**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C.  20549**

 

**FORM 10-K**

 

| **(Mark One)** |                                                                                                                                                                                                    |   |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **x**          | **ANNUAL  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**                                                                                                                                     |
|           | **SECURITIES EXCHANGE ACT OF 1934**                                                                                                                                                                     |
|           |                                                                                                                                                                                                    |
|           | **For the fiscal year ended  December 31, 2007**                                                                                                                                                   |
|           | ** **                                                                                                                                                                                              |
| **OR**         |
| ** **     |
| **o**          | **TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**                                                                                                                                 |
|           | **SECURITIES EXCHANGE ACT OF 1934**                                                                                                                                                                     |
|           |                                                                                                                                                                                                    |
|           | **For the transition period from                 to               .** |
|                |                                                                                                                                                                                                         |        |  |

 

**CommissionFile Number: 0-20625**

 

**DUKE REALTY LIMITED PARTNERSHIP**

(Exact Name ofRegistrant as Specified in Its Charter)

 

| **Indiana**                                                      | ** ** | **35-1898425**                        |
|------------------------------------------------------------------|------------|---------------------------------------|
| (State or Other  Jurisdiction  of Incorporation or Organization) |       | (IRS Employer  Identification Number) |
|                                                             |       |                                  |
| **600  East 96th Street, Suite 100  Indianapolis, Indiana** | ** ** | **46240**                             |
| (Address of  Principal Executive Offices)                        |       | (Zip Code)                            |

 

Registrant’s telephone number, including area code:**(317) 808-6000**

 

Securitiesregistered pursuant to Section 12(b) of the Act:

 

Securitiesregistered pursuant to Section 12(g) of the Act:  **None**

 

Indicate by checkmark whether the registrant is a well-known seasoned issuer, as defined in Rule 405of the Securities Act.              Yes  x   No  o

 

Indicate by checkmark if the registrant is not required to file reports pursuant to Section 13or Section 15(d) of the Act. Yes  o   No  x

 

Indicate by checkmark whether the registrant: (1) has filed all reports required to befiled by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrantwas required to file such reports), and (2) has been subject to suchfiling requirements for the past 90 days. Yes  x  No  o

 

Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 Regulation S-K isnot contained herein, and will not be contained, to the best of Registrant’sknowledge, in definitive proxy or information statements incorporated byreference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

 

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer or a smaller reporting company. See definition of  “large accelerated filer”, “accelerated filer”and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Checkone):

Large acceleratedfiler   Accelerated filer  o  Non-acceleratedfiler  x  Smallerreporting company  o

 

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  o   No  x

 

The aggregate marketvalue of Limited Partner Units held by non-affiliates of the Registrant is$348.5 million based on the last reported sale price of the common shares ofDuke Realty Corporation into which Limited Partner Units are exchangeable on June 30,2007.

 

The aggregate number ofLimited Partnership Units outstanding as of February 26, 2008 was154,177,370.

 

**DOCUMENTSINCORPORATED BY REFERENCE**

Certain portions of theregistrant’s General Partner’s Definitive Proxy Statement for its 2008 AnnualMeeting of Shareholders (the “Proxy Statement”) to be filed pursuant to Rule 14a-6of the Securities Exchange Act of 1934, as amended, are incorporated byreference into this Form 10-K. Other than those portions of the ProxyStatement specifically incorporated by reference pursuant to Items 10 through14 of Part III hereof, no other portions of the Proxy Statement shall bedeemed so incorporated.

 

 

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**TABLE OF CONTENTS**

 

**Form 10-K**

 
| **Item No.**  | ** ** | **Page(s)** |
|---------------|------------|-------------|
| ** **    | ** ** | ** **  |
| PART I   |       |
|          |       |
|          | 1.         |        | Business | 2-6 |
|          | 1A.        |        | Risk Factors | 6-13 |
|          | 1B.        |        | Unresolved Staff Comments | 13 |
|          | 2.         |        | Properties | 14-15 |
|          | 3.         |        | Legal Proceedings | 16 |
|          | 4.         |        | Submission  of Matters to a Vote of Security Holders | 16 |
|          |       |        |   |   |
| PART II  |       |        |
|          |       |        |
|          | 5.         |        | Market for  the Registrant’s Common Equity, Related StockholderMatters and  Issuer Purchases of Equity Securities | 16-17 |
|          | 6.         |        | Selected Financial  Data | 17-18 |
|          | 7.         |        | Management’s Discussion and Analysis of Financial  Condition and Results of Operations | 18-39 |
|          | 7A.        |        | Quantitative  and Qualitative Disclosures About Market Risk | 39 |
|          | 8.         |        | Financial  Statements and Supplementary Data | 39 |
|          | 9.         |        | Changes In  and Disagreements With Accountants on Accounting and Financial Disclosure | 39 |
|          | 9A.        |        | Controls and Procedures | 40 |
|          | 9B.        |        | Other Information | 40 |
|          |       |        |   |   |
| PART III |       |
|          |       |
|          | 10.        |        | Directors  and Executive Officers of the General Partner | 41 |
|          | 11.        |        | Executive  Compensation | 41 |
|          | 12.        |        | Security  Ownership of Certain Beneficial Owners and Management and Related Unitholder  Matters | 41 |
|          | 13.        |        | Certain  Relationships and Related Transactions, and Director Independence | 42 |
|          | 14.        |        | Principal  Accountant Fees and Services | 42 |
|          |       |        |   |   |
| PART IV  |       |
|          |       |
|          | 15.        |        | Exhibits and  Financial Statement Schedules | 42-93 |
|          |       |
| Signatures    | 94-95      |
|               |            |             |  |  |  |  |

 

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**CautionaryStatement Regarding Forward-Looking Statements**

 

Certain statementscontained in or incorporated by reference into this Report, including, withoutlimitation, those related to our future operations, constitute “forward-lookingstatements” within the meaning of Section 27A of the Securities Act, and Section 21Eof the Securities Exchange Act of 1934, as amended. The words “believe,” “estimate,”“expect,” “anticipate,” “intend,” “plan,” “seek”, “may” and similar expressionsor statements regarding future periods are intended to identify forward-lookingstatements.

 

Theseforward-looking statements involve known and unknown risks, uncertainties andother important factors that could cause our actual results, performance orachievements, or industry results, to differ materially from any predictions offuture results, performance or achievements that we express or imply in thisReport or in the information incorporated by reference into this Report. Someof the risks, uncertainties and other important factors that may affect futureresults include, among others:

 

·      Changes in general economic and business conditions,including performance of financial markets;

 

·      The General Partner’s continued qualification as areal estate investment trust, or “REIT”, for U.S. federal income tax purposes;

 

·      Heightened competition for tenants and potentialdecreases in property occupancy;

 

·      Potential increases in real estate constructioncosts;

 

·      Potential changes in the financial markets andinterest rates;

 

·      Volatility in the GeneralPartner’s stock price and trading volume;

 

·      Our continuing ability to raise funds on favorableterms through the issuance of debt and equity in the capital markets;

 

·      Our ability to successfully identify, acquire,develop and/or manage properties on terms that are favorable to us;

 

·      Our ability to be flexible in the development andoperation of joint venture properties;

 

·      Our ability to successfully dispose of properties onterms that are favorable to us;

 

·      Inherent risks in the real estate business,including, but not limited to, tenant defaults, potential liability relating toenvironmental matters and liquidity of real estate investments; and

 

·      Other risks and uncertainties described herein, aswell as, those risks and uncertainties discussed from time to time in thePartnership’s and the General Partner’s other reports and other public filingswith the Securities and Exchange Commission (“SEC”).

 

This list of risksand uncertainties, however, is only a summary of some of the most importantfactors and is not intended to be exhaustive. Additional information regardingrisk factors that may affect us is included under the caption “Risk Factors” inthis Report, and is updated by us from time to time in Quarterly Reports on Form 10-Q,Current Reports on Form 8-K and other filings that we make with the SEC.

 

Although wepresently believe that the plans, expectations and results expressed in orsuggested by the forward-looking statements are reasonable, all forward-lookingstatements are inherently subjective, uncertain and subject to change, as theyinvolve substantial risks and uncertainties beyond our control. New factorsemerge from time to time, and it is not possible for us to predict the nature,or assess the potential impact, of each new factor on our business. Given theseuncertainties, we caution you not to place undue reliance on theseforward-looking statements. We undertake no obligation to update or revise anyof our forward-looking statements for events or circumstances that arise afterthe statement is made, except as otherwise may be required by law.

 

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**PART I**

 

**Item1.  Business**

 

**Background**

 

The Partnership wasformed on October 4, 1993, when Duke Realty Corporation (the “GeneralPartner”) contributed all of its properties and related assets and liabilities,along with the net proceeds of $309.2 million from the issuance of anadditional 14,000,833 shares of the General Partner through an offering to thePartnership. Simultaneously, the Partnership completed the acquisition of DukeAssociates, a full-service commercial real estate firm operating in theMidwest. The General Partner was formed in 1985 and qualifies as a REIT underprovisions of the Internal Revenue Code. The General Partner is the solegeneral partner of the Partnership, owning 94.9% of the common Partnershipinterest as of December 31, 2007 (“General Partner Units”). The remaining5.1% of the Partnership’s common interest is owned by limited partners (“LimitedPartner Units” and, together with the General Partner Units, the “Common Units”).The Limited Partner Units are exchangeable for shares of the General Partner’scommon stock on a one-for-one basis subject generally to a one-year holdingperiod, or under certain circumstances, the General Partner may repurchase theLimited Partner Units for cash. The General Partner also owns preferredpartnership interests in the Partnership (“Preferred Units”). As of December 31,2007, our diversified portfolio of 726 rental properties (including 38properties comprising 10.0 million square feet under development) encompassmore than 121.1 million rentable square feet and are leased by a diverse andstable base of more than 3,400 tenants whose businesses include manufacturing,retailing, wholesale trade, distribution, healthcare and professional services.We also own or control approximately 7,700 acres of unencumbered land ready fordevelopment.

 

Through our ServiceOperations, we provide, on a fee basis, leasing, property and asset management,development, construction, build-to-suit and other tenant-related services. SeeItem 7, “Management’s Discussion and Analysis of Financial Condition andResults of Operations” and Item 8, “Financial Statements and Supplementary Data”for financial information. Our Rental Operations are conducted through DukeRealty Limited Partnership (“DRLP”). In addition, we conduct our ServiceOperations through Duke Realty Services LLC, Duke Realty Services LimitedPartnership and Duke Construction Limited Partnership.  In this Form 10-K Report, the terms “we,”“us” and “our” refer to Duke Realty Limited Partnership and subsidiaries (the “Partnership”)and those entities owned or controlled by the Partnership.

 

Our headquarters andexecutive offices are located in Indianapolis, Indiana. In addition, we have 21regional offices located in Alexandria, Virginia; Atlanta, Georgia; Austin,Texas; Baltimore, Maryland; Cincinnati, Ohio; Columbus, Ohio; Chicago,Illinois; Dallas, Texas; Houston, Texas; Minneapolis, Minnesota; Nashville,Tennessee; Newport Beach, California; Orlando, Florida; Phoenix, Arizona;Raleigh, North Carolina; St. Louis, Missouri; San Antonio, Texas; Savannah,Georgia; Seattle, Washington; Tampa, Florida; and Weston, Florida. We hadapproximately 1,400 employees as of December 31, 2007.

 

**BusinessStrategy**

 

One of our primarybusiness objectives is to increase Funds From Operations (“FFO”) by (i) maintainingand increasing property occupancy and rental rates through the management ofour portfolio of existing properties; (ii) developing and acquiring newproperties for Rental Operations in our existing markets; (iii) expandinggeographically by acquiring and developing properties in new markets; (iv) usingour construction expertise to act as a general contractor in our existingmarkets and other domestic markets on a fee basis; (v) developing andrepositioning properties in our existing markets and other markets which wewill sell through our Service Operations property sale program and (vi) providinga full line of real estate services to our tenants and to third parties. FFO isused by industry analysts and investors as a supplemental operating performancemeasure of an equity REIT like our General Partner. FFO is calculated inaccordance with the definition that was adopted by the Board of Governors ofthe National Association of Real Estate Investment Trusts (“NAREIT”).  NAREIT created FFO as a supplemental measureof REIT operating performance that excludes historical cost depreciation, amongother items, from net income determined in accordance with United Statesgenerally accepted accounting principles (“GAAP”).  FFO is

 

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a non-GAAPfinancial measure developed by NAREIT to compare the operating performance ofREITs.  The most comparable GAAP measureis net income (loss).  FFO should not beconsidered as a substitute for net income or any other measures derived inaccordance with GAAP and may not be comparable to other similarly titledmeasures of other companies.

 

Historical costaccounting for real estate assets in accordance with GAAP implicitly assumesthat the value of real estate assets diminishes predictably over time. Sincereal estate values instead have historically risen or fallen with marketconditions, many industry analysts and investors have considered presentationof operating results for real estate companies that use historical costaccounting to be insufficient by themselves. FFO, as defined by NAREIT, represents GAAP net income (loss), excludingextraordinary items as defined under GAAP and gains or losses from sales ofpreviously depreciated real estate assets, plus certain non-cash items such asreal estate asset depreciation and amortization, and after similar adjustmentsfor unconsolidated partnerships and joint ventures.

 

Managementbelieves that the use of FFO, combined with the required primary GAAPpresentations, improves the understanding of operating results of REITs amongthe investing public and makes comparisons of REIT operating results moremeaningful.  Management believes FFO is auseful measure for reviewing comparative operating and financial performance(although FFO should be reviewed in conjunction with net income which remainsthe primary measure of performance) because by excluding gains or lossesrelated to sales of previously depreciated real estate assets and excludingreal estate asset depreciation and amortization, FFO provides a usefulcomparison of the operating performance of our real estate between periods oras compared to different companies.

 

As a fully integratedcommercial real estate firm, we provide in-house leasing, management,development and construction services which, coupled with our significant baseof commercially zoned and unencumbered land in existing business parks, shouldgive us a competitive advantage both as a real estate operator and in futuredevelopment activities.

 

We believe that themanagement of real estate opportunities and risks can be done most effectivelyat regional or local levels. As a result, we intend to continue our emphasis onincreasing our market share and effective rents in the primary markets where weown properties. We also expect to utilize approximately 7,700 acres ofunencumbered land and our many business relationships with our more than 3,400commercial tenants to expand our build-to-suit business (development projectssubstantially pre-leased to a single tenant) and to pursue other developmentand acquisition opportunities in our primary markets. We believe that thisregional focus will allow us to assess market supply and demand for real estatemore effectively as well as to capitalize on the strong relationships with ourtenant base. In addition, we seek to further capitalize on strong customerrelationships to provide third-party construction and build-for-sale servicesoutside our primary markets and to expand into high growth and seaport marketsacross the United States.

 

Our strategy is to seekto develop and acquire primarily Class A commercial properties located inmarkets with high growth potential for large national and internationalcompanies and other quality regional and local firms. Our industrial andsuburban office development focuses on business parks and mixed-usedevelopments suitable for multiple projects on a single site where we can createand control the business environment. These business parks and mixed-usedevelopments often include restaurants and other amenities, which we believewill create an atmosphere that is particularly efficient and desirable. As afully integrated real estate company, we are able to arrange for or provide toour industrial, office and healthcare customers not only well located and wellmaintained facilities, but also additional services such as build-to-suitconstruction, tenant finish construction, and expansion flexibility.

 

All of our properties arelocated in areas that include competitive properties. Institutional investors,other REITs or local real estate operators generally own such properties;however, no single competitor or small group of competitors is dominant in ourcurrent markets. The supply and demand of similar available rental propertiesmay affect the rental rates we will receive on our properties.

 

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**FinancingStrategy**

 

We seek to maintain a well-balanced,conservative and flexible capital structure by: (i) extending andsequencing the maturity dates of debt; (ii) borrowing primarily at fixedrates by targeting a variable rate component of total debt less than 20%; (iii) pursuingcurrent and future long-term debt financings and refinancing on an unsecuredbasis;  (iv) maintainingconservative debt service and fixed charge coverage ratios; (v) generatingproceeds from the sale of non-strategic properties and (vi) issuingperpetual preferred equity for 5-10% of our total capital structure.

 

Management believes thatthese strategies have enabled and should continue to enable us to favorablyaccess capital markets for our long-term requirements such as debt refinancingand financing development and acquisitions of additional rental properties. Inaddition, as discussed under Item 7, “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations,” we have a $1.3 billionunsecured line of credit available for short-term funding of development andacquisition of additional rental properties. Further, we pursue favorableopportunities to dispose of assets that no longer meet our long-term investmentcriteria and recycle the proceeds into new investments that we believe haveexcellent long-term growth prospects. The General Partner’s debt to totalmarket capitalization ratio (total market capitalization is defined as thetotal market value of all outstanding Common Units and Preferred Units plusoutstanding indebtedness) at December 31, 2007 was 48.4%. Our ratio ofearnings to debt service and ratio of earnings to fixed charges for the yearended December 31, 2007 were 1.58x and 1.47x, respectively. In computingthe ratio of earnings to debt service, earnings have been calculated by addinginterest expense (excluding amortization of debt issuance costs) to income fromcontinuing operations, less preferred distributions. Debt service consists ofinterest expense and recurring principal amortization (excluding maturities)and excludes amortization of debt issuance costs. In computing the ratio ofearnings to fixed charges, earnings have been calculated by adding interestexpense to income from continuing operations. Fixed charges consist of interestcosts, whether expensed or capitalized, the interest component of rentalexpense and amortization of debt issuance costs.

 

**CorporateGovernance**

 

As a limited partnershipthat has one general partner owning over 90% of the Partnership’s commoninterest, the governance of the Partnership is necessarily linked to thecorporate governance of the General Partner. The General Partner has been andcontinues to be a leader in issues important to investors such as disclosureand corporate governance initiatives. Summarized below are the highlights of theGeneral Partner’s Corporate Governance initiatives.

 
| ** Board Composition** |   | ·      The General Partner’s Board is controlled  by supermajority (91.7%) of Independent Directors as of January 30, 2008  and thereafter                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|-----------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| ** Board Committees**  |   | ·      The General Partner’s Board Committee  members are all Independent Directors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| ** **                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| ** Lead Director**     |   | ·      The Chairman of the Corporate Governance  Committee serves as Lead Director of the General Partner’s Independent  Directors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| ** **                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| ** Board Policies**    |   | ·      No Shareholder Rights Plan (Poison Pill)

·      Code of Conduct applies to all Directors of  the General Partner and employees, including the Chief Executive Officer and  senior financial officers; waivers require the vote of the General Partner’s  Independent Directors  

·      Effective orientation program for new  Directors of the General Partner  

·      Independence of Directors of the General  Partner is reviewed annually  

·      Independent Directors of the General  Partner meet at least quarterly in executive session

  |

 

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| ** ** |   | ·      Independent  Directors of the General Partner receive no compensation from the General  Partner or Partnership other than as Directors

·      Equity-based compensation plans require the  General Partner’s shareholder approval

·      Board effectiveness and performance is  reviewed annually by the General Partner’s Corporate Governance Committee

·      The General Partner’s Corporate Governance  Committee conducts an annual review of the General Partner’s Chief Executive  Officer succession plan

·      Independent Directors of the General  Partner and all Board Committees may retain outside advisors, as they deem  appropriate

·      Policy governing retirement age for  Directors of the General Partner

·      Outstanding stock options of the General  Partner may not be repriced

·      Directors of the General Partner required  to offer resignation upon job change

·      Majority voting for election of Directors of the General Partner |
|------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** ** |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

 
| **Ownership** | Minimum Stock Ownership  Guidelines apply to all Directors and Executive Officers of the General  Partner |
|---------------|-----------------------------------------------------------------------------------------------------------|

 

The General Partner’sCode of Conduct (which applies to all Directors of the General Partner andemployees, including the Chief Executive Officer and senior financial officers)and the Corporate Governance Guidelines are available in the investorinformation/corporate governance section of the General Partner’s website atwww.dukerealty.com. A copy of these documents may also be obtained withoutcharge by writing to Duke Realty Corporation, 600 East 96th Street, Suite 100,Indianapolis, Indiana 46240, Attention: Investor Relations.

 

**AdditionalInformation**

 

For additional informationregarding our investments and operations, see Item 7, “Management’s Discussionand Analysis of Financial Condition and Results of Operations,” and Item 8, “FinancialStatements and Supplementary Data.” For additional information about our businesssegments, see Item 8, “Financial Statements and Supplementary Data.”

 

**AvailableInformation and Exchange Certifications**

 

In addition to thisAnnual Report, we file quarterly and special reports, proxy statements andother information with the Securities and Exchange Commission (the “SEC”). Alldocuments that are filed with the SEC are available free of charge on theGeneral Partner’s corporate website at www.dukerealty.com. You may also readand copy any document filed at the public reference facilities of the SEC at100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at (800)SEC-0330 for further information about the public reference facilities. Thesedocuments also may be accessed through the SEC’s electronic data gathering,analysis and retrieval system (“EDGAR”) via electronic means, including the SEC’shome page on the Internet (http://www.sec.gov). In addition, since some ofthe General Partner’s  securities arelisted on the New York Stock Exchange, you may read SEC filings at the officesof the New York Stock Exchange, 20 Broad Street, New York, New York 10005.

 

The New York StockExchange (“NYSE”) requires that the Chief Executive Officer of each listedcompany certify annually to the NYSE that he or she is not aware of anyviolation by the company of NYSE corporate governance listing standards as ofthe date of such certification. The General Partner submitted the certificationof its Chairman and Chief Executive Officer, Dennis D. Oklak, with its 2007Annual Written Affirmation to the NYSE on May 16, 2007.

 

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The General Partnerincluded the certifications of its Chief Executive Officer and its ChiefFinancial Officer required by Section 302 of the Sarbanes-Oxley Act of2002 and related rules, relating to the quality of the General Partner’s publicdisclosure, in this report as Exhibits 31.1 and 31.2.

 

**Item 1A.  Risk Factors**

 

Inaddition to the other information contained in this Report, you shouldcarefully consider, in consultation with your legal, financial and otherprofessional advisors, the risks described below, as well as the risk factorsand uncertainties discussed in our other public filings with the SEC under thecaption “Risk Factors” in evaluating us and our business before making adecision regarding an investment in the General Partner’s securities.

 

Therisks contained in this Report are not the only risks faced by us. Additionalrisks that are not presently known, or that we presently deem to be immaterial,also could have a material adverse effect on our financial condition, resultsof operations, business and prospects. The trading price of the General Partner’ssecurities could decline due to the materialization of any of these risks, andour unitholders may lose all or part of their investment.

 

ThisReport also contains forward-looking statements that may not be realized as aresult of certain factors, including, but not limited to, the risks describedherein and in our other public filings with the SEC. Please refer to thesection in this Report entitled “Cautionary Notice Regarding Forward-LookingStatements” for additional information regarding forward-looking statements.

 

**If the General Partner were to cease to qualify as a REIT,the General Partner and its shareholders would lose significant tax benefits.**

 

The General Partner intends to continue tooperate so as to qualify as a REIT under the Internal Revenue Code of 1986, asamended (the “Code”). Qualification as a REIT provides significant taxadvantages to the General Partner and its shareholders. However, in order forthe General Partner to continue to qualify as a REIT, it must satisfy numerousrequirements established under highly technical and complex Code provisions forwhich there are only limited judicial and administrative interpretations.Satisfaction of these requirements also depends on various factualcircumstances not entirely within the General Partner’s control. The fact thatthe General Partner holds its assets throughus further complicates the application of the REIT requirements. Even atechnical or inadvertent mistake could jeopardize the General Partner’s REITstatus. Although the General Partner believes that it can continue to operateso as to qualify as a REIT, we cannot offer any assurance that it can continueto do so or that legislation, new regulations, administrative interpretationsor court decisions will not significantly change the qualification requirementsor the federal income tax consequences of qualification. If the General Partnerwere to fail to qualify as a REIT in any taxable year, it would have thefollowing effects:

 

·      TheGeneral Partner would not be allowed a deduction for distributions to itsshareholders and would be subject to federal income tax (including anyapplicable alternative minimum tax) on its taxable income at regular corporaterates;

 

·      Unlessthe General Partner was entitled to relief under certain statutory provisions,it would be disqualified from treatment as a REIT for the four taxable yearsfollowing the year during which it ceased to qualify as a REIT;

 

·      TheGeneral Partner’s net earnings available for investment or distribution to itsshareholders would decrease due to the additional tax liability for the year oryears involved; and

 

·      TheGeneral Partner would no longer be required to make any distributions toshareholders in order to qualify as a REIT.

 

Assuch, the General Partner’s failure to qualify as a REIT would likely have asignificant adverse effect on the value of the General Partner’s securitiesand, consequently, the Partnership’s Units.

 

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**REIT distribution requirements limit the amount of cash wewill have available for other business purposes, including amounts that we needto fund our future growth.**

 

Tomaintain its qualification as a REIT under the Code, the General Partner mustannually distribute to its shareholders at least 90% of its ordinary taxableincome, excluding net capital gains. The General Partner intends to continue tomake distributions to its shareholders to comply with the 90% distributionrequirement. However, this requirement limits the General Partner’s ability toaccumulate capital for use for other business purposes. If the General Partnerdoes not have sufficient cash or other liquid assets to meet the distributionrequirements, it may have to borrow funds or sell properties on adverse termsin order to meet the distribution requirements. If the General Partner fails tomake a required distribution, it would cease to qualify as a REIT.

 

**U.S. federal income tax developments could affect thedesirability of investing in the General Partner for individual taxpayers.**

 

InMay 2003, federal legislation was enacted that reduced the maximum taxrate for dividends payable to individual taxpayers generally from 38.6% to 15%(from January 1, 2003 through 2008). However, dividends payable by REITsare not eligible for this treatment, except in limited circumstances. Althoughthis legislation did not have a direct adverse effect on the taxation of REITsor dividends paid by REITs, the more favorable treatment for non-REIT dividendscould cause individual investors to consider investments in non-REITcorporations as more attractive relative to an investment in the GeneralPartner as a REIT.

 

**U.S. federal income tax treatment of REITs and investments inREITs may change, which may result in the loss of the General Partner’s taxbenefits of operating as a REIT.**

 

Thepresent U.S. federal income tax treatment of a REIT and an investment in a REITmay be modified by legislative, judicial or administrative action at any time.Revisions in U.S. federal income tax laws and interpretations of these lawscould adversely affect us and the General Partner and the tax consequences ofan investment in the General Partner’s common shares.

 

**Our net earnings available for investment or distribution tounitholders could decrease as a result of factors outside of our control.**

 

Ourbusiness is subject to the risks incident to the ownership and operation ofcommercial real estate, many of which involve circumstances not within ourcontrol. Such risks include the following:

 

·      Changesin the general economic climate;

 

·      Increasesin interest rates;

 

·      Localconditions such as oversupply of property or a reduction in demand;

 

·      Competitionfor tenants;

 

·      Changesin market rental rates;

 

·      Oversupplyor reduced demand for space in the areas where our properties are located;

 

·      Delayor inability to collect rent from tenants who are bankrupt, insolvent orotherwise unwilling or unable to pay;

 

·      Difficultyin leasing or re-leasing space quickly or on favorable terms;

 

·      Costsassociated with periodically renovating, repairing and reletting rental space;

 

·      Ourability to provide adequate maintenance and insurance on our properties;

 

·      Ourability to control variable operating costs;

 

·      Changesin government regulations;

 

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·      Changesin interest rate levels;

 

·      Theavailability of financing on favorable terms; and

 

·      Potentialliability under, and changes in, environmental, zoning, tax and other laws.

 

Further,a significant portion of our costs, such as real estate taxes, insurance andmaintenance costs and our debt service payments, are generally not reduced whencircumstances cause a decrease in cash flow from our properties.

 

**Many real estate costs are fixed, even if income from propertiesdecreases.**

 

Ourfinancial results depend on leasing space in our real estate to tenants onterms favorable to us. Our income and funds available for distribution to ourunitholders will decrease if a significant number of our tenants cannot pay theirrent or we are unable to lease properties on favorable terms. In addition, if atenant does not pay its rent, we may not be able to enforce our rights aslandlord without delays and we may incur substantial legal costs. Costsassociated with real estate investment, such as real estate taxes andmaintenance costs, generally are not reduced when circumstances cause areduction in income from the investment.

 

**Our real estate development activities are subject to risksparticular to development.**

 

We intend to continue topursue development activities as opportunities arise. These developmentactivities generally require various government and other approvals. We may notreceive the necessary approvals. We are subject to the risks associated withdevelopment activities. These risks include:

 

·      Unsuccessfuldevelopment opportunities could result in direct expenses to us;

 

·      Constructioncosts of a project may exceed original estimates, possibly making the projectless profitable than originally estimated, or possibly unprofitable;

 

·      Timerequired to complete the construction of a project or to lease up the completedproject may be greater than originally anticipated, thereby adversely affectingour cash flow and liquidity;

 

·      Occupancyrates and rents of a completed project may not be sufficient to make theproject profitable; and

 

·      Favorablesources to fund our development activities may not be available.

 

**We are exposed to risks associated with entering new markets.**

 

Weconsider entering new markets from time to time. The construction and/or acquisitionof properties in new markets involves risks, including the risk that theproperty will not perform as anticipated and the risk that any actual costs forrehabilitation, repositioning, renovation and improvements identified in thepre-construction or pre-acquisition due diligence process will exceedestimates. There is, and it is expected that there will continue to be,significant competition for investment opportunities that meet our investmentcriteria as well as risks associated with obtaining financing for acquisitionactivities, if necessary.

 

**We may be unsuccessful in operating completed real estateprojects.**

 

Weface the risk that the real estate projects we develop or acquire will notperform in accordance with our expectations. This risk exists because offactors such as the following:

 

·      Pricespaid for acquired facilities are based upon a series of market judgments; and

 

·      Costsof any improvements required to bring an acquired facility up to standards toestablish the market position intended for that facility might exceed budgetedcosts.

 

Further, we can give no assurance thatacquisition targets meeting our guidelines for quality and yield will beavailable when we seek them.

 

8

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**Our use of joint ventures maylimit our flexibility with jointly owned investments.**

 

In appropriate circumstances, we intend todevelop and acquire properties in joint ventures with other persons or entitieswhen circumstances warrant the use of these structures. We currently have jointventures that are not consolidated with our financial statements.  Our participation in joint ventures issubject to the risks that:

 

·      Wecould become engaged in a dispute with any of our joint venture partners thatmight affect our ability to develop or operate a property;

 

·      Ourjoint venture partners may have different objectives than we have regarding theappropriate timing and terms of any sale or refinancing of properties; and

 

·      Ourjoint venture partners may have competing interests in our markets that couldcreate conflict of interest issues.

 

**We are exposed to the risks of defaults by tenants.**

 

Anyof our tenants may experience a downturn in their businesses that may weakentheir financial condition. In the event of default or the insolvency of asignificant number of our tenants, we may experience a substantial loss ofrental revenue and/or delays in collecting rent and incur substantial costs inenforcing our rights as landlord. If a tenant files for bankruptcy protection,a court could allow the tenant to reject and terminate its lease with us. Ourincome and distributable cash flow would be adversely affected if a significantnumber of our tenants became unable to meet their obligations to us, becameinsolvent or declared bankruptcy.

 

**We may be unable to renew leases or relet space.**

 

Whenour tenants decide not to renew their leases upon their expiration, we may notbe able to relet the space. Even if our tenants do renew or we are able torelet the space, the terms of renewal or reletting (including the cost ofrenovations, if necessary) may be less favorable than current lease terms. Ifwe are unable to promptly renew the leases or relet the space, or if the rentalrates upon such renewal or reletting are significantly lower than currentrates, then our income and distributable cash flow would be adversely affected,especially if we were unable to lease a significant amount of the space vacatedby tenants in our properties.

 

**Our insurance coverage on our properties may be inadequate.**

 

Wemaintain comprehensive insurance on each of our facilities, including property,liability, fire, flood and extended coverage. We believe this coverage is ofthe type and amount customarily obtained for real property. However, there arecertain types of losses, generally of a catastrophic nature, such asearthquakes, hurricanes and floods or acts of war or terrorism that may beuninsurable or not economically insurable. We use our discretion whendetermining amounts, coverage limits and deductibles for insurance. These termsare determined based on retaining an acceptable level of risk at a reasonablecost. This may result in insurance coverage that in the event of a substantialloss would not be sufficient to pay the full current market value or currentreplacement cost of our lost investment. Inflation, changes in building codesand ordinances, environmental considerations and other factors also may make itunfeasible to use insurance proceeds to replace a facility after it has beendamaged or destroyed. Under such circumstances, the insurance proceeds wereceive may not be adequate to restore our economic position in a property. Ifan insured loss occurred, we could lose both our investment in and anticipatedprofits and cash flow from a property, and we would continue to be obligated onany mortgage indebtedness or other obligations related to the property.Although we believe our insurance is with highly rated providers, we are alsosubject to the risk that such providers may be unwilling or unable to pay ourclaims when made.

 

9

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**Acquired properties may expose us to unknown liability.**

 

Fromtime to time, we may acquire properties subject to liabilities and without anyrecourse, or with only limited recourse, with respect to unknown liabilities. As a result, if a liability were asserted against us based upon ownership ofthose properties, we might have to pay substantial sums to settle or contestit, which could adversely affect our results of operations and cash flow.Unknown liabilities with respect to acquired properties might include:

 

·      liabilitiesfor clean-up of undisclosed environmental contamination;

 

·      claimsby tenants, vendors or other persons against the former owners of theproperties;

 

·      liabilitiesincurred in the ordinary course of business; and

 

·      claimsfor indemnification by general partners, directors, officers and othersindemnified by the former owners of the properties.

 

**We could be exposed to significant environmental liabilitiesas a result of conditions of which we currently are not aware.**

 

Asan owner and operator of real property, we may be liable under various federal,state and local laws for the costs of removal or remediation of certainhazardous substances released on or in our property. Such laws often impose liabilitywithout regard to whether the owner or operator knew of, or was responsiblefor, the release of the hazardous substances. In addition, we could havegreater difficulty in selling real estate on which hazardous substances werepresent or in obtaining borrowings using such real estate as collateral. It isour general policy to have Phase I environmental audits performed for all ofour properties and land by qualified environmental consultants. These Phase Ienvironmental audits have not revealed any environmental liability that wouldhave a material adverse effect on our business. However, a Phase Ienvironmental audit does not involve invasive procedures such as soil samplingor ground water analysis, and we cannot be sure that the Phase I environmentalaudits did not fail to reveal a significant environmental liability or that aprior owner did not create a material environmental condition on our propertiesor land which has not yet been discovered. We could also incur environmentalliability as a result of future uses or conditions of such real estate orchanges in applicable environmental laws.

 

**The General Partner may not have the same interests as theowners of Limited Partnership Units with regard to certain tax matters.**

 

TheGeneral Partner may have different objectives than the owners of LimitedPartnership Units regarding the appropriateness of the pricing and timing ofcertain transactions, including, without limitation, the sale of certain of ourproperties, the refinancing of debt related to those properties or in the eventthe General Partner is the subject of a tender offer or merger.  The General Partner is the sole generalpartner of the Partnership and has the exclusive authority to sell all of our wholly-ownedproperties or to refinance such properties. In certain circumstances, the General Partner may take actions that itdetermines will be financially advantageous to the General Partner'sshareholders, but that may result in adverse tax consequences to the owners ofLimited Partnership Units.

 

**Our use of debt financing could have a material adverseeffect on our financial condition.**

 

Weare subject to the risks normally associated with debt financing, including therisk that our cash flow will be insufficient to meet required principal andinterest payments and the risk that we will be unable to  refinance our existing indebtedness, or thatthe terms of such refinancing will not be as favorable as the terms of ourexisting indebtedness. If our debt cannot be paid, refinanced or extended, wemay not be able to make distributions to unitholders at expected levels or atall. Further, if prevailing interest rates or other factors at

 

10

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thetime of a refinancing result in higher interest rates or other restrictivefinancial covenants upon the refinancing, then such refinancing would adverselyaffect our cash flow and funds available for operation, development anddistribution. We are also subject to financial covenants under our existingdebt instruments. Should we fail to comply with the covenants in our existingdebt instruments, then we would not only be in breach under the applicable debtinstruments but we would also likely be unable to borrow any further amountsunder these instruments, which could adversely affect our ability to fundoperations. We also have incurred and may incur in the future indebtedness thatbears interest at variable rates. Thus, as market interest rates increase, sowill our debt expense, affecting our cash flow and our ability to makedistributions to unitholders.

 

**Financial covenants under existing credit agreements couldlimit our flexibility and adversely affect our financial condition.**

 

Theterms of our various credit agreements and other indebtedness require that wecomply with a number of customary financial and other covenants, such asmaintaining debt service coverage and leverage ratios and maintaining insurancecoverage. These covenants may limit our flexibility in our operations, andbreaches of these covenants could result in defaults under the instrumentsgoverning the applicable indebtedness even if we have satisfied our paymentobligations.  If we are unable to refinance our indebtedness at maturityor meet our payment obligations, the amount of our distributable cash flowwould be adversely affected.

 

**Debtfinancing may not be available and equity issuances could be dilutive to thePartnership’s unitholders.**

 

ThePartnership’s ability to execute its business strategy depends on its access toan appropriate blend of debt financing, including unsecured lines of credit andother forms of secured and unsecured debt, and equity financing, includingcommon and preferred equity. Debt financing may not be available in sufficientamounts, or on favorable terms or at all. If the General Partner issues additional equity securities to financedevelopments and acquisitions instead of incurring debt, the interests ofexisting unitholders could be diluted.

 

**OurGeneral Partner’s stock price and trading volume may be volatile, which couldresult in substantial losses to our unitholders.**

 

Theequity securities markets have from time to time experienced volatility,creating highly variable and unpredictable pricing of equity securities. Themarket price of our General Partner’s capital stock could change in ways thatmay or may not be related to our business, our industry or our operatingperformance and financial condition. In addition, the trading volume in ourGeneral Partner’s common stock may fluctuate and cause significant pricevariations to occur. Some of the factors that could negatively affect theGeneral Partner’s share price or result in fluctuations in the price or tradingvolume of our General Partner’s common stock include recent uncertainty in themarkets, general market and economic conditions, as well as those factorsdescribed in these “Risk Factors” and in other reports that we file with theSEC.

 

Manyof these factors are beyond our control, and we cannot predict their potentialeffects on the price of our General Partner’s securities. If the market priceof our General Partner’s securities decline, then our unitholders may be unableto resell their securities upon terms that are attractive to them. We cannotassure that the market price of our General Partner’s securities will notfluctuate or decline significantly in the future. In addition, the securitiesmarkets in general can experience considerable unexpected price and volumefluctuations.

 

**We, or our General Partner, may issue debt and equitysecurities which are senior to our General Partner’s common stock and preferredstock as to distributions and in liquidation, which could negatively affect thevalue of our Units and our General Partner’s preferred stock.**

 

Inthe future, we or our General Partner may attempt to increase our capitalresources by entering into debt or debt-like financing that is unsecured orsecured by certain of our assets, or issuing debt or equity securities, whichcould include issuances of secured or unsecured commercial paper, medium-termnotes, senior notes,

 

11

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subordinatednotes, preferred stock or common stock. In the event of our liquidation, ourlenders and holders of our debt securities would receive a distribution of ouravailable assets before distributions to the holders of our Common Units and PreferredUnits. Our General Partner’s preferred stock has a preference over our Common Unitswith respect to distributions and upon liquidation, which could further limitour ability to make distributions to our unitholders. Any additional preferredstock that our General Partner may issue may have a preference over our Common Unitsand existing series of Preferred Units with respect to distributions and uponliquidation.

 

Ourleverage strategy may require us to seek substantial amounts of commercialcredit and issue debt securities to support our asset growth. Because our, orour General Partner’s, decision to incur debt and issue securities in ourfuture offerings will depend on market conditions and other factors beyond ourcontrol, we cannot predict or estimate the amount, timing or nature of ourfuture offerings and debt financings. Further, market conditions could requireus, or our General Partner, to accept less favorable terms for the issuance ofsecurities in the future. Thus, our unitholders will bear the risk of ourfuture offerings reducing the value of their Units and diluting their interestin us. We may change this leverage strategy from time to time without obtainingapproval from the General Partner’s shareholders.

 

**If we are unable to generate sufficient capital andliquidity, then we may be unable to pursue future development projects andother strategic growth initiatives.**

 

Tocomplete our ongoing and planned development projects, and to pursue our otherstrategic growth initiatives, we must continue to generate sufficient capitaland liquidity to fund those activities. To generate that capital and liquidity,we rely upon funds from our existing operations, as well as funds that we raisethrough our capital raising activities. In the current economic environment,REITs like our General Partner have faced earnings pressures that have made itmore difficult to generate capital and liquidity from existing operations. Inaddition, due to the recent crises in the credit and liquidity markets, it hasbecome increasingly difficult to raise capital and generate liquidity throughthe sale of equity and/or debt securities on favorable terms, if at all. In theevent that we are unable to generate sufficient capital and liquidity to meetour short- and long-term needs, or if we are unable to generate capital andliquidity on terms that are favorable to us, then we may be required to curtailour proposed development projects, as well as our other strategic and growthinitiatives.

 

**We are subject to certain provisions that could discouragechange-of-control transactions, which may reduce the likelihood of the GeneralPartner’s shareholders receiving a control premium for their shares.**

 

Indianaanti-takeover legislation and certain provisions in our governing documents, aswe discuss below, may discourage potential acquirers from pursuing achange-of-control transaction with us. As a result, the General Partner’s shareholdersmay be less likely to receive a control premium for their shares.

 

*Unissued Preferred Stock.*  TheGeneral Partner’s charter permits its board of directors to classify unissuedpreferred stock by setting the rights and preferences of the shares at the timeof issuance. This power enables the General Partner’s board to adopt ashareholder rights plan, also known as a poison pill. Although the GeneralPartner has repealed its previously existing poison pill and its current boardof directors has adopted a policy not to issue preferred stock as ananti-takeover measure, the General Partner’s board can change this policy atany time. The adoption of a poison pill would discourage a potential bidderfrom acquiring a significant position at the General Partner without theapproval of its board.

 

*Business-Combination Provisions of Indiana Law.*  Wehave not opted out of the business-combination provisions of the IndianaBusiness Corporation Law. As a result, potential bidders may have to negotiatewith the General Partner’s board of directors before acquiring 10% of itsstock. Without securing board approval of the proposed business combinationbefore crossing the 10% ownership threshold, a bidder would not be permitted tocomplete a business combination for five years after becoming a 10%shareholder. Even after the five-year period, a business combination with thesignificant shareholder would require a “fair price” as defined in the IndianaBusiness Corporation Law or the approval of a majority of the disinterestedshareholders.

 

12

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*Control-Share-Acquisition Provisions of Indiana Law.* We have not opted out of the provisions of the Indiana Business Corporation Lawregarding acquisitions of control shares. Therefore, those who acquire asignificant block (at least 20%) of the General Partner’s shares may only votea portion of their shares unless its other shareholders vote to accord fullvoting rights to the acquiring person. Moreover, if the other shareholders voteto give full voting rights with respect to the control shares and the acquiringperson has acquired a majority of the General Partner’s outstanding shares, theother shareholders would be entitled to special dissenters’ rights.

 

*Supermajority Voting Provisions.*  The General Partner’s charter prohibits business combinations or significantdisposition transactions with a holder of 10% of its shares unless:

 

·      Theholders of 80% of the General Partner’s outstanding shares of capital stockapprove the transaction;

 

·      Thetransaction has been approved by three-fourths of those directors who served onthe General Partner’s board before the shareholder became a 10% owner; or

 

·      Thesignificant shareholder complies with the “fair price” provisions of theGeneral Partner’s charter.

 

Amongthe transactions with large shareholders requiring the supermajorityshareholder approval are dispositions of assets with a value of greater than orequal to $1,000,000 and business combinations.

 

*Partnership Provisions.*  The limited partnership agreement of the Partnership contains provisions thatcould discourage change-of-control transactions, including a requirement thatholders of at least 90% of the Common Units approve:

 

·      Anyvoluntary sale, exchange, merger, consolidation or other disposition of all orsubstantially all of the assets of the Partnership in one or more transactionsother than a disposition occurring upon a financing or refinancing of thePartnership;

 

·      TheGeneral Partner’s merger, consolidation or other business combination withanother entity unless after the transaction substantially all of the assets ofthe surviving entity are contributed to the Partnership in exchange for units;

 

·      TheGeneral Partner’s transfer of its interests in the Partnership other than toone of its wholly owned subsidiaries; and

 

·      Anyreclassification or recapitalization or change of outstanding shares of theGeneral Partner’s common stock other than certain changes in par value, stocksplits, stock dividends or combinations.

 

**We are dependent on key personnel.**

 

TheGeneral Partner’s executive officers and other senior officers have asignificant role in the success of the Partnership. Our ability to retain ourmanagement group or to attract suitable replacements should any members of themanagement group leave the General Partner is dependent on the competitivenature of the employment market. The loss of services from key members of themanagement group or a limitation in their availability could adversely impactour financial condition and cash flow. Further, such a loss could be negativelyperceived in the capital markets.

 

**Item1B.  Unresolved Staff Comments**

 

The Partnership has no unresolved comments with the SEC staff regarding its periodic or current reports under theExchange Act.

 

13

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**Item2.  Properties**

 

**ProductReview**

 

As of December 31,2007, we own interests in a diversified portfolio of 726 commercial propertiesencompassing more than 121.1 million net rentable square feet (including 38properties comprising 10.0 million square feet under development) andapproximately 7,700 acres of land for future development.

 

**IndustrialProperties:** We own interests in 411 industrial propertiesencompassing more than 84.6 million square feet (70% of total square feet) morespecifically described as follows:

·      **Bulk Warehouses –**Industrial warehouse/distributionbuildings with clear ceiling heights of 20 feet or more. We own 358 buildingstotaling approximately 81.2 million square feet of such properties.

·      **Service Center Properties –** Also known as flex buildings orlight industrial, this product type has 12-18 foot clear ceiling heights and acombination of drive-up and dock-height loading access. We own 53 buildingstotaling approximately 3.5 million square feet of such properties.

 

**OfficeProperties:**  We owninterests in 295 office buildings totaling approximately 34.4 million squarefeet (28% of total square feet). These properties include primarily suburbanoffice properties.

 

**OtherProperties:**  We owninterests in 20 healthcare and retail buildings totaling more than 2.1 millionsquare feet (2% of total square feet).

 

**Land:**  Weown or control approximately 7,700 acres of land located primarily in existingbusiness parks. The land is ready for immediate use and is unencumbered. Morethan 113 million square feet of additional space can be developed on thesesites and substantially all of the land is zoned for either office, industrial,healthcare or retail development.

 

**Property Descriptions**

 

The following schedulerepresents the geographic highlights of properties in our primary markets.

 

14

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**Duke Realty Limited Partnership**

**Geographic Highlights**

**In Service Properties as of December 31,2007**

 
|            |    | Square Feet (1) |       |                 |       | Percent of |
|-----------------|---------|---------------------------|------------|----------------------|------------|-----------------|
|            |    |                      |       |                 |       |            |   |   |   |   |   | Annual Net |   | Annual Net |
|            |    |                      |       |                 |       |            |   |   |   | Percent of |   | Effective |   | Effective |
|            |    | Industrial                |       | Suburban Office |       | Other           |   | Overall |   | Overall |   | Rent (2) |   | Rent |   |
| Primary Market  |    |                      |       |                 |       |            |   |   |   |   |   |   |   |   |   |
|            |    |                      |       |                 |       |            |   |   |   |   |   |   |   |   |   |
| Cincinnati      |    | 10,437,397                |       | 4,776,368            |       | 826,597         |   | 16,040,362 |   | 14.44% |   | $  84,968,472 |   | 13.57 | % |
| Indianapolis    |    | 18,016,702                |       | 2,977,170            |       | 26,352          |   | 21,020,224 |   | 18.91% |   | 80,951,114 |   | 12.94 | % |
| Atlanta         |    | 8,142,383                 |       | 3,942,600            |       | 389,659         |   | 12,474,642 |   | 11.22% |   | 74,272,067 |   | 11.87 | % |
| Chicago         |    | 5,565,486                 |       | 2,829,398            |       | 74,901          |   | 8,469,785 |   | 7.62% |   | 60,403,525 |   | 9.65 | % |
| St. Louis       |    | 3,937,813                 |       | 3,311,455            |       |            | - |   | 7,249,268 |   | 6.52% |   | 56,036,367 |   | 8.95 | % |
| Columbus        |    | 3,561,480                 |       | 3,321,971            |       |            | - |   | 6,883,451 |   | 6.19% |   | 47,889,436 |   | 7.65 | % |
| Raleigh         |    | 2,001,449                 |       | 2,697,713            |       |            | - |   | 4,699,162 |   | 4.23% |   | 44,088,142 |   | 7.05 | % |
| Central Florida |    | 3,360,479                 |       | 1,464,140            |       |            | - |   | 4,824,619 |   | 4.34% |   | 32,879,249 |   | 5.25 | % |
| Nashville       |    | 3,118,718                 |       | 1,319,788            |       |            | - |   | 4,438,506 |   | 3.99% |   | 29,246,865 |   | 4.67 | % |
| Minneapolis     |    | 3,575,125                 |       | 1,067,811            |       |            | - |   | 4,642,936 |   | 4.18% |   | 28,454,791 |   | 4.55 | % |
| Dallas          |    | 9,182,858                 |       | 152,000              |       |            | - |   | 9,334,858 |   | 8.40% |   | 22,636,638 |   | 3.62 | % |
| Savannah        |    | 4,393,700                 |       |                 | -          |            |   | - |   | 4,393,700 |   | 3.95% |   | 14,835,584 |   | 2.37 | % |
| Cleveland       |    |                      | -          |                 | 1,324,367  |            |   | - |   | 1,324,367 |   | 1.19% |   | 14,750,841 |   | 2.36 | % |
| Washington DC   | 654,918 |                      | 2,265,750  |                 |       | -               |   | 2,920,668 |   | 2.63% |   | 14,265,333 |   | 2.28 | % |
| South Florida   |    |                      | -          |                 | 773,923    |            |   | - |   | 773,923 |   | 0.70% |   | 8,690,496 |   | 1.39 | % |
| Norfolk         |    | 466,000                   |       |                 | -          |            |   | - |   | 466,000 |   | 0.42% |   | 2,290,177 |   | 0.37 | % |
| Seattle         |    | 120,000                   |       |                 | -          |            |   | - |   | 120,000 |   | 0.11% |   | 2,160,000 |   | 0.35 | % |
| Houston         |    | 172,000                   |       | 159,175              |       |            | - |   | 331,175 |   | 0.30% |   | 1,584,000 |   | 0.25 | % |
| Other (3)       |    | 436,139                   |       |                 | -          |            | 294,968 |   | 731,107 |   | 0.66% |   | 5,381,105 |   | 0.86 | % |
|            |    |                      |       |                 |       |            |   |   |   |   |   |   |   |   |   |   |
| Total           |    | 77,142,647                |       | 32,383,629           |       | 1,612,477       |   | 111,138,753 |   | 100.00% |   | $ 625,784,202 |   | 100.00 | % |
|            |    | ** **                | ** ** | ** **           | ** ** | ** **      |   | ** ** | ** ** |   |   |   |   |   |   |
|            |    | **69.41%**                | ** ** | **29.14%**           | ** ** | **1.45%**       |   | **100.00%** | ** ** |   |   |   |   |   |   |
|                 |         |                           |            |                      |            |                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 
|            |   | Occupancy% |
|-----------------|--------|------------|
|            |   |       |
|            |   |       | Industrial |   | Suburban Office |   | Other |   | Overall |   |
| Primary Market  |   |       |   |   |   |   |   |   |   |
|            |   |       |   |   |   |   |   |   |   |
| Cincinnati      |   | 90.96      | % | 90.41 | % | 94.70 | % | 90.98 | % |
| Indianapolis    |   | 95.39      | % | 95.81 | % | 81.03 | % | 95.43 | % |
| Atlanta         |   | 94.25      | % | 93.38 | % | 81.41 | % | 93.57 | % |
| Chicago         |   | 97.69      | % | 94.61 | % | 96.79 | % | 96.65 | % |
| St. Louis       |   | 85.88      | % | 91.24 | % | - |   | 88.33 | % |
| Columbus        |   | 100.00     | % | 89.01 | % | - |   | 94.69 | % |
| Raleigh         |   | 96.08      | % | 95.24 | % | - |   | 95.60 | % |
| Central Florida |   | 90.77      | % | 94.05 | % | - |   | 91.76 | % |
| Nashville       |   | 77.12      | % | 81.05 | % | - |   | 78.29 | % |
| Minneapolis     |   | 94.08      | % | 73.40 | % | - |   | 89.32 | % |
| Dallas          |   | 94.37      | % | 100.00 | % | - |   | 94.46 | % |
| Savannah        |   | 100.00     | % | - |   | - |   | 100.00 | % |
| Cleveland       |   | -          |   | 82.39 | % | - |   | 82.39 | % |
| Washington DC   | 97.69  | %          | 90.41 | % | - |   | 92.04 | % |
| South Florida   |   | -          |   | 77.64 | % | - |   | 77.64 | % |
| Norfolk         |   | 100.00     | % | - |   | - |   | 100.00 | % |
| Seattle         |   | 100.00     | % | - |   | - |   | 100.00 | % |
| Houston         |   | 100.00     | % | - |   | - |   | 51.94 | % |
| Other (3)       |   | 100.00     | % | - |   | 85.65 | % | 94.21 | % |
|            |   |       |   |   |   |   |   |   |   |
| Total           |   | 93.81      | % | 90.17 | % | 89.75 | % | 92.69 | % |
|                 |        |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

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| (1)                                                                | Includes  all wholly owned and joint venture projects shown at 100% as of report date .                                                                                                                                                                                                                                                        |   |
|--------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                               |                                                                                                                                                                                                                                                                                                                                           |
| (2)                                                                | Represents the average  annual rental property revenue due from tenants in occupancy as of the date  of this report, excluding additional rent due as operating expense  reimbursements, landlord allowances for operating expenses and percentage  rents. Joint Venture properties are shown at the Partnership’s ownership  percentage. |   |
|                                                               |                                                                                                                                                                                                                                                                                                                                           |
| (3)                                                                | Represents properties  not located in the Partnership’s primary markets. These properties are  located in similar midwest or southeast markets.                                                                                                                                                                                           |   |
|                                                               |                                                                                                                                                                                                                                                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Note: Excludes buildings that are in the held for  sale portfolio. |                                                                                                                                                                                                                                                                                                                                           |
|                                                                    |                                                                                                                                                                                                                                                                                                                                                |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

15

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**Item 3.  Legal Proceedings**

 

We are not subject to any material pendinglegal proceedings, other than ordinary routine litigation arising in theordinary course of business. Our management expects that these ordinary routinelegal proceedings will be covered by insurance and does not expect these legalproceedings to have a material adverse effect on our financial condition,results of operations, or liquidity.

 

**Item 4.  Submission of Matters to a Vote of SecurityHolders**

 

No matters were submitted to a vote of security holders of the GeneralPartner during the quarter ended December 31, 2007.

 

**PART II**

 

**Item 5.  Market for the Registrant’s Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities**

 

There is noestablished trading market for the Common Units.  The following table sets forth the cashdistributions paid during each quarter. As of February 20, 2008, therewere 162 record holders of Common Units.

 
| **Quarter Ended** | ** ** | ** ** | **2007 Distributions  Per Common Unit** | ** ** | **2006 Distributions  Per Common Unit** | ** ** |
|-------------------|------------|------------|----------------------------------------------|------------|----------------------------------------------|------------|
|              |       |       |                                         |       |                                         |
| December 31  |       | $.480      |                                         |       | $.475                                        |       |   |
| September 30 |       | .480       |                                         |       | .475                                         |       |   |
| June 30      |       | .475       |                                         |       | .470                                         |       |   |
| March 31     |       | .475       |                                         |       | .470                                         |       |   |

 

On January 30,2008, the General Partner declared a quarterly cash dividend of $.480 perCommon Unit, payable on February 29, 2008, to Common Unitholders of recordon February 14, 2008.

 

SecuritiesAuthorized for Issuance Under Equity Compensation Plans

 

The informationrequired by this Item concerning securities authorized for issuance under theGeneral Partner’s equity compensation plans is set forth in or incorporatedherein by reference to Part III, Item 12 of this Annual Report.

 

Sales ofUnregistered Securities

 

The GeneralPartner did not sell any of its securities during the three months ended December 31,2007 that were not registered under the Securities Act.

 

Issuer Purchasesof Equity Securities

 

From time to time,the General Partner may repurchase its common shares under a $750.0 millionshare repurchase program that initially was approved by the General Partner’s boardof directors and publicly announced in October 2001 (the “RepurchaseProgram”).   In July 2005, theGeneral Partner’s board of directors authorized management to purchase up to$750.0 million of common shares pursuant to this plan. Under the RepurchaseProgram, the General Partner also executes share repurchases on an ongoingbasis associated with certain employee elections under its compensation andbenefit programs.

 

16

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The followingtable shows the share repurchase activity for each of the three months in thequarter ended December 31, 2007:

 
| ** ** | **Month** |   | ** ** | ** ** | **Total  Number of  Shares    Purchased (1)  ** | ** ** |   |   | **Average  Price  Paid per Share** |   | ** ** |   | **Total  Number of  Shares Purchased as  Part of Publicly  Announced Plans or         Programs       ** | ** ** | ** ** | **Maximum Number    (or Approximate  Dollar Value) of  Shares that May  Yet be Purchased  Under the Plans or      Programs (2)    ** | ** ** | ** ** |
|------------|-----------|--------|------------|------------|---------------------------------------------------------------------|------------|--------|--------|------------------------------------|--------|------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|
|       |      |   |       |       |                                                                |       |   |   |                               |
| October    |      | -      |       |       | N/A                                                                 |       |   | -      |                               |   |       |   |
| November   |      | 6,443  |       |       | $26.55                                                              |       |   | 6,443  |                               |   |       |   |
| December   |      |   | 21,191     |       |                                                                | $26.64     |   |   |                               | 21,191 |       |   |                                                                                                                                                                               |       |
|       |      |   |       |       |                                                                |       |   |   |                               |   |       |   |                                                                                                                                                                               |       |
| Total      |      |   | 27,634     |       |                                                                | $26.62     |   |   |                               | 27,634 |       |   |                                                                                                                                                                               |       |
|            |           |        |            |            |                                                                     |            |        |        |                                    |        |            |        |                                                                                                                                                                                    |            |            |                                                                                                                                                                                   |            |            |  |  |  |  |  |

 

----

(1) Represents27,634 common shares of the General Partner swapped to pay the exercise priceof stock options.

 

(2) The number ofcommon shares of the General Partner that may yet be repurchased in the openmarket to fund shares purchased under its Employee Stock Purchase Plan, asamended, was 81,840 on December 31, 2007. The approximate dollar value of the General Partner’s common shares thatmay yet be purchased under the Repurchase Program was $361.0 million as of December 31,2007.

 

**Item 6.  Selected Financial Data**

 

The following setsforth selected financial and operating information on a historical basis foreach of the years in the five-year period ended December 31, 2007. Thefollowing information should be read in conjunction with Item 7, “Management’sDiscussion and Analysis of Financial Condition and Results of Operations” andItem 8, “Financial Statements and Supplementary Data” included in this Form 10-K(in thousands, except per unit amounts):

 
|                                                                     |       | ** **     | **2007**    | ** ** | ** ** |       | 2006       |       |       |       | 2005       |    |   |   | 2004    |   |   |   | 2003 |   | ** ** |
|--------------------------------------------------------------------------|------------|----------------|-------------|------------|------------|------------|------------|------------|------------|------------|------------|---------|--------|--------|---------|--------|--------|--------|------|--------|------------|
| **Results of Operations:**                                               |       |           |        |       |       |       |       |       |       |       |       |
| Revenues:                                                                |       |           |        |       |       |       |       |       |       |       |       |
| Rental  Operations from Continuing Operations                            | ** ** | **$**          | **823,869** |       | $          | 781,547    |       | $          | 631,611    |       | $          | 564,090 |   | $      | 513,431 |   |
| Service  Operations from Continuing Operations                           | ** ** | ** **     | **99,358**  |       |       | 90,125     |       |       | 81,941     |       |       | 70,803  |   |   | 58,496  |   |
| **Total Revenues from Continuing Operations**                            | ** ** | **$**          | **923,227** |       | $          | 871,672    |       | $          | 713,552    |       | $          | 634,893 |   | $      | 571,927 |   |
| ** **                                                               | ** ** | ** **     | ** **  | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Income from Continuing Operations**                                    | ** ** | **$**          | **165,803** |       | $          | 160,905    |       | $          | 141,529    |       | $          | 136,803 |   | $      | 145,433 |   |
| ** **                                                               | ** ** | ** **     | ** **  |       |       |       |       |       |       |       |       |    |   |   |    |   |
| **Net Income Available for common unitholders**                          | ** ** | **$**          | **232,249** |       | $          | 159,799    |       | $          | 339,239    |       | $          | 167,212 |   | $      | 179,587 |   |
|                                                                     |       |           |        |       |       |       |       |       |       |       |       |
| **Per Unit Data:**                                                       |       |           |        |       |       |       |       |       |       |       |       |
| Basic  income per Common Unit:                                           |       |           |        |       |       |       |       |       |       |       |       |
| Continuing  operations                                                   | ** ** | **$**          | **0.70**    |       | $          | 0.69       |       | $          | 0.61       |       | $          | 0.64    |   | $      | 0.71    |   |
| Discontinued  operations                                                 | ** ** | **0.86**       |        | 0.39       |       | 1.58       |       | 0.44       |       | 0.49       |       |
| Diluted  income per Common Unit:                                         |       |           |        |       |       |       |       |       |       |       |       |
| Continuing  operations                                                   | ** ** | **0.69**       |        | 0.68       |       | 0.61       |       | 0.64       |       | 0.70       |       |
| Discontinued  operations                                                 | ** ** | **0.86**       |        | 0.39       |       | 1.57       |       | 0.43       |       | 0.49       |       |
| Distributions  paid per Common Unit                                      | ** ** | **1.91**       |        | 1.89       |       | 1.87       |       | 1.85       |       | 1.83       |       |
| Distributions  paid per Common Unit – special                  |       | -              |        | -          |       | 1.05       |       | -          |       | -          |       |
| Weighted  average Common Units outstanding                               | ** ** | **148,459**    |        | 148,069    |       | 155,059    |       | 155,281    |       | 150,280    |       |
| Weighted  average Common Units and potential dilutive common equivalents |       | **149,614**    |        | 149,393    |       | 155,877    |       | 157,062    |       | 151,141    |       |
|                                                                     |       |           |        |       |       |       |       |       |       |       |       |
| **Balance Sheet Data (at December31):**                                  |       |           |        |       |       |       |       |       |       |       |       |
| Total  Assets                                                            | ** ** | **$7,660,651** |        | $7,238,204 |       | $5,646,687 |       | $5,894,644 |       | $5,558,711 |       |
| Total  Debt (1)                                                          | ** ** | **4,316,460**  |        | 4,109,154  |       | 2,600,651  |       | 2,518,704  |       | 2,335,536  |       |
| Total  Preferred Equity                                                  | ** ** | **744,000**    |        | 876,250    |       | 657,250    |       | 657,250    |       | 540,508    |       |
| Total  Partners’ Equity                                             | ** ** | **2,830,897**  |        | 2,659,243  |       | 2,635,244  |       | 3,021,128  |       | 2,878,320  |       |
| Total  Common Units Outstanding                                          | ** ** | **154,055**    |        | 146,328    |       | 148,095    |       | 156,490    |       | 150,705    |       |
| **Other Data:**                                                          |       |           |        |       |       |       |       |       |       |       |       |
| Funds  From Operations (2)                                               | ** ** | **$**          | **409,572** |       | $          | 371,570    |       | $          | 374,310    |       | $          | 388,185 |   | $      | 372,519 |   |
|                                                                          |            |                |             |            |            |            |            |            |            |            |            |         |        |        |         |        |        |        |      |        |            |  |  |  |  |

 

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(1)          Includes $147,309 ofsecured debt classified as liabilities of properties held for sale at December 31,2006.

 

(2)          Funds From Operations (“FFO”)is used by industry analysts and investors as a supplemental operating  performance measure of an equity real estateinvestment trust (“REIT”) like our General Partner. FFO is calculated inaccordance with the definition that was adopted by the Board of Governors ofthe National Association of Real Estate Investment Trusts (“NAREIT”). NAREITcreated FFO as a supplemental measure of REIT operating performance thatexcludes historical cost depreciation, among other items, from net incomedetermined in accordance with United States generally accepted accountingprinciples (“GAAP”).

 

17

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FFO is a non-GAAPfinancial measure developed by NAREIT to compare the operating performance ofREITs. The most comparable GAAP measure is net income (loss).  FFO should not be considered as a substitutefor net income or any other measures derived in accordance with GAAP and maynot be comparable to other similarly titled measures of other companies.

 

Historical cost accounting for real estate assets in accordance withGAAP implicitly assumes that the value of real estate assets diminishespredictably over time. Since real estate values instead have historically risenor fallen with market conditions, many industry analysts and investors haveconsidered the presentation of operating results for real estate companies thatuse historical cost accounting to be insufficient by themselves.  FFO, as defined by NAREIT, representsGAAP net income (loss), excluding extraordinary items as defined under GAAP andgains or losses from sales of previously depreciated real estate assets, pluscertain non-cash items such as real estate asset depreciation and amortization,and after similar adjustments for unconsolidated partnerships and jointventures.

 

Management believes that the use of FFO, combined with the requiredprimary GAAP presentations, improves the understanding of operating results ofREITs among the investing public and makes comparisons of REIT operatingresults more meaningful. Management believes FFO is a useful measure forreviewing comparative operating and financial performance (although FFO shouldbe reviewed in conjunction with net income which remains the primary measure ofperformance) because by excluding gains or losses related to sales ofpreviously depreciated real estate assets and excluding real estate assetdepreciation and amortization, FFO provides a useful comparison of theoperating performance of our real estate between periods or as compared todifferent companies.

 

See reconciliationof FFO to GAAP net income under Year in Review section of Management’sDiscussion and Analysis of Financial Condition and Results of Operations.

 

**Item 7.  Management’s Discussion and Analysis ofFinancial Condition and Results of Operations**

 

**Business Overview**

 

As of December 31, 2007, we:

·                  Owned or jointly controlled 726 industrial,office, healthcare and retail properties (including properties underdevelopment), consisting of more than 121.1 million square feet; and

·                  Owned or jointly controlled approximately 7,700acres of unencumbered land with an estimated future development potential ofmore than 113 million square feet of industrial, office, healthcare and retailproperties.

 

We provide the following services for our properties and for certainproperties owned by third parties and joint ventures:

·                  Property leasing;

·                  Property management;

·                  Asset management;

·                  Construction;

·                  Development; and

·                  Other tenant-related services.

 

**Management Philosophy and Priorities**

 

Our key business and financial strategies for the future include thefollowing:

 

·                  One of our primary business objectives is toincrease Funds From Operations (“FFO”) by (i) maintaining and increasingproperty occupancy and rental rates through the management of our portfolio ofexisting properties; (ii) developing and acquiring new properties forrental operations in our existing markets; (iii) expanding geographicallyby acquiring and developing properties in new markets; (iv) using ourconstruction expertise to act as a general contractor or construction managerin our existing markets and other domestic markets on a fee basis; (v) developingand repositioning properties in our existing markets and other markets which wewill sell through our Service Operations property sale program; and (vi) providinga full line of real estate services to our tenants and to third parties.

 

·                  Ourfinancing strategy is to actively manage the components of our capitalstructure including common and preferred equity and debt to maintain aconservatively leveraged balance sheet and investment grade ratings from ourcredit rating agencies. Additionally, we employ a capital

 

18

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recycling programwhere we utilize sales of operating real estate assets that no longer fit ourstrategies to generate proceeds that can be recycled into new properties thatbetter fit our current and longer term strategies.  This strategy provides us with the financialflexibility to fund both development and acquisition opportunities. We seek to maintain a well-balanced, conservativeand flexible capital structure by: (i) extending and sequencing thematurity dates of debt; (ii) borrowing primarily at fixed rates bytargeting a variable rate component of total debt less than 20%; (iii) pursuingcurrent and future long-term debt financings and refinancing generally on anunsecured basis;  (iv) maintainingconservative debt service and fixed charge coverage ratios; (v) generatingproceeds from the sale of non-strategic properties and (vi) issuingperpetual preferred equity for 5-10% of our total capital structure.

 

**Year in Review**

 

**During 2007, we continued theexecution of our strategy to improve our portfolio of held for investmentbuildings through our capital recycling program, increasing our developmentpipeline to over $1.9 billion, and continuing geographic expansion that we anticipatewill provide future earnings growth. As a result of these accomplishments, weachieved steady operating results while maintaining a strong balance sheet.**

** **

Net income available for common unitholders for the year ended December 31,2007, was $232.2 million, or $1.55 per unit (diluted), compared to net incomeof $159.8 million, or $1.07 per unit (diluted) for the year ended 2006. FFOavailable to common unitholders totaled $409.6 million for the year ended December 31,2007, compared to $371.6 million for the same period in 2006.  Industry analysts and investors use FFO as asupplemental operating performance measure of an equity real estate investmenttrust (“REIT”). FFO is calculated in accordance with the definition that wasadopted by the Board of Governors of the National Association of Real EstateInvestment Trusts (“NAREIT”). FFO, as defined by NAREIT, represents net income(loss) determined in accordance with United States generally acceptedaccounting principles (“GAAP”), excluding extraordinary items as defined underGAAP and gains or losses from sales of previously depreciated real estateassets, plus certain non-cash items such as real estate asset depreciation andamortization, and after similar adjustments for unconsolidated partnerships andjoint ventures.

 

Historical costaccounting for real estate assets in accordance with GAAP implicitly assumesthat the value of real estate assets diminishes predictably over time. Sincereal estate values instead have historically risen or fallen with marketconditions, many industry analystsand investors have considered presentation of operating results for real estatecompanies that use historical cost accounting to be insufficient by themselves.Thus, NAREIT created FFO as a supplemental measure of REIT operatingperformance that excludes historical cost depreciation, among other items, fromGAAP net income. Management believes that the use of FFO, combined with therequired primary GAAP presentations, improves the understanding of operatingresults of REITs among the investing public and makes comparisons of REIToperating results more meaningful. Management believes FFO is a useful measurefor reviewing comparative operating and financial performance (although FFOshould be reviewed in conjunction with net income which remains the primarymeasure of performance) because by excluding gains or losses related to salesof previously depreciated real estate assets and excluding real estate assetdepreciation and amortization, FFO provides a useful comparison of theoperating performance of our real estate between periods or as compared todifferent companies.

 

19

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The following table summarizes the calculation of FFO for the yearsended December 31, 2007, 2006 and 2005, respectively (in thousands):

 
| ** **                                                              | ** ** | ** **    | **2007**    | ** ** | ** ** | ** ** | **2006** | ** ** | ** ** | ** ** | **2005** | ** ** | ** ** |
|-------------------------------------------------------------------------|------------|---------------|-------------|------------|------------|------------|----------|------------|------------|------------|----------|------------|------------|
|                                                                    |       |          |        |       |       |       |     |
| Net  income available for common unitholders                            | ** ** | **$232,249**  |        | $159,799   |       | $339,239   |     |
| Adjustments:                                                            |       |          |        |       |       |       |     |
| Depreciation  and amortization                                          | ** ** | **277,691**   |        | 254,268    |       | 254,170    |     |
| Partnership  share of joint venture depreciation and amortization       | ** ** | **26,948**    |        | 18,394     |       | 19,510     |     |
| Earnings  from depreciable property sales – wholly owned           | ** ** | **(121,072)** |        | (42,089)   |       | (227,513)  |     |
| Earnings  from depreciable property sales – share of joint venture | ** ** | ** **    | **(6,244)** |       |       | (18,802)   |     |       | (11,096)   |       |
|                                                                    | ** ** | ** **    | ** **  |       |       |       |     |       |       |       |
| Funds  From Operations                                                  | ** ** | **$**         | **409,572** |       | $          | 371,570    |     | $          | 374,310    |       |
|                                                                         |            |               |             |            |            |            |          |            |            |            |          |            |            |  |  |  |

 

We continued strategic initiatives to expand geographically, recyclecapital from the disposition of operating properties, and create value byleveraging our development, construction and management capabilities asfollows:

 

·                  As part of our continuing strategy toexpand into new markets, we entered the Southern California, Seattle andEastern Virginia markets in 2007. This follows our geographic expansioninitiatives in 2006 into the Washington, D.C., Baltimore, Phoenix and Houstonmarkets.

 

·                  Throughout2007, we completed land acquisitions totaling $321.3 million while generatingproceeds of $161.5 million from the disposition of other land parcels. Of ourtotal undeveloped land inventory, $108.1 million was placed under developmentduring 2007 as construction activity commenced.

 

·                  In February 2007, we continuedour expansion into the health care real estate market by completing theacquisition of Bremner Healthcare Real Estate (“Bremner”), a national healthcare development and management firm. The initial consideration paid to thesellers totaled $47.1 million, and the sellers may be eligible for furthercontingent payments over the next three years.

 

·                  We disposed of 32 non-strategicwholly owned held for rental properties for $336.7 million of grossproceeds.  Additionally, unconsolidatedsubsidiaries disposed of 10 properties of which our share of the gross proceedstotaled $30.1 million.  These transactionswere a continuation of our long-term strategy of recycling assets into higheryielding new developments.

 

·                  We disposed of 15 properties, whichwere developed with the intent to sell, for $256.6 million of gross proceedsand recognized pre-tax gains on sale of $34.7 million.

 

·                  We will continue to develop long-term assets tobe held in our portfolio and develop assets to be sold upon, or soon after,completion. With over $1.9 billion (which includes $182.6 million ofthird-party construction backlog) in our development pipeline at December 31,2007, we are encouraged about the long-term growth opportunities in ourbusiness.  Newly developed properties,with a basis of $593.1 million and occupancy of 59.7% at December 31,2007, were placed in service during the year.

 

·                  We achieved record leasing activity in 2007 withapproximately 22.5 million square feet of new leases and approximately 12.0million square feet of lease renewals.

 

·                  We have continued to maintain a high occupancy level during this year of portfolio expansion asthe overall occupancy percentage of 92.7% on our in-service held for rentalportfolio was consistent with the 2006 level of 92.8%.

 

Highlightsof our key financing activities in 2007 are as follows:

 

·                  We had $546.1 million outstanding onour lines of credit as of December 31, 2007.  During 2007, the borrowing capacity on ourline of credit was increased from $1.0 billion to $1.3 billion whilemaintaining the interest rate of LIBOR plus 52.5 basis points.

 

20

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·                  We issued $300.0 million of unsecurednotes at an effective interest rate of 6.16%. We retired $200.0 million of unsecured notes with a weighted averageeffective interest rate of 5.55%.

 

·                  In October 2007, the GeneralPartner issued 7.0 million shares of its common stock for net proceeds of$232.7 million.

 

·                  In October 2007, the GeneralPartner redeemed all of the outstanding shares of its 7.99% Series BCumulative Redeemable Preferred Stock at a liquidation amount of $132.3million.

 

·                  We and the General Partner continueto maintain a conservative balance sheet and investment grade debt ratings fromMoody’s Investors Service (Baa1) and Standard & Poor’s Ratings Group(BBB+). The General Partner’s debt to total market capitalization ratio (totalmarket capitalization is defined as the total market value of all outstandingCommon Units and Preferred Units plus outstanding indebtedness) was 48.4% at December 31,2007 compared to 37.4% at December 31, 2006.

 

**Key Performance Indicators**

Our operating results dependprimarily upon rental income from our industrial, office, and healthcareproperties (“Rental Operations”). The following discussion highlights the areasof Rental Operations that we consider critical for future revenue growth. Allsquare footage totals and occupancy percentages reflect both wholly-ownedproperties and properties in joint ventures.

 

***Occupancy Analysis:*** As discussedabove, our ability to maintain favorable occupancy rates is a principal driverof our results of operations. The following table sets forth occupancyinformation regarding our in-service portfolio of rental properties (excludingin-service properties developed or acquired with the intent to sell – “ServiceOperations Buildings”) as of December 31, 2007 and 2006, respectively  (in thousands, except percentage data):

 
|           |       |        | Total  Square Feet |       | Percent of  Total Square Feet |       | Percent Occupied |   |
|----------------|------------|-------------|--------------------|------------|------------------------------------|------------|------------------|--------|
| ** **     | Type       | ** **  | ** **         | ** ** | **2007**                           | ** ** | ** **       | 2006   | ** ** | ** ** | **2007** | ** ** | ** ** | ** ** | 2006 | ** ** | ** ** | ** ** | **2007** | ** ** | ** ** | ** ** | 2006 | ** ** | ** ** |
| **Industrial** | ** ** | **77,143**  |               | 75,455     |                               | ** ** | **69.4**         | **%**  | ** ** | 69.3 | % | ** ** | **93.8%** |   | 93.1% |   |
| **Office**     | ** ** | **32,384**  |               | 32,481     |                               | ** ** | **29.1**         | **%**  | ** ** | 29.8 | % | ** ** | **90.2%** |   | 92.0% |   |
| **Other**      | ** ** | **1,612**   |               | 916        |                               | ** ** | **1.5**          | **%**  | ** ** | 0.9 | % | ** ** | **89.8%** |   | 96.2% |   |
| Total          | ** ** | **111,139** |               | 108,852    |                               | ** ** | **100.0**        | **%**  | ** ** | 100.0 | % | ** ** | **92.7%** |   | 92.8% |   |
|                |            |             |                    |            |                                    |            |                  |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

*** ***

***Lease Expiration and Renewals:*** Our ability to maintain and grow occupancy ratesprimarily depends upon our continuing ability to re-lease expiring space. Thefollowing table reflects our in-service portfolio lease expiration schedule byproperty type as of December 31, 2007. The table indicates square footageand annualized net effective rents (based on December 2007 rental revenue)under expiring leases (in thousands, except percentage data):

 
|                         |       | Total Portfolio |         | Industrial    |       | Office                |       | Other              |       |
|------------------------------|------------|-----------------|--------------|---------------|------------|-----------------------|------------|--------------------|------------|
| Year of Expiration           |       |            | Square  Feet |          |       | Ann. RentRevenue |       | % of  Revenue |       | Square  Feet |   | Ann. RentRevenue |   | Square  Feet |   | Ann. RentRevenue |   | Square  Feet |   | Ann. RentRevenue |   |
| ** **                   | ** ** | ** **      | ** **   | ** **    | ** ** | ** **            | ** ** | ** **         | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| 2008                         |       | 12,443          |         | $ 65,183 |       | 9                     | %          |               | 9,920      |   | $36,230 |   | 2,467 |   | $28,205 |   | 56 |   | $748 |   |
| 2009                         |       | 11,780          |         |          | 77,664     |                  | 11         | %                  |       | 8,394 |   | 33,718 |   | 3,317 |   | 43,223 |   | 69 |   | 723 |   |
| 2010                         |       | 13,509          |         |          | 99,944     |                  | 14         | %                  |       | 9,240 |   | 40,039 |   | 4,256 |   | 59,718 |   | 13 |   | 187 |   |
| 2011                         |       | 13,937          |         |          | 87,565     |                  | 12         | %                  |       | 10,396 |   | 39,297 |   | 3,474 |   | 47,207 |   | 67 |   | 1,061 |   |
| 2012                         |       | 10,992          |         |          | 77,328     |                  | 11         | %                  |       | 7,531 |   | 30,108 |   | 3,412 |   | 46,338 |   | 49 |   | 882 |   |
| 2013                         |       | 9,401           |         |          | 82,543     |                  | 12         | %                  |       | 5,220 |   | 22,364 |   | 4,126 |   | 59,361 |   | 55 |   | 818 |   |
| 2014                         |       | 6,486           |         |          | 38,275     |                  | 5          | %                  |       | 4,995 |   | 18,289 |   | 1,463 |   | 19,521 |   | 28 |   | 465 |   |
| 2015                         |       | 8,249           |         |          | 60,814     |                  | 8          | %                  |       | 5,988 |   | 23,622 |   | 2,261 |   | 37,192 |   | - |   | - |   |
| 2016                         |       | 3,994           |         |          | 27,347     |                  | 4          | %                  |       | 2,855 |   | 10,342 |   | 924 |   | 14,506 |   | 215 |   | 2,499 |   |
| 2017                         |       | 6,458           |         |          | 44,873     |                  | 6          | %                  |       | 4,572 |   | 18,166 |   | 1,539 |   | 21,988 |   | 347 |   | 4,719 |   |
| 2018  and Thereafter         |       | 5,767           |         |          | 54,201     |                  |       | 8                  | %          |   | 3,259 |   |   | 16,913 |   | 1,960 |   |   | 29,715 |   | 548 |   |   | 7,573 |   |
|                         |       | 103,016         |         | $             | 715,737    |                  |       | 100                | %          |   | 72,370 |   | $ | 289,088 |   | 29,199 |   | $ | 406,974 |   | 1,447 |   | $ | 19,675 |   |
|                         |       |            |         |          |       |                  |       |               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total  Portfolio Square Feet |       | 111,139         |         |          |       |                  |       | 77,143             |       |   |   | 32,384 |   |   |   | 1,612 |   |   |   |
|                         |       |            |         |          |       |                  |       |               |       |   |   |   |   |   |   |   |   |   |   |
| Percent  Occupied            |       | 92.7            | %            |          |       |                  |       |               | 93.8       | % |   |   |   | 90.2 | % |   |   |   | 89.8 | % |   |   |   |
|                              |            |                 |              |               |            |                       |            |                    |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

Note:  Excludesbuildings that are in the held for sale portfolio.

 

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We renewed 79.7% and79.9% of our leases up for renewal totaling approximately 9.8 million and 7.5million square feet in 2007 and 2006, respectively. We attained 5.81% growth innet effective rents on these renewals during 2007.  Our lease renewal percentages over the pastthree years have remained relatively consistent at a 70-80% success rate. We donot presently expect this renewal percentage in 2008 to differ from the pastthree years.

 

***Development:***Another source of growthin earnings is the development of additional properties. These propertiesshould provide future earnings through income upon sale or from RentalOperations income as they are placed in service. We had 16.6 million squarefeet of property under development with total estimated costs upon completionof $1.2 billion at December 31, 2007, compared to 10.6 million square feetand total costs of $1.1 billion at December 31, 2006. We have increasedour development pipeline during 2007 and will continue to pursue additionaldevelopment opportunities, while focusing on pre-leasing as we closely monitorthe strength of the national and local market economies.

 

The following tablesummarizes our properties under development as of December 31, 2007 (inthousands, except percentage data):

 
| Anticipated  In-Service  Date  |   |   | Square  Feet |   | Percent  Leased |   |                             | Project  Costs |      | Anticipated  Stabilized  Return |   |
|--------------------------------|--------|--------|--------------|--------|-----------------|--------|----------------------------------|----------------|-----------|---------------------------------|--------|
| Held  for Rental Buildings:    |   |   |         |   |            |   |                             |           |      |
| 1st  Quarter 2008              |   | 3,753  |         | 32%    |            |   | $    174,923 |           | 9.39%     |                            |   |
| 2nd  Quarter 2008              |   | 3,843  |         | 19%    |            |   | 231,851                          |           | 8.76%     |                            |   |
| 3rd  Quarter 2008              |   | 1,778  |         | 23%    |            |   | 198,615                          |           | 9.22%     |                            |   |
| Thereafter                     |   |   | 633          |   | 60%             |   |                             |           | 136,590   |                            | 8.82%  |   |   |
|                           |   |   | 10,007       |   | 28%             |   |                             |           | 741,979   |                            | 9.04%  |   |   |
| Service Operations  Buildings: |   |   |         |   |            |   |                             |           |      |                            |
| 1st  Quarter 2008              |   |   | 1,231        |   | 70%             |   |                             | 50,999         |      | 8.69%                           |   |   |
| 2nd  Quarter 2008              |   |   | 1,044        |   | 88%             |   |                             | 85,708         |      | 8.20%                           |   |   |
| 3rd  Quarter 2008              |   |   | 1,252        |   | 100%            |   |                             | 78,374         |      | 8.43%                           |   |   |
| Thereafter                     |   |   | 3,045        |   | 86%             |   |                             |           | 240,766   |                            | 8.11%  |   |   |
|                           |   |   | 6,572        |   | 86%             |   |                             |           | 455,847   |                            | 8.25%  |   |   |
| Total                          |   |   | 16,579       |   | 51%             |   |                             | $              | 1,197,826 |                            | 8.74%  |   |   |
|                                |        |        |              |        |                 |        |                                  |                |           |                                 |        |  |  |  |  |  |

 

***Acquisition andDisposition Activity:***We continued to selectively disposeof non-strategic properties in 2007. Gross sales proceeds related to the dispositions of wholly owned heldfor rental properties were $336.7 million, which included the disposition of aportfolio of eight office properties in the Cleveland market and a portfolio oftwelve industrial properties in the St. Louis market.  Our share of proceeds from sales ofproperties within unconsolidated joint ventures, in which we have less than a100% interest, totaled $30.1 million.  In2006, proceeds totaled $139.9 million for the disposition of wholly owned heldfor rental properties and $91.9 million for our share of property sales fromunconsolidated joint ventures. Dispositions of wholly owned properties developed for sale rather thanrental resulted in $256.6 million in proceeds in 2007 compared to $188.6million in 2006.  We intend to continueto identify properties for disposition in order to recycle the proceeds intohigher yielding assets. The level of 2008 dispositions will be impacted by theability of the prospective buyers to obtain favorable financing given thecurrent state of the capital markets.

 

In 2007, in addition tothe acquisition of Bremner, we acquired $117.0 million of income producing propertiesand $321.3 million of undeveloped land compared to $948.4 million of incomeproducing properties and $436.7 million of undeveloped land in 2006.

 

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**Results of Operations**

 

A summary of our operatingresults and property statistics for each of the years in the three-year periodended December 31, 2007, is as follows (in thousands, except number ofproperties and per unit data):

 
| ** **                                              | ** ** | ** **                                   | **2007** | ** **                                           | ** ** | ** **                                     | 2006   | ** ** | ** ** | ** ** | 2005 | ** ** | ** ** |
|---------------------------------------------------------|------------|----------------------------------------------|----------|------------------------------------------------------|------------|------------------------------------------------|--------|------------|------------|------------|------|------------|------------|
|                                                    |       |                                         |     |                                                 |       |                                           |   |
| Rental  Operations revenues from Continuing Operations  | ** ** | **$823,869**                                 |     | $781,547                                             |       | $631,611                                       |   |
| Service  Operations revenues from Continuing Operations | ** ** | **99,358**                                   |     | 90,125                                               |       | 81,941                                         |   |
| Earnings  from Continuing Rental Operations             | ** ** | **109,079**                                  |     | 125,512                                              |       | 110,812                                        |   |
| Earnings  from Continuing Service Operations            | ** ** | **52,034**                                   |     | 53,196                                               |       | 44,278                                         |   |
| Operating  income                                       | ** ** | **123,433**                                  |     | 142,911                                              |       | 124,128                                        |   |
| Net  income available for common unitholders            | ** ** | **232,249**                                  |     | 159,799                                              |       | 339,239                                        |   |
| Weighted  average Common Units outstanding              | ** ** | **148,459**                                  |     | 148,069                                              |       | 155,059                                        |   |
| Weighted  average Common Units and potential dilutive   |       |                                         |     |                                                 |       |                                           |   |
| common  equivalents                                     | ** ** | **149,614**                                  |     | 149,393                                              |       | 155,877                                        |   |
| Basic  income per Common Unit:                          |       |                                         |     |                                                 |       |                                           |   |
| Continuing  operations                                  | ** ** | **$      .70** |     | $        .69 |       | $       .61 |   |
| Discontinued  operations                                | ** ** | **$      .86** |     | $        .39 |       | $     1.58            |   |
| Diluted  income per Common Unit:                        |       |                                         |     |                                                 |       |                                           |   |
| Continuing  operations                                  | ** ** | **$      .69** |     | $        .68 |       | $       .61 |   |
| Discontinued  operations                                | ** ** | **$      .86** |     | $        .39 |       | $     1.57            |   |
| Number  of in-service properties at end of year         | ** ** | **688**                                      |     | 696                                                  |       | 660                                            |   |
| In-service  square footage at end of year               | ** ** | **111,139**                                  |     | 108,852                                              |       | 97,835                                         |   |

 

**Comparison of Year Ended December 31, 2007 to Year Ended December 31,2006**

 

Rental Revenue from Continuing Operations

 

Overall, rental revenuefrom continuing operations increased from $743.5 million in 2006 to $794.5million in 2007. The following table reconciles rental revenue from continuingoperations by reportable segment to our total reported rental revenue fromcontinuing operations for the years ended December 31, 2007 and 2006, respectively(in thousands):

 
| ** ** | ** ** | ** **   | **2007**    | ** ** | ** ** | ** ** | **2006** | ** ** | ** ** | ** ** |
|------------|------------|--------------|-------------|------------|------------|------------|----------|------------|------------|------------|
| Office     | ** ** | **$547,478** | ** **  |       | $534,369   |       |     |
| Industrial | ** ** | **219,080**  | ** **  |       | 194,670    |       |     |
| Other      | ** ** | ** **   | **27,930**  | ** ** |       |       | 14,504   |       |       |
| Total      | ** ** | **$**        | **794,488** | ** ** |       | $          | 743,543  |       |       |
|            |            |              |             |            |            |            |          |            |            |            |  |  |

 

Both of our reportablesegments that comprise Rental Operations (office and industrial) are within thereal estate industry; however, the same economic and industry conditions do notaffect each segment in the same manner. The primary causes of the increase inrental revenue from continuing operations, with specific references to aparticular segment when applicable, are summarized below:

 

·                  In 2007, we acquired six new properties and placed38 development projects in-service. These acquisitions and developmentsprovided incremental revenues of $2.9 million and $16.6 million, respectively.

 

·                  Acquisitions and developments that were placed inservice in 2006 provided $12.4 million and $25.1 million, respectively, ofincremental revenue in 2007.

 

·                  We acquired an additional 31 properties in 2006 andlater contributed them to an unconsolidated joint venture, resulting in a $40.2million reduction in revenues for the year ended December 31, 2007, ascompared to the same period in 2006.  Ofthese properties, 23 were contributed in the fourth quarter of 2006, seven werecontributed in the second quarter of 2007 and one was contributed in the fourthquarter of 2007.

 

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·                  Rental revenue includes lease termination fees.  Lease termination fees relate to specifictenants who pay a fee to terminate their lease obligations before the end ofthe contractual lease term. Lease termination fees increased from $16.1 millionin 2006 to $24.2 million in 2007.

 

·                  The remaining increase in rental revenues isprimarily the result of an $18.2 million increase in revenues from reimbursablerental expenses.  This increase islargely offset by a corresponding increase in overall rental expenses.

 

Equity in Earningsof Unconsolidated Companies

 

Equity in earningsrepresents our ownership share of net income from investments in unconsolidatedcompanies. These joint ventures generally own and operate rental properties anddevelop properties.  These earningsdecreased from $38.0 million in 2006 to $29.4 million in 2007. During 2006, ourjoint ventures sold 22 non-strategic buildings, with our share of the net gainrecorded through equity in earnings totaling $18.8 million, compared to tenjoint venture building sales in 2007, with $8.0 million recorded to equity inearnings for our share of the net gains.

 

Rental Expenses and Real Estate Taxes

 

The following table reconciles rental expenses and real estate taxes byreportable segment to our total reported amounts in the statement of operationsfor the years ended December 31, 2007 and 2006, respectively (inthousands):

 
| ** **          | ** ** | ** **               | **2007**    | ** **           | ** ** | ** ** | **2006** | ** ** | ** ** |
|---------------------|------------|--------------------------|-------------|----------------------|------------|------------|----------|------------|------------|
|                |       |                     |        |                 |       |
| Rental Expenses:    |       |                     |        |                 |       |
| Office              | ** ** | **$  144,320** |        | $  143,567 |       |
| Industrial          | ** ** | **23,919**               |        | 21,991               |       |
| Other               | ** ** | ** **               | **8,435**   |                 |       |       | 3,519    |       |
| Total               | ** ** | **$**                    | **176,674** |                 |       | $          | 169,077  |       |
|                |       |                     |        |                 |       |
| Real Estate  Taxes: |       |                     |        |                 |       |
| Office              | ** ** | **$  63,572**  |        | $  55,963  |       |
| Industrial          | ** ** | **27,530**               |        | 21,760               |       |
| Other               | ** ** | ** **               | **7,033**   |                 |       |       | 6,012    |       |
| Total               | ** ** | **$ **              | **98,135**  |                 |       | $     | 83,735   |       |
|                     |            |                          |             |                      |            |            |          |            |            |  |  |  |  |  |

 

Of the overall $7.6 millionincrease in rental expenses in 2007 compared to 2006, $9.9 million wasattributable to properties acquired and developments placed in service from January 1,2006 through December 31, 2007. This increase was largely offset by a reduction in rental expenses of$7.6 million resulting from the contribution of 31 properties to anunconsolidated joint venture in 2006 and 2007. Inclement weather conditions in the first quarter of 2007, an increasein utility rates and volume in the third quarter of 2007 due to unseasonablyhigh temperatures and normal inflationary factors triggered the remainingincrease in rental expenses.

 

Of the overall $14.4 millionincrease in real estate taxes in 2007 compared to 2006, $7.7 million wasattributable to properties acquired and developments placed in service from January 1,2006 through December 31, 2007.  Theremaining increase in real estate taxes was driven by increases in assessmentsin some of our markets.

 

**InterestExpense**

** **

Interest expensefrom continuing operations remained fairly consistent from 2006 to 2007 at$170.5 million in 2006, compared to $168.4 million in 2007.  While we maintained higher outstandingborrowings in 2007 compared to 2006, these higher borrowings were used to fundour increase in development activities and thus, the increased interest costsfrom these borrowings were capitalized into project costs rather than expensed.

 

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Depreciation andAmortization Expense

 

Depreciation andamortization increased from $232.7 million in 2006 to $271.6 million in 2007due to increases in our held-for-rental asset base from acquisitions anddevelopments placed in service during 2006 and 2007.

 

Service Operations

 

Service Operationsprimarily consist of sales of properties developed or acquired with the intentto sell within a short period of time and the leasing, management, constructionand development services for joint venture properties and properties owned bythird parties.  Leasing and managementfees are dependent upon occupancy while construction and development servicesrely on the expansion of business operations of third party property owners.Earnings from Service Operations decreased slightly from $53.2 million in 2006to $52.0 million in 2007.  The followingare the factors related to the decrease in earnings from Service Operations in2007:

 

·                  Our ServiceOperations building development and sales program, whereby a building isdeveloped or repositioned by us and then sold soon after completion, is asignificant component of earnings from operations and is often a significantdriver of fluctuations in earnings from Service Operations between periods.During 2007, we generated pre-tax gains of $34.7 million from the sale of 15properties compared to $44.6 million from the sale of nine properties in 2006.Partially offsetting the aforementioned decrease was a $2.9 million reductionin income taxes on these gains on sale, with the net effect of decreased gainson sale in 2007 resulting in a $7.0 million decrease in earnings from ServiceOperations.

·                  Increased netgeneral contractor revenues drove a $9.7 million increase in earnings fromService Operations from 2006 as the result of increased volume and margins andfavorable settlement of previously existing warranty reserves.

 

General andAdministrative Expense

 

General andadministrative expense increased from $35.8 million in 2006 to $37.7 million in2007. General and administrative expenses are comprised of two components. Thefirst component is direct expenses that are not attributable to specific assetssuch as legal fees, audit fees, marketing costs, investor relations expensesand other corporate overhead. The second component is the unallocated indirectcosts determined to be unrelated to the operation of our owned properties andService Operations. Those indirect costs not allocated to these operations arecharged to general and administrative expenses. There was a $31.7 millionincrease in the overall pool of overhead costs in 2007 that was necessitated byour overall growth. The majority of this increase in the overall pool ofoverhead costs was necessary as the result of increased rental and serviceoperations activity and thus, was allocated to rental operations, construction,development and leasing. Approximately $1.5 million of the aforementionedincrease in the overall overhead pool was not allocated to operations, whichwas the primary reason for the overall $1.9 million increase to general andadministrative expense.

 

DiscontinuedOperations

 

The results of operationsfor properties sold during the year or designated as held-for-sale at the endof the period are required to be classified as discontinued operations. Theproperty specific components of net earnings that are classified asdiscontinued operations include rental revenues, rental expenses, real estatetaxes, allocated interest expense and depreciation expense, as well as the netgain or loss on the disposition of properties.

 

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We classified theoperations of 302 properties as discontinued operations as of December 31,2007. These 302 properties consist of 253 industrial, 48 office and one retailproperty. As a result, we classified net income from operations of $7.1million, $11.7 million and $20.3 million as net income from discontinuedoperations for the years ended December 31, 2007, 2006 and 2005,respectively.

 

Of these properties, 32were sold during 2007, 21 properties were sold during 2006, 234 properties weresold during 2005, and 15 operating properties are classified as held-for-saleat December 31, 2007. The gains on disposal of these properties, net ofimpairment adjustment, of $121.1 million, $46.3 million and $223.9 million forthe years ended December 31, 2007, 2006 and 2005, respectively, are alsoreported in discontinued operations.

 

**Comparison of Year Ended December 31, 2006 to Year Ended December 31,2005**

 

Rental Revenue from Continuing Operations

 

Overall, rental revenuefrom continuing operations increased from $602.1 million in 2005 to $743.5million in 2006. The following table reconciles rental revenue from continuingoperations by reportable segment to total reported rental revenue fromcontinuing operations for the years ended December 31, 2006 and 2005,respectively (in thousands):

 
| ** ** | ** ** | ** **  | **2006**    | ** ** | ** ** | ** ** | **2005** | ** ** | ** ** |
|------------|------------|-------------|-------------|------------|------------|------------|----------|------------|------------|
| Office     | ** ** | **$**       | **534,369** | ** ** |       | $          | 443,927  |       |       |
| Industrial | ** ** | **194,670** | ** **  |       | 148,359    |       |     |
| Other      | ** ** | ** **  | **14,504**  | ** ** |       |       | 9,776    |       |       |
| Total      | ** ** | **$**       | **743,543** | ** ** |       | $          | 602,062  |       |       |
|            |            |             |             |            |            |            |          |            |            |  |  |  |  |

 

Both of our reportablesegments that comprise Rental Operations (office and industrial) are within thereal estate industry; however, the same economic and industry conditions do notaffect each segment in the same manner. The primary causes of the increase inrental revenue from continuing operations, with specific references to aparticular segment when applicable, are summarized below:

 

·                  In 2006, we acquired 50 new properties and placed 27development projects in-service. These 2006 acquisitions and developments arethe primary factor in the overall increase in rental revenue for the year ended2006 compared to 2005 as they provided incremental revenues of $73.8 millionand $9.3 million respectively. These acquisitions totaled $948.4 million on 8.6million square feet and were 99% leased at December 31, 2006.

 

·                  Acquisitions and developments that were placed inservice in 2005 provided $15.8 million and $11.2 million, respectively, ofincremental revenue in 2006.

 

·                  Rental revenue includes lease termination fees.  Lease termination fees relate to specifictenants who pay a fee to terminate their lease obligations before the end ofthe contractual lease term. Lease termination fees increased from $7.3 millionin 2005 to $16.1 million in 2006.

 

·                  Our in-service occupancy increased from 92.7% at December 31,2005, to 92.9% at December 31, 2006 and contributed to the remaining increasein rental revenue.

 

Equity in Earnings of Unconsolidated Companies

 

Equity in earningsrepresents our ownership share of net income from investments in unconsolidatedcompanies. These joint ventures generally own and operate rental properties anddevelop properties.  These earningsincreased from $29.5 million in 2005 to $38.0 million in 2006. During 2006, ourjoint ventures sold 22 non-strategic buildings, with our share of the net gainrecorded through equity in earnings totaling $18.8 million.  During the second quarter of 2005, one of ourventures sold three buildings, with our share of the net gain recorded throughequity in earnings totaling $11.1 million.

 

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Rental Expenses and Real Estate Taxes

 

The following table reconciles rental expenses and real estate taxes byreportable segment to our total reported amounts in the statement of operationsfor the years ended December 31, 2006 and 2005, respectively (inthousands):

 
| ** **          | ** ** | ** ** | **2006**    | ** ** | ** ** | ** ** | **2005** | ** ** | ** ** |
|---------------------|------------|------------|-------------|------------|------------|------------|----------|------------|------------|
| Rental Expenses:    |       |       |        |       |       |
| Office              | ** ** | **$**      | **143,567** |       | $          | 119,052    |     |
| Industrial          | ** ** | **21,991** |        | 18,264     |       |
| Other               | ** ** | ** ** | **3,519**   |       |       | 1,557      |     |
| Total               | ** ** | **$**      | **169,077** |       | $          | 138,873    |     |
|                |       |       |        |       |       |
| Real Estate  Taxes: |       |       |        |       |       |
| Office              | ** ** | **$**      | **55,963**  |       | $          | 49,936     |     |
| Industrial          | ** ** | **21,760** |        | 17,758     |       |
| Other               | ** ** | ** ** | **6,012**   |       |       | 5,104      |     |
| Total               | ** ** | **$**      | **83,735**  |       | $          | 72,798     |     |
|                     |            |            |             |            |            |            |          |            |            |  |  |

 

Rental expenses and realestate taxes for 2006 have increased from 2005 by $30.2 million and $10.9million, respectively, as the result of acquisition and development activity in2005 and 2006 as well as from an increase in occupancy over the past two years.

 

**InterestExpense**

** **

Interest expenseincreased from $106.0 million in 2005 to $170.5 million in 2006, asa result of the following:

 

·                  Interestcosts on the unsecured line of credit increased by $29.2 million from 2005 asthe result of increased borrowings throughout the year, as well as increasedinterest rates.

·                  Interestcosts on unsecured notes increased by $10.2 million as the result of an overallincrease in borrowings used mainly to fund acquisitions and development.

·                  Interestcosts on secured debt increased by $27.8 million as the result of the increasein borrowings in 2006.

·                  Offsettingthe above increases, capitalized interest increased by $26.8 million as theresult of increased development activities.

 

Depreciation andAmortization Expense

 

Depreciation andamortization increased from $203.1 million in 2005 to $232.7 million in 2006 asthe result of increases in our held-for-rental asset base from acquisitions anddevelopments placed in service during 2005 and 2006.

 

Service Operations

 

Service Operationsprimarily consist of sales of properties developed or acquired with the intentto sell within a short period of time and the leasing, management, constructionand development services for joint venture properties and properties owned bythird parties. Leasing and management fees are dependent upon occupancy whileconstruction and development services rely on the expansion of businessoperations of third party property owners. Earnings from Service Operationsincreased from $44.3 million in 2005 to $53.2 million in 2006. The followingare the factors related to the increase in earnings from Service Operations in2006.

 

27

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·                  OurService Operations building development and sales program, whereby a buildingis developed or repositioned by us and then sold soon after completion, is asignificant component of earnings from operations and is often a significantdriver of fluctuations in earnings from Service Operations between periods.During 2006, we generated pre-tax gains of $44.6 million from the sale of nineproperties compared to $29.9 million from the sale of ten properties in 2005.Profit margins on these types of building sales fluctuate by sale depending onthe type of property being sold, the strength of the underlying tenant andnature of the sale, such as a pre-contracted purchase price for a primarytenant versus a sale on the open market.

 

·                  Partiallyoffsetting the increased 2006 gains from our Service Operations buildingdevelopment and sales program was the effect of a decreased focus onthird-party construction services as well as the fact that in the first quarterof 2005, we recognized $2.7 million of a non-recurring deferred gain associatedwith the sale of our landscaping operations in 2001.

 

General andAdministrative Expense

 

General andadministrative expense increased from $31.0 million in 2005 to $35.8 million in2006. General and administrative expenses are comprised of two components. Thefirst component is direct expenses that are not attributable to specific assetssuch as legal fees, audit fees, marketing costs, investor relations expensesand other corporate overhead. The second component is the unallocated indirectcosts determined to be unrelated to the operation of our owned properties andService Operations. Those indirect costs not allocated to these operations arecharged to general and administrative expenses. The increase in general andadministrative expenses from 2005 was largely attributable to an increase inour overall pool of overhead costs to support our current and anticipatedfuture growth.

 

**CriticalAccounting Policies**

 

The preparation ofour consolidated financial statements in conformity with GAAP requires us tomake estimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported amounts of revenues and expensesduring the reported period. Our estimates, judgments and assumptions areinherently subjective and based on the existing business and market conditions,and are therefore continually evaluated based upon available information andexperience. Note 2 to the Consolidated Financial Statements includes furtherdiscussion of our significant accounting policies. Our management has assessedthe accounting policies used in the preparation of our financial statements anddiscussed them with the General Partner’s Audit Committee and independentauditors. The following accounting policies are considered critical based uponmateriality to the financial statements, degree of judgment involved inestimating reported amounts and sensitivity to changes in industry and economicconditions:

 

*Accountingfor Joint Ventures:*We analyze our investments in jointventures under Financial Accounting Standards Board (“FASB”) Interpretation No. 46(R),*Consolidation of Variable Interest Entities,*to determine if the joint venture is considered a variable interest entity andwould require consolidation. To the extent that our joint ventures do notqualify as variable interest entities, we further assess under the guidelinesof Emerging Issues Task Force (“EITF”) Issue No. 04-5, *Determining Whether a General Partner, or the GeneralPartners as a Group, Controls a Limited Partnership or Similar Entity When theLimited Partners Have Certain Rights*(“EITF 04-5”); Statement ofPosition 78-9, *Accounting for Investments inReal Estate Ventures* (“SOP 78-9”);**Accounting Research Bulletin No. 51, *Consolidated Financial Statements*;**and Statement of Financial Accounting Standard (“SFAS”) No. 94,* Consolidation of All Majority-OwnedSubsidiaries,*to determine if the venture should be consolidated. Wehave equity interests generally ranging from 10% to 50% in unconsolidated jointventures that develop, own and operate rental properties and hold land fordevelopment. We consolidate those joint ventures that are considered to bevariable interest entities where we are the primary beneficiary.  For non-variable interest entities, weconsolidate those joint ventures that we control through majority ownershipinterests or where we are the managing member and our partner does not havesubstantive participating rights. Control is further demonstrated by theability of the general partner to manage day-to-day

 

28

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operations,refinance debt and sell the assets of the joint venture without the consent ofthe limited partner and inability of the limited partner to replace the generalpartner. We use the equity method of accounting for those joint ventures wherewe do not have control over operating and financial policies. Under the equitymethod of accounting, our investment in each joint venture is included on ourbalance sheet; however, the assets and liabilities of the joint ventures forwhich we use the equity method are not included on our balance sheet.

 

To the extent thatwe contribute assets to a joint venture, our investment in joint venture isrecorded at our cost basis in the assets that were contributed to the jointventure.  To the extent that our costbasis is different than the basis reflected at the joint venture level, thebasis difference is amortized over the life of the related asset and includedin our share of equity in net income of the joint venture.  In accordance with the provisions of SOP 78-9and SFAS No. 66, *Accounting for Salesof Real Estate*, we recognize gains on the contribution or sale ofreal estate to joint ventures, relating solely to the outside partner’sinterest, to the extent the economic substance of the transaction is a sale.

 

*CostCapitalization:* Direct and certain indirect costs, includinginterest, clearly associated with and incremental to the development,construction, leasing or expansion of real estate investments are capitalizedas a cost of the property.

 

We capitalizeinterest and direct and indirect project costs associated with the initialconstruction of a property up to the time the property is substantiallycomplete and ready for its intended use. We believe the completion of thebuilding shell is the proper basis for determining substantial completion andthat this basis is the most widely accepted standard in the real estateindustry. The interest rate used to capitalize interest is based upon ouraverage borrowing rate on existing debt.

 

We also capitalizedirect and indirect costs, including interest costs, on vacant space duringextended lease-up periods after construction of the building shell has beencompleted if costs are being incurred to ready the vacant space for itsintended use. If costs and activities incurred to ready the vacant space cease,then cost capitalization is also discontinued until such activities areresumed. Once necessary work has been completed on a vacant space, projectcosts are no longer capitalized. We cease capitalization of all project costson extended lease-up periods after the shorter of a one-year period after thecompletion of the building shell or when the property attains 90%occupancy.  In addition, all leasingcommissions paid to third parties for new leases or lease renewals are capitalized.

 

In assessing theamount of indirect costs to be capitalized, we first allocate payroll costs, ona department-by-department basis, among activities for which capitalization iswarranted (i.e., construction, development and leasing) and those for whichcapitalization is not warranted (i.e., property management, maintenance,acquisitions and dispositions and general corporate functions). To the extentthe employees of a department split their time between capitalizable andnon-capitalizable activities, the allocations are made based on estimates ofthe actual amount of time spent in each activity. Once the payroll costs areallocated, the non-payroll costs of each department are allocated among thecapitalizable and non-capitalizable activities in the same proportion aspayroll costs.

 

To ensure that anappropriate amount of costs are capitalized, the amount of capitalized coststhat are allocated to a specific project are limited to amounts using standardswe developed. These standards consist of a percentage of the total developmentcosts of a project and a percentage of the total gross lease amount payableunder a specific lease. These standards are derived after considering theamounts that would be allocated if the personnel in the departments wereworking at full capacity. The use of these standards ensures that overheadcosts attributable to downtime or to unsuccessful projects or leasingactivities are not capitalized.

 

*Impairmentof Real Estate Investments:* We evaluate our real estateinvestments upon occurrence of significant changes in the operations, but notless than annually, to assess whether any impairment indications are presentthat affect the recovery of the recorded value. If any real estate investmentis considered to be impaired, a loss is provided to reduce the carrying valueof the asset to its estimated fair value. We utilize the guidelines establishedunder SFAS No. 144, *Accounting for theImpairment or Disposal of Long Lived Assets*(“SFAS 144”), todetermine if impairment conditions exist. Under SFAS 144, we review the expectedundiscounted

 

29

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cash flows of eachproperty in our held for rental portfolio to determine if there are anyindications of impairment of a property. The review of anticipated cash flowsinvolves subjective assumptions of estimated occupancy and rental rates andultimate residual value. In addition to reviewing anticipated cash flows, weassess other factors such as changes in business climate and legal factors thatmay affect the ultimate value of the property. These assumptions are subjectiveand the anticipated cash flows may not ultimately be achieved.

 

Real estate assetsto be disposed of are reported at the lower of their carrying value amount orthe fair value less estimated cost to sell.

 

*Acquisitionof Real Estate Property and Related Assets:*In accordancewith SFAS 141, *Business Combinations*,we allocate the purchase price of acquired properties to net tangible andidentified intangible assets based on their respective fair values.

 

The allocation totangible assets (buildings, tenant improvements and land) is based uponmanagement’s determination of the value of the property as if it were vacantusing discounted cash flow models similar to those used by independentappraisers. Factors considered by management include an estimate of carryingcosts during the expected lease-up periods considering current marketconditions, and costs to execute similar leases. The remaining purchase priceis allocated among three categories of intangible assets consisting of theabove or below market component of in-place leases, the value of in-placeleases and the value of customer relationships.

 

·                  The value allocable to the above orbelow market component of an acquired in-place lease is determined based uponthe present value (using an interest rate which reflects the risks associatedwith the lease) of the difference between (i) the contractual amounts tobe paid pursuant to the lease over its remaining term and (ii) management’sestimate of the amounts that would be paid using current fair market rates overthe remaining term of the lease. The amounts allocated to above market leasesare included in deferred leasing and other costs in the balance sheet and belowmarket leases are included in other liabilities in the balance sheet; both areamortized to rental income over the remaining terms of the respective leases.

·                  The total amount of intangible assetsis further allocated to in-place lease values and to customer relationshipvalues, based upon management’s assessment of their respective values. Theseintangible assets are included in deferred leasing and other costs in thebalance sheet and are depreciated over the remaining term of the existinglease, or the anticipated life of the customer relationship, as applicable.

 

*Valuationof Receivables:* We are subject to tenant defaults andbankruptcies that could affect the collection of outstanding receivables. Inorder to mitigate these risks, we perform in-house credit reviews and analyseson major existing tenants and all significant leases before they are executed.We have established the following procedures and policies to evaluate thecollectibility of outstanding receivables and record allowances:

 

·                  We maintain a tenant “watch list”containing a list of significant tenants for which the payment of receivablesand future rent may be at risk. Various factors such as late rent payments,lease or debt instrument defaults, and indications of a deteriorating financialposition are considered when determining whether to include a tenant on thewatch list.

·                  As a matter of policy, we reserve theentire receivable balance, including straight-line rent, of any tenant with anamount outstanding over 90 days.

·                  Straight-line rent receivables forany tenant on the watch list or any other tenant identified as a potentiallong-term risk, regardless of the status of rent receivables, are reviewed andreserved as necessary.

 

*ConstructionContracts:* We recognize income on construction contractswhere we serve as a general contractor on the percentage of completion method.Using this method, profits are recorded on the basis of our estimates of theoverall profit and percentage of completion of individual contracts. A portionof the estimated profits is accrued based upon our estimates of the percentageof completion of the construction contract.

 

30

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Cumulativerevenues recognized may be less or greater than cumulative costs and profitsbilled at any point in time during a contract’s term. This revenue recognitionmethod involves inherent risks relating to profit and cost estimates with thoserisks reduced through approval and monitoring processes.

 

With regard tocritical accounting policies, management has discussed the following with theAudit Committee of the General Partner’s board of directors:

 

·                  Criteria for identifying andselecting;

·                  Methodology in applying; and

·                  Impact on the financial statements.

 

The AuditCommittee of the General Partner has reviewed the critical accounting policieswe identified.

 

#### **Liquidity and Capital Resources**

 

**Sources of Liquidity**

 

We expect to meetour short-term liquidity requirements over the next twelve months, includingpayments of distributions, as well as recurring capital expenditures relatingto maintaining our current real estate assets, primarily through the following:

 

·                  workingcapital;

·                  netcash provided by operating activities; and

·                  proceedsreceived from real estate dispositions

 

Although wehistorically have not used any other sources of funds to pay for recurringcapital expenditures on our current real estate investments, we may rely on thetemporary use of borrowings needed to fund such expenditures during periods ofhigh leasing volume.

 

We expect to meetlong-term liquidity requirements, such as scheduled mortgage and unsecured debtmaturities, property acquisitions, financing of development activities andother non-recurring capital improvements, primarily from the following sources:

 

·                  issuanceof additional equity, including General Partner common stock and preferredequity;

·                  issuanceof additional debt securities;

·                  undistributedcash provided by operating activities; and

·                  proceedsreceived from real estate dispositions.

 

### **We do notbelieve the state of the credit markets will adversely affect our ability tosecure long-term financing.**

### ** **

### ***Rental Operations***

We believe ourprincipal source of liquidity, cash flows from Rental Operations, provides astable source of cash to fund operational expenses. We believe this cash-basedrevenue stream is substantially aligned with revenue recognition (except forperiodic straight-line rental income accruals and amortization of above orbelow market rents) as cash receipts from the leasing of rental properties aregenerally received in advance of or in a short time following the actualrevenue recognition.

 

We are subject torisks of decreased occupancy through market conditions, as well as tenantdefaults and bankruptcies, and potential reduction in rental rates upon renewalor re-letting of properties, each of which would result in reduced cash flowfrom operations. However, we believe that these risks may be mitigated by ourrelatively strong market presence in most of our markets and the fact that weperform in-house credit reviews and analyses on major tenants and allsignificant leases before they are executed.

 

31

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*Debt and Equity Securities*

We had anunsecured line of credit available at December 31, 2007.  During 2007, the borrowing capacity on thisline of credit was increased from $1.0 billion to $1.3 billion. Additionally,in July 2007, one of our consolidated majority owned subsidiaries enteredinto a lending agreement that included an additional unsecured line ofcredit.  Our unsecured lines of credit asof December 31, 2007 are described as follows (in thousands):

 
|                                                     |        | Borrowing |      | Maturity       |   | Outstanding Balance |   |                      |
|----------------------------------------------------------|-------------|-----------|-----------|----------------|--------|--------------------------|--------|---------------------------|
|                                                     | Description |      |      | Capacity  |   | Date      |   | at December 31, 2007 |   |   |
| Unsecured Line of  Credit                                |        | $         | 1,300,000 |           |   | January 2010        |   | $                         | 543,000 |   |   |
| Unsecured Line of  Credit – Consolidated Subsidiary |        | $         | 30,000    |           |   | July 2011           |   | $                         | 3,067 |   |   |
|                                                          |             |           |           |                |        |                          |        |                           |  |  |  |  |  |  |  |  |  |  |

 

We use our line ofcredit to fund development activities, acquire additional rental properties andprovide working capital. This line of credit provides us with an option toobtain borrowings from financial institutions that participate in the line, atrates lower than the stated interest rate, subject to certainrestrictions.  The interest rate on theamounts outstanding on the unsecured line of credit as of December 31,2007 was LIBOR plus .525%, which for borrowings outstanding at December 31,2007 ranged from 5.355% to 5.775%. Our line of credit also contains financialcovenants that require us to meet financial ratios and defined levels ofperformance, including those related to variable interest indebtedness,consolidated net worth and debt-to-market capitalization. As of December 31,2007, we were in compliance with all covenants under our line of credit.

 

The consolidatedsubsidiary’s unsecured line of credit allows for borrowings up to $30.0 millionat a rate of LIBOR plus .85% (equal to 5.73% for outstanding borrowings as of December 31,2007).  The unsecured line of credit isused to fund development activities within the consolidated subsidiary.  The consolidated subsidiary’s unsecured lineof credit matures in July 2011 with a 12-month extension option.

 

At December 31,2007, the General Partner and the Partnership had on file with the SEC anautomatic shelf registration statement on Form S-3, relating to the offerand sale, from time to time, of an indeterminate amount of debt securities.From time to time, we and the General Partner expect to issue additionalsecurities under this automatic shelf registration statement to funddevelopment and acquisition of additional rental properties and to fund therepayment of the credit facility and other long-term debt upon maturity.

 

In February 2008,the General Partner issued $300.0 million of 8.375% Series O CumulativeRedeemable Preferred Shares.

 

The indentures(and related supplemental indentures) governing our outstanding series of notesalso require us to comply with financial ratios and other covenants regardingour operations.  We were in compliancewith all such covenants as of December 31, 2007.

 

*Saleof Real Estate Assets*

We utilize salesof real estate assets as an additional source of liquidity. We pursueopportunities to sell real estate assets at favorable prices to capture valuecreated by us as well as to improve the overall quality of our portfolio byrecycling sale proceeds into new properties with greater value creationopportunities.

 

**Usesof Liquidity**

 

Our principal usesof liquidity include the following:

 

·  Property investments;

·  Recurring leasing/capital costs;

·  Distributions to unitholders;

·  Long-term debt maturities; and

·  Other contractual obligations

 

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*PropertyInvestments*

We evaluatedevelopment and acquisition opportunities based upon market outlook, supply andlong-term growth potential.

 

*RecurringExpenditures*

One of ourprincipal uses of our liquidity is to fund the recurring leasing/capitalexpenditures of our real estate investments. The following is a summary of ourrecurring capital expenditures for the years ended December 31, 2007, 2006and 2005, respectively (in thousands):

 
| ** **                     | ** ** | ** ** | **2007**   | ** ** | ** ** | ** ** | 2006   | ** ** | ** ** | ** ** | 2005 | ** ** | ** ** |
|--------------------------------|------------|------------|------------|------------|------------|------------|--------|------------|------------|------------|------|------------|------------|
|                           |       |       |       |       |       |       |   |
| Recurring tenant  improvements | ** ** | **$**      | **45,296** |       | $          | 41,895     |   | $60,633    |       |
| Recurring leasing  costs       | ** ** | **32,238** |       | 32,983     |       | 33,175     |   |
| Building  improvements         | ** ** | ** ** | **8,402**  |       |       | 8,122      |   |       | 15,232     |       |
| Totals                         | ** ** | **$**      | **85,936** |       | $          | 83,000     |   | $          | 109,040    |       |
|                                |            |            |            |            |            |            |        |            |            |            |      |            |            |  |  |

 

##### ***Distributions***

In order toqualify as a REIT for federal income tax purposes, the General Partner mustcurrently distribute at least 90% of its taxable income to its shareholders. Wepaid distributions per unit of $1.91, $1.89 and $1.87 for the years ended December 31,2007, 2006 and 2005, respectively. We also paid a one-time special distributionof $1.05 per unit in 2005 as a result of the significant gain realized from anindustrial portfolio sale. We expect to continue to distribute taxable earningsto meet the requirements of the General Partner to maintain its REIT status.However, distributions are declared at the discretion of the General Partner’sboard of directors and are subject to actual cash available for distribution,our financial condition, capital requirements and such other factors as theGeneral Partner’s board of directors deems relevant.

 

*DebtMaturities*

Debt outstandingat December 31, 2007 totaled $4.3 billion with a weighted average interestrate of 5.74% maturing at various dates through 2028. We had $3.2 billion ofunsecured notes, $546.1 million outstanding on our unsecured lines of creditand $524.4 million of secured debt outstanding at December 31, 2007.Scheduled principal amortization and maturities of such debt totaled $249.8million for the year ended December 31, 2007 and $146.4 million of secureddebt was transferred to unconsolidated subsidiaries in connection with thecontribution of properties in 2007.

 

The following is asummary of the scheduled future amortization and maturities of our indebtednessat December 31, 2007 (in thousands, except percentage data):

 
| ** ** | ** ** | **Future  Repayments** |             | **Weighted****Average** |       |
|------------|------------|------------------------|------------------|-------------------------|------------|
| ** ** | ** ** | **Scheduled**          |             |                    |       |   |   | **Interest  Rate of** |   |
| **Year**   | ** ** | ** **             | **Amortization** | ** **              | ** ** | ** ** | **Maturities** | ** ** | ** ** | ** ** | **Total** | ** ** | ** ** | ** ** | **Future  Repayments** | ** ** | ** ** |
|       |       |                   |             |                    |       |   |   |   |   |
| 2008       |       | $                      | 10,960           |                    | $          | 268,968 |   | $ | 279,928 |   | 5.04% |   |
| 2009       |       | 10,578                 |             | 275,000                 |       | 285,578 |   | 7.37% |   |
| 2010       |       | 10,253                 |             | 718,000                 |       | 728,253 |   | 5.49% |   |
| 2011       |       | 10,188                 |             | 1,036,206               |       | 1,046,394 |   | 5.12% |   |
| 2012       |       | 8,017                  |             | 201,216                 |       | 209,233 |   | 5.89% |   |
| 2013       |       | 7,897                  |             | 150,000                 |       | 157,897 |   | 4.71% |   |
| 2014       |       | 7,942                  |             | 272,111                 |       | 280,053 |   | 6.44% |   |
| 2015       |       | 6,006                  |             | -                       |       | 6,006 |   | 6.14% |   |
| 2016       |       | 4,944                  |             | 490,900                 |       | 495,844 |   | 6.16% |   |
| 2017       |       | 4,054                  |             | 450,000                 |       | 454,054 |   | 5.95% |   |
| 2018       |       | 2,698                  |             | 300,000                 |       | 302,698 |   | 6.16% |   |
| Thereafter |       |                   | 20,522           |                    |       | 50,000 |   |   | 70,522 |   | 6.84% |   |
|       |       | $                      | 104,059          |                    | $          | 4,212,401 |   | $ | 4,316,460 |   | 5.74% |   |
|            |            |                        |                  |                         |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

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**HistoricalCash Flows**

 

Cash and cashequivalents were $47.0 million and $68.2 million at December 31, 2007 and2006, respectively. The following highlights significant changes in net cashassociated with our operating, investing and financing activities (inmillions):

 
|                                                   |   |        | Years Ended  December 31, |       |   |
|--------------------------------------------------------|--------|-------------|--------------------------------|------------|--------|
|                                                   |   | ** **  | **2007**                       | ** ** |   |   | 2006 |   |   |   | 2005 |   |   |
| Net Cash Provided  by  Operating Activities            |   | **$323.0**  |                           | $          | 272.4  |   | $ | 409.6 |   |
| Net Cash Provided  by (Used  for) Investing Activities |   | **(434.5)** |                           | (1,234.0)  |   | 322.7 |   |
| Net Cash Provided  by (Used  for) Financing Activities |   | **90.4**    |                           | 1,002.9    |   | (711.2) |   |
|                                                        |        |             |                                |            |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

*OperatingActivities*

Cash flows fromoperating activities provide the cash necessary to meet normal operationalrequirements of our Rental Operations and Service Operations activities. Thereceipt of rental income from rental operations continues to provide theprimary source of our revenues and operating cash flows. In addition, wedevelop buildings with the intent to sell them at or soon after completion,which provides another significant source of operating cash flow activity.  Highlights of such activity are as follows:

 

·                  Duringthe year ended December 31, 2007, we incurred Service Operations buildingdevelopment costs of $281.1 million, compared to $281.7 million and $83.4million for the years ended December 31, 2006 and 2005, respectively. Thedifference is reflective of the increased activity in our held-for-salepipeline. The pipeline of build-for-sale projects under construction as of December 31,2007, has anticipated total costs upon completion of $455.8 million.

·                  Wesold 15 Service Operations buildings in 2007 compared to nine in 2006 and tenin 2005, receiving net proceeds of $232.6 million, $181.8 million and $113.0million, respectively. We recognized pre-tax gains of $34.7 million, $49.0million and $29.9 million on these sales for the years ended December 31,2007, 2006 and 2005, respectively.

 

*InvestingActivities*

Investingactivities are one of the primary uses of our liquidity. Development andacquisition activities typically generate additional rental revenues andprovide cash flows for operational requirements. Highlights of significant cashsources and uses are as follows:

 

·                  Salesof land and depreciated property provided $480.9 million in net proceeds in2007, compared to $180.8 million in 2006 and $1.1 billion in 2005. We soldportfolios of eight suburban office properties in our Cleveland market andtwelve industrial properties in our St. Louis market during 2007, whichtogether provided $203.5 million of the net proceeds received in 2007. We solda portfolio of eight industrial properties in our Cleveland market during 2006,which provided $69.8 million of the net proceeds received in 2006.  An industrial portfolio sale provided $955.0million of the $1.1 billion of proceeds received in 2005. We continue todispose of non-strategic and older properties as part of our capital recyclingprogram to fund acquisitions and new development while improving the overallquality of our investment portfolio.

·                  Wereceived financing distributions from unconsolidated subsidiaries (as a resultof the sale of properties or recapitalization) of $235.8 million in 2007,compared to $296.6 million in 2006.

·                  Developmentcosts for our held for rental portfolio increased to $451.2 million for theyear ended December 31, 2007, from $385.5 million and $210.0 million forthe years ended December 31, 2006 and 2005, respectively. Managementanticipated this continued increase, as a commitment to development activitywas part of our strategic plan for 2007.

 

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·                  During2007, we paid cash of $117.4 million for real estate acquisitions, includingboth $36.1 million for the Bremner acquisition (with the remaining $11.0million paid through the issuance of Units of the Partnership) and $55.4million for a portfolio of industrial properties located in Seattle, Virginiaand Houston, compared to $735.3 million in 2006 and $285.3 million in2005.  In addition, we paid cash of$317.3 million for undeveloped land in 2007, compared to $435.9 million in 2006and $135.8 million in 2005.  The mostsignificant activity in 2006 consisted of the purchase of a portfolio ofsuburban office and light industrial properties and undeveloped land in theWashington, D.C. area for $867.6 million (of which $713.5 million was paid incash) and the purchase of a portfolio of industrial properties in Savannah,Georgia for $196.2 million (of which $125.9 million was paid in cash).

 

*FinancingActivities*

The overalldecline in cash provided by (used for) financing activities is a result of thefinancing that was required for the significant acquisitions in 2006.  Specifically, the following items highlightmajor fluctuations in net cash flow related to financing activities:

 

·                  InSeptember 2007, we issued $300.0 million of 6.50% senior unsecured notesdue in 2018.  The proceeds were used topartially pay down our unsecured line of credit.  Our primary borrowing activity in 2006consisted of a $700.0 million secured term loan obtained in February 2006,which was priced at LIBOR +.525% and was paid in full in August 2006 withproceeds from two unsecured debt issuances: $450.0 million of 5.95% senior unsecured notes due in 2017 and $250.0million of 5.625% senior unsecured notes due in 2011.

·                  InAugust 2007, we repaid $100.0 million of 7.375% senior unsecured notes onthe scheduled maturity date.

·                  InOctober 2007, the General Partner issued 7.0 million shares of its commonstock for net proceeds of $232.7 million. The net proceeds of the offering were used to partially pay down our$1.3 billion unsecured line of credit.

·                  Alsoin October 2007, the General Partner redeemed all of the outstandingshares of its 7.990% Series B Cumulative Redeemable Preferred Stock at theliquidation amount of $132.3 million.

·                  InNovember 2007, we repaid $100.0 million of 3.5% senior unsecured notes onthe scheduled maturity date.

 

Credit Ratings

 

The General Partner and the Partnership are currently assigned investmentgrade corporate credit ratings on our senior unsecured notes from Moody’sInvestors Service and Standard and Poor’s Ratings Group. We have been assignedratings of BBB+ and Baa1, respectively, by Standard and Poor’s Ratings Groupand Moody’s Investors Service.

 

The General Partner and the Partnership also received investment gradecredit ratings from the same rating agencies on the General Partner’s preferredstock.  The General Partner has beenassigned ratings of BBB and Baa2, respectively, by Standard and Poor’s RatingsGroup and Moody’s Investors Service.

 

These senior notes and preferred stock ratings could change based upon,among other things, our results of operations and financial condition.

 

Financial Instruments

 

We are exposed to capitalmarket risk, such as changes in interest rates. In order to reduce thevolatility relating to interest rate risk, we may enter into interest ratehedging arrangements from time to time. We do not utilize derivative financialinstruments for trading or speculative purposes.

 

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In November 2007, weentered into $300.0 million of cash flow hedges through forward-startinginterest rate swaps to hedge interest rates on $300.0 million of anticipateddebt offerings in 2008. The swaps qualify for hedge accounting, with anychanges in fair value recorded in Other Comprehensive Income (“OCI”). At December 31,2007, the fair value of these swaps was approximately $6.2 million in aliability position as the effective rate on the swaps was higher than currentinterest rates at December 31, 2007.

 

In July 2007, weentered into a $21.0 million cash flow hedge through an interest rate swap tofix the rate on $21.0 million of floating rate term debt, issued by one of ourconsolidated majority owned subsidiaries, which matures in July 2011.  The swap qualifies for hedge accounting, withany changes in fair value recorded in OCI. At December 31, 2007, the fair value of this swap was approximately$1.1 million in a liability position.

 

In August 2005, weentered into $300.0 million of cash flow hedges through forward-startinginterest rate swaps to hedge interest rates on $300.0 million of anticipateddebt offerings in 2007. The swaps qualified for hedge accounting, with anychanges in fair value recorded in OCI. In conjunction with the September 2007issuance of $300.0 million of senior unsecured notes, we terminated these cashflow hedges as designated.  Thesettlement amount received of $10.7 million will be recognized to earningsthrough a reduction of interest expense over the term of the hedged cashflows.  The ineffective portion of thehedge was insignificant.

 

In March 2005, weentered into $300.0 million of cash flow hedges through forward-startinginterest rate swaps to hedge interest rates on $300.0 million of anticipateddebt offerings in 2006. The swaps qualified for hedge accounting, with anychanges in fair value recorded in OCI. In March 2006, we issued $150.0 million of 5.50% senior unsecurednotes due 2016 and terminated a corresponding amount of the cash flow hedgesdesignated for this transaction. The settlement amount paid of approximately$800,000 will be recognized to earnings through interest expense ratably overthe life of the senior unsecured notes and the ineffective portion of the hedgewas insignificant.  In August 2006,we issued $450.0 million of 5.95% senior unsecured notes due 2017 and $250.0million of 5.63% senior unsecured notes due 2011 and terminated the remaining$150.0 million of cash flow hedges.  Thesettlement amount received of approximately $1.6 million will be recognized toearnings through a reduction of interest expense ratably over the lives of thesenior unsecured notes. The ineffective portion of the hedge was insignificant.

 

The effectivenessof our hedges will be evaluated throughout their lives using the hypotheticalderivative method under which the change in fair value of the actual swapdesignated as the hedging instrument is compared to the change in fair value ofa hypothetical swap.

 

# **Off Balance Sheet Arrangements**

# ** **

# ***Investments in Unconsolidated Companies***

# ** **

Wehave equity interests generally ranging from 10% to 50% in unconsolidatedcompanies that own and operate rental properties and hold land for development.The equity method of accounting (seeCritical Accounting Policies) is used for these investments in which we havethe ability to exercise significant influence, but not control, over operatingand financial policies. As a result, the assets and liabilities of these jointventures are not included on our balance sheet.

 

Ourinvestments in and advances to unconsolidated companies representsapproximately 8% of our total assets as of December 31, 2007. Theseinvestments provide several benefits to us, including increased market share,tenant and property diversification and an additional source of capital to fundreal estate projects.

 

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The following table presents summarized financial information forunconsolidated companies for the years ended December 31, 2007 and 2006,respectively (in thousands, except percentage data):

 
| ** **                                   | ** ** | **Operating**           | ** **    | ** **       | ** ** | **Development**         | ** ** | ** **   | ** **  | ** ** | ** **  | ** **  | ** ** |
|----------------------------------------------|------------|-------------------------|---------------|------------------|------------|-------------------------|------------|--------------|-------------|------------|-------------|-------------|------------|
| ** **                                   | ** ** | **Joint Ventures** | ** **    | ** **       | ** ** | **Joint Ventures** | ** ** | ** **   | ** **  | **Total**  | ** **  |
| ** **                                   | ** ** | ** **              | **2007**      | ** **       | ** ** | ** **              | **2006**   | ** **   | ** **  | ** ** | ** **  | ** **  | **2007**   | ** ** | ** ** | ** ** | **2006** | ** ** | ** ** | ** ** | ** ** | ** ** | **2007** | ** ** | ** ** | ** ** | **2006** | ** ** | ** ** |
| Land, buildings and tenant improvements, net | ** ** | **$1,543,467**          |          | $ 1,336,929 | ** ** | ** **              | ** ** | **$**        | **227,875** |       | $      | 66,080      | ** ** | ** ** | ** ** | **$1,771,342** |   | $1,403,009 |   |
| Construction in  progress                    | ** ** | **41,157**              |          | 6,488            | ** ** | ** **              | ** ** | **64,639**   |        | 101,473    | ** **  | ** **  | ** ** | **105,796** |   | 107,961 |   |
| Land held for  development                   | ** ** | **27,558**              |          | 1,932            | ** ** | ** **              | ** ** | **86,695**   |        | 89,348     | ** **  | ** **  | ** ** | **114,253** |   | 91,280 |   |
| Other assets                                 | ** ** | **158,978**             |          | 116,442          | ** ** | ** **              | ** ** | **35,638**   |        | 32,138     | ** **  | ** **  | ** ** | **194,616** |   | 148,580 |   |
| ** **                                   |       | **$**                   | **1,771,160** | ** **       | $          | 1,461,791               |       |         |        | **$**      | **414,847** | ** **  | $          | 289,039 | ** ** | ** ** | ** ** | **$** | **2,186,007** |   | $ | 1,750,830 |   |
|                                         |       |                    |          |             |       |                    |       |         |        |       |        |        |       |   |   |   |   |
| Indebtedness                                 | ** ** | **$ 873,611**      |          | $ 68,807    | ** ** | ** **              | ** ** | **$115,509** |        | $49,163    | ** **  | ** **  | ** ** | **$ 989,120** |   | 417,970 |   |
| Other liabilities                            | ** ** | ** **              | **50,347**    |             |       |                    | 46,226     | ** **   | ** **  | ** ** | ** **  | **174,121** |       |   | 123,942 | ** ** | ** ** | ** ** | ** ** | **224,468** |   |   | 170,168 |   |
| ** **                                   |       |                    | **923,958**   | ** **       | ** ** | ** **              | 415,033    |         |        |       | **289,630** | ** **  | 173,105    |   |   |   | **1,213,588** |   | 588,138 |   |
| Owners’ equity                          | ** ** | ** **              | **847,202**   |             |       |                    | 1,046,758  | ** **   | ** **  | ** ** | **125,217** |        | 115,934    | ** ** | ** ** | ** ** | **972,419** |   | 1,162,692 |   |
| ** **                                   |       | **$**                   | **1,771,160** | ** **       |       | $                       | 1,461,791  |         |        |       | **$**       | **414,847** | ** ** | $ | 289,039 |   |   |   | **$** | **2,186,007** |   | $ | 1,750,830 |   |
| ** **                                   | ** ** | ** **              | ** **    | ** **       | ** ** | ** **              | ** ** | ** **   | ** **  | ** ** | ** **  | ** **  | ** ** | ** ** | ** ** | ** ** | ** ** |
| Rental revenue                               | ** ** | **$**                   | **207,584**   |             | $          | 155,162                 | ** ** | ** **   | ** **  | **$**      | **8,271**   | ** **  | $          | 2,024 | ** ** | ** ** | ** ** | **$** | **215,855** |   | $ | 157,186 |   |
| Net income (loss)                            | ** ** | **$**                   | **40,099**    |             | $          | 66,059                  | ** ** | ** **   | ** **  | **$**      | **1,626**   | ** **  | $          | (74) | ** ** | ** ** | ** ** | **$** | **41,725** |   | $ | 65,985 |   |
| ** **                                   | ** ** | ** **              | ** **    | ** **       | ** ** | ** **              | ** ** | ** **   | ** **  | ** ** | ** **  | ** **  | ** ** | ** ** | ** ** | ** ** | ** ** |
| Total square feet                            | ** ** | **34,046**              |          | 32,372           | ** ** | ** **              | ** ** | **4,491**    |        | 3,323      | ** **  | ** **  | ** ** | **38,537** |   | 35,695 |   |
| Percent leased                               | ** ** | **92.67%**              |          | 92.79%           | ** ** | ** **              | ** ** | **73.28%**   |        | 48.67%     | ** **  | ** **  | ** ** | **90.34%** |   | 88.69% |   |
| Partnership                                  |       |                    |          |             |       |                    |       |         |        |       |        |        |       |   |   |   |   |
|   ownership  percentage            | ** ** | **10%-50%**             |          | 10%-50%          | ** ** | ** **              | ** ** | **50%**      |        | 50%        |        |        |       |   |   |   |   |
|                                              |            |                         |               |                  |            |                         |            |              |             |            |             |             |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

We do not have anyrelationships with unconsolidated entities or financial partnerships (“specialpurpose entities”) that have been established solely for the purpose offacilitating off-balance sheet arrangements.

 

**Contractual Obligations**

 

At December 31, 2007, weare subject to certain contractual payment obligations as described in thetable below:

 
| ** **                                                   | ** ** | **Payments due by Period** | ** **    |
|--------------------------------------------------------------|------------|-------------------------------------------|---------------|
| **Contractual Obligations**                                  | ** ** | ** **                                | ** **    | **Total** | ** ** | ** ** | ** ** | **2008** | ** ** | ** ** | ** ** | **2009** | ** ** | ** ** | ** ** | **2010** | ** ** | ** ** | ** ** | **2011** | ** ** | ** ** | ** ** | **2012** | ** ** | ** ** | ** ** | **Thereafter** | ** ** | ** ** |
| Long-term debt (1)                                           |       | $5,048,222                                |          | $483,093 |   | $477,318 |   | $354,520 |   | $1,201,778 |   | $324,149 |   | $2,207,364 |   |
| Lines of credit (2)                                          |       | 608,569                                   |          | 30,116 |   | 30,116 |   | 545,170 |   | 3,167 |   | - |   | - |   |
| Share of mortgage debt  of unconsolidated joint ventures (3) |       | 996,309                                   |          | 46,570 |   | 81,073 |   | 183,496 |   | 36,245 |   | 74,760 |   | 574,165 |   |
| Ground leases                                                |       | 96,388                                    |          | 2,289 |   | 2,483 |   | 2,606 |   | 2,654 |   | 2,743 |   | 83,613 |   |
| Operating leases                                             |       | 726                                       |          | 443 |   | 215 |   | 44 |   | 18 |   | 6 |   | - |   |
| Development and construction                                 |       |                                      |          |   |   |   |   |   |   |   |   |   |   |   |   |
| backlog costs (4)                                            |       | 771,111                                   |          | 707,611 |   | 63,500 |   | - |   | - |   | - |   | - |   |
| Future land and building acquisitions (5)                    |       | 158,904                                   |          | 158,904 |   | - |   | - |   | - |   | - |   | - |   |
| Service contracts (6)                                        |       | 3,590                                     |          | 2,314 |   | 875 |   | 155 |   | 133 |   | 113 |   | - |   |
| Other (7)                                                    |       | 3,196                                     |          | 355 |   | 356 |   | 358 |   | 359 |   | 594 |   | 1,174 |   |
| **Total Contractual Obligations**                            | ** ** | **$**                                     | **7,687,015** | ** ** | **$** | **1,431,695** | ** ** | **$** | **655,936** | ** ** | **$** | **1,086,349** | ** ** | **$** | **1,244,354** | ** ** | **$** | **402,365** | ** ** | **$** | **2,866,316** | ** ** |
|                                                              |            |                                           |               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

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(1)   Our long-term debt consists of bothsecured and unsecured debt and includes both principal and interest. Interestexpense for variable rate debt was calculated using the interest rate at December 31,2007.

(2)   Our unsecured lines of credit consist ofan operating line of credit that matures January 2010 and the line ofcredit of a consolidated subsidiary that matures July 2011.

(3)   Our share of unconsolidated mortgage debtincludes both principal and interest. Interest expense for variable rate debtwas calculated using the interest rate at December 31, 2007.

(4)   Represents estimated remaining costs onthe completion of held-for-rental, build-for-sale and third-party constructionprojects.

(5)   These land acquisitions are subject tothe completion of due diligence requirements, resolution of certaincontingencies and completion of customary closing conditions. In most cases wemay withdraw from land purchase contracts with the seller’s only recourse beingearnest money deposits already made.

(6)   Service contracts defined as those, whichcover periods greater than one year and are not cancelable without cause byeither party.

(7)   Represents other contractual obligations.

 

**Related Party Transactions**

 

We provideproperty management, leasing, construction and other tenant related services tounconsolidated companies in which we have equity interests. For the years endedDecember 31, 2007, 2006 and 2005, respectively, we received from theseunconsolidated companies management fees of $7.1 million, $4.4 million and $4.8million, leasing fees of $4.2 million, $2.9 million and $4.3 million 

and constructionand development fees of $13.1 million, $19.1 million and $2.0 million. Werecorded these fees based on contractual terms that approximate market ratesfor these types of services, and we have eliminated our ownership percentagesof these fees in the consolidated financial statements.

 

37

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##### **Commitments and Contingencies**

 

We have guaranteed the repayment of $79.3 million ofeconomic development bonds issued by various municipalities in connection withcertain commercial developments. We will be required to make payments under ourguarantees to the extent that incremental taxes from specified developments arenot sufficient to pay the bond debt service. Management does not believe thatit is probable that we will be required to make any significant payments insatisfaction of these guarantees.

 

We also have guaranteed the repayment of secured and unsecured loans ofseven of our unconsolidated subsidiaries. At December 31, 2007, theoutstanding balance on these loans was approximately $219.8 million.Additionally, we guaranteed $29.0 million of secured indebtedness related to aproperty sold to a third party in 2006. Management believes that the value ofthe real estate exceeds the loan balance and that we will not be required tosatisfy these guarantees.

 

We have entered into agreements, subject to the completion of duediligence requirements, resolution of certain contingencies and completion ofcustomary closing conditions, for the future acquisitions of land and buildingstotaling $158.9 million. In most cases we may withdraw from land purchasecontracts with the seller’s only recourse being earnest money deposits alreadymade.

 

In October 2000, we sold or contributed industrial properties andundeveloped land with a fair value of $487.0 million to a joint venture (DuganRealty LLC) in which we have a 50% interest and recognized a net gain of $35.2million. In connection with this transaction, the joint venture partners weregiven an option to put up to a $50.0 million interest in the joint venture tous in exchange for the General Partner’s common stock or cash (at our option),subject to certain timing and other restrictions. As a result of this putoption, we deferred $10.2 million of gain on sale of depreciated property andrecorded a $50.0 million liability.

 

We are subject to various legal proceedings and claims that arise inthe ordinary course of business.  In theopinion of management, the amount of any ultimate liability with respect tothese actions will not materially affect our consolidated financial statementsor results of operations.

 

# **Recent Accounting Pronouncements**

# ** **

We adopted FASBInterpretation No. 48, *Accounting forUncertainty in Income Taxes, an Interpretation of FASB Statement No. 109*(“FIN 48”), on January 1, 2007.  Theadoption of FIN 48 resulted in an additional tax exposure of approximately $1.7million recorded as an adjustment to the opening balance of Distributions inExcess of Net Income. As of December 31, 2007, tax returns for thecalendar years 2004 through 2007 remain subject to examination by the InternalRevenue Service (“IRS”) and various state and local tax jurisdictions.  Our uncertain tax positions are immaterialboth individually and in the aggregate primarily due to the General Partner’stax status as a REIT.

 

In September 2006,the FASB issued SFAS No. 157, *FairValue Measurements* (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fairvalue in accordance with GAAP and expands disclosure about fair valuemeasurements.  SFAS 157 is effective forfiscal years beginning after November 15, 2007.  We do not expect SFAS 157 to have a materialeffect when adopted.

 

In January 2007,the FASB issued SFAS No. 159, *The FairValue Option for Financial Assets and Financial Liabilities* (“SFAS159”).  SFAS 159 provides a “Fair ValueOption” under which a company may irrevocably elect fair value as the initialand subsequent measurement attribute for certain financial assets andliabilities.  This Fair Value Option willbe available on a contract-by-contract basis with changes in fair valuerecognized in earnings as those changes occur. The effective date for SFAS 159 is the beginning of each reportingentity’s first fiscal year end that begins after November 15, 2007.  We will not elect the Fair Value Option forany of our financial assets or liabilities.

 

38

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In December 2007,the FASB issued SFAS No. 141R, *BusinessCombinations* (“SFAS 141R”) and SFAS No. 160, *Noncontrolling Interests in Consolidated FinancialStatements**— an amendment to ARB No. 51*(“SFAS 160”).  SFAS 141R and SFAS 160require most identifiable assets, liabilities, noncontrolling interests andgoodwill acquired in a business combination to be recorded at “full fair value”and require noncontrolling interests (previously referred to as minorityinterests) to be reported as a component of equity, which changes theaccounting for transactions with noncontrolling interest holders.  Both Statements are effective for periodsbeginning on or after December 15, 2008, and earlier adoption isprohibited.  SFAS 141R will be applied tobusiness combinations occurring after the effective date.  SFAS 160 will be applied prospectively to allnoncontrolling interests, including any that arose before the effectivedate.  We are currently evaluating the impactof adopting SFAS 141R and SFAS 160 on our results of operations and financialposition.

 

**Item 7A.  Quantitative and Qualitative Disclosure AboutMarket Risks**

 

 We are exposed to interest ratechanges primarily as a result of our line of credit and long-term debtborrowings. Our interest rate risk management objective is to limit the impactof interest rate changes on earnings and cash flows and to lower overallborrowing costs. To achieve our objectives, we borrow primarily at fixed ratesand may enter into derivative financial instruments such as interest rateswaps, caps and treasury locks in order to mitigate our interest rate risk on arelated financial instrument. We do not enter into derivative or interest ratetransactions for speculative purposes.

 

Ourinterest rate risk is monitored using a variety of techniques. The table belowpresents the principal amounts (in thousands) of the expected annualmaturities, weighted average interest rates for the average debt outstanding inthe specified period, fair values and other terms required to evaluate theexpected cash flows and sensitivity to interest rate changes.

 

|                            |       |       | 2008       |       |       |       | 2009       |           |       |       | 2010                |       |       | 2011       |       |       |       | 2012                 |   |                       |   | Thereafter |    |              | Total  |   |   |   | Fair  Value |   |   |
|---------------------------------|------------|------------|------------|------------|------------|------------|------------|----------------|------------|------------|---------------------|------------|------------|------------|------------|------------|------------|----------------------|--------|----------------------------|--------|------------|---------|-------------------|--------|--------|--------|--------|-------------|--------|--------|
| ** **                      | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** **     | ** ** | ** ** | ** **          | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Fixed rate  secured debt        |       | $          | 54,248     |       | $          | 9,868      |       | $              | 9,503      |       | $  21,542 |       | $          | 8,403      |       | $          | 411,859    |                 | $      | 515,423                    |   | $          | 482,655 |              |
| Weighted average  interest rate |       | 5.77%      |       | 6.95%      |       | 6.88%      |       | 7.17%          |       | 6.74%      |                | 6.04%      |       |       |       |       |       |
|                            |       |       |       |       |       |       |       |           |       |       |                |       |       |       |       |       |       |
| Variable rate  secured debt     |       | $          | 680        |       | $          | 710        |       | $              | 750        |       | $                   | 785        |       | $          | 830        |       | $          | 5,215                |   | $                          | 8,970  |       | $       |   8,970 |   |
| Weighted average  interest rate |       | 3.73%      |       | 3.72%      |       | 3.71%      |       | 3.70%          |       | 3.70%      |                | 3.87%      |       |       |       |       |       |
|                            |       |       |       |       |       |       |       |           |       |       |                |       |       |       |       |       |       |
| Fixed rate  unsecured notes     |       | $225,000   |       | $275,000   |       | $175,000   |       | $1,021,000     |       | $200,000   |                | $1,350,000 |       | $3,246,000 |       | $3,148,645 |       |
| Weighted average  interest rate |       | 4.87%      |       | 7.39%      |       | 5.37%      |       | 5.08%          |       | 5.87%      |                | 6.06%      |       |       |       |       |       |
|                            |       |       |       |       |       |       |       |           |       |       |                |       |       |       |       |       |       |
| Unsecured lines  of credit      |       | $          | -          |       | $          | -          |       | $ 543,000 |       | $3,067     |                | $          | -          |       | $          | -          |       | $ 546,067  |   | $   546,067 |   |
| Rate at  December 31, 2007 |       | N/A        |       | N/A        |       | 5.51%      |       | 5.73%          |       | N/A        |                | N/A        |       |       |       |       |       |
|                                 |            |            |            |            |            |            |            |                |            |            |                     |            |            |            |            |            |            |                      |        |                            |        |            |         |                   |        |        |        |        |             |        |        |  |  |  |  |  |  |  |  |  |  |

 

As the table incorporates only those exposures that exist as of December 31,2007, it does not consider those exposures or positions that could arise afterthat date. As a result, our ultimate realized gain or loss with respect tointerest rate fluctuations will depend on the exposures that arise during theperiod, our hedging strategies at that time, and interest rates.

 

**Item 8.  Financial Statements and Supplementary Data**

 

The financial statements and supplementary data are included under Item15 of this Report.

 

**Item 9.  Changes in and Disagreements with Accountantson Accounting and Financial Disclosure**

 

There was no change or disagreement with our accountants related to ouraccounting and financial disclosures.

 

39

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** **

**Item 9A. Controls and Procedures**

 

We conducted an evaluation of the effectiveness of the design andoperation of our “disclosure controls and procedures” as of the end of theperiod covered by this Annual Report. The controls evaluation was done underthe supervision and with the participation of management, including the GeneralPartner’s Chief Executive Officer and Chief Financial Officer.

 

Attached as exhibits to this Annual Report are certifications of theGeneral Partner’s Chief Executive Officer and Chief Financial Officer, whichare required in accordance with Rule 13a-14 of the Securities Exchange Actof 1934. This Controls and Procedures section includes the informationconcerning the controls evaluation referred to in the certifications and itshould be read in conjunction with the certifications for a more completeunderstanding of the topics presented.

 

Disclosure controls and procedures (as defined in Rule 13a-15 and15d-15f under the Securities Exchange Act of 1934 (the “Exchange Act”) arecontrols and other procedures that are designed to ensure that informationrequired to be disclosed in our reports filed under the Exchange Act, such asthis Annual Report, is recorded, processed, summarized and reported within thetime periods specified in the SEC’s rules and forms. Disclosure controlsand procedures are also designed to ensure that such information is accumulatedand communicated to our management, including the General Partner’s principalexecutive and principal financial officers, as appropriate, to allow timelydecisions regarding required disclosure.

 

Based on the disclosure controls and procedures evaluation referencedabove, the General Partner’s Chief Executive Officer and Chief FinancialOfficer have concluded that as of the end of the period covered by this AnnualReport, our disclosure controls and procedures were effective.

 

Management’s annual report on internal control over financial reportingand the audit report of our registered public accounting firm are included inItem 15 of Part IV under the headings “Management’s Report on InternalControl” and “Report of Independent Registered Public Accounting Firm,”respectively, and are incorporated herein by reference.

 

There were no changes in our internal controls over financial reportingduring the quarter ended December 31, 2007, that have materially affected,or are reasonably likely to materially affect, our internal controls overfinancial reporting.

 

**Item 9B.Other Information**

 

There was no information required to be disclosed in a report on Form 8-Kduring the fourth quarter of 2007 for which no Form 8-K was filed.

 

40

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**PART III**

 

**Item 10.  Directors and Executive Officers of theRegistrant**

 

The Partnership does not have any directors orofficers. Thefollowing is a summary of the executive officers of the General Partner as of January 1,2008:

 

***Dennis D. Oklak,age 54***.  Mr. Oklak was named Chief ExecutiveOfficer of the General Partner in April 2004, and was elected Chairman ofthe General Partner’s Board of Directors in April 2005. He was Co-ChiefOperating Officer from April 2002 through January 2003, at which timehe was named President and Chief Operating Officer. Mr. Oklak assumed theposition of Executive Vice President and Chief Administrative Officer in 1997.From 1986 through 1997, Mr. Oklak served in various financial positions ofthe General Partner. He is also a member of the board of directors ofrecreational vehicle manufacturer Monaco Coach Corporation and the board ofdirectors of the Central Indiana Corporate Partnership. Mr. Oklak alsoserves on the Board of Governors of the National Association of Real EstateInvestment Trusts, or NAREIT. Mr. Oklak has served as a director of the GeneralPartner since 2004.

 

***Matthew A. Cohoat,age 48***. Mr. Cohoatwas named Executive Vice President and Chief Financial Officer of the GeneralPartner on January 1, 2004. From 1990 through 2003, Mr. Cohoat heldvarious positions in financial areas of the General Partner. Mr. Cohoatcurrently is a member of the board of directors of the Indiana Golf AssociationFoundation, the Western Golf Association, and United Way of Central Indiana.Additionally, Mr. Cohoat is Vice Chair of the board of directors ofCathedral High School, Treasurer of the board of directors of the IndianapolisZoo, and secretary of the advisory council of St. Mary’s Child Center.

 

***Robert M. Chapman,age 54***.  Mr. Chapman has served as ChiefOperating Officer of the General Partner since August 2007.  He served as Senior Executive Vice President,Real Estate Operations, from November 2003 to July 2007. From 1999through November 2003, Mr. Chapman served in various real estateinvestment and operating positions of the General Partner. Mr. Chapmanserves as a director for Rock-Tenn Company, a leading manufacturer of packagingproducts, merchandising displays and bleached and recycled paperboard.

 

***Howard L. Feinsand,age 60***.** Mr. Feinsandhas served as the General Partner’s Executive Vice President and GeneralCounsel since 1999 and, since 2003, also has served as the General Partner’sCorporate Secretary. Mr. Feinsand served on the General Partner’s board ofdirectors from 1988 to January 2003. Mr. Feinsand serves as vicechair of the board of directors of The Alliance Theatre at the Woodruff ArtsCenter in Atlanta, Georgia, the predominant regional theatre for thesoutheastern United States. Mr. Feinsand is a director of the Center forJewish Educational Experiences and a trustee of the Jewish Federation ofGreater Atlanta.

 

***Steven R. Kennedy,age*****51**. Mr. Kennedy was named as theGeneral Partner’s Executive Vice President, Construction on January 1,2004. From 1986 until 2004, he served in various capacities in the constructiongroup, most recently as Senior Vice President. Mr. Kennedy serves as ViceChair of the advisory council for Purdue University’s School of Engineering.

 

All other information requiredby this item is contained in the General Partner’s Proxy Statement and isherein incorporated by this reference.

 

**Item 11.  Executive Compensation**

 

The information required by Item11 is contained in the General Partner’s Proxy Statement and is incorporatedherein by reference.

 

**Item 12. SecurityOwnership of Certain Beneficial Owners and Management and Related StockholderMatters**

** **

The information required by Item12 is contained in the General Partner’s Proxy Statement, and is incorporatedherein by reference.

 

41

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**Item 13.  Certain Relationshipsand Related Transactions, and Director Independence**

 

Theinformation required by Item 13 is contained in the General Partner’s ProxyStatement, and is incorporated herein by reference.

 

**Item 14.  Principal AccountantFees and Services**

 

Theinformation required by Item 14 is contained in the General Partner’s ProxyStatement, which herein is incorporated by reference.

 

**PART IV**

 

**Item15.  Exhibits and Financial StatementSchedules**

 

**(a)****          ****The following documents are filedas part of this Annual Report:**

 

**1.****   ****Consolidated Financial Statements**

 

Thefollowing Consolidated Financial Statements, together with the Management’sReport on Internal Control and the Report of Independent Registered PublicAccounting Firm are listed below:

 
|   | Management’s Report on  Internal Control                                                         |   |
|--------|-------------------------------------------------------------------------------------------------------|--------|
|   | Report of Independent  Registered Public Accounting Firm                                              |   |
|   | Consolidated Balance Sheets,  December 31, 2007 and 2006                                         |   |
|   | Consolidated  Statements of Operations, Years Ended December 31, 2007, 2006 and 2005             |   |
|   | Consolidated  Statements of Cash Flows, Years Ended December 31, 2007, 2006 and 2005             |   |
|   | Consolidated  Statements of Partners’ Equity, Years Ended December 31, 2007, 2006 and  2005 |   |
|   | Notes to Consolidated Financial Statements                                                            |   |

 

**2.****    ****Consolidated Financial Statement Schedules**

 

Schedule III – Real Estate andAccumulated Depreciation

 

42

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**3.****     Exhibits**

 

The following exhibits are filed with this Form 10-K orincorporated herein by reference to the listed document previously filed withthe SEC. Previously unfiled documents are noted with an asterisk (*).

 
| **Number** | ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | ** ** | **Description** | ** ** |
|------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-----------------|------------|
|       |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 3.1(i)     |       | Certificate of Limited Partnership of Duke Realty  Limited Partnership, dated September 17, 1993 (filed as  Exhibit 3.1(i) to the Partnership’s Annual Report on Form 10-K  for the year ended December 31, 2006, as filed with the SEC on  March 13, 2007, File No. 000-20625, and incorporated herein by this  reference).                                                                                                                                                                                         |
|       |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 3.2(i)     |       | Second Amended and Restated Agreement of Limited  Partnership of Duke Realty Limited Partnership (filed as  Exhibit 3.2(i) to the Partnership’s Annual Report on Form 10-K  for the year ended December 31, 2006, as filed with the SEC on  March 13, 2007, File No. 000-20625, and incorporated herein by this  reference).                                                                                                                                                                                              |
|       |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 3.2(ii)    |       | Second Amendment to Second Amended and Restated  Agreement of Limited Partnership of Duke Realty Limited Partnership (filed as  Exhibit 10.3 to the General Partner’s Annual Report on Form 10-K405  for the year ended December 31, 2001, as filed with the SEC on  March 15, 2002, File No. 001-09044, and incorporated herein by this  reference).                                                                                                                                                                          |
|       |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 3.2(iii)   |       | Third Amendment to Second Amended and Restated  Agreement of Limited Partnership of Duke Realty Limited Partnership (filed as  Exhibit 10.4 to the General Partner’s Annual Report on Form 10-K405  for the year ended December 31, 2001, as filed with the SEC on  March 15, 2002, File No. 001-09044, and incorporated herein by this  reference).                                                                                                                                                                           |
|       |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 3.2(iv)    |       | Fourth Amendment to Second Amended and Restated  Agreement of Limited Partnership of Duke Realty Limited Partnership (filed as  Exhibit 10.5 to the General Partner’s Annual Report on Form 10-K405  for the year ended December 31, 2001, as filed with the SEC on  March 15, 2002, File No. 001-09044, and incorporated herein by this  reference).                                                                                                                                                                          |
|       |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 3.2(v)     |       | Fifth Amendment to Second Amended and Restated  Agreement of Limited Partnership of Duke Realty Limited Partnership, dated  August 25, 2003, establishing the amount, terms and rights of Duke  Realty Limited Partnership’s 6.625% Series J Cumulative Redeemable  Preferred Units (filed as Exhibit 10.6 to the General Partner’s Annual  Report on Form 10-K for the year ended December 31, 2005, as filed  with the SEC on March 7, 2006, File No. 001-09044, and incorporated  herein by this reference). |
|       |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 3.2(vi)    |       | Sixth Amendment to Second Amended and Restated  Agreement of Limited Partnership of Duke Realty Limited Partnership, dated  February 13, 2004, establishing the amount, terms and rights of Duke  Realty Limited Partnership’s 6.5% Series K Cumulative Redeemable  Preferred Units (filed as Exhibit 10.7 to the General Partner’s Annual  Report on Form 10-K for the year ended December 31, 2005, as filed  with the SEC on March 7, 2006, File No. 001-09044, and incorporated  herein by this reference). |
|       |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 3.2(vii)   |       | Seventh Amendment to Second Amended and Restated  Agreement of Limited Partnership of Duke Realty Limited Partnership, dated  November 30, 2004, establishing the amount, terms and rights of Duke Realty  Limited Partnership’s 6.6% Series L Cumulative Redeemable Preferred Units  (filed as Exhibit 10.8 to the General Partner’s Annual Report on Form 10-K  for the year ended December 31, 2005, as filed with the SEC on March 7, 2006,  File No. 001-09044, and incorporated herein by this reference).                                   |

 

43

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| 3.2(viii) |   | Eighth Amendment to Second Amended and Restated  Agreement of Limited Partnership of Duke Realty Limited Partnership, dated  January 31, 2006, establishing the amount, terms and rights of Duke  Realty Limited Partnership’s 6.95% Series M Cumulative Redeemable  Preferred Units (filed as Exhibit 3.1 to the Current Report on  Form 8-K, as filed with the SEC on February 6, 2006, File  No. 000-20625, and incorporated herein by this reference).                                                                                                                                                                                                                       |
|-----------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.2(ix)   |   | Ninth Amendment to the Second Amended and Restated  Agreement of Limited Partnership of Duke Realty Limited Partnership, dated  June 30, 2006, establishing the amount, terms and rights of Duke Realty  Limited Partnership’s 7.25% Series N Cumulative Redeemable Preferred  Units (filed as Exhibit 3.1 to the Partnership’s Current Report on  Form 8-K, as filed with the SEC on July 5, 2006, File  No. 000-20625, and incorporated herein by this reference).                                                                                                                                                                                                        |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.2(x)    |   | Tenth Amendment to the Second Amended and Restated  Agreement of Limited Partnership of Duke Realty Limited Partnership, dated  April 30, 2007, deleting those exhibits setting forth the rights of the  Partnership’s previously issued Series A Preferred Units, Series D  Preferred Units, Series E Preferred Units, Series F Preferred  Units, Series H Preferred Units and Series I Preferred Units,  (filed as Exhibit 3.2(x) to the Partnership’s Quarterly Report on  Form 10-Q for the quarter ended June 30, 2007, as filed with the  SEC on August 13, 2007, File No. 000-20625, and incorporated herein  by this reference). |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.2(xi)   |   | Eleventh Amendment to the Second Amended and  Restated Agreement of Limited Partnership of Duke Realty Limited Partnership,  dated April 30, 2007, deleting those exhibits setting forth the rights  of the Partnership’s previously issued Series B Preferred Units.*                                                                                                                                                                                                                                                                                                                                                                                                                               |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 3.2(xii)  |   | Twelfth Amendment to the Second Amended and Restated  Agreement of Limited Partnership of Duke Realty Limited Partnership,  establishing the amount, terms and rights of Duke Realty Limited  Partnership’s 8.375% Series O Cumulative Redeemable Preferred Units  (filed as Exhibit 3.1 to the Partnership’s Current Report on  Form 8-K, as filed with the SEC on February 27, 2008, and  incorporated herein by this reference).                                                                                                                                                                                                                                                   |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.1(i)    |   | Third Restated Articles of Incorporation of Duke  Realty Corporation (filed as Exhibit 3.1 to the General Partner’s  Quarterly Report on Form 10-Q for the quarter ended March 31, 2003,  as filed with the SEC on May 13, 2003, File No. 001-09044, and  incorporated herein by this reference).                                                                                                                                                                                                                                                                                                                                                                                     |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.1(ii)   |   | Amendment to the Third Restated Articles of  Incorporation of Duke Realty Corporation, establishing the amount, terms and  rights of the General Partner’s 6.625% Series J Cumulative Redeemable  Preferred Shares (filed as Exhibit 3 to the General Partner’s Current  Report on Form 8-K, as filed with the SEC on August 27, 2003, File  No. 001-09044, and incorporated herein by this reference).                                                                                                                                                                                                                                                                          |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.1(iii)  |   | Amendment to the Third Restated Articles of  Incorporation of Duke Realty Corporation, establishing the amount, terms and  rights of the General Partner’s 6.5% Series K Cumulative Redeemable  Preferred Shares (filed as Exhibit 3 to the General Partner’s Current  Report on Form 8-K, as filed with the SEC on February 26, 2004,  File No. 001-09044, and incorporated herein by this reference).                                                                                                                                                                                                                                                                          |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.1(iv)   |   | Amendment to the Third Restated Articles of  Incorporation of Duke Realty Corporation, establishing the amount, terms and  rights of the General Partner’s 6.6% Series L Cumulative Redeemable  Preferred Shares (filed as Exhibit 3.1 of the General Partner’s Current  Report on Form 8-K, as filed with the SEC on November 29, 2004,  File No. 001-09044, and incorporated herein by reference).                                                                                                                                                                                                                                                                             |

 

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| 4.1(v)    |   | Amendment to the Third Restated Articles of  Incorporation of Duke Realty Corporation, establishing the amount, terms and  rights of the General Partner’s 7.25% Series N Cumulative Redeemable  Preferred Shares (filed as Exhibit 3.1 to the General Partner’s Current  Report on Form 8-K, as filed with the SEC on July 6, 2006, and  incorporated herein by this reference).                                                                                                                  |
|-----------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.1(vi)   |   | Amendment to the Third Restated Articles of  Incorporation of Duke Realty Corporation, amending the Designating Amendment  to the Third Restated Articles of Incorporation of Duke Realty Corporation,  establishing the amount, terms and rights of the General Partner’s 6.95%  Series M Cumulative Redeemable Preferred Shares (filed as  Exhibit 3.2 to the General Partner’s Current Report on Form 8-K, as  filed with the SEC on July 6, 2006, and incorporated herein by this  reference). |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.1(vii)  |   | Amendment to the Third Restated Articles of  Incorporation of Duke Realty Corporation, deleting Exhibits A, D, E, F, H and  I and de-designating the related series of preferred shares (filed as  Exhibit 3.1(viii) to the General Partner’s Quarterly Report on  Form 10-Q for the quarter ended June 30, 2007, as filed with the  SEC on August 7, 2007, File No. 001-09044, and incorporated herein  by this reference).                                                                  |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.1(viii) |   | Amendment to the Third Restated Articles of  Incorporation of Duke Realty Corporation, deleting Exhibit B and  de-designating the related series of preferred shares (filed as  Exhibit 3.1(viii) to the General Partner’s Annual Report on Form 10-K  as filed with the SEC on February 29, 2008, File No. 001-09044, and  incorporated herein by this reference).                                                                                                                           |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.1(ix)   |   | Amendment to the Third Restated Articles of  Incorporation of Duke Realty Corporation, establishing the amount, terms and  rights of Duke Realty Corporation’s 8.375% Series O Cumulative  Redeemable Preferred Shares (filed as Exhibit 3.1 to the General  Partner’s Registration Statement on Form 8-A, as filed with the SEC on  February 22, 2008, File No. 001-09044, and incorporated herein by this  reference).                                                                      |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.2(i)    |   | Third Amended and Restated Bylaws of Duke Realty  Corporation (filed as Exhibit 3.2 to the General Partner’s Quarterly  Report on Form 10-Q for the quarter ended March 31, 2003, as filed  with the SEC on May 13, 2003, File No. 001-09044, and incorporated  herein by this reference).                                                                                                                                                                                                         |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.2(ii)   |   | Amendment No. 1 to the Third Amended and  Restated By-Laws of Duke Realty Corporation (filed as Exhibit 3.1 to the  General Partner’s Current Report on Form 8-K, as filed with the SEC on  February 7, 2008, File No. 001-09044, and incorporated herein by  this reference).                                                                                                                                                                                                                     |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.3(i)    |   | Indenture, dated September 19, 1995, between  Duke Realty Limited Partnership and The First National Bank of Chicago,  Trustee (filed as Exhibit 4.1 to the General Partner’s Current Report on  Form 8-K, as filed with the SEC on September 22, 1995, File  No. 001-09044, and incorporated herein by this reference).                                                                                                                                                                           |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.3(ii)   |   | First Supplemental Indenture, dated  September 19, 1995, between Duke Realty Limited Partnership and The  First National Bank of Chicago, Trustee (filed as Exhibit 4.2 to the  General Partner’s Current Report on Form 8-K, as filed with the SEC on  September 22, 1995, File No. 001-09044, and incorporated herein by  this reference).                                                                                                                                                       |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 4.3(iii)  |   | Second Supplemental Indenture, dated April 29,  1996, between Duke Realty Limited Partnership and The First National Bank of  Chicago, Trustee (filed as Exhibit 4 to the Partnership’s Current Report  on Form 8-K, as filed with the SEC on July 12, 1996, File  No. 000-20625, and incorporated herein by this reference).                                                                                                                                                                      |

 

45

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| 4.3(iv)   |   | Third Supplemental Indenture, dated May 13, 1997,  between Duke Realty Limited Partnership and The First National Bank of  Chicago, Trustee (filed as Exhibit 4 to the Partnership’s Current Report on  Form 8-K, as filed with the SEC on May 20, 1997, File No. 000-20625, and  incorporated herein by this reference).                                           |
|-----------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |   |                                                                                                                                                                                                                                                                                                                                                                     |
| 4.3(v)    |   | Fourth Supplemental Indenture, dated August 21,  1997, between Duke Realty Limited Partnership and The First National Bank of  Chicago, Trustee (filed as Exhibit 4.8 to the General Partner’s  Registration Statement on Form S-4, as filed with the SEC on May 4,  1999, File No. 333-77645, and incorporated herein by this reference). |
|      |   |                                                                                                                                                                                                                                                                                                                                                                     |
| 4.3(vi)   |   | Fifth Supplemental Indenture, dated May 27,  1998, between Duke Realty Limited Partnership and The First National Bank of  Chicago, Trustee (filed as Exhibit 4 to the Partnership’s Current Report  on Form 8-K, as filed with the SEC on June 1, 1998, File  No. 000-20625, and incorporated herein by this reference).                  |
|      |   |                                                                                                                                                                                                                                                                                                                                                                     |
| 4.3(vii)  |   | Sixth Supplemental Indenture, dated  February 12, 1999, between Duke Realty Limited Partnership and The First  National Bank of Chicago, Trustee (filed as Exhibit 4 to the Partnership’s  Current Report on Form 8-K, as filed with the SEC on February 12,  1999, File No. 000-20625, and incorporated herein by this reference).        |
|      |   |                                                                                                                                                                                                                                                                                                                                                                     |
| 4.3(viii) |   | Seventh Supplemental Indenture, dated June 18,  1999, between Duke Realty Limited Partnership and The First National Bank of  Chicago, Trustee (filed as Exhibit 4 to the Partnership’s Current Report  on Form 8-K, as filed with the SEC on June 29, 1999, File  No. 000-20625, and incorporated herein by this reference).              |
|      |   |                                                                                                                                                                                                                                                                                                                                                                     |
| 4.3(ix)   |   | Eighth Supplemental Indenture, dated  November 16, 1999, between Duke Realty Limited Partnership and Bank One  Trust Company, N.A., Trustee (filed as Exhibit 4 to the Partnership’s  Current Report on Form 8-K, as filed with the SEC on November 15,  1999, File No. 000-20625, and incorporated herein by this reference).             |
|      |   |                                                                                                                                                                                                                                                                                                                                                                     |
| 4.3(x)    |   | Ninth Supplemental Indenture, dated March 5,  2001, between Duke Realty Limited Partnership and Bank One Trust Company,  N.A., Trustee (filed as Exhibit 4 to the Partnership’s Current Report on  Form 8-K, as filed with the SEC on March 2, 2001, File  No. 000-20625, and incorporated herein by this reference).                      |
|      |   |                                                                                                                                                                                                                                                                                                                                                                     |
| 4.3(xi)   |   | Tenth Supplemental Indenture, dated June 8,  2001, between Duke Realty Limited Partnership and Bank One Trust Company,  N.A., Trustee (filed as Exhibit 4 to the Partnership’s Current Report on  Form 8-K, as filed with the SEC on August 13, 2001, File  No. 000-20625, and incorporated herein by this reference).                     |
|      |   |                                                                                                                                                                                                                                                                                                                                                                     |
| 4.3(xii)  |   | Eleventh Supplemental Indenture, dated  August 26, 2002, between Duke Realty Limited Partnership and Bank One  Trust Company, N.A., Trustee (filed as Exhibit 4 to the Partnership’s  Current Report on Form 8-K, as filed with the SEC on August 26,  2002, File No. 000-20625, and incorporated herein by this reference).               |
|      |   |                                                                                                                                                                                                                                                                                                                                                                     |
| 4.3(xiii) |   | Twelfth Supplemental Indenture, dated  January 16, 2003, between Duke Realty Limited Partnership and Bank One  Trust Company, N.A., Trustee (filed as Exhibit 4 to the Partnership’s  Current Report on Form 8-K, as filed with the SEC on January 16, 2003,  File No. 000-20625, and incorporated herein by this reference).              |
|      |   |                                                                                                                                                                                                                                                                                                                                                                     |
| 4.3(xiv)  |   | Thirteenth Supplemental Indenture, dated  May 22, 2003, between Duke Realty Limited Partnership and Bank One Trust  Company, N.A., Trustee (filed as Exhibit 4 to the Partnership’s Current  Report on Form 8-K, as filed with the SEC on May 22, 2003, File  No. 000-20625, and incorporated herein by this reference).                   |

 

46

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| 4.3(xv)    |   | Fourteenth Supplemental Indenture, dated  October 24, 2003, between Duke Realty Limited Partnership and Bank One  Trust Company, N.A., Trustee (filed as Exhibit 4 to the Partnership’s  Current Report on Form 8-K, as filed with the SEC on October 24,  2003, File No. 000-20625, and incorporated herein by this reference).                                                                                                                                                                                                                                                                             |
|------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.3(xvi)   |   | Fifteenth Supplemental Indenture, dated  January 7, 2004, between Duke Realty Limited Partnership and J.P. Morgan  Trust Company, National Association, Trustee (filed as Exhibit 4 to the  Partnership’s Current Report on Form 8-K, as filed with the SEC on January 9,  2004, File No. 000-20625, and incorporated herein by this reference).                                                                                                                                                                                                                                                             |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.3(xvii)  |   | Sixteenth Supplemental Indenture, dated  January 16, 2004, between Duke Realty Limited Partnership and J.P.  Morgan Trust Company, National Association, Trustee (filed as Exhibit 4  to the Partnership’s Current Report on Form 8-K, as filed with the SEC  on January 23, 2004, File No. 000-20625, and incorporated herein by  this reference).                                                                                                                                                                                                                                                          |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.3(xviii) |   | Seventeenth Supplemental Indenture, dated  August 16, 2004, between Duke Realty Limited Partnership and J.P. Morgan  Trust Company, National Association, Trustee (filed as Exhibit 4 to the  Partnership’s Current Report on Form 8-K, as filed with the SEC on  August 18, 2004, File No. 000-20625, and incorporated herein by  this reference).                                                                                                                                                                                                                                                          |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.3(xix)   |   | Eighteenth Supplemental Indenture, dated  December 22, 2004, between Duke Realty Limited Partnership and J.P.  Morgan Trust Company, National Association, Trustee (filed as Exhibit 4  to the Partnership’s Current Report on Form 8-K, as filed with the SEC  on December 23, 2004, File No. 000-20625, and incorporated herein  by this reference).                                                                                                                                                                                                                                                       |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.3(xx)    |   | Nineteenth Supplemental Indenture, dated as of  March 1, 2006, by and between Duke Realty Limited Partnership and J.P.  Morgan Trust Company, National Association (successor in interest to Bank One  Trust Company, N.A.), including the form of global note evidencing the 5.5%  Senior Notes Due 2016 (filed as Exhibit 4.1 to the Partnership’s Current  Report on Form 8-K, as filed with the SEC on March 3, 2006, File  No. 000-20625, and incorporated herein by this reference).                                                                                                                   |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.3(xxi)   |   | Twentieth Supplemental Indenture, dated as of  July 24, 2006, by and between Duke Realty Limited Partnership and J.P.  Morgan Trust Company, National Association (successor in interest to The  First National Bank of Chicago), modifying certain financial covenants  contained in Sections 1004 and 1005 of the Indenture, dated  September 19, 1995, between Duke Realty Limited Partnership and The  First National Bank of Chicago, Trustee (filed as Exhibit 4.1 to the  Partnership’s Current Report on Form 8-K, filed with the SEC on  July 28, 2006, and incorporated herein by this reference). |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.4(i)     |   | Indenture, dated as of July 28, 2006, by and  between Duke Realty Limited Partnership and J.P. Morgan Trust Company,  National Association (filed as Exhibit 4.1 to the General Partner’s  automatic shelf registration statement on Form S-3, filed with the SEC  on July 31, 2006, and incorporated herein by this reference).                                                                                                                                                                                                                                                                                  |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.4(ii)    |   | First Supplemental Indenture, dated as of  August 24, 2006, by and between Duke Realty Limited Partnership and J.P.  Morgan Trust Company, National Association, including the form of global note  evidencing the 5.625% Senior Notes Due 2011 (filed as Exhibit 4.1 to the  Partnership’s Current Report on Form 8-K, as filed with the SEC on  August 30, 2006, and incorporated herein by this reference).                                                                                                                                                                                                    |

 

47

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| 4.4(iii)  |   | Second Supplemental Indenture, dated as of  August 24, 2006, by and between Duke Realty Limited Partnership and J.P.  Morgan Trust Company, National Association, including the form of global note  evidencing the 5.95% Senior Notes Due 2017 (filed as Exhibit 4.2 to the  Partnership’s Current Report on Form 8-K, as filed with the SEC on  August 30, 2006, and incorporated herein by this reference).                                                              |
|-----------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 4.4(iv)   |   | Third Supplemental Indenture, dated as of  September 11, 2007, by and between Duke Realty Limited Partnership and  The Bank of New York Trust Company, N.A. (as successor to J.P. Morgan Trust  Company, National Association), including the form of global note evidencing  the 6.50% Senior Notes Due 2018 (filed as exhibit 4.1 to the Partnership’s  Current Report on Form 8-K, as filed with the SEC on September 12,  2007, and incorporated herein by this reference).  |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 4.5       |   | Indenture, dated November 22, 2006, by and  among Duke Realty Limited Partnership, the General Partner and The Bank of  New York Trust Company, N.A., as trustee, including the form of 3.75%  Exchangeable Senior Note due 2011 (filed as Exhibit 4.1 to the  Partnership’s Current Report on Form 8-K, as filed with the Commission  on November 29, 2006, File No. 000-20625, and incorporated herein  by this reference).                                          |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 4.6       |   | Deposit Agreement, dated as of January 31, 2006,  by and among the General Partner, American Stock Transfer & Trust  Company, as depositary, and the holders from time to time of the Depositary  Receipts (which includes as an exhibit the form of Depositary Receipts filed  as Exhibit 4.1 to the General Partner’s Current Report on Form 8-K,  as filed with the SEC January 31, 2006, File No. 001-09044, and  incorporated herein by this reference). |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.1(i)   |   | Second Amended and Restated Agreement of Limited  Partnership of Duke Realty Services Limited Partnership (the “Services  Partnership”), dated as of September 30, 1994 (filed as  Exhibit 10.3 to the General Partner’s Annual Report on Form 10-K  for the year ended December 31, 1994, as filed with the SEC on  February 21, 1996, File No. 001-09044, and incorporated herein by  this reference).                                                |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.1(ii)  |   | First Amendment to Second Amended and Restated  Agreement of Limited Partnership of the Services Partnership, dated  July 23, 1998 (filed as Exhibit 10.7 to the General Partner’s  Annual Report on Form 10-K for the year ended December 31, 2001, as  filed with the SEC on March 15, 2002, File No. 001-09044, and  incorporated by this reference).                                                                                                          |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.1(iii) |   | Second Amendment to Second Amended and Restated  Agreement of Limited Partnership of the Services Partnership, dated  October 26, 1995 (filed as Exhibit 10.8 to the General Partner’s  Annual Report on Form 10-K for the year ended December 31, 2001, as  filed with the SEC on March 15, 2002, File No. 001-09044, and  incorporated by this reference).                                                                                                      |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.1(iv)  |   | Third Amendment to Second Amended and Restated  Agreement of Limited Partnership of the Services Partnership, effective as of  January 1, 2002 (filed as Exhibit 10.9 to the General Partner’s  Annual Report on Form 10-K for the year ended December 31, 2001, as  filed with the SEC on March 15, 2002, File No. 001-09044, and  incorporated by this reference).                                                                                              |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.2      |   | Promissory Note of the Services Partnership (filed  as Exhibit 10.3 to the General Partner’s Registration Statement on  Form S-2, as filed with the SEC on June 8, 1993, File  No. 33-64038, and incorporated herein by this reference).                                                                                                                                                                                                                                    |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.3(i)   |   | 1995 Key Employee Stock Option Plan of the General  Partner (filed as Exhibit 10.13 to the General Partner’s Annual Report  on Form 10-K for the year ended December 31, 1995, as filed with  the SEC on March 30, 1995, File No. 001-09044, and incorporated  herein by this reference).#                                                                                                                                                                             |

 

48

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| 10.3(ii)   |   | Amendment One to the 1995 Key Employees’ Stock  Option Plan of Duke Realty Investments, Inc. (filed as  Exhibit 10.19 to the General Partner’s Annual Report on  Form 10-K405 for the year ended December 31, 2001, as filed with  the SEC on March 15, 2002, File No. 001-09044, and incorporated  herein by this reference).#   |
|------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |   |                                                                                                                                                                                                                                                                                                                                                                      |
| 10.3(iii)  |   | Amendment Two to the 1995 Key Employees’ Stock  Option Plan of Duke Realty Investments, Inc. (filed as  Exhibit 10.20 to the General Partner’s Annual Report on  Form 10-K405 for the year ended December 31, 2001, as filed with  the SEC on March 15, 2002, File No. 001-09044, and incorporated  herein by this reference).#   |
|       |   |                                                                                                                                                                                                                                                                                                                                                                      |
| 10.3(iv)   |   | Amendment Three to the 1995 Key Employees’ Stock  Option Plan of Duke Realty Investments, Inc. (filed as  Exhibit 10.21 to the General Partner’s Annual Report on  Form 10-K405 for the year ended December 31, 2001, as filed with  the SEC on March 15, 2002, File No. 001-09044, and incorporated  herein by this reference).# |
|       |   |                                                                                                                                                                                                                                                                                                                                                                      |
| 10.3(v)    |   | Amendment Four to the 1995 Key Employees’ Stock  Option Plan of Duke Realty Investments, Inc. (filed as  Exhibit 10.22 to the General Partner’s Annual Report on  Form 10-K405 for the year ended December 31, 2001, as filed with  the SEC on March 15, 2002, File No. 001-09044, and incorporated  herein by this reference).#  |
|       |   |                                                                                                                                                                                                                                                                                                                                                                      |
| 10.3(vi)   |   | Amendment Five to the 1995 Key Employees’ Stock  Option Plan of Duke Realty Investments, Inc. (filed as  Exhibit 10.23 to the General Partner’s Annual Report on  Form 10-K405 for the year ended December 31, 2001, as filed with  the SEC on March 15, 2002, File No. 001-09044, and incorporated  herein by this reference).#  |
|       |   |                                                                                                                                                                                                                                                                                                                                                                      |
| 10.3(vii)  |   | Amendment Six to the 1995 Key Employees’ Stock  Option Plan of Duke Realty Investments, Inc. (filed as  Exhibit 10.24 to the General Partner’s Annual Report on  Form 10-K405 for the year ended December 31, 2001, as filed with  the SEC on March 15, 2002, File No. 001-09044, and incorporated  herein by this reference).#   |
|       |   |                                                                                                                                                                                                                                                                                                                                                                      |
| 10.3(viii) |   | Amendment Seven to the 1995 Key Employees’ Stock  Option Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.1  to the General Partner’s Quarterly Report on Form 10-Q, as filed with  the SEC on November 13, 2002, File No. 001-09044, and incorporated  herein by this reference).#                                          |
|       |   |                                                                                                                                                                                                                                                                                                                                                                      |
| 10.3(ix)   |   | Amendment Nine to the 1995 Key Employees’ Stock  Option Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.3  to the General Partner’s Quarterly Report on Form 10-Q, as filed with  the SEC on October 9, 2005, File No. 001-09044, and incorporated  herein by this reference).#                                             |
|       |   |                                                                                                                                                                                                                                                                                                                                                                      |
| 10.3(x)    |   | Amendment Ten to the 1995 Key Employees’ Stock  Option Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.4  to the General Partner’s Quarterly Report on Form 10-Q, as filed with  the SEC on November 8, 2006, File No. 001-09044, and incorporated  herein by this reference).#                                             |
|       |   |                                                                                                                                                                                                                                                                                                                                                                      |
| 10.4(i)    |   | 1995 Shareholder Value Plan of the Services  Partnership (filed as Exhibit 10.15 to the General Partner’s Annual  Report on Form 10-K for the year ended December 31, 1995, as filed  with the SEC on March 30, 1995, File No. 001-09044, and  incorporated herein by this reference).#                                                     |
|       |   |                                                                                                                                                                                                                                                                                                                                                                      |
| 10.4(ii)   |   | Amendment One to the 1995 Shareholder Value Plan of  the Services Partnership (filed as Exhibit 10.29 to the General  Partner’s Annual Report on Form 10-K405 for the year ended  December 31, 2001, as filed with the SEC on March 15, 2002, File  No. 001-09044, and incorporated herein by this reference).#                             |
|       |   |                                                                                                                                                                                                                                                                                                                                                                      |
| 10.4(iii)  |   | Amendment Two to the 1995 Shareholder Value Plan of  the Services Partnership (filed as Exhibit 10.30 to the General  Partner’s Annual Report on Form 10-K405 for the year ended  December 31, 2001, as filed with the SEC on March 15, 2002, File  No. 001-09044, and incorporated herein by this reference).#                             |

 

49

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| 10.4(iv)  |   | Amendment Three to the 1995 Shareholder Value Plan  of the Services Partnership (filed as Exhibit 10.31 to the General  Partner’s Annual Report on Form 10-K405 for the year ended  December 31, 2001, as filed with the SEC on March 15, 2002, File  No. 001-09044, and incorporated herein by this reference).#          |
|-----------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |   |                                                                                                                                                                                                                                                                                                                                                     |
| 10.4(v)   |   | Amendment Four to the 1995 Shareholder Value Plan of  the Services Partnership (filed as Exhibit 10.2 to the General Partner’s  Quarterly Report on Form 10-Q, as filed with the SEC on  November 13, 2002, File No. 001-09044, and incorporated herein by  this reference).#                                                   |
|      |   |                                                                                                                                                                                                                                                                                                                                                     |
| 10.4(vi)  |   | Amendment Five to the 1995 Shareholder Value Plan of  the Services Partnership (filed as Exhibit 10.2 to the General Partner’s  Quarterly Report on Form 10-Q, as filed with the SEC on October 9,  2005, File No. 001-09044, and incorporated herein by this reference).#                                                      |
|      |   |                                                                                                                                                                                                                                                                                                                                                     |
| 10.5(i)   |   | 1999 Directors’ Stock Option and Dividend Increase  Unit Plan of Duke Realty Investments, Inc. (filed as Annex F to the  prospectus in the General Partner’s Registration Statement on Form S-4,  as filed with the SEC on May 4, 1999, File No. 333-77645, and  incorporated herein by this reference).#                  |
|      |   |                                                                                                                                                                                                                                                                                                                                                     |
| 10.5(ii)  |   | Amendment One to the 1999 Directors’ Stock Option  and Dividend Increase Unit Plan of Duke Realty Investments, Inc. (filed  as Appendix B of the Registrant’s Definitive Proxy Statement on Schedule 14A,  as filed with the SEC on March 15, 2005, File No. 001-09044, and  incorporated herein by this reference).#           |
|      |   |                                                                                                                                                                                                                                                                                                                                                     |
| 10.6(i)   |   | 1999 Salary Replacement Stock Option and Dividend  Increase Unit Plan (filed as Annex G to the prospectus in the General  Partner’s Registration Statement on Form S-4, as filed with the SEC on  May 4, 1999, File No. 333-77645, and incorporated herein by this  reference).#                                                     |
|      |   |                                                                                                                                                                                                                                                                                                                                                     |
| 10.6(ii)  |   | Amendment One to the 1999 Salary Replacement Stock  Option and Dividend Increase Unit Plan of Duke Realty Investments, Inc.  (filed as Exhibit 10.3 to the General Partner’s Quarterly Report on  Form 10-Q, as filed with the SEC on November 13, 2002, File  No. 001-09044, and incorporated herein by this reference).# |
|      |   |                                                                                                                                                                                                                                                                                                                                                     |
| 10.6(iii) |   | Amendment Two to the 1999 Salary Replacement Stock  Option and Dividend Increase Unit Plan of Duke Realty Investments, Inc.  (filed as Exhibit 10.4 to the General Partner’s Quarterly Report on  Form 10-Q, as filed with the SEC on November 13, 2002, File  No. 001-09044, and incorporated herein by this reference).# |
|      |   |                                                                                                                                                                                                                                                                                                                                                     |
| 10.7(i)   |   | 2000 Performance Share Plan of Duke-Weeks Realty  Corporation (filed as Exhibit A of the Registrant’s Definitive Proxy  Statement on Schedule 14A, as filed with the SEC on March 15, 2001, File  No. 001-09044, and incorporated herein by this reference).#                                                                        |
|      |   |                                                                                                                                                                                                                                                                                                                                                     |
| 10.7(ii)  |   | Amendment One to the 2000 Performance Share Plan of  Duke-Weeks Realty Corporation (filed as Exhibit 10.6 to the General  Partner’s Quarterly Report on Form 10-Q, as filed with the SEC on  November 13, 2002, File No. 001-09044, and incorporated herein by  this reference).#                                               |
|      |   |                                                                                                                                                                                                                                                                                                                                                     |
| 10.7(iii) |   | Amendment Two to the 2000 Performance Share Plan of  Duke-Weeks Realty Corporation (filed as Exhibit 10.42 to the General  Partner’s Annual Report on Form 10-K for the year ended  December 31, 2003, as filed with the SEC on March 5, 2004, File  No. 001-09044, and incorporated herein by this reference).#           |
|      |   |                                                                                                                                                                                                                                                                                                                                                     |
| 10.7(iv)  |   | Amendment Three to the 2000 Performance Share Plan  of Duke-Weeks Realty Corporation (filed as Exhibit 99.1 to the General  Partner’s Current Report on Form 8-K, as filed with the SEC on  May 2, 2006, File No. 001-09044, and incorporated herein by this  reference).#                                                      |

 

50

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| 10.8(i)    |   | Dividend Increase Unit Plan of the Services  Partnership (filed as Exhibit 10.25 to the General Partner’s Annual  Report on Form 10-K405 for the year ended December 31, 2001, as  filed with the SEC on March 15, 2002, File No. 001-09044, and  incorporated herein by this reference).#                      |
|------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |   |                                                                                                                                                                                                                                                                                                                                          |
| 10.8(ii)   |   | Amendment One to the Dividend Increase Unit Plan of  the Services Partnership (filed as Exhibit 10.26 to the General  Partner’s Annual Report on Form 10-K405 for the year ended  December 31, 2001, as filed with the SEC on March 15, 2002, File  No. 001-09044, and incorporated herein by this reference).# |
|       |   |                                                                                                                                                                                                                                                                                                                                          |
| 10.8(iii)  |   | Amendment Two to the Dividend Increase Unit Plan of  the Services Partnership (filed as Exhibit 10.27 to the General  Partner’s Annual Report on Form 10-K405 for the year ended  December 31, 2001, as filed with the SEC on March 15, 2002, File  No. 001-09044, and incorporated herein by this reference).# |
|       |   |                                                                                                                                                                                                                                                                                                                                          |
| 10.8(iv)   |   | Amendment Three to the Dividend Increase Unit Plan  of the Services Partnership (filed as Exhibit 10.5 to the General  Partner’s Quarterly Report on Form 10-Q, as filed with the SEC on  November 13, 2002, File No. 001-09044, and incorporated herein by  this reference).#                                       |
|       |   |                                                                                                                                                                                                                                                                                                                                          |
| 10.8(v)    |   | Amendment Four to the Dividend Increase Unit Plan of  the Services Partnership (filed as Exhibit 10.30 to the General  Partner’s Annual Report on Form 10-K for the year ended  December 31, 2004, as filed with the SEC on March 4, 2005, File  No. 001-09044, and incorporated herein by this reference).#    |
|       |   |                                                                                                                                                                                                                                                                                                                                          |
| 10.9(i)    |   | Directors’ Deferred Compensation Plan of Duke-Weeks Realty  Corporation (filed as Exhibit 10.5 to the General Partner’s Quarterly  Report on Form 10-Q, as filed with the SEC on November 8, 2006,  File No. 001-09044, and incorporated herein by this reference).#                                            |
|       |   |                                                                                                                                                                                                                                                                                                                                          |
| 10.9(ii)   |   | Amendment One to the Directors’ Deferred  Compensation Plan of Duke-Weeks Realty Corporation (filed as  Exhibit 10.21(ii) to the General Partner’s Annual Report on  Form 10-K, as filed with the SEC on March 31, 2007, File  No. 001-09044, and incorporated herein by this reference).#                 |
|       |   |                                                                                                                                                                                                                                                                                                                                          |
| 10.9(iii)  |   | Amendment Two to the Directors’ Deferred  Compensation Plan of Duke-Weeks Realty Corporation (filed as  Exhibit 10.4 to the General Partner’s Quarterly Report on  Form 10-Q, as filed with the SEC on October 9, 2005, File  No. 001-09044, and incorporated herein by this reference).#                       |
|       |   |                                                                                                                                                                                                                                                                                                                                          |
| 10.9(iv)   |   | Amendment Three to the Directors’ Deferred  Compensation Plan of Duke-Weeks Realty Corporation (filed as  Exhibit 99.2 to the General Partner’s Registration Statement on  Form S-8, as filed with the SEC on March 24, 2004, File  No. 333-113907, and incorporated herein by this reference).#                |
|       |   |                                                                                                                                                                                                                                                                                                                                          |
| 10.10(i)   |   | Duke Realty Corporation 2005 Long-Term Incentive  Plan (filed as Appendix A to the General Partner’s Definitive Proxy Statement  on Schedule 14A, dated March 16, 2005, as filed with the SEC on  March 16, 2005, File No. 001-09044, and incorporated herein by this  reference).#                                       |
|       |   |                                                                                                                                                                                                                                                                                                                                          |
| 10.10(ii)  |   | Form of 2005 Long-Term Incentive Plan Stock  Option Award Certificate (filed as Exhibit 99.4 to the General Partner’s  Current Report on Form 8-K, as filed with the SEC on May 3, 2005,  File No. 001-09044, and incorporated herein by this reference).#                                                      |
|       |   |                                                                                                                                                                                                                                                                                                                                          |
| 10.10(iii) |   | Form of 2005 Long-Term Incentive Plan Award  Certificate for Restricted Stock Units and Shareholder Value Plan Awards  (filed as Exhibit 99.5 to the General Partner’s Current Report on  Form 8-K, as filed with the SEC on May 3, 2005, File  No. 001-09044, and incorporated herein by this reference).#     |

 

51

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| 10.10(iv)  |   | Form of 2005 Long-Term Incentive Plan  Restricted Stock Unit Award Certificate for Non-Employee Directors (filed as  Exhibit 99.6 to the General Partner’s Current Report on Form 8-K,  as filed with the SEC on May 3, 2005, File No. 001-09044, and  incorporated herein by this reference).#                                                                                                                                                                                                                 |
|------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.10(v)   |   | Duke Realty Corporation 2005 Shareholder Value Plan,  a sub-plan of the 2005 Long-Term Incentive Plan (filed as Exhibit 99.2  to the General Partner’s Current Report on Form 8-K, as filed with the  SEC on May 3, 2005, File No. 001-09044, and incorporated herein by  this reference).#                                                                                                                                                                                                                          |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.11(i)   |   | Duke Realty Corporation Non-Employee Directors  Compensation Plan, a sub-plan of the 2005 Long-Term Incentive Plan (filed as  Exhibit 99.3 to the General Partner’s Current Report on Form 8-K as  filed with the SEC on May 3, 2005, File No. 001-09044, and  incorporated herein by this reference).#                                                                                                                                                                                                              |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.11(ii)  |   | Amendment One to the Duke Realty Corporation 2005  Non-Employee Directors Compensation Plan (filed as Exhibit 99.1 to the  General Partner’s Current Report on Form 8-K, as filed with the SEC on  October 31, 2005, File No. 001-09044, and incorporated by this  reference).#                                                                                                                                                                                                                                      |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.11(iii) |   | Amendment Two to the Duke Realty Corporation 2005  Non-Employee Directors Compensation Plan (filed as Exhibit 99.1 to the  General Partner’s Current Report on Form 8-K, as filed with the SEC on  February 7, 2006, File No. 001-09044, and incorporated by this  reference).#                                                                                                                                                                                                                                      |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.11(iv)  |   | Amendment Three to the Duke Realty Corporation 2005  Non-Employee Directors Compensation Plan (filed as Exhibit 10.5 to the  General Partner’s Quarterly Report on Form 10-Q, as filed with the SEC  on November 8, 2006, File No. 001-09044, and incorporated by this  reference).#                                                                                                                                                                                                                                 |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.12      |   | Duke Realty Corporation 2005 Dividend Increase Unit  Replacement Plan (filed as Exhibit 99.1 to the General Partner’s Current  Report on Form 8-K, as filed with the SEC on December 9, 2005, File  No. 001-09044, and incorporated herein by this reference).#                                                                                                                                                                                                                                                      |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.13      |   | Form of Forfeiture Agreement/Performance Unit  Award Agreement (filed as Exhibit 99.2 to the General Partner’s Current  Report on Form 8-K, as filed with the SEC on December 9, 2005, File  No. 001-09044, and incorporated herein by this reference).#                                                                                                                                                                                                                                                        |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.14      |   | Form of Letter Agreement Regarding Executive  Severance, dated December 13, 2007, between the General Partner, as the  General Partner of Duke Realty Limited Partnership, and the following  executive officers: Dennis D. Oklak, Robert M. Chapman, Matthew A. Cohoat, Howard  L. Feinsand and Steven R. Kennedy (filed as Exhibit 10.23 to the General  Partner’s Annual Report on Form 10-K, as filed with the SEC on February  29, 2008, File No. 001-09044, and incorporated herein by this  reference).# |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.15      |   | Term Loan Agreement, Dated May 31, 2005, by and  between Duke Realty Limited Partnership, the General Partner, J.P. Morgan  Securities, Inc., JP Morgan Chase Bank, N.A. and the several banks,  financial institutions and other entities from time to time parties thereto  as lenders (filed as Exhibit 99.1 to the General Partner’s Current  Report on Form 8-K, as filed with the SEC on June 6, 2005, File  No. 001-09044, and incorporated herein by this reference).                              |

 

52

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| 10.16     |   | Commercial Multi-Property Agreement of Purchase and  Sale, dated January 24, 2006, by and among Duke Realty Limited  Partnership, The Mark Winkler Company, and each of the other entities  controlled by or affiliated with The Mark Winkler Company named therein, as  amended by the First Amendment to Commercial Multi-Property Agreement of  Purchase and Sale dated February 28, 2006, the Second Amendment to  Commercial Multi-Property Agreement of Purchase and Sale dated March 10,  2006, and the Third Amendment to Commercial Multi-Property Agreement of  Purchase and Sale dated April 21, 2006 (filed as Exhibit 10.1 to  the General Partner’s Quarterly Report on Form 10-Q, as filed with the  SEC on May 10, 2006, File No. 001-09044, and incorporated herein by  this reference). |
|-----------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.17(i)  |   | Fifth Amended and Restated Revolving Credit  Agreement dated January 25, 2006, among Duke Realty Limited Partnership,  as borrower, the General Partner, as Guarantor, and Bank One as  Administrative Agent and Lender (filed as Exhibit 10.56 to the General  Partner’s Annual Report on Form 10-K for the year ended  December 31, 2005, as filed with the SEC on March 7, 2006, File  No. 001-09044, and incorporated herein by this reference).                                                                                                                                                                                                                                                                                                                                                                |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.17(ii) |   | First Amendment to the Fifth Amended and Restated  Revolving Credit Agreement, dated November 13, 2007, by and between Duke  Realty Limited Partnership, Duke Realty Corporation, JP Morgan Chase Bank,  N.A., and the several banks, financial institutions and other entities from  time to time parties thereto as lenders (filed as Exhibit 10.1 to the  Partnership’s Current Report on Form 8-K, as filed with the SEC on  November 15, 2007, File No. 000-20625, and incorporated herein by  this reference).                                                                                                                                                                                                                                                                                                     |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.18     |   | Term Loan Agreement, dated as of February 28,  2006, by and among Duke Realty Limited Partnership, as borrower, the General  Partner, as Guarantor, certain of their respective subsidiaries, as  guarantors, Bank of America, N.A., individually and as Administrative Agent,  Banc of America Securities LLC, as Lead Arranger and Sole Book Runner, and  each of the other lenders named therein (filed as Exhibit 10.1 to the  Partnership’s Current Report on Form 8-K, as filed with the SEC on  March 3, 2006, File No. 000-20625, and incorporated herein by this  reference).                                                                                                                                                                                                                                   |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.19     |   | Registration Rights Agreement, dated  November 22, 2006, by and among Duke Realty Limited Partnership, the  General Partner, Morgan Stanley & Co. Incorporated, Citigroup Global  Markets Inc. and UBS Securities LLC, as representatives of the initial  purchasers of the Notes (incorporated by reference to Exhibit 10.1 to  the Partnership’s Current Report on Form 8-K, as filed with the  Commission on November 29, 2006, File No. 000-20625, and  incorporated herein by this reference).                                                                                                                                                                                                                                                                                                             |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.20     |   | Common Stock Delivery Agreement, dated  November 22, 2006, by and between Duke Realty Limited Partnership and  the General Partner (filed as Exhibit 10.2 to the Partnership’s Current  Report on Form 8-K, as filed with the Commission on November 29,  2006, File No. 000-20625, and incorporated herein by this reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.21     |   | Contribution Agreement, dated December 5, 2006,  by and between Duke Realty Limited Partnership and Quantico and Belbrook  Realty Corporation, an affiliate of an investment fund managed by Eaton Vance  (filed as Exhibit 10.30 to the General Partner’s Annual Report on  Form 10-K, as filed with the SEC on March 31, 2007, File  No. 001-09044, and incorporated herein by this reference).                                                                                                                                                                                                                                                                                                                                                                                                                        |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.22     |   | Contribution Agreement, dated December 5, 2006,  by and between Duke Realty Limited Partnership and Lafayette and Belcrest Realty  Corporation, an affiliate of an investment fund managed by Eaton Vance (filed  as Exhibit 10.31 to the General Partner’s Annual Report on  Form 10-K, as filed with the SEC on March 31, 2007, File  No. 001-09044, and incorporated herein by this reference).                                                                                                                                                                                                                                                                                                                                                                                                                       |

 

53

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| 12.1   |   | Statement of Computation of Ratios of Earnings to  Fixed Charges.*                                                                                         |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                       |
| 12.2   |   | Statement of Computation of Ratios of Earnings to  Debt Service.*                                                                                          |
|   |   |                                                                                                                                                       |
| 21.1   |   | List of the Duke Realty Limited Partnership’s  Subsidiaries.*                                                                                         |
|   |   |                                                                                                                                                       |
| 23.1   |   | Consent of KPMG LLP.*                                                                                                                                      |
|   |   |                                                                                                                                                       |
| 24.1   |   | Executed Powers of Attorney of certain directors.*                                                                                                         |
|   |   |                                                                                                                                                       |
| 31.1   |   | Certification of the Chief Executive Officer  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                             |
|   |   |                                                                                                                                                       |
| 31.2   |   | Certification of the Chief Financial Officer  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                             |
|   |   |                                                                                                                                                       |
| 32.1   |   | Certification of the Chief Executive Officer  pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002.* * * |
|   |   |                                                                                                                                                       |
| 32.2   |   | Certification of the Chief Financial Officer  pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002.* * * |
|   |   |                                                                                                                                                       |
| 99.1   |   | Selected Quarterly Financial Information.*                                                                                                                 |

 

----

# Represents management contract or compensatory plan or arrangement.

 

* Filed herewith.

 

** The certifications attached as Exhibits 32.1 and 32.2 accompany thisAnnual Report on Form 10-K and are “furnished” to the Securities andExchange Commission pursuant to Section 906 of the Sarbanes-Oxley Act of2002 and shall not be deemed “filed” by us for purposes of Section 18 ofthe Securities Exchange Act of 1934, as amended.

 

**(b)****          ****Exhibits**

 

The exhibits required to be filed with this Form 10-K pursuant toItem 601 of Regulation S-K are listed under “Exhibits” in Part IV, Item14(a)(3) of Form 10-K and are incorporated herein by reference.

 

**(c)****          ****Financial Statement Schedule**

 

The Financial Statement Schedule required tobe filed with this Form 10-K is listed under “Consolidated FinancialStatement Schedules” in Part IV, Item 14(a)(2) of this Form 10-K,and is incorporated herein by reference.

 

54

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**Management’s Report on Internal Control**

 

We, as management of Duke Realty Limited Partnershipand its subsidiaries (the “Partnership”), are responsible for establishing andmaintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) underthe Securities Exchange Act of 1934, as amended). Pursuant to the rules andregulations of the Securities and Exchange Commission, internal control overfinancial reporting is a process designed by, or under the supervision of, theGeneral Partner’s principal executive and principal financial officers, orpersons performing similar functions, and effected by the General Partner’sboard of directors, management and other personnel, to provide reasonableassurance regarding the reliability of financial reporting and the preparationof financial statements for external purposes in accordance with U.S. generallyaccepted accounting principles and includes those policies and procedure that:

 

·                  Pertain to themaintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of assets of the Partnership;

·                  Providereasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally acceptedaccounting principles, and that receipts and expenditures of the Partnershipare being made only in accordance with authorizations of management anddirectors of the General Partner; and

·                  Providereasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of the Partnership’s assets that could have amaterial effect on the financial statements.

 

Management has evaluated the effectiveness of its internalcontrol over financial reporting as of December 31, 2007 based on thecontrol criteria established in a report entitled Internal Control – IntegratedFramework, issued by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO). Based on such evaluation, we have concluded that, as of December 31,2007, our internal control over financial reporting is effective based on thesecriteria.

 

The independent registered public accounting firm ofKPMG LLP, as auditors of the Partnership’s consolidated financial statements,has issued an audit report on the Partnership’s internal control over financialreporting.

 

 

| /s/     Dennis D. Oklak              |   | /s/     Matthew A. Cohoat           |
|---------------------------------------------------------------|--------|--------------------------------------------------------------|
| Dennis D. Oklak                                               |   | Matthew A. Cohoat                                            |
| Chairman and Chief  Executive Officer  of the General Partner |   | Executive Vice President and  Chief Financial Officer of the |
| (Principal Executive Officer)                                 |   | General Partner                                              |
|                                                          |   | (Principal Financial  Officer)                               |

 

55

----

 

# **Report of Independent Registered Public AccountingFirm**

# ** **

The Partners of

Duke Realty Limited Partnership:

 

We have auditedthe consolidated**balance sheets of Duke RealtyLimited Partnership and Subsidiaries (the “Partnership”) as of December 31,2007 and 2006 and the related consolidatedstatements of operations, cash flows and partners’ equity for each of the yearsin the three-year period ended December 31, 2007.  In connection with our audits of theconsolidated financial statements, we have audited the financial statementschedule III. We also have audited the Partnership’s internal control overfinancial reporting as of December 31, 2007, based on criteria established in *Internal Control - Integrated Framework*issued by the Committee of Sponsoring Organizations of the Treadway Commission(COSO). The Partnership’s management is responsible for these consolidated financial statements andfinancial statement schedule, for maintaining effective internal control overfinancial reporting, and for its assessment of the effectiveness of internal controlover financial reporting, included in the accompanying management’s report oninternal control. Our responsibility is to express an opinion on these consolidated financial statements andthe financial statement schedule and an opinion on the Partnership’s internalcontrol over financial reporting based on our audits.

 

We conducted our audits in accordance with thestandards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement and whether effective internal control over financialreporting was maintained in all material respects. Our audits of theconsolidated financial statements included examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements, assessingthe accounting principles used and significant estimates made by management,and evaluating the overall financial statement presentation. Our audit ofinternal control over financial reporting included obtaining an understandingof internal control over financial reporting, assessing the risk that amaterial weakness exists, and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk.  Our audits also included performing suchother procedures as we considered necessary in the circumstances. We believethat our audits provide a reasonable basis for our opinions.

 

A company’s internal control over financial reportingis a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles. A company’sinternal control over financial reporting includes those policies andprocedures that (1) pertain to the maintenance of records that, inreasonable detail, accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accountingprinciples, and that receipts and expenditures of the company are being madeonly in accordance with authorizations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of thecompany’s assets that could have a material effect on the financial statements.

 

Because of its inherent limitations, internal controlover financial reporting may not prevent or detect misstatements. Also,projections of any evaluation of effectiveness to future periods are subject tothe risk that controls may become inadequate because of changes in conditions,or that the degree of compliance with the policies or procedures maydeteriorate.

 

In our opinion, the consolidated financial statementsreferred to above present fairly, in all material respects, the financialposition of Duke Realty Limited Partnership and Subsidiaries as of December 31,2007 and 2006, and the results of their operations and their cash flows foreach of the years in the three-year period ended December 31, 2007, inconformity with U.S. generally accepted accounting principles.  Also, in our opinion, the related financialstatement schedule III, when considered in relation to the basic consolidatedfinancial statements taken as a whole, presents fairly, in all materialrespects, the information set forth therein. Also, in our opinion, Duke RealtyLimited Partnership and Subsidiaries maintained, in all material respects,effective internal control over financial reporting as of December 31,2007, based on criteria established in*Internal Control - Integrated Framework*issued by the Committee of Sponsoring Organizations of the Treadway Commission.

 
| /s/ KPMG LLP          |
|-----------------------|
|                  |
| Indianapolis, Indiana |
| March 6, 2008    |

 

56

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**DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES**

**Consolidated Balance Sheets**

**As of December 31,**

**(in thousands)**

 
| ** **                                                                                  | ** ** | ** **    | **2007**      | ** ** | ** ** | ** ** | **2006** | ** ** | ** ** |
|---------------------------------------------------------------------------------------------|------------|---------------|---------------|------------|------------|------------|----------|------------|------------|
| **ASSETS**                                                                                  |       |          |          |       |       |
|                                                                                        |       |          |          |       |       |
| Real estate  investments:                                                                   |       |          |          |       |       |
| Land and  improvements                                                                      | ** ** | **$872,372**  |          | $          | 844,091    |       |
| Buildings and  tenant improvements                                                          | ** ** | **4,600,408** |          | 4,211,602  |       |
| Construction in  progress                                                                   | ** ** | **412,729**   |          | 359,765    |       |
| Investments in  and advances to unconsolidated companies                                    | ** ** | **601,801**   |          | 628,323    |       |
| Land held for  development                                                                  | ** ** | ** **    | **912,448**   |       |       | 737,752    |     |
| ** **                                                                                  |       | **7,399,758** |          | 6,781,533  |       |
| Accumulated  depreciation                                                                   | ** ** | ** **    | **(951,375)** |       |       | (867,079)  |     |
|                                                                                        | ** ** | ** **    |          |       |       |
| Net real estate  investments                                                                | ** ** | **6,448,383** |          | 5,914,454  |       |
|                                                                                        | ** ** | ** **    |          |       |       |
| Real estate  investments and other assets held-for-sale                                     | ** ** | **273,591**   |          | 512,925    |       |
|                                                                                        | ** ** | ** **    |          |       |       |
| Cash and cash  equivalents                                                                  | ** ** | **47,046**    |          | 68,154     |       |
| Accounts  receivable, net of allowance of $1,359 and $1,088                                 | ** ** | **29,009**    |          | 24,118     |       |
| Straight-line  rent receivable, net of allowance of $2,886 and $1,915                       | ** ** | **110,737**   |          | 105,319    |       |
| Receivables on  construction contracts, including retentions                                | ** ** | **66,925**    |          | 64,768     |       |
| Deferred  financing costs, net of accumulated amortization of $29,170 and $19,492           | ** ** | **55,986**    |          | 62,277     |       |
| Deferred leasing  and other costs, net of accumulated amortization of $150,702 and $127,155 | ** ** | **374,635**   |          | 311,553    |       |
| Escrow deposits  and other assets                                                           | ** ** | ** **    | **254,339**   |       |       | 174,636    |     |
| ** **                                                                                  |       | **$**         | **7,660,651** |       | $          | 7,238,204  |     |
| ** **                                                                                  |       | ** **    |          |       |       |
| **LIABILITIES  AND PARTNERS’ EQUITY**                                                  |       |          |          |       |       |
|                                                                                        |       |          |          |       |       |
| Indebtedness:                                                                               |       |          |          |       |       |
| Secured debt                                                                                | ** ** | **$**         | **524,393**   |       | $          | 515,192    |     |
| Unsecured notes                                                                             | ** ** | **3,246,000** |          | 3,129,653  |       |
| Unsecured lines  of credit                                                                  | ** ** | ** **    | **546,067**   |       |       | 317,000    |     |
| ** **                                                                                  |       | **4,316,460** |          | 3,961,845  |       |
| ** **                                                                                  |       | ** **    |          |       |       |
| Liabilities of  properties held for sale                                                    | ** ** | **8,954**     |          | 155,185    |       |
|                                                                                        | ** ** | ** **    |          |       |       |
| Construction  payables and amounts due subcontractors, including retentions                 | ** ** | **142,655**   |          | 136,508    |       |
|                                                                                        | ** ** | ** **    |          |       |       |
| Accrued expenses:                                                                           |       |          |          |       |       |
| Real estate taxes                                                                           | ** ** | **63,796**    |          | 59,273     |       |
| Interest                                                                                    | ** ** | **54,631**    |          | 52,106     |       |
| Other                                                                                       | ** ** | **56,901**    |          | 62,078     |       |
| Other liabilities                                                                           | ** ** | **149,172**   |          | 119,765    |       |
| Tenant security  deposits and prepaid rents                                                 | ** ** | ** **    | **34,535**    |       |       | 31,121     |     |
| Total liabilities                                                                           | ** ** | ** **    | **4,827,104** |       |       | 4,577,881  |     |
|                                                                                        | ** ** | ** **    |          |       |       |
| Minority interest                                                                           | ** ** | ** **    | **2,650**     |       |       | 1,080      |     |
|                                                                                        | ** ** | ** **    |          |       |       |
| Partners’ equity:                                                                      |       |          |          |       |       |
| General Partner:                                                                            |       |          |          |       |       |
| Common equity                                                                               | ** ** | **2,011,316** |          | 1,625,958  |       |
| Preferred equity  (liquidation preferences of $744,000 and $876,250)                        | ** ** | ** **    | **744,000**   |       |       | 876,250    |     |
| ** **                                                                                  |       | ** **    | **2,755,316** |       |       | 2,502,208  |     |
| Limited Partners’  common equity                                                       | ** ** | **76,860**    |          | 151,600    |       |
| Accumulated other  comprehensive income (loss)                                              | ** ** | ** **    | **(1,279)**   |       |       | 5,435      |     |
| Total partners’  equity                                                                | ** ** | ** **    | **2,830,897** |       |       | 2,659,243  |     |
|                                                                                        | ** ** | ** **    |          |       |       |
| ** **                                                                                  |       | **$**         | **7,660,651** |       | $          | 7,238,204  |     |
|                                                                                             |            |               |               |            |            |            |          |            |            |  |  |  |  |  |  |  |  |  |  |

 

See accompanying Notes toConsolidated Financial Statements.

 

57

----

 

**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

**Consolidated****Statements of Operations**

**For the Years Ended December 31,**

**(in thousands, except per unitamounts)**

 
| ** **                                                      | ** ** | ** **   | **2007**      | ** **  |   | 2006      |    |    |      | 2005   | ** **   | ** ** |
|-----------------------------------------------------------------|------------|--------------|---------------|-------------|--------|-----------|---------|---------|-----------|--------|--------------|------------|
| **RENTAL  OPERATIONS**                                          |       |         |          |        |   |      |    |
| Revenues:                                                       |       |         |          |        |   |      |    |
| Rental revenue  from continuing operations                      | ** ** | **$794,488** |          | $743,543    |   | $602,062  |    |
| Equity in  earnings of unconsolidated companies                 | ** ** | ** **   | ** **    | **29,381**  |   |      | 38,004  |    |      |   | 29,549  |       |
| ** **                                                      |       | ** **   | ** **    | **823,869** |   |      | 781,547 |    |      |   | 631,611      |       |
| Operating  expenses:                                            |       |         |          |        |   |      |    |
| Rental expenses                                                 | ** ** | **176,674**  |          | 169,077     |   | 138,873   |    |
| Real estate taxes                                               | ** ** | **98,135**   |          | 83,735      |   | 72,798    |    |
| Interest expense                                                | ** ** | **168,358**  |          | 170,484     |   | 106,047   |    |
| Depreciation and  amortization                                  | ** ** | ** **   | ** **    | **271,623** |   |      |    | 232,739 |      |   |         | 203,081    |   |
| ** **                                                      |       | ** **   | ** **    | **714,790** |   |      |    | 656,035 |      |   |         | 520,799    |   |
| Earnings from  continuing rental operations                     | ** ** | ** **   | ** **    | **109,079** |   |      |    | 125,512 |      |   |         | 110,812    |   |
|                                                            | ** ** | ** **   |          |        |   |      |    |
| **SERVICE  OPERATIONS**                                         |       |         |          |        |   |      |    |
| Revenues:                                                       |       |         |          |        |   |      |    |
| General  contractor gross revenue                               | ** ** | **280,537**  |          | 308,562     |   | 380,173   |    |
| General  contractor costs                                       | ** ** | ** **   | **(246,872)** |        |   | (284,633) |    |    | (348,263) |   |
|                                                            | ** ** | ** **   | ** **    |        |   |      |    |    |      |   |
| Net general contractor revenue                                  | ** ** | **33,665**   |          | 23,929      |   | 31,910    |    |
| Service fee  revenue                                            | ** ** | **31,011**   |          | 21,633      |   | 20,149    |    |
| Gain on sale of  service operations properties                  | ** ** | ** **   | **34,682**    |        |   | 44,563    |    |    | 29,882    |   |
|                                                            | ** ** | ** **   |          |        |   |      |    |
| Total service  operations revenue                               | ** ** | **99,358**   |          | 90,125      |   | 81,941    |    |
|                                                            | ** ** | ** **   |          |        |   |      |    |
| Operating  expenses                                             | ** ** | ** **   | **47,324**    |        |   | 36,929    |    |    | 37,663    |   |
|                                                            | ** ** | ** **   |          |        |   |      |    |    |
| Earnings from  service operations                               | ** ** | ** **   | **52,034**    |        |   | 53,196    |    |    | 44,278    |   |
|                                                            | ** ** | ** **   |          |        |   |      |    |    |
| General and  administrative expense                             | ** ** | ** **   | **(37,680)**  |        |   | (35,797)  |    |    | (30,962)  |   |
|                                                            | ** ** | ** **   | ** **    |        |   |      |    |    |      |   |
| Operating income                                                | ** ** | **123,433**  |          | 142,911     |   | 124,128   |    |
|                                                            | ** ** | ** **   |          |        |   |      |    |
| **OTHER  INCOME (EXPENSE)**                                     |       |         |          |        |   |      |    |
| Interest and  other income, net                                 | ** ** | **12,134**   |          | 10,450      |   | 4,637     |    |
| Earnings from  sale of land, net of impairment adjustments      | ** ** | **33,422**   |          | 7,791       |   | 14,202    |    |
| Minority interest  in earnings of subsidiaries                  | ** ** | ** **   | **(3,186)**   |        |   | (247)     |    |    | (1,438)   |   |
| Income from  continuing operations                              | ** ** | **165,803**  |          | 160,905     |   | 141,529   |    |
|                                                            | ** ** | ** **   |          |        |   |      |    |
| Discontinued  operations:                                       |       |         |          |        |   |      |    |
| Net income from  discontinued operations                        | ** ** | **7,149**    |          | 11,692      |   | 20,331    |    |
| Gain on sale of  depreciable property, net of impairment        |       |         |          |        |   |      |    |
| adjustments                                                     | ** ** | ** **   | **121,072**   |        |   | 46,254    |    |    | 223,858   |   |
| Income from  discontinued operations                            | ** ** | **128,221**  |          | 57,946      |   | 244,189   |    |
|                                                            | ** ** | ** **   |          |        |   |      |    |
| Net income                                                      | ** ** | **294,024**  |          | 218,851     |   | 385,718   |    |
| Distributions on  preferred units                               | ** ** | **(58,292)** |          | (56,419)    |   | (46,479)  |    |
| Adjustments for  redemption of preferred units                  | ** ** | ** **   | **(3,483)**   |        |   | (2,633)   |    |    | -         |   |
| Net income  available for common unitholders                    | ** ** | **$**        | **232,249**   |        | $      | 159,799   |    | $       | 339,239   |   |
|                                                            | ** ** | ** **   |          |        |   |      |    |
| Basic net income  per Common Unit:                              |       |         |          |        |   |      |    |
| Continuing  operations                                          | ** ** | **$**        | **.70**       |        | $      | .69       |    | $       | .61       |   |
| Discontinued  operations                                        | ** ** | ** **   | **.86**       |        |   | .39       |    |    | 1.58      |   |
| Total                                                           | ** ** | **$**        | **1.56**      |        | $      | 1.08      |    | $       | 2.19      |   |
| Diluted net  income per Common Unit:                            |       |         |          |        |   |      |    |
| Continuing  operations                                          | ** ** | **$**        | **.69**       |        | $      | .68       |    | $       | .61       |   |
| Discontinued  operations                                        | ** ** | ** **   | **.86**       |        |   | .39       |    |    | 1.57      |   |
| Total                                                           | ** ** | **$**        | **1.55**      |        | $      | 1.07      |    | $       | 2.18      |
|                                                            | ** ** | ** **   |          |        |   |      |    |
| Weighted average  number of Common Units outstanding            | ** ** | ** **   | **148,459**   |        |   | 148,069   |    |    | 155,059   |   |
|                                                            | ** ** | ** **   | ** **    |        |   |      |    |    |      |   |
| Weighted average  number of Common Units and potential dilutive |       |         |          |        |   |      |    |
| common  equivalents                                             | ** ** | ** **   | **149,614**   |        |   | 149,393   |    |    | 155,877   |   |
|                                                            | ** ** | ** **   | ** **    |        |   |      |    |    |      |   |
|                                                                 |            |              |               |             |        |           |         |         |           |        |              |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

See accompanying Notes toConsolidated Financial Statements.

 

58

----

 

**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

**Consolidated****Statements of Cash Flows**

**For the Years Ended December 31,**

**(in thousands)**

 
| ** **                                                                  | ** ** | ** ** | **2007**      | ** ** | ** ** | 2006        | ** ** | ** ** | 2005      |
|-----------------------------------------------------------------------------|------------|------------|---------------|------------|------------|-------------|------------|------------|-----------|
| Cash flows from  operating activities:                                      |       |       |          |       |       |        |       |       |      |
| Net income                                                                  | ** ** | ** ** | **$294,024**  |       |       | $218,851    |       |       | $385,718  |
| Adjustments to  reconcile net income to net                                 |       |       |          |       |       |        |       |       |      |
| cash provided by  operating activities:                                     |       |       |          |       |       |        |       |       |      |
| Depreciation of  buildings and tenant improvements                          | ** ** | ** ** | **214,477**   |       |       | 206,999     |       |       | 204,377   |
| Amortization of  deferred leasing and other costs                           | ** ** | ** ** | **63,214**    |       |       | 47,269      |       |       | 49,793    |
| Amortization of  deferred financing costs                                   | ** ** | ** ** | **11,212**    |       |       | 8,617       |       |       | 6,154     |
| Minority interest  in earnings                                              | ** ** | ** ** | **3,186**     |       |       | 247         |       |       | 1,438     |
| Straight-line  rent adjustment                                              | ** ** | ** ** | **(16,843)**  | ** ** |       | (20,795)    |       |       | (22,519)  |
| Earnings from  land and depreciated property sales                          | ** ** | ** ** | **(154,493)** |       |       | (49,614)    |       |       | (238,060) |
| Build-for-sale  operations, net                                             | ** ** | ** ** | **(84,547)**  |       |       | (148,849)   |       |       | (6,295)   |
| Construction  contracts, net                                                | ** ** | ** ** | **(25,818)**  |       |       | 1,749       |       |       | 16,196    |
| Other accrued  revenues and expenses, net                                   | ** ** | ** ** | **23,268**    |       |       | 26,299      |       |       | 15,891    |
| Operating  distributions received in excess of (less than)                  |       |       |          |       |       |        |       |       |      |
| equity in  earnings from unconsolidated companies                           | ** ** | ** ** | **(4,631)**   |       |       | (18,339)    |       |       | (3,055)   |
| **Net cash  provided by operating activities**                              | ** ** | ** ** | **323,049**   |       |       | 272,434     |       |       | 409,638   |
| ** **                                                                  | ** ** | ** ** | ** **    |       |       |        |       |       |      |
| Cash flows from  investing activities:                                      |       |       |          |       |       |        |       |       |      |
| Development of  real estate investments                                     | ** ** | ** ** | **(451,162)** |       |       | (385,516)   |       |       | (209,990) |
| Acquisition of  real estate investments and related intangible assets       | ** ** | ** ** | **(116,021)** |       |       | (735,294)   |       |       | (285,342) |
| Acquisition of  land held for development                                   | ** ** | ** ** | **(317,324)** |       |       | (435,917)   |       |       | (136,321) |
| Recurring tenant  improvements                                              | ** ** | ** ** | **(45,296)**  |       |       | (41,895)    |       |       | (60,633)  |
| Recurring leasing  costs                                                    | ** ** | ** ** | **(32,238)**  |       |       | (32,983)    |       |       | (33,175)  |
| Recurring  building improvements                                            | ** ** | ** ** | **(8,402)**   |       |       | (8,122)     |       |       | (15,232)  |
| Other deferred  leasing costs                                               | ** ** | ** ** | **(39,387)**  |       |       | (22,429)    |       |       | (19,425)  |
| Other deferred  costs and other assets                                      | ** ** | ** ** | **944**       |       |       | 944         |       |       | (20,281)  |
| Proceeds from  land and depreciated property sales, net                     | ** ** | ** ** | **480,943**   |       |       | 180,825     |       |       | 1,134,667 |
| Capital  distributions from unconsolidated companies                        | ** ** | ** ** | **235,754**   |       |       | 296,573     |       |       | -         |
| Capital  contributions and advances to unconsolidated companies, net        | ** ** | ** ** | **(142,330)** |       |       | (50,182)    |       |       | (31,599)  |
|                                                                        | ** ** | ** ** | ** **    | ** ** |       |        |       |       |      |   |
| **Net cash provided by (used for) investing  activities**                   | ** ** | ** ** | **(434,519)** |       |       | (1,233,996) |       |       | 322,669   |
|                                                                        | ** ** | ** ** | ** **    |       |       |        |       |       |      |   |
| Cash flows from financing activities:                                       |       |       |          |       |       |        |       |       |      |
| Contributions  from General Partner                                         | ** ** | ** ** | **239,605**   |       |       | -           |       |       | -         |
| Payments for  repurchases of Common Units                                   |       |       | -             |       |       | (101,282)   |       |       | (287,703) |
| Proceeds from  exercise of the General Partner’s stock options         | ** ** | ** ** | **1,197**     |       |       | 6,672       |       |       | 3,945     |
| Proceeds from  issuance of Preferred Units, net                             |       |       | -             |       |       | 283,994     |       |       | -         |
| Payments for  redemption of Preferred Units                                 | ** ** | ** ** | **(132,250)** |       |       | (75,000)    |       |       | -         |
| Redemption of Limited  Partner Units                                        |       |       | -             |       |       | -           |       |       | (2,129)   |
| Proceeds from  unsecured debt issuance                                      | ** ** | ** ** | **340,160**   |       |       | 1,429,497   |       |       | 400,000   |
| Payments on  unsecured debt                                                 | ** ** | ** ** | **(223,657)** |       |       | (350,000)   |       |       | (665,000) |
| Proceeds from  issuance of secured debt                                     |       |       | -             |       |       | 1,029,426   |       |       | -         |
| Payments on  secured indebtedness including principal amortization          | ** ** | ** ** | **(24,780)**  |       |       | (750,354)   |       |       | (46,675)  |
| Borrowings  (payments) on lines of credit, net                              | ** ** | ** ** | **229,067**   |       |       | (66,000)    |       |       | 383,000   |
| Distributions to  common unitholders                                        | ** ** | ** ** | **(283,726)** |       |       | (280,713)   |       |       | (290,463) |
| Distributions to  common unitholders – special distributions           |       |       | -             |       |       | -           |       |       | (157,904) |
| Distributions to  preferred unitholders                                     | ** ** | ** ** | **(58,292)**  |       |       | (56,419)    |       |       | (46,479)  |
| Distributions to  minority interest, net                                    | ** ** | ** ** | **(1,626)**   |       |       | 930         |       |       | (1,212)   |
| Payment for  capped call option                                             |       |       | -             |       |       | (26,967)    |       |       | -         |
| Cash settlement  of interest rate swaps                                     | ** ** | ** ** | **10,747**    |       |       | 733         |       |       | -         |
| Deferred  financing costs                                                   | ** ** | ** ** | **(6,083)**   |       |       | (41,659)    |       |       | (599)     |
| **Net cash  provided by (used for) financing activities**                   | ** ** | ** ** | **90,362**    |       |       | 1,002,858   |       |       | (711,219) |
| ** **                                                                  | ** ** | ** ** | ** **    |       |       |        |       |       |      |
| **Net  increase (decrease) in cash and cash equivalents**                   | ** ** | ** ** | **(21,108)**  |       |       | 41,296      |       |       | 21,088    |
| ** **                                                                  | ** ** | ** ** | ** **    |       |       |        |       |       |      |
| Cash and cash  equivalents at beginning of year                             | ** ** | ** ** | **68,154**    |       |       |        | 26,858     |       |      |   | 5,770 |
| Cash and cash  equivalents at end of year                                   | ** ** | **$**      | **47,046**    |       |       | $           | 68,154     |       |      | $ | 26,858 |
| Other non-cash  items:                                                      |       |       |          |       |       |        |       |       |      |   |   |
|  Assumption  of debt for real estate acquisitions                      | ** ** | **$**      | **34,259**    |       |       | $           | 217,520    |       |      | $ | 11,743 |
|  Contributions  of real estate investments to, net of debt assumed by, |       |       |          |       |       |        |       |       |      |   |   |
| unconsolidated  companies                                                   | ** ** | **$**      | **146,593**   |       |       | $           | 505,440    |       |      | $ | - |
|  Conversion  of Limited Partner Units to common shares of the          |       |       |          |       |       |        |       |       |      |   |   |
| General Partner                                                             | ** ** | **$**      | **96,725**    |       |       | $           | 23,629     |       |      | $ | 1,828 |
| Issuance of  Limited Partner Units for acquisition                          | ** ** | **$**      | **11,020**    |       |       | $           | -          |       |      | $ | - |
| Common shares of  the General Partner repurchased and retired, not settled  | ** ** | **$**      | **-**         |       |       | $           | -          |       |      | $ | 9,357 |
| Issuance of  Limited Partner Units for acquisition of minority interest     | ** ** | **$**      | **-**         |       |       | $           | -          |       |      | $ | 15,000 |
|                                                                             |            |            |               |            |            |             |            |            |           |  |  |  |  |  |  |  |  |  |  |

 

See accompanyingNotes to Consolidated FinancialStatements.

 

59

----

 

**DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES**

**Consolidated****Statements of Partners’ Equity**

**(in thousands, except per unitdata)**

 
|                                                              |       |                   |        |                 |       | Limited             |       | Accumulated          |       |                   |       |
|-------------------------------------------------------------------|------------|------------------------|-------------|----------------------|------------|---------------------|------------|----------------------|------------|------------------------|------------|
|                                                              |       | General Partner   |        | Partners’       |       | Other               |       |                 |       |
|                                                              |       | Common                 |        | Preferred            |       | Common              |       | Comprehensive        |       |                   |       |
|                                                              |       | Equity                 |        | Equity               |       | Equity              |       | Income               |       |                   | Total      |   |   |
| ** **                                                        | ** ** | ** **             | ** **  | ** **           | ** ** | ** **          | ** ** | ** **           | ** ** | ** **             | ** ** |
| **Balance  at December 31, 2004**                            | ** ** | **$2,178,442**         | ** **  | **$657,250**         | ** ** | **$191,983**        | ** ** | **$(6,547)**         | ** ** | **$3,021,128**         | ** ** |
| ** **                                                        | ** ** | ** **             | ** **  | ** **           | ** ** | ** **          | ** ** | ** **           | ** ** | ** **             | ** ** |
| Comprehensive  Income:                                            |       |                   |        |                 |       |                |       |                 |       |                   |       |
| Net income                                                        |       | 309,184                |        | 46,479               |       | 30,055              |       | -                    |       | 385,718                |       |
| Losses on  derivative instruments                                 |       | -                      |        | -                    |       | -                   |       | (571)                |       |                   | (571)      |   |
| Comprehensive  income                                             |       |                   |        |                 |       |                |       |                 |       | 385,147                |       |
| Capital  contribution from General Partner                        |       | 4,143                  |        | -                    |       | -                   |       | -                    |       | 4,143                  |       |
| Acquisition of  Partnership interest for common stock of          |       |                   |        |                 |       |                |       |                 |       |                   |       |
| General Partner                                                   |       | 18,085                 |        | -                    |       | (16,257)            |       | -                    |       | 1,828                  |       |
| Acquisition of  property in exchange for Limited Partner Units    |       | -                      |        | -                    |       | 15,000              |       | -                    |       | 15,000                 |       |
| Redemption of  Limited Partner Units                              |       | -                      |        | -                    |       | (2,061)             |       | -                    |       | (2,061)                |       |
| Tax benefits from  employee stock plans                           |       | 245                    |        | -                    |       | -                   |       | -                    |       | 245                    |       |
| FASB 123  compensation expense                                    |       | 2,032                  |        | -                    |       | -                   |       | -                    |       | 2,032                  |       |
| Retirement of Common  Units                                       |       | (297,060)              |        | -                    |       | -                   |       | -                    |       | (297,060)              |       |
| Distributions to  preferred unitholders                           |       | -                      |        | (46,479)             |       | -                   |       | -                    |       | (46,479)               |       |
| Distributions to  General Partner                                 |       | (42)                   |        | -                    |       | -                   |       | -                    |       | (42)                   |       |
| Distributions to  partners ($1.87 per Common Unit)                |       | (265,076)              |        | -                    |       | (25,441)            |       | -                    |       | (290,517)              |       |
| Distributions to  partners ($1.05 per Common Unit) – Special |       |                   | (144,052)   |                 |       | -                   |       |                 | (14,068)   |                   |       | - |   |   | (158,120) |   |
|                                                              |       |                   |        |                 |       |                |       |                 |       |                   |       |   |   |   |   |   |
| **Balance  at December 31, 2005**                            | ** ** | **$1,805,901**         | ** **  | **$********657,250** | ** ** | **$179,211**        | ** ** | **$(7,118)**         | ** ** | **$2,635,244**         |       |
|                                                              |       |                   |        |                 |       |                |       |                 |       |                   |       |   |   |   |   |   |
| Comprehensive  Income:                                            |       |                   |        |                 |       |                |       |                 |       |                   |       |
| Net income                                                        |       | 147,726                |        | 56,419               |       | 14,706              |       | -                    |       | 218,851                |       |
| Gains on  derivative instruments                                  |       | -                      |        | -                    |       | -                   |       | 12,553               |       |                   | 12,553     |   |
| Comprehensive  income                                             |       | -                      |        |                 |       |                |       |                 |       |                   | 231,404    |   |
| Capital  contribution from General Partner                        |       | (2,929)                |        | 294,000              |       | (891)               |       | -                    |       | 290,180                |       |
| Acquisition of  Partnership interest for common stock of          |       |                   |        |                 |       |                |       |                 |       |                   |       |
| General Partner                                                   |       | 39,918                 |        | -                    |       | (16,289)            |       | -                    |       | 23,629                 |       |
| Redemption of  Series I Preferred units                      |       | -                      |        | (75,000)             |       | -                   |       | -                    |       | (75,000)               |       |
| Capped call  option                                               |       | (26,967)               |        | -                    |       | -                   |       | -                    |       | (26,967)               |       |
| Tax benefits from  employee stock plans                           |       | 606                    |        | -                    |       | -                   |       | -                    |       | 606                    |       |
| Stock based  compensation expense                                 |       | 8,892                  |        | -                    |       | -                   |       | -                    |       | 8,892                  |       |
| Retirement of Common  Units                                       |       | (91,925)               |        | -                    |       | -                   |       | -                    |       | (91,925)               |       |
| Distributions to  preferred unitholders                           |       | -                      |        | (56,419)             |       | -                   |       | -                    |       | (56,419)               |       |
| Distribution to  General Partner                                  |       | (74)                   |        | -                    |       | -                   |       | -                    |       | (74)                   |       |
| Distributions to  partners ($1.89 per Common Unit)                |       |                   | (255,190)   |                 |       | -                   |       |                 | (25,137)   |                   |       | - |   |   | (280,327) |   |
|                                                              |       |                   |        |                 |       |                |       |                 |       |                   |       |
| **Balance  at December 31, 2006**                            | ** ** | **$1,625,958**         | ** **  | **$876,250**         | ** ** | **$151,600**        | ** ** | **$5,435**           | ** ** | **$2,659,243**         |       |
|                                                              |       |                   |        |                 |       |                |       |                 |       |                   |       |   |   |   |   |   |
| Effect of  implementing new accounting principle                  |       |                   | (1,717)     |                 |       | -                   |       |                 | -          |                   |       | - |   |   | (1,717) |   |
|                                                              |       |                   |        |                 |       |                |       |                 |       |                   |       |
| **Balance  at January 1, 2007**                              | ** ** | **$1,624,241**         | ** **  | **$876,250**         | ** ** | **$151,600**        | ** ** | **$5,435**           | ** ** | **$2,657,526**         | ** ** |
| ** **                                                        | ** ** | ** **             | ** **  | ** **           | ** ** | ** **          | ** ** | ** **           | ** ** | ** **             | ** ** |
| Comprehensive  Income:                                            |       |                   |        |                 |       |                |       |                 |       |                   |       |
| Net income                                                        |       | 221,175                |        | 58,292               |       | 14,557              |       | -                    |       | 294,024                |       |
| Gains on  derivative instruments                                  |       | -                      |        | -                    |       | -                   |       | (6,714)              |       |                   | (6,714)    |   |
| Comprehensive  Income                                             |       |                   |        |                 |       |                |       |                 |       |                   | 287,310    |   |
| Acquisition of  Partnership interest for common                   |       |                   |        |                 |       |                |       |                 |       |                   |       |
| stock of General  Partner                                         |       | 179,092                |        | -                    |       | (82,367)            |       | -                    |       | 96,725                 |       |
| Redemption of  Series B Preferred units                      |       | -                      |        | (132,250)            |       | -                   |       | -                    |       | (132,250)              |       |
| Unit issuance                                                     |       | -                      |        | -                    |       | 11,020              |       | -                    |       | 11,020                 |       |
| Capital  contribution from General Partner                        |       | 239,605                |        | -                    |       | -                   |       | -                    |       | 239,605                |       |
| Stock based  compensation plan activity                           |       | 12,979                 |        | -                    |       | -                   |       | -                    |       | 12,979                 |       |
| Distributions to  preferred unitholders                           |       | -                      |        | (58,292)             |       | -                   |       | -                    |       | (58,292)               |       |
| Distributions to  partners ($1.91 per Common Unit)                |       |                   | (265,776)   |                 |       | -                   |       |                 | (17,950)   |                   |       | - |   |   | (283,726) |   |
|                                                              |       |                   |        |                 |       |                |       |                 |       |                   |       |
| Balance at  December 31, 2007                                | ** ** | **$********2,011,316** | ** **  | **$********744,000** | ** ** | **$********76,860** | ** ** | **$********(1,279)** | ** ** | **$********2,830,897** |       |
|                                                              |       |                   |        |                 |       |                |       |                 |       |                   |       |   |   |   |   |   |
| **Common  Units outstanding at December 31, 2007**           | ** ** | ** **             | **146,175** | ** **           | ** ** | ** **          | ** ** | **7,880**            |       |                   |       | ** ** | **154,055** |   |
|                                                                   |            |                        |             |                      |            |                     |            |                      |            |                        |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

Seeaccompanying Notes to Consolidated****FinancialStatements.

 

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

 

Notes to Consolidated FinancialStatements

 

**(1)****           ThePartnership**

 

Duke RealtyLimited Partnership (the “Partnership”) was formed on October 4, 1993,when Duke Realty Corporation (the “General Partner”) contributed all of itsproperties and related assets and liabilities, along with the net proceeds fromthe issuance of additional shares of the General Partner, through an offeringto the Partnership. Simultaneously, the Partnership completed the acquisitionof Duke Associates, a full-service commercial real estate firm operating in theMidwest. The General Partner was formed in 1985 and qualifies as a Real EstateInvestment Trust (“REIT”) under provisions of the Internal Revenue Code. TheGeneral Partner is the sole general partner of the Partnership, owning 94.9% ofthe common Partnership interest as of December 31, 2007 (“General PartnerUnits”). The remaining 5.1% of the Partnership’s common interest is owned bylimited partners (“Limited Partner Units” and, together with the GeneralPartner Units, the “Common Units”). The Limited Partner Units are exchangeablefor shares of the General Partner’s common stock on a one-for-one basis subjectgenerally to a one-year holding period, or under certain circumstances, theGeneral Partner may repurchase the Limited Partnership Units for cash. TheGeneral Partner also owns preferred partnership interests in the Partnership(“Preferred Units”).

 

We own and operatea portfolio primarily consisting of industrial and office properties and providereal estate services to third-party owners. We conduct Service Operations (seeNote 8) through Duke Realty Services, LLC, Duke Realty Services LimitedPartnership and Duke Construction Limited Partnership. The consolidatedfinancial statements include our accounts and our majority-owned or controlledsubsidiaries, and the terms “we”, “us”, and “our” refer to the Partnership andthose entities owned or controlled by the Partnership.

 

**(2)****           Summaryof Significant Accounting Policies**

 

**Principles of Consolidation**

 

The consolidated financial statements include our accounts and ourcontrolled subsidiaries. The equity interests in these controlled subsidiaries not owned by us are reflected asminority interests in the consolidated financial statements. All significantintercompany balances and transactions have been eliminated in the consolidatedfinancial statements. Investments in entities that we do not control throughmajority voting interest or where the other owner has substantial participatingrights are not consolidated and are reflected as investments in unconsolidatedcompanies under the equity method of reporting.

 

**Reclassifications**

 

Certain 2006 and 2005 balances have beenreclassified to conform to the 2007 presentation.

 

**Real Estate Investments**

 

Rental real property, including land, land improvements, buildings andbuilding improvements, are included in real estate investments and aregenerally stated at cost. Buildings and land improvements are depreciated onthe straight-line method over their estimated life not to exceed 40 and 15years, respectively, and tenant improvement costs are depreciated using thestraight-line method over the term of the related lease.

 

Direct and certain indirect costs clearly associated with andincremental to the development, construction, leasing or expansion of realestate investments are capitalized as a cost of the property. In addition, allleasing commissions paid to third parties for new leases or lease renewals arecapitalized. We capitalize a portion of our indirect costs associated with ourconstruction, development and leasing efforts. In assessing the amount ofdirect and indirect costs to be capitalized, allocations are made based onestimates of the actual amount of time spent in each activity. We do not capitalizeany costs attributable to downtime or to unsuccessful projects.

 

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

 

Notes to Consolidated FinancialStatements

 

We capitalize direct and indirect project costs associated with theinitial construction of a property up to the time the property is substantiallycomplete and ready for its intended use. In addition, we capitalize costs,including real estate taxes, insurance, and utilities, that have been allocatedto vacant space based on the square footage of the portion of the building notheld available for immediate occupancy during the extended lease-up periodsafter construction of the building shell has been completed if costs are beingincurred to ready the vacant space for its intended use. If costs andactivities incurred to ready the vacant space cease, then cost capitalizationis also discontinued until such activities are resumed. Once necessary work hasbeen completed on a vacant space, project costs are no longer capitalized.

 

We cease capitalization of all project costs on extended lease-upperiods after the shorter of a one-year period after the completion of thebuilding shell or when the property attains 90% occupancy.

 

Construction in process and land held for development are included inreal estate investments and are stated at cost. Real estate investments alsoinclude our equity interests in unconsolidated joint ventures that own andoperate rental properties and hold land for development.

 

Properties held for rental are individually evaluated for impairmentwhen conditions exist which may indicate that it is probable that the sum ofexpected future cash flows (on an undiscounted basis) from a rental propertyover its anticipated holding period is less than its historical net cost basis.Upon determination that a permanent impairment has occurred, a loss is recordedto reduce the net book value of that property to its fair market value.Properties to be disposed of are reported at the lower of net historical costbasis or the estimated fair market value, less the estimated costs to sell.Once a property is designated as held for disposal, no further depreciationexpense is recorded.

 

We allocate the purchase price of acquired properties to net tangibleand identified intangible assets based on their respective fair values, basedon all pertinent information available and adjusted based on changes in thatinformation in no event to exceed one year from the date of acquisition. Theallocation to tangible assets (buildings, tenant improvements and land) isbased upon management’s determination of the value of the property as if itwere vacant using discounted cash flow models similar to those used byindependent appraisers. Factors considered by management include an estimate ofcarrying costs during the expected lease-up periods considering current marketconditions, and costs to execute similar leases. The remaining purchase priceis allocated among three categories of intangible assets consisting of theabove or below market component of in-place leases, the value of in-placeleases and the value of customer relationships.

 

The valueallocable to the above or below market component of an acquired in-place leaseis determined based upon the present value (using a discount rate which reflects the risks associated with theacquired leases) of the difference between (i) the contractual amounts tobe paid pursuant to the lease over its remaining term and (ii) management’sestimate of the amounts that would be paid using fair market rates over theremaining term of the lease. The amounts allocated to above market leases areincluded in deferred leasing and other costs in the balance sheet and belowmarket leases are included in other liabilities in the balance sheet; both areamortized to rental income over the remaining terms of the respective leases.

 

The total amountof intangible assets is further allocated to in-place lease values and tocustomer relationship values based upon management’sassessment of their respective values. These intangible assets are included indeferred leasing and other costs in the balance sheet and are depreciated overthe remaining term of the existing lease, or the anticipated life of thecustomer relationship, as applicable.

 

**Joint****Ventures**

 

We analyze ourinvestments in joint ventures under Financial Accounting Standards Board(“FASB”) Interpretation No. 46(R), *Consolidationof Variable Interest Entities,* to determine if the joint venture isconsidered a variable interest entity and would require consolidation. To theextent that our joint ventures do

 

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

 

Notes to Consolidated FinancialStatements

 

not qualify as variableinterest entities, we further assess under the guidelines of Emerging IssuesTask Force (“EITF”) Issue No. 04-5, *DeterminingWhether a General Partner, or the General Partners as a Group, Controls aLimited Partnership or Similar Entity When the Limited Partners Have CertainRights*(“EITF 04-5”); Statement of Position 78-9, *Accounting for Investments in Real Estate Ventures*(“SOP 78-9”);**Accounting ResearchBulletin No. 51, *Consolidated FinancialStatements*;**andStatement of Financial Accounting Standard (“SFAS”) No. 94, * Consolidationof All Majority-Owned Subsidiaries,*to determine if the ventureshould be consolidated. We have equity interests generally ranging from 10% to50% in unconsolidated joint ventures that develop, own and operate rental propertiesand hold land for development. We consolidate those joint ventures that areconsidered to be variable interest entities where we are the primarybeneficiary.  For non-variable interestentities, we consolidate those joint ventures that we control through majorityownership interests or where we are the managing member and our partner doesnot have substantive participating rights. Control is further demonstrated bythe ability of the general partner to manage day-to-day operations, refinancedebt and sell the assets of the joint venture without the consent of thelimited partner and inability of the limited partner to replace the generalpartner. We use the equity method of accounting for those joint ventures wherewe do not have control over operating and financial polices. Under the equitymethod of accounting, our investment in each joint venture is included on ourbalance sheet; however, the assets and liabilities of the joint ventures forwhich we use the equity method are not included on our balance sheet.

 

To the extent thatwe contribute assets to a joint venture, our investment in joint venture isrecorded at our cost basis in the assets that were contributed to the joint venture.  To the extent that our cost basis isdifferent than the basis reflected at the joint venture level, the basisdifference is amortized over the life of the related asset and included in ourshare of equity in net income of the joint venture.  In accordance with the provisions of SOP 78-9and SFAS No. 66, *Accounting for Salesof Real Estate* (“SFAS 66”), we recognize gains on the contributionor sale of real estate to joint ventures, relating solely to the outsidepartner’s interest, to the extent the economic substance of the transaction isa sale.

 

**Cash Equivalents**

 

Investments with an original maturity of three months or less areclassified as cash equivalents.

 

**Valuation of Receivables**

 

We reserve the entire receivable balance, including straight-line rent, of any tenant with anamount outstanding over 90 days. Straight-line rent receivables for any tenantwith long-term risk, regardless of the status of rent receivables, are reviewedand reserved as necessary.

 

**Deferred Costs**

 

Costs incurred in connection with obtaining financing are amortized tointerest expense on the straight-line method, which approximates a constantspread over the term of the related loan. All direct and indirect costs,including estimated internal costs,associated with the leasing of real estate investments owned by us arecapitalized and amortized over the term of the related lease. We include leaseincentive costs, which are payments made on behalf of a tenant to sign a lease,in deferred leasing costs and amortize them on a straight-line basis over therespective lease terms as a reduction of rental revenues. We include as leaseincentives amounts funded to construct tenant improvements owned by the tenant.Unamortized costs are charged to expense upon the early termination of thelease or upon early payment of the financing.

 

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

 

Notes to Consolidated Financial Statements

 

**Revenues**

 

Rental Operations

 

The timing of revenue recognition under an operating lease isdetermined based upon ownership of the tenant improvements. If we are the ownerof the tenant improvements, revenue recognition commences after theimprovements are completed and the tenant takes possession or control of the space. In contrast, if we determine that the tenant allowances we arefunding are lease incentives, then we commence revenue recognition whenpossession or control of the space is turned over to the tenant. Rental income from leases with scheduled rental increases duringtheir terms is recognized on a straight-line basis.

 

We record lease termination fees when a tenant has executed adefinitive termination agreement with us and the payment of the termination feeis not subject to any conditions that must be met or waived before thefee is due to us.

 

Service Operations

 

Management fees are based on a percentage ofrental receipts of properties managed and are recognized as the rental receiptsare collected. Maintenance fees are based upon established hourly rates and arerecognized as the services are performed.Construction management and development fees represent fee-based third-partycontracts and are recognized as earned based on the terms of thecontract, which approximates the percentage of completion method.

 

We recognizeincome on construction contracts where we serve as a general contractor on thepercentage of completion method. Using thismethod, profits are recorded based on our estimates of the percentage ofcompletion of individual contracts, commencing when the work performed under the contracts reach a point where the final costs can be estimatedwith reasonable accuracy. The percentage of completion estimates are based on acomparison of the contract expenditures incurred to the estimated final costs.Changes in job performance, job conditions and estimated profitability mayresult in revisions to costs and income and are recognized in the period inwhich the revisions are determined.

 

Unbilled receivables on construction contracts totaled $33.1 millionand $32.4 million at December 31, 2007 and 2006, respectively.

 

Property Sales

 

Gains on sales of all properties are recognized in accordance with SFAS66.* *Thespecific timing of the sale is measured against various criteria in SFAS 66related to the terms of the transactions and any continuing involvement in theform of management or financial assistance from the seller associated with theproperties.  We make judgments based onthe specific terms of each transaction as to the amount of the total profitfrom the transaction that we recognize considering factors such as continuingownership interest we may have with the buyer (“partial sales”) and our levelof future involvement with the property or the buyer that acquires theassets.  If the sales criteria are notmet, we defer gain recognition and account for the continued operations of theproperty by applying the finance, installment or cost recovery methods, asappropriate, until the full accrual sales criteria are met.  Estimated future costs to be incurred aftercompletion of each sale are included in the determination of the gain on sales.

 

Gains from sales of depreciated property are included in discontinuedoperations and the proceeds from the sale of these held-for-rental propertiesare classified in the investing activities section of theConsolidated Statements of Cash Flows.

 

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

 

Notes to Consolidated Financial Statements

 

Gains or losses from our sale of properties that were developed orrepositioned with the intent to sell and not for long-term rental areclassified as gain on sale of Service Operation properties in the ConsolidatedStatements of Operations. All activities and proceeds received from thedevelopment and sale of these buildings are classified in the operatingactivities section of the Consolidated Statements of Cash Flows.

 

**Net Income Per Common Unit**

 

Basic net income per Common Unit is computed by dividing net incomeavailable for common unitholders by the weighted average number of Common Unitsoutstanding for the period. Diluted net income per Common Unitis computed by dividing net income available for common unitholders by the sumof the weighted average number of Common Units outstanding and any potentialdilutive common equivalents for the period.

 

The following table reconciles the components of basic and diluted netincome per Common Unit (in thousands):

 
| ** **                                                                           | ** ** | **2007**     | ** ** | 2006       | ** ** | 2005       | ** ** |
|--------------------------------------------------------------------------------------|------------|--------------|------------|------------|------------|------------|------------|
| ** **                                                                           | ** ** | ** **   | ** ** | ** ** | ** ** | ** ** | ** ** |
| Basic and diluted  net income available for common unitholders                       | ** ** | **$232,249** |       | $159,799   |       | $339,239   |       |
|                                                                                 | ** ** | ** **   | ** ** |       |       |       |       |   |   |   |
| Weighted average  number of Common Units outstanding                                 | ** ** | **148,459**  |       | 148,069    |       | 155,059    |       |
| Dilutive units  for stock-based compensation plans (1)                               | ** ** | ** **   | **1,155**  |       |       | 1,324      |       |   | 818 |   |
| Weighted average  number of Common Units and potential dilutive   common equivalents |       | **149,614**  |       | 149,393    |       | 155,877    |       |
|                                                                                 |       |         | ** ** |       |       |       |       |   |   |   |
|                                                                                      |            |              |            |            |            |            |            |  |  |  |  |  |  |  |  |  |  |  |  |

 

----

(1)   Excludes the effect of the General Partner’soutstanding stock options, as well as the Exchangeable Senior Notes(“Exchangeable Notes”) issued in 2006, that have an anti-dilutive effect onearnings per unit for the periods presented.

 

A joint venture partner in one of our unconsolidated companies has theoption to convert a portion of its ownership in the joint venture to theGeneral Partner’s common shares, which would require the issuance of additionalCommon Units to the General Partner. The effect of this option on earnings perunit was anti-dilutive for the years ended December 31, 2007, 2006 and2005.

 

**Federal Income Taxes**

 

We recorded federal and state income taxes of $9.0 million, $7.9million and $5.6 million for 2007, 2006 and 2005, respectively, which wereprimarily attributable to the earnings of our taxable REIT subsidiaries. Wepaid federal and state income taxes of $10.1 million, $4.3 million and $8.7million for 2007, 2006 and 2005, respectively. The taxable REIT subsidiarieshave no significant deferred income tax items.

 

As a partnership, the allocated share of income and loss other than theoperations of the taxable REIT subsidiaries is included in the income taxreturns of the partners; accordingly, no accounting for federal income taxes isrequired in the accompanying consolidated financial statements.

 

**Stock****Based Compensation**

 

Under the limited partnership agreement of the Partnership, we arerequired to issue one Common Unit to the General Partner for each share ofcommon stock issued by the General Partner. Accordingly, the issuance of commonshares by the General Partner under its stock based compensation plans requiresthe issuance of a corresponding number of Common Units by us to the GeneralPartner.

 

For all issuances of stock-based awards by the General Partner prior to2002, we applied the recognition and measurement provisions of AccountingPrinciples Board Opinion No. 25, *Accountingfor Stock Issued to Employees* (“APB 25”), and relatedinterpretations, in accounting for our stock-based compensation.

 

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

 

Notes to Consolidated Financial Statements

 

Accordingly, for stock options granted prior to 2002, no compensationexpense is reflected in net income as all options granted had an exercise priceequal to the market value of the General Partner’s underlying common shares onthe date of the grant.

 

Effective January 1, 2002, we prospectively adopted the fair valuerecognition provisions of SFAS No. 123, *Accountingfor Stock-Based Compensation* (“SFAS 123”), and applied SFAS 123 toall awards granted after January 1, 2002.

 

The followingtable illustrates the effect on net income and earnings per unit if we hadapplied the fair value recognition provisions of SFAS 123 to all stock-basedemployee compensation for the year ended December 31, 2005 (in thousands,except per unit data):

 
| ** ** | ** ** | ** ** | 2005 | ** ** |
|------------|------------|------------|------|------------|

 
| Net income  available for common unitholders,           |   | $339,239 |    |
|---------------------------------------------------------|--------|----------|---------|
|   as  reported                                |   |     |    |
| Add: Stock-based  employee compensation                 |   |     |    |
|   expense  included in net income determined  |   |     |    |
|   under  fair value method                    |   | 1,116    |    |
|                                                    |   |     |    |
| Deduct: Total  stock-based compensation                 |   |     |    |
|   expense  determined under fair value method |   |     |    |
|   for  all awards                             |   |     | (1,285) |   |
|                                                    |   |     |    |   |
| Pro forma net  income available for common              |   |     |    |
|   unitholders                                 |   | $        | 339,070 |   |
|                                                    |   |     |    |
| Basic net income  per Common Unit                       |   |     |    |
|   As  reported                                |   | $2.19    |    |
|   Pro  forma                                  |   | $2.19    |    |
|                                                    |   |     |    |
| Diluted net  income per Common Unit                     |   |     |    |
|   As  reported                                |   | $2.18    |    |
|   Pro  forma                                  |   | $2.18    |    |
|                                                         |        |          |         |  |  |  |

 

Effective January 1, 2006, we adopted SFAS No. 123(R), *Share Based Payment*, (“SFAS 123(R)”),using the modified prospective application method. Under this method, asof  January 1, 2006, we applied theprovisions of SFAS 123(R) to new and modified awards, as well as to thenonvested portion of awards granted before the required effective date andoutstanding at such time.

 

## **DerivativeFinancial Instruments**

 

We periodically enter into certain interest rate protection agreementsto effectively convert or cap floating rate debt to a fixed rate, and to hedgeanticipated future financing transactions, both of which qualify for cash flowhedge accounting treatment. Net amounts paid or received under these agreementsare recognized as an adjustment to the interest expense of the correspondingdebt. We do not utilize derivative financial instruments for trading orspeculative purposes.

 

If a derivativequalifies as a cash flow hedge, the change in fair value of the derivative is recognizedin other comprehensive income to the extent the hedge is effective, while theineffective portion of the derivative’s change in fair value is recognized inearnings. Gains and losses on our interest rate protection agreements aresubsequently included in earnings as an adjustment to interest expense in thesame periods in which the related interest payments being hedged are recognizedin earnings.

 

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

 

Notes to Consolidated Financial Statements

 

We estimate thefair value of derivative instruments using standard market conventions andtechniques such as discounted cash flow analysis, option pricing models andtermination cost at each balance sheet date. For all hedging relationships, we formally document the hedgingrelationship and its risk-management objective and strategy for undertaking thehedge, the hedging instrument, the hedged item, the nature of the risk beinghedged, how the hedging instrument’s effectiveness in offsetting the hedgedrisk will be assessed prospectively and retrospectively, and a description ofthe method of measuring ineffectiveness.

 

**Use of Estimates**

 

The preparation of the financial statements requires management to makea number of estimates and assumptions that affect the reported amount of assetsand liabilities and the disclosure of contingent assets and liabilities at thedate of the financial statements and the reported amounts of revenues andexpenses during the period. Actual results could differ from those estimates.

 

**(3)****           SignificantAcquisitions and Dispositions**

 

Acquisitions

 

We acquired total income producing real estate related assets of $219.9million, $948.4 million and $295.6 million in 2007, 2006 and 2005, respectively.

 

In December 2007, in order to further establish our propertypositions around strategic port locations, we purchased a portfolio of fiveindustrial buildings, in Seattle, Virginia and Houston, as well asapproximately 161 acres of undeveloped land and a 12-acre container storagefacility in Houston.  The total price was$89.7 million and was financed in part through assumption of secured debt thathad a fair value of $34.3 million.  Ofthe total purchase price, $66.1 million was allocated to in-service real estateassets, $20.0 million was allocated to undeveloped land and the containerstorage facility, $3.3 million was allocated to lease related intangibleassets, and the remaining amount was allocated to acquired working capitalrelated assets and liabilities.  Thisallocation of purchase price based on the fair value of assets acquired ispreliminary. The results of operations for the acquired properties since thedate of acquisition have been included in continuing rental operations in our consolidatedfinancial statements.

 

In February 2007, we completed the acquisition of Bremner HealthcareReal Estate (“Bremner”), a national health care development and managementfirm.  The primary reason for theacquisition was to expand our development capabilities within the health carereal estate market. The initial consideration paid to the sellers totaled $47.1million, and the sellers may be eligible for further contingent payments overthe next three years. Approximately $39.0 million of the total purchase pricewas allocated to goodwill, which is attributable to the value of Bremner’soverall development capabilities and its in-place workforce.  The results of operations for Bremner sincethe date of acquisition have been included in continuing operations in ourconsolidated financial statements.

 

In February 2006, we acquired the majority of a Washington, D.C. metropolitanarea portfolio of suburban office and light industrial properties (the “MarkWinkler Portfolio”). The assets acquired for a purchase price of approximately$867.6 million are comprised of 32 in-service properties with approximately 2.9million square feet for rental, 166 acres of undeveloped land, as well ascertain related assets of the Mark Winkler Company, a real estate managementcompany. The acquisition was financed primarily through assumed mortgage loansand new borrowings.

 

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

 

Notes to Consolidated FinancialStatements

 

The assets acquired and liabilities assumed were recorded at theirestimated fair value at the date of acquisition, as summarized below (inthousands):

 
| Operating rental  properties                |   | $      |   | 602,011   |   |
|---------------------------------------------|--------|--------|--------|-----------|--------|
| Land held for  development                  |   |   |   | 154,300   |   |
| Total real estate  investments              |   |   |   | 756,311   |   |
|                                        |   |   |   |      |   |
| Other assets                                |   |   |   | 10,478    |   |
| Lease related  intangible assets            |   |   |   | 86,047    |   |
| Goodwill                                    |   |   |   | 14,722    |   |
| Total assets  acquired                      |   |   |   | 867,558   |   |
|                                        |   |   |   |      |   |
| Debt assumed                                |   |   |   | (148,527) |   |
| Other liabilities  assumed                  |   |   |   | (5,829)   |   |
| Purchase price,  net of assumed liabilities |   | $      |   | 713,202   |   |
|                                             |        |        |        |           |        |  |

 

In December 2006, we contributed 23 of these in-service propertiesacquired from the Mark Winkler Portfolio with a basis of $381.6 millionrepresenting real estate investments and acquired lease related intangibleassets to two new unconsolidated subsidiaries. Of the remaining nine in-serviceproperties, eight were contributed to these two unconsolidated subsidiaries in2007 and one remains in continuing operations as of December 31, 2007. Theeight properties contributed in 2007 had a basis of $298.4 million representingreal estate investments and acquired lease related intangible assets, and debtsecured by these properties of $146.4 million was also assumed by theunconsolidated subsidiaries.

 

In the third quarter of 2006, we finalized the purchase of a portfolio ofindustrial real estate properties in Savannah, Georgia. We completed a majorityof the purchase in January 2006. The assets acquired for a purchase priceof approximately $196.2 million are comprised of 18 buildings withapproximately 5.1 million square feet for rental as well as over 60 acres ofundeveloped land.  The acquisition wasfinanced in part through assumed mortgage loans. The results of operations forthe acquired properties since the date of acquisition have been included incontinuing rental operations in our consolidated financial statements.

 

The primary acquisition in 2005 was that of a suburban office portfolioin our Chicago market for a purchase price of approximately $257.6 million. Theresults of operations for the six properties in this portfolio have beenincluded in continuing rental operations in our consolidated financialstatements since the date of acquisition.

 

Dispositions

 

In March 2007, as part of our capital recycling program, we sold aportfolio of eight suburban office properties totaling 894,000 square feet inthe Cleveland market. The sales price totaled $140.4 million, of which wereceived net proceeds of $139.3 million. We also sold a portfolio of twelveflex and light industrial properties in July 2007, totaling 865,000 squarefeet in the St. Louis market, for a sales price of $65.0 million, of which wereceived net proceeds of $64.2 million.

 

On September 29, 2005, we completed the sale of a portfolio of 212real estate properties, consisting of approximately 14.1 million square feet ofprimarily light distribution and service center properties and approximately 50acres of undeveloped land (the “Industrial Portfolio Sale”). The sales pricetotaled $983 million, of which we received net proceeds of $955.0 million afterthe settlement of certain liabilities and transaction costs. Portions of theproceeds were used to pay down $423.0 million outstanding on our unsecured lineof credit and the entire outstanding balance on our $400.0 million term loan.The 2005 operations and gain associated with the properties in the IndustrialPortfolio Sale have been reclassified to

 

68

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

 

Notes to Consolidated Financial Statements

 

discontinued operations. As a result of the taxable income generated bythe sale, a one-time special cash distribution of $1.05 per unit was paid toour common unitholders in the fourth quarter of 2005.

 

**(4)****                                 Related Party Transactions**

 

We provide property management, leasing, constructionand other tenant related services to unconsolidated companies in which we haveequity interests. For the years ended December 31, 2007, 2006 and 2005,respectively, we received from these unconsolidated companies management feesof $7.1 million, $4.4 million and $4.8 million, leasing fees of $4.2 million,$2.9 million and $4.3 million and construction and development fees of $13.1million, $19.1 million and $2.0 million. We recorded these fees based oncontractual terms that approximate market rates for these types of services,and we have eliminated our ownership percentages of these fees in theconsolidated financial statements.

 

**(5)****                                 Investments in Unconsolidated Companies**

 

We have equityinterests generally ranging from 10% to 50% in unconsolidated joint venturesthat develop, own and operate rental properties and hold land for development.

 

Combinedsummarized financial information for the unconsolidated companies as of December 31,2007 and 2006, and for the years ended December 31, 2007, 2006 and 2005,are as follows (in thousands):

 
| ** **                                    | ** ** |           | **2007**      | ** ** |      |      | 2006   |   |    |   | 2005 |   |
|-----------------------------------------------|------------|----------------|---------------|------------|-----------|-----------|--------|--------|---------|--------|------|--------|
| Rental revenue                                |       | $              | **215,855**   |       | $         | 157,186   |   | $      | 163,447 |
| Net income                                    |       | $              | **41,725**    |       | $         | 65,985    |   | $      | 57,561  |
|                                          |       |           |          |       |      |      |
| Land, buildings and  tenant improvements, net | ** ** | **$1,771,342** |          | $          | 1,403,009 |      |   |
| Construction in progress                      | ** ** | **105,796**    |          | 107,961    |      |      |
| Land held for  development                    | ** ** | **114,253**    |          | 91,280     |      |      |
| Other assets                                  | ** ** |           | **194,616**   |       |      | 148,580   |   |   |
| ** **                                    |       | $              | **2,186,007** |       | $         | 1,750,830 |   |   |
|                                          |       |           |          |       |      |      |
| Indebtedness                                  | ** ** | $              | **989,120**   |       | $         | 417,970   |   |   |
| Other liabilities                             | ** ** | ** **     | **224,468**   |       |      | 170,168   |   |   |
| ** **                                    | ** ** | **1,213,588**  |          | 588,138    |      |      |
| Owners’ equity                           | ** ** |           | **972,419**   |       |      | 1,162,692 |   |   |
| ** **                                    |       | $              | **2,186,007** |       | $    | 1,750,830 |   |   |
|                                               |            |                |               |            |           |           |        |        |         |        |      |        |  |  |  |  |  |  |  |  |

 

Our share of the scheduled payments of long term debtfor the unconsolidated joint ventures for each of the next five years andthereafter as of December 31, 2007 are as follows (in thousands):

 
| ** ** | ** ** | Year       |   | ** ** | Future Repayments | ** ** |
|------------|------------|------------|--------|------------|------------------------|------------|
|       |       | 2008       |   | $          | 2,190                  |       |   |
|       |       | 2009       |   | 38,869     |                   |       |
|       |       | 2010       |   | 146,885    |                   |       |
|       |       | 2011       |   | 9,938      |                   |       |
|       |       | 2012       |   | 44,778     |                   |       |
|       |       | Thereafter |   |       | 139,361                |       |   |
|       |       |       |   | $          | 382,021                |       |   |

 

**(6)****                                 Discontinued Operations and Assets Held for Sale**

 

Weclassified the operations of 302 buildings as discontinued operations as of December 31,2007. These 302 buildings consist of 253 industrial, 48 office and one retailproperties. Of these properties, 32 were sold during 2007, 21 properties weresold during 2006, 234 properties were sold during 2005 and 15 operatingproperties are classified as held-for-sale at December 31, 2007.

 

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

 

Notes to Consolidated Financial Statements

 

Thefollowing table illustrates operations of the buildings reflected indiscontinuedoperations for theyears ended December 31 (in thousands):

 
| ** **                            | ** ** | ** **        | **2007**    | ** ** |   | 2006   |   |    | 2005    | ** ** |
|---------------------------------------|------------|-------------------|-------------|------------|--------|--------|--------|---------|---------|------------|
| Revenues                              | ** ** | **$ 41,117** |        | $          | 77,975 |   | $      | 166,235 |    |
| Expenses:                             |       |              |        |       |   |   |   |
| Operating                             | ** ** | **17,187**        |        | 28,613     |   | 57,335 |   |
| Interest                              | ** ** | **10,666**        |        | 16,022     |   | 37,223 |   |
| Depreciation and  Amortization        | ** ** | **6,068**         |        | 21,529     |   | 51,089 |   |
| General and  Administrative           | ** ** | ** **        | **47**      |       |   | 119    |   |    | 257     |       |
| Income from  discontinued operations, |       |              |        |       |   |   |   |
| before gain on  sales                 | ** ** | **7,149**         |        | 11,692     |   | 20,331 |   |
| Gain on sale of  property, net of     |       |              |        |       |   |   |   |
| impairment  adjustments               | ** ** | ** **        | **121,072** |       |   | 46,254 |   |    | 223,858 |       |
|                                  | ** ** | ** **        |        |       |   |   |   |
| Income from  discontinued operations  | ** ** | **$ **       | **128,221** |       | $      | 57,946 |   | $       | 244,189 |       |
|                                       |            |                   |             |            |        |        |        |         |         |            |  |  |  |  |  |

 

At December 31, 2007, we classified 15 properties as held-for-saleand included in discontinued operations. Additionally, we have classified nine in-service properties asheld-for-sale, but have included the results of operations of these propertiesin continuing operations, either based on our present intention to sell themajority of our ownership interest in the properties to entities in which wewill retain a minority equity ownership interest or because the results ofoperations for the properties are immaterial. The following table illustratesaggregate balance sheet information of the aforementioned 15 propertiesincluded in discontinued operations, as well as the nine held-for-saleproperties whose results are included in continuing operations at December 31,2007 (in thousands):

 
|                             |   |   | **Properties  Included in  Discontinued  Operations** |    | **Properties  Included in  Continuing  Operations** |   |    | **Total  Held-for-Sale  Properties** |   |
|----------------------------------|--------|--------|------------------------------------------------------------|---------|----------------------------------------------------------|--------|---------|--------------------------------------|--------|
| Balance Sheet:                   |   |   |                                                       |    |                                                     |   |
| Real estate  investments, net    |   |   | $                                                          | 132,194 |                                                     | $      | 122,556 |                                 |   | $ | 254,750 |   |
| Other assets                     |   |   |                                                       | 10,152  |                                                     |   | 8,689   |                                 |   |   | 18,841 |   |
| Total assets  held-for-sale      |   |   | $                                                          | 142,346 |                                                     | $      | 131,245 |                                 |   | $ | 273,591 |   |
|                             |   |   |                                                       |    |                                                     |   |    |                                 |   |
| Accrued expenses                 |   |   | $                                                          | 3,586   |                                                     | $      | 333     |                                 |   | $ | 3,919 |   |
| Other liabilities                |   |   |                                                       | 1,011   |                                                     |   | 4,024   |                                 |   |   | 5,035 |   |
| Total liabilities  held-for-sale |   |   | $                                                          | 4,597   |                                                     | $      | 4,357   |                                 |   | $ | 8,954 |   |
|                                  |        |        |                                                            |         |                                                          |        |         |                                      |        |  |  |  |  |  |  |

 

Weallocate interest expense to discontinued operations and have included suchinterest expense in computing net income from discontinued operations. Interestexpense allocable to discontinued operations includes interest on any debt onsecured properties included in discontinued operations and an allocable shareof our consolidated unsecured interest expense for unencumbered properties. Theallocation of unsecured interest expense to discontinued operations was basedupon the gross book value of the discontinued operations unencumberedpopulation as it related to our entire unencumbered population.

 

We recordedimpairment adjustments on depreciable properties of $266,000 and $3.7 millionin 2006 and 2005, respectively.  Noimpairment adjustments were recorded on depreciable properties in 2007.

 

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

 

Notes to Consolidated Financial Statements

 

**(7)****                                 Indebtedness**

 

Indebtedness at December 31, 2007 and 2006 consists of the following (in thousands):

 
| ** **                                                                                                                                                                      |       | ** **    | **2007**      |      |          | 2006      |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------|---------------|-----------|---------------|-----------|--------|
| Fixed rate  secured debt, weighted average interest rate of 6.11% at December 31,  2007,  and 6.21% at December 31, 2006, maturity dates ranging from 2008 to 2026    |       | **$515,423**  |          | $         |  652,886 |      |
|                                                                                                                                                                            |       |          |          |      |          |
| Variable rate  secured debt, weighted average interest rate of 3.35% at December 31,  2007, and 3.79% at December 31, 2006, maturity dates ranging from 2014  to 2025 |       | **8,970**     |          | 9,615     |          |
|                                                                                                                                                                            |       |          |          |      |          |
| Fixed rate  unsecured debt, weighted average interest rate of 5.73% at December 31,  2007,                                                                                 |       |          |          |      |          |
| and 5.67% at  December 31, 2006, maturity dates ranging from 2008 to 2028                                                                                                  | ** ** | **3,246,000** |          | 3,125,157 |          |
|                                                                                                                                                                            | ** ** | ** **    |          |      |          |
| Unsecured lines  of credit, weighted average interest rate of 5.52% at December 31, 2007,  and 5.82% at December 31, 2006 maturity dates ranging from 2010 to 2011    |       | **546,067**   |          | 317,000   |          |
|                                                                                                                                                                            |       |          |          |      |          |
| Variable rate  unsecured debt, market rate of 6.2% at December 31, 2006                                                                                                    |       | ** **    | -             |      |          | 4,496     |   |
|                                                                                                                                                                            |       | ** **    |          |      |          |      |   |
| ** **                                                                                                                                                                      |       | **$******     | **4,316,460** |      | $   | 4,109,154 |   |
|                                                                                                                                                                                 |            |               |               |           |               |           |        |  |  |  |  |  |

 

The fair value of our indebtedness as of December 31, 2007, was$4.2 billion. This fair value amount was calculated using current market ratesand spreads available to us on debt instruments with similar terms andmaturities.

 

As of December 31, 2007, the $524.4 million of secured debt wascollateralized by rental properties with a carrying value of $723.0 million andby letters of credit in the amount of $9.1 million.

 

We had an unsecured line of credit available at December 31,2007.  During 2007, the borrowingcapacity on this line of credit was increased from $1.0 billion to $1.3billion. Additionally, in July 2007, one of our consolidated majorityowned subsidiaries entered into a lending agreement that included an additionalunsecured line of credit.  Our unsecuredlines of credit as of December 31, 2007 are described as follows (inthousands):

 
| Description                                              |   |                            | Borrowing    Capacity |              | Maturity  Date |   | Outstanding  at December 31, 2007 |   |
|----------------------------------------------------------|--------|---------------------------------|---------------------------------|-------------------|----------------|--------|----------------------------------------|--------|
| Unsecured Line of  Credit                                |   | $1,300,000                      |                            | January 2010 |           | $      | 543,000                                |   |
| Unsecured Line of  Credit – Consolidated Subsidiary |   | $    30,000 |                            | July 2011    |           | $      | 3,067                                  |   |

 

We use our line of credit to fund development activities, acquireadditional rental properties and provide working capital. This line of creditprovides us with an option to obtain borrowings from financial institutionsthat participate in the line, at rates lower than the stated interest rate,subject to certain restrictions.  Theinterest rate on the amounts outstanding on the unsecured line of credit as of December 31,2007 was LIBOR plus .525%, which for borrowings outstanding at December 31,2007 ranged from  5.355% to 5.775%. Ourline of credit also contains various financial covenants that require us to meetfinancial ratios and defined levels of performance, including those related tovariable rate indebtedness, consolidated net worth and debt-to-marketcapitalization. As of December 31, 2007, we were in compliance with allcovenants under our line of credit.

 

The consolidated subsidiary’s unsecured line of credit allows forborrowings up to $30.0 million at a rate of LIBOR plus .85% (equal to 5.73% foroutstanding borrowings as of December 31, 2007).  The unsecured line of credit is used to funddevelopment activities within the consolidated subsidiary.  The consolidated subsidiary’s unsecured lineof credit matures in July 2011 with a 12-month extension option.

 

We took the following actions during the year ended December 31,2007, relevant to our indebtedness:

 

·        In August 2007, we repaid$100.0 million of 7.375% senior unsecured notes on the scheduled maturity date.

 

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

 

Notes to Consolidated Financial Statements

 

·      In September 2007, we issued $300.0million of 6.50% senior unsecured notes due in January 2018.  This issuance was hedged with a forwardstarting interest rate swap that was settled and reduced the effective interestrate to 6.16%.  The net proceeds fromthat issuance were used to partially pay down the outstanding balance on ourunsecured line of credit.

 

·      In November 2007, we repaid $100.0million of 3.5% senior unsecured notes on the scheduled maturity date.

 

In November 2006,we issued $575.0 million of 3.75% Exchangeable Senior Notes (“ExchangeableNotes”), which will pay interest semiannually at a rate of 3.75% per annum andmature in December 2011.

 

The ExchangeableNotes can be exchanged for shares of the General Partner’s common stock uponthe occurrence of certain events as well as at any time beginning on August 1,2011 and ending on the second business day prior to the maturity date.  The Exchangeable Notes had an initialexchange rate of approximately 20.4298 common shares per $1,000 principalamount of the notes, representing an exchange price of approximately $48.95 pershare of the General Partner’s common stock and an initial exchange premium ofapproximately 20.0% based on the price of $40.79 per share of the GeneralPartner’s common stock on the date of the original issuance. The initialexchange rate is subject to adjustment under certain circumstances includingincreases in the General Partner’s rate of dividends. Upon exchange the holdersof the notes would receive (i) cash equal to the principal amount of thenote and (ii) to the extent the conversion value exceeds the principalamount of the note, either cash or shares of the General Partner’s common stockat our option.

 

Concurrent withthe issuance of the Exchangeable Notes, we purchased a capped call option onthe General Partner’s common stock in a private transaction.  This capped call option allows us to buy theGeneral Partner’s common shares, up to a maximum of approximately 11.7 millionshares, from counter parties equal to the amounts of common stock and/or cashrelated to the excess conversion value we would pay to the holders of theExchangeable Notes upon conversion.  Thecapped call option will terminate upon the earlier of the maturity date of therelated Exchangeable Notes or the first day all of the related ExchangeableNotes are no longer outstanding due to conversion or otherwise.  The capped call option, which cost $27.0million, was recorded as a reduction of partners’ equity and effectively increased the conversionprice to 40% above the General Partner’s stock price on the issuance date.  The fair value of the capped call option was$1.9 million at December 31, 2007.

 

At December 31, 2007, the scheduled amortization and maturities ofall indebtedness for the next five years and thereafter were as follows  (in thousands):

 
| Year       |   | Amount                     |      |
|------------|--------|----------------------------|-----------|
| 2008       |   | $   279,928 |      |
| 2009       |   | 285,578                    |      |
| 2010       |   | 728,253                    |      |
| 2011       |   | 1,046,394                  |      |
| 2012       |   | 209,233                    |      |
| Thereafter |   |                       | 1,767,074 |   |
|       |   | $                     | 4,316,460 |   |

 

The amount of interest paid in 2007, 2006 and 2005 was $225.8 million,$198.1 million and $151.3 million, respectively. The amount of interest capitalizedin 2007, 2006 and 2005 was $59.2 million, $36.3 million and $9.5 million, respectively.

 

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

 

Notes to Consolidated Financial Statements

 

**(8)****           Segment Reporting**

 

We are engaged inthree reportable operating segments, the first two of which consist of theownership and rental of office and industrial real estate investments. Theoperations of our office and industrial properties, along with our healthcare  properties (our healthcare properties, andother property types which are not significant are not separately presented asa reportable segment), are collectively referred to as “Rental Operations”. Thethird reportable segment consists of our build-to-suit for sale operations andproviding various real estate services such as property management,maintenance, leasing, development and construction management to third-partyproperty owners and joint ventures (“Service Operations”). Our reportablesegments offer different products or services and are managed separatelybecause each segment requires different operating strategies and managementexpertise.

 

The assets of theService Operations business segment generally include properties underdevelopment.  During the period betweenthe completion of development, rehabilitation or repositioning of a ServiceOperations property and the date the property is contributed to a property fundor sold to a third party, the property and its associated rental income and rentalexpenses are included in the applicable Rental Operations segment because theprimary activity associated with the Service Operations property during thatperiod is rental activities.  Uponcontribution or sale, the resulting gain or loss is part of the income of theService Operations business segment.

 

Other revenueconsists mainly of equity in earnings of unconsolidated companies. Segment FFOinformation (FFO is defined below) is calculated by subtracting operatingexpenses attributable to the applicable segment from segment revenues.Non-segment assets consist of corporate assets including cash, deferredfinancing costs and investments in unconsolidated companies. Interest expenseand other non-property specific revenues and expenses are not allocated toindividual segments in determining our performance measure.

 

We assess andmeasure segment operating results based upon an industry performance measurereferred to as Funds From Operations (“FFO”), which management believes is auseful indicator of our operating performance. FFO is used by industry analysts and investors as a supplementaloperating performance measure of an equity real estate investment trust (“REIT”)like our General Partner. FFO is calculated in accordance with the definitionthat was adopted by the Board of Governors of the National Association of RealEstate Investment Trusts (“NAREIT”). NAREIT created FFO as a supplemental measure of REIT operatingperformance that excludes historical cost depreciation, among other items, fromnet income determined in accordance with GAAP. FFO is a non-GAAP financial measure developed by NAREIT to compare theoperating performance of REITs.  The mostcomparable GAAP measure is net income (loss). FFO should not be considered as a substitute for net income or any othermeasures derived in accordance with GAAP and may not be comparable to othersimilarly titled measures of other companies.

 

Historical costaccounting for real estate assets in accordance with GAAP implicitly assumesthat the value of real estate assets diminishes predictably over time.  Since real estate values instead havehistorically risen or fallen with market conditions, many industry analysts andinvestors have considered presentation of operating results for real estatecompanies that use historical cost accounting to be insufficient bythemselves.  FFO, as defined by NAREIT,represents GAAP net income (loss), excluding extraordinary items as definedunder GAAP and gains or losses from sales of previously depreciated real estateassets, plus certain non-cash items such as real estate asset depreciation andamortization, and after similar adjustments for unconsolidated partnerships andjoint ventures.

 

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

 

Notes to Consolidated Financial Statements

 

Managementbelieves that the use of FFO, combined with the required primary GAAPpresentations, improves the understanding of operating results of REITs amongthe investing public and makes comparisons of REIT operating results moremeaningful.  Management believes FFO is auseful measure for reviewing comparative operating and financial performance(although FFO should be reviewed in conjunction with net income which remainsthe primary measure of performance) because by excluding gains or lossesrelated to sales of previously depreciated real estate assets and excludingreal estate asset depreciation and amortization, FFO provides a usefulcomparison of the operating performance of our real estate between periods oras compared to different companies.

 

The following table shows (i) the revenues and FFO for each of thereportable segments and (ii) a reconciliation of net income available forcommon unitholders to the calculation of FFO for the years ended December 31,2007, 2006 and 2005 (in thousands):

 
| ** **                                                           |       | ** **    | **2007**    | ** ** | ** ** |    | 2006      | ** ** | ** ** |   | 2005 |   |
|----------------------------------------------------------------------|------------|---------------|-------------|------------|------------|---------|-----------|------------|------------|--------|------|--------|
| Revenues                                                             |       |          |        |       |       |    |      |
| Rental  Operations:                                                  |       |          |        |       |       |    |      |
| Office                                                               | ** ** | **$547,478**  |        | $          | 534,369    |    | $443,927  |       |
| Industrial                                                           | ** ** | **219,080**   |        |       | 194,670    |    | 148,359   |       |
| Non-reportable  Rental Operations segments                           | ** ** | **20,952**    |        |       | 5,770      |    | 4,449     |       |
| Service  Operations                                                  | ** ** | ** **    | **99,358**  |       |       | 90,125  |      |       | 81,941     |   |
| Total Segment  Revenues                                              | ** ** | **886,868**   |        |       | 824,934    |    | 678,676   |       |
| Other Revenue                                                        | ** ** | ** **    | **36,359**  |       |       | 46,738  |      |       | 34,876     |   |
| Consolidated  Revenue from continuing operations                     | ** ** | **923,227**   |        |       | 871,672    |    | 713,552   |       |
| Discontinued  Operations                                             | ** ** | ** **    | **41,117**  |       |       | 77,975  |      |       | 166,235    |   |
| Consolidated  Revenue                                                | ** ** | **$**         | **964,344** |       | $     | 949,647 |      | $          | 879,787    |   |
|                                                                 |       |          |        |       |       |    |      |       |
|                                                                 |       |          |        |       |       |    |      |       |
| Funds From  Operations                                               |       |          |        |       |       |    |      |       |
| Rental  Operations:                                                  |       |          |        |       |       |    |      |       |
| Office                                                               | ** ** | **$339,587**  |        | $          | 334,839    |    | $274,940  |       |
| Industrial                                                           | ** ** | **167,632**   |        |       | 150,919    |    | 112,336   |       |
| Non-reportable  Rental Operations segments                           | ** ** | **14,382**    |        |       | 4,372      |    | 3,335     |       |
| Services  Operations                                                 | ** ** | ** **    | **52,034**  |       |       | 53,196  |      |       | 44,278     |   |
| Total Segment FFO                                                    | ** ** | **573,635**   |        |       | 543,326    |    | 434,889   |       |
| Non-Segment FFO:                                                     |       |          |        |       |       |    |      |       |
| Interest expense                                                     | ** ** | **(168,358)** |        |       | (170,484)  |    | (106,047) |       |
| Interest and  other income, net                                      | ** ** | **12,134**    |        |       | 10,450     |    | 4,637     |       |
| General and  administrative expense                                  | ** ** | **(37,680)**  |        |       | (35,797)   |    | (30,962)  |       |
| Gain on land  sales, net of impairment                               | ** ** | **33,422**    |        |       | 7,791      |    | 14,201    |       |
| Other non-segment  income (expense)                                  | ** ** | **(1,922)**   |        |       | 157        |    | (3,875)   |       |
| Minority interest                                                    | ** ** | **(3,186)**   |        |       | (247)      |    | (1,438)   |       |
| Joint venture FFO                                                    | ** ** | **50,085**    |        |       | 37,774     |    | 37,964    |       |
| Distributions on  preferred units                                    | ** ** | **(58,292**)  |        |       | (56,419)   |    | (46,479)  |       |
| Adjustment for  redemption of preferred units                        | ** ** | **(3,483)**   |        |       | (2,633)    |    | —    |       |
| Discontinued  operations                                             | ** ** | ** **    | **13,217**  |       |       | 37,652  |      |       | 71,420     |   |
| Consolidated  basic FFO                                              | ** ** | **409,572**   |        |       | 371,570    |    | 374,310   |       |
| Depreciation and  amortization on continuing operations              | ** ** | **(271,623**) |        |       | (232,739)  |    | (203,081) |       |
| Depreciation and  amortization on discontinued operations            | ** ** | **(6,068**)   |        |       | (21,529)   |    | (51,089)  |       |
| Partnership’s  share of joint venture adjustments               | ** ** | **(26,948**)  |        |       | (18,394)   |    | (19,510)  |       |
| Earnings from  depreciated property sales on discontinued operations | ** ** | **121,072**   |        |       | 42,089     |    | 227,513   |       |
| Earnings from  depreciated property sales - share of joint venture   | ** ** | ** **    | **6,244**   |       |       | 18,802  |      |       | 11,096     |   |
|                                                                 | ** ** | ** **    |        |       |       |    |      |       |
| Net income  available for common unitholders                         | ** ** | **$**         | **232,249** |       | $     | 159,799 |      | $          | 339,239    |   |
|                                                                      |            |               |             |            |            |         |           |            |            |        |      |        |  |  |  |

 

The assets foreach of the reportable segments as of December 31, 2007 and 2006 are asfollows (in thousands):

 
| ** **                                 | ** ** | **December 31,** | ** **    | December 31, | ** ** |
|--------------------------------------------|------------|-----------------------|---------------|-------------------|------------|
| ** **                                 | ** ** | **2007**              | ** **    | 2006              | ** ** |
|                                       |       |                  |          |              |       |   |   |
| Assets                                     |       |                  |          |              |       |   |   |
| Rental  Operations:                        |       |                  |          |              |       |   |   |
| Office                                     | ** ** | **$**                 | **3,705,928** | ** **        |       | $ | 4,061,806 |   |   |
| Industrial                                 | ** ** | **2,313,507**         | ** **    |              | 1,942,992  |   |   |
| Non-reportable  Rental Operations segments | ** ** | **312,246**           | ** **    |              | 132,449    |   |   |
| Service  Operations                        | ** ** | ** **            | **476,033**   | ** **        |       |   | 301,886 |   |   |
| Total Segment  Assets                      | ** ** | ** **            | **6,807,714** | ** **        |       |   | 6,439,133 |   |   |
| Non-Segment  Assets                        | ** ** | ** **            | **852,937**   | ** **        |       |   | 799,071 |   |   |
| Consolidated  Assets                       | ** ** | **$ **           | **7,660,651** | ** **        |       | $  | 7,238,204 |   |   |

 

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**DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES**

 

Notes to Consolidated FinancialStatements

 

In addition to revenues and FFO, we also review our recurring capitalexpenditures in measuring the performance of our individual Rental Operationssegments. These recurring capital expenditures consist of tenant improvements,leasing commissions and building improvements. We review these expenditures todetermine the costs associated with re-leasing vacant space and maintaining thecondition of our properties. Our recurring capital expenditures by segment aresummarized as follows for the years ended December 31, 2007, 2006 and 2005(in thousands):

 
| ** **                                 | ** ** | ** **  | **2007**    |          | 2006   |    | 2005   |
|--------------------------------------------|------------|-------------|-------------|---------------|--------|---------|--------|
|                                       |       |        |        |          |   |    |   |
| Recurring Capital  Expenditures            |       | ** **  |        |          |   |    |   |
| Office                                     | ** ** | **$68,427** |        | $ 66,449 |   | $66,890 |   |
| Industrial                                 | ** ** | **16,454**  |        | 16,210        |   | 42,083  |   |
| Non-reportable  Rental Operations segments |       | ** **  | **1,055**   |          |   | 341     |   |   | 67 |   |
| Total                                      |       | ** **  | **$85,936** |          | $      | 83,000  |   | $ | 109,040 |   |
|                                            |            |             |             |               |        |         |        |  |  |  |  |  |

** **

**(9)****                                 Leasing Activity**

 

Future minimum rents due to us under non-cancelable operating leases atDecember 31, 2007 are as follows (in thousands):

 
| Year  |   | Amount    |      |
|------------|--------|--------------------------|-----------|
| 2008       |   | $645,005                 |      |
| 2009       |   | 634,921                  |      |
| 2010       |   | 573,033                  |      |
| 2011       |   | 482,761                  |      |
| 2012       |   | 409,167                  |      |
| Thereafter |   |                     | 1,364,161 |   |
|       |   | $                        | 4,109,048 |   |

 

In addition to minimum rents, certain leases require reimbursements ofspecified operating expenses that amounted to $177.2 million, $161.7 millionand $151.4 million for the years ended December 31, 2007, 2006 and 2005,respectively.

 

**(10)         Employee BenefitPlans**

 

We maintain a 401(k) plan for full-time employees.  We make matching contributions up to anamount equal to three percent of the employee’s salary and may also make annualdiscretionary contributions. The total expense recognized for this plan was$3.7 million, $3.9 million and $3.3 million for the years ended December 31,2007, 2006 and 2005, respectively.

 

We make contributions to a contributory health and welfare plan asnecessary to fund claims not covered by employee contributions. The totalexpense we recognized related to this plan was $9.3 million, $9.4 million and$8.1 million for 2007, 2006 and 2005, respectively. These expense amountsinclude estimates based upon the historical experience of claims incurred butnot reported as of year-end.

 

**(11)         Partners’ Equity**

 

The General Partner periodically accesses the public equity markets tofund the development and acquisition of additional rental properties or to paydown debt. The proceeds of these offerings are contributed to us in exchangefor an additional interest in the Partnership. In October 2007, the General Partner redeemed all of theoutstanding shares of its 7.99% Series B Cumulative Redeemable PreferredStock at a liquidation amount of $132.3 million. Offering costs of $3.5 millionwere charged against net income available to common unitholders in conjunctionwith the redemption of this equity.

 

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

 

Notes to Consolidated Financial Statements

 

The following series of preferred units were outstanding as of December 31,2007 (in thousands, except percentage data):

 
|                                            |   | Shares      |   | Dividend |   | Redemption              |   | Liquidation |   |
|-------------------------------------------------|--------|-------------|--------|----------|--------|-------------------------|--------|-------------|--------|
| Description       |   | Outstanding |   |     | Rate   |                    |   | Date        |   | Preference |   |
|                                            |   |        |   |     |   |                    |   |        |   |
| Series J Preferred                         |   | 400         |   | 6.625%   |   | August 29,  2008   |   | $100,000    |   |
| Series K Preferred                         |   | 600         |   | 6.500%   |   | February 13,  2009 |   | $150,000    |   |
| Series L Preferred                         |   | 800         |   | 6.600%   |   | November 30,  2009 |   | $200,000    |   |
| Series M Preferred                         |   | 736         |   | 6.950%   |   | January 31,  2011  |   | $184,000    |   |
| Series N Preferred                         |   | 440         |   | 7.250%   |   | June 30,  2011     |   | $110,000    |   |
|                                                 |        |             |        |          |        |                         |        |             |        |  |  |

 

All series of preferredequity require cumulative distributions and have no stated maturity date(although the General Partner may redeem all such preferred units on orfollowing their optional redemption dates at the General Partner’s option, inwhole or in part).

 

In October 2007,the General Partner issued 7.0 million shares of its common stock for netproceeds of $232.7 million.

 

Pursuant to the General Partner’s $750.0 million sharerepurchase plan that was approved by its board of directors, we paidapproximately $91.9 million for the redemption of 2,266,684 of the GeneralPartner’s common shares at an average price of $40.55 per share during the yearended December 31, 2006. From time to time, the General Partner’smanagement may repurchase additional common shares of the General Partner pursuantto its share repurchase plan.

 

**(12)         StockBased Compensation**

 

The General Partner is authorized to issue up to9,949,314 shares of its common stock under its stock based employee andnon-employee compensation plans.

 

Cash flows resulting from tax deductions in excess of recognizedcompensation cost from the exercise of stock options (excess tax benefits) werenot significant in any period presented.

 

Fixed Stock OptionPlans

 

The GeneralPartner had options outstanding under six fixed stock option plans as of December 31,2007. Additional grants may be made under one of those plans. Stock optionawards granted under the General Partner’s stock based employee andnon-employee compensation plans generally vest over five years at 20% per yearand have contractual lives of ten years. The exercise price for stock option grants is set at the fair value ofthe General Partner’s common stock on the day of grant.

 

The following table summarizes transactions under the GeneralPartner’s stock option plans as of December 31, 2007:

 
|                            | ** ** | ** **    | ** **    |         | **2007**   |          |       |       |     |
|---------------------------------|------------|---------------|---------------|--------------|------------|---------------|------------|------------|----------|
|                            |       |          |          | **Weighted** |       | **Weighted**  |       | Aggregate  |     |
|                            | ** ** | ** **    | ** **    | **Average**  |       | **Average**   |       | Intrinsic  |     |
|                            |       |          |          | **Exercise** |       | **Remaining** |       | Value (1)  |     |
|                            | ** ** | **Shares**    | ** **    | ** **   | **Price**  | ** **    | ** ** | ** ** | **Life** |   | (in Millions) |   |
| Outstanding, beginning  of year | ** ** | **3,848,925** | ** **    | **$27.85**   |       |          |       |       |     |
| Granted                         | ** ** | **2,457,608** | ** **    | **$32.23**   |       |          |       |       |     |
| Exercised                       | ** ** | **(371,628)** | ** **    | **$23.02**   |       |          |       |       |     |
| Forfeited                       | ** ** | ** **    | **(83,949)**  | ** **   | **$38.50** |          |       |       |     |   |
| Outstanding, end of year        | ** ** | ** **    | **5,850,956** | ** **   | **$29.84** |          | 7.3        |       | $6.6     |   |
| Options exercisable,            |       |          |          |         |       |          |       |       |     |
|   end of year         | ** ** | ** **    | **2,166,435** | ** **   | **$25.90** |          | 4.5        |       | $4.8     |   |
|                                 |            |               |               |              |            |               |            |            |          |  |  |  |  |  |  |

----

(1)          The aggregate intrinsic value represents thetotal pre-tax intrinsic value, based on the closing stock price of $26.08 at December 31,2007, which would have been received by the option holders had all optionholders exercised their options as of that date.  This amount changes continuously based on themarket prices of the General Partner’s stock.

 

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

 

Notes toConsolidated Financial Statements

 

Options granted inthe years ended December 31, 2007, 2006 and 2005, respectively, had aweighted average fair value per option of $2.89, $3.60 and $3.04. As of December 31,2007, there was $6.7 million of total unrecognized compensation expense relatedto stock options granted under the plans, which is expected to be recognizedover a weighted average remaining period of 3.91 years. The total intrinsicvalue of options exercised during the years ended December 31, 2007, 2006and 2005 respectively, was $5.6 million, $11.3 million and $3.4 million.  Compensation expense recognized for fixedstock option plans was $2.3 million, $1.7 million and $1.1 million for theyears ended December 31, 2007, 2006 and 2005, respectively.  The fair value of options vested during theyears ended December 31, 2007, 2006 and 2005 was $1.6 million, $1.6million and $1.2 million, respectively.

 

The fair values ofthe options were determined using the Black-Scholes option-pricing model withthe following assumptions:

 
| ** **              | ** ** | ** **         | **2007** | ** ** |   | 2006    |   |   | 2005 | ** ** |
|-------------------------|------------|--------------------|----------|------------|--------|---------|--------|--------|------|------------|
| Dividend yield          | ** ** | **5.75% -  6.50%** |     | 6.25%      |   | 6.25%   |   |
| Volatility              | ** ** | **18.0%**          |     | 20.0%      |   | 20.0%   |   |
| Risk-free interest rate | ** ** | **3.63% -  4.78%** |     | 4.5%       |   | 3.8%    |   |
| Expected life           | ** ** | **5 years**        |     | 6 years    |   | 6 years |   |
|                         |            |                    |          |            |        |         |        |        |      |            |  |

 

The risk freeinterest rate assumption is based upon observed interest rates appropriate forthe term of the General Partner’s employee stock options. The dividend yieldassumption is based on the history of and our present expectation of futuredividend payouts. Our computation of expected volatility for the valuation ofstock options granted in the years ended December 31, 2007, 2006 and 2005is based on historic, and our present expectation of future volatility over aperiod of time equal to the expected term. The expected life of employee stockoptions represents the weighted average period the stock options are expectedto remain outstanding.

 

## **Performance Share Plan**

 

Performance shares were granted under the 2000Performance Share Plan, with each performance share economically equivalent toone share of the General Partner’s common stock. The performance shares vestover a five-year period with the vesting percentage for a year dependent uponthe General Partner’s attainment of certain predefined levels of earningsgrowth for such year. The performance shares have a contractual life of fiveyears. In April 2006, the 2000 Performance Share Plan was amended toprovide that awards would be settled in shares of the General Partner’s commonstock rather than cash. The fair value of existing awards was fixed at the dateof the amendment and the fair value of subsequent awards will be fixed at thefair value of the General Partner’s common stock at the date of grant.

 

The following table summarizes transactions for theGeneral Partner’s performance shares for the year ended December 31, 2007:

 
| **2000 Performance Share Plan** | ** ** | ** ** | ** ** | **Vested** | ** ** | ** ** | **Unvested** | ** ** | ** ** | **Total** | ** ** |
|---------------------------------|------------|------------|------------|------------|------------|------------|--------------|------------|------------|-----------|------------|

 
|                                   |   |    |    |     |   |   |    |   |
|----------------------------------------|--------|---------|---------|----------|--------|--------|---------|--------|
| Performance Share Plan  units at       |   |    |    |     |   |   |    |   |
| December 31,  2006                |   | 103,255 |    | 69,768   |   |   | 173,023 |   |
| Granted                                |   | -       |    | -        |   |   | -       |   |
| Vested                                 |   | 29,791  |    | (29,791) |   |   | -       |   |
| Forfeited                              |   |    |    | -        |   |   | -       |   |
| Dividend reinvestments                 |   | 9,264   |    | -        |   |   | 9,264   |   |
| Disbursements                          |   |    | (4,111) |     |   | -      |    |   |   | (4,111) |   |
| Total Performance Share  Plan units    |   |    |    |     |   |   |    |   |   |
| outstanding  at December 31, 2007 |   |    | 138,199 |     |   | 39,977 |    |   |   | 178,176 |   |
|                                        |        |         |         |          |        |        |         |        |  |  |  |  |  |

 

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

 

Notes to ConsolidatedFinancial Statements

 

Compensation expense recognized for Performance SharePlan units was $1.3 million, $1.2 million and $1.3 million for 2007, 2006 and2005, respectively. The total vest date fair value of shares vesting during theyear ended December 31, 2007 was $1.1 million.

 

Shareholder ValuePlan Awards

 

The General Partner’s2005 Shareholder Value Plan (“2005 SVP Plan”), a sub-plan of its 2005 Long-TermIncentive Plan, was approved by the General Partner’s shareholders in April 2005.Upon vesting, payout of the 2005 Shareholder Value Plan awards will be made inshares of the General Partner’s common stock. Under the 2005 SVP Plan,shareholder value awards fully vest three years after the date of grant. Thenumber of common shares to be issued may range from 0%-300% of the targetshares awarded and will be based upon the General Partner’s total shareholderreturn for such three-year period as compared to the S&P 500 Index and theNAREIT Real Estate 50 Index. Each index is weighted at 50%.

 

Awards made under the2005 SVP Plan are measured at fair value, which is determined using a MonteCarlo simulation model that was developed to accommodate the unique features ofthe 2005 SVP Plan. Compensation cost recognized under the 2005 SVP Plan was $1.5million, $879,000 and $438,000 for the years ended December 31, 2007, 2006and 2005, respectively.

 

The following tablesummarizes transactions for the General Partner’s awards under the 2005 SVPPlan for 2007:

 
| ** **                              | ** ** | ** **     |     | **Weighted**    |
|-----------------------------------------|------------|----------------|----------|-----------------|
|                                    |       | **Number  of** |     | **Average**     |
| ** **                              | ** ** | **SVP**        |     | **Grant  Date** |
| **2005 Shareholder Value Plan  Awards** |       | **Units**      |     | **Fair  Value** |
| SVP awards at  December 31, 2006   |       | 159,634        |     | $32.63          |   |
| Granted                                 |       | 83,580         |     | $46.49          |   |
| Vested                                  |       | (67,845)       |     | $30.64          |   |
| Forfeited                               |       |           | (11,189) |            | $37.19 |   |
| SVP awards at  December 31, 2007   |       |           | 164,180  |            | $40.20 |   |
|                                         |            |                |          |                 |  |  |  |  |

 

As of December 31, 2007, there was $2.2 millionof total unrecognized compensation expense related to nonvested SVP Plan awardsgranted under the 2005 SVP Plan, which will be recognized over a weightedaverage period of 1.73 years. All 2005 SVP Plan awards have a contractual lifeof three years.

 

## **Restricted Stock Units**

Under the GeneralPartner’s 2005 Long-Term Incentive Plan and its 2005 Non-Employee DirectorsCompensation Plan approved by the General Partner’s shareholders in April 2005,restricted stock units (“RSUs”) may be granted to non-employee directors,executive officers and selected management employees. An RSU is economicallyequivalent to one share of the General Partner’s common stock. RSUs grantedprior to January 1, 2006 vest 20% per year over five years, havecontractual lives of five years and are payable in shares of the GeneralPartner’s common stock.  RSUs granted toexisting non-employee directors subsequent to January 1, 2006 vest 100%over one year, and have contractual lives of one year. We recognize the valueof the granted RSUs over this vesting period as expense.

 

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

 

Notes to Consolidated Financial Statements

 

The following table summarizestransactions for the General Partner’s RSUs, excluding dividend equivalents,for 2007:

 
| ** **                     | ** ** | ** **     |    |            | **Weighted** |
|--------------------------------|------------|----------------|---------|-----------------|--------------|
|                           |       | ** **     |    |            | **Average**  |
| ** **                     | ** ** | **Number  of** |    | **Grant  Date** |
| **Restricted Stock Units**     | ** ** |           |    | **RSUs**        |         |   | ** ** | **Fair  Value** |   |
| RSUs at December 31, 2006 |       | 235,693        |    |            | $33.07       |   |
| Granted                        |       | 96,113         |    |            | $46.67       |   |
| Vested                         |       | (62,353)       |    |            | $33.14       |   |
| Forfeited                      |       |           | (8,355) |            |         | $38.99 |   |
| RSUs at December 31, 2007 |       |           | 261,098 |            |         | $37.87 |   |
|                                |            |                |         |                 |              |  |  |  |  |  |  |  |  |  |

 

Compensation costrecognized for RSUs totaled $3.0 million, $2.1 million and $478,000 for theyears ended December 31, 2007, 2006 and 2005, respectively.

 

As of December 31,2007, there was $5.9 million of total unrecognized compensation expense relatedto nonvested RSUs granted under the Plan, which is expected to be recognizedover a weighted average period of 3.9 years.

 

**(13)****         FinancialInstruments**

 

We are exposed to capitalmarket risk, such as changes in interest rates. In order to reduce thevolatility relating to interest rate risk, we may enter into interest ratehedging arrangements from time to time. We do not utilize derivative financialinstruments for trading or speculative purposes.

 

In November 2007, weentered into $300.0 million of cash flow hedges through forward-startinginterest rate swaps to hedge interest rates on $300.0 million of anticipateddebt offerings in 2008. The swaps qualify for hedge accounting, with anychanges in fair value recorded in Other Comprehensive Income (“OCI”). At December 31,2007, the fair value of these swaps was approximately $6.2 million in aliability position as the effective rate on the swaps was higher than currentinterest rates at December 31, 2007.

 

In July 2007, weentered into a $21.0 million cash flow hedge though an interest rate swap tofix the rate on $21.0 million of floating rate term debt, issued by one of ourconsolidated majority owned subsidiaries, which matures in July 2011.  The swap qualifies for hedge accounting, withany changes in fair value recorded in OCI. At December 31, 2007, the fair value of this swap was approximately$1.1 million in a liability position.

 

In August 2005, weentered into $300.0 million of cash flow hedges through forward-startinginterest rate swaps to hedge interest rates on $300.0 million of anticipateddebt offerings in 2007. The swaps qualified for hedge accounting, with anychanges in fair value recorded in OCI. In conjunction with the September 2007 issuance of $300.0 millionof senior unsecured notes, we terminated these cash flow hedges asdesignated.  The settlement amountreceived of $10.7 million will be recognized to earnings through a reduction ofinterest expense over the term of the hedged cash flows.  The ineffective portion of the hedge wasinsignificant.

 

In March 2005, we entered into $300.0 million ofcash flow hedges through forward-starting interest rate swaps to hedge interestrates on $300.0 million of anticipated debt offerings in 2006. The swapsqualified for hedge accounting, with any changes in fair value recorded inOCI.  In March 2006, we issued$150.0 million of 5.50% senior unsecured notes due 2016 and terminated a correspondingamount of the cash flow hedges designated for this transaction. The settlementamount paid of approximately $800,000 will be recognized to earnings throughinterest expense ratably over the life of the senior unsecured notes and theineffective portion of the hedge was insignificant.  In August 2006, we issued $450.0 millionof 5.95% senior unsecured notes due 2017 and $250.0 million of 5.63% seniorunsecured notes due 2011 and terminated the remaining $150.0

 

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

 

Notes to Consolidated FinancialStatements

 

million of cash flow hedges.  The settlement amount received ofapproximately $1.6 million will be recognized to earnings through a reductionof interest expense ratably over the lives of the senior unsecured notes. Theineffective portion of the hedge was insignificant.

 

The effectiveness of our hedges will be evaluatedthroughout their lives using the hypothetical derivative method under which thechange in fair value of the actual swap designated as the hedging instrument iscompared to the change in fair value of a hypothetical swap.

 

**(14)****         RecentAccounting Pronouncements**

 

We adopted FASB Interpretation No. 48, *Accounting for Uncertainty in Income Taxes, anInterpretation of FASB Statement No. 109* (“FIN 48”), on January 1,2007.  The adoption of FIN 48 resulted inan additional tax exposure of approximately $1.7 million recorded as anadjustment to the opening balance of Distributions in Excess of Net Income. Asof December 31, 2007, tax returns for the calendar years 2004 through 2007remain subject to examination by the Internal Revenue Service (“IRS”) andvarious state and local tax jurisdictions. Our uncertain tax positions areimmaterial both individually and in the aggregate primarily due to the GeneralPartner’s tax status as a REIT.

 

In September 2006,the FASB issued SFAS No. 157, *FairValue Measurements* (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fairvalue in accordance with GAAP and expands disclosure about fair valuemeasurements.  SFAS 157 is effective forfiscal years beginning after November 15, 2007.  We do not expect SFAS 157 to have a materialeffect when adopted.

 

In January 2007,the FASB issued SFAS No. 159, *The FairValue Option for Financial Assets and Financial Liabilities* (“SFAS159”).  SFAS 159 provides a “Fair ValueOption” under which a company may irrevocably elect fair value as the initialand subsequent measurement attribute for certain financial assets andliabilities.   This Fair Value Optionwill be available on a contract-by-contract basis with changes in fair valuerecognized in earnings as those changes occur. The effective date for SFAS 159 is the beginning of each reportingentity’s first fiscal year end that begins after November 15, 2007.  We will not elect the Fair Value Option forany of our financial assets or liabilities.

 

In December 2007,the FASB issued SFAS No. 141R, *BusinessCombinations* (“SFAS 141R”) and SFAS No. 160, *Noncontrolling Interests in Consolidated FinancialStatements* –*an amendment to ARB No. 51*(“SFAS 160”).  SFAS 141R and SFAS 160require most identifiable assets, liabilities, noncontrolling interests andgoodwill acquired in a business combination to be recorded at “full fair value”and require noncontrolling interests (previously referred to as minorityinterests) to be reported as a component of equity, which changes theaccounting for transactions with noncontrolling interest holders.  Both Statements are effective for periodsbeginning on or after December 15, 2008, and earlier adoption isprohibited.  SFAS 141R will be applied tobusiness combinations after the effective date. SFAS 160 will be appliedprospectively to all noncontrolling interests, including any that arose beforethe effective date.  We are currentlyevaluating the impact of adopting SFAS 141R and SFAS 160 on our results ofoperations and financial position.

 

**(15)****         Commitmentsand Contingencies**

 

We have guaranteed therepayment of $79.3 million of economic development bonds issued by variousmunicipalities in connection with certain commercial developments. We will berequired to make payments under our guarantees to the extent that incrementaltaxes from specified developments are not sufficient to pay the bond debtservice. Management does not believe that it is probable that we will berequired to make any significant payments in satisfaction of these guarantees.

 

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

 

Notes to Consolidated Financial Statements

 

We also have guaranteedthe repayment of secured and unsecured loans of seven of our unconsolidatedsubsidiaries. At December 31, 2007, the outstanding balance on these loanswas approximately $219.8 million. Additionally, we guaranteed $29.0 million ofsecured indebtedness related to a property sold to a third party in 2006.Management believes that the value of the real estate exceeds the loan balanceand that we will not be required to satisfy these guarantees.

 

We have entered intoagreements, subject to the completion of due diligence requirements, resolutionof certain contingencies and completion of customary closing conditions, forthe future acquisitions of land and buildings totaling $158.9 million. In mostcases we may withdraw from land purchase contracts with the seller’s onlyrecourse being earnest money deposits already made.

 

In October 2000,we sold or contributed industrial properties and undeveloped land with a fairvalue of $487.0 million to a joint venture (Dugan Realty LLC) in which we havea 50% interest and recognized a net gain of $35.2 million. In connection withthis transaction, the joint venture partners were given an option to put up toa $50.0 million interest in the joint venture to us in exchange for the GeneralPartner’s common stock or cash (at our option), subject to certain timing andother restrictions. As a result of this put option, we deferred $10.2 millionof gain on sale of depreciated property and recorded a $50.0 million liability.

 

We are subject to variouslegal proceedings and claims that arise in the ordinary course ofbusiness.  In the opinion of management,the amount of any ultimate liability with respect to these actions will not materiallyaffect our consolidated financial statements or results of operations.

 

**(16)****        ****Subsequent Events**

 

*Declarationof Distributions*

The General Partner’sboard of directors declared the following distributions at its January 30,2008, regularly scheduled board meeting:

 
| ** **                        | ** ** | **Quarterly**                 | ** ** | ** **              | ** ** | ** **              | ** ** |
|-----------------------------------|------------|-------------------------------|------------|-------------------------|------------|-------------------------|------------|
| **Class**                         | ** ** | **Amount/Share**              | ** ** | **Record  Date**        | ** ** | ** Payment  Date** | ** ** |
| Common                            |       | $    0.48 |       | February 14,  2008 |       | February 29,  2008 |       |
| Preferred  (per depositary unit): |       |                          |       |                    |       |                    |       |
| Series J                     |       | $0.414063                     |       | February 15,  2008 |       | February 29,  2008 |       |
| Series K                     |       | $0.406250                     |       | February 15,  2008 |       | February 29,  2008 |       |
| Series L                     |       | $0.412500                     |       | February 15,  2008 |       | February 29,  2008 |       |
| Series M                     |       | $0.434375                     |       | March 17,  2008    |       | March 31,  2008    |       |
| Series N                     |       | $0.453125                     |       | March 17,  2008    |       | March 31,  2008    |       |
|                                   |            |                               |            |                         |            |                         |            |  |  |  |

 

In February 2008, the General Partner issued $300.0 millionof 8.375% Series O Cumulative Redeemable Preferred Shares.

 

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| **Duke Realty Limited Partnership**           | **Schedule 3** |
|-----------------------------------------------|----------------|
| **Real Estate and Accumulated  Depreciation** |
| **December 31, 2007**                         |
| **(in thousands)**                            |

 
| ** **                      | ** ** | ** **                     | ** ** | **Building** | ** ** | ** **       | ** ** | **Initial Cost** | ** ** | **Cost  Capitalized  Subsequent to****Development** | ** ** | **Gross Book Value 12/31/07** | ** ** | **Accumulated**        | ** ** | **Year**     | ** ** | **Year**   | ** ** |
|---------------------------------|------------|--------------------------------|------------|--------------|------------|------------------|------------|-----------------------|------------|-----------------------------------------------------|------------|----------------------------------------------|------------|------------------------|------------|--------------|------------|------------|------------|
| **Development**                 | ** ** | **Name**                       | ** ** | **Type**     | ** ** | **Encumbrances** | ** ** | **Land**              | ** ** | **Buildings**                                       | ** ** | **or Acquisition**                      | ** ** | **Land/Land Imp** | ** ** | **Bldgs/TI** | ** ** | **Total**  | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
| ** **                      | ** ** | ** **                     | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **                                          | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **ALLEN, TEXAS**                | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |       |       |   |   |   |   |   |   |   |
| Allen Central Park              |       | One Allen Center               |       | Office       |       | -           |       | 1,966                 |       | 11,178                                              |       | 629                                          |       | 1,966                  |       | 11,807       |       |       | 13,773     |   | - |   | 2007 |   | 2007 |   |
|                            |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |       |       |   |   |   |   |   |   |   |
| **ALPHARETTA, GEORGIA**         | ** ** | ** **                     | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** |                                                |       | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Brookside Office Park           |       | Radiant I                      |       | Office       |       | -           |       | 1,269                 |       | 14,697                                              |       | 63                                           |       | 1,269                  |       | 14,760       |       |       | 16,029     |   | 3,142 |   | 1998 |   | 1999 |   |
| Brookside Office Park           |       | Brookside I                    |       | Office       |       | -           |       | 1,625                 |       | 8,594                                               |       | 3,926                                        |       | 1,492                  |       | 12,653       |       |       | 14,145     |   | 2,834 |   | 1999 |   | 1999 |   |
| Brookside Office Park           |       | Radiant II                     |       | Office       |       | -           |       | 831                   |       | 6,755                                               |       | 185                                          |       | 831                    |       | 6,940        |       |       | 7,771      |   | 1,229 |   | 2000 |   | 2000 |   |
| Brookside Office Park           |       | Brookside II                   |       | Office       |       | -           |       | 1,381                 |       | 11,239                                              |       | 2,048                                        |       | 1,248                  |       | 13,420       |       |       | 14,668     |   | 3,159 |   | 2000 |   | 2000 |   |
| Hembree Crest                   |       | 11415 Old Roswell Road         |       | Industrial   |       | -           |       | 648                   |       | 2,454                                               |       | 1,055                                        |       | 648                    |       | 3,509        |       |       | 4,157      |   | 1,353 |   | 1991 |   | 1999 |   |
| NorthWinds Center               |       | Northwinds VII                 |       | Office       |       | -           |       | 2,271                 |       | 19,852                                              |       | 1,571                                        |       | 2,304                  |       | 21,390       |       |       | 23,694     |   | 4,909 |   | 1998 |   | 1999 |   |
| NorthWinds Center               |       | Northwinds I                   |       | Office       |       | -           |       | 1,879                 |       | 15,933                                              |       | 1,641                                        |       | 1,879                  |       | 17,574       |       |       | 19,453     |   | 3,286 |   | 1997 |   | 2004 |   |
| NorthWinds Center               |       | Northwinds II                  |       | Office       |       | -           |       | 1,796                 |       | 15,973                                              |       | 600                                          |       | 1,796                  |       | 16,573       |       |       | 18,369     |   | 3,406 |   | 1997 |   | 2004 |   |
| NorthWinds Center               |       | Northwinds III                 |       | Office       |       | 15,931           |       | 1,868                 |       | 16,114                                              |       | 597                                          |       | 1,868                  |       | 16,711       |       |       | 18,579     |   | 3,482 |   | 1998 |   | 2004 |   |
| NorthWinds Center               |       | Northwinds IV                  |       | Office       |       | 15,162           |       | 1,844                 |       | 16,089                                              |       | 1,727                                        |       | 1,844                  |       | 17,816       |       |       | 19,660     |   | 3,669 |   | 1999 |   | 2004 |   |
| NorthWinds Center               |       | Northwinds V                   |       | Office       |       | -           |       | 2,215                 |       | 15,522                                              |       | 1,336                                        |       | 2,215                  |       | 16,858       |       |       | 19,073     |   | 3,313 |   | 1999 |   | 2004 |   |
| NorthWinds Center               |       | Northwinds VI                  |       | Office       |       | -           |       | 2,662                 |       | 15,600                                              |       | 708                                          |       | 2,662                  |       | 16,308       |       |       | 18,970     |   | 3,512 |   | 2000 |   | 2004 |   |
| NorthWinds Center               |       | Northwinds Village             |       | Retail       |       | -           |       | 704                   |       | 4,453                                               |       | 153                                          |       | 710                    |       | 4,600        |       |       | 5,310      |   | 591 |   | 2000 |   | 2004 |   |
| NorthWinds Center               |       | Northwinds Restaurant          |       | Retail       |       | -           |       | 202                   |       | 329                                                 |       | -                                            |       | 202                    |       | 329          |       |       | 531        |   | 51 |   | 1997 |   | 2004 |   |
| Ridgeland                       |       | 1320 Ridgeland Parkway         |       | Industrial   |       | -           |       | 998                   |       | 5,874                                               |       | 52                                           |       | 998                    |       | 5,926        |       |       | 6,924      |   | 1,250 |   | 1999 |   | 1999 |   |
| Ridgeland                       |       | 1345 Ridgeland Parkway         |       | Industrial   |       | -           |       | 488                   |       | 2,186                                               |       | 1,068                                        |       | 488                    |       | 3,254        |       |       | 3,742      |   | 769 |   | 1999 |   | 1999 |   |
| Ridgeland                       |       | 1335 Ridgeland Pkwy            |       | Industrial   |       | -           |       | 579                   |       | 2,105                                               |       | 803                                          |       | 579                    |       | 2,908        |       |       | 3,487      |   | 650 |   | 1999 |   | 1999 |   |
| Preston Ridge                   |       | Preston Ridge IV               |       | Office       |       | -           |       | 2,777                 |       | 13,300                                              |       | 725                                          |       | 2,781                  |       | 14,021       |       |       | 16,802     |   | 3,658 |   | 2000 |   | 2004 |   |
| Windward                        |       | 800 North Point Parkway        |       | Office       |       | -           |       | 1,250                 |       | 18,443                                              |       | -                                       |       | 1,250                  |       | 18,443       |       |       | 19,693     |   | 2,341 |   | 1991 |   | 2003 |   |
| Windward                        |       | 900 North Point Parkway        |       | Office       |       | -           |       | 1,250                 |       | 13,945                                              |       | -                                       |       | 1,250                  |       | 13,945       |       |       | 15,195     |   | 1,786 |   | 1991 |   | 2003 |   |
|                            |       |                           |       |         |       | -           |       |                  |       |                                                |       |                                         |       |                   |       |         |       |       |       |   |   |   |   |   |   |   |
| **ARLINGTON HEIGHTS, ILLINOIS** |       |                           |       |         |       | -           |       |                  |       |                                                |       |                                         |       |                   |       |         |       |       |       |   |   |   |   |   |   |   |
| Arlington Business Park         |       | Atrium II                      |       | Office       |       | -           |       | 776                   |       | 6,882                                               |       | 2,167                                        |       | 776                    |       | 9,049        |       |       | 9,825      |   | 2,479 |   | 1986 |   | 1998 |   |
|                            |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |       |       |   |   |   |   |   |   |   |
| **ATLANTA, GEORGIA**            | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |       |       |   |   |   |   |   |   |   |
| Druid Chase                     |       | 6 West Druid Hills Drive       |       | Office       |       | -           |       | 473                   |       | 6,731                                               |       | 2,489                                        |       | 473                    |       | 9,220        |       |       | 9,693      |   | 2,608 |   | 1968 |   | 1999 |   |
| Druid Chase                     |       | 2801 Buford Highway            |       | Office       |       | -           |       | 794                   |       | 9,310                                               |       | 2,757                                        |       | 794                    |       | 12,067       |       |       | 12,861     |   | 2,836 |   | 1977 |   | 1999 |   |
| Druid Chase                     |       | 1190 West Druid Hills Drive    |       | Office       |       | -           |       | 689                   |       | 6,485                                               |       | 1,308                                        |       | 689                    |       | 7,793        |       |       | 8,482      |   | 1,780 |   | 1980 |   | 1999 |   |
| Center Pointe Medical I and II  |       | Center Pointe Medical I and II |       | Healthcare   |       | 24,067           |       | 9,697                 |       | 29,308                                              |       | 599                                          |       | 9,697                  |       | 29,907       |       |       | 39,604     |   | 500 |   | 1984 |   | 2007 |   |
|                            |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |       |       |   |   |   |   |   |   |   |
| **AURORA, ILLINOIS**            | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |       |       |   |   |   |   |   |   |   |
| Meridian Business Campus        |       | 535 Exchange                   |       | Industrial   |       | -           |       | 386                   |       | 920                                                 |       | 269                                          |       | 386                    |       | 1,189        |       |       | 1,575      |   | 301 |   | 1984 |   | 1999 |   |
| Meridian Business Campus        |       | 525 North Enterprise Street    |       | Industrial   |       | -           |       | 342                   |       | 1,678                                               |       | 110                                          |       | 342                    |       | 1,788        |       |       | 2,130      |   | 473 |   | 1984 |   | 1999 |   |
| Meridian Business Campus        |       | 615 North Enterprise Street    |       | Industrial   |       | -           |       | 468                   |       | 2,824                                               |       | 649                                          |       | 468                    |       | 3,473        |       |       | 3,941      |   | 973 |   | 1984 |   | 1999 |   |
| Meridian Business Campus        |       | 3615 Exchange                  |       | Industrial   |       | -           |       | 410                   |       | 1,603                                               |       | 140                                          |       | 410                    |       | 1,743        |       |       | 2,153      |   | 493 |   | 1986 |   | 1999 |   |
| Meridian Business Campus        |       | 4000 Sussex Avenue             |       | Industrial   |       | -           |       | 417                   |       | 1,711                                               |       | 332                                          |       | 417                    |       | 2,043        |       |       | 2,460      |   | 535 |   | 1990 |   | 1999 |   |
| Meridian Business Campus        |       | 3737 East Exchange             |       | Industrial   |       | -           |       | 598                   |       | 2,543                                               |       | 166                                          |       | 598                    |       | 2,709        |       |       | 3,307      |   | 721 |   | 1985 |   | 1999 |   |
| Meridian Business Campus        |       | 444 North Commerce Street      |       | Industrial   |       | -           |       | 722                   |       | 5,403                                               |       | 597                                          |       | 722                    |       | 6,000        |       |       | 6,722      |   | 1,659 |   | 1985 |   | 1999 |   |
| Meridian Business Campus        |       | 880 North Enterprise Street    |       | Industrial   |       | -           |       | 1,150                 |       | 5,669                                               |       | 530                                          |       | 1,150                  |       | 6,199        |       |       | 7,349      |   | 1,426 |   | 1999 |   | 1999 |   |
| Meridian Business Campus        |       | Meridian Office Service Center |       | Industrial   |       | -           |       | 567                   |       | 1,083                                               |       | 1,701                                        |       | 567                    |       | 2,784        |       |       | 3,351      |   | 578 |   | 2001 |   | 2001 |   |
| Meridian Business Campus        |       | Genera Corporation             |       | Industrial   |       | -           |       | 1,957                 |       | 3,827                                               |       | -                                       |       | 1,957                  |       | 3,827        |       |       | 5,784      |   | 593 |   | 2004 |   | 2004 |   |
|                            |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |       |       |   |   |   |   |   |   |   |
| **BATAVIA, OHIO**               | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |       |       |   |   |   |   |   |   |   |
| Mercy Hospital Clermont MOB     |       | Mercy Hospital Clermont MOB    |       | Healthcare   |       | -           |       | -                |       | 8,699                                               |       | 667                                          |       | -                 |       | 9,366        |       |       | 9,366      |   | -  |   | 2005 |   | 2007 |   |
|                            |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |       |       |   |   |   |   |   |   |   |
| **BERRY HILL, TN**              | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |       |       |   |   |   |   |   |   |   |
| Four-Forty Business Center      |       | Four-Forty Business Center I   |       | Industrial   |       | -           |       | 938                   |       | 6,462                                               |       | 46                                           |       | 938                    |       | 6,508        |       |       | 7,446      |   | 1,383 |   | 1997 |   | 1999 |   |
| Four-Forty Business Center      |       | Four-Forty Business Center III |       | Industrial   |       | -           |       | 1,812                 |       | 7,579                                               |       | 259                                          |       | 1,812                  |       | 7,838        |       |       | 9,650      |   | 1,795 |   | 1998 |   | 1999 |   |
| Four-Forty Business Center      |       | Four-Forty Business Center IV  |       | Industrial   |       | -           |       | 1,522                 |       | 5,552                                               |       | 416                                          |       | 1,522                  |       | 5,968        |       |       | 7,490      |   | 1,343 |   | 1997 |   | 1999 |   |
| Four-Forty Business Center      |       | Four-Forty Business Center V   |       | Industrial   |       | -           |       | 471                   |       | 3,321                                               |       | 527                                          |       | 471                    |       | 3,848        |       |       | 4,319      |   | 1,436 |   | 1999 |   | 1999 |   |
|                            |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |       |       |   |   |   |   |   |   |   |
| **BLOOMINGTON, MINNESOTA**      | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |       |       |   |   |   |   |   |   |   |
| Alpha Business Center           |       | Alpha Business Ctr I&II    |       | Office       |       | -           |       | 280                   |       | 1,421                                               |       | 367                                          |       | 280                    |       | 1,788        |       |       | 2,068      |   | 431 |   | 1980 |   | 1999 |   |
| Alpha Business Center           |       | Alpha Business Ctr III&IV  |       | Industrial   |       | -           |       | 341                   |       | 1,775                                               |       | 375                                          |       | 341                    |       | 2,150        |       |       | 2,491      |   | 519 |   | 1980 |   | 1999 |   |
| Alpha Business Center           |       | Alpha Business Ctr V           |       | Industrial   |       | -           |       | 537                   |       | 2,977                                               |       | 361                                          |       | 537                    |       | 3,338        |       |       | 3,875      |   | 813 |   | 1980 |   | 1999 |   |
| Hampshire Dist. Center          |       | Hampshire Dist Center North    |       | Industrial   |       | 1,228            |       | 779                   |       | 4,500                                               |       | 287                                          |       | 779                    |       | 4,787        |       |       | 5,566      |   | 1,253 |   | 1979 |   | 1997 |   |
| Hampshire Dist. Center          |       | Hampshire Dist Center South    |       | Industrial   |       | 1,389            |       | 901                   |       | 5,069                                               |       | 313                                          |       | 901                    |       | 5,382        |       |       | 6,283      |   | 1,412 |   | 1979 |   | 1997 |   |
| Norman Pointe Office Park       |       | Norman Pointe I                |       | Office       |       | -           |       | 3,650                 |       | 25,966                                              |       | 2,350                                        |       | 3,650                  |       | 28,316       |       |       | 31,966     |   | 5,621 |   | 2000 |   | 2000 |   |
| Norman Pointe Office Park       |       | Norman Pointe II               |       | Office       |       | -           |       | 5,885                 |       | 38,649                                              |       | 1,206                                        |       | 5,885                  |       | 39,855       |       |       | 45,740     |   | 279 |   | 2007 |   | 2007 |   |

 

82

----

 
| **Duke Realty Limited Partnership**           | **Schedule 3** |
|-----------------------------------------------|----------------|
| **Real Estate and Accumulated  Depreciation** |
| **December 31, 2007**                         |
| **(in thousands)**                            |

 
| ** **                   | ** ** | ** **                     | ** ** | **Building** | ** ** | ** **       | ** ** | **Initial Cost** | ** ** | **Cost  Capitalized  Subsequent to****Development** | ** ** | **Gross Book Value 12/31/07** | ** ** | **Accumulated**        | ** ** | **Year**     | ** ** | **Year**  | ** ** |
|------------------------------|------------|--------------------------------|------------|--------------|------------|------------------|------------|-----------------------|------------|-----------------------------------------------------|------------|----------------------------------------------|------------|------------------------|------------|--------------|------------|-----------|------------|
| **Development**              | ** ** | **Name**                       | ** ** | **Type**     | ** ** | **Encumbrances** | ** ** | **Land**              | ** ** | **Buildings**                                       | ** ** | **or Acquisition**                      | ** ** | **Land/Land Imp** | ** ** | **Bldgs/TI** | ** ** | **Total** | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
| ** **                   | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **BLUE ASH, OHIO**           | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| McAuley Place                |       | McAuley Place                  |       | Office       |       | -           |       | 2,331                 |       | 17,604                                              |       | 2,103                                        |       | 2,331                  |       | 19,707       |       | 22,038    |       | 3,822 |   | 2000 |   | 2001 |   |
| Huntington Bank Building     |       | Huntington Bank Building       |       | Office       |       | -           |       | 175                   |       | 241                                                 |       | -                                            |       | 175                    |       | 241          |       | 416       |       | 71 |   | 1986 |   | 1996 |   |
| Lake Forest/Westlake         |       | Lake Forest Place              |       | Office       |       | -           |       | 1,953                 |       | 18,680                                              |       | 3,281                                        |       | 1,953                  |       | 21,961       |       | 23,914    |       | 6,367 |   | 1985 |   | 1996 |   |
| Northmark Office Park        |       | Northmark Building 1           |       | Office       |       | -           |       | 1,452                 |       | 5,077                                               |       | 440                                          |       | 1,452                  |       | 5,517        |       | 6,969     |       | 1,913 |   | 1987 |   | 2004 |   |
| Lake Forest/Westlake         |       | Westlake Center                |       | Office       |       | -           |       | 2,459                 |       | 15,911                                              |       | 3,446                                        |       | 2,459                  |       | 19,357       |       | 21,816    |       | 6,049 |   | 1981 |   | 1996 |   |
| Landings                     |       | Landings Building I            |       | Office       |       | -           |       | 4,302                 |       | 17,512                                              |       | 301                                          |       | 4,302                  |       | 17,813       |       | 22,115    |       | 1,171 |   | 2006 |   | 2006 |   |
| Landings                     |       | Landings Building II           |       | Office       |       | -           |       | 4,817                 |       | 9,377                                               |       | 2,134                                        |       | 4,817                  |       | 11,511       |       | 16,328    |       | 318 |   | 2007 |   | 2007 |   |
|                         |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **BOLINGBROOK, ILLINOIS**    | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Joliet Road Business Park    |       | 555 Joliet Road, Bolingbrook   |       | Industrial   |       | -           |       | 2,184                 |       | 9,284                                               |       | 752                                          |       | 2,332                  |       | 9,888        |       | 12,220    |       | 1,527 |   | 1967 |   | 2002 |   |
| Joliet Road Business Park    |       | Dawes Transportation           |       | Industrial   |       | -           |       | 3,050                 |       | 4,453                                               |       | -                                       |       | 3,050                  |       | 4,453        |       | 7,503     |       | 632 |   | 2005 |   | 2005 |   |
|                         |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **BRASELTON, GEORGIA**       | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Braselton Business Park      |       | Braselton II                   |       | Industrial   |       | -           |       | 1,365                 |       | 8,720                                               |       | 1,720                                        |       | 1,884                  |       | 9,921        |       | 11,805    |       | 1,787 |   | 2001 |   | 2001 |   |
| Park 85 at Braselton         |       | Park 85 at Braselton Bldg 625  |       | Industrial   |       | -           |       | 9,855                 |       | 25,690                                              |       | 463                                          |       | 9,855                  |       | 26,153       |       | 36,008    |       | 1,871 |   | 2004 |   | 2005 |   |
|                         |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **BRENTOOD, TENNESSEE**      | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Brentwood South Bus. Center  |       | Brentwood South Bus Ctr I      |       | Industrial   |       | -           |       | 1,065                 |       | 5,773                                               |       | 838                                          |       | 1,065                  |       | 6,611        |       | 7,676     |       | 1,572 |   | 1987 |   | 1999 |   |
| Brentwood South Bus. Center  |       | Brentwood South Bus Ctr II     |       | Industrial   |       | -           |       | 1,065                 |       | 2,781                                               |       | 1,275                                        |       | 1,065                  |       | 4,056        |       | 5,121     |       | 882 |   | 1987 |   | 1999 |   |
| Brentwood South Bus. Center  |       | Brentwood South Bus Ctr III    |       | Industrial   |       | -           |       | 848                   |       | 3,998                                               |       | 660                                          |       | 848                    |       | 4,658        |       | 5,506     |       | 1,160 |   | 1989 |   | 1999 |   |
| Creekside Crossing           |       | Creekside Crossing I           |       | Office       |       | -           |       | 1,900                 |       | 7,649                                               |       | 580                                          |       | 1,901                  |       | 8,228        |       | 10,129    |       | 2,294 |   | 1997 |   | 1997 |   |
| Creekside Crossing           |       | Creekside Crossing II          |       | Office       |       | -           |       | 2,087                 |       | 7,801                                               |       | 1,204                                        |       | 2,087                  |       | 9,005        |       | 11,092    |       | 2,477 |   | 1999 |   | 1999 |   |
| Creekside Crossing           |       | Creekside Crossing III         |       | Office       |       | -           |       | 2,969                 |       | 9,700                                               |       | 1,668                                        |       | 2,969                  |       | 11,368       |       | 14,337    |       | 840 |   | 2006 |   | 2006 |   |
| Creekside Crossing           |       | Creekside Crossing IV          |       | Office       |       | -           |       | 2,966                 |       | 8,104                                               |       | 651                                          |       | 3,010                  |       | 8,711        |       | 11,721    |       | 101 |   | 2007 |   | 2007 |   |
|                         |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **BROOKLYN PARK, MINNESOTA** |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| 7300 Northland Drive         |       | 7300 Northland Drive           |       | Industrial   |       | -           |       | 700                   |       | 6,578                                               |       | 278                                          |       | 703                    |       | 6,853        |       | 7,556     |       | 1,831 |   | 1980 |   | 1998 |   |
| Crosstown North Bus. Ctr.    |       | Crosstown North Bus. Ctr. 1    |       | Industrial   |       | -           |       | 835                   |       | 5,321                                               |       | 1,113                                        |       | 1,286                  |       | 5,983        |       | 7,269     |       | 1,705 |   | 1998 |   | 1999 |   |
| Crosstown North Bus. Ctr.    |       | Crosstown North Bus. Ctr. 2    |       | Industrial   |       | -           |       | 449                   |       | 2,722                                               |       | 674                                          |       | 599                    |       | 3,246        |       | 3,845     |       | 834 |   | 1998 |   | 1999 |   |
| Crosstown North Bus. Ctr.    |       | Crosstown North Bus. Ctr. 3    |       | Industrial   |       | -           |       | 758                   |       | 1,891                                               |       | 233                                          |       | 837                    |       | 2,045        |       | 2,882     |       | 515 |   | 1999 |   | 1999 |   |
| Crosstown North Bus. Ctr.    |       | Crosstown North Bus. Ctr. 4    |       | Industrial   |       | -           |       | 2,079                 |       | 7,324                                               |       | 1,331                                        |       | 2,397                  |       | 8,337        |       | 10,734    |       | 2,617 |   | 1999 |   | 1999 |   |
| Crosstown North Bus. Ctr.    |       | Crosstown North Bus. Ctr. 5    |       | Industrial   |       | -           |       | 1,079                 |       | 4,433                                               |       | 509                                          |       | 1,354                  |       | 4,667        |       | 6,021     |       | 1,049 |   | 1999 |   | 1999 |   |
| Crosstown North Bus. Ctr.    |       | Crosstown North Bus. Ctr. 6    |       | Industrial   |       | -           |       | 788                   |       | 2,951                                               |       | 2,144                                        |       | 1,031                  |       | 4,852        |       | 5,883     |       | 1,550 |   | 2000 |   | 2000 |   |
| Crosstown North Bus. Ctr.    |       | Crosstown North Bus. Ctr. 10   |       | Industrial   |       | -           |       | 2,757                 |       | 4,642                                               |       | 1,079                                        |       | 2,723                  |       | 5,755        |       | 8,478     |       | 801 |   | 2004 |   | 2004 |   |
| Crosstown North Bus. Ctr.    |       | Crosstown North Bus. Ctr. 12   |       | Industrial   |       | -           |       | 4,564                 |       | 9,014                                               |       | 215                                          |       | 4,564                  |       | 9,229        |       | 13,793    |       | 1,066 |   | 2005 |   | 2005 |   |
|                         |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **BUFFALO, NEW YORK**        | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Office Development           |       | HealthNow                      |       | Office       |       | -           |       | 11,686                |       | 54,009                                              |       | 3,732                                        |       | 11,686                 |       | 57,741       |       | 69,427    |       | -  |   | 2007 |   | 2007 |   |
|                         |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **CARMEL, INDIANA**          | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Hamilton Crossing            |       | Hamilton Crossing I            |       | Industrial   |       | -           |       | 835                   |       | 4,008                                               |       | 2,588                                        |       | 847                    |       | 6,584        |       | 7,431     |       | 2,599 |   | 1989 |   | 1993 |   |
| Hamilton Crossing            |       | Hamilton Crossing II           |       | Office       |       | -           |       | 313                   |       | 840                                                 |       | 1,180                                        |       | 384                    |       | 1,949        |       | 2,333     |       | 623 |   | 1997 |   | 1997 |   |
| Hamilton Crossing            |       | Hamilton Crossing III          |       | Office       |       | -           |       | 890                   |       | 9,581                                               |       | 1,912                                        |       | 890                    |       | 11,493       |       | 12,383    |       | 3,276 |   | 2000 |   | 2000 |   |
| Hamilton Crossing            |       | Hamilton Crossing IV           |       | Office       |       | -           |       | 515                   |       | 5,186                                               |       | 571                                          |       | 598                    |       | 5,674        |       | 6,272     |       | 1,320 |   | 1999 |   | 1999 |   |
| Hamilton Crossing            |       | Hamilton Crossing VI           |       | Office       |       | -           |       | 1,044                 |       | 13,671                                              |       | 840                                          |       | 1,068                  |       | 14,487       |       | 15,555    |       | 2,271 |   | 2003 |   | 2003 |   |
| Meridian Technology Center   |       | Meridian Tech Center           |       | Office       |       | -           |       | 376                   |       | 2,695                                               |       | 1,107                                        |       | 376                    |       | 3,802        |       | 4,178     |       | 831 |   | 1986 |   | 2002 |   |
| West Carmel Marketplace      |       | Burger King (Ground Lease)     |       | Grounds      |       | -           |       | 848                   |       | -                                              |       | 189                                          |       | 1,037                  |       | -       |       | 1,037     |       | -  |   | n/a |   | 2007 |   |
|                         |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **CAROL STREAM, ILLINOIS**   | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Carol Stream Business Park   |       | Carol Stream IV                |       | Industrial   |       | -           |       | 3,204                 |       | 14,986                                              |       | 471                                          |       | 3,204                  |       | 15,457       |       | 18,661    |       | 2,303 |   | 1994 |   | 2003 |   |
| Carol Stream Business Park   |       | Carol Stream V                 |       | Industrial   |       | -           |       | 4,553                 |       | 7,605                                               |       | 242                                          |       | 4,553                  |       | 7,847        |       | 12,400    |       | 707 |   | 1986 |   | 2003 |   |
| **CARY, NORTH CAROLINA**     | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Regency Forest               |       | 200 Regency Forest Dr.         |       | Office       |       | -           |       | 1,230                 |       | 13,365                                              |       | 1,877                                        |       | 1,230                  |       | 15,242       |       | 16,472    |       | 3,641 |   | 1999 |   | 1999 |   |
| Regency Forest               |       | 100 Regency Forest Dr.         |       | Office       |       | -           |       | 1,538                 |       | 9,835                                               |       | 1,907                                        |       | 1,618                  |       | 11,662       |       | 13,280    |       | 2,720 |   | 1997 |   | 1999 |   |
| Weston Parkway               |       | 6501 Weston Parkway            |       | Office       |       | -           |       | 1,775                 |       | 10,580                                              |       | 1,287                                        |       | 1,775                  |       | 11,867       |       | 13,642    |       | 2,807 |   | 1996 |   | 1999 |   |
|                         |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **CELEBRATION, FLORIDA**     | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Celebration Business Center  |       | Celebration Business Center I  |       | Office       |       | -           |       | 1,102                 |       | 4,722                                               |       | 529                                          |       | 1,308                  |       | 5,045        |       | 6,353     |       | 1,151 |   | 1997 |   | 1999 |   |
| Celebration Business Center  |       | Celebration Business Center II |       | Office       |       | -           |       | 771                   |       | 3,587                                               |       | 337                                          |       | 961                    |       | 3,734        |       | 4,695     |       | 879 |   | 1997 |   | 1999 |   |
| Celebration Office Center    |       | Celebration Office Center I    |       | Office       |       | -           |       | 1,382                 |       | 5,771                                               |       | 326                                          |       | 1,382                  |       | 6,097        |       | 7,479     |       | 1,318 |   | 2000 |   | 2000 |   |
| Celebration Office Center    |       | Celebration Office Center II   |       | Office       |       | -           |       | 1,382                 |       | 5,859                                               |       | 2,422                                        |       | 1,382                  |       | 8,281        |       | 9,663     |       | 2,455 |   | 2001 |   | 2001 |   |
|                         |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **CHANTILLY, VIRGINIA**      | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Northridge at Westfields     |       | 15002 Northridge Dr.           |       | Office       |       | -           |       | 1,148                 |       | 2,597                                               |       | 442                                          |       | 1,148                  |       | 3,039        |       | 4,187     |       | -  |   | 2007 |   | 2007 |   |
| Northridge at Westfields     |       | 15004 Northridge Dr.           |       | Office       |       | -           |       | 1,305                 |       | 2,981                                               |       | 426                                          |       | 1,305                  |       | 3,407        |       | 4,712     |       | -  |   | 2007 |   | 2007 |   |
| Northridge at Westfields     |       | 15006 Northridge Dr.           |       | Office       |       | -           |       | 1,611                 |       | 3,586                                               |       | 522                                          |       | 1,611                  |       | 4,108        |       | 5,719     |       | -  |   | 2007 |   | 2007 |   |

 

83

----

 
| **Duke Realty Limited Partnership**           | **Schedule 3** |
|-----------------------------------------------|----------------|
| **Real Estate and Accumulated  Depreciation** |
| **December 31, 2007**                         |
| **(in thousands)**                            |

 
| ** **                   | ** ** | ** **                         | ** ** | **Building** | ** ** | ** **       | ** ** | **Initial Cost** | ** ** | **Cost  Capitalized  Subsequent to****Development** | ** ** | **Gross Book Value 12/31/07** | ** ** | **Accumulated**        | ** ** | **Year**     | ** ** | **Year**  | ** ** |
|------------------------------|------------|------------------------------------|------------|--------------|------------|------------------|------------|-----------------------|------------|-----------------------------------------------------|------------|----------------------------------------------|------------|------------------------|------------|--------------|------------|-----------|------------|
| **Development**              | ** ** | **Name**                           | ** ** | **Type**     | ** ** | **Encumbrances** | ** ** | **Land**              | ** ** | **Buildings**                                       | ** ** | **or Acquisition**                      | ** ** | **Land/Land Imp** | ** ** | **Bldgs/TI** | ** ** | **Total** | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
|                         |       |                               |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **CHILLICOTHE, OHIO**        | ** ** |                               |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Adena Health Pavilion        |       | Adena Health Pavilion              |       | Healthcare   |       | -                |       | -                     |       | 11,738                                              |       | 8                                            |       | -                      |       | 11,746       |       | 11,746    |       | 396 |   | 2005 |   | 2007 |   |
| Adena Health System OPC      |       | Adena Health System OPC            |       | Healthcare   |       | -                |       | -                     |       | 2,946                                               |       | 1                                            |       | -                      |       | 2,947        |       | 2,947     |       | 266 |   | 2005 |   | 2007 |   |
|                         |       |                               |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **CINCINNATI, OHIO**         | ** ** |                               |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| 311 Elm                      |       | 311 Elm                            |       | Office       |       | -           |       | 339                   |       | 5,734                                               |       | 1,321                                        |       | 346                    |       | 7,048        |       | 7,394     |       | 3,955 |   | 1986 |   | 1993 |   |
| 312 Elm                      |       | 312 Elm                            |       | Office       |       | 34,273           |       | 4,750                 |       | 46,380                                              |       | 5,159                                        |       | 5,428                  |       | 50,861       |       | 56,289    |       | 18,388 |   | 1992 |   | 1993 |   |
| 312 Plum                     |       | 312 Plum                           |       | Office       |       | -           |       | 2,539                 |       | 23,832                                              |       | 3,736                                        |       | 2,590                  |       | 27,517       |       | 30,107    |       | 9,825 |   | 1987 |   | 1993 |   |
| One Ashview Place            |       | One Ashview Place                  |       | Office       |       | -           |       | 1,204                 |       | 12,613                                              |       | 2,877                                        |       | 1,204                  |       | 15,490       |       | 16,694    |       | 5,149 |   | 1989 |   | 1997 |   |
| Blue Ash Office Center       |       | Blue Ash Office Center VI          |       | Office       |       | -           |       | 518                   |       | 2,752                                               |       | 647                                          |       | 518                    |       | 3,399        |       | 3,917     |       | 975 |   | 1989 |   | 1997 |   |
| Towers of Kenwood            |       | Towers of Kenwood                  |       | Office       |       | -           |       | 4,891                 |       | 42,239                                              |       | 2,103                                        |       | 4,891                  |       | 44,342       |       | 49,233    |       | 5,897 |   | 1989 |   | 2003 |   |
| Governors Hill               |       | 8790 Governor’s Hill          |       | Office       |       | -           |       | 400                   |       | 4,559                                               |       | 1,055                                        |       | 408                    |       | 5,606        |       | 6,014     |       | 2,058 |   | 1985 |   | 1993 |   |
| Governors Hill               |       | 8800 Governor’s Hill          |       | Office       |       | -           |       | 225                   |       | 2,293                                               |       | 597                                          |       | 231                    |       | 2,884        |       | 3,115     |       | 1,394 |   | 1985 |   | 1993 |   |
| Governors Hill               |       | 8600/8650 Governor’s Hill Dr. |       | Office       |       | -           |       | 1,220                 |       | 18,337                                              |       | 6,138                                        |       | 1,245                  |       | 24,450       |       | 25,695    |       | 8,726 |   | 1986 |   | 1993 |   |
| Kenwood Executive Center     |       | Kenwood Executive Center           |       | Office       |       | -           |       | 606                   |       | 3,930                                               |       | 971                                          |       | 664                    |       | 4,843        |       | 5,507     |       | 1,377 |   | 1981 |   | 1997 |   |
| Kenwood Commons              |       | 8230 Kenwood Commons               |       | Office       |       | 3,398            |       | 638                   |       | 4,225                                               |       | 1,006                                        |       | 638                    |       | 5,231        |       | 5,869     |       | 2,676 |   | 1986 |   | 1993 |   |
| Kenwood Commons              |       | 8280 Kenwood Commons               |       | Office       |       | 2,102            |       | 638                   |       | 3,027                                               |       | 504                                          |       | 638                    |       | 3,531        |       | 4,169     |       | 1,542 |   | 1986 |   | 1993 |   |
| Kenwood Medical Office Bldg. |       | Kenwood Medical Office Bldg.       |       | Office       |       | -                |       | -                |       | 7,663                                               |       | 100                                          |       | -                 |       | 7,763        |       | 7,763     |       | 1,710 |   | 1999 |   | 1999 |   |
| Pfeiffer Place               |       | Pfeiffer Place                     |       | Office       |       | -                |       | 3,608                 |       | 12,806                                              |       | 1,491                                        |       | 3,608                  |       | 14,297       |       | 17,905    |       | 3,390 |   | 2001 |   | 2001 |   |
| Pfeiffer Woods               |       | Pfeiffer Woods                     |       | Office       |       | -                |       | 1,450                 |       | 12,322                                              |       | 1,777                                        |       | 2,131                  |       | 13,418       |       | 15,549    |       | 3,090 |   | 1998 |   | 1999 |   |
| Remington Office Park        |       | Remington Park Building A          |       | Office       |       | -                |       | 560                   |       | 1,448                                               |       | 680                                          |       | 560                    |       | 2,128        |       | 2,688     |       | 571 |   | 1982 |   | 1997 |   |
| Remington Office Park        |       | Remington Park Building B          |       | Office       |       | -                |       | 560                   |       | 1,347                                               |       | 953                                          |       | 560                    |       | 2,300        |       | 2,860     |       | 700 |   | 1982 |   | 1997 |   |
| Triangle Office Park         |       | Triangle Office Park               |       | Office       |       | 3,470            |       | 1,018                 |       | 10,917                                              |       | 1,294                                        |       | 1,018                  |       | 12,211       |       | 13,229    |       | 6,380 |   | 1965 |   | 1993 |   |
|                         |       |                               |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **CLAYTON, MISSOURI**        | ** ** |                               |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Interco Corporate Tower      |       | Interco Corporate Tower            |       | Office       |       | -           |       | 6,150                 |       | 43,068                                              |       | 2,555                                        |       | 6,150                  |       | 45,623       |       | 51,773    |       | 7,890 |   | 1986 |   | 2002 |   |
|                         |       |                               |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **COLUMBUS, OHIO**           | ** ** |                               |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Easton                       |       | One Easton Oval                    |       | Office       |       | -           |       | 2,789                 |       | 9,946                                               |       | 731                                          |       | 2,789                  |       | 10,677       |       | 13,466    |       | 2,659 |   | 1998 |   | 1998 |   |
| Easton                       |       | Two Easton Oval                    |       | Office       |       | -           |       | 2,489                 |       | 16,379                                              |       | 1,756                                        |       | 2,489                  |       | 18,135       |       | 20,624    |       | 4,584 |   | 1996 |   | 1998 |   |
| Easton                       |       | Easton Way One                     |       | Office       |       | -           |       | 1,874                 |       | 9,181                                               |       | 582                                          |       | 1,874                  |       | 9,763        |       | 11,637    |       | 2,707 |   | 2000 |   | 2000 |   |
| Easton                       |       | Easton Way Two                     |       | Office       |       | -           |       | 2,005                 |       | 8,994                                               |       | 794                                          |       | 2,005                  |       | 9,788        |       | 11,793    |       | 3,243 |   | 2001 |   | 2001 |   |
| Easton                       |       | Easton Way Three                   |       | Office       |       | -           |       | 2,768                 |       | 11,186                                              |       | 93                                           |       | 2,768                  |       | 11,279       |       | 14,047    |       | 2,823 |   | 2002 |   | 2002 |   |
| Easton                       |       | Lane Bryant                        |       | Office       |       | -           |       | 4,346                 |       | 11,395                                              |       | 71                                           |       | 4,371                  |       | 11,441       |       | 15,812    |       | 1,336 |   | 2005 |   | 2005 |   |
| Easton                       |       | 4400 Easton Commons                |       | Office       |       | -           |       | 1,886                 |       | 7,779                                               |       | 988                                          |       | 1,886                  |       | 8,767        |       | 10,653    |       | 812 |   | 2005 |   | 2005 |   |
| Easton                       |       | 4343 Easton Commons                |       | Office       |       | -           |       | 3,059                 |       | 7,248                                               |       | 344                                          |       | 3,059                  |       | 7,592        |       | 10,651    |       | 49 |   | 2007 |   | 2007 |   |
| Polaris                      |       | 1000 Polaris Parkway               |       | Office       |       | -           |       | 1,200                 |       | 5,723                                               |       | 1,502                                        |       | 1,293                  |       | 7,132        |       | 8,425     |       | 1,665 |   | 1992 |   | 1999 |   |
|                         |       |                               |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **COPPELL, TEXAS**           | ** ** |                               |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Freeport North               |       | Freeport X                         |       | Industrial   |       | -           |       | 8,198                 |       | 18,852                                              |       | 3,031                                        |       | 8,198                  |       | 21,883       |       | 30,081    |       | 5,300 |   | 2003 |   | 2003 |   |
|                         |       |                               |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **DAVENPORT, FLORIDA**       | ** ** |                               |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Park 27 Distribution Center  |       | Park 27 Distribution Center I      |       | Industrial   |       | -           |       | 2,449                 |       | 6,107                                               |       | 20                                           |       | 2,449                  |       | 6,127        |       | 8,576     |       | 1,398 |   | 2002 |   | 2002 |   |
|                         |       |                               |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **DES PLAINES, ILLINOIS**    | ** ** |                               |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| 2180 South Wolf Road         |       | 2180 South Wolf Road               |       | Industrial   |       | -           |       | 179                   |       | 1,632                                               |       | 486                                          |       | 179                    |       | 2,118        |       | 2,297     |       | 611 |   | 1966 |   | 1998 |   |
|                         |       |                               |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **DOWNERS GROVE, ILLINOIS**  |       |                               |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Executive Towers             |       | Executive Towers I                 |       | Office       |       | -           |       | 2,652                 |       | 23,402                                              |       | 6,571                                        |       | 2,652                  |       | 29,973       |       | 32,625    |       | 8,141 |   | 1983 |   | 1997 |   |
| Executive Towers             |       | Executive Towers II                |       | Office       |       | -           |       | 3,386                 |       | 27,730                                              |       | 8,441                                        |       | 3,386                  |       | 36,171       |       | 39,557    |       | 10,255 |   | 1984 |   | 1997 |   |
| Executive Towers             |       | Executive Towers III               |       | Office       |       | -           |       | 3,512                 |       | 32,345                                              |       | 6,854                                        |       | 3,512                  |       | 39,199       |       | 42,711    |       | 11,467 |   | 1987 |   | 1997 |   |
|                         |       |                               |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **DUBLIN, OHIO**             | ** ** |                               |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Scioto Corporate Center      |       | Scioto Corporate Center            |       | Office       |       | -           |       | 1,100                 |       | 2,876                                               |       | 1,527                                        |       | 1,100                  |       | 4,403        |       | 5,503     |       | 1,317 |   | 1987 |   | 1996 |   |
| Tuttle Crossing              |       | Qwest                              |       | Office       |       | -           |       | 2,618                 |       | 18,715                                              |       | 1,816                                        |       | 2,670                  |       | 20,479       |       | 23,149    |       | 7,456 |   | 1990 |   | 1993 |   |
| Tuttle Crossing              |       | 4600 Lakehurst                     |       | Office       |       | -           |       | 1,494                 |       | 12,858                                              |       | 560                                          |       | 1,524                  |       | 13,388       |       | 14,912    |       | 4,915 |   | 1990 |   | 1993 |   |
| Tuttle Crossing              |       | 4700 Lakehurst Court               |       | Office       |       | -           |       | 717                   |       | 2,406                                               |       | 776                                          |       | 717                    |       | 3,182        |       | 3,899     |       | 1,067 |   | 1994 |   | 1994 |   |
| Tuttle Crossing              |       | 4675 Lakehurst                     |       | Office       |       | -           |       | 605                   |       | 5,863                                               |       | 176                                          |       | 605                    |       | 6,039        |       | 6,644     |       | 2,006 |   | 1995 |   | 1995 |   |
| Tuttle Crossing              |       | 5500 Glendon Court                 |       | Office       |       | -           |       | 1,066                 |       | 7,620                                               |       | 1,147                                        |       | 1,066                  |       | 8,767        |       | 9,833     |       | 3,174 |   | 1995 |   | 1995 |   |
| Tuttle Crossing              |       | 5555 Glendon Court                 |       | Office       |       | -           |       | 1,600                 |       | 7,197                                               |       | 1,313                                        |       | 1,767                  |       | 8,343        |       | 10,110    |       | 3,021 |   | 1995 |   | 1995 |   |
| Britton Central              |       | 6060 Britton Parkway               |       | Office       |       | -           |       | 1,601                 |       | 8,725                                               |       | 182                                          |       | 1,601                  |       | 8,907        |       | 10,508    |       | 4,189 |   | 1996 |   | 1996 |   |
| Tuttle Crossing              |       | Compmanagement                     |       | Office       |       | -           |       | 867                   |       | 4,397                                               |       | 653                                          |       | 867                    |       | 5,050        |       | 5,917     |       | 1,751 |   | 1997 |   | 1997 |   |
| Tuttle Crossing              |       | 4725 Lakehurst                     |       | Office       |       | -           |       | 483                   |       | 9,349                                               |       | 759                                          |       | 483                    |       | 10,108       |       | 10,591    |       | 3,533 |   | 1998 |   | 1998 |   |
| Tuttle Crossing              |       | 5555 Parkcenter Circle             |       | Office       |       | -           |       | 1,580                 |       | 8,951                                               |       | 1,084                                        |       | 1,580                  |       | 10,035       |       | 11,615    |       | 3,426 |   | 1992 |   | 1994 |   |
| Tuttle Crossing              |       | Parkwood Place                     |       | Office       |       | -           |       | 1,690                 |       | 11,563                                              |       | 1,093                                        |       | 1,690                  |       | 12,656       |       | 14,346    |       | 4,802 |   | 1997 |   | 1997 |   |
| Tuttle Crossing              |       | Nationwide                         |       | Office       |       | -           |       | 4,815                 |       | 15,431                                              |       | 823                                          |       | 4,815                  |       | 16,254       |       | 21,069    |       | 4,899 |   | 1996 |   | 1996 |   |
| Tuttle Crossing              |       | Emerald II                         |       | Office       |       | -           |       | 495                   |       | 2,767                                               |       | 199                                          |       | 495                    |       | 2,966        |       | 3,461     |       | 776 |   | 1998 |   | 1998 |   |

 

84

----

 
| **Duke Realty Limited Partnership**           | **Schedule 3** |
|-----------------------------------------------|----------------|
| **Real Estate and Accumulated  Depreciation** |
| **December 31, 2007**                         |
| **(in thousands)**                            |

 
| ** **                      | ** ** | ** **                      | ** ** | **Building** | ** ** | ** **       | ** ** | **Initial Cost** | ** ** | **Cost  Capitalized  Subsequent to****Development** | ** ** | **Gross Book Value 12/31/07** | ** ** | **Accumulated**        | ** ** | **Year**     | ** ** | **Year**  | ** ** |
|---------------------------------|------------|---------------------------------|------------|--------------|------------|------------------|------------|-----------------------|------------|-----------------------------------------------------|------------|----------------------------------------------|------------|------------------------|------------|--------------|------------|-----------|------------|
| **Development**                 | ** ** | **Name**                        | ** ** | **Type**     | ** ** | **Encumbrances** | ** ** | **Land**              | ** ** | **Buildings**                                       | ** ** | **or Acquisition**                      | ** ** | **Land/Land Imp** | ** ** | **Bldgs/TI** | ** ** | **Total** | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
| Tuttle Crossing                 |       | Atrium II, Phase I              |       | Office       |       | -                |       | 1,649                 |       |                                                | 9,884      |                                         | 551        |                   | 1,649      |         | 10,435     |      | 12,084     |   | 3,348 |   | 1997 |   | 1997 |   |
| Tuttle Crossing                 |       | Atrium II, Phase II             |       | Office       |       | -                |       | 1,597                 |       |                                                | 7,993      |                                         | 1,134      |                   | 1,597      |         | 9,127      |      | 10,724     |   | 2,359 |   | 1998 |   | 1998 |   |
| Tuttle Crossing                 |       | Blazer I                        |       | Office       |       | -                |       | 904                   |       |                                                | 4,511      |                                         | 592        |                   | 904        |         | 5,103      |      | 6,007      |   | 1,445 |   | 1999 |   | 1999 |   |
| Tuttle Crossing                 |       | Parkwood II                     |       | Office       |       | -                |       | 1,848                 |       |                                                | 14,030     |                                         | 821        |                   | 2,400      |         | 14,299     |      | 16,699     |   | 4,943 |   | 2000 |   | 2000 |   |
| Tuttle Crossing                 |       | Blazer II                       |       | Office       |       | -                |       | 1,016                 |       |                                                | 6,046      |                                         | 736        |                   | 1,016      |         | 6,782      |      | 7,798      |   | 1,853 |   | 2000 |   | 2000 |   |
| Tuttle Crossing                 |       | Emerald III                     |       | Office       |       | -                |       | 1,685                 |       |                                                | 8,079      |                                         | 1,683      |                   | 1,694      |         | 9,753      |      | 11,447     |   | 2,316 |   | 2001 |   | 2001 |   |
|                            |       |                            |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |   |
| **DULUTH, GEORGIA**             | ** ** |                            |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |   |
| Crestwood Pointe                |       | 3805 Crestwood Parkway          |       | Office       |       | -                |       | 877                   |       |                                                | 14,888     |                                         | 1,449      |                   | 877        |         | 16,337     |      | 17,214     |   | 3,952 |   | 1997 |   | 1999 |   |
| Crestwood Pointe                |       | 3885 Crestwood Parkway          |       | Office       |       | -                |       | 878                   |       |                                                | 13,972     |                                         | 877        |                   | 878        |         | 14,849     |      | 15,727     |   | 3,345 |   | 1998 |   | 1999 |   |
| Hampton Green                   |       | Hampton Green Office I          |       | Office       |       | -                |       | 1,388                 |       |                                                | 11,379     |                                         | 772        |                   | 1,388      |         | 12,151     |      | 13,539     |   | 3,103 |   | 2000 |   | 2000 |   |
| River Green                     |       | 3450 River Green Court          |       | Industrial   |       | -                |       | 194                   |       |                                                | 2,001      |                                         | 273        |                   | 194        |         | 2,274      |      | 2,468      |   | 484 |   | 1989 |   | 1999 |   |
| Business Park At Sugarloaf      |       | 2775 Premiere Parkway           |       | Industrial   |       | 6,854            |       | 560                   |       |                                                | 4,671      |                                         | 277        |                   | 565        |         | 4,943      |      | 5,508      |   | 1,065 |   | 1997 |   | 1999 |   |
| Business Park At Sugarloaf      |       | 3079 Premiere Parkway           |       | Industrial   |       | 11,554           |       | 776                   |       |                                                | 6,277      |                                         | 1,995      |                   | 783        |         | 8,265      |      | 9,048      |   | 2,249 |   | 1998 |   | 1999 |   |
| Business Park At Sugarloaf      |       | Sugarloaf Office I              |       | Office       |       | -                |       | 1,042                 |       |                                                | 8,680      |                                         | 725        |                   | 1,042      |         | 9,405      |      | 10,447     |   | 2,285 |   | 1998 |   | 1999 |   |
| Business Park At Sugarloaf      |       | 2850 Premiere Parkway           |       | Office       |       | 7,071            |       | 621                   |       |                                                | 4,631      |                                         | 19         |                   | 627        |         | 4,644      |      | 5,271      |   | 612 |   | 1997 |   | 2002 |   |
| Business Park At Sugarloaf      |       | Sugarloaf Office II (3039)      |       | Office       |       | -                |       | 972                   |       |                                                | 3,784      |                                         | 618        |                   | 1,006      |         | 4,368      |      | 5,374      |   | 599 |   | 1999 |   | 2002 |   |
| Business Park At Sugarloaf      |       | Sugarloaf Office III (2810)     |       | Office       |       | -                |       | 696                   |       |                                                | 3,896      |                                         | 431        |                   | 696        |         | 4,327      |      | 5,023      |   | 763 |   | 1999 |   | 2002 |   |
| Business Park At Sugarloaf      |       | 2855 Premiere Parkway           |       | Industrial   |       | 6,068            |       | 765                   |       |                                                | 3,512      |                                         | 512        |                   | 770        |         | 4,019      |      | 4,789      |   | 951 |   | 1999 |   | 1999 |   |
| Business Park At Sugarloaf      |       | 6655 Sugarloaf                  |       | Industrial   |       | 9,934            |       | 1,651                 |       |                                                | 6,985      |                                         | 75         |                   | 1,659      |         | 7,052      |      | 8,711      |   | 1,083 |   | 1998 |   | 2001 |   |
| Business Park At Sugarloaf      |       | Sugarloaf Office IV             |       | Office       |       | -                |       | 623                   |       |                                                | 2,695      |                                         | 391        |                   | 623        |         | 3,086      |      | 3,709      |   | 650 |   | 2000 |   | 2000 |   |
| Business Park At Sugarloaf      |       | Sugarloaf Office V              |       | Office       |       | -                |       | 744                   |       |                                                | 3,159      |                                         | 539        |                   | 744        |         | 3,698      |      | 4,442      |   | 1,511 |   | 2001 |   | 2001 |   |
| Business Park At Sugarloaf      |       | Sugarloaf VI                    |       | Office       |       | -                |       | 1,589                 |       |                                                | 5,902      |                                         | 967        |                   | 1,589      |         | 6,869      |      | 8,458      |   | 1,035 |   | 2004 |   | 2004 |   |
| Business Park At Sugarloaf      |       | Sugarloaf VII                   |       | Office       |       | -                |       | 1,722                 |       |                                                | 5,163      |                                         | 2,396      |                   | 1,726      |         | 7,555      |      | 9,281      |   | 373 |   | 2006 |   | 2006 |   |
|                            |       |                            |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |   |
| **EAGAN, MINNESOTA**            | ** ** |                            |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |   |
| Apollo Industrial Center        |       | Apollo Industrial Ctr I         |       | Industrial   |       | -                |       | 866                   |       |                                                | 4,976      |                                         | 1,472      |                   | 882        |         | 6,432      |      | 7,314      |   | 2,110 |   | 1997 |   | 1997 |   |
| Apollo Industrial Center        |       | Apollo Industrial Ctr II        |       | Industrial   |       | -                |       | 474                   |       |                                                | 2,462      |                                         | 167        |                   | 474        |         | 2,629      |      | 3,103      |   | 534 |   | 2000 |   | 2000 |   |
| Apollo Industrial Center        |       | Apollo Industrial Ctr III       |       | Industrial   |       | -                |       | 1,432                 |       |                                                | 6,316      |                                         | 51         |                   | 1,432      |         | 6,367      |      | 7,799      |   | 1,345 |   | 2000 |   | 2000 |   |
| Silver Bell Commons             |       | Silver Bell Commons             |       | Industrial   |       | -                |       | 1,807                 |       |                                                | 6,527      |                                         | 1,747      |                   | 1,908      |         | 8,173      |      | 10,081     |   | 2,422 |   | 1999 |   | 1999 |   |
| Trapp Road Commerce Center      |       | Trapp Road Commerce Center I    |       | Industrial   |       | -                |       | 671                   |       |                                                | 3,847      |                                         | 453        |                   | 700        |         | 4,271      |      | 4,971      |   | 1,046 |   | 1996 |   | 1998 |   |
| Trapp Road Commerce Center      |       | Trapp Road Commerce Center II   |       | Industrial   |       | -                |       | 1,250                 |       |                                                | 6,738      |                                         | 1,095      |                   | 1,266      |         | 7,817      |      | 9,083      |   | 2,011 |   | 1998 |   | 1998 |   |
|                            |       |                            |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |   |
| **EARTH CITY, MISSOURI**        | ** ** |                            |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |   |
| Earth City                      |       | Rider Trail                     |       | Office       |       | -                |       | 2,615                 |       |                                                | 10,877     |                                         | 2,105      |                   | 2,615      |         | 12,982     |      | 15,597     |   | 3,566 |   | 1987 |   | 1997 |   |
| Earth City                      |       | 3300 Pointe 70                  |       | Office       |       | -                |       | 1,186                 |       |                                                | 7,357      |                                         | 2,516      |                   | 1,186      |         | 9,873      |      | 11,059     |   | 3,448 |   | 1989 |   | 1997 |   |
| Earth City                      |       | Corporate Center, Earth City    |       | Industrial   |       | -                |       | 783                   |       |                                                | 3,399      |                                         | 1,501      |                   | 783        |         | 4,900      |      | 5,683      |   | 1,954 |   | 2000 |   | 2000 |   |
| Earth City                      |       | Corporate Trail Distribution    |       | Industrial   |       | -                |       | 2,850                 |       |                                                | 6,163      |                                         | 659        |                   | 2,850      |         | 6,822      |      | 9,672      |   | 495 |   | 2005 |   | 2005 |   |
|                            |       |                            |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |   |
| **EAST POINTE, GEORGIA**        | ** ** |                            |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |   |
| Camp Creek                      |       | Camp Creek Bldg 1400            |       | Office       |       | 5,211            |       | 561                   |       |                                                | 2,839      |                                         | 821        |                   | 563        |         | 3,658      |      | 4,221      |   | 854 |   | 1988 |   | 2001 |   |
| Camp Creek                      |       | Camp Creek Bldg 1800            |       | Office       |       | 4,124            |       | 462                   |       |                                                | 2,612      |                                         | 228        |                   | 464        |         | 2,838      |      | 3,302      |   | 514 |   | 1989 |   | 2001 |   |
| Camp Creek                      |       | Camp Creek Bldg 2000            |       | Office       |       | 3,322            |       | 395                   |       |                                                | 2,292      |                                         | 46         |                   | 397        |         | 2,336      |      | 2,733      |   | 425 |   | 1989 |   | 2001 |   |
| Camp Creek                      |       | Camp Creek Bldg 2400            |       | Industrial   |       | 3,050            |       | 296                   |       |                                                | 1,675      |                                         | 427        |                   | 298        |         | 2,100      |      | 2,398      |   | 435 |   | 1988 |   | 2001 |   |
| Camp Creek                      |       | Camp Creek Bldg 2600            |       | Industrial   |       | 3,393            |       | 364                   |       |                                                | 2,086      |                                         | 172        |                   | 366        |         | 2,256      |      | 2,622      |   | 423 |   | 1990 |   | 2001 |   |
| Camp Creek                      |       | Clorox Company                  |       | Industrial   |       | 19,322           |       | 4,406                 |       |                                                | 9,512      |                                         | 601        |                   | 4,841      |         | 9,678      |      | 14,519     |   | 1,502 |   | 2003 |   | 2003 |   |
| Camp Creek                      |       | Camp Creek Building 1200        |       | Office       |       | -                |       | 1,334                 |       |                                                | 2,475      |                                         | 946        |                   | 1,334      |         | 3,421      |      | 4,755      |   | 904 |   | 2004 |   | 2004 |   |
| Camp Creek                      |       | 3900 North Commerce             |       | Industrial   |       | 5,321            |       | 1,059                 |       |                                                | 2,967      |                                         | -          |                   | 1,059      |         | 2,967      |      | 4,026      |   | 331 |   | 2005 |   | 2005 |   |
| Camp Creek                      |       | 3909 North Commerce             |       | Industrial   |       | -                |       | 5,687                 |       |                                                | 10,192     |                                         | 8,741      |                   | 7,279      |         | 17,341     |      | 24,620     |   | 840 |   | 2005 |   | 2005 |   |
| Camp Creek                      |       | Hartsfield Warehouse BTS        |       | Industrial   |       | 11,930           |       | 2,065                 |       |                                                | 7,076      |                                         | 64         |                   | 2,065      |         | 7,140      |      | 9,205      |   | 455 |   | 2005 |   | 2005 |   |
| Camp Creek                      |       | Camp Creek Building 1000        |       | Office       |       | -                |       | 1,537                 |       |                                                | 2,459      |                                         | 1,103      |                   | 1,537      |         | 3,562      |      | 5,099      |   | 385 |   | 2006 |   | 2006 |   |
| Camp Creek                      |       | 3000 Centre Parkway             |       | Industrial   |       | -                |       | 1,163                 |       |                                                | 1,884      |                                         | 881        |                   | 1,170      |         | 2,758      |      | 3,928      |   | 129 |   | 2007 |   | 2007 |   |
|                            |       |                            |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |   |
| **EVANSVILLE, INDIANA**         | ** ** |                            |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |   |
| St. Mary’s Heart Institute |       | St. Mary’s Heart Institute |       | Healthcare   |       | -                |       | -                     |       |                                                | 20,946     |                                         | 1,298      |                   | -          |         | 22,244     |      | 22,244     |   | 898 |   | 2005 |   | 2007 |   |
|                            |       |                            |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |   |
| **FAIRFIELD, OHIO**             | ** ** |                            |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |   |
| Thunderbird Building 1          |       | Thunderbird Building 1          |       | Industrial   |       | -                |       | 248                   |       |                                                | 1,656      |                                         | 331        |                   | 248        |         | 1,987      |      | 2,235      |   | 632 |   | 1991 |   | 1995 |   |
|                            |       |                            |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |   |
| **FISHERS, INDIANA**            | ** ** |                            |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |   |
| Exit 5                          |       | Exit 5 Building 1               |       | Industrial   |       | -                |       | 822                   |       |                                                | 2,695      |                                         | 153        |                   | 822        |         | 2,848      |      | 3,670      |   | 796 |   | 1999 |   | 1999 |   |
| Exit 5                          |       | Exit 5 Building 2               |       | Industrial   |       | -                |       | 749                   |       |                                                | 4,134      |                                         | 373        |                   | 749        |         | 4,507      |      | 5,256      |   | 1,603 |   | 1999 |   | 1999 |   |
|                            |       |                            |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |   |
| **FRANKLIN, TENNESSEE**         | ** ** |                            |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |   |
| Aspen Grove Business Center     |       | Aspen Grove Business Ctr I      |       | Industrial   |       | -                |       | 936                   |       |                                                | 6,382      |                                         | 2,721      |                   | 936        |         | 9,103      |      | 10,039     |   | 2,371 |   | 1996 |   | 1999 |   |
| Aspen Grove Business Center     |       | Aspen Grove Business Ctr II     |       | Industrial   |       | -                |       | 1,151                 |       |                                                | 6,482      |                                         | 540        |                   | 1,151      |         | 7,022      |      | 8,173      |   | 1,556 |   | 1996 |   | 1999 |   |
| Aspen Grove Business Center     |       | Aspen Grove Business Ctr III    |       | Industrial   |       | -                |       | 970                   |       |                                                | 5,815      |                                         | 84         |                   | 970        |         | 5,899      |      | 6,869      |   | 1,522 |   | 1998 |   | 1999 |   |
| Aspen Grove Business Center     |       | Aspen Grove Business Center IV  |       | Industrial   |       | -                |       | 492                   |       |                                                | 2,416      |                                         | 20         |                   | 492        |         | 2,436      |      | 2,928      |   | 443 |   | 2002 |   | 2002 |   |
| Aspen Grove Business Center     |       | Aspen Grove Business Ctr V      |       | Industrial   |       | -                |       | 943                   |       |                                                | 5,172      |                                         | 1,452      |                   | 943        |         | 6,624      |      | 7,567      |   | 1,587 |   | 1996 |   | 1999 |   |

 

85

----

 
| **Duke Realty Limited Partnership**           | **Schedule 3** |
|-----------------------------------------------|----------------|
| **Real Estate and Accumulated  Depreciation** |
| **December 31, 2007**                         |
| **(in thousands)**                            |

 
| ** **                      | ** ** | ** **                       | ** ** | **Building** | ** ** | ** **       | ** ** | **Initial Cost** | ** ** | **Cost  Capitalized  Subsequent to****Development** | ** ** | **Gross Book Value 12/31/07** | ** ** | **Accumulated**        | ** ** | **Year**     | ** ** | **Year**  | ** ** |
|---------------------------------|------------|----------------------------------|------------|--------------|------------|------------------|------------|-----------------------|------------|-----------------------------------------------------|------------|----------------------------------------------|------------|------------------------|------------|--------------|------------|-----------|------------|
| **Development**                 | ** ** | **Name**                         | ** ** | **Type**     | ** ** | **Encumbrances** | ** ** | **Land**              | ** ** | **Buildings**                                       | ** ** | **or Acquisition**                      | ** ** | **Land/Land Imp** | ** ** | **Bldgs/TI** | ** ** | **Total** | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
| Aspen Grove Business Center     |       | Aspen Grove Flex Center II       |       | Industrial   |       | -                |       | 240                   |       | 1,289                                               |       | 373                                          |       | 240                    |       | 1,662        |       | 1,902     |       | 144 |   | 1999 |   | 1999 |   |
| Aspen Grove Business Center     |       | Aspen Grove Office Center I      |       | Office       |       | -                |       | 950                   |       | 6,247                                               |       | 2,449                                        |       | 950                    |       | 8,696        |       | 9,646     |       | 1,974 |   | 1999 |   | 1999 |   |
| Aspen Grove Business Center     |       | Aspen Grove Flex Center I        |       | Industrial   |       | -                |       | 301                   |       | 1,233                                               |       | 630                                          |       | 301                    |       | 1,863        |       | 2,164     |       | 443 |   | 1999 |   | 1999 |   |
| Aspen Grove Business Center     |       | Aspen Grove Flex Center III      |       | Industrial   |       | -                |       | 327                   |       | 1,697                                               |       | 846                                          |       | 327                    |       | 2,543        |       | 2,870     |       | 789 |   | 2001 |   | 2001 |   |
| Aspen Grove Business Center     |       | Aspen Grove Flex Center IV       |       | Industrial   |       | -                |       | 205                   |       | 861                                                 |       | 205                                          |       | 205                    |       | 1,066        |       | 1,271     |       | 164 |   | 2001 |   | 2001 |   |
| Aspen Grove Business Center     |       | Aspen Corporate Center 100       |       | Office       |       | -                |       | 723                   |       | 3,451                                               |       | 94                                           |       | 723                    |       | 3,545        |       | 4,268     |       | 718 |   | 2004 |   | 2004 |   |
| Aspen Grove Business Center     |       | Aspen Corporate Center 200       |       | Office       |       | -                |       | 1,306                 |       | 1,870                                               |       | 1,341                                        |       | 1,306                  |       | 3,211        |       | 4,517     |       | 344 |   | 2005 |   | 2005 |   |
| Aspen Grove Business Center     |       | Aspen Corporate Center 400       |       | Office       |       | -                |       | 1,833                 |       | 2,621                                               |       | 461                                          |       | 1,833                  |       | 3,082        |       | 4,915     |       | 90 |   | 2007 |   | 2007 |   |
| Aspen Grove Business Center     |       | Aspen Grove Office Center II     |       | Office       |       | -                |       | 2,320                 |       | 8,177                                               |       | 3,661                                        |       | 2,320                  |       | 11,838       |       | 14,158    |       | 518 |   | 2007 |   | 2007 |   |
| Brentwood South Bus. Center     |       | Brentwood South Bus Ctr IV       |       | Industrial   |       | -                |       | 569                   |       | 2,435                                               |       | 901                                          |       | 569                    |       | 3,336        |       | 3,905     |       | 673 |   | 1990 |   | 1999 |   |
| Brentwood South Bus. Center     |       | Brentwood South Bus   Ctr V |       | Industrial   |       | -                |       | 445                   |       | 1,932                                               |       | 93                                           |       | 445                    |       | 2,025        |       | 2,470     |       | 439 |   | 1990 |   | 1999 |   |
| Brentwood South Bus. Center     |       | Brentwood South Bus Ctr VI       |       | Industrial   |       | -                |       | 489                   |       | 1,243                                               |       | 602                                          |       | 489                    |       | 1,845        |       | 2,334     |       | 408 |   | 1990 |   | 1999 |   |
|                            |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **FRANKLIN PARK, ILLINOIS**     |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| O’Hare Distribution Center |       | O’Hare Distribution Ctr     |       | Industrial   |       | -                |       | 3,900                 |       | 3,013                                               |       | 233                                          |       | 3,900                  |       | 3,246        |       | 7,146     |       | 31 |   | 2007 |   | 2007 |   |
|                            |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **FRISCO, TEXAS**               | ** ** |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Duke Bridges                    |       | Duke Bridges III                 |       | Office       |       | -                |       | 4,647                 |       | 7,676                                               |       | 1,885                                        |       | 4,647                  |       | 9,561        |       | 14,208    |       | - |   | 2007 |   | 2007 |   |
|                            |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **FT. WAYNE, INDIANA**          | ** ** |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Parkview Ambulatory Svcs - MOB  |       | Parkview Ambulatory Svcs - MOB   |       | Healthcare   |       | -                |       | 937                   |       | 10,974                                              |       | 526                                          |       | 937                    |       | 11,500       |       | 12,437    |       | 75 |   | 2006 |   | 2007 |   |
|                            |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **GARDEN CITY, GEORGIA**        | ** ** |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Aviation Court                  |       | Aviation Court Land              |       | Grounds      |       | -                |       | 1,509                 |       | -                                                   |       | -                                            |       | 1,509                  |       | -            |       | 1,509     |       | 37 |   | n/a |   | 2006 |   |
|                            |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **GRAND PRAIRIE, TEXAS**        | ** ** |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Grand Lakes                     |       | Grand Lakes I                    |       | Industrial   |       | -                |       | 8,106                 |       | 13,069                                              |       | 316                                          |       | 8,040                  |       | 13,451       |       | 21,491    |       | 1,149 |   | 2006 |   | 2006 |   |
|                            |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **GROVEPORT, OHIO**             | ** ** |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| 6600 Port Road                  |       | 6600 Port Road                   |       | Industrial   |       | -                |       | 2,725                 |       | 23,261                                              |       | 1,422                                        |       | 2,850                  |       | 24,558       |       | 27,408    |       | 6,819 |   | 1995 |   | 1997 |   |
| Groveport Commerce Center       |       | Groveport Commerce Center #437   |       | Industrial   |       | -                |       | 1,049                 |       | 6,759                                               |       | 1,244                                        |       | 1,065                  |       | 7,987        |       | 9,052     |       | 1,782 |   | 1999 |   | 1999 |   |
| Groveport Commerce Center       |       | Groveport Commerce Center #168   |       | Industrial   |       | -                |       | 510                   |       | 3,755                                               |       | 1,060                                        |       | 510                    |       | 4,815        |       | 5,325     |       | 1,389 |   | 1999 |   | 1999 |   |
| Groveport Commerce Center       |       | Groveport Commerce Center #345   |       | Industrial   |       | -                |       | 1,045                 |       | 6,435                                               |       | 942                                          |       | 1,045                  |       | 7,377        |       | 8,422     |       | 1,712 |   | 2000 |   | 2000 |   |
| Groveport Commerce Center       |       | Groveport Commerce Center #667   |       | Industrial   |       | -                |       | 4,420                 |       | 14,231                                              |       | 356                                          |       | 4,420                  |       | 14,587       |       | 19,007    |       | 2,300 |   | 2004 |   | 2004 |   |
|                            |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **HANAHAN, SOUTH CAROLINA**     |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Charleston                      |       | 916 Commerce Circle              |       | Industrial   |       | 1,079            |       | 286                   |       | 1,781                                               |       | 79                                           |       | 286                    |       | 1,860        |       | 2,146     |       | - |   | 1999 |   | 2006 |   |
|                            |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **HAZELWOOD, MISSOURI**         | ** ** |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Hazelwood                       |       | Lindbergh Distribution Center    |       | Industrial   |       | -                |       | 8,200                 |       | 10,305                                              |       | 1,064                                        |       | 8,200                  |       | 11,369       |       | 19,569    |       | 154 |   | 2007 |   | 2007 |   |
|                            |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **HEBRON, KENTUCKY**            | ** ** |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Southpark, KY                   |       | Southpark Building 4             |       | Industrial   |       | -                |       | 779                   |       | 3,353                                               |       | 156                                          |       | 779                    |       | 3,509        |       | 4,288     |       | 1,225 |   | 1994 |   | 1994 |   |
| Southpark, KY                   |       | CR Services                      |       | Industrial   |       | -                |       | 1,085                 |       | 4,214                                               |       | 1,410                                        |       | 1,085                  |       | 5,624        |       | 6,709     |       | 1,922 |   | 1994 |   | 1994 |   |
| Hebron Industrial Park          |       | Hebron Building 1                |       | Industrial   |       | -                |       | 8,855                 |       | 11,527                                              |       | 221                                          |       | 8,855                  |       | 11,748       |       | 20,603    |       | 1,157 |   | 2006 |   | 2006 |   |
| Hebron Industrial Park          |       | Hebron Building 2                |       | Industrial   |       | -                |       | 6,790                 |       | 9,039                                               |       | 380                                          |       | 6,791                  |       | 9,418        |       | 16,209    |       | 81 |   | 2007 |   | 2007 |   |
|                            |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **HOPKINS, MINNESOTA**          | ** ** |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Cornerstone Business Center     |       | Cornerstone Business Center      |       | Industrial   |       | 4,563            |       | 1,469                 |       | 8,402                                               |       | 497                                          |       | 1,543                  |       | 8,825        |       | 10,368    |       | 2,375 |   | 1996 |   | 1997 |   |
|                            |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **HOUSTON, TEXAS**              | ** ** |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Cedar Crossing Business Park    |       | Cedar Crossing                   |       | Industrial   |       | 12,615           |       | 6,098                 |       | 9,776                                               |       | -                                            |       | 6,098                  |       | 9,776        |       | 15,874    |       | - |   | 2005 |   | 2007 |   |
| Sam Houston Crossing            |       | Sam Houston Crossing One         |       | Office       |       | -                |       | 4,016                 |       | 8,535                                               |       | 135                                          |       | 4,052                  |       | 8,634        |       | 12,686    |       | - |   | 2007 |   | 2007 |   |
|                            |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **HUTCHINS, TEXAS**             | ** ** |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Duke Intermodal Park            |       | Duke Intermodal I                |       | Industrial   |       | -                |       | 5,290                 |       | 9,641                                               |       | 1,091                                        |       | 5,290                  |       | 10,732       |       | 16,022    |       | 1,399 |   | 2006 |   | 2006 |   |
|                            |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **INDEPENDENCE, OHIO**          | ** ** |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Corporate Plaza                 |       | Corporate Plaza I                |       | Office       |       | -                |       | 2,116                 |       | 14,072                                              |       | 2,599                                        |       | 2,116                  |       | 16,671       |       | 18,787    |       | 4,625 |   | 1989 |   | 1996 |   |
| Corporate Plaza                 |       | Corporate Plaza II               |       | Office       |       | -                |       | 1,841                 |       | 11,906                                              |       | 2,661                                        |       | 1,841                  |       | 14,567       |       | 16,408    |       | 3,977 |   | 1991 |   | 1996 |   |
| Freedom Square                  |       | Freedom Square I                 |       | Office       |       | -                |       | 595                   |       | 3,842                                               |       | 816                                          |       | 600                    |       | 4,653        |       | 5,253     |       | 1,348 |   | 1980 |   | 1996 |   |
| Freedom Square                  |       | Freedom Square II                |       | Office       |       | -                |       | 1,746                 |       | 11,534                                              |       | 2,288                                        |       | 1,746                  |       | 13,822       |       | 15,568    |       | 3,686 |   | 1987 |   | 1996 |   |
| Freedom Square                  |       | Freedom Square III               |       | Office       |       | -                |       | 701                   |       | 5,861                                               |       | 371                                          |       | 701                    |       | 6,232        |       | 6,933     |       | 1,620 |   | 1997 |   | 1997 |   |
| Oak Tree Place                  |       | Oak Tree Place                   |       | Office       |       | -                |       | 703                   |       | 4,555                                               |       | 844                                          |       | 703                    |       | 5,399        |       | 6,102     |       | 1,339 |   | 1979 |   | 1997 |   |
| Park Center Plaza               |       | Park Center Plaza I              |       | Office       |       | -                |       | 2,193                 |       | 12,607                                              |       | 991                                          |       | 2,193                  |       | 13,598       |       | 15,791    |       | 3,953 |   | 1998 |   | 1998 |   |
| Park Center Plaza               |       | Park Center Plaza II             |       | Office       |       | -                |       | 2,190                 |       | 13,353                                              |       | 918                                          |       | 2,190                  |       | 14,271       |       | 16,461    |       | 4,194 |   | 1999 |   | 1999 |   |
| Park Center Plaza               |       | Park Center Plaza III            |       | Office       |       | -                |       | 2,190                 |       | 11,545                                              |       | 2,605                                        |       | 2,190                  |       | 14,150       |       | 16,340    |       | 3,327 |   | 2000 |   | 2000 |   |

 

86

----

 
| **Duke Realty Limited Partnership**           | **Schedule 3** |
|-----------------------------------------------|----------------|
| **Real Estate and Accumulated  Depreciation** |
| **December 31, 2007**                         |
| **(in thousands)**                            |

 
| ** **                  | ** ** | ** **                    | ** ** | **Building** | ** ** | ** **       | ** ** | **Initial Cost** | ** ** | **Cost  Capitalized  Subsequent to****Development** | ** ** | **Gross Book Value 12/31/07** | ** ** | **Accumulated**        | ** ** | **Year**     | ** ** | **Year**  | ** ** |
|-----------------------------|------------|-------------------------------|------------|--------------|------------|------------------|------------|-----------------------|------------|-----------------------------------------------------|------------|----------------------------------------------|------------|------------------------|------------|--------------|------------|-----------|------------|
| **Development**             | ** ** | **Name**                      | ** ** | **Type**     | ** ** | **Encumbrances** | ** ** | **Land**              | ** ** | **Buildings**                                       | ** ** | **or Acquisition**                      | ** ** | **Land/Land Imp** | ** ** | **Bldgs/TI** | ** ** | **Total** | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
| ** **                  | ** ** |                          |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **INDIANAPOLIS, INDIANA**   | ** ** |                          |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Park 100                    |       | Park 465                      |       | Industrial   |       | -                |       | 124                   |       | 759                                                 |       | 19                                           |       | 124                    |       | 778          |       | 902       |       | 59 |   | 1983 |   | 2005 |   |
| Franklin Road Business Park |       | Franklin Road Business Center |       | Industrial   |       | -                |       | 594                   |       | 9,280                                               |       | 1,354                                        |       | 594                    |       | 10,634       |       | 11,228    |       | 3,789 |   | 1962 |   | 1995 |   |
| 6061 Guion Road             |       | 6061 Guion Rd                 |       | Industrial   |       | -                |       | 274                   |       | 1,798                                               |       | 194                                          |       | 274                    |       | 1,992        |       | 2,266     |       | 664 |   | 1974 |   | 1995 |   |
| Hillsdale                   |       | Hillsdale Technecenter 4      |       | Industrial   |       | -                |       | 366                   |       | 5,007                                               |       | 1,295                                        |       | 366                    |       | 6,302        |       | 6,668     |       | 2,248 |   | 1987 |   | 1993 |   |
| Hillsdale                   |       | Hillsdale Technecenter 5      |       | Industrial   |       | -                |       | 251                   |       | 2,933                                               |       | 1,107                                        |       | 251                    |       | 4,040        |       | 4,291     |       | 1,371 |   | 1987 |   | 1993 |   |
| Hillsdale                   |       | Hillsdale Technecenter 6      |       | Industrial   |       | -                |       | 315                   |       | 2,962                                               |       | 1,925                                        |       | 315                    |       | 4,887        |       | 5,202     |       | 1,692 |   | 1987 |   | 1993 |   |
| Keystone Crossing           |       | 8555 N. River Road            |       | Office       |       | -                |       | -                     |       | 5,911                                               |       | 1,231                                        |       | -                      |       | 7,142        |       | 7,142     |       | 2,069 |   | 1985 |   | 1997 |   |
| One North Capitol           |       | One North Capitol             |       | Office       |       | -                |       | 1,439                 |       | 9,276                                               |       | 1,416                                        |       | 1,439                  |       | 10,692       |       | 12,131    |       | 2,671 |   | 1980 |   | 1998 |   |
| 8071 Township Line Road     |       | 8071 Township Line Road       |       | Healthcare   |       | -                |       | -                     |       | 2,319                                               |       | 561                                          |       | -                      |       | 2,880        |       | 2,880     |       | 17 |   | 1976 |   | 2007 |   |
| Park 100                    |       | Park 100 Bldg 31              |       | Industrial   |       | -                |       | 64                    |       | 378                                                 |       | 20                                           |       | 64                     |       | 398          |       | 462       |       | 28 |   | 1978 |   | 2005 |   |
| Park 100                    |       | Park 100 Building 96          |       | Industrial   |       | -                |       | 1,414                 |       | 13,804                                              |       | 113                                          |       | 1,667                  |       | 13,664       |       | 15,331    |       | 4,535 |   | 1994 |   | 1995 |   |
| Park 100                    |       | Park 100 Building 98          |       | Industrial   |       | -                |       | 273                   |       | 8,217                                               |       | 2,170                                        |       | 273                    |       | 10,387       |       | 10,660    |       | 3,874 |   | 1968 |   | 1994 |   |
| Park 100                    |       | Park 100 Building 100         |       | Industrial   |       | -                |       | 103                   |       | 2,073                                               |       | 663                                          |       | 103                    |       | 2,736        |       | 2,839     |       | 915 |   | 1995 |   | 1995 |   |
| Park 100                    |       | Park 100 Building 102         |       | Office       |       | -                |       | 182                   |       | 1,118                                               |       | 68                                           |       | 182                    |       | 1,186        |       | 1,368     |       | 89 |   | 1982 |   | 2005 |   |
| Park 100                    |       | Park 100 Building 107         |       | Industrial   |       | -                |       | 99                    |       | 1,698                                               |       | 370                                          |       | 99                     |       | 2,068        |       | 2,167     |       | 656 |   | 1984 |   | 1995 |   |
| Park 100                    |       | Park 100 Building 109         |       | Industrial   |       | -                |       | 240                   |       | 1,802                                               |       | 350                                          |       | 246                    |       | 2,146        |       | 2,392     |       | 1,103 |   | 1985 |   | 1986 |   |
| Park 100                    |       | Park 100 Building 116         |       | Office       |       | -                |       | 341                   |       | 3,166                                               |       | 367                                          |       | 348                    |       | 3,526        |       | 3,874     |       | 1,742 |   | 1988 |   | 1988 |   |
| Park 100                    |       | Park 100 Building 118         |       | Office       |       | -                |       | 226                   |       | 2,198                                               |       | 791                                          |       | 230                    |       | 2,985        |       | 3,215     |       | 1,093 |   | 1988 |   | 1993 |   |
| Park 100                    |       | Park 100 Building 119         |       | Office       |       | -                |       | 388                   |       | 3,667                                               |       | 1,394                                        |       | 500                    |       | 4,949        |       | 5,449     |       | 2,265 |   | 1989 |   | 1993 |   |
| Park 100                    |       | Park 100 Building 122         |       | Industrial   |       | -                |       | 284                   |       | 3,695                                               |       | 1,017                                        |       | 290                    |       | 4,706        |       | 4,996     |       | 1,748 |   | 1990 |   | 1993 |   |
| Park 100                    |       | Park 100 Building 124         |       | Office       |       | -                |       | 227                   |       | 2,496                                               |       | 418                                          |       | 227                    |       | 2,914        |       | 3,141     |       | 403 |   | 1992 |   | 2002 |   |
| Park 100                    |       | Park 100 Building 127         |       | Industrial   |       | -                |       | 96                    |       | 1,654                                               |       | 454                                          |       | 96                     |       | 2,108        |       | 2,204     |       | 682 |   | 1995 |   | 1995 |   |
| Park 100                    |       | Park 100 Building 141         |       | Industrial   |       | -                |       | 1,120                 |       | 3,305                                               |       | 93                                           |       | 1,120                  |       | 3,398        |       | 4,518     |       | 472 |   | 2005 |   | 2005 |   |
| Park 100                    |       | UPS Parking                   |       | Grounds      |       | -                |       | 270                   |       | -                                                   |       | -                                            |       | 270                    |       | -            |       | 270       |       | 92 |   | n/a |   | 1997 |   |
| Park 100                    |       | Norgate Ground Lease          |       | Grounds      |       | -                |       | 51                    |       | -                                                   |       | -                                            |       | 51                     |       | -            |       | 51        |       | - |   | n/a |   | 1995 |   |
| Park 100                    |       | Zollman Ground Lease          |       | Grounds      |       | -                |       | 115                   |       | -                                                   |       | -                                            |       | 115                    |       | -            |       | 115       |       | - |   | n/a |   | 1994 |   |
| Park 100                    |       | Bldg 111 Parking Lot          |       | Grounds      |       | -                |       | 196                   |       | -                                                   |       | -                                            |       | 196                    |       | -            |       | 196       |       | 62 |   | n/a |   | 1994 |   |
| Park 100                    |       | Becton Dickinson Lot          |       | Grounds      |       | -                |       | -                     |       | -                                                   |       | 13                                           |       | 13                     |       | -            |       | 13        |       | 12 |   | n/a |   | 1993 |   |
| Park 100                    |       | 3.58 acres on Allison Avenue  |       | Grounds      |       | -                |       | 242                   |       | -                                                   |       | -                                            |       | 242                    |       | -            |       | 242       |       | 31 |   | n/a |   | 2000 |   |
| Park 100                    |       | Hewlett-Packard Land Lease    |       | Grounds      |       | -                |       | 252                   |       | -                                                   |       | -                                            |       | 252                    |       | -            |       | 252       |       | 25 |   | n/a |   | 2003 |   |
| Park 100                    |       | Park 100 Bldg 121 Land Lease  |       | Grounds      |       | -                |       | 5                     |       | -                                                   |       | -                                            |       | 5                      |       | -            |       | 5         |       | - |   | n/a |   | 2003 |   |
| Park 100                    |       | Hewlett Packard Land Lse-62   |       | Grounds      |       | -                |       | 45                    |       | -                                                   |       | -                                            |       | 45                     |       | -            |       | 45        |       | 4 |   | n/a |   | 2003 |   |
| Park 100                    |       | West 79th St. Parking Lot LL  |       | Grounds      |       | -                |       | 350                   |       | -                                                   |       | -                                            |       | 350                    |       | -            |       | 350       |       | 17 |   | n/a |   | 2006 |   |
| Park Fletcher               |       | Park Fletcher Building 33     |       | Industrial   |       | -                |       | 1,237                 |       | 5,264                                               |       | 17                                           |       | 1,237                  |       | 5,281        |       | 6,518     |       | 307 |   | 1997 |   | 2006 |   |
| Park Fletcher               |       | Park Fletcher Building 34     |       | Industrial   |       | -                |       | 1,331                 |       | 5,636                                               |       | 193                                          |       | 1,331                  |       | 5,829        |       | 7,160     |       | 351 |   | 1997 |   | 2006 |   |
| Park Fletcher               |       | Park Fletcher Building 35     |       | Industrial   |       | -                |       | 380                   |       | 1,503                                               |       | 3                                            |       | 380                    |       | 1,506        |       | 1,886     |       | 107 |   | 1997 |   | 2006 |   |
| Park Fletcher               |       | Park Fletcher Building 36     |       | Industrial   |       | -                |       | 476                   |       | 2,355                                               |       | 27                                           |       | 476                    |       | 2,382        |       | 2,858     |       | 131 |   | 1997 |   | 2006 |   |
| Park Fletcher               |       | Park Fletcher Building 37     |       | Industrial   |       | -                |       | 286                   |       | 653                                                 |       | 2                                            |       | 286                    |       | 655          |       | 941       |       | 49 |   | 1998 |   | 2006 |   |
| Park Fletcher               |       | Park Fletcher Building 38     |       | Industrial   |       | -                |       | 1,428                 |       | 5,957                                               |       | 49                                           |       | 1,428                  |       | 6,006        |       | 7,434     |       | 326 |   | 1999 |   | 2006 |   |
| Park Fletcher               |       | Park Fletcher Building 39     |       | Industrial   |       | -                |       | 570                   |       | 2,130                                               |       | 101                                          |       | 570                    |       | 2,231        |       | 2,801     |       | 127 |   | 1999 |   | 2006 |   |
| Park Fletcher               |       | Park Fletcher Building 40     |       | Industrial   |       | -                |       | 761                   |       | 3,363                                               |       | 111                                          |       | 761                    |       | 3,474        |       | 4,235     |       | 183 |   | 1999 |   | 2006 |   |
| Park Fletcher               |       | Park Fletcher Building 41     |       | Industrial   |       | -                |       | 952                   |       | 4,310                                               |       | 78                                           |       | 952                    |       | 4,388        |       | 5,340     |       | 226 |   | 2001 |   | 2006 |   |
| Park Fletcher               |       | Park Fletcher Building 42     |       | Industrial   |       | -                |       | 2,095                 |       | 8,301                                               |       | 13                                           |       | 2,095                  |       | 8,314        |       | 10,409    |       | (6 | ) | 2001 |   | 2006 |   |
| Parkwood Crossing           |       | One Parkwood Crossing         |       | Office       |       | -                |       | 1,018                 |       | 10,007                                              |       | 1,110                                        |       | 1,028                  |       | 11,107       |       | 12,135    |       | 3,642 |   | 1989 |   | 1995 |   |
| Parkwood Crossing           |       | Two Parkwood Crossing         |       | Office       |       | -                |       | 861                   |       | 6,421                                               |       | 1,027                                        |       | 871                    |       | 7,438        |       | 8,309     |       | 2,276 |   | 1996 |   | 1996 |   |
| Parkwood Crossing           |       | Three Parkwood Crossing       |       | Office       |       | -                |       | 1,377                 |       | 8,583                                               |       | 749                                          |       | 1,387                  |       | 9,322        |       | 10,709    |       | 3,007 |   | 1997 |   | 1997 |   |
| Parkwood Crossing           |       | Four Parkwood Crossing        |       | Office       |       | -                |       | 1,489                 |       | 10,995                                              |       | 656                                          |       | 1,537                  |       | 11,603       |       | 13,140    |       | 2,840 |   | 1998 |   | 1998 |   |
| Parkwood Crossing           |       | Five Parkwood Crossing        |       | Office       |       | -                |       | 1,485                 |       | 11,703                                              |       | 702                                          |       | 1,528                  |       | 12,362       |       | 13,890    |       | 3,185 |   | 1999 |   | 1999 |   |
| Parkwood Crossing           |       | Six Parkwood Crossing         |       | Office       |       | -                |       | 1,960                 |       | 16,055                                              |       | 1,028                                        |       | 1,960                  |       | 17,083       |       | 19,043    |       | 4,840 |   | 2000 |   | 2000 |   |
| Parkwood Crossing           |       | Eight Parkwood Crossing       |       | Office       |       | -                |       | 6,435                 |       | 16,367                                              |       | 482                                          |       | 6,435                  |       | 16,849       |       | 23,284    |       | 3,603 |   | 2002 |   | 2002 |   |
| Parkwood Crossing           |       | Nine Parkwood Crossing        |       | Office       |       | -                |       | 6,046                 |       | 15,991                                              |       | 841                                          |       | 6,047                  |       | 16,831       |       | 22,878    |       | 1,837 |   | 2005 |   | 2005 |   |
| Parkwood West               |       | One West                      |       | Office       |       | -                |       | 5,361                 |       | 16,182                                              |       | 898                                          |       | 5,361                  |       | 17,080       |       | 22,441    |       | 173 |   | 2007 |   | 2007 |   |
| River Road - Indianapolis   |       | River Road Building I         |       | Office       |       | -                |       | 856                   |       | 7,725                                               |       | 1,750                                        |       | 856                    |       | 9,475        |       | 10,331    |       | 3,544 |   | 1997 |   | 1997 |   |
| Woodland Corporate Park     |       | Woodland Corporate Park I     |       | Office       |       | -                |       | 290                   |       | 4,338                                               |       | 700                                          |       | 320                    |       | 5,008        |       | 5,328     |       | 1,966 |   | 1998 |   | 1998 |   |
| Woodland Corporate Park     |       | Woodland Corporate Park II    |       | Office       |       | -                |       | 271                   |       | 3,543                                               |       | 855                                          |       | 297                    |       | 4,372        |       | 4,669     |       | 1,323 |   | 1999 |   | 1999 |   |
| Woodland Corporate Park     |       | Woodland Corporate Park III   |       | Office       |       | -                |       | 1,227                 |       | 4,135                                               |       | 242                                          |       | 1,227                  |       | 4,377        |       | 5,604     |       | 1,193 |   | 1999 |   | 2000 |   |
| Woodland Corporate Park     |       | Woodland Corporate Park IV    |       | Office       |       | -                |       | 715                   |       | 7,245                                               |       | 528                                          |       | 715                    |       | 7,773        |       | 8,488     |       | 2,426 |   | 2000 |   | 2000 |   |
| Woodland Corporate Park     |       | Woodland Corporate Park V     |       | Office       |       | -                |       | 768                   |       | 10,015                                              |       | 36                                           |       | 768                    |       | 10,051       |       | 10,819    |       | 1,800 |   | 2002 |   | 2002 |   |
|                        |       |                          |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **IRVING, TEXAS**           | ** ** |                          |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| International Commerce Park |       | DFW Airport I                 |       | Industrial   |       | -                |       | 3,612                 |       | 9,160                                               |       | 4,028                                        |       | 3,612                  |       | 13,188       |       | 16,800    |       | - |   | 2007 |   | 2007 |   |
|                        |       |                          |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **LAKE FOREST, ILLINOIS**   | ** ** |                          |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Bradley Business Center     |       | 13825 West Laurel Drive       |       | Industrial   |       | -                |       | 750                   |       | 1,874                                               |       | 906                                          |       | 750                    |       | 2,780        |       | 3,530     |       | 1,129 |   | 1978 |   | 1999 |   |
| Conway Park                 |       | One Conway Park               |       | Office       |       | -                |       | 1,901                 |       | 17,612                                              |       | 2,591                                        |       | 1,901                  |       | 20,203       |       | 22,104    |       | 5,284 |   | 1989 |   | 1998 |   |

 

87

----

 
| **Duke Realty Limited Partnership**           | **Schedule 3** |
|-----------------------------------------------|----------------|
| **Real Estate and Accumulated  Depreciation** |
| **December 31, 2007**                         |
| **(in thousands)**                            |

 
| ** **                     | ** ** | ** **                     | ** ** | **Building** | ** ** | ** **       | ** ** | **Initial Cost** | ** ** | **Cost  Capitalized  Subsequent to****Development** | ** ** | **Gross Book Value 12/31/07** | ** ** | **Accumulated**        | ** ** | **Year**     | ** ** | **Year**  | ** ** |
|--------------------------------|------------|--------------------------------|------------|--------------|------------|------------------|------------|-----------------------|------------|-----------------------------------------------------|------------|----------------------------------------------|------------|------------------------|------------|--------------|------------|-----------|------------|
| **Development**                | ** ** | **Name**                       | ** ** | **Type**     | ** ** | **Encumbrances** | ** ** | **Land**              | ** ** | **Buildings**                                       | ** ** | **or Acquisition**                      | ** ** | **Land/Land Imp** | ** ** | **Bldgs/TI** | ** ** | **Total** | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
| ** **                     | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **LAKE MARY, FLORIDA**         | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Northpoint                     |       | Northpoint Center I            |       | Office       |       | -                |       | 1,087                 |       | 10,487                                              |       | 1,464                                        |       | 1,087                  |       | 11,951       |       | 13,038    |       | 2,612 |   | 1998 |   | 2001 |   |
| Northpoint                     |       | Northpoint Center II           |       | Office       |       | -                |       | 1,202                 |       | 9,238                                               |       | 916                                          |       | 1,202                  |       | 10,154       |       | 11,356    |       | 1,988 |   | 1999 |   | 2001 |   |
| Northpoint                     |       | Northpoint III                 |       | Office       |       | -                |       | 1,552                 |       | 10,252                                              |       | 198                                          |       | 1,552                  |       | 10,450       |       | 12,002    |       | 2,818 |   | 2001 |   | 2001 |   |
| Northpoint                     |       | Northpoint IV                  |       | Office       |       | -                |       | 1,605                 |       | 8,273                                               |       | 4,703                                        |       | 1,605                  |       | 12,976       |       | 14,581    |       | 2,182 |   | 2002 |   | 2002 |   |
|                           |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **LAWRENCEVILLE, GEORGIA**     |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Hillside at Huntcrest          |       | Huntcrest I                    |       | Office       |       | -                |       | 1,193                 |       | 10,829                                              |       | 286                                          |       | 1,193                  |       | 11,115       |       | 12,308    |       | 2,618 |   | 2000 |   | 2001 |   |
| Hillside at Huntcrest          |       | Huntcrest II                   |       | Office       |       | -                |       | 927                   |       | 9,559                                               |       | 1,010                                        |       | 927                    |       | 10,569       |       | 11,496    |       | 1,657 |   | 2000 |   | 2001 |   |
| Hillside at Huntcrest          |       | Huntcrest III                  |       | Office       |       | -                |       | 1,358                 |       | 12,817                                              |       | 348                                          |       | 1,358                  |       | 13,165       |       | 14,523    |       | 2,733 |   | 2001 |   | 2002 |   |
| Hillside at Huntcrest          |       | Huntcrest IV                   |       | Office       |       | -                |       | 1,295                 |       | 5,742                                               |       | 332                                          |       | 1,306                  |       | 6,063        |       | 7,369     |       | 766 |   | 2003 |   | 2003 |   |
| Other Northeast I85 Properties |       | Weyerhaeuser BTS               |       | Industrial   |       | 9,290            |       | 3,974                 |       | 3,101                                               |       | 21                                           |       | 3,982                  |       | 3,114        |       | 7,096     |       | 786 |   | 2004 |   | 2004 |   |
|                           |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **LEBANON, INDIANA**           | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Lebanon Business Park          |       | Lebanon Building 4             |       | Industrial   |       | 11,610           |       | 305                   |       | 9,012                                               |       | 236                                          |       | 305                    |       | 9,248        |       | 9,553     |       | 2,236 |   | 1997 |   | 1997 |   |
| Lebanon Business Park          |       | Lebanon Building 9             |       | Industrial   |       | 10,614           |       | 554                   |       | 6,871                                               |       | 770                                          |       | 554                    |       | 7,641        |       | 8,195     |       | 1,806 |   | 1999 |   | 1999 |   |
| Lebanon Business Park          |       | Lebanon Building 12            |       | Industrial   |       | 24,610           |       | 5,163                 |       | 13,207                                              |       | 394                                          |       | 5,163                  |       | 13,601       |       | 18,764    |       | 2,731 |   | 2002 |   | 2002 |   |
| Lebanon Business Park          |       | Lebanon Building 13            |       | Industrial   |       | 9,365            |       | 561                   |       | 6,579                                               |       | 83                                           |       | 1,901                  |       | 5,322        |       | 7,223     |       | 1,262 |   | 2003 |   | 2003 |   |
| Lebanon Business Park          |       | Lebanon Building 14            |       | Industrial   |       | 19,431           |       | 2,813                 |       | 12,056                                              |       | 601                                          |       | 2,813                  |       | 12,657       |       | 15,470    |       | 1,418 |   | 2004 |   | 2004 |   |
|                           |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **LEBANON, TENNESSEE**         | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Park 840 Logistics Center      |       | Pk 840 Logistics Cnt. Bldg 653 |       | Industrial   |       | -                |       | 6,776                 |       | 11,125                                              |       | 1,090                                        |       | 6,776                  |       | 12,215       |       | 18,991    |       | 733 |   | 2006 |   | 2006 |   |
|                           |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **LISLE, ILLINOIS**            | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Corporate Lakes Business Park  |       | 2275 Cabot Drive               |       | Office       |       | -                |       | 3,355                 |       | 7,008                                               |       | 6                                            |       | 3,355                  |       | 7,014        |       | 10,369    |       | 901 |   | 1996 |   | 2004 |   |
|                           |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **MARYLAND HEIGHTS, MISSOURI** |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Riverport Business Park        |       | Riverport Tower                |       | Office       |       | -                |       | 3,549                 |       | 29,254                                              |       | 8,249                                        |       | 3,954                  |       | 37,098       |       | 41,052    |       | 10,929 |   | 1991 |   | 1997 |   |
| Riverport Business Park        |       | Riverport Distribution         |       | Industrial   |       | -                |       | 242                   |       | 2,230                                               |       | 1,043                                        |       | 242                    |       | 3,273        |       | 3,515     |       | 736 |   | 1990 |   | 1997 |   |
| Riverport Business Park        |       | Express Scripts Service Center |       | Industrial   |       | -                |       | 1,197                 |       | 8,755                                               |       | 427                                          |       | 1,197                  |       | 9,182        |       | 10,379    |       | 2,570 |   | 1992 |   | 1997 |   |
| Riverport Business Park        |       | Express Scripts HQ             |       | Office       |       | -                |       | 2,285                 |       | 8,988                                               |       | 295                                          |       | 2,285                  |       | 9,283        |       | 11,568    |       | 2,036 |   | 1999 |   | 1999 |   |
| Riverport Business Park        |       | Riverport 1                    |       | Industrial   |       | -                |       | 900                   |       | 2,849                                               |       | 372                                          |       | 900                    |       | 3,221        |       | 4,121     |       | 937 |   | 1999 |   | 1999 |   |
| Riverport Business Park        |       | Riverport 2                    |       | Industrial   |       | -                |       | 1,238                 |       | 4,161                                               |       | 80                                           |       | 1,238                  |       | 4,241        |       | 5,479     |       | 1,091 |   | 2000 |   | 2000 |   |
| Riverport Business Park        |       | Riverport 3                    |       | Industrial   |       | -                |       | 1,269                 |       | 3,804                                               |       | 2,171                                        |       | 1,269                  |       | 5,975        |       | 7,244     |       | 2,270 |   | 2001 |   | 2001 |   |
| Riverport Business Park        |       | Riverport IV                   |       | Industrial   |       | -                |       | 1,864                 |       | 3,362                                               |       | 1,353                                        |       | 1,864                  |       | 4,715        |       | 6,579     |       | 169 |   | 2007 |   | 2007 |   |
|                           |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **MASON, OHIO**                | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Deerfield Crossing             |       | Deerfield Crossing Building 1  |       | Office       |       | -                |       | 1,493                 |       | 12,046                                              |       | 853                                          |       | 1,493                  |       | 12,899       |       | 14,392    |       | 3,285 |   | 1999 |   | 1999 |   |
| Deerfield Crossing             |       | Deerfield Crossing Building 2  |       | Office       |       | -                |       | 1,069                 |       | 13,478                                              |       | 491                                          |       | 1,069                  |       | 13,969       |       | 15,038    |       | 4,335 |   | 2001 |   | 2001 |   |
| Governors Pointe               |       | Governor’s Pointe 4770    |       | Office       |       | -                |       | 586                   |       | 7,870                                               |       | 818                                          |       | 596                    |       | 8,678        |       | 9,274     |       | 3,996 |   | 1986 |   | 1993 |   |
| Governors Pointe               |       | Governor’s Pointe 4705    |       | Office       |       | -                |       | 719                   |       | 6,100                                               |       | 3,688                                        |       | 987                    |       | 9,520        |       | 10,507    |       | 3,471 |   | 1988 |   | 1993 |   |
| Governors Pointe               |       | Governor’s Pointe 4605    |       | Office       |       | -                |       | 630                   |       | 17,632                                              |       | 3,526                                        |       | 909                    |       | 20,879       |       | 21,788    |       | 7,277 |   | 1990 |   | 1993 |   |
| Governors Pointe               |       | Governor’s Pointe 4660    |       | Office       |       | -                |       | 385                   |       | 4,298                                               |       | 279                                          |       | 529                    |       | 4,433        |       | 4,962     |       | 1,382 |   | 1997 |   | 1997 |   |
| Governors Pointe               |       | Governor’s Pointe 4680    |       | Office       |       | -                |       | 1,115                 |       | 7,283                                               |       | 1,041                                        |       | 1,115                  |       | 8,324        |       | 9,439     |       | 2,418 |   | 1998 |   | 1998 |   |
| Governors Pointe Retail        |       | Bigg’s Supercenter        |       | Retail       |       | -                |       | 2,107                 |       | 9,927                                               |       | 430                                          |       | 4,227                  |       | 8,237        |       | 12,464    |       | 3,429 |   | 1996 |   | 1996 |   |
| Governors Pointe Retail        |       | Lowes                          |       | Retail       |       | -                |       | 3,750                 |       | 6,502                                               |       | 623                                          |       | 3,750                  |       | 7,125        |       | 10,875    |       | 3,190 |   | 1997 |   | 1997 |   |
|                           |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **MCDONOUGH, GEORGIA**         | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Liberty Distribution Center    |       | 120 Declaration Drive          |       | Industrial   |       | -                |       | 615                   |       | 8,522                                               |       | 282                                          |       | 615                    |       | 8,804        |       | 9,419     |       | 1,954 |   | 1997 |   | 1999 |   |
| Liberty Distribution Center    |       | 250 Declaration Drive          |       | Industrial   |       | 22,292           |       | 2,273                 |       | 13,225                                              |       | 2,278                                        |       | 2,312                  |       | 15,464       |       | 17,776    |       | 2,757 |   | 2001 |   | 2001 |   |
|                           |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **MENDOTA HEIGHTS, MINNESOTA** |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Enterprise Industrial Center   |       | Enterprise Industrial Center   |       | Industrial   |       | 1,138            |       | 864                   |       | 5,027                                               |       | 579                                          |       | 888                    |       | 5,582        |       | 6,470     |       | 1,502 |   | 1979 |   | 1997 |   |
|                           |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **MIAMISBURG, OHIO**           | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Kettering Sycamore POB         |       | Kettering Sycamore POB         |       | Healthcare   |       | -                |       | 203                   |       | 12,501                                              |       | 459                                          |       | 203                    |       | 12,960       |       | 13,163    |       | - |   | 2007 |   | 2007 |   |
|                           |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **MONROE, OHIO**               | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Monroe Business Center         |       | Monroe Business Center Bldg. 1 |       | Industrial   |       | -                |       | 660                   |       | 5,082                                               |       | 354                                          |       | 660                    |       | 5,436        |       | 6,096     |       | 1,511 |   | 1992 |   | 1999 |   |
|                           |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **MOREHEAD CITY, NC**          | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Industrial Development         |       | NC State Ports Authority       |       | Industrial   |       | -                |       | -                     |       | 11,653                                              |       | 1,693                                        |       | -                      |       | 13,346       |       | 13,346    |       | - |   | 2007 |   | 2007 |   |

 

88

----

 
| **Duke Realty Limited Partnership**           | **Schedule 3** |
|-----------------------------------------------|----------------|
| **Real Estate and Accumulated  Depreciation** |
| **December 31, 2007**                         |
| **(in thousands)**                            |

 
| ** **                      | ** ** | ** **                     | ** ** | **Building** | ** ** | ** **       | ** ** | **Initial Cost** | ** ** | **Cost  Capitalized  Subsequent to****Development** | ** ** | **Gross Book Value 12/31/07** | ** ** | **Accumulated**        | ** ** | **Year**     | ** ** | **Year**  | ** ** |
|---------------------------------|------------|--------------------------------|------------|--------------|------------|------------------|------------|-----------------------|------------|-----------------------------------------------------|------------|----------------------------------------------|------------|------------------------|------------|--------------|------------|-----------|------------|
| **Development**                 | ** ** | **Name**                       | ** ** | **Type**     | ** ** | **Encumbrances** | ** ** | **Land**              | ** ** | **Buildings**                                       | ** ** | **or Acquisition**                      | ** ** | **Land/Land Imp** | ** ** | **Bldgs/TI** | ** ** | **Total** | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
| **MORRISVILLE, NORTH CAROLINA** |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Perimeter Park                  |       | 507 Airport Blvd               |       | Industrial   |       | -                |       | 1,327                 |       | 8,273                                               |       | 1,510                                        |       | 1,351                  |       | 9,759        |       | 11,110    |       | 2,424 |   | 1993 |   | 1999 |   |
| Perimeter Park                  |       | 5151 McCrimmon Pkwy            |       | Office       |       | -                |       | 1,318                 |       | 7,832                                               |       | 1,926                                        |       | 1,342                  |       | 9,734        |       | 11,076    |       | 1,934 |   | 1995 |   | 1999 |   |
| Perimeter Park                  |       | 2600 Perimeter Park Dr         |       | Industrial   |       | -                |       | 975                   |       | 5,210                                               |       | 613                                          |       | 991                    |       | 5,807        |       | 6,798     |       | 1,217 |   | 1997 |   | 1999 |   |
| Perimeter Park                  |       | 5150 McCrimmon Pkwy            |       | Industrial   |       | -                |       | 1,739                 |       | 12,207                                              |       | 819                                          |       | 1,773                  |       | 12,992       |       | 14,765    |       | 2,782 |   | 1998 |   | 1999 |   |
| Perimeter Park                  |       | 2400 Perimeter Park Dr.        |       | Office       |       | -                |       | 760                   |       | 5,776                                               |       | 1,159                                        |       | 778                    |       | 6,917        |       | 7,695     |       | 1,676 |   | 1999 |   | 1999 |   |
| Perimeter Park                  |       | 3000 Perimeter Park Dr (Met 1) |       | Industrial   |       | 554              |       | 482                   |       | 2,891                                               |       | 1,160                                        |       | 491                    |       | 4,042        |       | 4,533     |       | 1,036 |   | 1989 |   | 1999 |   |
| Perimeter Park                  |       | 2900 Perimeter Park Dr (Met 2) |       | Industrial   |       | 407              |       | 235                   |       | 1,942                                               |       | 1,108                                        |       | 264                    |       | 3,021        |       | 3,285     |       | 663 |   | 1990 |   | 1999 |   |
| Perimeter Park                  |       | 2800 Perimeter Park Dr (Met 3) |       | Industrial   |       | 762              |       | 777                   |       | 4,826                                               |       | 599                                          |       | 811                    |       | 5,391        |       | 6,202     |       | 1,235 |   | 1992 |   | 1999 |   |
| Perimeter Park                  |       | 1100 Perimeter Park Drive      |       | Industrial   |       | -                |       | 777                   |       | 5,950                                               |       | 932                                          |       | 794                    |       | 6,865        |       | 7,659     |       | 1,618 |   | 1990 |   | 1999 |   |
| Perimeter Park                  |       | 1400 Perimeter Park Drive      |       | Office       |       | -                |       | 666                   |       | 4,561                                               |       | 1,214                                        |       | 900                    |       | 5,541        |       | 6,441     |       | 1,490 |   | 1991 |   | 1999 |   |
| Perimeter Park                  |       | 1500 Perimeter Park Drive      |       | Office       |       | -                |       | 1,148                 |       | 10,262                                              |       | 404                                          |       | 1,177                  |       | 10,637       |       | 11,814    |       | 2,337 |   | 1996 |   | 1999 |   |
| Perimeter Park                  |       | 1600 Perimeter Park Drive      |       | Office       |       | -                |       | 1,463                 |       | 9,964                                               |       | 2,101                                        |       | 1,513                  |       | 12,015       |       | 13,528    |       | 2,859 |   | 1994 |   | 1999 |   |
| Perimeter Park                  |       | 1800 Perimeter Park Drive      |       | Office       |       | -                |       | 907                   |       | 5,649                                               |       | 1,067                                        |       | 993                    |       | 6,630        |       | 7,623     |       | 1,554 |   | 1994 |   | 1999 |   |
| Perimeter Park                  |       | 2000 Perimeter Park Drive      |       | Office       |       | -                |       | 788                   |       | 5,738                                               |       | 897                                          |       | 842                    |       | 6,581        |       | 7,423     |       | 1,909 |   | 1997 |   | 1999 |   |
| Perimeter Park                  |       | 1700 Perimeter Center West     |       | Office       |       | -                |       | 1,230                 |       | 10,765                                              |       | 2,779                                        |       | 1,260                  |       | 13,514       |       | 14,774    |       | 3,018 |   | 1997 |   | 1999 |   |
| Perimeter Park                  |       | 3900 N. Paramount Parkway      |       | Office       |       | -                |       | 540                   |       | 13,270                                              |       | 256                                          |       | 574                    |       | 13,492       |       | 14,066    |       | 2,901 |   | 1998 |   | 1999 |   |
| Perimeter Park                  |       | 3900 S. Paramount Pkwy         |       | Office       |       | -                |       | 1,575                 |       | 12,152                                              |       | 1,483                                        |       | 1,612                  |       | 13,598       |       | 15,210    |       | 3,918 |   | 2000 |   | 1999 |   |
| Perimeter Park                  |       | 5200 East Paramount            |       | Office       |       | -                |       | 1,748                 |       | 17,388                                              |       | 1,010                                        |       | 1,797                  |       | 18,349       |       | 20,146    |       | 5,681 |   | 1999 |   | 1999 |   |
| Perimeter Park                  |       | 3500 Paramount Pkwy            |       | Office       |       | -                |       | 755                   |       | 12,948                                              |       | 137                                          |       | 755                    |       | 13,085       |       | 13,840    |       | 4,333 |   | 1999 |   | 2000 |   |
| Perimeter Park                  |       | 2700 Perimeter Park            |       | Industrial   |       | -                |       | 662                   |       | 2,794                                               |       | 1,732                                        |       | 662                    |       | 4,526        |       | 5,188     |       | 1,379 |   | 2001 |   | 2001 |   |
| Perimeter Park                  |       | 5200 West Paramount            |       | Office       |       | -                |       | 1,831                 |       | 12,608                                              |       | 1,083                                        |       | 1,831                  |       | 13,691       |       | 15,522    |       | 2,954 |   | 2000 |   | 2001 |   |
| Perimeter Park                  |       | 2450 Perimeter Park            |       | Office       |       | -                |       | 669                   |       | 2,894                                               |       | 25                                           |       | 669                    |       | 2,919        |       | 3,588     |       | 789 |   | 2001 |   | 2001 |   |
| Perimeter Park                  |       | 3800 Paramount Parkway         |       | Office       |       | -                |       | 2,657                 |       | 7,329                                               |       | 3,052                                        |       | 2,657                  |       | 10,381       |       | 13,038    |       | 660 |   | 2006 |   | 2006 |   |
| Perimeter Park                  |       | Lenovo BTS I                   |       | Office       |       | -                |       | 1,439                 |       | 16,961                                              |       | 1,503                                        |       | 1,439                  |       | 18,464       |       | 19,903    |       | 932 |   | 2006 |   | 2006 |   |
| Perimeter Park                  |       | Lenovo BTS II                  |       | Office       |       | -                |       | 1,725                 |       | 16,809                                              |       | 1,984                                        |       | 1,725                  |       | 18,793       |       | 20,518    |       | 801 |   | 2007 |   | 2007 |   |
| Perimeter Park                  |       | Perimeter One                  |       | Office       |       | -                |       | 5,880                 |       | 14,421                                              |       | 833                                          |       | 5,880                  |       | 15,254       |       | 21,134    |       | 112 |   | 2007 |   | 2007 |   |
| Woodlake Center                 |       | 100 Innovation Avenue (Woodlk) |       | Industrial   |       | -                |       | 633                   |       | 3,748                                               |       | 634                                          |       | 633                    |       | 4,382        |       | 5,015     |       | 859 |   | 1994 |   | 1999 |   |
| Woodlake Center                 |       | 101 Innovation Ave(Woodlk III) |       | Industrial   |       | -                |       | 615                   |       | 4,095                                               |       | 148                                          |       | 615                    |       | 4,243        |       | 4,858     |       | 957 |   | 1997 |   | 1999 |   |
| Woodlake Center                 |       | 200 Innovation Drive           |       | Industrial   |       | -                |       | 357                   |       | 4,489                                               |       | 60                                           |       | 357                    |       | 4,549        |       | 4,906     |       | 1,271 |   | 1999 |   | 1999 |   |
| Woodlake Center                 |       | 501 Innovation Ave.            |       | Industrial   |       | -                |       | 640                   |       | 5,632                                               |       | 176                                          |       | 640                    |       | 5,808        |       | 6,448     |       | 1,140 |   | 1999 |   | 1999 |   |
| Woodlake Center                 |       | 1000 Innovation (Woodlk 6)     |       | Industrial   |       | -                |       | 514                   |       | 2,927                                               |       | 88                                           |       | 514                    |       | 3,015        |       | 3,529     |       | 436 |   | 1996 |   | 2002 |   |
| Woodlake Center                 |       | 1200 Innovation (Woodlk 7)     |       | Industrial   |       | -                |       | 740                   |       | 5,936                                               |       | 98                                           |       | 740                    |       | 6,034        |       | 6,774     |       | 1,958 |   | 1996 |   | 2002 |   |
| Woodlake Center                 |       | Woodlake VIII                  |       | Industrial   |       | -                |       | 908                   |       | 1,517                                               |       | 339                                          |       | 908                    |       | 1,856        |       | 2,764     |       | 441 |   | 2003 |   | 2003 |   |
|                            |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **NAPERVILLE, ILLINOIS**        | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Meridian Business Campus        |       | 1835 Jefferson                 |       | Industrial   |       | -                |       | 3,180                 |       | 7,959                                               |       | 5                                            |       | 3,184                  |       | 7,960        |       | 11,144    |       | 956 |   | 2003 |   | 2003 |   |
|                            |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **NASHVILLE, TENNESSEE**        | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Airpark East                    |       | Airpark East-800 Commerce Dr.  |       | Industrial   |       | -                |       | 1,564                 |       | 2,943                                               |       | 732                                          |       | 1,564                  |       | 3,675        |       | 5,239     |       | 696 |   | 2001 |   | 2002 |   |
| Lakeview Place                  |       | Three Lakeview                 |       | Office       |       | -                |       | 2,126                 |       | 11,737                                              |       | 2,869                                        |       | 2,126                  |       | 14,606       |       | 16,732    |       | 3,143 |   | 1999 |   | 1999 |   |
| Lakeview Place                  |       | One Lakeview Place             |       | Office       |       | -                |       | 2,046                 |       | 11,147                                              |       | 1,837                                        |       | 2,123                  |       | 12,907       |       | 15,030    |       | 3,140 |   | 1986 |   | 1998 |   |
| Lakeview Place                  |       | Two Lakeview Place             |       | Office       |       | -                |       | 2,046                 |       | 11,712                                              |       | 1,954                                        |       | 2,046                  |       | 13,666       |       | 15,712    |       | 3,374 |   | 1988 |   | 1998 |   |
| Riverview Business Center       |       | Riverview Office Building      |       | Office       |       | -                |       | 847                   |       | 5,892                                               |       | 1,456                                        |       | 847                    |       | 7,348        |       | 8,195     |       | 1,731 |   | 1983 |   | 1999 |   |
| Nashville Business Center       |       | Nashville Business Center I    |       | Industrial   |       | -                |       | 936                   |       | 6,031                                               |       | 656                                          |       | 936                    |       | 6,687        |       | 7,623     |       | 1,397 |   | 1997 |   | 1999 |   |
| Nashville Business Center       |       | Nashville Business Center II   |       | Industrial   |       | -                |       | 5,659                 |       | 10,206                                              |       | 840                                          |       | 5,659                  |       | 11,046       |       | 16,705    |       | 1,074 |   | 2005 |   | 2005 |   |
|                            |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **NEW ALBANY, OHIO**            | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| New Albany                      |       | 6525 West Campus Oval          |       | Office       |       | -                |       | 842                   |       | 3,607                                               |       | 2,245                                        |       | 881                    |       | 5,813        |       | 6,694     |       | 1,072 |   | 1999 |   | 1999 |   |
|                            |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **NILES, ILLINOIS**             | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Howard 220                      |       | Howard 220                     |       | Industrial   |       | -                |       | 4,920                 |       | 3,669                                               |       | 138                                          |       | 4,920                  |       | 3,807        |       | 8,727     |       | 306 |   | 1950 |   | 2004 |   |
|                            |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **NORCROSS, GEORGIA**           | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Gwinnett Park                   |       | 1835 Shackleford Court         |       | Office       |       | -                |       | 29                    |       | 6,052                                               |       | 1,012                                        |       | 29                     |       | 7,064        |       | 7,093     |       | 1,708 |   | 1990 |   | 1999 |   |
| Gwinnett Park                   |       | 1854 Shackelford Court         |       | Office       |       | -                |       | 52                    |       | 9,790                                               |       | 1,331                                        |       | 52                     |       | 11,121       |       | 11,173    |       | 2,524 |   | 1985 |   | 1999 |   |
| Gwinnett Park                   |       | 4275 Shackleford Road          |       | Office       |       | -                |       | 8                     |       | 2,027                                               |       | 548                                          |       | 12                     |       | 2,571        |       | 2,583     |       | 693 |   | 1985 |   | 1999 |   |
|                            |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **NORFOLK, VIRGINIA**           | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Norfolk Industrial Park         |       | 1400 Sewells Point Road        |       | Industrial   |       | 3,131            |       | 1,463                 |       | 5,723                                               |       | -                                            |       | 1,463                  |       | 5,723        |       | 7,186     |       | - |   | 1983 |   | 2007 |   |
|                            |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **NORTHLAKE, ILLINOIS**         | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Northlake 1 Park                |       | Northlake I                    |       | Industrial   |       | -                |       | 5,721                 |       | 10,579                                              |       | 624                                          |       | 5,721                  |       | 11,203       |       | 16,924    |       | 1,863 |   | 2002 |   | 2002 |   |
| Northlake Distribution Park     |       | Northlake III - Grand Whse.    |       | Industrial   |       | -                |       | 5,382                 |       | 5,708                                               |       | 230                                          |       | 5,382                  |       | 5,938        |       | 11,320    |       | 368 |   | 2006 |   | 2006 |   |
|                            |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **NORTH OLMSTED, OHIO**         | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Great Northern Corporate Ctr.   |       | Great Northern Corp Center I   |       | Office       |       | -                |       | 1,048                 |       | 6,779                                               |       | 1,697                                        |       | 1,040                  |       | 8,484        |       | 9,524     |       | 2,373 |   | 1985 |   | 1996 |   |
| Great Northern Corporate Ctr.   |       | Great Northern Corp Center II  |       | Office       |       | -                |       | 1,048                 |       | 6,742                                               |       | 1,750                                        |       | 1,048                  |       | 8,492        |       | 9,540     |       | 2,264 |   | 1987 |   | 1996 |   |
| Great Northern Corporate Ctr.   |       | Great Northern Corp Center III |       | Office       |       | -                |       | 604                   |       | 4,952                                               |       | 605                                          |       | 604                    |       | 5,557        |       | 6,161     |       | 1,244 |   | 1999 |   | 1999 |   |

 

89

----

 
| **Duke Realty Limited Partnership**           | **Schedule 3** |
|-----------------------------------------------|----------------|
| **Real Estate and Accumulated  Depreciation** |
| **December 31, 2007**                         |
| **(in thousands)**                            |

 
| ** **                            | ** ** | ** **                       | ** ** | **Building** | ** ** | ** **       | ** ** | **Initial Cost** | ** ** | **Cost  Capitalized  Subsequent to****Development** | ** ** | **Gross Book Value 12/31/07** | ** ** | **Accumulated**        | ** ** | **Year**     | ** ** | **Year**  | ** ** |
|---------------------------------------|------------|----------------------------------|------------|--------------|------------|------------------|------------|-----------------------|------------|-----------------------------------------------------|------------|----------------------------------------------|------------|------------------------|------------|--------------|------------|-----------|------------|
| **Development**                       | ** ** | **Name**                         | ** ** | **Type**     | ** ** | **Encumbrances** | ** ** | **Land**              | ** ** | **Buildings**                                       | ** ** | **or Acquisition**                      | ** ** | **Land/Land Imp** | ** ** | **Bldgs/TI** | ** ** | **Total** | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
| ** **                            | ** ** |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **OAK BROOK, ILLINOIS**               | ** ** |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| 2000 York Road                        |       | 2000 York Road                   |       | Office       |       | 10,422           |       | 2,625                 |       | 15,831                                              |       | 15                                           |       | 2,625                  |       | 15,846       |       | 18,471    |       | 5,421 |   | 1960 |   | 2005 |   |
|                                  |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **ORLANDO, FLORIDA**                  | ** ** |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Liberty Park at Southcenter           |       | Southcenter I-Brede/Allied BTS   |       | Industrial   |       | -                |       | 3,094                 |       | 3,867                                               |       | -                                            |       | 3,094                  |       | 3,867        |       | 6,961     |       | 877 |   | 2002 |   | 2002 |   |
| Parksouth Distribution Center         |       | Parksouth Dist. Ctr-Bldg B       |       | Industrial   |       | -                |       | 565                   |       | 4,893                                               |       | 431                                          |       | 570                    |       | 5,319        |       | 5,889     |       | 1,264 |   | 1996 |   | 1999 |   |
| Parksouth Distribution Center         |       | Parksouth Dist. Ctr-Bldg A       |       | Industrial   |       | -                |       | 493                   |       | 4,521                                               |       | 234                                          |       | 498                    |       | 4,750        |       | 5,248     |       | 1,052 |   | 1997 |   | 1999 |   |
| Parksouth Distribution Center         |       | Parksouth Dist. Ctr-Bldg D       |       | Industrial   |       | -                |       | 593                   |       | 4,131                                               |       | 287                                          |       | 597                    |       | 4,414        |       | 5,011     |       | 928 |   | 1998 |   | 1999 |   |
| Parksouth Distribution Center         |       | Parksouth Dist. Ctr-Bldg E       |       | Industrial   |       | -                |       | 649                   |       | 4,549                                               |       | 344                                          |       | 653                    |       | 4,889        |       | 5,542     |       | 1,098 |   | 1997 |   | 1999 |   |
| Parksouth Distribution Center         |       | Parksouth Dist. Ctr-Bldg F       |       | Industrial   |       | -                |       | 1,030                 |       | 5,232                                               |       | 1,104                                        |       | 1,035                  |       | 6,331        |       | 7,366     |       | 1,629 |   | 1999 |   | 1999 |   |
| Parksouth Distribution Center         |       | Parksouth Dist. Ctr-Bldg H       |       | Industrial   |       | -                |       | 725                   |       | 3,310                                               |       | 125                                          |       | 730                    |       | 3,430        |       | 4,160     |       | 742 |   | 2000 |   | 2000 |   |
| Parksouth Distribution Center         |       | Parksouth Dist. Ctr-Bldg C       |       | Industrial   |       | -                |       | 598                   |       | 1,769                                               |       | 1,273                                        |       | 674                    |       | 2,966        |       | 3,640     |       | 481 |   | 2000 |   | 2000 |   |
| Parksouth Distribution Center         |       | Parksouth-Benjamin Moore BTS     |       | Industrial   |       | -                |       | 708                   |       | 2,070                                               |       | 10                                           |       | 1,115                  |       | 1,673        |       | 2,788     |       | 347 |   | 2003 |   | 2003 |   |
| Crossroads Business Park              |       | Crossroads Business Center VII   |       | Industrial   |       | -                |       | 2,803                 |       | 5,891                                               |       | 3,184                                        |       | 2,803                  |       | 9,075        |       | 11,878    |       | 600 |   | 2006 |   | 2006 |   |
| Crossroads Business Park              |       | Crossroads VIII                  |       | Industrial   |       | -                |       | 2,701                 |       | 4,817                                               |       | 303                                          |       | 2,701                  |       | 5,120        |       | 7,821     |       | 70 |   | 2007 |   | 2007 |   |
| Park 27 Distribution Center           |       | Park 27 Distribution Center II   |       | Industrial   |       | -                |       | 4,374                 |       | 8,218                                               |       | 235                                          |       | 4,374                  |       | 8,453        |       | 12,827    |       | 92 |   | 2007 |   | 2007 |   |
|                                  |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **OTSEGO, MINNESOTA**                 | ** ** |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Gateway North Business Center         |       | Gateway North 1                  |       | Industrial   |       | -                |       | 2,243                 |       | 3,959                                               |       | 4                                            |       | 2,243                  |       | 3,963        |       | 6,206     |       | 49 |   | 2007 |   | 2007 |   |
|                                  |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **PARK RIDGE, ILLINOIS**              | ** ** |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| O’Hare Corporate Centre          |       | O’Hare Corporate Centre     |       | Office       |       | -                |       | 1,476                 |       | 8,816                                               |       | 787                                          |       | 1,476                  |       | 9,603        |       | 11,079    |       | 1,279 |   | 1985 |   | 2003 |   |
|                                  |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **PHOENIX, ARIZONA**                  | ** ** |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Buckeye Logistics Center              |       | Buckeye Logistics Center         |       | Industrial   |       | -                |       | 7,421                 |       | 26,329                                              |       | 212                                          |       | 7,424                  |       | 26,538       |       | 33,962    |       | - |   | 2007 |   | 2007 |   |
|                                  |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **PLAINFIELD, ILLINOIS**              | ** ** |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Edward Plainfield MOB I               |       | Edward Plainfield MOB I          |       | Healthcare   |       | -                |       | -                     |       | 9,483                                               |       | 706                                          |       | -                      |       | 10,189       |       | 10,189    |       | 480 |   | 2005 |   | 2007 |   |
|                                  |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **PLAINFIELD, INDIANA**               | ** ** |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Plainfield Business Park              |       | Plainfield Building 1            |       | Industrial   |       | 17,026           |       | 1,104                 |       | 11,151                                              |       | 425                                          |       | 1,104                  |       | 11,576       |       | 12,680    |       | 2,354 |   | 2000 |   | 2000 |   |
| Plainfield Business Park              |       | Plainfield Building 2            |       | Industrial   |       | 17,657           |       | 1,387                 |       | 9,437                                               |       | 2,806                                        |       | 2,603                  |       | 11,027       |       | 13,630    |       | 2,762 |   | 2000 |   | 2000 |   |
| Plainfield Business Park              |       | Plainfield Building 3            |       | Industrial   |       | 17,424           |       | 2,016                 |       | 9,239                                               |       | 2,303                                        |       | 2,016                  |       | 11,542       |       | 13,558    |       | 1,306 |   | 2002 |   | 2002 |   |
| Plainfield Business Park              |       | Plainfield Building 5            |       | Industrial   |       | 13,114           |       | 2,726                 |       | 7,284                                               |       | 212                                          |       | 2,726                  |       | 7,496        |       | 10,222    |       | 1,115 |   | 2004 |   | 2004 |   |
| Plainfield Business Park              |       | Plainfield Building 8            |       | Industrial   |       | 21,693           |       | 4,527                 |       | 11,928                                              |       | 859                                          |       | 4,527                  |       | 12,787       |       | 17,314    |       | 815 |   | 2006 |   | 2006 |   |
|                                  |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **PLANO, TEXAS**                      | ** ** |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| 5556 & 5560 Tennyson Parkway |       | 5560 Tennyson Parkway            |       | Office       |       | -                |       | 1,527                 |       | 5,831                                               |       | 724                                          |       | 1,527                  |       | 6,555        |       | 8,082     |       | 1,615 |   | 1997 |   | 1999 |   |
| 5556 & 5560 Tennyson Parkway |       | 5556 Tennyson Parkway            |       | Office       |       | -                |       | 1,181                 |       | 11,154                                              |       | 205                                          |       | 1,181                  |       | 11,359       |       | 12,540    |       | 3,119 |   | 1999 |   | 1999 |   |
|                                  |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **PLYMOUTH, MINNESOTA**               | ** ** |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Medicine Lake Indust Ctr              |       | Medicine Lake Indus. Center      |       | Industrial   |       | 1,968            |       | 1,145                 |       | 5,977                                               |       | 1,362                                        |       | 1,145                  |       | 7,339        |       | 8,484     |       | 1,789 |   | 1970 |   | 1997 |   |
|                                  |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **PORT WENTWORTH, GEORGIA**           |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Grange Road                           |       | 318 Grange Road                  |       | Industrial   |       | 2,824            |       | 957                   |       | 4,816                                               |       | 1                                            |       | 957                    |       | 4,817        |       | 5,774     |       | 351 |   | 2001 |   | 2006 |   |
| Grange Road                           |       | 246 Grange Road                  |       | Industrial   |       | 6,197            |       | 1,191                 |       | 8,294                                               |       | 7                                            |       | 1,191                  |       | 8,301        |       | 9,492     |       | 525 |   | 2006 |   | 2006 |   |
| Crossroads (Savannah)                 |       | 100 Ocean Link Way-Godley Rd     |       | Industrial   |       | 11,102           |       | 2,306                 |       | 13,389                                              |       | 30                                           |       | 2,336                  |       | 13,389       |       | 15,725    |       | 646 |   | 2006 |   | 2006 |   |
|                                  |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **RALEIGH, NORTH CAROLINA**           |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Brook Forest                          |       | Brook Forest I                   |       | Office       |       | -                |       | 1,242                 |       | 5,248                                               |       | 541                                          |       | 1,242                  |       | 5,789        |       | 7,031     |       | 1,502 |   | 2000 |   | 2000 |   |
| Centerview                            |       | Centerview 5540                  |       | Office       |       | -                |       | 773                   |       | 6,243                                               |       | 1,462                                        |       | 773                    |       | 7,705        |       | 8,478     |       | 1,222 |   | 1986 |   | 2003 |   |
| Centerview                            |       | Centerview 5565                  |       | Office       |       | -                |       | 513                   |       | 4,807                                               |       | 691                                          |       | 513                    |       | 5,498        |       | 6,011     |       | 783 |   | 1999 |   | 2003 |   |
| Crabtree Overlook                     |       | Crabtree Overlook                |       | Office       |       | -                |       | 2,164                 |       | 20,253                                              |       | 135                                          |       | 2,164                  |       | 20,388       |       | 22,552    |       | 6,054 |   | 2000 |   | 2000 |   |
| Interchange Plaza                     |       | 801 Jones Franklin Rd            |       | Office       |       | -                |       | 1,351                 |       | 7,753                                               |       | 934                                          |       | 1,351                  |       | 8,687        |       | 10,038    |       | 2,036 |   | 1995 |   | 1999 |   |
| Interchange Plaza                     |       | 5520 Capital Ctr Dr (Intrch I)   |       | Office       |       | -                |       | 842                   |       | 4,395                                               |       | 531                                          |       | 842                    |       | 4,926        |       | 5,768     |       | 1,432 |   | 1993 |   | 1999 |   |
| Walnut Creek                          |       | Walnut Creek Business Park #1    |       | Industrial   |       | -                |       | 419                   |       | 2,294                                               |       | 582                                          |       | 442                    |       | 2,853        |       | 3,295     |       | 649 |   | 2001 |   | 2001 |   |
| Walnut Creek                          |       | Walnut Creek Business Park #2    |       | Industrial   |       | -                |       | 456                   |       | 3,529                                               |       | 287                                          |       | 487                    |       | 3,785        |       | 4,272     |       | 1,106 |   | 2001 |   | 2001 |   |
| Walnut Creek                          |       | Walnut Creek Business Park #3    |       | Industrial   |       | -                |       | 679                   |       | 3,966                                               |       | 1,251                                        |       | 719                    |       | 5,177        |       | 5,896     |       | 1,197 |   | 2001 |   | 2001 |   |
| Walnut Creek                          |       | Walnut Creek IV                  |       | Industrial   |       | -                |       | 2,038                 |       | 2,152                                               |       | 514                                          |       | 2,083                  |       | 2,621        |       | 4,704     |       | 597 |   | 2004 |   | 2004 |   |
|                                  |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **ROMEOVILLE, ILLINOIS**              | ** ** |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Crossroads Business Park              |       | Chapco Carton Company            |       | Industrial   |       | -                |       | 917                   |       | 4,537                                               |       | 49                                           |       | 917                    |       | 4,586        |       | 5,503     |       | 696 |   | 1999 |   | 2002 |   |
| Park 55                               |       | Park 55 Bldg. 1                  |       | Industrial   |       | -                |       | 6,433                 |       | 8,997                                               |       | 944                                          |       | 6,433                  |       | 9,941        |       | 16,374    |       | 1,680 |   | 2004 |   | 2004 |   |
|                                  |       |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **ROSEMONT, ILLINOIS**                | ** ** |                             |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| O’Hare International Ctr         |       | O’Hare International Ctr I  |       | Office       |       | -                |       | 7,700                 |       | 33,263                                              |       | 386                                          |       | 7,700                  |       | 33,649       |       | 41,349    |       | 6,332 |   | 1984 |   | 2005 |   |
| O’Hare International Ctr         |       | O’Hare International Ctr II |       | Office       |       | -                |       | 8,103                 |       | 31,997                                              |       | 2,675                                        |       | 8,103                  |       | 34,672       |       | 42,775    |       | 5,440 |   | 1987 |   | 2005 |   |

 

90

----

 
| **Duke Realty Limited Partnership**           | **Schedule 3** |
|-----------------------------------------------|----------------|
| **Real Estate and Accumulated  Depreciation** |
| **December 31, 2007**                         |
| **(in thousands)**                            |

 
| ** **                    | ** ** | ** **                     | ** ** | **Building** | ** ** | ** **       | ** ** | **Initial Cost** | ** ** | **Cost  Capitalized  Subsequent to****Development** | ** ** | **Gross Book Value 12/31/07** | ** ** | **Accumulated**        | ** ** | **Year**     | ** ** | **Year**  | ** ** |
|-------------------------------|------------|--------------------------------|------------|--------------|------------|------------------|------------|-----------------------|------------|-----------------------------------------------------|------------|----------------------------------------------|------------|------------------------|------------|--------------|------------|-----------|------------|
| **Development**               | ** ** | **Name**                       | ** ** | **Type**     | ** ** | **Encumbrances** | ** ** | **Land**              | ** ** | **Buildings**                                       | ** ** | **or Acquisition**                      | ** ** | **Land/Land Imp** | ** ** | **Bldgs/TI** | ** ** | **Total** | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
| Riverway                      |       | Riverway East                  |       | Office       |       | -                |       | 13,664                |       | 34,542                                              |       | 1,477                                        |       | 13,664                 |       | 36,019       |       | 49,683    |       | 7,300 |   | 1987 |   | 2005 |   |
| Riverway                      |       | Riverway West                  |       | Office       |       | -                |       | 3,294                 |       | 39,676                                              |       | 3,499                                        |       | 3,294                  |       | 43,175       |       | 46,469    |       | 5,567 |   | 1989 |   | 2005 |   |
| Riverway                      |       | Riverway Central               |       | Office       |       | -                |       | 4,229                 |       | 68,293                                              |       | 2,311                                        |       | 4,229                  |       | 70,604       |       | 74,833    |       | 8,727 |   | 1989 |   | 2005 |   |
| Riverway                      |       | Riverway Retail                |       | Retail       |       | -                |       | 189                   |       | -                                                   |       | 3                                            |       | 189                    |       | 3            |       | 192       |       | 45 |   | 1987 |   | 2005 |   |
| Riverway                      |       | Riverway MW II (Ground Lease)  |       | Grounds      |       | -                |       | 586                   |       | -                                                   |       | -                                            |       | 586                    |       | -            |       | 586       |       | - |   | n/a |   | 2007 |   |
|                          |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **SAVANNAH, GEORGIA**         | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Gulfstream Road               |       | 198 Gulfstream                 |       | Industrial   |       | 6,280            |       | 549                   |       | 4,255                                               |       | -                                            |       | 549                    |       | 4,255        |       | 4,804     |       | 323 |   | 1997 |   | 2006 |   |
| Gulfstream Road               |       | 194 Gulfstream                 |       | Industrial   |       | 978              |       | 412                   |       | 2,816                                               |       | 20                                           |       | 412                    |       | 2,836        |       | 3,248     |       | 212 |   | 1998 |   | 2006 |   |
| Gulfstream Road               |       | 190 Gulfstream                 |       | Industrial   |       | 2,172            |       | 689                   |       | 4,916                                               |       | -                                            |       | 689                    |       | 4,916        |       | 5,605     |       | 355 |   | 1999 |   | 2006 |   |
| Grange Road                   |       | 250 Grange Road                |       | Industrial   |       | 4,644            |       | 928                   |       | 8,648                                               |       | 7                                            |       | 928                    |       | 8,655        |       | 9,583     |       | 555 |   | 2002 |   | 2006 |   |
| Grange Road                   |       | 248 Grange Road                |       | Industrial   |       | 1,980            |       | 664                   |       | 3,496                                               |       | 8                                            |       | 664                    |       | 3,504        |       | 4,168     |       | 230 |   | 2002 |   | 2006 |   |
| SPA Park                      |       | 80 Coleman Blvd.               |       | Industrial   |       | 2,074            |       | 782                   |       | 2,962                                               |       | -                                            |       | 782                    |       | 2,962        |       | 3,744     |       | 160 |   | 2002 |   | 2006 |   |
| Crossroads (Savannah)         |       | 163 Portside Court             |       | Industrial   |       | 21,417           |       | 8,433                 |       | 8,366                                               |       | 1                                            |       | 8,433                  |       | 8,367        |       | 16,800    |       | 945 |   | 2004 |   | 2006 |   |
| Crossroads (Savannah)         |       | 151 Portside Court             |       | Industrial   |       | 3,765            |       | 966                   |       | 7,155                                               |       | -                                            |       | 966                    |       | 7,155        |       | 8,121     |       | 341 |   | 2003 |   | 2006 |   |
| Crossroads (Savannah)         |       | 175 Portside Court             |       | Industrial   |       | 13,892           |       | 4,300                 |       | 15,696                                              |       | -                                            |       | 4,300                  |       | 15,696       |       | 19,996    |       | 1,179 |   | 2005 |   | 2006 |   |
| Crossroads (Savannah)         |       | 150 Portside Court             |       | Industrial   |       | 10,603           |       | 3,071                 |       | 23,001                                              |       | 704                                          |       | 3,071                  |       | 23,705       |       | 26,776    |       | 1,581 |   | 2001 |   | 2006 |   |
| Crossroads (Savannah)         |       | 235 Jimmy Deloach Parkway      |       | Industrial   |       | 3,862            |       | 1,074                 |       | 8,442                                               |       | -                                            |       | 1,074                  |       | 8,442        |       | 9,516     |       | 517 |   | 2001 |   | 2006 |   |
| Crossroads (Savannah)         |       | 239 Jimmy Deloach Parkway      |       | Industrial   |       | 3,337            |       | 1,074                 |       | 7,141                                               |       | -                                            |       | 1,074                  |       | 7,141        |       | 8,215     |       | 441 |   | 2001 |   | 2006 |   |
| Crossroads (Savannah)         |       | 246 Jimmy Deloach Parkway      |       | Industrial   |       | 3,766            |       | 992                   |       | 5,383                                               |       | 14                                           |       | 992                    |       | 5,397        |       | 6,389     |       | 337 |   | 2006 |   | 2006 |   |
| Crossroads (Savannah)         |       | 276 Jimmy Deloach Parkway      |       | Grounds      |       | -                |       | 2,266                 |       | -                                                   |       | -                                            |       | 2,266                  |       | -            |       | 2,266     |       | 84 |   | n/a |   | 2006 |   |
|                          |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **SEVEN HILLS, OHIO**         | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Rock Run Business Campus      |       | Rock Run North                 |       | Office       |       | -                |       | 837                   |       | 5,429                                               |       | 664                                          |       | 960                    |       | 5,970        |       | 6,930     |       | 1,847 |   | 1984 |   | 1996 |   |
| Rock Run Business Campus      |       | Rock Run Center                |       | Office       |       | -                |       | 1,046                 |       | 6,898                                               |       | 758                                          |       | 1,169                  |       | 7,533        |       | 8,702     |       | 2,400 |   | 1985 |   | 1996 |   |
|                          |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **SHARONVILLE, OHIO**         | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Mosteller Distribution Center |       | Mosteller Distribution Ctr. I  |       | Industrial   |       | -                |       | 1,275                 |       | 5,294                                               |       | 3,534                                        |       | 1,275                  |       | 8,828        |       | 10,103    |       | 2,618 |   | 1957 |   | 1996 |   |
| Mosteller Distribution Center |       | Mosteller Distribution Ctr. II |       | Industrial   |       | -                |       | 828                   |       | 4,723                                               |       | 1,577                                        |       | 828                    |       | 6,300        |       | 7,128     |       | 2,413 |   | 1997 |   | 1997 |   |
|                          |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **ST. LOUIS PARK, MINNESOTA** |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| The West End                  |       | 1600 Tower                     |       | Office       |       | -                |       | 2,321                 |       | 29,136                                              |       | 4,686                                        |       | 2,321                  |       | 33,822       |       | 36,143    |       | 8,348 |   | 2000 |   | 2000 |   |
| The West End                  |       | MoneyGram Tower                |       | Office       |       | -                |       | 3,039                 |       | 35,487                                              |       | 6,151                                        |       | 3,091                  |       | 41,586       |       | 44,677    |       | 8,927 |   | 1987 |   | 1999 |   |
| Minneapolis                   |       | Chilies Ground Lease           |       | Grounds      |       | -                |       | 921                   |       | -                                                   |       | 69                                           |       | 990                    |       | -            |       | 990       |       | 5 |   | n/a |   | 1998 |   |
| Minneapolis                   |       | Olive Garden Ground Lease      |       | Grounds      |       | -                |       | 921                   |       | -                                                   |       | -                                            |       | 921                    |       | -            |       | 921       |       | - |   | n/a |   | 1998 |   |
|                          |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **ST. LOUIS, MISSOURI**       | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Lakeside Crossing             |       | Lakeside Crossing Building One |       | Industrial   |       | -                |       | 596                   |       | 2,078                                               |       | 637                                          |       | 596                    |       | 2,715        |       | 3,311     |       | 800 |   | 2001 |   | 2001 |   |
| Lakeside Crossing             |       | Lakeside Crossing Building II  |       | Industrial   |       | -                |       | 1,122                 |       | 2,227                                               |       | -                                            |       | 1,121                  |       | 2,228        |       | 3,349     |       | 1,007 |   | 2002 |   | 2002 |   |
| Lakeside Crossing             |       | Lakeside Crossing Building III |       | Industrial   |       | -                |       | 1,905                 |       | 4,305                                               |       | 650                                          |       | 1,905                  |       | 4,955        |       | 6,860     |       | 1,101 |   | 2001 |   | 2001 |   |
| Lakeside Crossing             |       | Lakeside Crossing V            |       | Office       |       | -                |       | 860                   |       | 1,928                                               |       | -                                            |       | 860                    |       | 1,928        |       | 2,788     |       | 776 |   | 2003 |   | 2003 |   |
| Lakeside Crossing             |       | Lakeside Crossing Building VI  |       | Industrial   |       | -                |       | 1,079                 |       | 2,125                                               |       | 2,388                                        |       | 1,512                  |       | 4,080        |       | 5,592     |       | 1,053 |   | 2002 |   | 2002 |   |
| Laumeier Office Park          |       | Laumeier I                     |       | Office       |       | -                |       | 1,384                 |       | 8,869                                               |       | 2,271                                        |       | 1,384                  |       | 11,140       |       | 12,524    |       | 3,825 |   | 1987 |   | 1995 |   |
| Laumeier Office Park          |       | Laumeier II                    |       | Office       |       | -                |       | 1,421                 |       | 9,440                                               |       | 1,565                                        |       | 1,421                  |       | 11,005       |       | 12,426    |       | 3,855 |   | 1988 |   | 1995 |   |
| Laumeier Office Park          |       | Laumeier IV                    |       | Office       |       | -                |       | 1,029                 |       | 6,728                                               |       | 1,455                                        |       | 1,029                  |       | 8,183        |       | 9,212     |       | 2,107 |   | 1987 |   | 1998 |   |
| Maryville Center              |       | 500-510 Maryville Centre       |       | Office       |       | -                |       | 3,402                 |       | 24,533                                              |       | 3,915                                        |       | 3,402                  |       | 28,448       |       | 31,850    |       | 7,537 |   | 1984 |   | 1997 |   |
| Maryville Center              |       | 530 Maryville Centre           |       | Office       |       | -                |       | 2,219                 |       | 15,231                                              |       | 2,381                                        |       | 2,219                  |       | 17,612       |       | 19,831    |       | 5,023 |   | 1990 |   | 1997 |   |
| Maryville Center              |       | 550 Maryville Centre           |       | Office       |       | -                |       | 1,996                 |       | 12,516                                              |       | 2,261                                        |       | 1,996                  |       | 14,777       |       | 16,773    |       | 3,730 |   | 1988 |   | 1997 |   |
| Maryville Center              |       | 635-645 Maryville Centre       |       | Office       |       | -                |       | 3,048                 |       | 18,166                                              |       | 2,372                                        |       | 3,048                  |       | 20,538       |       | 23,586    |       | 5,550 |   | 1987 |   | 1997 |   |
| Maryville Center              |       | 655 Maryville Centre           |       | Office       |       | -                |       | 1,860                 |       | 13,258                                              |       | 2,320                                        |       | 1,860                  |       | 15,578       |       | 17,438    |       | 3,864 |   | 1994 |   | 1997 |   |
| Maryville Center              |       | 540 Maryville Centre           |       | Office       |       | -                |       | 2,219                 |       | 14,455                                              |       | 1,736                                        |       | 2,219                  |       | 16,191       |       | 18,410    |       | 4,503 |   | 1990 |   | 1997 |   |
| Maryville Center              |       | 520 Maryville Centre           |       | Office       |       | -                |       | 2,404                 |       | 14,520                                              |       | 1,121                                        |       | 2,404                  |       | 15,641       |       | 18,045    |       | 3,751 |   | 1998 |   | 1998 |   |
| Maryville Center              |       | 700 Maryville Centre           |       | Office       |       | -                |       | 4,556                 |       | 28,599                                              |       | 397                                          |       | 4,556                  |       | 28,996       |       | 33,552    |       | 7,789 |   | 1999 |   | 1999 |   |
| Maryville Center              |       | 533 Maryville Centre           |       | Office       |       | -                |       | 3,230                 |       | 16,746                                              |       | 283                                          |       | 3,230                  |       | 17,029       |       | 20,259    |       | 4,342 |   | 2000 |   | 2000 |   |
| Maryville Center              |       | 555 Maryville Centre           |       | Office       |       | -                |       | 3,226                 |       | 15,978                                              |       | 1,901                                        |       | 3,226                  |       | 17,879       |       | 21,105    |       | 3,965 |   | 2000 |   | 2000 |   |
| Maryville Center              |       | 625 Maryville Centre           |       | Office       |       | 2,109            |       | 2,509                 |       | 11,229                                              |       | 282                                          |       | 2,509                  |       | 11,511       |       | 14,020    |       | 2,343 |   | 1996 |   | 2002 |   |
| West Port Place               |       | Westport Center I              |       | Industrial   |       | -                |       | 1,707                 |       | 5,329                                               |       | 887                                          |       | 1,707                  |       | 6,216        |       | 7,923     |       | 1,959 |   | 1998 |   | 1998 |   |
| West Port Place               |       | Westport Center II             |       | Industrial   |       | -                |       | 914                   |       | 2,000                                               |       | 257                                          |       | 914                    |       | 2,257        |       | 3,171     |       | 740 |   | 1998 |   | 1998 |   |
| West Port Place               |       | Westport Center III            |       | Industrial   |       | -                |       | 1,206                 |       | 2,651                                               |       | 523                                          |       | 1,206                  |       | 3,174        |       | 4,380     |       | 902 |   | 1998 |   | 1998 |   |
| West Port Place               |       | Westport Center IV             |       | Industrial   |       | -                |       | 1,440                 |       | 4,860                                               |       | 58                                           |       | 1,440                  |       | 4,918        |       | 6,358     |       | 1,142 |   | 2000 |   | 2000 |   |
| West Port Place               |       | Westport Center V              |       | Industrial   |       | -                |       | 493                   |       | 1,274                                               |       | 52                                           |       | 493                    |       | 1,326        |       | 1,819     |       | 316 |   | 1999 |   | 1999 |   |
| West Port Place               |       | Westport Place                 |       | Office       |       | -                |       | 1,990                 |       | 5,478                                               |       | 2,069                                        |       | 1,990                  |       | 7,547        |       | 9,537     |       | 1,837 |   | 1999 |   | 1999 |   |
| Westmark                      |       | Westmark                       |       | Office       |       | -                |       | 1,497                 |       | 10,012                                              |       | 2,234                                        |       | 1,684                  |       | 12,059       |       | 13,743    |       | 4,371 |   | 1987 |   | 1995 |   |
| Westview Place                |       | Westview Place                 |       | Office       |       | -                |       | 669                   |       | 8,295                                               |       | 3,482                                        |       | 669                    |       | 11,777       |       | 12,446    |       | 3,767 |   | 1988 |   | 1995 |   |
| Woodsmill Commons             |       | Woodsmill Commons II (400)     |       | Office       |       | -                |       | 1,718                 |       | 7,896                                               |       | 51                                           |       | 1,718                  |       | 7,947        |       | 9,665     |       | 1,196 |   | 1985 |   | 2003 |   |
| Woodsmill Commons             |       | Woodsmill Commons I (424)      |       | Office       |       | -                |       | 1,836                 |       | 7,779                                               |       | 598                                          |       | 1,836                  |       | 8,377        |       | 10,213    |       | 1,307 |   | 1985 |   | 2003 |   |

 

91

----

 
| **Duke Realty Limited Partnership**           | **Schedule 3** |
|-----------------------------------------------|----------------|
| **Real Estate and Accumulated  Depreciation** |
| **December 31, 2007**                         |
| **(in thousands)**                            |

 
| ** **                    | ** ** | ** **                     | ** ** | **Building** | ** ** | ** **       | ** ** | **Initial Cost** | ** ** | **Cost  Capitalized  Subsequent to****Development** | ** ** | **Gross Book Value 12/31/07** | ** ** | **Accumulated**        | ** ** | **Year**     | ** ** | **Year**  | ** ** |
|-------------------------------|------------|--------------------------------|------------|--------------|------------|------------------|------------|-----------------------|------------|-----------------------------------------------------|------------|----------------------------------------------|------------|------------------------|------------|--------------|------------|-----------|------------|
| **Development**               | ** ** | **Name**                       | ** ** | **Type**     | ** ** | **Encumbrances** | ** ** | **Land**              | ** ** | **Buildings**                                       | ** ** | **or Acquisition**                      | ** ** | **Land/Land Imp** | ** ** | **Bldgs/TI** | ** ** | **Total** | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
| **STERLING, VIRGINIA**        | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| TransDulles Centre            |       | 22800 Davis Drive              |       | Office       |       | -                |       | 2,550                 |       | 11,250                                              |       | -                                            |       | 2,550                  |       | 11,250       |       | 13,800    |       | 648 |   | 1989 |   | 2006 |   |
| TransDulles Centre            |       | 22714 Glenn Drive              |       | Industrial   |       | -                |       | 3,973                 |       | 4,422                                               |       | 128                                          |       | 3,973                  |       | 4,550        |       | 8,523     |       | - |   | 2007 |   | 2007 |   |
|                          |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **SUFFOLK, VIRGINIA**         | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Northgate Commerce Park       |       | 101 Industrial Drive, Bldg. A  |       | Industrial   |       | -                |       | 1,558                 |       | 8,231                                               |       | -                                            |       | 1,558                  |       | 8,231        |       | 9,789     |       | - |   | 2007 |   | 2007 |   |
| Northgate Commerce Park       |       | 155 Industrial Drive, Bldg. B  |       | Industrial   |       | -                |       | 1,558                 |       | 8,231                                               |       | -                                            |       | 1,558                  |       | 8,231        |       | 9,789     |       | - |   | 2007 |   | 2007 |   |
|                          |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **SUMMIT, NEW JERSEY**        | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Medical Arts Center II        |       | Medical Arts Center II         |       | Healthcare   |       | -                |       | -                     |       | 13,096                                              |       | 1,054                                        |       | -                      |       | 14,150       |       | 14,150    |       | - |   | 2006 |   | 2007 |   |
|                          |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **SUMNER, WASHINGTON**        | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Sumner Transit                |       | Sumner Transit                 |       | Industrial   |       | 18,519           |       | 17,385                |       | 6,100                                               |       | -                                            |       | 17,385                 |       | 6,100        |       | 23,485    |       | - |   | 2005 |   | 2007 |   |
|                          |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **SUNRISE, FLORIDA**          | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Sawgrass                      |       | Sawgrass - Building B          |       | Office       |       | -                |       | 1,211                 |       | 5,176                                               |       | 1,253                                        |       | 1,211                  |       | 6,429        |       | 7,640     |       | 1,504 |   | 1999 |   | 2001 |   |
| Sawgrass                      |       | Sawgrass - Building A          |       | Office       |       | -                |       | 1,147                 |       | 4,544                                               |       | 63                                           |       | 1,147                  |       | 4,607        |       | 5,754     |       | 1,214 |   | 2000 |   | 2001 |   |
| Sawgrass                      |       | Sawgrass Pointe                |       | Office       |       | -                |       | 3,484                 |       | 21,827                                              |       | 5,804                                        |       | 3,484                  |       | 27,631       |       | 31,115    |       | 5,473 |   | 2001 |   | 2001 |   |
|                          |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **TAMPA, FLORIDA**            | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Fairfield Distribution Center |       | Fairfield Distribution Ctr I   |       | Industrial   |       | -                |       | 483                   |       | 2,626                                               |       | 94                                           |       | 487                    |       | 2,716        |       | 3,203     |       | 589 |   | 1998 |   | 1999 |   |
| Fairfield Distribution Center |       | Fairfield Distribution Ctr II  |       | Industrial   |       | -                |       | 530                   |       | 4,900                                               |       | 70                                           |       | 534                    |       | 4,966        |       | 5,500     |       | 1,066 |   | 1998 |   | 1999 |   |
| Fairfield Distribution Center |       | Fairfield Distribution Ctr III |       | Industrial   |       | -                |       | 334                   |       | 2,771                                               |       | 98                                           |       | 338                    |       | 2,865        |       | 3,203     |       | 610 |   | 1999 |   | 1999 |   |
| Fairfield Distribution Center |       | Fairfield Distribution Ctr IV  |       | Industrial   |       | -                |       | 600                   |       | 1,958                                               |       | 1,089                                        |       | 604                    |       | 3,043        |       | 3,647     |       | 755 |   | 1999 |   | 1999 |   |
| Fairfield Distribution Center |       | Fairfield Distribution Ctr V   |       | Industrial   |       | -                |       | 488                   |       | 2,796                                               |       | 213                                          |       | 488                    |       | 3,009        |       | 3,497     |       | 669 |   | 2000 |   | 2000 |   |
| Fairfield Distribution Center |       | Fairfield Distribution Ctr VI  |       | Industrial   |       | -                |       | 555                   |       | 4,153                                               |       | 487                                          |       | 555                    |       | 4,640        |       | 5,195     |       | 1,070 |   | 2001 |   | 2001 |   |
| Fairfield Distribution Center |       | Fairfield Distribution Ctr VII |       | Industrial   |       | -                |       | 394                   |       | 2,618                                               |       | 778                                          |       | 394                    |       | 3,396        |       | 3,790     |       | 1,018 |   | 2001 |   | 2001 |   |
| Fairfield Distribution Center |       | Fairfield VIII                 |       | Industrial   |       | -                |       | 1,082                 |       | 3,326                                               |       | -                                            |       | 1,082                  |       | 3,326        |       | 4,408     |       | 979 |   | 2004 |   | 2004 |   |
| Eagle Creek Business Center   |       | Eagle Creek Business Ctr. I    |       | Industrial   |       | -                |       | 3,705                 |       | 3,187                                               |       | 1,043                                        |       | 3,705                  |       | 4,230        |       | 7,935     |       | 431 |   | 2006 |   | 2006 |   |
| Eagle Creek Business Center   |       | Eagle Creek Business Ctr. II   |       | Industrial   |       | -                |       | 2,354                 |       | 2,272                                               |       | 960                                          |       | 2,354                  |       | 3,232        |       | 5,586     |       | 179 |   | 2007 |   | 2007 |   |
| Eagle Creek Business Center   |       | Eagle Creek Business Ctr. III  |       | Industrial   |       | -                |       | 2,332                 |       | 2,237                                               |       | 501                                          |       | 2,332                  |       | 2,738        |       | 5,070     |       | 138 |   | 2007 |   | 2007 |   |
| Highland Oaks                 |       | Highland Oaks I                |       | Office       |       | -                |       | 1,525                 |       | 12,720                                              |       | 937                                          |       | 1,525                  |       | 13,657       |       | 15,182    |       | 3,236 |   | 1999 |   | 1999 |   |
| Highland Oaks                 |       | Highland Oaks II               |       | Office       |       | -                |       | 1,605                 |       | 10,991                                              |       | 3,218                                        |       | 1,605                  |       | 14,209       |       | 15,814    |       | 3,623 |   | 1999 |   | 1999 |   |
| Highland Oaks                 |       | Highland Oaks III              |       | Office       |       | -                |       | 2,882                 |       | 8,871                                               |       | 288                                          |       | 2,522                  |       | 9,519        |       | 12,041    |       | 312 |   | 2007 |   | 2007 |   |
| Highland Oaks                 |       | Highland Oaks V                |       | Office       |       | -                |       | 2,412                 |       | 6,524                                               |       | 961                                          |       | 2,412                  |       | 7,485        |       | 9,897     |       | 317 |   | 2007 |   | 2007 |   |
|                          |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **TITUSVILLE, FLORIDA**       | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Retail Development            |       | Crossroads Marketplace         |       | Retail       |       | -                |       | 12,678                |       | 6,314                                               |       | 503                                          |       | 12,021                 |       | 7,474        |       | 19,495    |       | - |   | 2007 |   | 2007 |   |
|                          |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **WEST CHESTER, OHIO**        | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Centre Pointe Office Park     |       | Centre Pointe I                |       | Office       |       | -                |       | 2,501                 |       | 9,552                                               |       | 313                                          |       | 2,501                  |       | 9,865        |       | 12,366    |       | 2,101 |   | 2000 |   | 2004 |   |
| Centre Pointe Office Park     |       | Centre Pointe II               |       | Office       |       | -                |       | 2,056                 |       | 10,063                                              |       | 286                                          |       | 2,056                  |       | 10,349       |       | 12,405    |       | 2,109 |   | 2001 |   | 2004 |   |
| Centre Pointe Office Park     |       | Centre Pointe III              |       | Office       |       | -                |       | 2,048                 |       | 10,309                                              |       | 461                                          |       | 2,048                  |       | 10,770       |       | 12,818    |       | 2,352 |   | 2002 |   | 2004 |   |
| Centre Pointe Office Park     |       | Centre Pointe IV               |       | Office       |       | -                |       | 2,013                 |       | 9,017                                               |       | 1,540                                        |       | 2,932                  |       | 9,638        |       | 12,570    |       | 939 |   | 2005 |   | 2005 |   |
| Centre Pointe Office Park     |       | Centre Pointe V                |       | Office       |       | -                |       | 2,557                 |       | 13,982                                              |       | 98                                           |       | 2,611                  |       | 14,026       |       | 16,637    |       | - |   | 2007 |   | 2007 |   |
| World Park at Union Centre    |       | World Park at Union Centre 10  |       | Industrial   |       | -                |       | 2,150                 |       | 7,885                                               |       | 587                                          |       | 2,151                  |       | 8,471        |       | 10,622    |       | 543 |   | 2005 |   | 2005 |   |
| World Park at Union Centre    |       | World Park at Union Centre 11  |       | Industrial   |       | -                |       | 2,592                 |       | 6,936                                               |       | 13                                           |       | 2,592                  |       | 6,949        |       | 9,541     |       | 1,247 |   | 2004 |   | 2004 |   |
|                          |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **WESTMONT, ILLINOIS**        | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Oakmont Corporate Center      |       | Oakmont Tech Center            |       | Office       |       | -                |       | 1,501                 |       | 8,590                                               |       | 2,488                                        |       | 1,703                  |       | 10,876       |       | 12,579    |       | 2,676 |   | 1989 |   | 1998 |   |
| Oakmont Corporate Center      |       | Oakmont Circle Office          |       | Office       |       | -                |       | 3,177                 |       | 13,798                                              |       | 2,785                                        |       | 3,521                  |       | 16,239       |       | 19,760    |       | 4,073 |   | 1990 |   | 1998 |   |
|                          |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **WESTON, FLORIDA**           | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Weston Pointe                 |       | Weston Pointe I                |       | Office       |       | -                |       | 2,580                 |       | 10,020                                              |       | 705                                          |       | 2,580                  |       | 10,725       |       | 13,305    |       | 1,536 |   | 1999 |   | 2003 |   |
| Weston Pointe                 |       | Weston Pointe II               |       | Office       |       | -                |       | 2,183                 |       | 10,791                                              |       | 64                                           |       | 2,183                  |       | 10,855       |       | 13,038    |       | 1,539 |   | 2000 |   | 2003 |   |
| Weston Pointe                 |       | Weston Pointe III              |       | Office       |       | -                |       | 2,183                 |       | 11,531                                              |       | 717                                          |       | 2,183                  |       | 12,248       |       | 14,431    |       | 1,546 |   | 2001 |   | 2003 |   |
| Weston Pointe                 |       | Weston Pointe IV               |       | Office       |       | -                |       | 3,349                 |       | 10,686                                              |       | 29                                           |       | 3,349                  |       | 10,715       |       | 14,064    |       | 1,030 |   | 2005 |   | 2005 |   |
|                          |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| **ZIONSVILLE, INDIANA**       | ** ** |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
| Anson                         |       | Marketplace at Anson           |       | Retail       |       | -                |       | 2,147                 |       | 2,862                                               |       | 160                                          |       | 2,147                  |       | 3,022        |       | 5,169     |       | - |   | 2007 |   | 2007 |   |
|                          |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
|                          |       | Eliminations                   |       |         |       |             |       |                  |       |                                                |       | (764                                         | )          | (17                    | )          | (747         | )          | (764      | )          | (3,008 | ) |   |   |   |   |
|                          |       |                           |       |         |       |             |       |                  |       |                                                |       |                                         |       |                   |       |         |       |      |       |   |   |   |   |   |   |
|                          |       |                           |       |         |       | 548,460          |       | 914,492               |       | 4,334,420                                           |       | 516,835                                      |       | 931,767                |       | 4,833,980    |       | 5,765,747 |       | 990,280 |   |   |   |   |   |

 

----

(1) Depreciation of real estate is computed usingthe straight-line method over 40 years for buildings, 15 years for land improvementsand shorter periods based on lease terms (generally 3 to 10 years) for tenantimprovements.

 

92

----

** **
| **Duke Realty Limited Partnership**           | **Schedule 3** |
|-----------------------------------------------|----------------|
| **Real Estate and Accumulated  Depreciation** |
| **December 31, 2007**                         |
| **(in thousands)**                            |

** **
| ** **                                  | ** ** | ** ** | ** ** | **Building**       | ** ** | ** **       | ** ** | **Initial Cost**    | ** ** | **Cost  Capitalized  Subsequent to****Development** | ** ** | **Gross Book Value 12/31/07** | ** ** | **Accumulated**         | ** ** | **Year**     | ** ** | **Year**   | ** ** |
|---------------------------------------------|------------|------------|------------|--------------------|------------|------------------|------------|--------------------------|------------|-----------------------------------------------------|------------|----------------------------------------------|------------|-------------------------|------------|--------------|------------|------------|------------|
| **Development**                             | ** ** | **Name**   | ** ** | **Type**           | ** ** | **Encumbrances** | ** ** | **Land**                 | ** ** | **Buildings**                                       | ** ** | **or Acquisition**                      | ** ** | **Land/rLand Imp** | ** ** | **Bldgs/TI** | ** ** | **Total**  | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
| ** **                                  | ** ** | ** ** | ** ** | ** **         | ** ** | ** **       | ** ** | ** **               | ** ** |
| ** **                                  | ** ** | ** ** | ** ** | Real Estate Assets | ** ** | ** **       | ** ** | Accumulated Depreciation | ** ** |
| ** **                                  | ** ** | ** ** | ** ** | 2007               |       |             |       | 2006                     |       |                                                |       | 2005                                         |       |                    |       | 2007         |       |       |       | 2006 |   |   |   | 2005 |   |
| ** **                                  | ** ** | ** ** | ** ** | ** **         | ** ** | ** **       | ** ** | ** **               | ** ** | ** **                                          | ** ** | ** **                                   | ** ** | ** **              | ** ** | ** **   | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Balance at  beginning of year               | ** ** | ** ** | ** ** | $                  | 5,83,188   | ** **       | ** ** | ** **               | $          | 4,831,506                                           | ** ** | ** **                                   | ** ** | $                       | 5,377,094  | ** **   | ** ** | ** ** | $          | 900,898 | ** ** | ** ** | ** ** | $ | 754,742 | ** ** | ** ** | ** ** | $ | 788,900 | ** ** |
| Acquisitions                                | ** ** |       | ** ** | 194,072            | ** ** |             | ** ** | 836,146                  | ** ** |                                                | ** ** | 272,141                                      | ** ** |                    | ** ** | -            | ** ** |       | ** ** | - | ** ** |   | ** ** | - | ** ** |
| Construction  costs and tenant improvements | ** ** |       | ** ** | 788,951            | ** ** |             | ** ** | 540,442                  | ** ** |                                                | ** ** | 321,786                                      | ** ** |                    | ** ** | -            | ** ** |       | ** ** | - | ** ** |   | ** ** | - | ** ** |
| Depreciation expense                        | ** ** |       | ** ** | -                  |       |             | ** ** | -                        | ** ** |                                                | ** ** | -                                            | ** ** |                    | ** ** | 214,477      | ** ** |       | ** ** | 206,999 | ** ** |   | ** ** | 204,377 | ** ** |
| Acquisition of minority  interest           | ** ** |       | ** ** | -                  | ** ** |             | ** ** | -                        | ** ** |                                                | ** ** | -                                            | ** ** |                    | ** ** | -            | ** ** |       | ** ** | - | ** ** |   | ** ** | - | ** ** |
|                                        | ** ** |       | ** ** | 6,566,211          | ** ** |             | ** ** | 6,208,094                | ** ** |                                                | ** ** | 5,971,021                                    | ** ** |                    | ** ** | 1,115,375    | ** ** |       | ** ** | 961,741 | ** ** |   | ** ** | 993,277 | ** ** |
|                                        | ** ** |       | ** ** |               | ** ** |             | ** ** |                     | ** ** |                                                | ** ** |                                         | ** ** |                    | ** ** |         | ** ** |       | ** ** |   | ** ** |   | ** ** |   | ** ** |
| Deductions during year:                     | ** ** |       | ** ** |               | ** ** |             | ** ** |                     | ** ** |                                                | ** ** |                                         | ** ** |                    | ** ** |         | ** ** |       | ** ** |   | ** ** |   | ** ** |   | ** ** |
| Cost of real estate sold  or contributed    | ** ** |       | ** ** | (726,860           | )          |             | ** ** | (582,457                 | )          |                                                | ** ** | (1,077,172                                   | )          |                    | ** ** | (51,491      | **)**      |       | ** ** | (18,660 | ) |   | ** ** | (179,848 | ) |
| Impairment Allowance                        | ** ** |       | ** ** | -                  | ** ** |             | ** ** | (266                     | )          |                                                | ** ** | (3,656                                       | )          |                    | ** ** | -            | ** ** |       | ** ** | - | ** ** |   | ** ** | - | ** ** |
| Write-off of fully  amortized assets        | ** ** |       | ** ** | (73,604            | )          |             | ** ** | (42,183                  | )          |                                                | ** ** | (58,687                                      | )          |                    | ** ** | (73,604      | **)**      |       | ** ** | (42,183 | ) |   | ** ** | (58,687 | ) |
| Balance at end of year                      | ** ** |       | ** ** | $                  | 5,765,747  | ** **       |       | ** **               | $          |  5,583,188                                     | ** ** |                                         | ** ** | $                       | 4,831,506  | ** **   |       | ** ** | $          | 990,280 | ** ** |   | ** ** | $ | 900,898 | ** ** |   | ** ** | $ | 754,742 | ** ** |

 

93

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**SIGNATURES**

 

Pursuant to the requirements of Section 13 or 15(d) of theSecurities Exchange Act of 1934, the registrant has duly caused this report tobe signed on its behalf by the undersigned, thereunto duly authorized.

 
|                | DUKE  REALTY LIMITED PARTNERSHIP |
|---------------------|----------------------------------|
|                |                             |
|                |                             |
| March 6,  2008 | By:                              |         /s/  Dennis D. Oklak |
|                |                             | Dennis  D. Oklak |
|                |                             |   Chairman  and Chief Executive |
|                |                             |    Officer  of the General Partner |
|                |                             |
|                | By:                              |         /s/  Matthew A. Cohoat |
|                |                             | Matthew  A. Cohoat |
|                |                             | Executive  Vice President and |
|                |                             |   Chief  Financial Officer of the General Partner |
|                |                             |      (Principal  Financial Officer) |
|                     |                                  |  |  |  |

 

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

 
|                              | Signature |   |    |   |   | Date                             |   |   |   |   | Title |   |
|-----------------------------------|-----------|--------|---------|--------|--------|----------------------------------|--------|--------|--------|--------|-------|--------|
|                              |      |   |    |   |   |                             |
| /s/ Barrington H. Branch*         |      |   | 1/30/08 |   |   | Director  of the General Partner |
| Barrington  H. Branch             |      |   |    |   |   |                             |
|                              |      |   |    |   |   |                             |
| /s/  Geoffrey Button *            |      |   | 1/30/08 |   |   | Director  of the General Partner |
| Geoffrey  Button                  |      |   |    |   |   |                             |
|                              |      |   |    |   |   |                             |
| /s/  William Cavanaugh, III* |      |   | 1/30/08 |   |   | Director  of the General Partner |
| William  Cavanaugh, III      |      |   |    |   |   |                             |
|                              |      |   |    |   |   |                             |
| /s/  Ngaire E. Cuneo *            |      |   | 1/30/08 |   |   | Director  of the General Partner |
| Ngaire  E. Cuneo                  |      |   |    |   |   |                             |
|                              |      |   |    |   |   |                             |
| /s/  Charles R. Eitel*            |      |   | 1/30/08 |   |   | Director  of the General Partner |
| Charles  R. Eitel                 |      |   |    |   |   |                             |
|                              |      |   |    |   |   |                             |
| /s/  Dr. R. Glenn Hubbard*   |      |   | 1/30/08 |   |   | Director  of the General Partner |
| Dr. R.  Glenn Hubbard        |      |   |    |   |   |                             |
|                              |      |   |    |   |   |                             |
| /s/  Dr. Martin C. Jischke*  |      |   | 1/30/08 |   |   | Director  of the General Partner |
| Dr. Martin  C. Jischke       |      |   |    |   |   |                             |
|                              |      |   |    |   |   |                             |
| /s/  L. Ben Lytle *               |      |   | 1/30/08 |   |   | Director  of the General Partner |
| L.  Ben Lytle                     |      |   |    |   |   |                             |

 

94

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| /s/  William O. McCoy *   |   |   | 1/30/08 |   |   | Director  of the General Partner |
|---------------------------|--------|--------|---------|--------|--------|----------------------------------|
| William  O. McCoy         |   |   |    |   |   |                             |
|                      |   |   |    |   |   |                             |
| /s/  Jack R. Shaw *       |   |   | 1/30/08 |   |   | Director  of the General Partner |
| Jack  R. Shaw             |   |   |    |   |   |                             |
|                      |   |   |    |   |   |                             |
| /s/  Robert J. Woodward * |   |   | 1/30/08 |   |   | Director  of the General Partner |
| Robert  J. Woodward       |   |   |    |   |   |                             |

 

----

* By Dennis D. Oklak, Attorney-in-Fact      /s/  Dennis D. Oklak

 

95

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