  
|                                                                      | Reynosa Industrial Center III(d)            |                                               |  | 1                 |    |                                |  |              |  |               |  | 589       |        |              |  |           |        |                 |  | 5,777         |        |  |  | 589       |        |  |  | 5,777     |         |  |  | 6,366     |         |  |  |           |        |   | 2001                              
|                                                                      | Villa Florida Industrial Center(d)          |                                               |  | 1                 |    |                                |  |              |  |               |  | 2,527     |        |              |  | 14,314     |        |                 |  |              |        |  |  | 2,527     |        |  |  | 14,314    |         |  |  | 16,841    |         |  |  |           |        |   | 2004                              
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |        |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      |                                             | Total Reynosa, Mexico                         |  |                   | 14 |                                |  |              |  |               |  |           | 9,915  |              |  |            | 16,926 |                 |  |               | 42,113 |  |  |           | 10,187 |  |  |           | 58,767  |  |  |           | 68,954  |  |  |            | (5,262 | ) |                                    | 
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |        |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      | Subtotal North America                      |                                               |  | 1,377             |    |                                |  |              |  |               |  | 1,525,428 |        |              |  | 4,889,729  |        |                 |  | 1,531,229     |        |  |  | 1,551,907 |        |  |  | 6,394,479 |         |  |  | 7,946,386 |         |  |  | (1,108,352 | )      |   |                                   
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |        |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|Europe:                                                               |                                             |                                               |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |        |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|Czech Republic:                                                       |                                             |                                               |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |        |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      | Prague East Distribution Center(d)          |                                               |  | 2                 |    |                                |  |              |  |               |  | 3,354     |        |              |  |           |        |                 |  | 11,245        |        |  |  | 3,354     |        |  |  | 11,245    |         |  |  | 14,599    |         |  |  |           |        |   | 2005                              
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |        |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      |                                             | Total Czech Republic                          |  |                   | 2  |                                |  |              |  |               |  |           | 3,354  |              |  |            |       |                 |  |               | 11,245 |  |  |           | 3,354  |  |  |           | 11,245  |  |  |           | 14,599  |  |  |            |       |   |                                    | 
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |        |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|France:                                                               |                                             |                                               |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |        |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      | Clesud Grans Miramas Distribution Center(d) |                                               |  | 1                 |    |                                |  |              |  |               |  | 924       |        |              |  |           |        |                 |  | 7,870         |        |  |  | 925       |        |  |  | 7,869     |         |  |  | 8,794     |         |  |  |           |        |   | 2005                              
|                                                                      | Isle dAbeau Distribution Center(d)         |                                               |  | 2                 |    |                                |  |              |  |               |  | 2,226     |        |              |  | 15,068     |        |                 |  | 7,685         |        |  |  | 2,320     |        |  |  | 22,659    |         |  |  | 24,979    |         |  |  |           |        |   | 2002, 2005                        
|                                                                      | Le Havre Distribution Center(d)             |                                               |  | 1                 |    |                                |  |              |  |               |  | 206       |        |              |  |           |        |                 |  | 14,065        |        |  |  | 199       |        |  |  | 14,072    |         |  |  | 14,271    |         |  |  |           |        |   | 2003                              
|                                                                      | Metz Distribution Center(d)                 |                                               |  | 1                 |    |                                |  |              |  |               |  | 1,070     |        |              |  | 6,500      |        |                 |  | (374          | )      |  |  | 1,015     |        |  |  | 6,181     |         |  |  | 7,196     |         |  |  |           |        |   | 2004                              
|                                                                      | Moissy Cramayel Distribution Center(d)      |                                               |  | 4                 |    |                                |  |              |  |               |  | 2,750     |        |              |  |           |        |                 |  | 42,874        |        |  |  | 2,750     |        |  |  | 42,874    |         |  |  | 45,624    |         |  |  |           |        |   | 2005                              
|                                                                      | Orleans Distribution Center(d)              |                                               |  | 1                 |    |                                |  |              |  |               |  | 3,125     |        |              |  | 16,558     |        |                 |  | (571          | )      |  |  | 2,936     |        |  |  | 16,176    |         |  |  | 19,112    |         |  |  |           |        |   | 2004                              
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |        |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      |                                             | Total France                                  |  |                   | 10 |                                |  |              |  |               |  |           | 10,301 |              |  |            | 38,126 |                 |  |               | 71,549 |  |  |           | 10,145 |  |  |           | 109,831 |  |  |           | 119,976 |  |  |            |       |   |                                    | 
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |        |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  

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##### Table of Contents





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|--------------------------------------------------------------------- | ------------------------------------------- | --------------------------------------------- |  | ----------------- | -- | ------------------------------ |  | ------------ |  | ------------- |  | ------ | ------ | ------------ |  | ---------- | ------ | --------------- |  | ------------- | ------ |  |  | ------ | ------ |  |  | ------ | ------ |  |  | ------ | ------ |  |  | ------ | - |  | ---------- | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                             |                                               |  |                   |    | Gross Amounts At Which Carried |  |             
|                                                                      |                                             | Initial Cost to ProLogis                      |  |                   |    | as of December 31, 2005        |  |             
|                                                                      |                                             |                                               |  | Costs Capitalized |    |                                |  |              |  | Date of      
|                                                                      |                                             | No. of                                        |  | Encum-            |    |                                |  | Building &   |  | Subsequent to |  |        |        | Building &   |  |            |        | Accumulated     |  | Construction/
|Description                                                           |                                             | Bldgs.                                        |  | brances           |    | Land                           |  | Improvements |  | Acquisition   |  | Land   |        | Improvements |  | Total(a,b) |        | Depreciation(c) |  | Acquisition  
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |              
|                                                                      |                                             | (In thousands of U.S. dollars, as applicable)
|Germany:                                                              |                                             |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |               |        |  |  |        |        |  |  |        |        |  |  |        |        |  |  |        |   | 
|                                                                      | Dradenau Distribution Center(d)             |                                               |  | 1                 |    |                                |  |              |  |               |  | 80     |        |              |  |           |        |                 |  | 10,573        |        |  |  | 80     |        |  |  | 10,573 |        |  |  | 10,653 |        |  |  |       |   |  | 2005      
|                                                                      | Frankfurt Riederhof Distribution Center(d)  |                                               |  | 1                 |    |                                |  |              |  |               |  | 7,320  |        |              |  |           |        |                 |  | 13,851        |        |  |  | 7,104  |        |  |  | 14,067 |        |  |  | 21,171 |        |  |  |       |   |  | 2003      
|                                                                      | Koblenz Distribution Center(d)              |                                               |  | 1                 |    |                                |  |              |  |               |  | 590    |        |              |  |           |        |                 |  | 2,167         |        |  |  | 590    |        |  |  | 2,167  |        |  |  | 2,757  |        |  |  |       |   |  | 2005      
|                                                                      | Krefeld Distribution Center(d)              |                                               |  | 1                 |    |                                |  |              |  |               |  | 2,143  |        |              |  |           |        |                 |  | 9,801         |        |  |  | 2,496  |        |  |  | 9,448  |        |  |  | 11,944 |        |  |  |       |   |  | 2002      
|                                                                      | Munich Distribution Center(d)               |                                               |  | 1                 |    |                                |  |              |  |               |  | 6,872  |        |              |  |           |        |                 |  | 11,021        |        |  |  | 6,872  |        |  |  | 11,021 |        |  |  | 17,893 |        |  |  |       |   |  | 2005      
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |               |        |  |  |        |        |  |  |        |        |  |  |        |        |  |  |        |   | 
|                                                                      |                                             | Total Germany                                 |  |                   | 5  |                                |  |              |  |               |  |        | 17,005 |              |  |            |       |                 |  |               | 47,413 |  |  |        | 17,142 |  |  |        | 47,276 |  |  |        | 64,418 |  |  |        |  |  |            | 
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |               |        |  |  |        |        |  |  |        |        |  |  |        |        |  |  |        |   | 
|Hungary:                                                              |                                             |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |               |        |  |  |        |        |  |  |        |        |  |  |        |        |  |  |        |   | 
|                                                                      | Budapest Distribution Center(d)             |                                               |  | 1                 |    |                                |  |              |  |               |  | 1,302  |        |              |  |           |        |                 |  | 6,874         |        |  |  | 1,302  |        |  |  | 6,874  |        |  |  | 8,176  |        |  |  |       |   |  | 2005      
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |               |        |  |  |        |        |  |  |        |        |  |  |        |        |  |  |        |   | 
|                                                                      |                                             | Total Hungary                                 |  |                   | 1  |                                |  |              |  |               |  |        | 1,302  |              |  |            |       |                 |  |               | 6,874  |  |  |        | 1,302  |  |  |        | 6,874  |  |  |        | 8,176  |  |  |        |  |  |            | 
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |               |        |  |  |        |        |  |  |        |        |  |  |        |        |  |  |        |   | 
|Italy:                                                                |                                             |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |               |        |  |  |        |        |  |  |        |        |  |  |        |        |  |  |        |   | 
|                                                                      | Lodi Distribution Center(d)                 |                                               |  | 1                 |    |                                |  |              |  |               |  | 1,367  |        |              |  | 13,258     |        |                 |  |              |        |  |  | 1,367  |        |  |  | 13,258 |        |  |  | 14,625 |        |  |  |       |   |  | 2005      
|                                                                      | Padua Distribution Center(d)                |                                               |  | 1                 |    |                                |  |              |  |               |  | 2,724  |        |              |  |           |        |                 |  | 9,416         |        |  |  | 2,724  |        |  |  | 9,416  |        |  |  | 12,140 |        |  |  |       |   |  | 2005      
|                                                                      | Romentino Distribution Center(d)            |                                               |  | 1                 |    |                                |  |              |  |               |  | 1,478  |        |              |  |           |        |                 |  | 9,167         |        |  |  | 1,479  |        |  |  | 9,166  |        |  |  | 10,645 |        |  |  |       |   |  | 2005      
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |               |        |  |  |        |        |  |  |        |        |  |  |        |        |  |  |        |   | 
|                                                                      |                                             | Total Italy                                   |  |                   | 3  |                                |  |              |  |               |  |        | 5,569  |              |  |            | 13,258 |                 |  |               | 18,583 |  |  |        | 5,570  |  |  |        | 31,840 |  |  |        | 37,410 |  |  |        |  |  |            | 
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |               |        |  |  |        |        |  |  |        |        |  |  |        |        |  |  |        |   | 
|Poland:                                                               |                                             |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |               |        |  |  |        |        |  |  |        |        |  |  |        |        |  |  |        |   | 
|                                                                      | Blonie Distribution Center(d)               |                                               |  | 1                 |    |                                |  |              |  |               |  | 1,421  |        |              |  |           |        |                 |  | 8,895         |        |  |  | 1,421  |        |  |  | 8,895  |        |  |  | 10,316 |        |  |  |       |   |  | 2005      
|                                                                      | Poznan II Distribution Center(d)            |                                               |  | 3                 |    |                                |  |              |  |               |  | 2,572  |        |              |  |           |        |                 |  | 15,698        |        |  |  | 2,572  |        |  |  | 15,698 |        |  |  | 18,270 |        |  |  |       |   |  | 2005      
|                                                                      | Sosnowiec Distribution Center(d)            |                                               |  | 2                 |    |                                |  |              |  |               |  | 1,353  |        |              |  |           |        |                 |  | 19,678        |        |  |  | 1,353  |        |  |  | 19,678 |        |  |  | 21,031 |        |  |  |       |   |  | 2005      
|                                                                      | Teresin Distribution Center(d)              |                                               |  | 2                 |    |                                |  |              |  |               |  | 2,151  |        |              |  |           |        |                 |  | 22,019        |        |  |  | 2,156  |        |  |  | 22,014 |        |  |  | 24,170 |        |  |  |       |   |  | 2004, 2005
|                                                                      | Wroclaw Distribution Center(d)              |                                               |  | 2                 |    |                                |  |              |  |               |  | 3,701  |        |              |  |           |        |                 |  | 13,853        |        |  |  | 3,702  |        |  |  | 13,852 |        |  |  | 17,554 |        |  |  |       |   |  | 2005      
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |               |        |  |  |        |        |  |  |        |        |  |  |        |        |  |  |        |   | 
|                                                                      |                                             | Total Poland                                  |  |                   | 10 |                                |  |              |  |               |  |        | 11,198 |              |  |            |       |                 |  |               | 80,143 |  |  |        | 11,204 |  |  |        | 80,137 |  |  |        | 91,341 |  |  |        |  |  |            | 
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |               |        |  |  |        |        |  |  |        |        |  |  |        |        |  |  |        |   | 
|Spain:                                                                |                                             |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |               |        |  |  |        |        |  |  |        |        |  |  |        |        |  |  |        |   | 
|                                                                      | Alcala Distribution Center(d)               |                                               |  | 2                 |    |                                |  |              |  |               |  | 7,413  |        |              |  |           |        |                 |  | 22,389        |        |  |  | 7,413  |        |  |  | 22,389 |        |  |  | 29,802 |        |  |  |       |   |  | 2005      
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |               |        |  |  |        |        |  |  |        |        |  |  |        |        |  |  |        |   | 
|                                                                      |                                             | Total Spain                                   |  |                   | 2  |                                |  |              |  |               |  |        | 7,413  |              |  |            |       |                 |  |               | 22,389 |  |  |        | 7,413  |  |  |        | 22,389 |  |  |        | 29,802 |  |  |        |  |  |            | 
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |               |        |  |  |        |        |  |  |        |        |  |  |        |        |  |  |        |   | 
|United Kingdom:                                                       |                                             |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |        |                 |  |               |        |  |  |        |        |  |  |        |        |  |  |        |        |  |  |        |   | 
|                                                                      | Ardra Road, Edmonton Distribution Center(d) |                                               |  | 1                 |    |                                |  |              |  |               |  | 13,715 |        |              |  |           |        |                 |  | 14,868        |        |  |  | 13,715 |        |  |  | 14,868 |        |  |  | 28,583 |        |  |  |       |   |  | 2005      
|                                                                      | Beddington Distribution Center(d)           |                                               |  | 2                 |    |                                |  |              |  |               |  | 12,198 |        |              |  | 16,288     |        |                 |  | 6,386         |        |  |  | 13,537 |        |  |  | 21,335 |        |  |  | 34,872 |        |  |  |       |   |  | 2002      
|                                                                      | Bermuda Distribution Center(d)              |                                               |  | 1                 |    |                                |  |              |  |               |  | 9,364  |        |              |  |           |        |                 |  | 17,646        |        |  |  | 9,364  |        |  |  | 17,646 |        |  |  | 27,010 |        |  |  |       |   |  | 2005      
|                                                                      | Bristol Coldstore Distribution Center       |                                               |  | 1                 |    |                                |  |              |  |               |  | 10,071 |        |              |  | 3,022      |        |                 |  | 94            |        |  |  | 10,160 |        |  |  | 3,027  |        |  |  | 13,187 |        |  |  | (2,364 | ) |  | 2003      
|                                                                      | Campbell Road Distribution Center(d)        |                                               |  | 1                 |    |                                |  |              |  |               |  | 7,391  |        |              |  |           |        |                 |  | 11,476        |        |  |  | 6,557  |        |  |  | 12,310 |        |  |  | 18,867 |        |  |  |       |   |  | 2004      
|                                                                      | Didcot Distribution Center(d)               |                                               |  | 1                 |    |                                |  |              |  |               |  | 9,512  |        |              |  |           |        |                 |  | 10,487        |        |  |  | 9,512  |        |  |  | 10,487 |        |  |  | 19,999 |        |  |  |       |   |  | 2005      
|                                                                      | Fort Dunlop Distribution Center(d)          |                                               |  | 2                 |    |                                |  |              |  |               |  | 12,666 |        |              |  |           |        |                 |  | 11,239        |        |  |  | 13,451 |        |  |  | 10,454 |        |  |  | 23,905 |        |  |  |       |   |  | 2001, 2005

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|                                                                      |                                               |                                               |  |                   |       |                                |  |              |  |               |  |         |           |              |  |            |           |                 |  |               |           |  |  |         |           |  |  |         |           |  |  |         |           |  |  |        |            |   |      | 
|--------------------------------------------------------------------- | --------------------------------------------- | --------------------------------------------- |  | ----------------- | ----- | ------------------------------ |  | ------------ |  | ------------- |  | ------- | --------- | ------------ |  | ---------- | --------- | --------------- |  | ------------- | --------- |  |  | ------- | --------- |  |  | ------- | --------- |  |  | ------- | --------- |  |  | ------ | ---------- | - | ---- | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                               |                                               |  |                   |       | Gross Amounts At Which Carried |  |             
|                                                                      |                                               | Initial Cost to ProLogis                      |  |                   |       | as of December 31, 2005        |  |             
|                                                                      |                                               |                                               |  | Costs Capitalized |       |                                |  |              |  | Date of      
|                                                                      |                                               | No. of                                        |  | Encum-            |       |                                |  | Building &   |  | Subsequent to |  |         |           | Building &   |  |            |           | Accumulated     |  | Construction/
|Description                                                           |                                               | Bldgs.                                        |  | brances           |       | Land                           |  | Improvements |  | Acquisition   |  | Land    |           | Improvements |  | Total(a,b) |           | Depreciation(c) |  | Acquisition  
|                                                                      |                                               |                                               |  |                   |       |                                |  |              |  |               |  |         |           |              |  |            |           |                 |  |              
|                                                                      |                                               | (In thousands of U.S. dollars, as applicable)
|                                                                      | Gascoigne Road Barking Distribution Center(d) |                                               |  | 1                 |       |                                |  |              |  |               |  | 5,500   |           |              |  |           |           |                 |  | 9,480         |           |  |  | 5,487   |           |  |  | 9,493   |           |  |  | 14,980  |           |  |  |       |            |   | 2003
|                                                                      | Kings Lynn Coldstore Distribution Center      |                                               |  | 1                 |       |                                |  |              |  |               |  | 16,435  |           |              |  | 5,325      |           |                 |  | 165           |           |  |  | 16,586  |           |  |  | 5,339   |           |  |  | 21,925  |           |  |  | (3,628 | )          |   | 2003
|                                                                      | North Kettering Distribution Center(d)        |                                               |  | 1                 |       |                                |  |              |  |               |  | 9,547   |           |              |  |           |           |                 |  | 24,856        |           |  |  | 9,547   |           |  |  | 24,856  |           |  |  | 34,403  |           |  |  |       |            |   | 2005
|                                                                      | River Road Distribution Center(d)             |                                               |  | 1                 |       |                                |  |              |  |               |  | 20,397  |           |              |  |           |           |                 |  | 22,042        |           |  |  | 18,591  |           |  |  | 23,848  |           |  |  | 42,439  |           |  |  |       |            |   | 2004
|                                                                      | Wellingborough Distribution Center(d)         |                                               |  | 1                 |       |                                |  |              |  |               |  | 6,513   |           |              |  |           |           |                 |  | 11,606        |           |  |  | 6,513   |           |  |  | 11,606  |           |  |  | 18,119  |           |  |  |       |            |   | 2005
|                                                                      | Weston Avenue Distribution Center(d)          |                                               |  | 1                 |       |                                |  |              |  |               |  | 6,172   |           |              |  | 4,620      |           |                 |  | 3,624         |           |  |  | 6,825   |           |  |  | 7,591   |           |  |  | 14,416  |           |  |  |       |            |   | 2002
|                                                                      |                                               |                                               |  |                   |       |                                |  |              |  |               |  |         |           |              |  |            |           |                 |  |               |           |  |  |         |           |  |  |         |           |  |  |         |           |  |  |        |            |  
|                                                                      |                                               | Total United Kingdom                          |  |                   | 15    |                                |  |              |  |               |  |         | 139,481   |              |  |            | 29,255    |                 |  |               | 143,969   |  |  |         | 139,845   |  |  |         | 172,860   |  |  |         | 312,705   |  |  |        | (5,992     | ) |      | 
|                                                                      |                                               |                                               |  |                   |       |                                |  |              |  |               |  |         |           |              |  |            |           |                 |  |               |           |  |  |         |           |  |  |         |           |  |  |         |           |  |  |        |            |  
|                                                                      | Subtotal Europe                               |                                               |  | 48                |       |                                |  |              |  |               |  | 195,623 |           |              |  | 80,639     |           |                 |  | 402,165       |           |  |  | 195,975 |           |  |  | 482,452 |           |  |  | 678,427 |           |  |  | (5,992 | )          |   |     
|                                                                      |                                               |                                               |  |                   |       |                                |  |              |  |               |  |         |           |              |  |            |           |                 |  |               |           |  |  |         |           |  |  |         |           |  |  |         |           |  |  |        |            |  
|Asia:                                                                 |                                               |                                               |  |                   |       |                                |  |              |  |               |  |         |           |              |  |            |           |                 |  |               |           |  |  |         |           |  |  |         |           |  |  |         |           |  |  |        |            |  
|China:                                                                |                                               |                                               |  |                   |       |                                |  |              |  |               |  |         |           |              |  |            |           |                 |  |               |           |  |  |         |           |  |  |         |           |  |  |         |           |  |  |        |            |  
|                                                                      | Guangzhou Distribution Center(d)              |                                               |  | 1                 |       |                                |  |              |  |               |  | 1,067   |           |              |  |           |           |                 |  | 3,720         |           |  |  | 1,066   |           |  |  | 3,721   |           |  |  | 4,787   |           |  |  |       |            |   | 2005
|                                                                      | Taopu Distribution Center(d)                  |                                               |  | 3                 |       |                                |  |              |  |               |  | 5,323   |           |              |  |           |           |                 |  | 12,817        |           |  |  | 5,323   |           |  |  | 12,817  |           |  |  | 18,140  |           |  |  |       |            |   | 2005
|                                                                      |                                               |                                               |  |                   |       |                                |  |              |  |               |  |         |           |              |  |            |           |                 |  |               |           |  |  |         |           |  |  |         |           |  |  |         |           |  |  |        |            |  
|                                                                      |                                               | Total China                                   |  |                   | 4     |                                |  |              |  |               |  |         | 6,390     |              |  |            |          |                 |  |               | 16,537    |  |  |         | 6,389     |  |  |         | 16,538    |  |  |         | 22,927    |  |  |        |           |   |      | 
|                                                                      |                                               |                                               |  |                   |       |                                |  |              |  |               |  |         |           |              |  |            |           |                 |  |               |           |  |  |         |           |  |  |         |           |  |  |         |           |  |  |        |            |  
|Japan:                                                                |                                               |                                               |  |                   |       |                                |  |              |  |               |  |         |           |              |  |            |           |                 |  |               |           |  |  |         |           |  |  |         |           |  |  |         |           |  |  |        |            |  
|                                                                      | ProLogis Park Narita II(d)                    |                                               |  | 1                 |       |                                |  |              |  |               |  | 2,509   |           |              |  |           |           |                 |  | 18,373        |           |  |  | 2,509   |           |  |  | 18,373  |           |  |  | 20,882  |           |  |  |       |            |   | 2005
|                                                                      | ProLogis Park Sugito I(d)                     |                                               |  | 1                 |       |                                |  |              |  |               |  | 18,143  |           |              |  |           |           |                 |  | 32,543        |           |  |  | 18,143  |           |  |  | 32,543  |           |  |  | 50,686  |           |  |  |       |            |   | 2005
|                                                                      |                                               |                                               |  |                   |       |                                |  |              |  |               |  |         |           |              |  |            |           |                 |  |               |           |  |  |         |           |  |  |         |           |  |  |         |           |  |  |        |            |  
|                                                                      |                                               | Total Japan                                   |  |                   | 2     |                                |  |              |  |               |  |         | 20,652    |              |  |            |          |                 |  |               | 50,916    |  |  |         | 20,652    |  |  |         | 50,916    |  |  |         | 71,568    |  |  |        |           |   |      | 
|                                                                      |                                               |                                               |  |                   |       |                                |  |              |  |               |  |         |           |              |  |            |           |                 |  |               |           |  |  |         |           |  |  |         |           |  |  |         |           |  |  |        |            |  
|Singapore:                                                            |                                               |                                               |  |                   |       |                                |  |              |  |               |  |         |           |              |  |            |           |                 |  |               |           |  |  |         |           |  |  |         |           |  |  |         |           |  |  |        |            |  
|                                                                      | Changi South Distribution Center(d)           |                                               |  | 1                 |       |                                |  |              |  |               |  |        |           |              |  | 11,598     |           |                 |  |              |           |  |  |        |           |  |  | 11,598  |           |  |  | 11,598  |           |  |  |       |            |   | 2004
|                                                                      |                                               |                                               |  |                   |       |                                |  |              |  |               |  |         |           |              |  |            |           |                 |  |               |           |  |  |         |           |  |  |         |           |  |  |         |           |  |  |        |            |  
|                                                                      |                                               | Total Singapore                               |  |                   | 1     |                                |  |              |  |               |  |         |          |              |  |            | 11,598    |                 |  |               |          |  |  |         |          |  |  |         | 11,598    |  |  |         | 11,598    |  |  |        |           |   |      | 
|                                                                      |                                               |                                               |  |                   |       |                                |  |              |  |               |  |         |           |              |  |            |           |                 |  |               |           |  |  |         |           |  |  |         |           |  |  |         |           |  |  |        |            |  
|                                                                      | Subtotal Asia                                 |                                               |  | 7                 |       |                                |  |              |  |               |  | 27,042  |           |              |  | 11,598     |           |                 |  | 67,453        |           |  |  | 27,041  |           |  |  | 79,052  |           |  |  | 106,093 |           |  |  |       |            |   |     
|                                                                      |                                               |                                               |  |                   |       |                                |  |              |  |               |  |         |           |              |  |            |           |                 |  |               |           |  |  |         |           |  |  |         |           |  |  |         |           |  |  |        |            |  
|                                                                      |                                               | Total Industrial Distribution Properties(d)   |  |                   | 1,432 |                                |  |              |  |               |  |         | 1,748,093 |              |  |            | 4,981,966 |                 |  |               | 2,000,847 |  |  |         | 1,774,923 |  |  |         | 6,955,983 |  |  |         | 8,730,906 |  |  |        | (1,114,344 | ) |      | 
|                                                                      |                                               |                                               |  |                   |       |                                |  |              |  |               |  |         |           |              |  |            |           |                 |  |               |           |  |  |         |           |  |  |         |           |  |  |         |           |  |  |        |            |  
|Retail Properties:                                                    |                                               |                                               |  |                   |       |                                |  |              |  |               |  |         |           |              |  |            |           |                 |  |               |           |  |  |         |           |  |  |         |           |  |  |         |           |  |  |        |            |  
|Denver, Colorado                                                      |                                               |                                               |  |                   |       |                                |  |              |  |               |  |         |           |              |  |            |           |                 |  |               |           |  |  |         |           |  |  |         |           |  |  |         |           |  |  |        |            |  
|                                                                      | Belcaro Shopping Center                       |                                               |  | 1                 |       |                                |  |              |  |               |  | 3,758   |           |              |  | 15,036     |           |                 |  |              |           |  |  | 3,758   |           |  |  | 15,036  |           |  |  | 18,794  |           |  |  | (110   | )          |   | 2005
|                                                                      |                                               |                                               |  |                   |       |                                |  |              |  |               |  |         |           |              |  |            |           |                 |  |               |           |  |  |         |           |  |  |         |           |  |  |         |           |  |  |        |            |  
|                                                                      |                                               | Total Denver, Colorado                        |  |                   | 1     |                                |  |              |  |               |  |         | 3,758     |              |  |            | 15,036    |                 |  |               |          |  |  |         | 3,758     |  |  |         | 15,036    |  |  |         | 18,794    |  |  |        | (110       | ) |      | 
|                                                                      |                                               |                                               |  |                   |       |                                |  |              |  |               |  |         |           |              |  |            |           |                 |  |               |           |  |  |         |           |  |  |         |           |  |  |         |           |  |  |        |            |  

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|                                                                      |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |   |      | 
|--------------------------------------------------------------------- | ------------------------------ | --------------------------------------------- |  | ----------------- | -- | ------------------------------ |  | ------------ |  | ------------- |  | ------ | ------ | ------------ |  | ---------- | ------- | --------------- |  | ------------- | - |  |  | ------ | ------ |  |  | ------ | ------- |  |  | ------- | ------- |  |  | ---- | ------ | - | ---- | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                |                                               |  |                   |    | Gross Amounts At Which Carried |  |             
|                                                                      |                                | Initial Cost to ProLogis                      |  |                   |    | as of December 31, 2005        |  |             
|                                                                      |                                |                                               |  | Costs Capitalized |    |                                |  |              |  | Date of      
|                                                                      |                                | No. of                                        |  | Encum-            |    |                                |  | Building &   |  | Subsequent to |  |        |        | Building &   |  |            |         | Accumulated     |  | Construction/
|Description                                                           |                                | Bldgs.                                        |  | brances           |    | Land                           |  | Improvements |  | Acquisition   |  | Land   |        | Improvements |  | Total(a,b) |         | Depreciation(c) |  | Acquisition  
|                                                                      |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |              
|                                                                      |                                | (In thousands of U.S. dollars, as applicable)
|Los Angeles/ Orange County, California                                |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|                                                                      | Anaheim Retail Center          |                                               |  | 2                 |    |                                |  |              |  |               |  | 1,604  |        |              |  | 3,741      |         |                 |  |              |   |  |  | 1,604  |        |  |  | 3,741  |         |  |  | 5,345   |         |  |  | (28  | )      |   | 2005
|                                                                      | Newport Retail Center          |                                               |  | 1                 |    |                                |  |              |  |               |  | 4,478  |        |              |  | 10,450     |         |                 |  |              |   |  |  | 4,478  |        |  |  | 10,450 |         |  |  | 14,928  |         |  |  |     |        |   | 2005
|                                                                      | Tustin Retail Center           |                                               |  | 1                 |    |                                |  |              |  |               |  | 2,001  |        |              |  | 4,669      |         |                 |  |              |   |  |  | 2,001  |        |  |  | 4,669  |         |  |  | 6,670   |         |  |  | (34  | )      |   | 2005
|                                                                      | Woodland Retail Center         |                                               |  | 3                 |    |                                |  |              |  |               |  | 10,376 |        |              |  | 24,208     |         |                 |  |              |   |  |  | 10,376 |        |  |  | 24,208 |         |  |  | 34,584  |         |  |  | (176 | )      |   | 2005
|                                                                      |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|                                                                      |                                | Total Los Angeles/ Orange County, California  |  |                   | 7  |                                |  |              |  |               |  |        | 18,459 |              |  |            | 43,068  |                 |  |               |  |  |  |        | 18,459 |  |  |        | 43,068  |  |  |         | 61,527  |  |  |      | (238   | ) |      | 
|                                                                      |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|Phoenix, Arizona                                                      |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|                                                                      | Tucson La Cholla Retail Center |                                               |  | 4                 |    |                                |  |              |  |               |  | 1,208  |        |              |  | 6,845      |         |                 |  |              |   |  |  | 1,208  |        |  |  | 6,845  |         |  |  | 8,053   |         |  |  | (50  | )      |   | 2005
|                                                                      |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|                                                                      |                                | Total Phoenix, Arizona                        |  |                   | 4  |                                |  |              |  |               |  |        | 1,208  |              |  |            | 6,845   |                 |  |               |  |  |  |        | 1,208  |  |  |        | 6,845   |  |  |         | 8,053   |  |  |      | (50    | ) |      | 
|                                                                      |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|Portland, Oregon                                                      |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|                                                                      | Raleigh West Shopping Center   |                                               |  | 2                 |    |                                |  |              |  |               |  | 1,173  |        |              |  | 6,647      |         |                 |  |              |   |  |  | 1,173  |        |  |  | 6,647  |         |  |  | 7,820   |         |  |  | (31  | )      |   | 2005
|                                                                      |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|                                                                      |                                | Total Portland, Oregon                        |  |                   | 2  |                                |  |              |  |               |  |        | 1,173  |              |  |            | 6,647   |                 |  |               |  |  |  |        | 1,173  |  |  |        | 6,647   |  |  |         | 7,820   |  |  |      | (31    | ) |      | 
|                                                                      |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|San Francisco (East Bay), California                                  |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|                                                                      | EB Bridge Shopping Center      |                                               |  | 8                 |    |                                |  |              |  |               |  | 23,041 |        |              |  | 81,693     |         |                 |  |              |   |  |  | 23,041 |        |  |  | 81,693 |         |  |  | 104,734 |         |  |  | (596 | )      |   | 2005
|                                                                      | Granada Shopping Center        |                                               |  | 1                 |    |                                |  |              |  |               |  | 2,604  |        |              |  | 9,232      |         |                 |  |              |   |  |  | 2,604  |        |  |  | 9,232  |         |  |  | 11,836  |         |  |  | (67  | )      |   | 2005
|                                                                      |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|                                                                      |                                | Total San Francisco (East Bay), California    |  |                   | 9  |                                |  |              |  |               |  |        | 25,645 |              |  |            | 90,925  |                 |  |               |  |  |  |        | 25,645 |  |  |        | 90,925  |  |  |         | 116,570 |  |  |      | (663   | ) |      | 
|                                                                      |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|San Francisco (South Bay), California                                 |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|                                                                      | Pacific Commons Retail Center  |                                               |  | 6                 |    |                                |  |              |  |               |  | 16,606 |        |              |  | 58,883     |         |                 |  |              |   |  |  | 16,606 |        |  |  | 58,883 |         |  |  | 75,489  |         |  |  | (465 | )      |   | 2005
|                                                                      |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|                                                                      |                                | Total San Francisco (South Bay), California   |  |                   | 6  |                                |  |              |  |               |  |        | 16,606 |              |  |            | 58,883  |                 |  |               |  |  |  |        | 16,606 |  |  |        | 58,883  |  |  |         | 75,489  |  |  |      | (465   | ) |      | 
|                                                                      |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|                                                                      |                                | Total Retail Properties                       |  |                   | 29 |                                |  |              |  |               |  |        | 66,849 |              |  |            | 221,404 |                 |  |               |  |  |  |        | 66,849 |  |  |        | 221,404 |  |  |         | 288,253 |  |  |      | (1,557 | ) |      | 
|                                                                      |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|Office Properties:                                                    |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|Chicago, Illinois                                                     |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|                                                                      | Glenview Office Center         |                                               |  | 2                 |    |                                |  |              |  |               |  | 4,362  |        |              |  | 21,518     |         |                 |  |              |   |  |  | 4,362  |        |  |  | 21,518 |         |  |  | 25,880  |         |  |  | (160 | )      |   | 2005
|                                                                      | Santa Fe Office Center         |                                               |  | 1                 |    |                                |  |              |  |               |  | 8,809  |        |              |  | 44,716     |         |                 |  |              |   |  |  | 8,809  |        |  |  | 44,716 |         |  |  | 53,525  |         |  |  | (314 | )      |   | 2005
|                                                                      | Woodridge Office Center        |                                               |  | 1                 |    |                                |  |              |  |               |  | 1,165  |        |              |  | 5,689      |         |                 |  |              |   |  |  | 1,165  |        |  |  | 5,689  |         |  |  | 6,854   |         |  |  | (43  | )      |   | 2005
|                                                                      |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|                                                                      |                                | Total Chicago, Illinois                       |  |                   | 4  |                                |  |              |  |               |  |        | 14,336 |              |  |            | 71,923  |                 |  |               |  |  |  |        | 14,336 |  |  |        | 71,923  |  |  |         | 86,259  |  |  |      | (517   | ) |      | 
|                                                                      |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|Dallas/ Fort Worth, Texas                                             |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|                                                                      | Freeport Office Center         |                                               |  | 1                 |    |                                |  |              |  |               |  | 1,922  |        |              |  | 10,893     |         |                 |  |              |   |  |  | 1,922  |        |  |  | 10,893 |         |  |  | 12,815  |         |  |  | (84  | )      |   | 2005
|                                                                      |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|                                                                      |                                | Total Dallas/ Fort Worth, Texas               |  |                   | 1  |                                |  |              |  |               |  |        | 1,922  |              |  |            | 10,893  |                 |  |               |  |  |  |        | 1,922  |  |  |        | 10,893  |  |  |         | 12,815  |  |  |      | (84    | ) |      | 
|                                                                      |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|Denver, Colorado                                                      |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|                                                                      | Circle Point Corporate Center  |                                               |  | 2                 |    |                                |  |              |  |               |  | 9,037  |        |              |  | 36,149     |         |                 |  |              |   |  |  | 9,037  |        |  |  | 36,149 |         |  |  | 45,186  |         |  |  | (282 | )      |   | 2005
|                                                                      |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  
|                                                                      |                                | Total Denver, Colorado                        |  |                   | 2  |                                |  |              |  |               |  |        | 9,037  |              |  |            | 36,149  |                 |  |               |  |  |  |        | 9,037  |  |  |        | 36,149  |  |  |         | 45,186  |  |  |      | (282   | ) |      | 
|                                                                      |                                |                                               |  |                   |    |                                |  |              |  |               |  |        |        |              |  |            |         |                 |  |               |   |  |  |        |        |  |  |        |         |  |  |         |         |  |  |      |        |  

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|                                                                      |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |   |      | 
|--------------------------------------------------------------------- | -------------------------------- | ------------------------------------------------ |  | ----------------- | -- | ------------------------------ |  | ------------ |  | ------------- |  | --------- | ------ | ------------ |  | ---------- | ------- | --------------- |  | ------------- | ------ |  |  | --------- | ------ |  |  | --------- | ------- |  |  | --------- | ------- |  |  | ---------- | ------ | - | ---- | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                  |                                                  |  |                   |    | Gross Amounts At Which Carried |  |             
|                                                                      |                                  | Initial Cost to ProLogis                         |  |                   |    | as of December 31, 2005        |  |             
|                                                                      |                                  |                                                  |  | Costs Capitalized |    |                                |  |              |  | Date of      
|                                                                      |                                  | No. of                                           |  | Encum-            |    |                                |  | Building &   |  | Subsequent to |  |           |        | Building &   |  |            |         | Accumulated     |  | Construction/
|Description                                                           |                                  | Bldgs.                                           |  | brances           |    | Land                           |  | Improvements |  | Acquisition   |  | Land      |        | Improvements |  | Total(a,b) |         | Depreciation(c) |  | Acquisition  
|                                                                      |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |              
|                                                                      |                                  | (In thousands of U.S. dollars, as applicable)   
|Los Angeles/ Orange County, California                                |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      | Anaheim Office Park              |                                                  |  | 2                 |    |                                |  |              |  |               |  | 7,203     |        |              |  | 16,573     |         |                 |  |              |        |  |  | 7,203     |        |  |  | 16,573    |         |  |  | 23,776    |         |  |  | (119       | )      |   | 2005
|                                                                      | Chatsworth Office Park           |                                                  |  | 4                 |    |                                |  |              |  |               |  | 8,696     |        |              |  | 20,377     |         |                 |  |              |        |  |  | 8,696     |        |  |  | 20,377    |         |  |  | 29,073    |         |  |  | (153       | )      |   | 2005
|                                                                      | Corona Office Park               |                                                  |  | 1                 |    |                                |  |              |  |               |  | 3,806     |        |              |  | 8,880      |         |                 |  |              |        |  |  | 3,806     |        |  |  | 8,880     |         |  |  | 12,686    |         |  |  | (65        | )      |   | 2005
|                                                                      | Newport Office Park              |                                                  |  | 2                 |    |                                |  |              |  |               |  | 3,627     |        |              |  | 8,464      |         |                 |  |              |        |  |  | 3,627     |        |  |  | 8,464     |         |  |  | 12,091    |         |  |  | (62        | )      |   | 2005
|                                                                      | Orange Office Park               |                                                  |  | 1                 |    |                                |  |              |  |               |  | 2,245     |        |              |  | 5,238      |         |                 |  |              |        |  |  | 2,245     |        |  |  | 5,238     |         |  |  | 7,483     |         |  |  | (31        | )      |   | 2005
|                                                                      | Santa Ana Office Park            |                                                  |  | 1                 |    |                                |  |              |  |               |  | 755       |        |              |  | 1,762      |         |                 |  |              |        |  |  | 755       |        |  |  | 1,762     |         |  |  | 2,517     |         |  |  | (11        | )      |   | 2005
|                                                                      | Tustin Office Park               |                                                  |  | 1                 |    |                                |  |              |  |               |  | 3,395     |        |              |  | 6,359      |         |                 |  |              |        |  |  | 3,395     |        |  |  | 6,359     |         |  |  | 9,754     |         |  |  | (47        | )      |   | 2005
|                                                                      |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      |                                  | Total Los Angeles/ Orange County, California     |  |                   | 12 |                                |  |              |  |               |  |           | 29,727 |              |  |            | 67,653  |                 |  |               |       |  |  |           | 29,727 |  |  |           | 67,653  |  |  |           | 97,380  |  |  |            | (488   | ) |      | 
|                                                                      |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|Portland, Oregon                                                      |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      | Raleigh West Executive Center    |                                                  |  | 1                 |    |                                |  |              |  |               |  | 507       |        |              |  | 2,872      |         |                 |  |              |        |  |  | 507       |        |  |  | 2,872     |         |  |  | 3,379     |         |  |  | (20        | )      |   | 2005
|                                                                      |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      |                                  | Total Portland, Oregon                           |  |                   | 1  |                                |  |              |  |               |  |           | 507    |              |  |            | 2,872   |                 |  |               |       |  |  |           | 507    |  |  |           | 2,872   |  |  |           | 3,379   |  |  |            | (20    | ) |      | 
|                                                                      |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|San Francisco (Central Valley), California                            |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      | Central Valley Office Park       |                                                  |  | 4                 |    |                                |  |              |  |               |  | 2,098     |        |              |  | 7,456      |         |                 |  |              |        |  |  | 2,098     |        |  |  | 7,456     |         |  |  | 9,554     |         |  |  | (54        | )      |   | 2005
|                                                                      |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      |                                  | Total San Francisco (Central Valley), California |  |                   | 4  |                                |  |              |  |               |  |           | 2,098  |              |  |            | 7,456   |                 |  |               |       |  |  |           | 2,098  |  |  |           | 7,456   |  |  |           | 9,554   |  |  |            | (54    | ) |      | 
|                                                                      |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      |                                  | Total Office Properties                          |  |                   | 24 |                                |  |              |  |               |  |           | 57,627 |              |  |            | 196,946 |                 |  |               |       |  |  |           | 57,627 |  |  |           | 196,946 |  |  |           | 254,573 |  |  |            | (1,445 | ) |      | 
|                                                                      |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      | Total Operating Properties       |                                                  |  | 1,485             |    |                                |  |              |  |               |  | 1,872,569 |        |              |  | 5,400,316  |         |                 |  | 2,000,847     |        |  |  | 1,899,399 |        |  |  | 7,374,333 |         |  |  | 9,273,732 |         |  |  | (1,117,346 | )      |   |     
|                                                                      |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|Properties Under Development:                                         |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|North America:                                                        |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|United States:                                                        |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|Atlanta, Georgia                                                      |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      | Douglas Hill Distribution Center |                                                  |  | 1                 |    |                                |  |              |  |               |  |          |        |              |  |           |         |                 |  | 22,695        |        |  |  | 22,695    |        |  |  |          |         |  |  | 22,695    |         |  |  |           |        |   |     
|                                                                      | Greenwood Industrial Park        |                                                  |  | 1                 |    |                                |  |              |  |               |  | 4,231     |        |              |  |           |         |                 |  | 10,355        |        |  |  | 14,586    |        |  |  |          |         |  |  | 14,586    |         |  |  |           |        |   |     
|                                                                      |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      |                                  | Total Atlanta, Georgia                           |  |                   | 2  |                                |  |              |  |               |  |           | 4,231  |              |  |            |        |                 |  |               | 33,050 |  |  |           | 37,281 |  |  |           |        |  |  |           | 37,281  |  |  |            |       |   |      | 
|                                                                      |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|Charlotte, North Carolina                                             |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      | Interstate North Business Park   |                                                  |  | 1                 |    |                                |  |              |  |               |  | 355       |        |              |  |           |         |                 |  | 107           |        |  |  | 462       |        |  |  |          |         |  |  | 462       |         |  |  |           |        |   |     
|                                                                      | West Pointe Business Center      |                                                  |  | 1                 |    |                                |  |              |  |               |  | 2,371     |        |              |  |           |         |                 |  | 3,432         |        |  |  | 5,803     |        |  |  |          |         |  |  | 5,803     |         |  |  |           |        |   |     
|                                                                      |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      |                                  | Total Charlotte, North Carolina                  |  |                   | 2  |                                |  |              |  |               |  |           | 2,726  |              |  |            |        |                 |  |               | 3,539  |  |  |           | 6,265  |  |  |           |        |  |  |           | 6,265   |  |  |            |       |   |      | 
|                                                                      |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|Chicago, Illinois                                                     |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      | I-80 Morris Distribution Center  |                                                  |  | 1                 |    |                                |  |              |  |               |  | 4,329     |        |              |  |           |         |                 |  | 11,023        |        |  |  | 15,352    |        |  |  |          |         |  |  | 15,352    |         |  |  |           |        |   |     
|                                                                      |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      |                                  | Total Chicago, Illinois                          |  |                   | 1  |                                |  |              |  |               |  |           | 4,329  |              |  |            |        |                 |  |               | 11,023 |  |  |           | 15,352 |  |  |           |        |  |  |           | 15,352  |  |  |            |       |   |      | 
|                                                                      |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|Columbus, Ohio                                                        |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      | Etna Distribution Center         |                                                  |  | 1                 |    |                                |  |              |  |               |  | 1,693     |        |              |  |           |         |                 |  | 10,535        |        |  |  | 12,228    |        |  |  |          |         |  |  | 12,228    |         |  |  |           |        |   |     
|                                                                      |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  
|                                                                      |                                  | Total Columbus, Ohio                             |  |                   | 1  |                                |  |              |  |               |  |           | 1,693  |              |  |            |        |                 |  |               | 10,535 |  |  |           | 12,228 |  |  |           |        |  |  |           | 12,228  |  |  |            |       |   |      | 
|                                                                      |                                  |                                                  |  |                   |    |                                |  |              |  |               |  |           |        |              |  |            |         |                 |  |               |        |  |  |           |        |  |  |           |         |  |  |           |         |  |  |            |        |  

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|                                                                      |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   |  |  | 
|--------------------------------------------------------------------- | ------------------------------- | --------------------------------------------- |  | ----------------- | - | ------------------------------ |  | ------------ |  | ------------- |  | ----- | ----- | ------------ |  | ---------- | - | --------------- |  | ------------- | ------ |  |  | ------ | ------ |  |  | - | - |  |  | ------ | ------ |  |  | - | - |  |  | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                 |                                               |  |                   |   | Gross Amounts At Which Carried |  |             
|                                                                      |                                 | Initial Cost to ProLogis                      |  |                   |   | as of December 31, 2005        |  |             
|                                                                      |                                 |                                               |  | Costs Capitalized |   |                                |  |              |  | Date of      
|                                                                      |                                 | No. of                                        |  | Encum-            |   |                                |  | Building &   |  | Subsequent to |  |       |       | Building &   |  |            |   | Accumulated     |  | Construction/
|Description                                                           |                                 | Bldgs.                                        |  | brances           |   | Land                           |  | Improvements |  | Acquisition   |  | Land  |       | Improvements |  | Total(a,b) |   | Depreciation(c) |  | Acquisition  
|                                                                      |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |              
|                                                                      |                                 | (In thousands of U.S. dollars, as applicable)
|Houston, Texas                                                        |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Jersey Village Corporate Center |                                               |  | 2                 |   |                                |  |              |  |               |  | 2,697 |       |              |  |           |   |                 |  | 11,417        |        |  |  | 14,114 |        |  |  |  |   |  |  | 14,114 |        |  |  |  |   |  | 
|                                                                      |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                 | Total Houston, Texas                          |  |                   | 2 |                                |  |              |  |               |  |       | 2,697 |              |  |            |  |                 |  |               | 11,417 |  |  |        | 14,114 |  |  |   |  |  |  |        | 14,114 |  |  |   |  |  |  | 
|                                                                      |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|I-81 Corridor, Pennsylvania                                           |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Quakertown Distribution Center  |                                               |  | 1                 |   |                                |  |              |  |               |  | 7,017 |       |              |  |           |   |                 |  | 7,401         |        |  |  | 14,418 |        |  |  |  |   |  |  | 14,418 |        |  |  |  |   |  | 
|                                                                      |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                 | Total I-81 Corridor, Pennsylvania             |  |                   | 1 |                                |  |              |  |               |  |       | 7,017 |              |  |            |  |                 |  |               | 7,401  |  |  |        | 14,418 |  |  |   |  |  |  |        | 14,418 |  |  |   |  |  |  | 
|                                                                      |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Los Angeles/ Orange County, California                                |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Redlands Distribution Center    |                                               |  | 2                 |   |                                |  |              |  |               |  | 1,925 |       |              |  |           |   |                 |  | 7,499         |        |  |  | 9,424  |        |  |  |  |   |  |  | 9,424  |        |  |  |  |   |  | 
|                                                                      |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                 | Total Los Angeles/ Orange County, California  |  |                   | 2 |                                |  |              |  |               |  |       | 1,925 |              |  |            |  |                 |  |               | 7,499  |  |  |        | 9,424  |  |  |   |  |  |  |        | 9,424  |  |  |   |  |  |  | 
|                                                                      |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Louisville, Kentucky                                                  |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | I-65 Meyer Distribution Center  |                                               |  | 1                 |   |                                |  |              |  |               |  | 2,816 |       |              |  |           |   |                 |  | 9,484         |        |  |  | 12,300 |        |  |  |  |   |  |  | 12,300 |        |  |  |  |   |  | 
|                                                                      |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                 | Total Louisville, Kentucky                    |  |                   | 1 |                                |  |              |  |               |  |       | 2,816 |              |  |            |  |                 |  |               | 9,484  |  |  |        | 12,300 |  |  |   |  |  |  |        | 12,300 |  |  |   |  |  |  | 
|                                                                      |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|New Jersey                                                            |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Stults Distribution Center      |                                               |  | 1                 |   |                                |  |              |  |               |  | 767   |       |              |  |           |   |                 |  | 57            |        |  |  | 824    |        |  |  |  |   |  |  | 824    |        |  |  |  |   |  | 
|                                                                      |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                 | Total New Jersey                              |  |                   | 1 |                                |  |              |  |               |  |       | 767   |              |  |            |  |                 |  |               | 57     |  |  |        | 824    |  |  |   |  |  |  |        | 824    |  |  |   |  |  |  | 
|                                                                      |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Orlando, Florida                                                      |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Marianna Distribution Center    |                                               |  | 1                 |   |                                |  |              |  |               |  | 755   |       |              |  |           |   |                 |  | 5,024         |        |  |  | 5,779  |        |  |  |  |   |  |  | 5,779  |        |  |  |  |   |  | 
|                                                                      | Orlando Corporate Center        |                                               |  | 2                 |   |                                |  |              |  |               |  | 1,660 |       |              |  |           |   |                 |  | 1,013         |        |  |  | 2,673  |        |  |  |  |   |  |  | 2,673  |        |  |  |  |   |  | 
|                                                                      |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                 | Total Orlando, Florida                        |  |                   | 3 |                                |  |              |  |               |  |       | 2,415 |              |  |            |  |                 |  |               | 6,037  |  |  |        | 8,452  |  |  |   |  |  |  |        | 8,452  |  |  |   |  |  |  | 
|                                                                      |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Portland, Oregon                                                      |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | PDX Corporate Center North II   |                                               |  | 2                 |   |                                |  |              |  |               |  | 2,905 |       |              |  |           |   |                 |  | 3,564         |        |  |  | 6,469  |        |  |  |  |   |  |  | 6,469  |        |  |  |  |   |  | 
|                                                                      | Southshore Corporate Center     |                                               |  | 1                 |   |                                |  |              |  |               |  | 1,605 |       |              |  |           |   |                 |  | 724           |        |  |  | 2,329  |        |  |  |  |   |  |  | 2,329  |        |  |  |  |   |  | 
|                                                                      |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                 | Total Portland, Oregon                        |  |                   | 3 |                                |  |              |  |               |  |       | 4,510 |              |  |            |  |                 |  |               | 4,288  |  |  |        | 8,798  |  |  |   |  |  |  |        | 8,798  |  |  |   |  |  |  | 
|                                                                      |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|San Antonio, Texas                                                    |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Coliseum Distribution Center    |                                               |  | 2                 |   |                                |  |              |  |               |  | 1,102 |       |              |  |           |   |                 |  | 4,564         |        |  |  | 5,666  |        |  |  |  |   |  |  | 5,666  |        |  |  |  |   |  | 
|                                                                      | Tri-County Distribution Center  |                                               |  | 1                 |   |                                |  |              |  |               |  | 927   |       |              |  |           |   |                 |  | 7,087         |        |  |  | 8,014  |        |  |  |  |   |  |  | 8,014  |        |  |  |  |   |  | 
|                                                                      |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                 | Total San Antonio, Texas                      |  |                   | 3 |                                |  |              |  |               |  |       | 2,029 |              |  |            |  |                 |  |               | 11,651 |  |  |        | 13,680 |  |  |   |  |  |  |        | 13,680 |  |  |   |  |  |  | 
|                                                                      |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Washington D.C./ Baltimore, Maryland                                  |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Gateway Business Center         |                                               |  | 3                 |   |                                |  |              |  |               |  | 5,070 |       |              |  |           |   |                 |  | 1,101         |        |  |  | 6,171  |        |  |  |  |   |  |  | 6,171  |        |  |  |  |   |  | 
|                                                                      |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                 | Total Washington D.C./ Baltimore, Maryland    |  |                   | 3 |                                |  |              |  |               |  |       | 5,070 |              |  |            |  |                 |  |               | 1,101  |  |  |        | 6,171  |  |  |   |  |  |  |        | 6,171  |  |  |   |  |  |  | 
|                                                                      |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Mexico:                                                               |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Monterrey                                                             |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Monterrey Industrial Center     |                                               |  | 1                 |   |                                |  |              |  |               |  | 347   |       |              |  |           |   |                 |  | 1,174         |        |  |  | 1,521  |        |  |  |  |   |  |  | 1,521  |        |  |  |  |   |  | 
|                                                                      |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                 | Total Monterrey, Mexico                       |  |                   | 1 |                                |  |              |  |               |  |       | 347   |              |  |            |  |                 |  |               | 1,174  |  |  |        | 1,521  |  |  |   |  |  |  |        | 1,521  |  |  |   |  |  |  | 
|                                                                      |                                 |                                               |  |                   |   |                                |  |              |  |               |  |       |       |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 

140



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##### Table of Contents





|                                                                      |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   |  |  | 
|--------------------------------------------------------------------- | ---------------------------------- | --------------------------------------------- |  | ----------------- | - | ------------------------------ |  | ------------ |  | ------------- |  | ------ | ------ | ------------ |  | ---------- | - | --------------- |  | ------------- | ------ |  |  | ------- | ------ |  |  | - | - |  |  | ------- | ------ |  |  | - | - |  |  | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                    |                                               |  |                   |   | Gross Amounts At Which Carried |  |             
|                                                                      |                                    | Initial Cost to ProLogis                      |  |                   |   | as of December 31, 2005        |  |             
|                                                                      |                                    |                                               |  | Costs Capitalized |   |                                |  |              |  | Date of      
|                                                                      |                                    | No. of                                        |  | Encum-            |   |                                |  | Building &   |  | Subsequent to |  |        |        | Building &   |  |            |   | Accumulated     |  | Construction/
|Description                                                           |                                    | Bldgs.                                        |  | brances           |   | Land                           |  | Improvements |  | Acquisition   |  | Land   |        | Improvements |  | Total(a,b) |   | Depreciation(c) |  | Acquisition  
|                                                                      |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |              
|                                                                      |                                    | (In thousands of U.S. dollars, as applicable)
|Reynosa                                                               |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      | Pharr Bridge Industrial Center     |                                               |  | 3                 |   |                                |  |              |  |               |  | 2,200  |        |              |  |           |   |                 |  | 773           |        |  |  | 2,973   |        |  |  |  |   |  |  | 2,973   |        |  |  |  |   |  | 
|                                                                      |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      |                                    | Total Reynosa, Mexico                         |  |                   | 3 |                                |  |              |  |               |  |        | 2,200  |              |  |            |  |                 |  |               | 773    |  |  |         | 2,973  |  |  |   |  |  |  |         | 2,973  |  |  |   |  |  |  | 
|                                                                      |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|Canada:                                                               |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|Toronto                                                               |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      | Mississauga Gateway Center         |                                               |  | 3                 |   |                                |  |              |  |               |  | 22,066 |        |              |  |           |   |                 |  | 10,938        |        |  |  | 33,004  |        |  |  |  |   |  |  | 33,004  |        |  |  |  |   |  | 
|                                                                      |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      |                                    | Total Toronto, Canada                         |  |                   | 3 |                                |  |              |  |               |  |        | 22,066 |              |  |            |  |                 |  |               | 10,938 |  |  |         | 33,004 |  |  |   |  |  |  |         | 33,004 |  |  |   |  |  |  | 
|                                                                      |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      | Subtotal North America             |                                               |  | 32                |   |                                |  |              |  |               |  | 66,838 |        |              |  |           |   |                 |  | 129,967       |        |  |  | 196,805 |        |  |  |  |   |  |  | 196,805 |        |  |  |  |   |  | 
|                                                                      |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|Europe:                                                               |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|Belgium:                                                              |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      | Vilvoorde Distribution Center      |                                               |  | 1                 |   |                                |  |              |  |               |  |       |        |              |  |           |   |                 |  | 4,138         |        |  |  | 4,138   |        |  |  |  |   |  |  | 4,138   |        |  |  |  |   |  | 
|                                                                      | Willebroek Distribution Center     |                                               |  | 2                 |   |                                |  |              |  |               |  | 4,630  |        |              |  |           |   |                 |  | 3,741         |        |  |  | 8,371   |        |  |  |  |   |  |  | 8,371   |        |  |  |  |   |  | 
|                                                                      |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      |                                    | Total Belgium                                 |  |                   | 3 |                                |  |              |  |               |  |        | 4,630  |              |  |            |  |                 |  |               | 7,879  |  |  |         | 12,509 |  |  |   |  |  |  |         | 12,509 |  |  |   |  |  |  | 
|                                                                      |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|France:                                                               |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      | Macon Distribution Center          |                                               |  | 1                 |   |                                |  |              |  |               |  | 1,808  |        |              |  |           |   |                 |  | 5,132         |        |  |  | 6,940   |        |  |  |  |   |  |  | 6,940   |        |  |  |  |   |  | 
|                                                                      |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      |                                    | Total France                                  |  |                   | 1 |                                |  |              |  |               |  |        | 1,808  |              |  |            |  |                 |  |               | 5,132  |  |  |         | 6,940  |  |  |   |  |  |  |         | 6,940  |  |  |   |  |  |  | 
|                                                                      |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|Germany:                                                              |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      | Berlin Distribution Center         |                                               |  | 1                 |   |                                |  |              |  |               |  | 2,308  |        |              |  |           |   |                 |  | 2,885         |        |  |  | 5,193   |        |  |  |  |   |  |  | 5,193   |        |  |  |  |   |  | 
|                                                                      | Malsfeld Distribution Center       |                                               |  | 1                 |   |                                |  |              |  |               |  | 1,938  |        |              |  |           |   |                 |  | 8,299         |        |  |  | 10,237  |        |  |  |  |   |  |  | 10,237  |        |  |  |  |   |  | 
|                                                                      | Martinszehnten Distribution Center |                                               |  | 1                 |   |                                |  |              |  |               |  | 2,674  |        |              |  |           |   |                 |  | 3,021         |        |  |  | 5,695   |        |  |  |  |   |  |  | 5,695   |        |  |  |  |   |  | 
|                                                                      |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      |                                    | Total Germany                                 |  |                   | 3 |                                |  |              |  |               |  |        | 6,920  |              |  |            |  |                 |  |               | 14,205 |  |  |         | 21,125 |  |  |   |  |  |  |         | 21,125 |  |  |   |  |  |  | 
|                                                                      |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|Italy:                                                                |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      | Bologna Distribution Center        |                                               |  | 1                 |   |                                |  |              |  |               |  | 4,002  |        |              |  |           |   |                 |  | 6,567         |        |  |  | 10,569  |        |  |  |  |   |  |  | 10,569  |        |  |  |  |   |  | 
|                                                                      | Romentino Distribution Center      |                                               |  | 2                 |   |                                |  |              |  |               |  | 2,866  |        |              |  |           |   |                 |  | 22,002        |        |  |  | 24,868  |        |  |  |  |   |  |  | 24,868  |        |  |  |  |   |  | 
|                                                                      |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      |                                    | Total Italy                                   |  |                   | 3 |                                |  |              |  |               |  |        | 6,868  |              |  |            |  |                 |  |               | 28,569 |  |  |         | 35,437 |  |  |   |  |  |  |         | 35,437 |  |  |   |  |  |  | 
|                                                                      |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|Poland:                                                               |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      | Gdansk Distribution Center         |                                               |  | 1                 |   |                                |  |              |  |               |  | 5,546  |        |              |  |           |   |                 |  | 284           |        |  |  | 5,830   |        |  |  |  |   |  |  | 5,830   |        |  |  |  |   |  | 
|                                                                      | Piotrkow Distribution Center       |                                               |  | 1                 |   |                                |  |              |  |               |  | 645    |        |              |  |           |   |                 |  | 4,378         |        |  |  | 5,023   |        |  |  |  |   |  |  | 5,023   |        |  |  |  |   |  | 
|                                                                      | Wroclaw Distribution Center        |                                               |  | 1                 |   |                                |  |              |  |               |  | 1,789  |        |              |  |           |   |                 |  | 508           |        |  |  | 2,297   |        |  |  |  |   |  |  | 2,297   |        |  |  |  |   |  | 
|                                                                      |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      |                                    | Total Poland                                  |  |                   | 3 |                                |  |              |  |               |  |        | 7,980  |              |  |            |  |                 |  |               | 5,170  |  |  |         | 13,150 |  |  |   |  |  |  |         | 13,150 |  |  |   |  |  |  | 
|                                                                      |                                    |                                               |  |                   |   |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 

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|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |         |         |              |  |            |   |                 |  |               |         |  |  |         |         |  |  |   |   |  |  |         |         |  |  |   |   |  |  | 
|--------------------------------------------------------------------- | ------------------------------------------- | --------------------------------------------- |  | ----------------- | -- | ------------------------------ |  | ------------ |  | ------------- |  | ------- | ------- | ------------ |  | ---------- | - | --------------- |  | ------------- | ------- |  |  | ------- | ------- |  |  | - | - |  |  | ------- | ------- |  |  | - | - |  |  | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                             |                                               |  |                   |    | Gross Amounts At Which Carried |  |             
|                                                                      |                                             | Initial Cost to ProLogis                      |  |                   |    | as of December 31, 2005        |  |             
|                                                                      |                                             |                                               |  | Costs Capitalized |    |                                |  |              |  | Date of      
|                                                                      |                                             | No. of                                        |  | Encum-            |    |                                |  | Building &   |  | Subsequent to |  |         |         | Building &   |  |            |   | Accumulated     |  | Construction/
|Description                                                           |                                             | Bldgs.                                        |  | brances           |    | Land                           |  | Improvements |  | Acquisition   |  | Land    |         | Improvements |  | Total(a,b) |   | Depreciation(c) |  | Acquisition  
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |         |         |              |  |            |   |                 |  |              
|                                                                      |                                             | (In thousands of U.S. dollars, as applicable)
|United Kingdom:                                                       |                                             |                                               |  |                   |    |                                |  |              |  |               |  |         |         |              |  |            |   |                 |  |               |         |  |  |         |         |  |  |   |   |  |  |         |         |  |  |   |   | 
|                                                                      | Crewe Distribution Center                   |                                               |  | 1                 |    |                                |  |              |  |               |  | 9,496   |         |              |  |           |   |                 |  | 17,150        |         |  |  | 26,646  |         |  |  |  |   |  |  | 26,646  |         |  |  |  |   |  | 
|                                                                      | Dunstable Distribution Center               |                                               |  | 2                 |    |                                |  |              |  |               |  | 62,436  |         |              |  |           |   |                 |  | 3,786         |         |  |  | 66,222  |         |  |  |  |   |  |  | 66,222  |         |  |  |  |   |  | 
|                                                                      | Marston Gate Distribution Center            |                                               |  | 1                 |    |                                |  |              |  |               |  | 2,521   |         |              |  |           |   |                 |  | 212           |         |  |  | 2,733   |         |  |  |  |   |  |  | 2,733   |         |  |  |  |   |  | 
|                                                                      | North Kettering Distribution Center         |                                               |  | 1                 |    |                                |  |              |  |               |  | 22,550  |         |              |  |           |   |                 |  | 23,908        |         |  |  | 46,458  |         |  |  |  |   |  |  | 46,458  |         |  |  |  |   |  | 
|                                                                      | Peterborough Distribution Center            |                                               |  | 1                 |    |                                |  |              |  |               |  | 16,118  |         |              |  |           |   |                 |  | 1,214         |         |  |  | 17,332  |         |  |  |  |   |  |  | 17,332  |         |  |  |  |   |  | 
|                                                                      | Stafford Distribution Center                |                                               |  | 3                 |    |                                |  |              |  |               |  | 24,266  |         |              |  |           |   |                 |  | 18,966        |         |  |  | 43,232  |         |  |  |  |   |  |  | 43,232  |         |  |  |  |   |  | 
|                                                                      | Swindon Distribution Center                 |                                               |  | 1                 |    |                                |  |              |  |               |  | 10,775  |         |              |  |           |   |                 |  | 8,928         |         |  |  | 19,703  |         |  |  |  |   |  |  | 19,703  |         |  |  |  |   |  | 
|                                                                      | Wakefield Distribution Center               |                                               |  | 1                 |    |                                |  |              |  |               |  | 4,656   |         |              |  |           |   |                 |  | 10,466        |         |  |  | 15,122  |         |  |  |  |   |  |  | 15,122  |         |  |  |  |   |  | 
|                                                                      | Wellingborough Distribution Center          |                                               |  | 1                 |    |                                |  |              |  |               |  | 8,281   |         |              |  |           |   |                 |  | 13,363        |         |  |  | 21,644  |         |  |  |  |   |  |  | 21,644  |         |  |  |  |   |  | 
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |         |         |              |  |            |   |                 |  |               |         |  |  |         |         |  |  |   |   |  |  |         |         |  |  |   |   | 
|                                                                      |                                             | Total United Kingdom                          |  |                   | 12 |                                |  |              |  |               |  |         | 161,099 |              |  |            |  |                 |  |               | 97,993  |  |  |         | 259,092 |  |  |   |  |  |  |         | 259,092 |  |  |   |  |  |  | 
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |         |         |              |  |            |   |                 |  |               |         |  |  |         |         |  |  |   |   |  |  |         |         |  |  |   |   | 
|                                                                      | Subtotal Europe                             |                                               |  | 25                |    |                                |  |              |  |               |  | 189,305 |         |              |  |           |   |                 |  | 158,948       |         |  |  | 348,253 |         |  |  |  |   |  |  | 348,253 |         |  |  |  |   |  | 
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |         |         |              |  |            |   |                 |  |               |         |  |  |         |         |  |  |   |   |  |  |         |         |  |  |   |   | 
|Asia:                                                                 |                                             |                                               |  |                   |    |                                |  |              |  |               |  |         |         |              |  |            |   |                 |  |               |         |  |  |         |         |  |  |   |   |  |  |         |         |  |  |   |   | 
|China:                                                                |                                             |                                               |  |                   |    |                                |  |              |  |               |  |         |         |              |  |            |   |                 |  |               |         |  |  |         |         |  |  |   |   |  |  |         |         |  |  |   |   | 
|                                                                      | Beijing Airport Phase I Distribution Center |                                               |  | 1                 |    |                                |  |              |  |               |  |        |         |              |  |           |   |                 |  | 309           |         |  |  | 309     |         |  |  |  |   |  |  | 309     |         |  |  |  |   |  | 
|                                                                      | ProLogis Park TEDA Distribution Center      |                                               |  | 2                 |    |                                |  |              |  |               |  | 1,294   |         |              |  |           |   |                 |  | 65            |         |  |  | 1,359   |         |  |  |  |   |  |  | 1,359   |         |  |  |  |   |  | 
|                                                                      | Puyun Distribution Center                   |                                               |  | 2                 |    |                                |  |              |  |               |  | 3,322   |         |              |  |           |   |                 |  | 2,852         |         |  |  | 6,174   |         |  |  |  |   |  |  | 6,174   |         |  |  |  |   |  | 
|                                                                      | Taopu Distribution Center                   |                                               |  | 2                 |    |                                |  |              |  |               |  | 1,190   |         |              |  |           |   |                 |  | 90            |         |  |  | 1,280   |         |  |  |  |   |  |  | 1,280   |         |  |  |  |   |  | 
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |         |         |              |  |            |   |                 |  |               |         |  |  |         |         |  |  |   |   |  |  |         |         |  |  |   |   | 
|                                                                      |                                             | Total China                                   |  |                   | 7  |                                |  |              |  |               |  |         | 5,806   |              |  |            |  |                 |  |               | 3,316   |  |  |         | 9,122   |  |  |   |  |  |  |         | 9,122   |  |  |   |  |  |  | 
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |         |         |              |  |            |   |                 |  |               |         |  |  |         |         |  |  |   |   |  |  |         |         |  |  |   |   | 
|Japan:                                                                |                                             |                                               |  |                   |    |                                |  |              |  |               |  |         |         |              |  |            |   |                 |  |               |         |  |  |         |         |  |  |   |   |  |  |         |         |  |  |   |   | 
|                                                                      | Amagasaki Distribution Center               |                                               |  | 1                 |    |                                |  |              |  |               |  | 34,264  |         |              |  |           |   |                 |  | 15,743        |         |  |  | 50,007  |         |  |  |  |   |  |  | 50,007  |         |  |  |  |   |  | 
|                                                                      | Koshigaya II Distribution Center            |                                               |  | 1                 |    |                                |  |              |  |               |  | 19,444  |         |              |  |           |   |                 |  | 6,614         |         |  |  | 26,058  |         |  |  |  |   |  |  | 26,058  |         |  |  |  |   |  | 
|                                                                      | Maishima I Distribution Center              |                                               |  | 1                 |    |                                |  |              |  |               |  | 16,793  |         |              |  |           |   |                 |  | 15,217        |         |  |  | 32,010  |         |  |  |  |   |  |  | 32,010  |         |  |  |  |   |  | 
|                                                                      | Maishima II Distribution Center             |                                               |  | 1                 |    |                                |  |              |  |               |  | 6,685   |         |              |  |           |   |                 |  | 113           |         |  |  | 6,798   |         |  |  |  |   |  |  | 6,798   |         |  |  |  |   |  | 
|                                                                      | Tokyo II Distribution Center                |                                               |  | 2                 |    |                                |  |              |  |               |  | 55,505  |         |              |  |           |   |                 |  | 74,689        |         |  |  | 130,194 |         |  |  |  |   |  |  | 130,194 |         |  |  |  |   |  | 
|                                                                      | Tomiya Distribution Center                  |                                               |  | 1                 |    |                                |  |              |  |               |  | 4,235   |         |              |  |           |   |                 |  | 2,249         |         |  |  | 6,484   |         |  |  |  |   |  |  | 6,484   |         |  |  |  |   |  | 
|                                                                      | Urayasu III Distribution Center             |                                               |  | 1                 |    |                                |  |              |  |               |  | 47,324  |         |              |  |           |   |                 |  | 31,290        |         |  |  | 78,614  |         |  |  |  |   |  |  | 78,614  |         |  |  |  |   |  | 
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |         |         |              |  |            |   |                 |  |               |         |  |  |         |         |  |  |   |   |  |  |         |         |  |  |   |   | 
|                                                                      |                                             | Total Japan                                   |  |                   | 8  |                                |  |              |  |               |  |         | 184,250 |              |  |            |  |                 |  |               | 145,915 |  |  |         | 330,165 |  |  |   |  |  |  |         | 330,165 |  |  |   |  |  |  | 
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |         |         |              |  |            |   |                 |  |               |         |  |  |         |         |  |  |   |   |  |  |         |         |  |  |   |   | 
|                                                                      | Subtotal Asia                               |                                               |  | 15                |    |                                |  |              |  |               |  | 190,056 |         |              |  |           |   |                 |  | 149,231       |         |  |  | 339,287 |         |  |  |  |   |  |  | 339,287 |         |  |  |  |   |  | 
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |         |         |              |  |            |   |                 |  |               |         |  |  |         |         |  |  |   |   |  |  |         |         |  |  |   |   | 
|                                                                      |                                             | Total Properties Under Development            |  |                   | 72 |                                |  |              |  |               |  |         | 446,199 |              |  |            |  |                 |  |               | 438,146 |  |  |         | 884,345 |  |  |   |  |  |  |         | 884,345 |  |  |   |  |  |  | 
|                                                                      |                                             |                                               |  |                   |    |                                |  |              |  |               |  |         |         |              |  |            |   |                 |  |               |         |  |  |         |         |  |  |   |   |  |  |         |         |  |  |   |   | 

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|                                                                      |                                        |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   |  |                  | 
|--------------------------------------------------------------------- | -------------------------------------- | --------------------------------------------- |  | ----------------- |  | ------------------------------ |  | ------------ |  | ------------- |  | ------ | ------ | ------------ |  | ---------- | - | --------------- |  | ------------- | ------ |  |  | ------ | ------ |  |  | - | - |  |  | ------ | ------ |  |  | - | - |  | ---------------- | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                        |                                               |  |                   |  | Gross Amounts At Which Carried |  |             
|                                                                      |                                        | Initial Cost to ProLogis                      |  |                   |  | as of December 31, 2005        |  |             
|                                                                      |                                        |                                               |  | Costs Capitalized |  |                                |  |              |  | Date of      
|                                                                      |                                        | No. of                                        |  | Encum-            |  |                                |  | Building &   |  | Subsequent to |  |        |        | Building &   |  |            |   | Accumulated     |  | Construction/
|Description                                                           |                                        | Bldgs.                                        |  | brances           |  | Land                           |  | Improvements |  | Acquisition   |  | Land   |        | Improvements |  | Total(a,b) |   | Depreciation(c) |  | Acquisition  
|                                                                      |                                        |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |              
|                                                                      |                                        | (In thousands of U.S. dollars, as applicable)
|Land Held for Future Development                                      |                                        |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|North America:                                                        |                                        |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|United States:                                                        |                                        |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Atlanta, Georgia                                                      |                                        |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Atlanta West Distribution Center       |                                               |  |                   |  |                                |  |              |  |               |  | 561    |        |              |  |           |   |                 |  | 193           |        |  |  | 754    |        |  |  |  |   |  |  | 754    |        |  |  |  |   |  | 1994            
|                                                                      | Breckenridge Distribution Center       |                                               |  |                   |  |                                |  |              |  |               |  | 1,422  |        |              |  |           |   |                 |  | 329           |        |  |  | 1,751  |        |  |  |  |   |  |  | 1,751  |        |  |  |  |   |  | 1997, 1998      
|                                                                      | Douglas Hill                           |                                               |  |                   |  |                                |  |              |  |               |  | 1,223  |        |              |  |           |   |                 |  |              |        |  |  | 1,223  |        |  |  |  |   |  |  | 1,223  |        |  |  |  |   |  | 2005            
|                                                                      | Greenwood Industrial Park              |                                               |  |                   |  |                                |  |              |  |               |  | 11,018 |        |              |  |           |   |                 |  | 9,816         |        |  |  | 20,834 |        |  |  |  |   |  |  | 20,834 |        |  |  |  |   |  | 2000, 2002, 2005
|                                                                      |                                        |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                        | Total Atlanta, Georgia                        |  |                   |  |                                |  |              |  |               |  |        | 14,224 |              |  |            |  |                 |  |               | 10,338 |  |  |        | 24,562 |  |  |   |  |  |  |        | 24,562 |  |  |   |  |  |                  | 
|                                                                      |                                        |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Austin, Texas                                                         |                                        |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Robert Muller Airport (RMMA)           |                                               |  |                   |  |                                |  |              |  |               |  | 11,719 |        |              |  |            |   |                 |  |              |        |  |  | 11,719 |        |  |  |   |   |  |  | 11,719 |        |  |  |   |   |  | 2005            
|                                                                      | Walnut Creek Corporate Center          |                                               |  |                   |  |                                |  |              |  |               |  | 135    |        |              |  |           |   |                 |  | 183           |        |  |  | 318    |        |  |  |  |   |  |  | 318    |        |  |  |  |   |  | 1994            
|                                                                      |                                        |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                        | Total Austin, Texas                           |  |                   |  |                                |  |              |  |               |  |        | 11,854 |              |  |            |  |                 |  |               | 183    |  |  |        | 12,037 |  |  |   |  |  |  |        | 12,037 |  |  |   |  |  |                  | 
|                                                                      |                                        |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Charlotte, North Carolina                                             |                                        |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | ProLogis Park I-485                    |                                               |  |                   |  |                                |  |              |  |               |  | 352    |        |              |  |           |   |                 |  | 818           |        |  |  | 1,170  |        |  |  |  |   |  |  | 1,170  |        |  |  |  |   |  | 1997            
|                                                                      | West Pointe Business Center            |                                               |  |                   |  |                                |  |              |  |               |  | 4,463  |        |              |  |           |   |                 |  |              |        |  |  | 4,463  |        |  |  |   |   |  |  | 4,463  |        |  |  |  |   |  | 2004, 2005      
|                                                                      |                                        |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                        | Total Charlotte, North Carolina               |  |                   |  |                                |  |              |  |               |  |        | 4,815  |              |  |            |  |                 |  |               | 818    |  |  |        | 5,633  |  |  |   |  |  |  |        | 5,633  |  |  |   |  |  |                  | 
|                                                                      |                                        |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Chicago, Illinois                                                     |                                        |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Chicago Damen Avenue                   |                                               |  |                   |  |                                |  |              |  |               |  | 26,131 |        |              |  |           |   |                 |  |              |        |  |  | 26,131 |        |  |  |  |   |  |  | 26,131 |        |  |  |  |   |  | 2005            
|                                                                      | I-55 Distribution Center               |                                               |  |                   |  |                                |  |              |  |               |  | 4,043  |        |              |  |           |   |                 |  | 2,551         |        |  |  | 6,594  |        |  |  |  |   |  |  | 6,594  |        |  |  |  |   |  | 2000            
|                                                                      | Joliet                                 |                                               |  |                   |  |                                |  |              |  |               |  | 3,550  |        |              |  |           |   |                 |  |              |        |  |  | 3,550  |        |  |  |  |   |  |  | 3,550  |        |  |  |  |   |  | 2005            
|                                                                      | Minooka                                |                                               |  |                   |  |                                |  |              |  |               |  | 7,156  |        |              |  |           |   |                 |  |              |        |  |  | 7,156  |        |  |  |  |   |  |  | 7,156  |        |  |  |  |   |  | 2005            
|                                                                      | OHare Cargo Distribution Center       |                                               |  |                   |  |                                |  |              |  |               |  | 3,927  |        |              |  |           |   |                 |  | 2,687         |        |  |  | 6,614  |        |  |  |  |   |  |  | 6,614  |        |  |  |  |   |  | 1996, 1997      
|                                                                      | Prairie Glenn II                       |                                               |  |                   |  |                                |  |              |  |               |  | 1,860  |        |              |  |           |   |                 |  |              |        |  |  | 1,860  |        |  |  |  |   |  |  | 1,860  |        |  |  |  |   |  | 2005            
|                                                                      | Route 47 Distribution Center           |                                               |  |                   |  |                                |  |              |  |               |  | 7,142  |        |              |  |           |   |                 |  |              |        |  |  | 7,142  |        |  |  |  |   |  |  | 7,142  |        |  |  |  |   |  | 2005            
|                                                                      | Woodridge International Center         |                                               |  |                   |  |                                |  |              |  |               |  | 6,320  |        |              |  |           |   |                 |  |              |        |  |  | 6,320  |        |  |  |  |   |  |  | 6,320  |        |  |  |  |   |  | 2005            
|                                                                      |                                        |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                        | Total Chicago, Illinois                       |  |                   |  |                                |  |              |  |               |  |        | 60,129 |              |  |            |  |                 |  |               | 5,238  |  |  |        | 65,367 |  |  |   |  |  |  |        | 65,367 |  |  |   |  |  |                  | 
|                                                                      |                                        |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Cincinnati, Ohio                                                      |                                        |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Park 275                               |                                               |  |                   |  |                                |  |              |  |               |  | 6,142  |        |              |  |           |   |                 |  |              |        |  |  | 6,142  |        |  |  |  |   |  |  | 6,142  |        |  |  |  |   |  | 2005            
|                                                                      | West Chester Commerce Park I           |                                               |  |                   |  |                                |  |              |  |               |  | 1,695  |        |              |  |           |   |                 |  |              |        |  |  | 1,695  |        |  |  |  |   |  |  | 1,695  |        |  |  |  |   |  | 1997, 2000, 2001
|                                                                      |                                        |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                        | Total Cincinnati, Ohio                        |  |                   |  |                                |  |              |  |               |  |        | 7,837  |              |  |            |  |                 |  |               |       |  |  |        | 7,837  |  |  |   |  |  |  |        | 7,837  |  |  |   |  |  |                  | 
|                                                                      |                                        |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Columbus, Ohio                                                        |                                        |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Capital Park South Distribution Center |                                               |  |                   |  |                                |  |              |  |               |  | 794    |        |              |  |           |   |                 |  | 145           |        |  |  | 939    |        |  |  |  |   |  |  | 939    |        |  |  |  |   |  | 1994, 1998, 2000
|                                                                      | Etna Distribution Center               |                                               |  |                   |  |                                |  |              |  |               |  | 4,480  |        |              |  |           |   |                 |  |              |        |  |  | 4,480  |        |  |  |  |   |  |  | 4,480  |        |  |  |  |   |  | 2005            
|                                                                      |                                        |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                        | Total Columbus, Ohio                          |  |                   |  |                                |  |              |  |               |  |        | 5,274  |              |  |            |  |                 |  |               | 145    |  |  |        | 5,419  |  |  |   |  |  |  |        | 5,419  |  |  |   |  |  |                  | 
|                                                                      |                                        |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |        |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 

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##### Table of Contents





|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   |  |                  | 
|--------------------------------------------------------------------- | ----------------------------------- | --------------------------------------------- |  | ----------------- |  | ------------------------------ |  | ------------ |  | ------------- |  | ------ | ------ | ------------ |  | ---------- | - | --------------- |  | ------------- | ----- |  |  | ------ | ------ |  |  | - | - |  |  | ------ | ------ |  |  | - | - |  | ---------------- | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                     |                                               |  |                   |  | Gross Amounts At Which Carried |  |             
|                                                                      |                                     | Initial Cost to ProLogis                      |  |                   |  | as of December 31, 2005        |  |             
|                                                                      |                                     |                                               |  | Costs Capitalized |  |                                |  |              |  | Date of      
|                                                                      |                                     | No. of                                        |  | Encum-            |  |                                |  | Building &   |  | Subsequent to |  |        |        | Building &   |  |            |   | Accumulated     |  | Construction/
|Description                                                           |                                     | Bldgs.                                        |  | brances           |  | Land                           |  | Improvements |  | Acquisition   |  | Land   |        | Improvements |  | Total(a,b) |   | Depreciation(c) |  | Acquisition  
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |              
|                                                                      |                                     | (In thousands of U.S. dollars, as applicable)
|Dallas/ Fort Worth, Texas                                             |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Beal/ NW Industrial Center          |                                               |  |                   |  |                                |  |              |  |               |  | 3,528  |        |              |  |           |   |                 |  |              |       |  |  | 3,528  |        |  |  |  |   |  |  | 3,528  |        |  |  |  |   |  | 2005            
|                                                                      | Blue Mound                          |                                               |  |                   |  |                                |  |              |  |               |  | 585    |        |              |  |           |   |                 |  |              |       |  |  | 585    |        |  |  |  |   |  |  | 585    |        |  |  |  |   |  | 2002            
|                                                                      | Freeport Corporate Center           |                                               |  |                   |  |                                |  |              |  |               |  | 436    |        |              |  |           |   |                 |  | 906           |       |  |  | 1,342  |        |  |  |  |   |  |  | 1,342  |        |  |  |  |   |  | 1999            
|                                                                      | Gateway Coppell                     |                                               |  |                   |  |                                |  | (i)          |  |               |  | 10,340 |        |              |  |           |   |                 |  |              |       |  |  | 10,340 |        |  |  |  |   |  |  | 10,340 |        |  |  |  |   |  | 2005            
|                                                                      | Gateway East                        |                                               |  |                   |  |                                |  |              |  |               |  | 3,300  |        |              |  |           |   |                 |  |              |       |  |  | 3,300  |        |  |  |  |   |  |  | 3,300  |        |  |  |  |   |  | 2005            
|                                                                      | Great Southwest Distribution Center |                                               |  |                   |  |                                |  |              |  |               |  | 398    |        |              |  |           |   |                 |  |              |       |  |  | 398    |        |  |  |  |   |  |  | 398    |        |  |  |  |   |  | 2001            
|                                                                      | Lancaster Distribution Center       |                                               |  |                   |  |                                |  |              |  |               |  | 7,827  |        |              |  |           |   |                 |  |              |       |  |  | 7,827  |        |  |  |  |   |  |  | 7,827  |        |  |  |  |   |  | 2005            
|                                                                      | Lewisville Distribution Center      |                                               |  |                   |  |                                |  |              |  |               |  | 5,069  |        |              |  |           |   |                 |  | 4,699         |       |  |  | 9,768  |        |  |  |  |   |  |  | 9,768  |        |  |  |  |   |  | 2000, 2001      
|                                                                      | Plano Business Park                 |                                               |  |                   |  |                                |  |              |  |               |  | 1,340  |        |              |  |           |   |                 |  |              |       |  |  | 1,340  |        |  |  |  |   |  |  | 1,340  |        |  |  |  |   |  | 2005            
|                                                                      | Stellar Way                         |                                               |  |                   |  |                                |  |              |  |               |  | 1,510  |        |              |  |           |   |                 |  |              |       |  |  | 1,510  |        |  |  |  |   |  |  | 1,510  |        |  |  |  |   |  | 2005            
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                     | Total Dallas/ Fort Worth, Texas               |  |                   |  |                                |  |              |  |               |  |        | 34,333 |              |  |            |  |                 |  |               | 5,605 |  |  |        | 39,938 |  |  |   |  |  |  |        | 39,938 |  |  |   |  |  |                  | 
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Denver, Colorado                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Circle Point Center                 |                                               |  |                   |  |                                |  |              |  |               |  | 2,080  |        |              |  |           |   |                 |  |              |       |  |  | 2,080  |        |  |  |  |   |  |  | 2,080  |        |  |  |  |   |  | 2005            
|                                                                      | Eastgate Business Center            |                                               |  |                   |  |                                |  |              |  |               |  | 12,000 |        |              |  |           |   |                 |  |              |       |  |  | 12,000 |        |  |  |  |   |  |  | 12,000 |        |  |  |  |   |  | 2005            
|                                                                      | ProLogis Park 70                    |                                               |  |                   |  |                                |  |              |  |               |  | 3,964  |        |              |  |           |   |                 |  |              |       |  |  | 3,964  |        |  |  |  |   |  |  | 3,964  |        |  |  |  |   |  | 2003            
|                                                                      | Stapleton Business Center           |                                               |  |                   |  |                                |  |              |  |               |  | 1,850  |        |              |  |           |   |                 |  |              |       |  |  | 1,850  |        |  |  |  |   |  |  | 1,850  |        |  |  |  |   |  | 2005            
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                     | Total Denver, Colorado                        |  |                   |  |                                |  |              |  |               |  |        | 19,894 |              |  |            |  |                 |  |               |      |  |  |        | 19,894 |  |  |   |  |  |  |        | 19,894 |  |  |   |  |  |                  | 
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|El Paso, Texas                                                        |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Goodyear Distribution Center        |                                               |  |                   |  |                                |  |              |  |               |  | 555    |        |              |  |           |   |                 |  | 18            |       |  |  | 573    |        |  |  |  |   |  |  | 573    |        |  |  |  |   |  | 2001            
|                                                                      | Northwestern Corporate Center       |                                               |  |                   |  |                                |  |              |  |               |  | 1,051  |        |              |  |           |   |                 |  | 2,258         |       |  |  | 3,309  |        |  |  |  |   |  |  | 3,309  |        |  |  |  |   |  | 1991            
|                                                                      | Pan Am Distribution Center          |                                               |  |                   |  |                                |  |              |  |               |  | 153    |        |              |  |           |   |                 |  |              |       |  |  | 153    |        |  |  |  |   |  |  | 153    |        |  |  |  |   |  | 2002            
|                                                                      | Vista Del Sol Industrial Center     |                                               |  |                   |  |                                |  |              |  |               |  | 324    |        |              |  |           |   |                 |  | 12            |       |  |  | 336    |        |  |  |  |   |  |  | 336    |        |  |  |  |   |  | 1994            
|                                                                      | Vista Del Sol Industrial Center II  |                                               |  |                   |  |                                |  |              |  |               |  | 242    |        |              |  |           |   |                 |  | 58            |       |  |  | 300    |        |  |  |  |   |  |  | 300    |        |  |  |  |   |  | 1995            
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                     | Total El Paso, Texas                          |  |                   |  |                                |  |              |  |               |  |        | 2,325  |              |  |            |  |                 |  |               | 2,346 |  |  |        | 4,671  |  |  |   |  |  |  |        | 4,671  |  |  |   |  |  |                  | 
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Houston, Texas                                                        |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Hobby Business Center               |                                               |  |                   |  |                                |  |              |  |               |  | 4,422  |        |              |  |           |   |                 |  |              |       |  |  | 4,422  |        |  |  |  |   |  |  | 4,422  |        |  |  |  |   |  | 2005            
|                                                                      | Jersey Village Corporate Center     |                                               |  |                   |  |                                |  |              |  |               |  | 3,039  |        |              |  |           |   |                 |  | 1,220         |       |  |  | 4,259  |        |  |  |  |   |  |  | 4,259  |        |  |  |  |   |  | 1997            
|                                                                      | Sugarland Corporate Center          |                                               |  |                   |  |                                |  |              |  |               |  | 648    |        |              |  |           |   |                 |  | 519           |       |  |  | 1,167  |        |  |  |  |   |  |  | 1,167  |        |  |  |  |   |  | 2004, 2005      
|                                                                      | West by Northwest Industrial Center |                                               |  |                   |  |                                |  |              |  |               |  | 379    |        |              |  |           |   |                 |  | 266           |       |  |  | 645    |        |  |  |  |   |  |  | 645    |        |  |  |  |   |  | 1993            
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                     | Total Houston, Texas                          |  |                   |  |                                |  |              |  |               |  |        | 8,488  |              |  |            |  |                 |  |               | 2,005 |  |  |        | 10,493 |  |  |   |  |  |  |        | 10,493 |  |  |   |  |  |                  | 
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|I-81 Corridor, Pennsylvania                                           |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | I-81 Corridor Distribution Center   |                                               |  |                   |  |                                |  |              |  |               |  | 9,501  |        |              |  |           |   |                 |  | 2,238         |       |  |  | 11,739 |        |  |  |  |   |  |  | 11,739 |        |  |  |  |   |  | 2003, 2004, 2005
|                                                                      | Northport Industrial Center         |                                               |  |                   |  |                                |  |              |  |               |  | 2,500  |        |              |  |           |   |                 |  | 15            |       |  |  | 2,515  |        |  |  |  |   |  |  | 2,515  |        |  |  |  |   |  | 2002            
|                                                                      | Park 33 Distribution Center         |                                               |  |                   |  |                                |  |              |  |               |  | 18,953 |        |              |  |           |   |                 |  | 1,620         |       |  |  | 20,573 |        |  |  |  |   |  |  | 20,573 |        |  |  |  |   |  | 2004            
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                     | Total I-81 Corridor, Pennsylvania             |  |                   |  |                                |  |              |  |               |  |        | 30,954 |              |  |            |  |                 |  |               | 3,873 |  |  |        | 34,827 |  |  |   |  |  |  |        | 34,827 |  |  |   |  |  |                  | 
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 

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|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   |  |                  | 
|--------------------------------------------------------------------- | ----------------------------------- | --------------------------------------------- |  | ----------------- |  | ------------------------------ |  | ------------ |  | ------------- |  | ------ | ------ | ------------ |  | ---------- | - | --------------- |  | ------------- | ----- |  |  | ------ | ------ |  |  | - | - |  |  | ------ | ------ |  |  | - | - |  | ---------------- | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                     |                                               |  |                   |  | Gross Amounts At Which Carried |  |             
|                                                                      |                                     | Initial Cost to ProLogis                      |  |                   |  | as of December 31, 2005        |  |             
|                                                                      |                                     |                                               |  | Costs Capitalized |  |                                |  |              |  | Date of      
|                                                                      |                                     | No. of                                        |  | Encum-            |  |                                |  | Building &   |  | Subsequent to |  |        |        | Building &   |  |            |   | Accumulated     |  | Construction/
|Description                                                           |                                     | Bldgs.                                        |  | brances           |  | Land                           |  | Improvements |  | Acquisition   |  | Land   |        | Improvements |  | Total(a,b) |   | Depreciation(c) |  | Acquisition  
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |              
|                                                                      |                                     | (In thousands of U.S. dollars, as applicable)
|Indianapolis, Indiana                                                 |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Airport Business Center             |                                               |  |                   |  |                                |  |              |  |               |  | 1,122  |        |              |  |           |   |                 |  |              |       |  |  | 1,122  |        |  |  |  |   |  |  | 1,122  |        |  |  |  |   |  | 1999            
|                                                                      | Lebanon Commerce Park Land          |                                               |  |                   |  |                                |  |              |  |               |  | 2,246  |        |              |  |           |   |                 |  |              |       |  |  | 2,246  |        |  |  |  |   |  |  | 2,246  |        |  |  |  |   |  | 1998, 2003      
|                                                                      | Plainfield Park Distribution Center |                                               |  |                   |  |                                |  |              |  |               |  | 1,082  |        |              |  |           |   |                 |  | 571           |       |  |  | 1,653  |        |  |  |  |   |  |  | 1,653  |        |  |  |  |   |  | 1996            
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                     | Total Indianapolis, Indiana                   |  |                   |  |                                |  |              |  |               |  |        | 4,450  |              |  |            |  |                 |  |               | 571   |  |  |        | 5,021  |  |  |   |  |  |  |        | 5,021  |  |  |   |  |  |                  | 
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Las Vegas, Nevada                                                     |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Hughes Airport Center               |                                               |  |                   |  |                                |  |              |  |               |  | 263    |        |              |  |           |   |                 |  | 11            |       |  |  | 274    |        |  |  |  |   |  |  | 274    |        |  |  |  |   |  | 1997            
|                                                                      | Las Vegas Corporate Center          |                                               |  |                   |  |                                |  | (i)          |  |               |  | 976    |        |              |  |           |   |                 |  | 794           |       |  |  | 1,770  |        |  |  |  |   |  |  | 1,770  |        |  |  |  |   |  | 1997            
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                     | Total Las Vegas, Nevada                       |  |                   |  |                                |  |              |  |               |  |        | 1,239  |              |  |            |  |                 |  |               | 805   |  |  |        | 2,044  |  |  |   |  |  |  |        | 2,044  |  |  |   |  |  |                  | 
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Los Angeles/ Orange County, California                                |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Anaheim Office                      |                                               |  |                   |  |                                |  |              |  |               |  | 2,100  |        |              |  |           |   |                 |  |              |       |  |  | 2,100  |        |  |  |  |   |  |  | 2,100  |        |  |  |  |   |  | 2005            
|                                                                      | Crossroads                          |                                               |  |                   |  |                                |  |              |  |               |  | 23,495 |        |              |  |           |   |                 |  |              |       |  |  | 23,495 |        |  |  |  |   |  |  | 23,495 |        |  |  |  |   |  | 2005            
|                                                                      | Kaiser Commerce                     |                                               |  |                   |  |                                |  | (i)          |  |               |  | 8,680  |        |              |  |           |   |                 |  |              |       |  |  | 8,680  |        |  |  |  |   |  |  | 8,680  |        |  |  |  |   |  | 2005            
|                                                                      | San Bernardino                      |                                               |  |                   |  |                                |  |              |  |               |  | 580    |        |              |  |           |   |                 |  |              |       |  |  | 580    |        |  |  |  |   |  |  | 580    |        |  |  |  |   |  | 2005            
|                                                                      | Union Station Office                |                                               |  |                   |  |                                |  |              |  |               |  | 25,119 |        |              |  |           |   |                 |  |              |       |  |  | 25,119 |        |  |  |  |   |  |  | 25,119 |        |  |  |  |   |  | 2005            
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                     | Total Los Angeles/ Orange County, California  |  |                   |  |                                |  |              |  |               |  |        | 59,974 |              |  |            |  |                 |  |               |      |  |  |        | 59,974 |  |  |   |  |  |  |        | 59,974 |  |  |   |  |  |                  | 
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Louisville, Kentucky                                                  |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Cedar Grove                         |                                               |  |                   |  |                                |  |              |  |               |  | 2,250  |        |              |  |           |   |                 |  |              |       |  |  | 2,250  |        |  |  |  |   |  |  | 2,250  |        |  |  |  |   |  | 2005            
|                                                                      | I-65 Meyer Distribution Center      |                                               |  |                   |  |                                |  |              |  |               |  | 1,450  |        |              |  |           |   |                 |  |              |       |  |  | 1,450  |        |  |  |  |   |  |  | 1,450  |        |  |  |  |   |  | 2001, 2002, 2003
|                                                                      | Riverport Distribution Center       |                                               |  |                   |  |                                |  |              |  |               |  | 600    |        |              |  |           |   |                 |  | 37            |       |  |  | 637    |        |  |  |  |   |  |  | 637    |        |  |  |  |   |  | 2003            
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                     | Total Louisville, Kentucky                    |  |                   |  |                                |  |              |  |               |  |        | 4,300  |              |  |            |  |                 |  |               | 37    |  |  |        | 4,337  |  |  |   |  |  |  |        | 4,337  |  |  |   |  |  |                  | 
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Memphis, Tennessee                                                    |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | De Soto Distribution Center         |                                               |  |                   |  |                                |  |              |  |               |  | 7,041  |        |              |  |           |   |                 |  |              |       |  |  | 7,041  |        |  |  |  |   |  |  | 7,041  |        |  |  |  |   |  | 2005            
|                                                                      | Distriplex Distribution Center      |                                               |  |                   |  |                                |  |              |  |               |  | 1,919  |        |              |  |           |   |                 |  | 129           |       |  |  | 2,048  |        |  |  |  |   |  |  | 2,048  |        |  |  |  |   |  | 2000            
|                                                                      | Stateline Distribution Center       |                                               |  |                   |  |                                |  |              |  |               |  | 1,638  |        |              |  |           |   |                 |  | 1,706         |       |  |  | 3,344  |        |  |  |  |   |  |  | 3,344  |        |  |  |  |   |  | 2001            
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                     | Total Memphis, Tennessee                      |  |                   |  |                                |  |              |  |               |  |        | 10,598 |              |  |            |  |                 |  |               | 1,835 |  |  |        | 12,433 |  |  |   |  |  |  |        | 12,433 |  |  |   |  |  |                  | 
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|New Jersey                                                            |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Cranbury Business Park              |                                               |  |                   |  |                                |  |              |  |               |  | 8,046  |        |              |  |           |   |                 |  |              |       |  |  | 8,046  |        |  |  |  |   |  |  | 8,046  |        |  |  |  |   |  | 2004            
|                                                                      | Elizabeth Seaport Business Park     |                                               |  |                   |  |                                |  |              |  |               |  | 23,638 |        |              |  |           |   |                 |  |              |       |  |  | 23,638 |        |  |  |  |   |  |  | 23,638 |        |  |  |  |   |  | 2005            
|                                                                      | Port Reading Business Park          |                                               |  |                   |  |                                |  |              |  |               |  | 41,887 |        |              |  |            |   |                 |  |              |       |  |  | 41,887 |        |  |  |  |   |  |  | 41,887 |        |  |  |  |   |  | 2005            
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                     | Total New Jersey                              |  |                   |  |                                |  |              |  |               |  |        | 73,571 |              |  |            |  |                 |  |               |      |  |  |        | 73,571 |  |  |   |  |  |  |        | 73,571 |  |  |   |  |  |                  | 
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Portland, Oregon                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Clackamas Distribution Center       |                                               |  |                   |  |                                |  |              |  |               |  | 512    |        |              |  |           |   |                 |  | 189           |       |  |  | 701    |        |  |  |  |   |  |  | 701    |        |  |  |  |   |  | 1997            
|                                                                      | PDX Corporate Center North Phase II |                                               |  |                   |  |                                |  |              |  |               |  | 5,486  |        |              |  |           |   |                 |  |              |       |  |  | 5,486  |        |  |  |  |   |  |  | 5,486  |        |  |  |  |   |  | 2004, 2005      
|                                                                      | Southshore Distribution Center      |                                               |  |                   |  |                                |  | (i)          |  |               |  | 5,296  |        |              |  |           |   |                 |  |              |       |  |  | 5,296  |        |  |  |  |   |  |  | 5,296  |        |  |  |  |   |  | 2005            
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                     | Total Portland, Oregon                        |  |                   |  |                                |  |              |  |               |  |        | 11,294 |              |  |            |  |                 |  |               | 189   |  |  |        | 11,483 |  |  |   |  |  |  |        | 11,483 |  |  |   |  |  |                  | 
|                                                                      |                                     |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 

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|                                                                      |                                             |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   |  |                  | 
|--------------------------------------------------------------------- | ------------------------------------------- | --------------------------------------------- |  | ----------------- |  | ------------------------------ |  | ------------ |  | ------------- |  | ------ | ------ | ------------ |  | ---------- | - | --------------- |  | ------------- | ----- |  |  | ------ | ------ |  |  | - | - |  |  | ------ | ------ |  |  | - | - |  | ---------------- | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                             |                                               |  |                   |  | Gross Amounts At Which Carried |  |             
|                                                                      |                                             | Initial Cost to ProLogis                      |  |                   |  | as of December 31, 2005        |  |             
|                                                                      |                                             |                                               |  | Costs Capitalized |  |                                |  |              |  | Date of      
|                                                                      |                                             | No. of                                        |  | Encum-            |  |                                |  | Building &   |  | Subsequent to |  |        |        | Building &   |  |            |   | Accumulated     |  | Construction/
|Description                                                           |                                             | Bldgs.                                        |  | brances           |  | Land                           |  | Improvements |  | Acquisition   |  | Land   |        | Improvements |  | Total(a,b) |   | Depreciation(c) |  | Acquisition  
|                                                                      |                                             |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |              
|                                                                      |                                             | (In thousands of U.S. dollars, as applicable)
|Reno, Nevada                                                          |                                             |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Golden Valley Distribution Center           |                                               |  |                   |  |                                |  |              |  |               |  | 212    |        |              |  |           |   |                 |  | 365           |       |  |  | 577    |        |  |  |  |   |  |  | 577    |        |  |  |  |   |  | 1995            
|                                                                      |                                             |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                             | Total Reno, Nevada                            |  |                   |  |                                |  |              |  |               |  |        | 212    |              |  |            |  |                 |  |               | 365   |  |  |        | 577    |  |  |   |  |  |  |        | 577    |  |  |   |  |  |                  | 
|                                                                      |                                             |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Salt Lake City, Utah                                                  |                                             |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Clearfield Industrial Center                |                                               |  |                   |  |                                |  |              |  |               |  | 125    |        |              |  |           |   |                 |  | 41            |       |  |  | 166    |        |  |  |  |   |  |  | 166    |        |  |  |  |   |  | 1995            
|                                                                      | Salt Lake International Distribution Center |                                               |  |                   |  |                                |  |              |  |               |  | 50     |        |              |  |           |   |                 |  |              |       |  |  | 50     |        |  |  |  |   |  |  | 50     |        |  |  |  |   |  | 1994, 1995      
|                                                                      |                                             |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                             | Total Salt Lake City, Utah                    |  |                   |  |                                |  |              |  |               |  |        | 175    |              |  |            |  |                 |  |               | 41    |  |  |        | 216    |  |  |   |  |  |  |        | 216    |  |  |   |  |  |                  | 
|                                                                      |                                             |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|San Antonio, Texas                                                    |                                             |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | City Park East Distribution Center          |                                               |  |                   |  |                                |  |              |  |               |  | 483    |        |              |  |           |   |                 |  |              |       |  |  | 483    |        |  |  |  |   |  |  | 483    |        |  |  |  |   |  | 2003            
|                                                                      | Eisenhauer Distribution Center              |                                               |  |                   |  |                                |  |              |  |               |  | 1,194  |        |              |  |           |   |                 |  | 2             |       |  |  | 1,196  |        |  |  |  |   |  |  | 1,196  |        |  |  |  |   |  | 2002            
|                                                                      |                                             |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                             | Total San Antonio, Texas                      |  |                   |  |                                |  |              |  |               |  |        | 1,677  |              |  |            |  |                 |  |               | 2     |  |  |        | 1,679  |  |  |   |  |  |  |        | 1,679  |  |  |   |  |  |                  | 
|                                                                      |                                             |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|San Francisco, California                                             |                                             |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Beaumont                                    |                                               |  |                   |  |                                |  |              |  |               |  | 16,399 |        |              |  |            |   |                 |  |              |       |  |  | 16,399 |        |  |  |   |   |  |  | 16,399 |        |  |  |  |   |  | 2005            
|                                                                      | Duck Creek (Stockton)                       |                                               |  |                   |  |                                |  |              |  |               |  | 3,404  |        |              |  |           |   |                 |  |              |       |  |  | 3,404  |        |  |  |  |   |  |  | 3,404  |        |  |  |  |   |  | 2005            
|                                                                      | East Bay Bridge                             |                                               |  |                   |  |                                |  |              |  |               |  | 3,400  |        |              |  |            |   |                 |  |              |       |  |  | 3,400  |        |  |  |   |   |  |  | 3,400  |        |  |  |  |   |  | 2005            
|                                                                      | Oliveira Farm (Tracy)                       |                                               |  |                   |  |                                |  |              |  |               |  | 7,740  |        |              |  |           |   |                 |  |              |       |  |  | 7,740  |        |  |  |  |   |  |  | 7,740  |        |  |  |  |   |  | 2005            
|                                                                      | Pac Commons (Retail and office)             |                                               |  |                   |  |                                |  |              |  |               |  | 43,600 |        |              |  |           |   |                 |  |              |       |  |  | 43,600 |        |  |  |  |   |  |  | 43,600 |        |  |  |  |   |  | 2005            
|                                                                      | Patterson Pass Business Center              |                                               |  |                   |  |                                |  |              |  |               |  | 887    |        |              |  |           |   |                 |  | 137           |       |  |  | 1,024  |        |  |  |  |   |  |  | 1,024  |        |  |  |  |   |  | 1999            
|                                                                      | Spreckles  Manteca                         |                                               |  |                   |  |                                |  |              |  |               |  | 2,540  |        |              |  |           |   |                 |  |              |       |  |  | 2,540  |        |  |  |  |   |  |  | 2,540  |        |  |  |  |   |  | 2005            
|                                                                      | Stockton 1C Gibraltar                       |                                               |  |                   |  |                                |  | (i)          |  |               |  | 1,835  |        |              |  |           |   |                 |  |              |       |  |  | 1,835  |        |  |  |  |   |  |  | 1,835  |        |  |  |  |   |  | 2005            
|                                                                      | Tracy Industrial Park                       |                                               |  |                   |  |                                |  |              |  |               |  | 4,684  |        |              |  |           |   |                 |  | 3,039         |       |  |  | 7,723  |        |  |  |  |   |  |  | 7,723  |        |  |  |  |   |  | 2000            
|                                                                      | Tracy West (Industrial)                     |                                               |  |                   |  |                                |  |              |  |               |  | 7,507  |        |              |  |           |   |                 |  |              |       |  |  | 7,507  |        |  |  |  |   |  |  | 7,507  |        |  |  |  |   |  | 2005            
|                                                                      |                                             |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                             | Total San Francisco, California               |  |                   |  |                                |  |              |  |               |  |        | 91,996 |              |  |            |  |                 |  |               | 3,176 |  |  |        | 95,172 |  |  |   |  |  |  |        | 95,172 |  |  |   |  |  |                  | 
|                                                                      |                                             |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Seattle, Washington                                                   |                                             |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Port of Tacoma Distribution Center          |                                               |  |                   |  |                                |  |              |  |               |  | 1,543  |        |              |  |           |   |                 |  | 676           |       |  |  | 2,219  |        |  |  |  |   |  |  | 2,219  |        |  |  |  |   |  | 1998            
|                                                                      |                                             |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                             | Total Seattle, Washington                     |  |                   |  |                                |  |              |  |               |  |        | 1,543  |              |  |            |  |                 |  |               | 676   |  |  |        | 2,219  |  |  |   |  |  |  |        | 2,219  |  |  |   |  |  |                  | 
|                                                                      |                                             |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Tampa, Florida                                                        |                                             |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Tampa East Industrial Center                |                                               |  |                   |  |                                |  |              |  |               |  | 2,773  |        |              |  |           |   |                 |  | 1,602         |       |  |  | 4,375  |        |  |  |  |   |  |  | 4,375  |        |  |  |  |   |  | 1994, 2005      
|                                                                      |                                             |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                             | Total Tampa, Florida                          |  |                   |  |                                |  |              |  |               |  |        | 2,773  |              |  |            |  |                 |  |               | 1,602 |  |  |        | 4,375  |  |  |   |  |  |  |        | 4,375  |  |  |   |  |  |                  | 
|                                                                      |                                             |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Washington D.C./ Baltimore, Maryland                                  |                                             |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Dulles Distribution Center                  |                                               |  |                   |  |                                |  |              |  |               |  | 5,140  |        |              |  |           |   |                 |  | 1,454         |       |  |  | 6,594  |        |  |  |  |   |  |  | 6,594  |        |  |  |  |   |  | 1998, 2000, 2005
|                                                                      | Edgewood Distribution Center                |                                               |  |                   |  |                                |  |              |  |               |  | 4,561  |        |              |  |           |   |                 |  |              |       |  |  | 4,561  |        |  |  |  |   |  |  | 4,561  |        |  |  |  |   |  | 2005            
|                                                                      | Meadowridge Distribution Center             |                                               |  |                   |  |                                |  |              |  |               |  | 110    |        |              |  |           |   |                 |  | 47            |       |  |  | 157    |        |  |  |  |   |  |  | 157    |        |  |  |  |   |  | 1996            
|                                                                      |                                             |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                             | Total Washington D.C./ Baltimore, Maryland    |  |                   |  |                                |  |              |  |               |  |        | 9,811  |              |  |            |  |                 |  |               | 1,501 |  |  |        | 11,312 |  |  |   |  |  |  |        | 11,312 |  |  |   |  |  |                  | 
|                                                                      |                                             |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |       |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 

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|                                                                      |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   |  |            | 
|--------------------------------------------------------------------- | ------------------------------- | --------------------------------------------- |  | ----------------- |  | ------------------------------ |  | ------------ |  | ------------- |  | ------- | ------ | ------------ |  | ---------- | - | --------------- |  | ------------- | ----- |  |  | ------- | ------ |  |  | - | - |  |  | ------- | ------ |  |  | - | - |  | ---------- | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                 |                                               |  |                   |  | Gross Amounts At Which Carried |  |             
|                                                                      |                                 | Initial Cost to ProLogis                      |  |                   |  | as of December 31, 2005        |  |             
|                                                                      |                                 |                                               |  | Costs Capitalized |  |                                |  |              |  | Date of      
|                                                                      |                                 | No. of                                        |  | Encum-            |  |                                |  | Building &   |  | Subsequent to |  |         |        | Building &   |  |            |   | Accumulated     |  | Construction/
|Description                                                           |                                 | Bldgs.                                        |  | brances           |  | Land                           |  | Improvements |  | Acquisition   |  | Land    |        | Improvements |  | Total(a,b) |   | Depreciation(c) |  | Acquisition  
|                                                                      |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |              
|                                                                      |                                 | (In thousands of U.S. dollars, as applicable)
|Mexico:                                                               |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|Juarez, Mexico                                                        |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      | Los Aztecas Industrial Center   |                                               |  |                   |  |                                |  |              |  |               |  | 499     |        |              |  |           |   |                 |  | 1             |       |  |  | 500     |        |  |  |  |   |  |  | 500     |        |  |  |  |   |  | 2000      
|                                                                      | Ramon Rivera Industrial Center  |                                               |  |                   |  |                                |  |              |  |               |  | 445     |        |              |  |           |   |                 |  | 34            |       |  |  | 479     |        |  |  |  |   |  |  | 479     |        |  |  |  |   |  | 2000      
|                                                                      | Salvarcar Industrial Center II  |                                               |  |                   |  |                                |  |              |  |               |  | 2,242   |        |              |  |           |   |                 |  |              |       |  |  | 2,242   |        |  |  |  |   |  |  | 2,242   |        |  |  |  |   |  | 2002      
|                                                                      | Salvarcar Industrial Center III |                                               |  |                   |  |                                |  |              |  |               |  | 2,167   |        |              |  |           |   |                 |  | 55            |       |  |  | 2,222   |        |  |  |  |   |  |  | 2,222   |        |  |  |  |   |  | 2002      
|                                                                      |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      |                                 | Total Juarez, Mexico                          |  |                   |  |                                |  |              |  |               |  |         | 5,353  |              |  |            |  |                 |  |               | 90    |  |  |         | 5,443  |  |  |   |  |  |  |         | 5,443  |  |  |   |  |  |            | 
|                                                                      |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|Monterrey, Mexico                                                     |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      | Monterrey Airport               |                                               |  |                   |  |                                |  |              |  |               |  | 28,384  |        |              |  |           |   |                 |  |              |       |  |  | 28,384  |        |  |  |  |   |  |  | 28,384  |        |  |  |  |   |  | 2005      
|                                                                      |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      |                                 | Total Monterrey, Mexico                       |  |                   |  |                                |  |              |  |               |  |         | 28,384 |              |  |            |  |                 |  |               |      |  |  |         | 28,384 |  |  |   |  |  |  |         | 28,384 |  |  |   |  |  |            | 
|                                                                      |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|Reynosa, Mexico                                                       |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      | Del Norte Industrial Center II  |                                               |  |                   |  |                                |  |              |  |               |  | 596     |        |              |  |           |   |                 |  | 339           |       |  |  | 935     |        |  |  |  |   |  |  | 935     |        |  |  |  |   |  | 1998      
|                                                                      | Pharr Bridge Industrial Center  |                                               |  |                   |  |                                |  |              |  |               |  | 2,069   |        |              |  |           |   |                 |  | 1,910         |       |  |  | 3,979   |        |  |  |  |   |  |  | 3,979   |        |  |  |  |   |  | 2000      
|                                                                      |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      |                                 | Total Reynosa, Mexico                         |  |                   |  |                                |  |              |  |               |  |         | 2,665  |              |  |            |  |                 |  |               | 2,249 |  |  |         | 4,914  |  |  |   |  |  |  |         | 4,914  |  |  |   |  |  |            | 
|                                                                      |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|Canada:                                                               |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|Toronto, Canada                                                       |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      | Mississauga Gateway Center      |                                               |  |                   |  |                                |  |              |  |               |  | 30,737  |        |              |  |           |   |                 |  |              |       |  |  | 30,737  |        |  |  |  |   |  |  | 30,737  |        |  |  |  |   |  | 2004      
|                                                                      |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      |                                 | Total Toronto, Canada                         |  |                   |  |                                |  |              |  |               |  |         | 30,737 |              |  |            |  |                 |  |               |      |  |  |         | 30,737 |  |  |   |  |  |  |         | 30,737 |  |  |   |  |  |            | 
|                                                                      |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      | Subtotal North America          |                                               |  |                   |  |                                |  |              |  |               |  | 540,880 |        |              |  |           |   |                 |  | 43,690        |       |  |  | 584,570 |        |  |  |  |   |  |  | 584,570 |        |  |  |  |   |  |           
|                                                                      |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|Europe:                                                               |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|Belgium:                                                              |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      | Liege Park                      |                                               |  |                   |  |                                |  |              |  |               |  | 882     |        |              |  |           |   |                 |  |              |       |  |  | 882     |        |  |  |  |   |  |  | 882     |        |  |  |  |   |  | 2001      
|                                                                      | Tongeren Distribution Center    |                                               |  |                   |  |                                |  |              |  |               |  | 240     |        |              |  |           |   |                 |  |              |       |  |  | 240     |        |  |  |  |   |  |  | 240     |        |  |  |  |   |  | 2000      
|                                                                      | Willebroek Distribution Center  |                                               |  |                   |  |                                |  |              |  |               |  | 3,100   |        |              |  |           |   |                 |  |              |       |  |  | 3,100   |        |  |  |  |   |  |  | 3,100   |        |  |  |  |   |  | 2004      
|                                                                      |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      |                                 | Total Belgium                                 |  |                   |  |                                |  |              |  |               |  |         | 4,222  |              |  |            |  |                 |  |               |      |  |  |         | 4,222  |  |  |   |  |  |  |         | 4,222  |  |  |   |  |  |            | 
|                                                                      |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|Czech Republic:                                                       |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      | Prague East Distribution Center |                                               |  |                   |  |                                |  |              |  |               |  | 1,515   |        |              |  |           |   |                 |  |              |       |  |  | 1,515   |        |  |  |  |   |  |  | 1,515   |        |  |  |  |   |  | 2002      
|                                                                      | Prague West Distribution Center |                                               |  |                   |  |                                |  |              |  |               |  | 1,486   |        |              |  |           |   |                 |  |              |       |  |  | 1,486   |        |  |  |  |   |  |  | 1,486   |        |  |  |  |   |  | 2003      
|                                                                      |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      |                                 | Total Czech Republic                          |  |                   |  |                                |  |              |  |               |  |         | 3,001  |              |  |            |  |                 |  |               |      |  |  |         | 3,001  |  |  |   |  |  |  |         | 3,001  |  |  |   |  |  |            | 
|                                                                      |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|France:                                                               |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      | Le Havre Distribution Center    |                                               |  |                   |  |                                |  |              |  |               |  | 2,542   |        |              |  |           |   |                 |  |              |       |  |  | 2,542   |        |  |  |  |   |  |  | 2,542   |        |  |  |  |   |  | 1998, 2005
|                                                                      | Moissy Cramayel                 |                                               |  |                   |  |                                |  |              |  |               |  | 22,103  |        |              |  |           |   |                 |  |              |       |  |  | 22,103  |        |  |  |  |   |  |  | 22,103  |        |  |  |  |   |  | 2004      
|                                                                      | Vatry Distribution Center       |                                               |  |                   |  |                                |  |              |  |               |  | 2,444   |        |              |  |           |   |                 |  |              |       |  |  | 2,444   |        |  |  |  |   |  |  | 2,444   |        |  |  |  |   |  | 2002      
|                                                                      |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 
|                                                                      |                                 | Total France                                  |  |                   |  |                                |  |              |  |               |  |         | 27,089 |              |  |            |  |                 |  |               |      |  |  |         | 27,089 |  |  |   |  |  |  |         | 27,089 |  |  |   |  |  |            | 
|                                                                      |                                 |                                               |  |                   |  |                                |  |              |  |               |  |         |        |              |  |            |   |                 |  |               |       |  |  |         |        |  |  |   |   |  |  |         |        |  |  |   |   | 

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|                                                                      |                                         |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |   |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   |  |            | 
|--------------------------------------------------------------------- | --------------------------------------- | --------------------------------------------- |  | ----------------- |  | ------------------------------ |  | ------------ |  | ------------- |  | ------ | ------ | ------------ |  | ---------- | - | --------------- |  | ------------- | - |  |  | ------ | ------ |  |  | - | - |  |  | ------ | ------ |  |  | - | - |  | ---------- | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                         |                                               |  |                   |  | Gross Amounts At Which Carried |  |             
|                                                                      |                                         | Initial Cost to ProLogis                      |  |                   |  | as of December 31, 2005        |  |             
|                                                                      |                                         |                                               |  | Costs Capitalized |  |                                |  |              |  | Date of      
|                                                                      |                                         | No. of                                        |  | Encum-            |  |                                |  | Building &   |  | Subsequent to |  |        |        | Building &   |  |            |   | Accumulated     |  | Construction/
|Description                                                           |                                         | Bldgs.                                        |  | brances           |  | Land                           |  | Improvements |  | Acquisition   |  | Land   |        | Improvements |  | Total(a,b) |   | Depreciation(c) |  | Acquisition  
|                                                                      |                                         |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |              
|                                                                      |                                         | (In thousands of U.S. dollars, as applicable)
|Germany:                                                              |                                         |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |   |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Alzenau Distribution Center             |                                               |  |                   |  |                                |  |              |  |               |  | 3,736  |        |              |  |           |   |                 |  |              |   |  |  | 3,736  |        |  |  |  |   |  |  | 3,736  |        |  |  |  |   |  | 2003      
|                                                                      | Cologne Distribution Center             |                                               |  |                   |  |                                |  |              |  |               |  | 4,159  |        |              |  |           |   |                 |  |              |   |  |  | 4,159  |        |  |  |  |   |  |  | 4,159  |        |  |  |  |   |  | 2005      
|                                                                      | Frankfurt Riederhof Distribution Center |                                               |  |                   |  |                                |  |              |  |               |  | 5,274  |        |              |  |           |   |                 |  |              |   |  |  | 5,274  |        |  |  |  |   |  |  | 5,274  |        |  |  |  |   |  | 2002      
|                                                                      | Krefeld Park                            |                                               |  |                   |  |                                |  |              |  |               |  | 1,935  |        |              |  |           |   |                 |  |              |   |  |  | 1,935  |        |  |  |  |   |  |  | 1,935  |        |  |  |  |   |  | 2001      
|                                                                      | Neufahrn Distribution Center            |                                               |  |                   |  |                                |  |              |  |               |  | 7,257  |        |              |  |           |   |                 |  |              |   |  |  | 7,257  |        |  |  |  |   |  |  | 7,257  |        |  |  |  |   |  | 2005      
|                                                                      | Saarwellingen Distribution Center       |                                               |  |                   |  |                                |  |              |  |               |  | 2,737  |        |              |  |           |   |                 |  |              |   |  |  | 2,737  |        |  |  |  |   |  |  | 2,737  |        |  |  |  |   |  | 2005      
|                                                                      |                                         |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |   |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                         | Total Germany                                 |  |                   |  |                                |  |              |  |               |  |        | 25,098 |              |  |            |  |                 |  |               |  |  |  |        | 25,098 |  |  |   |  |  |  |        | 25,098 |  |  |   |  |  |            | 
|                                                                      |                                         |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |   |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Hungary:                                                              |                                         |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |   |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Budapest Park                           |                                               |  |                   |  |                                |  |              |  |               |  | 4,700  |        |              |  |           |   |                 |  |              |   |  |  | 4,700  |        |  |  |  |   |  |  | 4,700  |        |  |  |  |   |  | 2001      
|                                                                      | Budapest Park Phase II                  |                                               |  |                   |  |                                |  |              |  |               |  | 2,648  |        |              |  |           |   |                 |  |              |   |  |  | 2,648  |        |  |  |  |   |  |  | 2,648  |        |  |  |  |   |  | 2004      
|                                                                      |                                         |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |   |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                         | Total Hungary                                 |  |                   |  |                                |  |              |  |               |  |        | 7,348  |              |  |            |  |                 |  |               |  |  |  |        | 7,348  |  |  |   |  |  |  |        | 7,348  |  |  |   |  |  |            | 
|                                                                      |                                         |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |   |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Italy:                                                                |                                         |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |   |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Bologna Distribution Center             |                                               |  |                   |  |                                |  |              |  |               |  | 9,137  |        |              |  |           |   |                 |  |              |   |  |  | 9,137  |        |  |  |  |   |  |  | 9,137  |        |  |  |  |   |  | 2005      
|                                                                      | Padua Distribution Center               |                                               |  |                   |  |                                |  |              |  |               |  | 17,438 |        |              |  |           |   |                 |  |              |   |  |  | 17,438 |        |  |  |  |   |  |  | 17,438 |        |  |  |  |   |  | 2004      
|                                                                      |                                         |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |   |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                         | Total Italy                                   |  |                   |  |                                |  |              |  |               |  |        | 26,575 |              |  |            |  |                 |  |               |  |  |  |        | 26,575 |  |  |   |  |  |  |        | 26,575 |  |  |   |  |  |            | 
|                                                                      |                                         |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |   |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Netherlands:                                                          |                                         |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |   |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Venlo Distribution Center               |                                               |  |                   |  |                                |  |              |  |               |  | 6,364  |        |              |  |           |   |                 |  |              |   |  |  | 6,364  |        |  |  |  |   |  |  | 6,364  |        |  |  |  |   |  | 2005      
|                                                                      |                                         |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |   |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                         | Total Netherlands                             |  |                   |  |                                |  |              |  |               |  |        | 6,364  |              |  |            |  |                 |  |               |  |  |  |        | 6,364  |  |  |   |  |  |  |        | 6,364  |  |  |   |  |  |            | 
|                                                                      |                                         |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |   |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Poland:                                                               |                                         |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |   |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Bedzin Distribution Center              |                                               |  |                   |  |                                |  |              |  |               |  | 3,147  |        |              |  |           |   |                 |  |              |   |  |  | 3,147  |        |  |  |  |   |  |  | 3,147  |        |  |  |  |   |  | 2002      
|                                                                      | Blonie Industrial Park                  |                                               |  |                   |  |                                |  |              |  |               |  | 3,977  |        |              |  |           |   |                 |  |              |   |  |  | 3,977  |        |  |  |  |   |  |  | 3,977  |        |  |  |  |   |  | 2002      
|                                                                      | Chorzow Distribution Center             |                                               |  |                   |  |                                |  |              |  |               |  | 5,103  |        |              |  |           |   |                 |  |              |   |  |  | 5,103  |        |  |  |  |   |  |  | 5,103  |        |  |  |  |   |  | 2005      
|                                                                      | Gdank Distribution Center               |                                               |  |                   |  |                                |  |              |  |               |  | 1,559  |        |              |  |           |   |                 |  |              |   |  |  | 1,559  |        |  |  |  |   |  |  | 1,559  |        |  |  |  |   |  | 2005      
|                                                                      | Piotrkow Distribution Center            |                                               |  |                   |  |                                |  |              |  |               |  | 2,982  |        |              |  |           |   |                 |  |              |   |  |  | 2,982  |        |  |  |  |   |  |  | 2,982  |        |  |  |  |   |  | 2002, 2005
|                                                                      | Poznan II Distribution Center           |                                               |  |                   |  |                                |  |              |  |               |  | 7,415  |        |              |  |           |   |                 |  |              |   |  |  | 7,415  |        |  |  |  |   |  |  | 7,415  |        |  |  |  |   |  | 2005      
|                                                                      | Warsaw II Distribution Center           |                                               |  |                   |  |                                |  |              |  |               |  | 4,855  |        |              |  |           |   |                 |  |              |   |  |  | 4,855  |        |  |  |  |   |  |  | 4,855  |        |  |  |  |   |  | 2005      
|                                                                      | Wroclaw Distribution Center             |                                               |  |                   |  |                                |  |              |  |               |  | 11,879 |        |              |  |            |   |                 |  |              |   |  |  | 11,879 |        |  |  |  |   |  |  | 11,879 |        |  |  |  |   |  | 2004      
|                                                                      |                                         |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |   |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                         | Total Poland                                  |  |                   |  |                                |  |              |  |               |  |        | 40,917 |              |  |            |  |                 |  |               |  |  |  |        | 40,917 |  |  |   |  |  |  |        | 40,917 |  |  |   |  |  |            | 
|                                                                      |                                         |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |   |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|Spain:                                                                |                                         |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |   |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      | Massalaves Distribution Center          |                                               |  |                   |  |                                |  |              |  |               |  | 9,925  |        |              |  |           |   |                 |  |              |   |  |  | 9,925  |        |  |  |  |   |  |  | 9,925  |        |  |  |  |   |  | 2005      
|                                                                      | Penedes Distribution Center             |                                               |  |                   |  |                                |  |              |  |               |  | 10,228 |        |              |  |           |   |                 |  |              |   |  |  | 10,228 |        |  |  |  |   |  |  | 10,228 |        |  |  |  |   |  | 2005      
|                                                                      |                                         |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |   |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 
|                                                                      |                                         | Total Spain                                   |  |                   |  |                                |  |              |  |               |  |        | 20,153 |              |  |            |  |                 |  |               |  |  |  |        | 20,153 |  |  |   |  |  |  |        | 20,153 |  |  |   |  |  |            | 
|                                                                      |                                         |                                               |  |                   |  |                                |  |              |  |               |  |        |        |              |  |            |   |                 |  |               |   |  |  |        |        |  |  |   |   |  |  |        |        |  |  |   |   | 

148



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##### Table of Contents





|                                                                      |                                       |                                               |  |                   |  |                                |  |              |  |               |  |           |           |              |  |            |   |                 |  |               |        |  |  |           |           |  |  |           |   |  |  |            |           |  |  |            |   |  |            | 
|--------------------------------------------------------------------- | ------------------------------------- | --------------------------------------------- |  | ----------------- |  | ------------------------------ |  | ------------ |  | ------------- |  | --------- | --------- | ------------ |  | ---------- | - | --------------- |  | ------------- | ------ |  |  | --------- | --------- |  |  | --------- | - |  |  | ---------- | --------- |  |  | ---------- | - |  | ---------- | 
|PROLOGIS                                                             
|SCHEDULE III  REAL ESTATE AND ACCUMULATED DEPRECIATION  (Continued)
|December 31, 2005                                                    
|                                                                      |                                       |                                               |  |                   |  | Gross Amounts At Which Carried |  |             
|                                                                      |                                       | Initial Cost to ProLogis                      |  |                   |  | as of December 31, 2005        |  |             
|                                                                      |                                       |                                               |  | Costs Capitalized |  |                                |  |              |  | Date of      
|                                                                      |                                       | No. of                                        |  | Encum-            |  |                                |  | Building &   |  | Subsequent to |  |           |           | Building &   |  |            |   | Accumulated     |  | Construction/
|Description                                                           |                                       | Bldgs.                                        |  | brances           |  | Land                           |  | Improvements |  | Acquisition   |  | Land      |           | Improvements |  | Total(a,b) |   | Depreciation(c) |  | Acquisition  
|                                                                      |                                       |                                               |  |                   |  |                                |  |              |  |               |  |           |           |              |  |            |   |                 |  |              
|                                                                      |                                       | (In thousands of U.S. dollars, as applicable)
|United Kingdom:                                                       |                                       |                                               |  |                   |  |                                |  |              |  |               |  |           |           |              |  |            |   |                 |  |               |        |  |  |           |           |  |  |           |   |  |  |            |           |  |  |            |   | 
|                                                                      | Ashby de la Zouch Distribution Center |                                               |  |                   |  |                                |  |              |  |               |  | 5,938     |           |              |  |           |   |                 |  |              |        |  |  | 5,938     |           |  |  |          |   |  |  | 5,938      |           |  |  |           |   |  | 1998      
|                                                                      | Basford Sidings Crewe                 |                                               |  |                   |  |                                |  |              |  |               |  | 11,024    |           |              |  |           |   |                 |  |              |        |  |  | 11,024    |           |  |  |          |   |  |  | 11,024     |           |  |  |           |   |  | 2003      
|                                                                      | Bourne Avenue Hayes                   |                                               |  |                   |  |                                |  |              |  |               |  | 44,949    |           |              |  |           |   |                 |  |              |        |  |  | 44,949    |           |  |  |          |   |  |  | 44,949     |           |  |  |           |   |  | 2003      
|                                                                      | Campbell Road Distribution Center     |                                               |  |                   |  |                                |  |              |  |               |  | 17,202    |           |              |  |           |   |                 |  |              |        |  |  | 17,202    |           |  |  |          |   |  |  | 17,202     |           |  |  |           |   |  | 2002      
|                                                                      | Corby Distribution Center             |                                               |  |                   |  |                                |  |              |  |               |  | 2,123     |           |              |  |           |   |                 |  |              |        |  |  | 2,123     |           |  |  |          |   |  |  | 2,123      |           |  |  |           |   |  | 1998      
|                                                                      | Coventry Distribution Center          |                                               |  |                   |  |                                |  |              |  |               |  | 13,570    |           |              |  |           |   |                 |  |              |        |  |  | 13,570    |           |  |  |          |   |  |  | 13,570     |           |  |  |           |   |  | 1998      
|                                                                      | Hemel Hempstead                       |                                               |  |                   |  |                                |  |              |  |               |  | 14,060    |           |              |  |           |   |                 |  |              |        |  |  | 14,060    |           |  |  |          |   |  |  | 14,060     |           |  |  |           |   |  | 2003      
|                                                                      | Houghton Main Distribution Center     |                                               |  |                   |  |                                |  |              |  |               |  | 8,206     |           |              |  |           |   |                 |  |              |        |  |  | 8,206     |           |  |  |          |   |  |  | 8,206      |           |  |  |           |   |  | 2005      
|                                                                      | Kingston Park II Distribution Center  |                                               |  |                   |  |                                |  |              |  |               |  | 7,546     |           |              |  |           |   |                 |  |              |        |  |  | 7,546     |           |  |  |          |   |  |  | 7,546      |           |  |  |           |   |  | 2001, 2004
|                                                                      | Liverpool                             |                                               |  |                   |  |                                |  |              |  |               |  | 229       |           |              |  |           |   |                 |  |              |        |  |  | 229       |           |  |  |          |   |  |  | 229        |           |  |  |           |   |  | 2003      
|                                                                      | New Greenham Park, Newbury            |                                               |  |                   |  |                                |  |              |  |               |  | 35,072    |           |              |  |           |   |                 |  |              |        |  |  | 35,072    |           |  |  |          |   |  |  | 35,072     |           |  |  |           |   |  | 2005      
|                                                                      | North Kettering Business Park         |                                               |  |                   |  |                                |  |              |  |               |  | 28,723    |           |              |  |           |   |                 |  |              |        |  |  | 28,723    |           |  |  |          |   |  |  | 28,723     |           |  |  |           |   |  | 2004      
|                                                                      | South Marston Park Swindon            |                                               |  |                   |  |                                |  |              |  |               |  | 1,508     |           |              |  |           |   |                 |  |              |        |  |  | 1,508     |           |  |  |          |   |  |  | 1,508      |           |  |  |           |   |  | 2004      
|                                                                      | Wellingborough                        |                                               |  |                   |  |                                |  |              |  |               |  | 13,495    |           |              |  |           |   |                 |  |              |        |  |  | 13,495    |           |  |  |          |   |  |  | 13,495     |           |  |  |           |   |  | 2004      
|                                                                      |                                       |                                               |  |                   |  |                                |  |              |  |               |  |           |           |              |  |            |   |                 |  |               |        |  |  |           |           |  |  |           |   |  |  |            |           |  |  |            |   | 
|                                                                      |                                       | Total United Kingdom                          |  |                   |  |                                |  |              |  |               |  |           | 203,645   |              |  |            |  |                 |  |               |       |  |  |           | 203,645   |  |  |           |  |  |  |            | 203,645   |  |  |            |  |  |            | 
|                                                                      |                                       |                                               |  |                   |  |                                |  |              |  |               |  |           |           |              |  |            |   |                 |  |               |        |  |  |           |           |  |  |           |   |  |  |            |           |  |  |            |   | 
|                                                                      | Subtotal Europe                       |                                               |  |                   |  |                                |  |              |  |               |  | 364,412   |           |              |  |           |   |                 |  |              |        |  |  | 364,412   |           |  |  |          |   |  |  | 364,412    |           |  |  |           |   |  |           
|                                                                      |                                       |                                               |  |                   |  |                                |  |              |  |               |  |           |           |              |  |            |   |                 |  |               |        |  |  |           |           |  |  |           |   |  |  |            |           |  |  |            |   | 
|Asia:                                                                 |                                       |                                               |  |                   |  |                                |  |              |  |               |  |           |           |              |  |            |   |                 |  |               |        |  |  |           |           |  |  |           |   |  |  |            |           |  |  |            |   | 
|China:                                                                |                                       |                                               |  |                   |  |                                |  |              |  |               |  |           |           |              |  |            |   |                 |  |               |        |  |  |           |           |  |  |           |   |  |  |            |           |  |  |            |   | 
|                                                                      | Beijing Airport                       |                                               |  |                   |  |                                |  |              |  |               |  | 7,996     |           |              |  |           |   |                 |  |              |        |  |  | 7,996     |           |  |  |          |   |  |  | 7,996      |           |  |  |           |   |  | 2005      
|                                                                      |                                       |                                               |  |                   |  |                                |  |              |  |               |  |           |           |              |  |            |   |                 |  |               |        |  |  |           |           |  |  |           |   |  |  |            |           |  |  |            |   | 
|                                                                      |                                       | Total China                                   |  |                   |  |                                |  |              |  |               |  |           | 7,996     |              |  |            |  |                 |  |               |       |  |  |           | 7,996     |  |  |           |  |  |  |            | 7,996     |  |  |            |  |  |            | 
|                                                                      |                                       |                                               |  |                   |  |                                |  |              |  |               |  |           |           |              |  |            |   |                 |  |               |        |  |  |           |           |  |  |           |   |  |  |            |           |  |  |            |   | 
|Japan:                                                                |                                       |                                               |  |                   |  |                                |  |              |  |               |  |           |           |              |  |            |   |                 |  |               |        |  |  |           |           |  |  |           |   |  |  |            |           |  |  |            |   | 
|                                                                      | ProLogis Park Hokko (Osaka)           |                                               |  |                   |  |                                |  |              |  |               |  | 26,611    |           |              |  |           |   |                 |  |              |        |  |  | 26,611    |           |  |  |          |   |  |  | 26,611     |           |  |  |           |   |  | 2005      
|                                                                      | ProLogis Park Komaki (Aichi)          |                                               |  |                   |  |                                |  |              |  |               |  | 33,070    |           |              |  |           |   |                 |  |              |        |  |  | 33,070    |           |  |  |          |   |  |  | 33,070     |           |  |  |           |   |  | 2005      
|                                                                      | ProLogis Park Shin-moji (Fukuoka)     |                                               |  |                   |  |                                |  |              |  |               |  | 2,688     |           |              |  |           |   |                 |  |              |        |  |  | 2,688     |           |  |  |          |   |  |  | 2,688      |           |  |  |           |   |  | 2005      
|                                                                      | ProLogis Park Sugito (Tokyo)          |                                               |  |                   |  |                                |  |              |  |               |  | 25,695    |           |              |  |           |   |                 |  |              |        |  |  | 25,695    |           |  |  |          |   |  |  | 25,695     |           |  |  |           |   |  | 2005      
|                                                                      |                                       |                                               |  |                   |  |                                |  |              |  |               |  |           |           |              |  |            |   |                 |  |               |        |  |  |           |           |  |  |           |   |  |  |            |           |  |  |            |   | 
|                                                                      |                                       | Total Japan                                   |  |                   |  |                                |  |              |  |               |  |           | 88,064    |              |  |            |  |                 |  |               |       |  |  |           | 88,064    |  |  |           |  |  |  |            | 88,064    |  |  |            |  |  |            | 
|                                                                      |                                       |                                               |  |                   |  |                                |  |              |  |               |  |           |           |              |  |            |   |                 |  |               |        |  |  |           |           |  |  |           |   |  |  |            |           |  |  |            |   | 
|                                                                      | Subtotal Asia                         |                                               |  |                   |  |                                |  |              |  |               |  | 96,060    |           |              |  |           |   |                 |  |              |        |  |  | 96,060    |           |  |  |          |   |  |  | 96,060     |           |  |  |           |   |  |           
|                                                                      |                                       |                                               |  |                   |  |                                |  |              |  |               |  |           |           |              |  |            |   |                 |  |               |        |  |  |           |           |  |  |           |   |  |  |            |           |  |  |            |   | 
|                                                                      |                                       | Total Land Held for Development               |  |                   |  |                                |  |              |  |               |  |           | 1,001,352 |              |  |            |  |                 |  |               | 43,690 |  |  |           | 1,045,042 |  |  |           |  |  |  |            | 1,045,042 |  |  |            |  |  |            | 
|                                                                      |                                       |                                               |  |                   |  |                                |  |              |  |               |  |           |           |              |  |            |   |                 |  |               |        |  |  |           |           |  |  |           |   |  |  |            |           |  |  |            |   | 
|                                                                      | GRAND TOTAL                           |                                               |  |                   |  |                                |  |              |  |               |  | 3,320,120 |           |              |  | 5,400,316  |   |                 |  | 2,482,683     |        |  |  | 3,828,786 |           |  |  | 7,374,333 |   |  |  | 11,203,119 |           |  |  | (1,117,346 | ) |  |           
|                                                                      |                                       |                                               |  |                   |  |                                |  |              |  |               |  |           |           |              |  |            |   |                 |  |               |        |  |  |           |           |  |  |           |   |  |  |            |           |  |  |            |   | 

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|    |  |                                                                                                                                        
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Reconciliation of real estate assets per Schedule III to
    our Consolidated Balance Sheet as of December 31, 2005 (in
    thousands):

|                                        |  |   |            |       
|--------------------------------------- |  | - | ---------- | ------
|Total per Schedule III                  |  | $ | 11,203,119 |       
|Land subject to ground leases and other |  |   | 538,095    | (e)(i)
|Other investments                       |  |   | 133,916    | (k)   
|                                        |  |   |           
|Total per consolidated balance sheet    |  | $ | 11,875,130 | (l)   
|                                        |  |   |           



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) |  | The tax basis at 12/31/2005 of our real estate assets for
    federal income tax purposes was approximately $9,122,677,265.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(c) |  | Real estate assets (excluding land balances) are depreciated
    over their estimated useful lives. These useful lives are
    generally seven years for capital improvements, 10 years
    for standard tenant improvements, 30 years for acquired
    industrial properties, 40 years for office and retail
    properties acquired and 40 years for properties developed
    by us. We do not depreciate properties that have been developed
    or acquired in the CDFS business segment with the intent to sell
    the property to a third party or contribute the property to a
    property fund.



| |                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------
| | Reconciliation of accumulated depreciation per Schedule III
    to our Consolidated Balance Sheet as of December 31, 2005
    (in thousands):

|                                              |  |   |           | 
|--------------------------------------------- |  | - | --------- | 
|Total per Schedule III                        |  | $ | 1,117,346 | 
|Accumulated depreciation on other investments |  |   | 1,201     | 
|                                              |  |   |          
|Total per Consolidated Balance Sheet          |  | $ | 1,118,547 | 
|                                              |  |   |          



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(d) |  | Total operating properties include 124 properties developed or
    acquired in the CDFS business segment aggregating
    29.4 million square feet at a total investment of
    $1.4 billion. See Item 1. Business 
    Operating Segments  Property Operations.                                                                                                                                                                                                                               
|   
|(e) |  | Properties with an aggregate undepreciated cost of
    $3,509,162,000 secure $1,643,586,000 of mortgage notes. See
    Note 8.                                                                                                                                                                                                                                                                                                                                                                    
|   
|(f) |  | With respect to one building, we own only 98,000 square
    feet or 31% of the building. The remaining portion is owned by
    the North American Properties Fund V.                                                                                                                                                                                                                                                                                                                              
|   
|(g) |  | With respect to one building, we own only 64,000 square
    feet or 42% of the building. The remaining portion is owned by
    the North American Properties Fund V.                                                                                                                                                                                                                                                                                                                              
|   
|(h) |  | With respect to one building, we own only 115,000 square
    feet or 32% of the building. The remaining portion is owned by
    the North American Properties Fund V.                                                                                                                                                                                                                                                                                                                             
|   
|(i) |  | Properties with an aggregate undepreciated cost of
    $1,019,106,000 secure $34,565,000 of assessment bonds. See
    Note 8.                                                                                                                                                                                                                                                                                                                                                                     
|   
|(j) |  | With respect to one building, we own only 237,000 square
    feet or 54% of the building. The remaining portion is owned by
    the North American Properties Fund V.                                                                                                                                                                                                                                                                                                                             
|   
|(k) |  | Other investments include: (i) restricted funds that are
    held in escrow pending the completion of tax-deferred exchange
    transactions involving operating properties; (ii) earnest
    money deposits associated with potential acquisitions;
    (iii) costs incurred during the pre-acquisition due
    diligence process; (iv) costs incurred during the
    pre-construction phase related to future development projects;
    and (v) costs related to our corporate office buildings.

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|    |  |                                                                                                                                                                                               
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(l) |  | A summary of activity for our real estate assets and accumulated
    depreciation for the three years ended December 31, 2005,
    2004 and 2003 is as follows (in thousands of U.S. dollars):

|                          |                                                                                                                                  |                          |   |            |      |  |   |            |   |  |   |           |  
|------------------------- | -------------------------------------------------------------------------------------------------------------------------------- | ------------------------ | - | ---------- | ---- |  | - | ---------- | - |  | - | --------- | -
|                          |                                                                                                                                  | Years Ended December 31, |  
|                          |                                                                                                                                  |                          |  
|                          |                                                                                                                                  | 2005                     |   |            | 2004 |  |   | 2003       |  
|                          |                                                                                                                                  |                          |   |            |      |  |   |            |  
|Real estate assets:       |                                                                                                                                  |                          |   |            |      |  |   |            |   |  |   |          
|                          | Balance at beginning of year                                                                                                     |                          | $ | 6,333,731  |      |  | $ | 5,854,047  |   |  | $ | 5,395,527 |  
|                          | Acquisitions of operating properties, transfers of development
    completions from CIP and improvements to operating properties |                          |   | 5,414,725  |      |  |   | 1,441,703  |   |  |   | 1,055,331 |  
|                          | Basis of operating properties disposed of                                                                                        |                          |   | (1,188,407 | )    |  |   | (1,253,290 | ) |  |   | (754,410  | )
|                          | Change in properties under development balance                                                                                   |                          |   | 308,642    |      |  |   | 171,122    |   |  |   | 27,197    |  
|                          | Change in land held for development balance                                                                                      |                          |   | 449,041    |      |  |   | 86,666     |   |  |   | 124,343   |  
|                          | Change in land subject to ground leases and other balance                                                                        |                          |   | 538,095    |      |  |   |           |   |  |   |          |  
|                          | Change in capitalized preacquisition costs balance                                                                               |                          |   | 19,303     |      |  |   | 33,483     |   |  |   | 6,059     |  
|                          |                                                                                                                                  |                          |   |            |      |  |   |            |  
|                          | Balance at end of year                                                                                                           |                          | $ | 11,875,130 |      |  | $ | 6,333,731  |   |  | $ | 5,854,047 |  
|                          |                                                                                                                                  |                          |   |            |      |  |   |            |  
|Accumulated Depreciation: |                                                                                                                                  |                          |   |            |      |  |   |            |   |  |   |          
|                          | Balance at beginning of year                                                                                                     |                          | $ | 989,221    |      |  | $ | 847,221    |   |  | $ | 712,319   |  
|                          | Depreciation expense                                                                                                             |                          |   | 174,244    |      |  |   | 149,127    |   |  |   | 142,022   |  
|                          | Balances retired upon disposition of operating properties                                                                        |                          |   | (44,918    | )    |  |   | (7,127     | ) |  |   | (7,120    | )
|                          |                                                                                                                                  |                          |   |            |      |  |   |            |  
|                          | Balance at end of year                                                                                                           |                          | $ | 1,118,547  |      |  | $ | 989,221    |   |  | $ | 847,221   |  
|                          |                                                                                                                                  |                          |   |            |      |  |   |            |  

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##### Table of Contents



SIGNATURES






| |         
| | --------
| | PROLOGIS



| |     |                        
| | --- | -----------------------
| | By: | /s/ JEFFREY H. SCHWARTZ

| |                                    
| | -----------------------------------
| |                                    
| | Jeffrey H. Schwartz                
| | Chief Executive Officer and Trustee





|                                                 |  |                                                        |  |                |  | 
|------------------------------------------------ |  | ------------------------------------------------------ |  | -------------- |  | 
|Signature                                        |  | Title                                                  |  | Date          
|                                                 |  |                                                        |  |               
|                                                
|/s/ JEFFREY H. SCHWARTZJeffrey H. Schwartz       |  | Chief Executive Officer and Trustee                    |  | March 14, 2006
|                                                
|/s/ WALTER C. RAKOWICHWalter C. Rakowich         |  | President, Chief Operating Officer
    and Trustee     |  | March 14, 2006
|                                                
|/s/ DESSA M. BOKIDESDessa M. Bokides             |  | Chief Financial Officer                                |  | March 14, 2006
|                                                
|/s/ JEFFREY S. FINNINJeffrey S. Finnin           |  | Senior Vice President and
    Chief Accounting Officer |  | March 14, 2006
|                                                
|/s/ K. DANE BROOKSHERK. Dane Brooksher           |  | Chairman and Trustee                                   |  | March 14, 2006
|                                                
|/s/ IRVING F.
    LYONS, IIIIrving F. Lyons, III |  | Vice Chairman and Trustee                              |  | March 14, 2006
|                                                
|/s/ STEPHEN L. FEINBERGStephen L. Feinberg       |  | Trustee                                                |  | March 14, 2006
|                                                
|/s/ GEORGE L. FOTIADESGeorge L. Fotiades         |  | Trustee                                                |  | March 14, 2006
|                                                
|/s/ CHRISTINE N. GARVEYChristine N. Garvey       |  | Trustee                                                |  | March 14, 2006
|                                                
|/s/ DONALD P. JACOBSDonald P. Jacobs             |  | Trustee                                                |  | March 14, 2006

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|                                           |  |         |  |                |  | 
|------------------------------------------ |  | ------- |  | -------------- |  | 
|Signature                                  |  | Title   |  | Date          
|                                           |  |         |  |               
|                                          
|/s/ NELSON C. RISINGNelson C. Rising       |  | Trustee |  | March 14, 2006
|                                          
|/s/ KENNETH N. STENSBYKenneth N. Stensby   |  | Trustee |  | March 14, 2006
|                                          
|/s/ D. MICHAEL STEUERTD. Michael Steuert   |  | Trustee |  | March 14, 2006
|                                          
|/s/ J. ANDRÉ
    TEIXEIRAJ. André Teixeira |  | Trustee |  | March 14, 2006
|                                          
|/s/ WILLIAM D. ZOLLARSWilliam D. Zollars   |  | Trustee |  | March 14, 2006
|                                          
|/s/ ANDREA M. ZULBERTIAndrea M. Zulberti   |  | Trustee |  | March 14, 2006

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##### Table of Contents



EXHIBIT INDEX


12b-32,


|        |   |     |  |             |  |                                                                                                                                                                                                                                            
|------- | - | --- |  | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |   |     |  |            
|Number  |   |     |  | Description
|        |   |     |  |            
|        | 3 | .1  |  |            |  | Articles of Amendment and Restatement of Declaration of Trust of
    ProLogis (incorporated by reference to exhibit 4.1 to
    ProLogis Form 10-Q for the quarter ended
    June 30, 1999).                                               
|        | 3 | .2  |  |            |  | Certificate of Amendment, dated as of May 22, 2002, to
    Amended and Restated of Declaration of Trust of
    ProLogis(incorporated by reference to exhibit 99.1 to
    ProLogis Form 8-K dated May 30, 2002).                           
|        | 3 | .3  |  |            |  | Amended and Restated Bylaws of ProLogis dated March 15,
    2005 (incorporated by reference to Exhibit 3.1 to
    ProLogis Form 8-K filed on March 21, 2005).                                                                             
|        | 3 | .4  |  |            |  | Articles Supplementary Classifying and Designating the
    Series F Cumulative Redeemable Preferred Shares of
    Beneficial Interest (incorporated by reference exhibit 4.2
    to ProLogis Form 8-K dated December 24, 2003).           
|        | 3 | .5  |  |            |  | Articles Supplementary Classifying and Designating the
    Series G Cumulative Redeemable Preferred Shares of
    Beneficial Interest (incorporated by reference exhibit 4.3
    to ProLogis Form 8-K dated December 24, 2003).           
|        | 3 | .6  |  |            |  | Articles of Amendment to Amended and Restated Declaration of
    Trust of ProLogis dated as of May 19, 2005 (incorporated by
    reference to Exhibit 3.1 to ProLogis Form 8-K
    filed on May 20, 2005).                                
|        | 3 | .7  |  |            |  | Articles of Amendment to Amended and Restated Declaration of
    Trust of ProLogis dated as of July 12, 2005 (incorporated
    by reference to Exhibit 3.1 to ProLogis Form 8-K
    filed on July 13, 2005).                              
|        | 3 | .8  |  |            |  | Articles Supplementary Reclassifying and Designating Shares of
    Beneficial Interest of ProLogis as Common Shares of Beneficial
    Interest (incorporated by reference to Exhibit 3.2 to
    ProLogis Form 8-K filed on July 13, 2005).
|        | 4 | .1  |  |            |  | Form of share certificate for common shares of Beneficial
    Interest of ProLogis (incorporated by reference to
    exhibit 4.4 to ProLogis registration statement
    No. 33-73382).                                                    
|        | 4 | .2  |  |            |  | ProLogis Trust Employee Share Purchase Plan, as amended and
    restated (incorporated by reference to Exhibit 4.27 to
    ProLogis Form S-8, dated September 27, 2001).                                                                  
|        | 4 | .3  |  |            |  | 8.72% Note due March 1, 2009 (incorporated by
    reference to exhibit 4.7 to ProLogis Form 10-K
    for the year ended December 31, 1994).                                                                                               
|        | 4 | .4  |  |            |  | Form of share certificate for Series C Cumulative
    Redeemable Preferred Shares of Beneficial Interest of ProLogis
    (incorporated by reference to exhibit 4.8 to ProLogis
    Form 10-K for the year ended December 31, 1996).       
|        | 4 | .5  |  |            |  | 9.34% Note due March 1, 2015 (incorporated by
    reference to exhibit 4.8 to ProLogis Form 10-K
    for the year ended December 31, 1994).                                                                                               
|        | 4 | .6  |  |            |  | 7.875% Note due May 15, 2009 (incorporated by
    reference to exhibit 4.4 to ProLogis Form 8-K
    dated May 9, 1995).                                                                                                                   
|        | 4 | .7  |  |            |  | 7.95% Note due May 15, 2008 (incorporated by reference
    to exhibit 4.2 to ProLogis Form 10-Q for the
    quarter ended June 30, 1996).                                                                                                 
|        | 4 | .8  |  |            |  | 8.65% Note due May 15, 2016 (incorporated by reference
    to exhibit 4.3 to ProLogis Form 10-Q for the
    quarter ended June 30, 1996).                                                                                                 
|        | 4 | .9  |  |            |  | 7.81% Medium-Term Notes, Series A, due February 1,
    2015 (incorporated by reference to exhibit 4.17 to
    ProLogis Form 10-K for the year ended
    December 31, 1996).                                                               
|        | 4 | .10 |  |            |  | Indenture, dated as of March 1, 1995, between ProLogis and
    State Street Bank and Trust Company, as Trustee (incorporated by
    reference to exhibit 4.9 to ProLogis Form 10-K
    for the year ended December 31, 1994).             

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|        |    |     |  |             |  |                                                                                                                                                                                                                                                                                                                                   
|------- | -- | --- |  | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |     |  |            
|Number  |    |     |  | Description
|        |    |     |  |            
|        | 4  | .11 |  |            |  | Collateral Trust Indenture, dated as of July 22,
    1993,between Krauss/Schwartz Properties, Ltd. and NationsBank of
    Virginia, N.A., as Trustee (incorporated by reference to
    exhibit 4.10 to ProLogis Form 10-K for the year
    ended December 31, 1994).                                                             
|        | 4  | .12 |  |            |  | First Supplement Collateral Trust Indenture, dated as of
    October 28, 1994, among ProLogis Limited Partnership-IV,
    Krauss/Schwartz Properties, Ltd., and NationsBank of Virginia,
    N.A., as Trustee (incorporated by reference to exhibit 10.6
    to ProLogis Form 10-Q for the quarter ended
    September 30, 1994).
|        | 4  | .13 |  |            |  | 7.625% Note due July 1, 2017 (incorporated by
    reference to exhibit 4 to ProLogis Form 8-K
    dated July 11, 1997).                                                                                                                                                                                                          
|        | 4  | .14 |  |            |  | Form of 7.05% Promissory Note due July 15,
    2006(incorporated by reference to exhibit 4.24 to
    ProLogis Form 10-K for the year ended
    December 31, 1999).                                                                                                                                                               
|        | 4  | .15 |  |            |  | Form of 7.10% Promissory Note due April 15,
    2008(incorporated by reference to exhibit 4.27 to
    ProLogis Form 10-K for the year ended
    December 31, 1999).                                                                                                                                                              
|        | 4  | .16 |  |            |  | Form of 5.50% Promissory Note due March 1,
    2013(incorporated by reference to exhibit 4.26 to
    ProLogis Form 10-K for the year ended
    December 31, 2002).                                                                                                                                                               
|        | 4  | .17 |  |            |  | Form of share certificate for Series F Cumulative
    Redeemable Preferred Shares of Beneficial Interest of ProLogis
    (incorporated by reference to exhibit 4.1 to ProLogis
    Form 8-K dated November 26, 2003).                                                                                                            
|        | 4  | .18 |  |            |  | Form of share certificate for Series G Cumulative
    Redeemable Preferred Shares of Beneficial Interest of ProLogis
    (incorporated by reference to exhibit 4.1 to ProLogis
    Form 8-K dated December 24, 2003).                                                                                                            
|        | 4  | .19 |  |            |  | First Supplemental Indenture, dated as of February 9,
    2005,by and between ProLogis and U.S. Bank National
    Association, as Trustee (as successor in interest to State
    Street Bank and Trust Company) (incorporated by reference to
    exhibit 4.1 to ProLogis Form 8-K dated
    February 9, 2005).                  
|        | 4  | .20 |  |            |  | Second Supplemental Indenture dated as of November 2, 2005
    by and between ProLogis and U.S. Bank National Association,
    as Trustee (as successor in interest to State Street Bank and
    Trust Company) (incorporated by reference to Exhibit 4.1 to
    ProLogis Form 8-K filed on November 4, 2005).                   
|        | 4  | .21 |  |            |  | Third Supplemental Indenture dated as of November 2, 2005
    by and between ProLogis and U.S. Bank National Association,
    as Trustee (as successor in interest to State Street Bank and
    Trust Company) (incorporated by reference to Exhibit 4.2 to
    ProLogis Form 8-K filed on November 4, 2005).                    
|        | 10 | .1  |  |            |  | Agreement of Limited Partnership of ProLogis Limited
    Partnership-I, dated as of December 22, 1993, by and among
    ProLogis, as general partner, and the limited partners set forth
    therein (incorporated by reference to exhibit 10.4 to
    ProLogis Registration Statement No. 33-73382).                            
|        | 10 | .2  |  |            |  | Amended and Restated Agreement of Limited Partnership of
    ProLogis Limited Partnership-II, dated as of February 15,1994,
    among ProLogis as general partner, and the limited partners set
    forth therein (incorporated by reference to exhibit 10.12
    to ProLogis Registration Statement No. 33-78080).              
|        | 10 | .3  |  |            |  | Form of Indemnification Agreement entered into between ProLogis
    and its Trustees and executive officers (incorporated by
    reference to exhibit 10.16 to ProLogis Registration
    Statement No. 33-73382).                                                                                                                
|        | 10 | .4  |  |            |  | Indemnification Agreement between ProLogis and each of its
    independent Trustees (incorporated by reference to
    exhibit 10.16 to ProLogis Form 10-K for the year
    ended December 31, 1995).                                                                                                                             
|        | 10 | .5  |  |            |  | Declaration of Trust for the benefit of ProLogis
    independent Trustees (incorporated by reference to
    exhibit 10.17 to ProLogis Form 10-K for the year
    ended December 31, 1995).                                                                                                                                      
|        | 10 | .6* |  |            |  | Share Option Plan for Outside Trustees (as Amended and Restated
    Effective September May 18, 2004) (incorporated by
    reference to exhibit 10. 1 to ProLogis Form 8-K
    dated May 18, 2003).                                                                                                                              

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|        |    |      |  |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------- | -- | ---- |  | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |      |  |            
|Number  |    |      |  | Description
|        |    |      |  |            
|        | 10 | .7   |  |            |  | 1999 Dividend Reinvestment and Share Purchase Plan (incorporated
    by reference to the Prospectus contained in Registration
    Statement No. 333-102166).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|        | 10 | .8   |  |            |  | Amended and Restated Agreement of Limited Partnership of
    ProLogis Limited Partnership-III, dated as of October 28,1994,
    by and among ProLogis, as general partner, and the limited
    partners set forth therein (incorporated by reference to
    exhibit 10.3 to ProLogis Form 10-Q for the
    quarter ended September 30, 1994).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | 10 | .9   |  |            |  | Amended and Restated Agreement of Limited Partnership of
    ProLogis Limited Partnership-IV, dated as of October 28, 1994,
    by and among ProLogis IV, Inc., as general partner, and the
    limited partners set forth therein (incorporated by reference to
    exhibit 10.4 to ProLogis Form 10-Q for the
    quarter ended September 30, 1994).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | 10 | .10  |  |            |  | Loan Agreement, dated as of December 23, 1998, between
    ProLogis and Connecticut General Life Insurance Company
    (incorporated by reference to exhibit 10.19 to
    ProLogis Form 10-K for the year ended
    December 31, 1998).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        | 10 | .11  |  |            |  | Amended and Restated Loan Administration Agreement between
    The Prudential Insurance Company of America and Meridian,
    IndTennco Limited Partnership, Metro-Sierra Limited Partnership,
    and Progress Center/Alabama Limited Partnership, dated as of
    February 23, 1996 (incorporated by reference to
    exhibit 10.24 to Meridians Form 10-K for the
    year ended December 31, 1996).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | 10 | .12  |  |            |  | Note Purchase Agreement among Meridian and The Travelers
    Insurance Company (I/N/TRAL & CO.), United Services
    Automobile Association (I/N/O SALKELD & CO.), The
    Variable Annuity Life Insurance Company, The United States Life
    Insurance Company in the City of New York, All American Life
    Insurance Company, The Old Line Life Insurance Company of
    America, The Lincoln National Life Insurance Company, Lincoln
    Life & Annuity Company of New York, First Penn- Pacific
    Life Insurance Company (I/N/O CUDD & CO), Lincoln
    National Health & Casualty Insurance Company, Allied
    Life Insurance Company B (I/N/O GERLACH &
    CO), sons of Norway (I/N/O VAR & CO), Aid Association
    for Lutherans(I/N/O NIMER & CO), Metropolitan Life
    Insurance Company, National Life Insurance Company, Life
    Insurance Company of the Southwest, Keyport Life Insurance
    Company (I/N/O BOST & CO), Union Central Life Insurance
    Company (I/N/O HARE & CO), and Pan-American Life
    Insurance Company, dated November 15,1997 (incorporated by
    reference to exhibit 10.66 to Meridians
    Form 10-K for the year ended December 31, 1997).
|        | 10 | .13  |  |            |  | Mortgage Noted dated as of March 29, 1999 between ProLogis
    Trust and Pro-Industrial Funding Company, Inc. (incorporated by
    reference to exhibit 10.1 to ProLogis Form 8-K
    dated May 17, 1999).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        | 10 | .14  |  |            |  | Agreement of Limited Partnership of Meridian Realty Partners,
    L.P. (incorporated by reference to exhibit 99.1 to
    ProLogis Registration Statement No. 333-86081).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 10 | .15* |  |            |  | ProLogis Trust 1997 Long-Term Incentive Plan (as Amended and
    Restated Effective as of September 26, 2002 (incorporated
    by reference to exhibit 10.1 to ProLogis
    Form 8-K dated February 19, 2003).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|        | 10 | .16  |  |            |  | Stabilized Property Contribution Agreement, dated
    September 15, 1999, between ProLogis Management S.a.r.l.,
    ProLogis Developments S.a.r.l., ProLogis France Developments,
    Inc., Kingspark Holding S.A. and ProLogis (incorporated by
    reference to exhibit 10.29 to ProLogis
    Form 10-K/A#1 for the year ended December 31, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        | 10 | .17* |  |            |  | Amended and Restated Special Equity Agreement between ProLogis
    and K. Dane Brooksher, dated as of March 5,
    2003(incorporated by reference to exhibit 10.28 to
    ProLogis Form 10-K for the year ended
    December 31, 2002).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        | 10 | .18* |  |            |  | Special Equity Agreement between ProLogis and Irving F.
    Lyons III, dated as of March 5, 2003 (incorporated by
    reference to exhibit 10.29 to ProLogis Form 10-K
    for the year ended December 31, 2002).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        | 10 | .19  |  |            |  | Amended and Restated Agreement of Limited Partnership of
    ProLogis Fraser, L.P. dated as of August 4, 2004
    (incorporated by reference to exhibit 10.1 to
    ProLogis Form 10-Q for the quarter ended
    September 30, 2004).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

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|        |    |     |  |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------- | -- | --- |  | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |     |  |            
|Number  |    |     |  | Description
|        |    |     |  |            
|        | 10 | .20 |  |            |  | Employment Agreement dated as of June 5, 2005 by and
    between ProLogis and Ted R. Antenucci (incorporated by reference
    to Exhibit 10.1 to ProLogis Registration Statement
    No. 333-126560).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | 10 | .21 |  |            |  | $500,000,000 Term Loan dated as of January 4, 2006 among
    ProLogis and Certain Affiliated Borrowers, as borrowers, and
    Bank of America, N.A. (incorporated by reference to
    Exhibit 10.1 to ProLogis Form 8-K filed on
    January 10, 2006).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        | 10 | .22 |  |            |  | Registration Rights Agreement dated November 2, 2005, by
    and among ProLogis and Banc of America Securities LLC, Citigroup
    Global Markets Inc. and J.P.Morgan Securities Inc., as initial
    representatives of the initial purchasers (incorporated by
    reference to Exhibit 10.1 to ProLogis Form 8-K
    filed on November 4, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        | 10 | .23 |  |            |  | Amended and Restated Security Agency Agreement dated as of
    October 6, 2005, among Bank of America, N.A., as global
    administrative agent under the Global Senior Credit Agreement
    referred to therein, certain other creditors of ProLogis and
    Bank of America, N.A., as collateral agent (incorporated by
    reference to Exhibit 10.2 to ProLogis Form 8-K
    filed on November 4, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        | 10 | .24 |  |            |  | Global Senior Credit Agreement dated as of October 6, 2005,
    among ProLogis, certain of its subsidiaries, Bank of America,
    N.A., as global administrative agent, collateral agent,
    U.S. funding agent, U.S. swing line lender, and a
    U.S. L/C issuer, Bank of America, N.A., acting through its
    Canada Branch, as Canadian funding agent and a Canadian L/C
    issuer, ABN AMRO Bank N.V., as global syndication agent, Euro
    funding agent, Euro swing line lender, and a Euro L/C issuer,
    Sumitomo Mitsui Banking Corporation, as a global documentation
    agent, Yen tranche bookrunner, KRW tranche bookrunner,
    Yen Funding Agent, KRW funding agent, and a Yen L/C issuer,
    JPMorgan Chase Bank, N.A. and the Royal Bank of Scotland PLC, as
    global documentation agents, and the other lenders party thereto
    Banc of America Securities LLC and ABN AMRO Bank N.V., as global
    joint lead arrangers and global joint book runners (incorporated
    by reference to Exhibit 10.1 to ProLogis
    Form 8-K filed on October 12, 2005).                                                                                                                                                                                                  
|        | 10 | .25 |  |            |  | First Amendment to the Amended and Restated Special Equity
    Agreement dated as of March 5, 2003 by and between ProLogis
    and K. Dane Brooksher entered into as of September 22, 2005
    (incorporated by reference to Exhibit 10.1 to
    ProLogis Form 8-K filed on September 26, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 10 | .26 |  |            |  | First Amendment to the Amended and Restated Special Equity
    Agreement dated as of March 5, 2003 by and between ProLogis
    and Irving F. Lyons III entered into as of
    September 22, 2005 (incorporated by reference to
    Exhibit 10.2 to ProLogis Form 8-K filed on
    September 26, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|        | 10 | .27 |  |            |  | Amendment, dated as of May 2, 2005, to Note Purchase
    Agreement among ProLogis (as successor by merger to Meridian
    Industrial Trust, Inc., a Maryland corporation) and The
    Travelers Insurance Company (I/N/TRAL & CO.), United
    Services Automobile Association (I/N/O SALKELD & CO.),
    The Variable Annuity Life Insurance Company, The United States
    Life Insurance Company in the City of New York, All American
    Life Insurance Company, The Old Line Life Insurance Company of
    America, The Lincoln National Life Insurance Company, Lincoln
    Life & Annuity Company of New York, First Penn-Pacific
    Life Insurance Company (I/N/O CUDD & CO), Lincoln
    National Health & Casualty Insurance Company, Allied
    Life Insurance Company B (I/N/O GERLACH &
    CO), sons of Norway (I/N/O VAR & CO), Aid Association
    for Lutherans (I/N/O NIMER & CO), Metropolitan Life
    Insurance Company, National Life Insurance Company, Life
    Insurance Company of the Southwest, Keyport Life Insurance
    Company (I/N/O BOST & CO), Union Central Life Insurance
    Company (I/N/O HARE & CO), and Pan-American Life
    Insurance Company (incorporated by reference to
    Exhibit 10.1 to ProLogis Form 8-K filed on
    May 2, 2005).
|        | 10 | .28 |  |            |  | Forms of Executive Protection Agreements entered into between
    ProLogis and Jeffrey H. Schwartz and Walter C. Rakowich
    (incorporated by reference to Exhibit 10.1 to
    ProLogis Form 8-K filed on March 21, 2005).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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|        |    |     |  |             |  |                                                                                                                                                                                                                                                                                                                                                                                                             
|------- | -- | --- |  | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |     |  |            
|Number  |    |     |  | Description
|        |    |     |  |            
|        | 10 | .29 |  |            |  | Forms of Executive Protection Agreements entered into between
    ProLogis and Robert J. Watson, John W. Seiple, Jr., Steven
    K. Meyer and Edward S. Nekritz (incorporated by reference to
    Exhibit 10.2 to ProLogis Form 8-K filed on
    March 21, 2005).                                                                                                                                          
|        | 10 | .30 |  |            |  | Forms of Executive Protection Agreements entered into between
    ProLogis and M. Gordon Keiser, Jr., Paul C. Congelton,
    Masato Miki, Miki Yamada and Ming Z. Mei (incorporated by
    reference to Exhibit 10.3 to ProLogis Form 8-K
    filed on March 21, 2005).                                                                                                                                    
|        | 10 | .31 |  |            |  | $1,500,000,000 Term Loan Agreement dated as of
    September 15, 2005, among ProLogis, as borrower, Bank of
    America, N.A., as administrative agent and a lender, Citigroup
    North America, Inc., as a lender, JPMorgan Chase Bank, N.A., as
    a lender, and the other parties lender thereto (incorporated by
    reference to Exhibit 10.1 to ProLogis Form 8-K
    filed on September 20, 2005).
|        | 12 | .1  |  |            |  | Statement re: Computation of Ratio of Earnings to Fixed Charges.                                                                                                                                                                                                                                                                                                                                            
|        | 12 | .2  |  |            |  | Statement re: Computation of Ratio of Earnings to Combined Fixed
    Charges and Preferred Share Dividends.                                                                                                                                                                                                                                                                                                 
|        | 21 | .1  |  |            |  | Subsidiaries of ProLogis.                                                                                                                                                                                                                                                                                                                                                                                   
|        | 23 | .1  |  |            |  | Consent of KPMG LLP                                                                                                                                                                                                                                                                                                                                                                                         
|        | 31 | .1  |  |            |  | Certification of Chief Executive Officer                                                                                                                                                                                                                                                                                                                                                                    
|        | 31 | .2  |  |            |  | Certification of Chief Financial Officer.                                                                                                                                                                                                                                                                                                                                                                   
|        | 32 | .1  |  |            |  | Certification of Chief Executive Officer pursuant to Section 906
    of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                     
|        | 32 | .2  |  |            |  | Certification of Chief Financial Officer pursuant to Section 906
    of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                     
|        | 99 | .1  |  |            |  | Limited Liability Company Agreement of CSI/Frigo LLC dated as of
    January 2, 2001 (incorporated by reference to
    exhibit 99.5 to ProLogis Form 10-K/A#1 for the
    year ended December 31, 2000).                                                                                                                                                                                                   
|        | 99 | .2  |  |            |  | Promissory Note from CSI/Frigo LLC dated January 5, 2001
    (incorporated by reference to exhibit 99.6 to
    ProLogis Form 10-K/A#1 for the year ended
    December 31, 2000).                                                                                                                                                                                                                           
|        | 99 | .3  |  |            |  | Promissory Note from K. Dane Brooksher dated July 18, 2000
    to GoProLogis Incorporated (incorporated by reference to
    exhibit 99.8 to ProLogis Form 10-K/A#1 for the
    year ended December 31, 2000).                                                                                                                                                                                              
|        | 99 | .4  |  |            |  | Option agreement dated July 18, 2000 among GoProLogis
    Incorporated, K. Dane Brooksher and ProLogis (incorporated by
    reference to exhibit 99.9 to ProLogis
    Form 10-K/A#1 for the year ended December 31, 2000).                                                                                                                                                                                 
|        | 99 | .5  |  |            |  | Promissory Note from K. Dane Brooksher dated September 20,
    2000 to ProLogis Broadband(1) Incorporated (incorporated by
    reference to exhibit 99.10 to ProLogis
    Form 10-K/A#1 for the year ended December 31, 2000).                                                                                                                                                                             
|        | 99 | .6  |  |            |  | Promissory Note from K. Dane Brooksher dated January 4,
    2001 to ProLogis Broadband(1) Incorporated (incorporated by
    reference to exhibit 99.11 to ProLogis
    Form 10-K/A#1 for the year ended December 31, 2000).                                                                                                                                                                                
|        | 99 | .7  |  |            |  | Option Agreement dated September 20, 2000 among ProLogis
    Broadband(1) Incorporated, K. Dane Brooksher and ProLogis
    (incorporated by reference to exhibit 99.12 to
    ProLogis Form 10-K/A#1 for the year ended
    December 31, 2000).                                                                                                                                                            
|        | 99 | .8  |  |            |  | Purchase and Sale Agreement dated October 23, 2002, between
    CSI/Frigo LLC and ProLogis (incorporated by reference to
    exhibit 99.14 to ProLogis Form 10-K for the year
    ended December 31, 2002).                                                                                                                                                                                                
|        | 99 | .9  |  |            |  | Promissory Note from CSI/Frigo LLC dated October 23, 2002
    (incorporated by reference to exhibit 99.15 to
    ProLogis Form 10-K for the year ended
    December 31, 2002).                                                                                                                                                                                                                             






|  |                                                        
|- | -------------------------------------------------------
|* | Management Contract or Compensatory Plan or Arrangement

158