** **

**UNITED STATES**

**SECURITIES AND EXCHANGECOMMISSION**

**WASHINGTON, D.C. 20549**

** **

**FORM 10-K**

 
| **(Mark One)**                                 |   |                                                                                                                                                                                                                                                                                                                     |
|------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **ý**                                     |   | **Annual report pursuant to section 13  or 15(d) of the Securities Exchange Act of 1934**                                                                                                                                                                                                                                |
|                                           |   |                                                                                                                                                                                                                                                                                                                     |
|                                           |   | **For the fiscal year ended December 31, 2002**                                                                                                                                                                                                                                                                          |
|                                           |   |                                                                                                                                                                                                                                                                                                                     |
| **OR**                                         |
|                                           |   |                                                                                                                                                                                                                                                                                                                     |
| **o**                                          |   | **Transition report pursuant to section  13 or 15(d) of the Securities Exchange Act of 1934**                                                                                                                                                                                                                            |
|                                           |   |                                                                                                                                                                                                                                                                                                                     |
|                                           |   | **For the transition period from                         to                          ** |
|                                           |   |                                                                                                                                                                                                                                                                                                                     |
| **Commission file number   0-20625** |

 

**DUKE REALTY LIMITED PARTNERSHIP**

 

| State of Incorporation:                                                     |   | IRS Employer ID Number: |
|-----------------------------------------------------------------------------|--------|-------------------------|
| **Indiana**                                                                 |   | **35-1898425**          |
|                                                                        |   |                    |
| **600 East 96th Street, Suite 100  Indianapolis, Indiana 46240**            |
|                                                                        |   |                    |
| Telephone:   **(317)  808-6000**                             |
|                                                                        |   |                    |
| Securities registered pursuant to Section  12(b) of the Act:**  None** |
|                                                                        |   |                    |
| Securities registered pursuant to Section  12(g) of the Act:**  None** |

 

Indicateby check mark whether the Registrant (1) has filed all reports required to befiled by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the Registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.               Yes    ý     No    o

 

Indicateby check mark if disclosure of delinquent filers pursuant to Item 405 RegulationS-K is not contained herein, and will not be contained, to the best ofRegistrant’s knowledge, in definitive proxy or information statementsincorporated by reference in Part III of this Form 10-K or any amendment tothis Form 10-K.   ý

 

Indicateby check mark whether the registrant is an accelerated filer (as defined inRule 12b-2 of the Securities Exchange Act). Yes  o No  ý

 

Theaggregate market value of the Limited Partner Units held by non-affiliates ofRegistrant is $321.5 million based on the last reported sale price of thecommon shares of Duke Realty Corporation into which Limited Partner Units areexchangeable, on February 18, 2003.

 

Thenumber of Limited Partnership Units outstanding as of February 18, 2003, was149,963,048.

 

 

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**TABLE OF CONTENTS**

 

**Form 10-K**

 
|       |   |                                                                                             |
|------------|--------|--------------------------------------------------------------------------------------------------|
|       |   |                                                                                             |
| PART I     |   |
|       |   |                                                                                             |
|       | 1.     | Business                                                                                         |
|       | 2.     | Properties                                                                                       |
|       | 3.     | Legal  Proceedings                                                                               |
|       | 4.     | Submission  of Matters to a Vote of Security Holders                                             |
|       |   | Executive  Officers of the General Partner                                                       |
|       |   |                                                                                             |
| PART II    |   |
|       |   |
|       |   |                                                                                             |
|       | 5.     | Market  for the Registrant’s Common Equity and Related Stockholder Matters                  |
|       | 6.     | Selected  Consolidated Financial Data                                                            |
|       | 7.     | Management’s  Discussion and Analysis of Financial Condition and Results of Operations      |
|       | 7A.    | Quantitative  and Qualitative Disclosures about Market Risk                                      |
|       | 8.     | Financial  Statements and Supplementary Data                                                     |
|       | 9.     | Changes  in and Disagreements with Accountants on Accounting and Financial Disclosure            |
|       |   |                                                                                             |
| PART III   |   |
|       |   |                                                                                             |
|       | 10.    | Directors  and Executive Officers of the Registrant                                              |
|       | 11.    | Executive  Compensation                                                                          |
|       | 12.    | Security  Ownership of Certain Beneficial Owners and Management and Related Unitholders  Matters |
|       | 13.    | Certain  Relationships and Related Transactions                                                  |
|       | 14.    | Disclosure Controls  and Procedures                                                              |
|       |   |                                                                                             |
| PART IV    |   |
|       |   |                                                                                             |
|       | 15     | Exhibits, Financial Statement  Schedules and Reports on Form 8-K                                 |
|       |   |                                                                                             |
| Signatures |

 

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**PART I**

 

**Item 1.  Business**

 

**Risk Factors**

 

There are certain risk factors associated with aninvestment of securities issued by Duke Realty Corporation (the “GeneralPartner”) and Duke Realty Limited Partnership (the “Partnership”). Discussionof these risk factors can be found in the General Partner’s Report on Form 8Kfiled with the Securities and Exchange Commission (“SEC”) on December 6, 2001.

 

**Background**

 

ThePartnership was formed on October 4, 1993, when Duke Realty Corporation (the“Predecessor” or the “General Partner”) contributed all of its properties andrelated assets and liabilities, along with the net proceeds of $309.3 millionfrom the issuance of an additional 14,000,833 shares of the General Partnerthrough an offering, to the Partnership. Simultaneously, the Partnershipcompleted the acquisition of Duke Associates, a full-service commercial realestate firm operating in the Midwest. The General Partner was formed in 1985and qualifies as a Real Estate Investment Trust (“REIT”) under provisions ofthe Internal Revenue Code. The General Partner is the sole general partner ofthe Partnership, owning 90.1% of the partnership interest as of December 31,2002 (“General Partner Units”). The remaining 9.9% of the Partnership is ownedby limited partners (“Limited Partner Units” and, together with the GeneralPartner Units, the “Common Units”). As of December 31, 2002, the Partnership’sdiversified portfolio of 927 rental properties (including 17 propertiestotaling 3.1 million square feet under development) encompass over 108 millionrentable square feet and are leased by a diverse and stable base ofapproximately 4,500 tenants whose businesses include manufacturing, retailing,wholesale trade, distribution and professional services. The Partnership alsoowns or controls more than 3,800 acres of unencumbered land ready fordevelopment.

 

ThePartnership, through its Service Operations, also provides, on a fee basis,leasing, property and asset management, development, construction,build-to-suit, and other tenant-related services for approximately 400 tenantsin over 8 million square feet of space at properties owned by third-partyclients. With 13 primary operating platforms, the Partnership concentrates itsactivities in the Midwest and Southeast United States. See Item 7,“Management’s Discussion and Analysis of Financial Condition and Results ofOperations” and Item 8, “Financial Statements and Supplementary Data” forfinancial information. The Partnership conducts its Service Operations throughDuke Realty Services Limited Partnership (“DRSLP”) and Duke ConstructionLimited Partnership (“DCLP”). All references to the “Partnership” in thisAnnual Report Form 10-K include the Partnership and those entities owned orcontrolled by the Partnership, unless the context indicates otherwise.

 

ThePartnership’s headquarters and executive offices are located in Indianapolis,Indiana. In addition, the Partnership has twelve regional offices located inAtlanta, Georgia; Cincinnati, Ohio; Columbus, Ohio; Cleveland, Ohio; Chicago,Illinois; Dallas, Texas; Minneapolis, Minnesota; Nashville, Tennessee; Orlando,Florida; Raleigh, North Carolina; St. Louis, Missouri and Tampa, Florida. ThePartnership had 1,001 employees as of December 31, 2002.

 

**BusinessStrategy**

 

The Partnership’s business objective is to increase its Funds FromOperations (“FFO”) by (i) maintaining and increasing property occupancy andrental rates through the aggressive management of its portfolio of existingproperties; (ii) expanding existing properties; (iii) developing and acquiringnew properties; and (iv) providing a full line of real estate services to thePartnership’s tenants and to third-parties. FFO is defined by the NationalAssociation of Real Estate Investment Trusts as net income or loss, excludinggains or losses from sales of depreciated operating property, plus operatingproperty depreciation and amortization and adjustments for minority interestand unconsolidated companies on the same basis. While management believes thatFFO

 

1

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is a relevant measure of the Partnership’s operating performancebecause it is widely used by industry analysts to measure the operatingperformance of equity REITs, such amount does not represent cash flow fromoperations as defined by generally accepted accounting principles, should notbe considered as an alternative to net income as an indicator of the Partnership’soperating performance, and is not indicative of cash available to fund all cashflow needs. As a fully integrated commercial real estate firm, the Partnershipbelieves that its in-house leasing, management, development and constructionservices and the Partnership’s significant base of commercially zoned andunencumbered land in existing business parks should give the Partnership acompetitive advantage in its future development activities.

 

ThePartnership believes that the analysis of real estate opportunities and riskscan be done most effectively at regional or local levels. As a result, thePartnership intends to continue its emphasis on increasing its market share andeffective rents in its primary markets where it owns properties. The Partnershipalso expects to utilize its more than 3,800 acres of unencumbered land and itsmany business relationships with nearly 4,500 commercial tenants to expand itsbuild-to-suit business (development projects substantially pre-leased to asingle tenant) and to pursue other development and acquisition opportunities inits primary markets. The Partnership believes that this regional focus willallow it to assess market supply and demand for real estate more effectively aswell as to capitalize on its strong relationships with its tenant base.

 

The Partnership’s policy is to seek to develop and acquire Class Acommercial properties located in markets with high growth potential for Fortune500 companies and other quality regional and local firms. The Partnership’s industrialand suburban office development focuses on business parks and mixed-usedevelopments suitable for multiple projects on a single site where thePartnership can create and control the business environment. These businessparks and mixed-use developments generally include restaurants and otheramenities which the Partnership believes will create an atmosphere that isparticularly efficient and desirable. The Partnership’s retail developmentfocuses on community, power and neighborhood centers in its existing markets.As a fully integrated real estate company, the Partnership is able to arrangefor or provide to its industrial, office and retail tenants not only welllocated and well maintained facilities, but also additional services such asbuild-to-suit construction, tenant finish construction, expansion flexibilityand advertising and marketing services.

 

All of the Partnership’s properties are located in areas that includecompetitive properties. Such properties are generally owned by institutional investors,other REITs or local real estate operators; however, no single competitor orsmall group of competitors is dominant in the Partnership’s current markets.The supply and demand of similar available rental properties may affect therental rates the Partnership will receive on its properties.

 

**FinancingStrategy**

 

ThePartnership seeks to maintain a well-balanced, conservative and flexiblecapital structure by: (i) extending and sequencing the maturity dates of itsdebt; (ii) borrowing primarily at fixed rates; (iii) generally pursuing currentand future long-term debt financings and refinancings on an unsecured basis;and (iv) maintaining conservative debt service and fixed charge coverageratios. Management believes that these strategies have enabled and shouldcontinue to enable the General Partner and the Partnership to access capitalmarkets for their long-term requirements such as debt refinancings andfinancing development and acquisitions of additional rental properties. Inaddition, as discussed under Item 7, “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations,” the Partnership has a $500million unsecured line of credit and a $50 million secured line of creditavailable for short-term fundings of development and acquisition of additionalrental properties. In addition, the Partnership pursues favorable opportunitiesto dispose of assets that no longer meet the Partnership’s long-term investmentcriteria and re-deploy the proceeds into new investments that the Partnershipbelieves have excellent long-term growth prospects. See additional discussionunder Item 7,

 

2

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“Management’sDiscussion and Analysis of Financial Condition and Results of Operations.” ThePartnership’s debt to total market capitalization ratio (total marketcapitalization is defined as the total market value of all outstanding CommonUnits and Preferred equity plus outstanding indebtedness) at December 31, 2002was 32.7%. The Partnership’s ratio of earnings to debt service and ratio ofearnings to fixed charges for the year ended December 31, 2002, were 2.40x and1.88x, respectively. In computing the ratio of earnings to debt service,earnings have been calculated by adding debt service to income from continuingoperations before earnings or losses from the sale of land and depreciableproperty dispositions, net of impairment adjustments. 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 fixedcharges, excluding capitalized interest, to income from continuing operationsbefore earnings or losses from the sale of land and depreciable propertydispositions, net of impairment adjustments. Fixed charges consist of interestcosts, whether expensed or capitalized, the interest component of rentalexpense, amortization of debt issuance costs and preferred equity dividendrequirements.

 

**Other**

 

ThePartnership’s operations are not dependent on a single or few customers as nosingle customer accounts for more than 1.6% of the Partnership’s total revenue.The Partnership’s operations are not subject to any significant seasonalfluctuations. The Partnership believes it is in compliance with environmentalregulations and does not anticipate material effects of continued compliance.

 

Foradditional information regarding the Partnership’s investments and operations,see Item 7, “Management’s Discussion and Analysis of Financial Condition andResults of Operations,” and Item 8, “Financial Statements and SupplementaryData.” For additional information about the Partnership’s business segments,see Item 8, “Financial Statements and Supplementary Data.”

 

In addition to this Annual Report, the General Partner and thePartnership file quarterly and special reports, proxy statements and other information with the SEC. You may read andcopy any document that is filed at the public reference facilities of the SECat 450 Fifth Street, N.W., Washington, D.C. 25049.  Please call the SEC at (800) SEC-0330 for further informationabout the public reference facilities. These documents also may be accessedthrough the SEC’s electronic data gathering, analysis and retrieval system(“EDGAR”) via electronic means, including the SEC’s home page on the Internet(http://www.sec.gov). In addition, since some of our securities are listed onthe New York Stock Exchange, you can read SEC filings at the offices of the NewYork Stock Exchange, 20 Broad Street, New York, New York 10005.

# ** **

**Item 2.  Properties**

 

**Product Review**

 

Asof December 31, 2002, the Partnership owns an interest in a diversifiedportfolio of 927 commercial properties encompassing over 108 million netrentable square feet (including  17properties comprising 3.1 million square feet under development) and more than3,800 acres of land for future development.

 

**IndustrialProperties:** ThePartnership owns interests in 668 industrial properties encompassingapproximately 81.7 million square feet (75% of total square feet) morespecifically described as follows:

•                             **Bulk Warehouses –**Industrialwarehouse/distribution buildings with clear ceiling heights of 20 feet or more.The Partnership owns 439 buildings totaling 67.9 million square feet of suchproperties.

•                             **Service Centers –** Also known as flexbuildings or light industrial, this product type has 12-18 foot clear ceilingheights and a combination of drive-up and dock-height loading access. The Partnershipowns 229 buildings totaling 13.8 million square feet of such properties.

 

 

3

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**OfficeProperties:**  The Partnership owns interests in 246 officebuildings totaling approximately 25.6 million square feet (24% of total squarefeet) more specifically described as follows:

 

•                       **Suburban Office –**The Partnership owns 242suburban office buildings totaling 24.7 million square feet.

•                       **CBD Office –** The Partnership owns fourdowntown office projects totaling approximately 861,000 square feet.

 

**Retail Properties:**  ThePartnership owns interests in 13 retail projects totaling approximately 1.0million square feet (1% of total square feet). These properties encompass bothpower and neighborhood shopping centers.

 

**Land:**  ThePartnership owns or controls more than 3,800 acres of land located primarily inits existing business parks. The land is ready for immediate use and isunencumbered by debt. Over 59 million square feet of additional space can bedeveloped on these sites and all of the land is zoned for either office,industrial or retail development.

 

**Service Operations:**  ThePartnership provides property and asset management, development, leasing andconstruction services to third party owners in addition to its own properties.The Partnership’s current property management base for third parties includesover 8.0 million square feet of properties serving approximately 400 tenants.

 

**Property Descriptions**

 

Thefollowing schedule represents the geographic highlights of the Partnership’sin-service properties in its primary markets as of December 31, 2002:

 

 
|               |       | **Square Feet(1)** |         |       |    | **Percent of  Annual Net********Effective  Rent** |   |
|--------------------|------------|--------------------|--------------|------------|---------|---------------------------------------------------|--------|
|               |       |               |         |       |    |                                              |   |   |   | **Retail** |   | **Overall** |   | **Percent of********Overall** |   | **Annual Net  Effective Rent(2)** |   |   |
| **Industrial**     | **Office** |
| **Service Center** |       | **Bulk**           | **Suburban** |       | **CBD** |
|               |       |               |         |       |    |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Primary Market     |       |               |         |       |    |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
|               |       |               |         |       |    |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Atlanta            |       | 3,300,785          |         | 9,137,762  |    | 1,996,336                                         |   | — |   | 19,115 |   | 14,453,998 |   | 13.74 | % | 78,288,523 |   | 13.78 | % |
| Cincinnati         |       | 1,240,393          |         | 8,398,090  |    | 3,226,604                                         |   | 699,402 |   | 718,165 |   | 14,282,654 |   | 13.58 | % | 74,008,465 |   | 13.01 | % |
| Indianapolis       |       | 1,608,384          |         | 16,602,443 |    | 2,433,524                                         |   | 161,984 |   | 102,090 |   | 20,908,425 |   | 19.88 | % | 66,060,906 |   | 11.62 | % |
| St. Louis          |       | 1,368,761          |         | 2,890,585  |    | 3,313,179                                         |   | — |   | — |   | 7,572,525 |   | 7.20 | % | 65,449,116 |   | 11.51 | % |
| Columbus           |       | 82,520             |         | 4,731,652  |    | 3,102,150                                         |   | — |   | — |   | 7,916,322 |   | 7.53 | % | 48,772,149 |   | 8.58 | % |
| Minneapolis        |       | 2,553,377          |         | 4,245,231  |    | 1,156,912                                         |   | — |   | — |   | 7,955,520 |   | 7.56 | % | 48,022,224 |   | 8.44 | % |
| Cleveland          |       | 60,600             |         | 3,359,967  |    | 2,018,449                                         |   | — |   | — |   | 5,439,016 |   | 5.17 | % | 40,916,417 |   | 7.20 | % |
| Nashville          |       | 1,285,437          |         | 3,335,961  |    | 787,496                                           |   | — |   | — |   | 5,408,894 |   | 5.14 | % | 38,316,926 |   | 6.74 | % |
| Raleigh            |       | 1,159,838          |         | 1,487,910  |    | 2,098,549                                         |   | — |   | — |   | 4,746,297 |   | 4.51 | % | 37,311,823 |   | 6.56 | % |
| Chicago            |       | 276,344            |         | 3,352,629  |    | 1,619,021                                         |   | — |   | — |   | 5,247,994 |   | 4.99 | % | 28,790,456 |   | 5.06 | % |
| Central Florida    |       | 350,493            |         | 2,096,277  |    | 1,136,439                                         |   | — |   | — |   | 3,583,209 |   | 3.41 | % | 22,105,509 |   | 3.89 | % |
| Dallas             |       | 470,754            |         | 5,407,053  |    | 152,000                                           |   | — |   | — |   | 6,029,807 |   | 5.73 | % | 13,849,405 |   | 2.44 | % |
| South Florida      |       | —             |         | 539,336    |    | 675,581                                           |   | — |   | — |   | 1,214,917 |   | 1.15 | % | 6,207,622 |   | 1.09 | % |
| Other(3)           |       | —             |         | 436,139    |    | —                                            |   | — |   | — |   | 436,139 |   | 0.41 | % | 557,914 |   | 0.10 | % |
|               |       |               |         |       |    |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total              |       | 13,757,686         |         | 66,021,035 |    | 23,716,240                                        |   | 861,386 |   | 839,370 |   | 105,195,717 |   | 100.00 | % | $ | 568,657,457 |   | 100.00 | % |
|               |       |               |         |       |    |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
|               |       | 13.08              | %            | 62.77      | %       | 22.54                                             | %      | 0.82 | % | 0.80 | % | 100.00 | % |   |   |   |   |   |   |
|                    |            |                    |              |            |         |                                                   |        |  |  |  |  |  |  |  |  |  |  |  |  |  |

 
|                  |   | **Occupancy %**    |   |
|-----------------------|--------|--------------------|--------|
|                  |   | **Industrial**     |   | **Office** |   |   |   |   |   |
|                  |   | **Service Center** |   | **Bulk** |   | **Suburban** |   | **CBD** |   | **Retail** |   | **Overall** |   |
| Primary   Market |   |               |   |   |   |   |   |   |   |   |   |   |   |
|                  |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Atlanta               |   | 89.18              | %      | 80.06 | % | 87.05 | % | — |   | 100.00 | % | 83.13 | % |
| Cincinnati            |   | 82.84              | %      | 91.85 | % | 89.80 | % | 91.51 | % | 99.40 | % | 90.97 | % |
| Indianapolis          |   | 93.94              | %      | 89.45 | % | 85.86 | % | 95.34 | % | 91.62 | % | 89.43 | % |
| St.Louis              |   | 82.91              | %      | 86.32 | % | 94.05 | % | — |   | — |   | 89.09 | % |
| Columbus              |   | 100.00             | %      | 81.79 | % | 92.29 | % | — |   | — |   | 86.09 | % |
| Minneapolis           |   | 87.75              | %      | 87.64 | % | 87.03 | % | — |   | — |   | 87.59 | % |
| Cleveland             |   | 100.00             | %      | 86.49 | % | 87.26 | % | — |   | — |   | 86.93 | % |
| Nashville             |   | 83.90              | %      | 90.43 | % | 81.34 | % | — |   | — |   | 87.55 | % |
| Raleigh               |   | 89.37              | %      | 72.96 | % | 74.44 | % | — |   | — |   | 77.63 | % |
| Chicago               |   | 68.03              | %      | 81.36 | % | 81.15 | % | — |   | — |   | 80.59 | % |
| Central Florida       |   | 86.15              | %      | 76.97 | % | 77.09 | % | — |   | — |   | 77.91 | % |
| Dallas                |   | 89.61              | %      | 95.82 | % | 100.00 | % | — |   | — |   | 95.44 | % |
| South Florida         |   | —             |   | 100.00 | % | 65.17 | % | — |   | — |   | 80.63 | % |
| Other(3)              |   | —             |   | 100.00 | % | — |   | — |   | — |   | 100.00 | % |
|                  |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Total                 |   | 87.42              | %      | 87.05 | % | 86.26 | % | 92.23 |   | 98.46 |   | 87.05 | % |

 

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(1)          Includes all wholly owned and joint ventureprojects shown at 100% as of report date.

 

(2)          Represents the average annual rentalproperty revenue due from tenants in occupancy as of the date of this report,excluding additional rent due as operating expense reimbursements, landlordallowances for operating expenses and percentage rents.  Joint Venture properties are shown at theCompany’s ownership percentage.

 

(3)          Represents properties not located in theCompany’s primary markets.  Theseproperties are located in similar midwest or southeast markets.

 

4

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### **Item3.  LegalProceedings**

 

TheGeneral Partner and the Partnership are subject to various legal proceedingsand claims that arise in the ordinary course of business.  In the opinion of management, the amount ofany ultimate liability with respect to these actions will not materially affectthe Partnership’s consolidated financial statements or results of operations.

 

**Item 4.  Submissionof Matters to a Vote of Security Holders**

 

Nomatters were submitted to a vote of security holders of the Partnership duringthe fourth quarter of the year ended December 31, 2002.

 

**ExecutiveOfficers of the General Partner**

 

***Gary A. Burk, age 51***.  Mr. Burk has served as Vice Chairman andExecutive Vice President of Construction of the General Partner since January2003.  Mr. Burk served as Co-ChiefOperating Officer of the General Partner from March 2002 until January2003.  Prior to that time and since1993, Mr. Burk served as the General Partner’s Executive Vice President,Construction.

 

***Robert M. Chapman,age 49****.*  Mr. Chapman has served as the GeneralPartner’s Executive Vice President, Southern Region, since 2000. He isresponsible for the Partnership’s Atlanta, Orlando, Tampa, Raleigh, Nashvilleand Dallas property portfolios.  Mr.Chapman was previously the General Partner’s Executive Vice President of theAtlanta/Texas region from 1999 to 2000, and its Executive Vice President ofAcquisitions and Dispositions from 1997 to 1999. Before joining the GeneralPartner in 1997, he served as Senior Vice President and Portfolio Manager forThe RREEF Funds. Prior to that, Gerald Hines Interests and Lincoln Propertyemployed Mr. Chapman.

 

***Howard L. Feinsand,age 55***.** Mr. Feinsand has served as the GeneralPartner’s Executive Vice President, and General Counsel since 1999. Mr.Feinsand served on the General Partner’s Board of Directors from  1988 to January 2003. From 1996 until 1999,Mr. Feinsand was the founder and principal of Choir Capital Ltd. From 1995until 1996, he was Managing Director of Citicorp North America, Inc.  He was the Senior Vice President andManager-Capital Markets, Pricing and Investor Programs of GE Capital AviationServices, Inc., an aircraft leasing company, from 1989 to 1995.

 

***Thomas L. Hefner,age 56***.  Mr.Hefner has served as Chairman of the Board since 1998 and Chief ExecutiveOfficer of the General Partner since 1993. Mr. Hefner has served as a Directorof the General Partner since 1993 and also serves as a member of the board ofdirectors of the National Association of Real Estate Investment Trusts, theCentral Indiana Corporate Partnership and the Nature Conservancy of Indiana. Inaddition, he serves on the Dean’s Advisory Council of Purdue University’sKrannert School of Business.

 

***William E.Linville, III, age 48***. Mr. Linville has been Executive Vice President, Midwest Region, for theGeneral Partner since March 2001. In this role, he has responsibility for thePartnership’s Indiana, Chicago, Minneapolis and St. Louis operations.  From 1994 until March 2001, Mr. Linville ledthe Partnership’s Midwest Industrial Group. He originally joined thePartnership in 1987 as head of its Indiana Industrial Group.

 

***Dennis D. Oklak,age 49***.  Mr. Oklakhas served as the President and Chief Operating Officer of the General Partnersince January 2003. Prior to that, Mr. Oklak served as Co-Chief OperatingOfficer and Executive Vice President of the General Partner. He was also theChief Administrative Officer of the General Partner since 1997. From 1993 to1997, he served as the General Partner’s Vice-President and Treasurer.

 

5

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***Darell E. Zink, Jr****., **age 56.***  Mr. Zink has served as the General Partner’sVice Chairman, Executive Vice President and Chief Financial Officer sinceJanuary 2003.  Prior to that time heserved as the General Partner’s Executive Vice President and Chief FinancialOfficer since 1993.  He has been withthe Partnership since 1982 and has served as a Director since 1993.  Mr. Zink also serves as a member of theboard of directors of Citizens Gas & Coke Utility, Fifth Third Bank ofIndiana, the CICOA Foundation, the Indianapolis Chamber of Commerce, VEI/IMM (asubsidiary of Community Hospitals), Vanderbilt University Alumni Board andEducational Choice.  He also serves aschairman of the Inroads Advisory Board.

 

**PART II**

 

**Item 5.  Marketfor the Registrant’s Common Equity and Related Stockholder Matters**

 

There is noestablished public trading market for the Common Units. The following tablesets forth the cash distributions paid during each quarter. As of February 18,2003, there were 181 record holders of Common Units.

 
| **Quarter Ended** |   | **2002  Distributions  per Common Unit** |     | **2001  Distributions  per Common Unit** |   |
|-------------------|--------|------------------------------------------|----------|------------------------------------------|--------|
|              |   |                                     |     |                                     |   |
| December  31      |   | **$**                                    | **.455** |                                     | $      | .45 |   |
| September  30     |   | **.455**                                 |     | .45                                      |   |
| June  30          |   | **.450**                                 |     | .43                                      |   |
| March  31         |   | **.450**                                 |     | .43                                      |   |
|                   |        |                                          |          |                                          |        |  |  |

 

On January 29,2003, the Partnership declared a quarterly cash distribution of $0.455 perCommon Unit payable on February 28, 2003, to Common Unitholders of record onFebruary 14, 2003.

 

**Item 6.  SelectedConsolidated Financial Data**

 

The following setsforth selected consolidated financial and operating information on a historicalbasis for the Partnership for each of the years in the five-year period endedDecember 31, 2002. The following information should be read in conjunction withItem 7, “Management’s Discussion and Analysis of Financial Condition and Resultsof Operations” and Item 8, “Financial Statements and Supplementary Data”included in this Form 10-K (in thousands, except per unit amounts):

 

|                                                         |   | **2002**      |          | **2001**  |   | **2000**  |       | **1999**      |      | **1998**  |   |
|--------------------------------------------------------------|--------|---------------|---------------|-----------|--------|-----------|------------|---------------|-----------|-----------|--------|
| **Results  of Operations:**                                  |   |          |          |      |   |      |       |          |      |      |   |
| Revenues:                                                    |   |          |          |      |   |      |       |          |      |      |   |
| Rental  Operations                                           |   | **$**         | **711,526**   |      | $      | 714,739   |       | $             | 706,747   |      | $      | 534,555 |   | $ | 347,847 |   |
| Service  Operations                                          |   | **67,620**    |          | 80,459    |   | 82,799    |       | 54,031        |      | 24,716    |   |
| **Total  Revenues from Continuing Operations**               |   | **$**         | **779,146**   |      | $      | 795,198   |       | $             | 789,546   |      | $      | 588,586 |   | $ | 372,563 |   |
|                                                         |   |          |          |      |   |      |       |          |      |      |   |
| **Net  Income Available for Common Unitholders**             |   | **$**         | **179,746**   |      | $      | 262,430   |       | $             | 245,029   |      | $      | 159,447 |   | $ | 103,112 |   |
|                                                         |   |          |          |      |   |      |       |          |      |      |   |
| **Per  Unit Data**:                                          |   |          |          |      |   |      |       |          |      |      |   |
| Basic  Income per Common Unit:                               |   |          |          |      |   |      |       |          |      |      |   |
| Continuing  Operations                                       |   | **$**         | **1.16**      |      | $      | 1.75      |       | $             | 1.67      |      | $      | 1.33 |   | $ | 1.13 |   |
| Discontinued  Operations                                     |   | **.04**       |          | .02       |   | .01       |       |          |      | —    |   |
| Diluted  Income per Common Unit:                             |   |          |          |      |   |      |       |          |      |      |   |
| Continuing  Operations                                       |   | **1.15**      |          | 1.73      |   | 1.65      |       | 1.32          |      | 1.12      |   |
| Discontinued  Operations                                     |   | **.04**       |          | .02       |   | .01       |       | —        |      | —    |   |
| Dividends  paid per Common Unit                              |   | **1.81**      |          | 1.76      |   | 1.64      |       | 1.46          |      | 1.28      |   |
| Weighted  Average Common Units Outstanding                   |   | **149,423**   |          | 147,961   |   | 145,906   |       | 119,467       |      | 91,576    |   |
| Weighted  Average Common and Dilutive Potential Common Units |   | **150,839**   |          | 151,710   |   | 147,441   |       | 120,511       |      | 92,468    |   |
|                                                         |   |          |          |      |   |      |       |          |      |      |   |
| **Balance  Sheet Data (at December 31):**                    |   |          |          |      |   |      |       |          |      |      |   |
|                                                         |   |          |          |      |   |      |       |          |      |      |   |
| Total  Assets                                                |   | **$**         | **5,347,055** |      | $      | 5,330,246 |       | $             | 5,461,233 |      | $      | 5,487,284 |   | $ | 2,854,062 |   |
| Total  Debt                                                  |   | **2,106,285** |          | 1,814,856 |   | 1,973,215 |       | 2,113,476     |      | 1,007,317 |   |
| Total  Preferred Equity                                      |   | **415,466**   |          | 583,419   |   | 689,216   |       | 690,340       |      | 348,366   |   |
| Total  Partners’ Equity                                 |   | **2,919,843** |          | 3,176,232 |   | 3,147,598 | ** ** | **3**,101,989 |      | 1,677,988 |   |
| Total  Common Units Outstanding                              |   | **149,907**   |          | 148,438   |   | 146,911   |       | 144,803       |      | 96,853    |   |
|                                                         |   |          |          |      |   |      |       |          |      |      |   |
| **Other Data:**                                              |   |          |          |      |   |      |       |          |      |      |   |
| Funds  From Operations(1)                                    |   | **$**         | **376,454**   |      | $      | 395,693   |       | $             | 365,129   |      | $      | 267,243 |   | $ | 174,829 |   |
| Cash  Flow Provided by (Used by):                            |   |          |          |      |   |      |       |          |      |      |   |
| Operating  activities                                        |   | **$**         | **568,973**   |      | $      | 348,680   |       | $             | 363,610   |      | $      | 316,286 |   | $ | 220,529 |   |
| Investing  activities                                        |   | **(337,247**  | **)**         | 93,488    |   | (11,972   | )          | (740,847      | )         | (703,575  | )      |
| Financing  activities                                        |   | **(225,050**  | **)**         | (470,915  | )      | (330,952  | )          | 436,449       |      | 479,300   |   |

 

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(1)          Funds From Operations isdefined by the National Association of Real Estate Investment Trusts as netincome or loss, excluding gains or losses from sales of depreciated property,plus operating property depreciation and amortization and adjustments forminority interest and unconsolidated  companieson the same basis. Funds From Operations does not  represent cash flow from operations as defined by generally acceptedaccounting principles, should not be considered as an alternative to net incomeas an indicator of the Partnership’s operating performance, and is notindicative of cash available to fund all cash flow needs.

 

6

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**Item 7.  Management’sDiscussion and Analysis of Financial Condition and Results of Operations**

 

**CautionaryStatement Regarding Forward Looking Statements**

 

Certain statements in this Annual Report, including those related tothe Partnership’s future operations, constitute “forward-looking statements”within the meaning of Section 27A of the Securities Act of 1933, as amended,and Section 21E of the Securities Exchange Act of 1934, as amended. Theseforward-looking statements involve known and unknown risks, uncertainties andother important factors that could cause the actual results, performance orachievements of the Partnership, or industry results, to differ materially fromany predictions of future results, performance or achievements that we expressor imply in this report. Some of the risks, uncertainties and other importantfactors that may affect future results include, among others:

 

•    General economic and business conditions;

•    The General Partner’s continued qualification as a real estateinvestment trust;

•    Competition for tenants and a decrease in property occupancy;

•    Potential increases in real estate construction costs;

•    Potential changes in interest rates;

•    Continuing ability to favorably raise debt and equity in the capital markets; and

•    Other risks inherent in the real estate business including tenant defaults, potential liability relating toenvironmental matters and liquidity of real estate investments.

 

This list of risks and uncertainties, however, is not intended to beexhaustive. The General Partner has on file with the SEC a Report on Form 8Kdated December 6, 2001, with additional risk factor information.

 

Thewords “believe,” “estimate,” “expect” and similar expressions or statementsregarding future periods are intended to identify forward-looking statements.Although we believe that the plans, expectations and results expressed in orsuggested by our forward-looking statements are reasonable, all forward-lookingstatements are inherently uncertain as they involve substantial risks anduncertainties beyond the Partnership’s control. New factors emerge from time totime, and it is not possible for us to predict the nature or assess thepotential impact of each new factor on the Partnership’s business. Given theseuncertainties, we caution you not to place undue reliance on theseforward-looking statements. The Partnership undertakes no obligation to updateor revise any of its forward-looking statements for events or circumstancesthat arise after the statement is made.

 

**Business Overview**

 

As of December 31, 2002, the Partnership:

 

•                 Owned or controlled 927 industrial, office andretail properties (including properties under development), consisting of over108 million square feet located in 12 states; and

•                 Owned or controlled approximately 3,800 acres ofland with an estimated future development potential of approximately 59 millionsquare feet of industrial, office and retail properties.

 

7

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The Partnership provides the following services for its properties andfor certain properties owned by third parties:

 

•                 leasing;

•                 management;

•                 construction;

•                 development; and

•                 other tenant-related services.

 

The Partnership’s operating results depend primarily upon income fromthe Rental Operations of its properties. This rental income is substantiallyinfluenced by the supply and demand for the Partnership’s rental space. ThePartnership’s continued growth is dependent upon its ability to maintainoccupancy rates and increase rental rates of its in-service portfolio. ThePartnership’s strategy for growth also includes developing and acquiringadditional rental properties.

 

Rental Operations revenues decreased from $714.7 million in 2001 to$711.5 million in 2002, as the effects of a weakened economy lingered in thePartnership’s markets for 2001 and 2002. The occupancy level of thePartnership’s in-service portfolio decreased from 88.6% at December 31, 2001,to 87.1% at December 31, 2002 due to the following factors:

 

•    The low occupancy levels of new developments placed in-service over thelast twelve to eighteen months as a result of slow lease-up activity;

•    The slowdown in demand in many of the Partnership’s markets from theweakened economy; and

•    The effects of the Partnership’s disposition activities in 2000 and2001 during which the Partnership sold over $1 billion of assets in an effortto de-leverage the Partnership’s balance sheet and dispose of unwantedproperties

 

Whilethese events have affected growth and related rental income, the Partnershipbelieves that is has strong liquidity and financial flexibility (See additionaldiscussion under Liquidity and Capital Resources). With a debt to marketcapitalization ratio of 32.7% and $219 million available on its unsecured lineof credit as of December 31, 2002, the Partnership believes that it ispositioned to fund its operational expenses and shareholder distributions andto make future opportunistic real estate investments.

 

Thefollowing highlights the areas of Rental Operations that the Partnershipconsiders critical for future revenue growth (all square footage totals andoccupancy percentages reflect 100% of both wholly-owned properties andproperties in joint ventures):

 

***Same Property Performance:*** The Partnership tracks same propertyperformance, which measures the performance of properties that were in-servicefor all reported portions of a two-year period by comparing the results of thesecond year with the results of the first year. In 2002, net operating incomefrom the same property portfolio increased just .3% over 2001, compared to 4.4%growth in 2001 over 2000. The lower growth in same property performanceresulted from lower occupancies in the properties that rolled into the sameproperty population in 2002, coupled with the fact that a majority of theproperties sold over the past two years were from the same property populationand were over 90% leased. The lower occupancy on our same property populationwas slightly offset by an increase in net effective rents; however, rental rategrowth has decreased significantly from 2000 and 2001.

 

***Occupancy Analysis:*** As discussed above, the ability to maintainoccupancy rates is a principal driver of the Partnership’s results ofoperations. The following table sets forth information regarding thePartnership’s in-service portfolio of rental properties as of December 31, 2002and 2001 (square feet in thousands):

 

8

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|            |   | **Total  Square Feet** |   | **Percent of  Total Square Feet** |       | **Percent Occupied** |       |
|-----------------|--------|------------------------|--------|-----------------------------------|------------|----------------------|------------|
| **Type**        |   | **2002**               |   | **2001**                          |       | **2002**             |       | **2001** |   | **2002** |   | **2001** |   |
| **Industrial**  |   |                   |   |                              |       |                 | ** ** |   |   |   | ** ** |   |   |
| Service Centers |   | **13,758**             |   | 13,833                            | ** ** | **13.0**             | **%**      | 13.4 | % | **87.4** | **%** | 88.7 | % |
| Bulk            |   | **66,021**             |   | 64,786                            | ** ** | **62.8**             | **%**      | 63.0 | % | **87.1** | **%** | 89.4 | % |
| **Office**      |   | **24,578**             |   | 23,528                            | ** ** | **23.4**             | **%**      | 22.9 | % | **86.5** | **%** | 86.0 | % |
| **Retail**      |   | **839**                |   | 745                               | ** ** | **0.8**              | **%**      | 0.7 | % | **98.5** | **%** | 96.8 | % |
| Total           |   | **1****05,196**        |   | 102,892                           | ** ** | **100.0**            | **%**      | 100.0 | % | **87.1** | **%** | 88.6 | % |

 

The Partnership’s lower occupancy percentage in 2002 as compared to2001 was primarily caused by slower lease-up of new developments placedin-service during 2002 and 2001 and reduced demand for existing space. Whilethe decline in occupancy appears to be slowing, and the Partnership is focusedon leasing existing space, management cannot predict when the occupancy ofthese properties will increase.

 

***Lease Expiration:*** The Partnership’s ability to maintain and growits occupancy rates primarily depends upon its continuing ability to re-leaseexpiring space. The following table reflects the Partnership’s in-service leaseexpiration schedule as of December 31, 2002, by product type. The tableindicates square footage and annualized net effective rents (based on December2002 rental revenue) under expiring leases (in thousands):

 
|                        |   | **Total Portfolio** |   | **Industrial** |    | **Office** |   | **Retail**       |   |
|-----------------------------|--------|---------------------|--------|----------------|---------|------------|--------|------------------|--------|
| **Year of  Expiration**     |   | **Square  Feet**    |   | **Dollars**    |    | **%**      |   | **Square  Feet** |   | **Dollars** |   | **Square  Feet** |   | **Dollars** |   | **Square  Feet** |   | **Dollars** |   |
|                        |   |                |   |           |    |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| 2003                        |   | 10,194              |   | $              | 64,266  |       | 10     | %                | 8,200  |   | $ | 40,074 |   | 1,994 |   | $ | 24,192 |   | — |   | $ | — |   |
| 2004                        |   | 10,963              |   | 77,778         |    | 12         | %      | 8,248            |   | 39,784 |   | 2,692 |   | 37,587 |   | 23 |   | 407 |   |
| 2005                        |   | 13,727              |   | 96,060         |    | 15         | %      | 10,828           |   | 54,391 |   | 2,861 |   | 41,165 |   | 38 |   | 504 |   |
| 2006                        |   | 11,045              |   | 76,865         |    | 12         | %      | 8,725            |   | 45,491 |   | 2,315 |   | 31,296 |   | 5 |   | 78 |   |
| 2007                        |   | 10,771              |   | 75,862         |    | 12         | %      | 8,199            |   | 41,209 |   | 2,514 |   | 33,934 |   | 58 |   | 719 |   |
| 2008                        |   | 8,491               |   | 52,229         |    | 8          | %      | 6,912            |   | 30,958 |   | 1,555 |   | 20,901 |   | 24 |   | 370 |   |
| 2009                        |   | 7,135               |   | 43,927         |    | 7          | %      | 5,776            |   | 25,112 |   | 1,340 |   | 18,446 |   | 19 |   | 369 |   |
| 2010                        |   | 6,312               |   | 49,314         |    | 8          | %      | 4,511            |   | 21,403 |   | 1,785 |   | 27,647 |   | 16 |   | 264 |   |
| 2011                        |   | 3,600               |   | 31,389         |    | 5          | %      | 2,325            |   | 11,193 |   | 1,259 |   | 19,951 |   | 16 |   | 245 |   |
| 2012                        |   | 4,303               |   | 26,920         |    | 4          | %      | 3,267            |   | 12,526 |   | 1,018 |   | 13,896 |   | 18 |   | 498 |   |
| 2013 and Thereafter         |   | 5,037               |   | 46,849         |    | 7          | %      | 2,508            |   | 12,310 |   | 1,920 |   | 29,788 |   | 609 |   | 4,751 |   |
|                        |   | 91,578              |   | $              | 641,459 |       | 100    | %                | 69,499 |   | $ | 334,451 |   | 21,253 |   | $ | 298,803 |   | 826 |   | $ | 8,205 |   |
|                        |   |                |   |           |    |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Total Portfolio Square Feet |   | 105,196             |   |           |    |       |   | 79,779           |   |   |   | 24,578 |   |   |   | 839 |   |   |   |
|                        |   |                |   |           |    |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Percent Occupied            |   | 87.05               | %      |           |    |       |   | 87.12            | %      |   |   | 86.47 | % |   |   | 98.46 | % |   |   |

 

***LeaseRenewals: ***ThePartnership renewed 72.1% of leases up for renewal in 2002, totaling 8.7million square feet on which it attained a 3.3% growth in net effective rents.Slower demand for rental space reduced rental rates during 2002.

 

The Partnership does not currently expect its renewal percentage or itsgrowth in net effective rents on new leases in 2003 to significantly differfrom the re-leasing activity in 2002.

 

***Future Development:***The Partnership also expects to realize growth in earnings from RentalOperations through the development and acquisition of additional rentalproperties. Specifically, the Partnership has approximately 3.1 million squarefeet of properties under development at December 31, 2002. These propertiesunder development should provide future earnings through Service Operationsincome upon sale or from Rental Operations growth as they are placed in serviceas follows (in thousands, except percent leased and stabilized returns):

 

9

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| **Anticipated In-Service Date** |   |   | **Square  Feet** |   | **Percent  Leased** |   | **Project  Costs** |   | **Anticipated  Stabilized  Return** |   |
|---------------------------------|--------|--------|------------------|--------|---------------------|--------|--------------------|--------|-------------------------------------|--------|
| Held  for Rental:               |   |   |             |   |                |   |               |   |                                |
|                            |   |   |             |   |                |   |               |   |                                |
| 1st Quarter 2003                |   | 638    |             | 100    | %                   | $      | 22,385             |   | 9.7                                 | %      |
| 2nd Quarter 2003                |   | 427    |             | 81     | %                   | 42,232 |               | 10.8   | %                                   |
| 3rd Quarter 2003                |   | 38     |             | 69     | %                   | 3,373  |               | 11.9   | %                                   |
| Thereafter                      |   | 1,462  |             | 68     | %                   | 73,899 |               | 10.3   | %                                   |
|                            |   | 2,565  |             | 78     | %                   | $      | 141,889            |   | 10.4                                | %      |
| Held for Sale:                  |   |   |             |   |                |   |               |   |                                |
|                            |   |   |             |   |                |   |               |   |                                |
| 1st Quarter 2003                |   | 17     |             | 82     | %                   | $      | 2,335              |   | 13.5                                | %      |
| 2nd Quarter 2003                |   | 61     |             | 77     | %                   | 6,887  |               | 10.9   | %                                   |
| 3rd Quarter 2003                |   | 159    |             | 70     | %                   | 15,204 |               | 12.0   | %                                   |
| Thereafter                      |   | 256    |             | 100    | %                   | 28,707 |               | 8.9    | %                                   |
|                            |   | 493    |             | 87     | %                   | $      | 53,133             |   | 10.2                                | %      |
|                            |   |   |             |   |                |   |               |   |                                |
| Total                           |   | 3,058  |             | 80     | %                   | $      | 195,022            |   | 10.3                                | %      |

 

**Results ofOperations**

 

A summary of thePartnership’s operating results and property statistics for each of the yearsin the three-year period ended December 31, 2002, is as follows (in thousands,except number of properties and per unit amounts):

 
|                                                         |   | **2002**    |        | **2001** |   | **2000** |   |
|--------------------------------------------------------------|--------|-------------|-------------|----------|--------|----------|--------|
|                                                         |   |        |        |     |   |     |   |
| Rental Operations revenues                                   |   | **$**       | **711,526** |     | $      | 714,739  |   | $ | 706,747 |   |
| Service Operations revenues                                  |   | **67,620**  |        | 80,459   |   | 82,799   |   |
| Earnings from Rental Operations                              |   | **219,114** |        | 254,103  |   | 225,183  |   |
| Earnings from Service Operations                             |   | **29,520**  |        | 35,115   |   | 32,760   |   |
| Operating income                                             |   | **223,899** |        | 273,665  |   | 236,806  |   |
| Net income available for common units                        |   | **179,746** |        | 262,430  |   | 245,029  |   |
| Weighted average common units outstanding                    |   | **149,423** |        | 147,961  |   | 145,906  |   |
| Weighted average common and dilutive potential common  units |   | **150,839** |        | 151,710  |   | 147,441  |   |
| Basic income per common unit:                                |   |        |        |     |   |     |   |
| Continuing operations                                        |   | **$**       | **1.16**    |     | $      | 1.75     |   | $ | 1.67 |   |
| Discontinued operations                                      |   | **$**       | **.04**     |     | $      | .02      |   | $ | .01 |   |
| Diluted income per common unit:                              |   |        |        |     |   |     |   |
| Continuing operations                                        |   | **$**       | **1.15**    |     | $      | 1.73     |   | $ | 1.65 |   |
| Discontinued operations                                      |   | **.04**     |        | .02      |   | .01      |   |
| Number of in-service properties at end of year               |   | **910**     |        | 888      |   | 913      |   |
| In-service square footage at end of year                     |   | **105,196** |        | 102,892  |   | 100,962  |   |
| Under development square footage at end of year              |   | **3,058**   |        | 4,701    |   | 8,056    |   |

 

**Comparison ofYear Ended December 31, 2002 to Year Ended December 31, 2001**

 

Rental Operations

 

Rental Operations are comprised of net incomefrom rental properties (“Rental Net Income”) and equity in earnings fromunconsolidated companies (“Equity in Earnings”). Rental Net Income is definedas rental income less rental expenses and real estate taxes. Overall, RentalNet Income decreased from $492.1 million in 2001 to $483.9 million in 2002. Thedecrease is primarily attributable to an overall decrease in occupancy of thePartnership’s in-service portfolio from 88.6% at December 31, 2001, to 87.1% atDecember 31, 2002. This decrease is the result of the weakened economy and itseffect on business in the Partnership’s markets. These markets are experiencinga shortage of demand compared to the supply of office and industrial spaceresulting from downsizing of leased space for existing tenants, the lack of newbusiness growth, and the tendency of existing businesses to hold off on growthplans until the economy improves. These effects were somewhat mitigated by thePartnership recognizing $27.4 million and $18.3 million of lease terminationfees in 2002 and 2001, respectively.

10

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The Partnership analyzes the results ofRental Operations by office, industrial and retail portfolios. The followinghighlights the financial results for each of the Partnership’s RentalOperations portfolios.

 

*Office*

Rental Net Income for Office properties increased from $255.3 millionin 2001, to $265.8 million in 2002 as a result of the following:

•             The Partnershipexperienced an increase in its in-service Office portfolio occupancy from 86.0%at December 31, 2001, to 86.5% at December 31, 2002.

•             The Partnership’sin-service Office portfolio has increased from 229 properties at December 31,2001, to 239 properties at December 31, 2002.

•             The Partnershiprecognized $21.7 million in termination fees associated with this segment in2002, compared to $14.5 million in 2001.

 

*Industrial*

Rental Net Income for Industrial properties decreased to $212.6 millionin 2002, from $223.1 million in 2001 as a result of the following:

 

•             The Partnershipexperienced a decrease in its in-service Industrial portfolio occupancy from89.3% at December 31, 2001, to 87.1% at December 31, 2002.

•             The Partnership’sin-service Industrial portfolio increased from 649 properties at December 31,2001 to 661 properties at December 31, 2002.

•             The Partnershiprecognized $5.5 million of lease termination fees for the year ended December31, 2002, compared to $3.6 million in 2001.

 

*Retail*

Rental Net Income for Retail properties decreased to $6.0 million in2002, from $15.0 million in 2001 in connection with the following:

•             In August of 2001,the Partnership sold 21 properties or approximately 75% of its retailportfolio.  As a result of this sale,the Partnership had eight months of operations associated with these propertiesin 2001.

•             The Partnership’sRetail portfolio had an in-service occupancy percentage of 98.5% at December31, 2002, compared to 96.8% at December 31, 2001.

 

Depreciation and amortization expense for the year ended December 31,2002, increased over the prior year through an increase in the Partnership’sbuilding asset basis, increased investments in tenant improvements and theexpensing of undepreciated tenant improvements associated with the early terminationsof tenants.

 

The $5.2 million increase in interest expense is attributable to thefollowing:

 

•             Interest capitalizedon development projects decreased from $25.9 million in 2001 to $13.5 millionin 2002 because of decreased development activity by the Partnership over thepast twelve to eighteen months in response to soft demand in most of thePartnership’s markets.

•             Interest expense onthe Partnership’s unsecured debt increased from $98.7 million in 2001 to $100.8million in 2002. The Partnership issued $150 million of ten-year unsecured debtin August 2002 at an effective interest rate of 5.88% and $50 million often-year unsecured debt in September 2002 at an effective interest rate of5.45%. Also in 2002, the Partnership paid off $50 million of debt that maturedin September, which had an effective rate of 7.31%.

•             Interest expense onthe Partnership’s secured debt decreased from $30.8 million in 2001 to $22.9million in 2002 as the Partnership paid off $13.5 million of secured debtthroughout 2002 and experienced lower borrowings on its secured line of creditduring 2002 compared to 2001. Additionally, the Partnership paid off approximately $128.5 million ofsecured debt throughout 2001.

 

11

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•             Interest expense onthe Partnership’s $500 million unsecured line of credit decreased byapproximately $1.1 million in 2002 compared to 2001 as the Partnershipmaintained lower balances on the line throughout most of 2002.

 

As a result of the above-mentioned items, earnings from RentalOperations decreased $35.0 million from $254.1 million for the year endedDecember 31, 2001, to $219.1 million for the year ended December 31, 2002.

 

## **Service Operations**

 

Service Operationsprimarily consist of leasing, management, construction and development servicesfor joint venture properties and properties owned by third parties. ServiceOperations revenues decreased from $80.5 million for the year ended December31, 2001, to $67.6 million for the year ended December 31, 2002. The prolongedeffect of the slow economy has been the primary factor in the overall decreasein revenues. The Partnership experienced a decrease of $12.7 million in netgeneral contractor revenues because of a decrease in the volume of constructionin 2002, compared to 2001, as well as slightly lower profit margins.

 

Property management,maintenance and leasing fee revenues decreased from $22.8 million in 2001 to$14.3 million in 2002 primarily because of a decrease in landscapingmaintenance revenue resulting from the sale of the landscaping operations inthe third quarter of 2001.

 

Construction managementand development activity income represents construction and development feesearned on projects where the Partnership acts as the construction manager alongwith profits from the Partnership’s held for sale program whereby thePartnership develops a property for sale upon completion. The increase inrevenues of $10.3 million in 2002 is primarily due to an increase in volume ofthe sale of properties from the held for sale program.

 

Service Operationsexpenses decreased from $45.3 million in 2001 to $38.1 million in 2002.  The decrease is attributable to the decreasein construction and development activity and the reduced overhead costs as a resultof the sale of the landscape business in 2001.

 

As a result of the above,earnings from Service Operations decreased from $35.1 million for the yearended December 31, 2001, to $29.5 million for the year ended December 31, 2002.

 

General andAdministrative Expense

 

General andAdministrative Expense increased from $15.6 million in 2001 to $24.7 millionfor the year ended December 31, 2002. The Partnership has been successfulreducing total operating and administration costs; however, reducedconstruction and development activities have resulted in a greater amount ofoverhead being charged to general and administrative expense instead of beingcapitalized into development projects or charged to Service Operations.

 

Other Income and Expenses

 

Gain on sale of land and depreciable property dispositions, net ofimpairment adjustment, is comprised of the following amounts in 2002 and 2001:

 
|                                     |   | **2002**   |      | **2001** |   |
|------------------------------------------|--------|------------|-----------|----------|--------|
|                                     |   |       |      |     |   |
| Gain on sales of  depreciable properties |   | **$**      | **4,491** |     | $      | 45,428 |   |
| Gain on land  sales                      |   | **4,478**  |      | 5,080    |   |
| Impairment  adjustment                   |   | **(9,379** | **)**     | (4,800   | )      |
|                                     |   |       |      |     |   |
| Total                                    |   | **$**      | **(410**  | **)**    | $      | 45,708 |   |

 

Gain on sales of depreciable properties represent sales of previouslyheld for investment rental properties. Beginning in 2000 and continuing into2001, the Partnership pursued favorable opportunities to dispose of

 

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real estate assets that no longer met long-term investment objectives.In 2002, the Partnership significantly reduced this property sales programuntil the business climate improves and provides better investmentopportunities for the sale proceeds.

 

Gain on land sales represents sales of undeveloped land owned by thePartnership. The Partnership pursues opportunities to dispose of land inmarkets with a high concentration of undeveloped land and those markets wherethe land no longer meets strategic development plans of the Partnership.

 

The Partnership recorded a $9.4 million adjustment in 2002 associatedwith six properties determined to have an impairment of book value. ThePartnership has analyzed each of its in-service properties and has determinedthat there are no additional valuation adjustments that need to be made as ofDecember 31, 2002. The Partnership recorded an adjustment of $4.8 million in2001 for one property that the Partnership had contracted to sell for a priceless than its book value.

 

Other revenue for the year ended December 31, 2002, includes $1.4million of gain related to an interest rate swap that did not qualify for hedgeaccounting.

 

Discontinued Operations

 

The Partnership adopted Statement of Financial Accounting Standards No.144, “*Accounting for the Impairment orDisposal of Long Lived Assets*” (“SFAS 144”), on January 1, 2002.SFAS 144 requires the Partnership to report in discontinued operations theresults of operations of a property that has either been disposed or isclassified as held for sale, unless certain conditions are met.

 

The Partnership classified the results of operations of seven buildingsin its December 31, 2002, held for sale portfolio as discontinued operations inaccordance with SFAS 144. In addition, two properties were sold during 2002that were identified as held for sale post adoption of SFAS 144; therefore, theresults of operations and gains on disposal for these two properties are alsoreported in discontinued operations. The results of operations and gains fromdisposal for all other properties sold during the year ended December 31, 2002,are classified in continuing operations as these properties were identified asheld for sale prior to the adoption of SFAS 144. The effect of the adoption ofSFAS 144 resulted in net income of $3.2 million and $3.6 million beingclassified as discontinued operations for the years ended December 31, 2002 and2001, respectively.  Additionally, thegain of $2.7 million on the sale of the two properties sold in 2002 isclassified as discontinued operations in accordance with SFAS 144.

 

Net Income Available for Common Unitholders

 

Net income available for common unitholders for the year ended December31, 2002 was $179.7 million compared to $262.4 million for the year endedDecember 31, 2001. This decrease results primarily from operating resultfluctuations in Rental Operations, Service Operations, General andAdministrative Expenses and earnings from sales of depreciable property asdiscussed above.

 

**Comparison ofYear Ended December 31, 2001 to Year Ended December 31, 2000**

 

Rental Operations

 

Rental Net Income decreased from $503.5million in 2000 to $492.1 million in 2001. This decrease is the result of anoverall decrease in occupancy of in-service properties from 93.6 % at December31, 2000, to 88.6% at December 31, 2001. Also contributing to the decline inRental Net Income is the effects of the Partnership’s property dispositions.During 2000 and 2001, the Partnership sold approximately $1 billion of held forinvestment rental properties from its in-service portfolio.  A majority of these properties were over 90%leased and the new developments placed in-service over the same time periodwere leased at lower percentages and therefore, the Partnership realized lessrental income. These effects were somewhat mitigated by the Partnershiprecognizing $18.3 million and $7.0 million of lease termination fees in 2001and 2000, respectively.

 

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The Partnership analyzes the results ofRental Operations by office, industrial and retail portfolios.  The following highlights the financialresults for each of the Partnership’s Rental Operations portfolios.

 

*Office*

Rental Net Income for Office properties increased from $225.5 millionin 2000, to $255.3 million in 2001 as a result of the following:

•             The Partnershipexperienced a decrease in its in-service Office portfolio occupancy from 91.3%at December 31, 2000, to 86.1% at December 31, 2001.

•             The Partnership’sin-service Office portfolio increased from 232 properties at December 31, 2000to 239 properties at December 31, 2001.

•             The Partnershiprecognized $14.5 million in lease termination fees associated with this segmentin 2001, compared to only $3.8 million in 2000.

 

*Industrial*

Rental Net Income for Industrial properties decreased to $223.1 millionin 2001, from $256.3 million in 2000 as a result of the following:

•             The Partnershipexperienced a decrease in its in-service Industrial portfolio occupancy from94.2% at December 31, 2000, to 89.3% at December 31, 2001.

•             The Partnership’sin-service Industrial portfolio decreased from 695 properties at December 31,2000 to 663 properties at December 31, 2001.

•             In 2001, thePartnership recognized $3.6 million of lease termination fees, compared to $2.9million in 2000.

 

*Retail*

Rental Net Income for Retail properties decreased to $15.0 million in2001, from $23.0 million in 2000 as a result of the following:

•             In August of 2001,the Partnership sold 21 properties or approximately 75% of its retailportfolio.  As a result of this sale,the Partnership had only eight months of operations associated with theseproperties in 2001, compared to twelve in 2000.

•             The Partnership’sretail portfolio had an in-service occupancy percentage of 96.7% at December31, 2001, compared to 97.8% at December 31, 2000.

•             The Partnershiprecognized approximately $235,000 of lease termination fees in 2001 compared to$289,000 in 2000.

 

The $19.5 million decrease in interest expense is primarilyattributable to lower outstanding balances on the Partnership’s lines of creditassociated with the financing of the Partnership’s investment and operatingactivities. The Partnership has maintained a significantly lower balance on itslines of credit throughout 2001 compared to 2000, as a result of its propertydispositions proceeds used to fund future development, combined with a lowerdevelopment level as a result of the slower economy. Additionally, thePartnership paid off $128.5 million of secured mortgage loans throughout 2001,as well as an $85 million unsecured term loan. These decreases were partiallyoffset by an increase in interest expense on unsecured debt as a result of thePartnership issuing $175.0 million of debt in February 2001, as well as adecrease in the amount of interest capitalized in 2001 versus 2000, because ofthe decrease in development activity by the Partnership.

 

As a result of the above-mentioned items, earnings from RentalOperations increased $28.9 million from $225.2 million for the year endedDecember 31, 2000, to $254.1 million for the year ended December 31, 2001.

 

## **Service Operations**

 

Service Operationsrevenues decreased from $82.8 million for the year ended December 31, 2000, to$80.5 million for the year ended December 31, 2001. The Partnership experienceda decrease of $4.3

 

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million in net generalcontractor revenues from third party jobs because of a decrease in the volumeof construction in 2001, compared to 2000, as well as slightly lower profitmargins. This decrease is the effect of businesses delaying or terminatingplans to expand in the wake of the slowed economy.

 

Property management,maintenance and leasing fee revenues decreased approximately $2.7 millionmainly because of a decrease in landscaping maintenance revenue associated withthe sale of the landscape business in the third quarter of 2001 (see discussionbelow).

 

Construction managementand development activity income represents construction and development feesearned on projects where the Partnership acts as the construction manager alongwith profits from the Partnership’s held for sale program whereby thePartnership develops a property for sale upon completion. The increase inrevenues of $2.2 million in 2001 is primarily because of an increase in profitson the sale of properties from the held for sale program.

 

Other income increasedapproximately $2.4 million in 2001 over 2000; due to a $1.8 million gain thePartnership recognized on the sale of its landscape business in the thirdquarter of 2001. The sale of the landscape business resulted in a total netprofit of over $9 million after deducting all related expenses. This gain willbe recognized in varying amounts over the next seven years because thePartnership has an on-going contract to purchase future services from thebuyer.

 

Service Operationsexpenses decreased by $4.7 million for the year ended December 31, 2001,compared to the same period in 2000, as the Partnership reduced total overheadcosts throughout 2001 in an effort to minimize the effects of decreasedconstruction and development activity. The primary savings were experienced inemployee salary and related costs through personnel reductions and reducedoverhead costs from the sale of the landscaping business.

 

As a result, earningsfrom Service Operations increased from $32.8 million for the year endedDecember 31, 2000, to $35.1 million for the year ended December 31, 2001.

 

General andAdministrative Expense

 

General andAdministrative Expense decreased from $21.1 million in 2000 to $15.6 millionfor the year ended December 31, 2001, through overhead cost reduction efforts.In late 2000 and continuing throughout 2001, the Partnership introduced severalcost cutting measures to reduce the amount of overhead, including personnelreductions, centralization of responsibilities and reduction of employee costssuch as travel and entertainment.

 

Other Income and Expenses

 

Gain on sale of land and depreciable property dispositions, net ofimpairment adjustment, was comprised of the following amounts in 2001 and 2000:

 
|                                     |   | **2001**   |       | **2000** |   |
|------------------------------------------|--------|------------|------------|----------|--------|
|                                     |   |       |       |     |   |
| Gain on sales of  depreciable properties |   | **$**      | **45,428** |     | $      | 52,067 |   |
| Gain on land  sales                      |   | **5,080**  |       | 9,165    |   |
| Impairment  adjustment                   |   | **(4,800** | **)**      | (540     | )      |
|                                     |   |       |       |     |   |
| Total                                    |   | **$**      | **45,708** |     | $      | 60,692 |   |

 

Gain on sales of depreciable properties represent sales of previouslyheld for investment rental properties. Beginning in 2000 and continuing into 2001,the Partnership pursued favorable opportunities to dispose of real estateassets that no longer meet long-term investment objectives.

 

Gain on land sales represents sales of undeveloped land owned by thePartnership. The Partnership pursues opportunities to dispose of land inmarkets with a high concentration of undeveloped land and those markets wherethe land no longer meets strategic development plans of the Partnership.

 

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The Partnership recorded a $4.8 million asset impairment adjustment in2001 on a single property that was sold in 2002.

 

Other expense for the year ended December 31, 2001, includes a $1.4million expense related to an interest rate swap that does not qualify forhedge accounting.

 

Net Income Available for Common Unitholders

 

Net income available for common unitholders for the year ended December31, 2001 was $262.4 million compared to $245.0 million for the year endedDecember 31, 2000. This increase results primarily from the operating resultfluctuations in Rental and Service Operations and earnings from sales of realestate assets explained above.

 

# **CriticalAccounting Policies**

 

The preparation of the Partnership’s consolidated financial statementsin conformity with accounting principles generally accepted in the UnitedStates requires us to make estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosure of contingent assets andliabilities at the date of the financial statements and the reported amounts ofrevenues and expenses during the reported period.  The Partnership’s estimates, judgments and assumptions arecontinually evaluated based upon available information and experience.  Note 1 to the Consolidated FinancialStatements includes further discussion of the Partnership’s significantaccounting policies.

 

The Partnership has assessed the accounting policies used in thepreparation of its financial statements. The following accounting policies are considered critical based upon materialityto the financial statements, degree of judgment involved in estimating reportedamounts and sensitivity to changes in industry and economic conditions:

 

*Accounting for joint ventures:*ThePartnership has equity interests ranging from 10-95% in joint ventures that ownand operate rental properties and hold land for development. The Partnershipconsolidates those joint ventures that it controls through majority ownershipinterests or substantial participating rights. Control is further demonstratedby the ability of the general partner to manage day-to-day 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. The Partnership uses the equity method of accounting for those jointventures where the Partnership does not have control over operating andfinancial polices. Under the equity method of accounting, the assets andliabilities of joint ventures for which the Partnership uses the equity methodare not included on the Partnership’s balance sheet.

 

*Cost Capitalization:*  Direct and certain indirect costs, includinginterest, clearly associated with the development, construction, leasing orexpansion of real estate investments are capitalized as a cost of theproperty.  The following discusses thesignificant categories of costs incurred by the Partnership:

 

Within the Rental Operations of the Partnership, direct and indirectcosts are capitalized under the guidelines of FASB 67, *Accounting for Costs and Initial Rental Operations ofReal Estate Projects (“FASB 67”)*and interest costs are capitalizedunder the guidelines of FASB 34, “*Capitalizationof Interest Cost*” (“FASB 34”). The Partnership capitalizes theseproject costs associated with the initial construction of a property up to thetime the property is substantially complete and ready for its intended use. ThePartnership believes the completion of the building shell is the proper basisfor determining substantial completion and that this basis is the most widelyaccepted standard in the real estate industry. The interest rate used tocapitalize costs is based upon the Partnership’s average borrowing rate onexisting debt.

 

In addition, the Partnership capitalizes costs, including interestcosts, on vacant space during extended lease-up periods after construction ofthe building shell has been completed if costs are being incurred to ready thevacant space for its intended use.  Ifcosts and activities incurred to ready the vacant space cease, then cost

 

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capitalization is also discontinued until such activities are resumed.Once necessary work has been completed on a vacant space, project costs are nolonger capitalized. The Partnership ceases 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 a 90% occupancy.The Partnership follows guidelines in FASB 34 and FASB 67 in determining thecapitalization of project costs during the lease-up period of a property andbelieves that this treatment is consistent with real estate industry standardsfor project cost capitalization.

 

A portion of the direct costs associated with theconstruction/development division and the leasing division, as well as aportion of indirect costs, are capitalized into the cost of specificconstruction/development and leasing projects. The capitalized portion of thesecosts is based upon standard charges determined by the Partnership. Thestandard charges were established based upon time estimates developed by thePartnership to cover the direct overhead costs of the construction/ developmentand leasing divisions and a portion of the remaining indirect overhead of thePartnership. The Partnership reviews these standards on a quarterly basis toensure that the amounts capitalized are appropriate.

 

*Impairment of Real EstateInvestments:* The Partnership evaluates its 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 impaired, a loss is provided to reduce the carrying value of theasset to its estimated fair value. The Partnership utilizes the guidelinesestablished under SFAS 144 to determine if impairment conditions exist. UnderSFAS 144, the Partnership reviews the expected undiscounted cash flows of eachproperty in its 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, thePartnership assesses other factors such as changes in business climate andlegal factors that may affect the ultimate value of the property. Theseassumptions are subjective and may not ultimately be achieved.

 

Real estate assets to be disposed of are reported at the lower of theircarrying value amount or the fair value less cost to sell.

 

*Valuation of Receivables:*  The Partnership is subject to tenantdefaults and bankruptcies that could affect the collection of outstandingreceivables. In order to mitigate these risks, the Partnership performsin-house credit review and analysis on major existing tenants and allsignificant leases before they are executed. The Partnership has the followingprocedures and policies to evaluate the collectibility of outstandingreceivables and record allowances:

 

•             A tenant “watch list”as well as a list of the 100 largest tenants based upon annual gross rent ismaintained and monitored for tenants with potential risk; and

•             The Partnership has adefined accounting policy to reserve for the entire tenant receivable balanceof any tenant with an amount outstanding over 90 days.

 

*Revenue Recognition on Long-TermConstruction Contracts:* The Partnership recognizes income on long-term construction contractswhere the Partnership serves as a general contractor on the percentage ofcompletion method. Using this method, profits are recorded on the basis of thePartnership’s estimates of the overall profit and percentage of completion ofindividual contracts. A portion of the estimated profits is accrued based uponthe Partnership’s estimates of the percentage of completion of the constructioncontract. Cumulative revenues recognized may be less or greater than cumulativecosts and profits billed at any point in time during a contract’s term. Thisrevenue recognition method involves inherent risk relating to profit and costestimates that is reduced through approval and monitoring processes.

 

 

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With regards to critical accounting policies, management has discussedthe following with the Audit Committee of the General Partner’s Board ofDirectors:

 

•             Criteria foridentifying and selecting;

•             Methodology inapplying; and

•             Impact to thefinancial statements.

 

# **Liquidity and Capital Resources**

 

#### **Sourcesof Liquidity**

 

The Partnership expects to meet liquidity requirementsover the next twelve months, including payments of dividends and distributionsas well as recurring capital expenditures relating to maintaining thePartnership’s current real estate assets, primarily through the following:

 

•              workingcapital; and

•              netcash provided by operating activities.

 

The Partnership expects to meet long-term liquidityrequirements, such as scheduled mortgage debt maturities, the retirement ofunsecured notes and amounts outstanding under the unsecured credit facility,property acquisitions, financing of development activities and othernon-recurring capital improvements, through the following:

 

•              issuanceof additional unsecured notes;

•              undistributedcash available for distribution, if any; and

•              proceedsreceived from real estate dispositions.

 

### ***Rental Operations***

The Partnership believes that its principal source ofliquidity, cash flows from Rental Operations, provides a stable source of cashto fund operational expenses. The Partnership believes that this cash basedrevenue stream is substantially aligned with revenue recognition (except forperiodic straight-line rental income accruals) as cash receipts from theleasing of rental properties are generally received in advance of or in a shorttime following the actual revenue recognition. The Partnership is subject torisks of decreased occupancy through market conditions as well as tenantdefaults and bankruptcies, which would result in reduced cash flow fromoperations. However, management believes that these risks are mitigated by thePartnership’s strong market presence in most of its locations and the fact thatthe Partnership performs in-house credit review and analysis on major tenantsand all significant leases before they are executed.

 

*CreditFacilities*

The Partnershiphas the following lines of credit available (in thousands):

 
| **Description**           |   | **Borrowing  Capacity** |    | **Maturity  Date** |          | **Interest  Rate** |        | **Amount  Outstanding  at December  31, 2002** |   |
|---------------------------|--------|-------------------------|---------|--------------------|---------------|--------------------|-------------|------------------------------------------------|--------|
| Unsecured Line  of Credit |   | $                       | 500,000 |               | February 2004 |               | LIBOR + .65 | %                                              | $      | 281,000 |   |
| Secured Line of  Credit   |   | $                       | 50,000  |               | January 2006  |               | LIBOR + .60 | %                                              | $      | 23,895 |   |

 

The lines ofcredit are used to fund development and acquisition of additional rentalproperties and to provide working capital.

 

In December 2002,the Partnership renewed its secured line of credit and reduced the amountavailable from $100 million to $50 million, reduced the interest rate fromLIBOR + 1.05% to LIBOR + .60%, and extended the maturity date to January 2006.

 

Associated withthe $500 million line of credit are financial covenants that require thePartnership to meet defined levels of performance. As of December 31, 2002, thePartnership is in compliance with all covenants pertaining to the $500 millionline of credit.

 

*Debtand Equity Securities*

The Partnershipcurrently has on file with the SEC an effective shelf registration statementthat permits the Partnership to sell up to an additional $420 million ofunsecured debt securities.  In addition,the General

 

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Partner has onfile with the SEC an effective shelf registration statement that permits theGeneral Partner to sell up to an additional $250.7 million of common andpreferred stock. From time-to-time, the Partnership and General Partner expectto issue additional securities under these registration statements to funddevelopment and acquisition of additional rental properties and to fund therepayment of the credit facilities and other long-term debt upon maturity.

 

The indenturegoverning the Partnership’s unsecured notes also requires the Partnership tocomply with financial ratios and other covenants regarding the operations of thePartnership. The Partnership is currently in compliance with all such covenantsand expects to remain in compliance in the foreseeable future.

 

In January 2003, the Partnership completed an issuance of unsecureddebt totaling $175 million bearing interest at 5.25%, due 2010.

 

*Saleof Real Estate Assets*

The Partnershiputilizes sales of real estate assets as an additional source of liquidity.  During 2000 and 2001, the Partnershipengaged in a capital-recycling program that resulted in sales of over $1 billionof real estate assets during these two years. In 2002, this program wassubstantially reduced as capital needs were met through other sources and theslower business climate provided fewer opportunities to profitably reinvestsale proceeds. The Partnership continues to pursue opportunities to sell realestate assets when beneficial to the long-term strategy of the Partnership.

 

Uses of Liquidity

 

The Partnership’sprincipal uses of liquidity include the following:

 

•              Propertyinvestments and recurring leasing/capital costs;

•              Dividendsand distributions to shareholders and unitholders;

•              Long-termdebt maturities; and

•              TheGeneral Partner’s common stock repurchase program.

 

*PropertyInvestments and Other Capital Expenditures*

One of thePartnership’s principal uses of its liquidity is for the development,acquisition and recurring leasing/capital expenditures of its real estateinvestments.

 

A summary of the Partnership’s recurring capital expenditures is asfollows (in thousands):

 
|                   |   | **2002**   |       | **2001** |   | **2000** |   |
|------------------------|--------|------------|------------|----------|--------|----------|--------|
|                   |   |       |       |     |   |     |   |
| Tenant  improvements   |   | **$**      | **28,011** |     | $      | 18,416   |   | $ | 31,955 |   |
| Leasing costs          |   | **17,975** |       | 13,845   |   | 17,530   |   |
| Building  improvements |   | **13,373** |       | 10,873   |   | 6,804    |   |
| Totals                 |   | **$**      | **59,359** |     | $      | 43,134   |   | $ | 56,289 |   |

 

*Dividends and Distributions*

In order to qualify as a REIT for federal income tax purposes, theGeneral Partner must currently distribute at least 90% of its taxable income toits shareholders. The Partnership paid distributions of $1.81, $1.76 and $1.64for the years ended December 31, 2002, 2001 and 2000, respectively. ThePartnership expects to continue to distribute taxable earnings at least to theextent necessary for the General Partner to maintain its REIT status. However,distributions are declared at the discretion of the General Partner’s Board ofDirectors and are subject to actual cash available for distribution, thePartnership’s financial condition, capital requirements and such other factorsas the Board of Directors deems relevant.

 

*DebtMaturities*

Debt outstandingat December 31, 2002, totals $2.1 billion with a weighted average interest rateof 6.25% maturing at various dates through 2028. The Partnership had $1.8billion of unsecured debt and $299.1 million of secured debt outstanding atDecember 31, 2002. Scheduled principal amortization of such debt totaled $10.9million for the year ended December 31, 2002.

 

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Following is asummary of the scheduled future amortization and maturities of thePartnership’s indebtedness at December 31, 2002 (in thousands):

 
|                        |   |                   |   | **Weighted****Average  Interest Rate of  Future Repayments** |   |
|-----------------------------|--------|------------------------|--------|--------------------------------------------------------------|--------|
| **Year**                    |   | **Future  Repayments** |   |                                                         |
| **Scheduled  Amortization** |   | **Maturities**         |   | **Total**                                                    |
|                        |   |                   |   |                                                         |   |   |   |   |   |
| 2003                        |   | $                      | 10,309 |                                                         | $      | 249,437 |   | $ | 259,746 |   | 7.61 | % |
| 2004                        |   | 8,724                  |   | 462,151                                                      |   | 470,875 |   | 4.11 | % |
| 2005                        |   | 8,192                  |   | 205,980                                                      |   | 214,172 |   | 7.17 | % |
| 2006                        |   | 7,702                  |   | 170,074                                                      |   | 177,776 |   | 6.38 | % |
| 2007                        |   | 5,932                  |   | 114,615                                                      |   | 120,547 |   | 7.07 | % |
| 2008                        |   | 4,939                  |   | 133,852                                                      |   | 138,791 |   | 6.20 | % |
| 2009                        |   | 4,802                  |   | 275,000                                                      |   | 279,802 |   | 7.31 | % |
| 2010                        |   | 4,194                  |   | —                                                       |   | 4,194 |   | 6.30 | % |
| 2011                        |   | 3,462                  |   | 175,000                                                      |   | 178,462 |   | 6.93 | % |
| 2012                        |   | 1,977                  |   | 200,000                                                      |   | 201,977 |   | 5.76 | % |
| Thereafter                  |   | 9,943                  |   | 50,000                                                       |   | 59,943 |   | 6.54 | % |
|                        |   | $                      | 70,176 |                                                         | $      | 2,036,109 |   | $ | 2,106,285 |   | 6.25 | % |

 

### ***Common Stock Repurchase Program***

In January 2000, the General Partner’s Board of Directors authorized acommon stock repurchase program pursuant to which the General Partner wasauthorized to purchase up to $100 million of currently issued and outstandingcommon stock. During 2001, the General Partner’s Board of Directors increasedthe size of this common stock repurchase program to $250 million. Thisauthority may be exercised from time to time and in such amounts as marketconditions warrant. As of December 31, 2002, the General Partner has purchased20,000 shares of common stock valued at $437,000 under the repurchase program.The General Partner considers the price of its common stock and the effect ofrepurchases on its financial condition in determining whether to purchasecommon stock under its repurchase program.

 

Historical Cash Flows

 

Cash and cash equivalents were $17.1 million, $10.5 million and $39.2million at December 31, 2002, 2001 and 2000, respectively.  The 2002 increase of $6.6 million and 2001decrease of $28.7 million is the result of the following increases anddecreases in cash flows (amounts in thousands):

 
|                                              |   | **Years  Ended December 31,** |       |
|---------------------------------------------------|--------|-------------------------------|------------|
|                                              |   | **2002**                      |       | **2001** |   | **2000** |   |
| Net cash  provided by Operating Activities        |   | **$**                         | **569.0**  |   | $ | 348.7 |   | $ | 363.6 |   |
|                                              |   |                          |       |   |   |   |   |
| Net Cash  Provided (Used) by Investing Activities |   | **$**                         | **(337.2** | **)** | $ | 93.5 |   | $ | (12.0 | ) |
|                                              |   |                          |       |   |   |   |   |
| Net Cash Used  for Financing Activities           |   | **$**                         | **(225.1** | **)** | $ | (470.9 | ) | $ | (331.0 | ) |

 

*Operating Activities*

The $220.3 million increase in net cash provided by operatingactivities in 2002 compared to 2001 resulted primarily from the following:

•              ThePartnership received net proceeds of $168.2 million from its Build-to-Suitoperations in 2002, compared to incurring net development costs of $79.9million in 2001.  During 2002, thePartnership sold eight properties from its Build-to-Suit portfolio and at thesame time reduced its development pipeline in favor of developing properties tobe held as rental investments.

 

The Partnership’s net cash provided by operating activities decrease of$14.7 million from 2000 to 2001 was primarily the result of changes in cashprovided by changes in operating and assets and liabilities.

 

 

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*Investing Activities*

The decrease from net cash provided by investing activities in 2001 to2002 was attributable to the following:

 

•              During2001, the Partnership’s capital recycling program provided $436.1 million innet proceeds from land and depreciated property sales, compared to $52.2million in 2002, as the Partnership curtailed its recycling program.

•              Realestate development costs decreased from $251.4 million in 2001 to $158.1million in 2002, due to a reduction in new development in 2002 in response toweakened demand in many of the Partnership’s markets.

•              ThePartnership acquired $98.1 million of real estate assets in 2002 compared to $13.9million in 2001.

•              ThePartnership acquired $92.2 million of undeveloped land in 2001 compared to$27.2 million in 2002. The Partnership continually evaluates its inventory ofundeveloped land and strives to keep only land that meets long-term developmentopportunities.

•              In2001, the Partnership received $50.0 million in distributions fromunconsolidated companies associated with proceeds received from financingtransactions on two joint ventures in which the Partnership has a 50% ownershipinterest.

 

The change from net cash used by investing activities in 2000 to netcash provided by investing activities in 2001 was the result of the following:

•              Realestate development costs decreased by $54.9 million.

•              Cashfrom tax deferred exchange escrow, net, increased by $43.5 million with theincreased activity in the capital-recycling program.

•              In2001, net proceeds from land and depreciated property sales increased by $22.4million in connection with the capital recycling program.

•              Netdecreases in recurring tenant improvements, leasing costs and deferred leasingcosts of $45.6 million.

•              In2000, the Partnership received $158.4 million in distributions fromunconsolidated companies as a result of significant financing transactions withtwo joint ventures in which the Partnership has a 50% ownership interest (Seediscussion under Investments in Unconsolidated Companies).

 

*Financing Activities*

The $245.8 million decrease in net cash used for financing activitiesfrom 2001 to 2002 resulted from the following:

•                The Partnershiphad net borrowings of $157.3 million on its unsecured line of credit in 2002compared to net repayments of $125.1 million in 2001. The change is primarilydue to the Partnership’s increased use of its line of credit in the latter partof 2002.

•                During 2002, theGeneral Partner redeemed its Series F Preferred Stock for $150.0 million and aportion of its Series B Preferred Stock for $17.7 million. In 2001, the GeneralPartner redeemed its Series A Preferred Stock for $75.0 million and issued itsSeries I Preferred Stock for net proceeds of $72.2 million.

•                In 2002, thePartnership redeemed its Series G Preferred Units for $35.0 million.

•                In 2002, thePartnership issued $200.0 million of unsecured debt compared to $175.0 millionin 2001.

•                The Partnershippaid off $223.6 million of secured and unsecured debt in 2001 compared to $72.0million in 2002. During 2001, the Partnership took advantage of excessliquidity to pay off a portion of its secured debt early.

•                Distributions tocommon unitholders increased from $262.2 million in 2001 to $271.7 million in2002, which reflects the increase in common units outstanding and the quarterlyper unit dividend increase from $.45 to $.455 in 2002.

 

The $139.9 million increase in net cash used for financing activitiesfrom 2000 to 2001 was attributable to the following:

•                The Partnershiphad net borrowings of $14.7 million in 2000 compared to net repayments of$125.1 million in 2001 as discussed above.

 

21

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•              ThePartnership paid off $75.7 million of secured debt in 2000 compared to $223.6million in 2001 as discussed above.

 

Credit Ratings

 

The General Partner and the Partnership are currently assignedinvestment grade corporate credit ratings on senior unsecured notes from FitchRatings, Moody’s Investor Service and Standard and Poor’s Ratings Group.Currently, Fitch and Standard and Poor’s have assigned a rating of BBB+ andMoody’s Investors has assigned a rating of Baa1 to the senior notes.These ratingscould change based upon, among other things, the Partnership’s results ofoperations and financial condition.

 

The General Partner and the Partnership also receive credit ratingsfrom the same rating agencies on preferred stock.  Fitch and Standard and Poor’s have assigned a rating of BBB andMoody’s Investors has assigned a rating of Baa2. These ratings could changebased upon, among other things, the Partnership’s results of operations andfinancial condition.

 

Derivative Financial Instruments

 

The Partnership is exposed to capital market risk, such as changes ininterest rates.  In order to manage thevolatility relating to interest rate risk, the Partnership may enter intointerest rate hedging arrangements from time to time. The Partnership does notutilize derivative financial instruments for trading or speculative purposes.On January 1, 2001, the Partnership adopted Statement of Financial AccountingStandard No. 133, “*Accounting for DerivativeInstruments and Hedging Activities*”, as amended (“SFAS 133”). SFAS133 establishes accounting and reporting standards for derivative instrumentsand requires that entities recognize all derivatives as either assets orliabilities and measure those instruments at fair value. The cumulative effectof adopting SFAS 133 was not material to the Partnership’s financialstatements.

 

During the years ended December 31, 2002 and 2001, the Partnershiprecorded a $1.4 million gain and a $1.4 million loss, respectively, associatedwith an interest rate contract that did not qualify for hedge accounting. Thecontract expired on December 30, 2002.

 

In December 2002, the Partnership simultaneously entered into two $50million forward-starting interest rate swaps. The Partnership designated the aggregate $100 million swaps as a hedge toeffectively fix the rate on financing expected in 2003. The Partnership expectsand intends that the financing will be a ten-year fixed-rate semi-annualfinancing, pricing between May 1, 2003 and November 1, 2003. The fair value ofthe swaps was a liability of ($2.1) million as of December 31, 2002, and isrecorded in other liabilities in the accompanying balance sheet. The swapsqualify for hedge accounting under SFAS 133, therefore, changes in fair valuewill be recorded in other comprehensive income.

 

In July 2001, the Partnership terminatedthree interest rate swaps that were tied to an $85 million unsecured term loan.The swaps qualified for hedge accounting under SFAS 133. The costs to terminatethe swaps was $548,000, which was recorded as interest expense and reversed outof other comprehensive income.

 

# **Investments in Unconsolidated Companies**

 

The Partnership has equity interests ranging from 10 – 64% inunconsolidated partnerships and joint ventures that own and operate rentalproperties and hold land for development. The equity method of accounting isused for these investments in which the Partnership has the ability to exercisesignificant influence, but not control, over operating and financial policies.As a result, the assets and liabilities of these joint ventures are notincluded on the Partnership’s balance sheet.

 

The Partnership’s investment in unconsolidated companies representsless than 6% of the Partnership’s total assets as of December 31, 2002. Thisinvestment provides several benefits to the Partnership including increasedmarket share and an additional source of capital to fund real estate projects.

 

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Thefollowing tables presents summarized financial information for the Partnership’sinvestments in unconsolidated companies for the years ended December 31, 2002and 2001 (in thousands, except percentages):

 
|                                         |   | **Dugan  Realty, LLC** |    | **Dugan  Texas, LLC** |   | **Dugan  Office, LLC** |   | **Other  Industrial  and Office  Joint Ventures** |    | **Total** |   |
|----------------------------------------------|--------|------------------------|---------|-----------------------|--------|------------------------|--------|---------------------------------------------------|---------|-----------|--------|
|                                         |   | **2002**               |    | **2001**              |   | **2002**               |   | **2001**                                          |    | **2002**  |   | **2001** |   | **2002** |   | **2001** |   | **2002** |   | **2001** |   |
| Land, buildings and tenant improvements, net |   | $                      | 739,372 |                  | $      | 748,318                |   | $                                                 | 214,796 |      | $      | 204,339 |   | $ | 94,718 |   | $ | 97,855 |   | $ | 183,140 |   | $ | 210,978 |   | $ | 1,232,026 |   | $ | 1,261,490 |   |
| Land held for development                    |   | 18,763                 |    | 18,572                |   | 9,148                  |   | 12,453                                            |    | 4,294     |   | 4,293 |   | 6,643 |   | 6,644 |   | 38,848 |   | 41,962 |   |
| Other Assets                                 |   | 26,372                 |    | 23,443                |   | 17,427                 |   | 9,484                                             |    | 4,654     |   | 4,383 |   | 19,137 |   | 24,707 |   | 67,590 |   | 62,017 |   |
|                                         |   | $                      | 784,507 |                  | $      | 790,333                |   | $                                                 | 241,371 |      | $      | 226,276 |   | $ | 103,666 |   | $ | 106,531 |   | $ | 208,920 |   | $ | 242,329 |   | $ | 1,338,464 |   | $ | 1,365,469 |   |
|                                         |   |                   |    |                  |   |                   |   |                                              |    |      |   |   |   |   |   |   |   |   |   |   |   |
| Property indebtedness                        |   | $                      | 408,305 |                  | $      | 401,185                |   | $                                                 | 17,200  |      | $      | 17,200 |   | $ | 69,936 |   | $ | 70,658 |   | $ | 84,452 |   | $ | 92,434 |   | $ | 579,893 |   | $ | 581,477 |   |
| Other liabilities                            |   | 17,533                 |    | 19,086                |   | 7,851                  |   | 8,172                                             |    | 3,790     |   | 3,308 |   | 22,883 |   | 30,043 |   | 52,057 |   | 60,609 |   |
|                                         |   | 425,838                |    | 420,271               |   | 25,051                 |   | 25,372                                            |    | 73,726    |   | 73,966 |   | 107,335 |   | 122,477 |   | 631,950 |   | 642,086 |   |
| Owner’s equity                          |   | 358,669                |    | 370,062               |   | 216,320                |   | 200,904                                           |    | 29,940    |   | 32,565 |   | 101,585 |   | 119,852 |   | 706,514 |   | 723,383 |   |
|                                         |   | $                      | 784,507 |                  | $      | 790,333                |   | $                                                 | 241,371 |      | $      | 226,276 |   | $ | 103,666 |   | $ | 106,531 |   | $ | 208,920 |   | $ | 242,329 |   | $ | 1,338,464 |   | $ | 1,365,469 |   |
|                                         |   |                   |    |                  |   |                   |   |                                              |    |      |   |   |   |   |   |   |   |   |   |   |   |
| Rental income                                |   | $                      | 94,176  |                  | $      | 93,562                 |   | $                                                 | 26,636  |      | $      | 24,459 |   | $ | 17,280 |   | $ | 18,698 |   | $ | 31,591 |   | $ | 35,538 |   | $ | 169,683 |   | $ | 172,257 |   |
|                                         |   |                   |    |                  |   |                   |   |                                              |    |      |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                   |   | $                      | 28,164  |                  | $      | 27,381                 |   | $                                                 | 13,308  |      | $      | 13,532 |   | $ | 1,660 |   | $ | 4,965 |   | $ | 7,881 |   | $ | 12,213 |   | $ | 51,013 |   | $ | 58,091 |   |
|                                         |   |                   |    |                  |   |                   |   |                                              |    |      |   |   |   |   |   |   |   |   |   |   |   |
| Total square feet                            |   | 22,757                 |    | 23,356                |   | 5,878                  |   | 5,719                                             |    | 648       |   | 648 |   | 5,452 |   | 5,936 |   | 34,735 |   | 35,659 |   |
|                                         |   |                   |    |                  |   |                   |   |                                              |    |      |   |   |   |   |   |   |   |   |   |   |   |
| Percent leased                               |   | 94.1                   | %       | 92.8                  | %      | 95.3                   | %      | 85.9                                              | %       | 95.3      | %      | 94.6 | % | 87.2 | % | 79.2 | % | 93.2 | % | 89.5 | % |
|                                         |   |                   |    |                  |   |                   |   |                                              |    |      |   |   |   |   |   |   |   |   |   |   |   |
| Partnership ownership percentage             |   | 50.0                   | %       | 50.0                  | %      | 50.0                   | %      | 50.0                                              | %       | 50.0      | %      | 50.0 | % | 10.0%  -64.0 | % | 10.0%  -64.0 | % |   |   |   |   |

 

In October 2000,the Partnership sold or contributed industrial properties and undeveloped landwith a fair value of $487 million to a joint venture (Dugan Realty LLC) inwhich the Partnership has a 50% interest and recognized a net gain of $35.2million. This transaction expanded an existing joint venture with aninstitutional real estate investor. As a result of the total transactions, thePartnership received $363.9 million of proceeds. The joint venture partiallyfinanced this transaction with $350 million of secured mortgage debt of whichthe Partnership has guaranteed $90 million and agreed to provide additionalcapital contributions to pay all sums due under the remaining $260 million. AtDecember 31, 2002, this $350 million of debt is collateralized by rentalproperties with a net carrying value substantially in excess of the outstandingdebt. If required to make additional capital contributions, the Partnershipwill receive proportionately increased ownership in the respectivecollateralized properties. The Partnership does not anticipate that it will berequired to satisfy the guarantee or additional capital contributionobligations. In connection with this transaction, the joint venture partnerswere given an option to put up to a $50 million interest in the joint ventureto the Partnership in exchange for common stock of the General Partner or cash,subject to timing and other restrictions. As a result of this put option, thePartnership deferred $10.2 million of gain on sale of depreciated property andrecorded a $50 million liability. At December 31, 2002, the joint venture owns130 buildings totaling approximately 23 million square feet with a value ofapproximately $760 million. The Partnership provides real estate relatedservices to the venture through its Service Operations.

 

In December 2000,the Partnership contributed 14 industrial properties, including five underdevelopment, totaling approximately three million square feet to a jointventure (Dugan Texas LLC) in which the Partnership has a 50% interest. ThePartnership also contributed 145 acres of undeveloped land. The Partnershipreceived $33.1 million of proceeds and recorded a net gain of $686,000 as aresult of the transaction. At December 31, 2002, the joint venture owns 32buildings totaling approximately 6 million square feet with a value ofapproximately $224 million. The Partnership provides real estate relatedservices to the venture through its Service Operations.

 

The Partnership does not have any relationships withunconsolidated entities or financial partnerships, such as “special purposeentities,” which were established for the purpose of facilitating off-balancesheet arrangements or other specific purposes.

 

**RelatedParty Transactions**

 

ThePartnership provides property management, leasing, construction and othertenant related services to properties in which certain executives haveownership interests. The Partnership has an option to acquire

 

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theseexecutive officers’ interests in these properties (the “Option Properties”).The Partnership received fees totaling $1.4 million, $1.7 million and $1.9million in 2002, 2001 and 2000, respectively, for services provided to theOption Properties. The fees charged by the Partnership for such services areequivalent to those charged to third-party owners for similar services.

 

On June 27, 2001, A. Ray Weeks, Jr. resigned his position as a directorand Vice Chairman of the General Partner. On August 17, 2001, the Partnershipredeemed 620,156 common units beneficially owned by Mr. Weeks and certainmembers of his immediate and extended family (the “Weeks Affiliates”). Thedeemed value of the units redeemed was $15.7 million, which was based on theaverage closing stock price of the General Partner’s common stock for a certainperiod of days preceding the redemption date. As consideration for theredemption, the Weeks Affiliates received a distribution of seven industrialrental properties and one undeveloped tract of land located in the Atlanta,Georgia metropolitan area with a value of $31.7 million. The Weeks Affiliatesalso assumed a loan in the amount of $16 million from Wachovia Bank, N.A. tothe Partnership. The value of the properties distributed to the WeeksAffiliates was based on negotiations between Mr. Weeks and members of theGeneral Partner’s executive committee, and was approved by the unaffiliatedmembers of the General Partner’s Board of Directors.

 

In 2002, the Partnership received lease termination fees totaling $7.7million from a tenant that is a subsidiary of Progress Energy. WilliamCavanaugh III is President and Chief Executive Officer of Progress Energy and amember of the General Partner’s Board of Directors. The General Partner’sindependent directors approved the transaction and management believes that theamount received approximates a value that would have been charged to tenantswith similar lease terms and commitments.

 

The Partnership has other related party transactions that areinsignificant and terms are considered to be at arm’s-length and equal to thosenegotiated with independent parties.

 

**Commitmentsand Contingencies**

 

The Partnershiphas the following commitments and contingencies in addition to those previouslydisclosed:

 

In 1998 and 1999,members of management and the General Partner’s Board of Directors purchased$69 million of common stock in connection with an Executive and Senior OfficerStock Purchase Plan. The purchases were financed by five-year personal loans atmarket interest rates from financial institutions. As of December 31, 2002, theoutstanding balance on these loans is $33.5 million as some participants haveexited the program and repaid their principal balance. These loans are securedby $41.0 million of the General Partner’s common shares (based on a price pershare of $25.45 at December 31, 2002) purchased through this program and heldat December 31, 2002, by the remaining plan participants. As a condition of thefinancing agreement with the financial institution, the Partnership hasguaranteed repayment of principal, interest and other obligations for eachparticipant, but is fully indemnified by the participants. In the opinion of management,it is not probable that the Partnership will be required to satisfy theseguarantees.

 

The Partnershiphas entered into agreements, subject to the completion of due diligencerequirements, resolution of certain contingencies and completion of customaryclosing conditions, for the future acquisition of land totaling $26.2 million.The acquisitions are scheduled to close periodically through 2003.

 

The Partnershiprenewed all major insurance programs for 2002-2003, including obtainingcoverage for acts of terrorism for its properties. The Partnership believesthat insurance is in place that provides adequate coverage to provide financialprotection against normal insurance risks such that it believes that any lossexperienced would not have a significant impact on the Partnership’s liquidity,financial position, or results of operations.

 

The Partnership issubject to various legal proceedings and claims that arise in the ordinarycourse of business. In the opinion of management, the amount of any ultimateliability with respect to these actions will not materially affect thePartnership’s consolidated financial statements or results of operations.

 

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# **FundsFrom Operations**

 

Management believes that Funds From Operations (“FFO”) is the industrystandard for reporting the operations of real estate investment trusts. FFO isdefined by the National Association of Real Estate Investment Trusts as GAAPnet income or loss, excluding gains or losses from sales of depreciatedoperating property, plus operating property depreciation and amortization andadjustments for minority interest and unconsolidated companies on the samebasis.

 

The following table reflects the calculation of FFO for the years endedDecember 31 (in thousands):

 
|                                              |   | **2002**     |        | **2001** |   | **2000** |   |
|---------------------------------------------------|--------|--------------|-------------|----------|--------|----------|--------|
|                                              |   |         |        |     |   |     |   |
| Net income available for common units             |   | **$**        | **179,746** |     | $      | 262,430  |   | $ | 245,029 |   |
| Add back (deduct):                                |   |         |        |     |   |     |   |
| Depreciation and amortization                     |   | **175,621**  |        | 159,714  |   | 162,523  |   |
| Share of adjustments for unconsolidated companies |   | **17,657**   |        | 14,177   |   | 9,104    |   |
| Loss (Earnings) from depreciated property sales   |   | **3,430**    |        | (40,628  | )      | (51,527  | )      |
| **Funds From Operations**                         |   | **$**        | **376,454** |     | $      | 395,693  |   | $ | 365,129 |   |
| **Cash flow provided by (used by):**              |   |         |        |     |   |     |   |
| Operating activities                              |   | **$**        | **568,973** |     | $      | 348,680  |   | $ | 363,610 |   |
| Investing activities                              |   | **(337,247** | **)**       | 93,488   |   | (11,972  | )      |
| Financing activities                              |   | **(225,050** | **)**       | (470,915 | )      | (330,952 | )      |

 

Whilemanagement believes that FFO is the most relevant and widely used measure ofthe Partnership’s operating performance, such amount does not represent cashflow from operations as defined by generally accepted accounting principles,should not be considered as an alternative to net income as an indicator of thePartnership’s operating performance, and is not indicative of cash available tofund all cash flow needs.

 

# **Accounting Changes**

 

The Partnership elected to prospectivelyadopt Statement of Financial Accounting Standards (“SFAS”) No. 123, *“Accounting for Stock Based Compensation,”(“SFAS123”)*effective January 1, 2002. As a result, the Partnershipexpenses stock options over the vesting period based upon the estimated fairvalue of the options at the date of grant. Additionally, the Partnershipexpenses the discount given to employees under the employee stock purchaseplan. The Partnership recorded expense of $405,000 for the year ended 2002related to stock compensation from this accounting change.

 

In conjunction with the adoption of SFAS 123, the Partnership adoptedSFAS No. 148, *“Accounting for Stock BasedCompensation- Transition and Disclosure,”* which amends SFAS No.123.  SFAS No. 148 provides foralternative methods of transition for a voluntary adoption of SFAS 123 andamends the disclosure requirements of SFAS 123 to require disclosures in bothannual and interim financial statements about the method of accounting forstock-based employee compensation and the effect of the method used on reportedresults. The adoption of this statement using the prospective method did nothave a material impact on the financial position or results of operations ofthe Partnership.

 

The Partnership adopted SFAS No. 144, *“Accountingfor the Impairment or Disposal of Long Lived Assets,”* (“SFAS 144”)on January 1, 2002.  SFAS 144 requiresthe Partnership to report in discontinued operations the results of operationsof a property that has either been disposed of or is classified as held forsale, unless certain conditions are met. The effect of adoption of SFAS 144resulted in net income of $3.2 million, $3.6 million and $1.2 million beingclassified as discontinued operations for the three years ended December 31,2002, 2001 and 2000, respectively. SFAS 144 also requires that any gains orlosses from the sale of a property be reported in discontinued operations,unless certain conditions are met. The Partnership also classified a gain onthe sale of properties of $2.7 million as discontinued operations for the yearended December 31, 2002.

 

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# **RecentAccounting Pronouncements**

 

In April 2002, the Financial Accounting Standards Board (“FASB”) issuedSFAS No. 145, which rescinded SFAS No. 4, SFAS No. 44 and SFAS No. 64, as wellas amending SFAS No. 13.  The adoptionof this statement is not expected to have a material impact on the financialposition or results of operations of the Partnership.

 

In June 2002, the FASB issued SFAS No. 146, *“Accounting for Costs Associated with Exit or Disposal Activities,”*which addresses financial accounting and reporting for costs associated withexit or disposal activities. The provisions of this statement are effective forexit and disposal activities that are initiated after December 31, 2002. Theadoption of this statement is not expected to have a material impact on thefinancial position or results of operations of the Partnership.

 

In November 2002, FASB issued Interpretation No. 45, *Guarantor’s Accounting and Disclosure Requirementsfor Guarantees, Including Indirect Guarantees of Indebtedness of Others*(“Interpretation45”)*,*which addresses the disclosureto be made by a guarantor in its interim and annual financial statements aboutits obligations under guarantees. These disclosure requirements are included inthe footnotes to the consolidated financial statements. Interpretation 45 alsorequires the recognition of a liability by a guarantor at the inception ofcertain guarantees.

 

Interpretation 45 requires the guarantor to recognize a liability forthe non-contingent component of the guarantee, which is the obligation to standready to perform in the event that specified triggering events or conditionsoccur. The initial measurement of this liability is the fair value of theguarantee at inception. The recognition of the liability is required even if itis not probable that payments will be required under the guarantee or if theguarantee was issued with a premium payment or as part of a transaction withmultiple elements. The Partnership has adopted the disclosure requirements ofInterpretation 45 and will apply the recognition and measurement provisions forall guarantees entered into or modified after December 31, 2002.

 

In January 2003, FASB issued Interpretation 46, *Consolidation of Variable Interest Entities*(“Interpretation46”)*,* which addressesconsolidation of certain variable interest entities and is effective January31, 2003. The Partnership will review its investments in unconsolidatedcompanies based on this new accounting pronouncement, but does not anticipatethat the adoption of Interpretation 46 will have a material impact on its financialstatements.

 

**Item 7A.  Quantitative and QualitativeDisclosure About Market Risks**

 

The Partnership is exposed to interest rate changes primarily as aresult of its line of credit and long-term debt used to maintain liquidity andfund capital expenditures and expansion of the Partnership’s real estateinvestment portfolio and operations. The Partnership’s interest rate riskmanagement objective is to limit the impact of interest rate changes onearnings and cash flows and to lower its overall borrowing costs. To achieveits objectives the Partnership borrows primarily at fixed rates and may enterinto derivative financial instruments such as interest rate swaps, caps andtreasury locks in order to mitigate its interest rate risk on a related financialinstrument. The Partnership does not enter into derivative or interest ratetransactions for speculative purposes.

 

ThePartnership’s interest rate risk is monitored using a variety of techniques.The table below presents the principal amounts (in thousands) of the expectedannual maturities, weighted average interest rates for the average debtoutstanding in the specified period, fair values and other terms required toevaluate the expected cash flows and sensitivity to interest rate changes. Thefair values of the Partnership’s debt instruments are calculated as the presentvalue of estimated future cash flows using a discount rate commensurate withthe risks involved.

 

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|                                      |   | **2003** |    | **2004** |   | **2005** |   | **2006** |    | **2007** |   | **Thereafter** |   | **Total** |    | **Fair  Value** |   |
|-------------------------------------------|--------|----------|---------|----------|--------|----------|--------|----------|---------|----------|--------|----------------|--------|-----------|---------|-----------------|--------|
|                                      |   |     |    |     |   |     |   |     |    |     |   |           |   |      |    |            |   |
| Fixed rate secured debt                   |   | $        | 83,809  |     | $      | 38,900   |   | $        | 13,204  |     | $      | 52,860         |   | $         | 19,580  |            | $      | 51,023 |   | $ | 259,376 |   | $ | 278,820 |   |
| Weighted average interest rate            |   | 8.32     | %       | 7.68     | %      | 7.19     | %      | 7.17     | %       | 7.63     | %      | 5.63           | %      |      |    |            |   |
|                                      |   |     |    |     |   |     |   |     |    |     |   |           |   |      |    |            |   |
| Variable rate LIBOR based secured debt    |   | $        | —  |     | $      | —   |   | $        | —  |     | $      | 23,895         |   | $         | —  |            | $      | — |   | $ | 23,895 |   | $ | 23,895 |   |
| Rate at December 31, 2002                 |   | N/A      |    | N/A      |   | N/A      |   | 1.98     | %       | NA       |   | N/A            |   |      |    |            |   |
|                                      |   |     |    |     |   |     |   |     |    |     |   |           |   |      |    |            |   |
| Variable rate Treasury based secured debt |   | $        | 686     |     | $      | 711      |   | $        | 741     |     | $      | 781            |   | $         | 811     |            | $      | 12,146 |   | $ | 15,876 |   | $ | 15,875 |   |
| Weighted average interest rate            |   | 1.39     | %       | 1.39     | %      | 1.39     | %      | 1.38     | %       | 1.38     | %      | 1.29           | %      |      |    |            |   |
|                                      |   |     |    |     |   |     |   |     |    |     |   |           |   |      |    |            |   |
| Unsecured notes                           |   | $        | 175,251 |     | $      | 150,264  |   | $        | 200,227 |     | $      | 100,240        |   | $         | 100,156 |            | $      | 800,000 |   | $ | 1,526,138 |   | $ | 1,666,557 |   |
| Weighted average interest rate            |   | 7.30     | %       | 7.01     | %      | 7.19     | %      | 7.05     | %       | 7.00     | %      | 6.78           | %      |      |    |            |   |
|                                      |   |     |    |     |   |     |   |     |    |     |   |           |   |      |    |            |   |
| Unsecured lines of credit                 |   | $        | —  |     | $      | 281,000  |   | $        | —  |     | $      | —         |   | $         | —  |            | $      | — |   | $ | 281,000 |   | $ | 281,000 |   |
| Weighted average interest rate            |   | N/A      |    | 2.07     | %      | N/A      |   | N/A      |    | N/A      |   | N/A            |   |      |    |            |   |

 

As the table incorporates only those exposures that exist as ofDecember 31, 2002, it does not consider those exposures or positions that couldarise after that date. As a result, the Partnership’s ultimate realized gain orloss with respect to interest rate fluctuations will depend on the exposuresthat arise during the period, the Partnership’s hedging strategies at thattime, and interest rates.

 

In December 2002, the Partnership entered into two $50 millionforward-starting interest rate swaps. The fair value of the swaps was aliability of ($2.1) million as of December 31, 2002. See footnote 12 to theConsolidated Financial Statements for further information.

 

**Item 8.  Financial Statements andSupplementary Data**

 

Thefinancial statements and supplementary data are included under Item 15 of thisReport.

 

**Item 9.  Changesin and Disagreements with Accountants on Accounting and Financial Disclosure**

 

None.

 

**Part III**

 

**Item 10.  Directorsand Executive Officers of the Registrant**

 

ThePartnership does not have any directors or officers. The information requiredby Item 10 for Directors and Certain Executive Officers is contained in adefinitive proxy statement of the General Partner, which was filed on March 7,2003, and herein is incorporated by reference.

 

**Item 11.  Executive Compensation**

 

Theinformation required by Item 11 is contained in a definitive proxy statementfor the General Partner that was filed on March 7, 2003, and herein isincorporated by reference.

 

**Item 12.Security Ownership of CertainBeneficial Owners and Management and Related Unitholder Matters**

 

The information required by Item 12 is contained in a definitive proxystatement for the General Partner that was filed on March 7, 2003, and herein is incorporated by reference.

 

**Item 13.  Certain Relationships and RelatedTransactions**

 

Theinformation required by Item 13 is contained in a definitive proxy statementfor the General Partner that was filed on March 7, 2003, and herein isincorporated by reference.

 

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**Item 14.DisclosureControls and Procedures**

 

The Partnership maintains disclosure controls and procedures that aredesigned to ensure that information required to be disclosed in our annual andperiodic reports filed with the SEC is recorded, processed, summarized andreported within the time periods specified in the SEC’s rules and forms. Thesedisclosure controls and procedures are further designed to ensure that suchinformation is accumulated and communicated to management, including theGeneral Partner’s chief executive officer and chief financial officer, to allowtimely decisions regarding required disclosure.

 

Based on the most recent evaluation, which was completed within 90 daysof the filing of this report, the General Partner’s chief executive officer andchief financial officer believe that the Partnership’s disclosure controls andprocedures are effective. There have been no significant changes in theinternal controls or in other factors that could significantly affect theinternal controls subsequent to the date of the completed evaluation.

 

**Part IV**

 

**Item 15.****  Exhibits, Financial Statement Schedules, andReports on Form 8-K**

 

**(a)             Thefollowing documents are filed as part of this Form 10-K:**

 

**1.       Consolidated Financial Statements**

 

Thefollowing Consolidated Financial Statements of the Partnership, together withthe Independent Auditors’ Report, are listed below:

 
| Independent Auditors’ Report                                                               |
|-------------------------------------------------------------------------------------------------|
| Consolidated Balance Sheets,  December 31, 2002 and 2001                                        |
| Consolidated Statements of  Operations, Years Ended December 31, 2002, 2001 and 2000            |
| Consolidated Statements of  Cash Flows, Years Ended December 31, 2002, 2001 and 2000            |
| Consolidated Statements of  Partners’ Equity, Years Ended December 31, 2002, 2001 and 2000 |
| Notes to Consolidated  Financial Statements                                                     |

 

**2.       Consolidated Financial StatementSchedules**

 

ScheduleIII – Real Estate and Accumulated Depreciation

 

**3.       Exhibits**

 

The following exhibits are filed with this Annual ReportForm 10-K or incorporated herein by reference to the listed document previouslyfiled with the SEC. Previously unfilled documents are noted with an asterisk(*).

 
| **Number** |   | **Description**                                                                                                                                                                                                                                           |
|------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |   |                                                                                                                                                                                                                                                      |
| 4.1        |   | Second  Amended and Restated Agreement of Limited Partnership of the Partnership,  incorporated by reference to Exhibit 4.1 to the Partnership’s Current Report  on Form 8-K filed on July 16, 2000.                                                 |
|       |   |                                                                                                                                                                                                                                                      |
| 4.2        |   | First  Amendment to Second Amended and Restated Agreement of Limited Partnership of  the Partnership, incorporated by reference from Exhibit 10.2 to the General  Partner’s Annual Report on Form 10-K for the fiscal year ended December 31,  2001. |
|       |   |                                                                                                                                                                                                                                                      |
| 4.3        |   | Second  Amendment to Second Amended and Restated Agreement of Limited Partnership of  the Partnership, incorporated by reference to Exhibit 10.3 to the General  Partner’s Annual Report on Form 10-K for the fiscal year ended December 31,  2002.  |

 

28

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| 4.4    |   | Third  Amendment To Second Amended and Restated Agreement of Limited Partnership of  the Partnership, incorporated by reference to Exhibit 10.4 to the General  Partner’s Annual Report on Form 10-K for the fiscal year ended December 31,  2002.                                         |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                            |
| 4.5    |   | Fourth  Amendment to Second Amended and Restated Agreement of Limited Partnership of  the Partnership, incorporated by reference to Exhibit 10.5 to the General  Partner’s Annual Report on Form 10-K for the fiscal year ended December 31,  2002.                                        |
|   |   |                                                                                                                                                                                                                                                                                            |
| 4.6    |   | Indenture  between the Partnership and The First National Bank of Chicago, Trustee,  incorporated by reference to Exhibit 4.1 to the General Partner’s Current  Report on Form 8-K filed September 22, 1995.                                                                               |
|   |   |                                                                                                                                                                                                                                                                                            |
| 4.7    |   | First  Supplement to Indenture, incorporated by reference to Exhibit 4.2 to the  General Partner’s Current Report on Form 8-K filed September 22, 1995.                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                            |
| 4.8    |   | Second  Supplement to Indenture, incorporated by reference to Exhibit 4 to the  Partnership’s Current Report on Form 8-K filed July 12, 1996.                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                            |
| 4.9    |   | Third  Supplement to Indenture, incorporated by reference to Exhibit 4 to the  Partnership’s Current Report on Form 8-K filed May 20, 1998.                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                            |
| 4.10   |   | Fourth  Supplement to Indenture, incorporated by reference to Exhibit 4.8 to the  General Partner’s Form S-4 Registration Statement No. 333-77645 dated May 4,  2000 (Merger Registration Statement).                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                            |
| 4.11   |   | Fifth  Supplement to Indenture, incorporated by reference to Exhibit 4 to the  Partnership’s Current Report on Form 8-K filed June 1, 1999.                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                            |
| 4.12   |   | Sixth  Supplement to Indenture, incorporated by reference to Exhibit 4 to the  Partnership’s Current Report on Form 8-K filed February 12, 2000.                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                            |
| 4.13   |   | Seventh  Supplement to Indenture, incorporated by reference to Exhibit 4 to the  Partnership’s Current Report on Form 8-K filed June 29, 2000.                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                            |
| 4.14   |   | Eighth  Supplement to Indenture, incorporated by reference to Exhibit 4 to the  Partnership’s Current Report on Form 8-K filed November 15, 2000.                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                            |
| 4.15   |   | Ninth  supplement to Indenture, incorporated by reference to Exhibit 4 to the  Partnership’s Current Report on Form 8-K filed March 2, 2002.                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                            |
| 4.16   |   | Tenth  supplement to Indenture, incorporated by reference to Exhibit 4 to the  Partnership’s Current Report on Form 8-K filed August 13, 2002.                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                            |
| 4.17   |   | Eleventh  supplement to Indenture, incorporated by reference to Exhibit 4 to the  Partnership’s Current Report on Form 8-K filed August 26, 2002.                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                            |
| 4.18   |   | Twelfth  supplement to Indenture, incorporated by reference to Exhibit 4 to the  Partnership’s Current Report on Form 8-K filed January 16, 2003.                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                            |
| 10.1   |   | Second  Amended and Restated Agreement of Limited Partnership of Duke Realty Services  Limited Partnership (the “Services Partnership”) incorporated herein by  reference to Exhibit 10.3 to the Partnership’s Annual Report on Form 10-K for  the year ended December 31, 1995. |

 

29

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| 10.2   |   | First  Amendment to Second Amended and Restated Agreement of Limited Partnership of  the Services Partnership incorporated by reference to Exhibit 10.7 to the  General Partner’s Annual Report on Form 10-K for the fiscal year ended  December 31, 2002.  |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                             |
| 10.3   |   | Second  Amendment to Second Amended and Restated Agreement of Limited Partnership of  the Services Partnership incorporated by reference to Exhibit 10.8 to the  General Partner’s Annual Report on Form 10-K for the fiscal year ended  December 31, 2002. |
|   |   |                                                                                                                                                                                                                                                             |
| 10.4   |   | Third  Amendment to Second Amended and Restated Agreement of Limited Partnership of  the Services Partnership incorporated by reference to Exhibit 10.9 to the  General Partner’s Annual Report on Form 10-K for the fiscal year ended  December 31, 2002.  |
|   |   |                                                                                                                                                                                                                                                             |
| 10.5   |   | Promissory  Note of the Services Partnership incorporated herein by reference to Exhibit  10.3 to the Partnership’s Form S-2 Registration Statement No 33-64038 filed  June 8, 1993 (the “1993 Registration Statement”).                          |
|   |   |                                                                                                                                                                                                                                                             |
| 10.6   |   | Services  Partnership 1993 Stock Option Plan incorporated herein by reference to  Exhibit 10.4 to the 1993 Registration Statement.#                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                             |
| 10.7   |   | Amendment  One to Services Partnership 1993 Stock Option Plan incorporated by reference  to Exhibit 10.12 to the General Partner’s Annual Report on Form 10-K for the  fiscal year ended December 31, 2002.#                                                |
|   |   |                                                                                                                                                                                                                                                             |
| 10.8   |   | Amendment  Two to Services Partnership 1993 Stock Option Plan incorporated by reference  to Exhibit 10.13 to the General Partner’s Annual Report on Form 10-K for the  fiscal year ended December 31, 2002.#                                                |
|   |   |                                                                                                                                                                                                                                                             |
| 10.9   |   | Amendment  Three to Services Partnership 1993 Stock Option Plan incorporated by  reference to Exhibit 10.14 to the General Partner’s Annual Report on Form  10-K for the fiscal year ended December 31, 2002.#                                              |
|   |   |                                                                                                                                                                                                                                                             |
| 10.10  |   | Acquisition  Option Agreement relating to certain properties not contributed to the  Operating Partnership by Duke Associates (the “Excluded Properties”)  incorporated herein by reference to Exhibit 10.5 to the 1993 Registration  Statement.       |
|   |   |                                                                                                                                                                                                                                                             |
| 10.11  |   | Management  Agreement relating to the Excluded Properties incorporated herein by  reference to Exhibit 10.6 to the 1993 Registration Statement.                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                             |
| 10.12  |   | Indemnification  Agreement incorporated herein by reference to Exhibit 10.11 to the 1993  Registration Statement.                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                             |
| 10.13  |   | 1995  Key Employee Stock Option Plan of the Partnership incorporated herein by  reference to Exhibit 10.13 to the Partnership’s Annual Report on Form 10-K  for the year ended December 31, 1995.#                                                          |
|   |   |                                                                                                                                                                                                                                                             |
| 10.14  |   | Amendment  One To The 1995 Key Employees’ Stock Option Plan of Duke Realty Investments,  Inc. incorporated by reference to Exhibit 10.19 to the General Partner’s  Annual Report on Form 10-K for the fiscal year ended December 31, 2002.#            |
|   |   |                                                                                                                                                                                                                                                             |
| 10.15  |   | Amendment  Two to the 1995 Key Employees’ Stock Option Plan of Duke Realty Investments,  Inc. incorporated by reference to Exhibit 10.20 to the General Partner’s  Annual Report on Form 10-K for the fiscal year ended December 31, 2002.#            |

 

30

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| 10.16  |   | Amendment  Three to the 1995 Key Employees’ Stock Option Plan of Duke Realty  Investments, Inc. incorporated by reference to Exhibit 10.21 to the General  Partner’s Annual Report on Form 10-K for the fiscal year ended December 31,  2002.# |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                     |
| 10.17  |   | Amendment  Four to the 1995 Key Employees’ Stock Option Plan of Duke Realty Investments,  Inc. incorporated by reference to Exhibit 10.22 to the General Partner’s  Annual Report on Form 10-K for the fiscal year ended December 31, 2002.#   |
|   |   |                                                                                                                                                                                                                                                     |
| 10.18  |   | Amendment  Five to the 1995 Key Employees’ Stock Option Plan of Duke Realty Investments,  Inc. incorporated by reference to Exhibit 10.23 to the General Partner’s  Annual Report on Form 10-K for the fiscal year ended December 31, 2002.#   |
|   |   |                                                                                                                                                                                                                                                     |
| 10.19  |   | Amendment  Six to the 1995 Key Employees’ Stock Option Plan of Duke Realty Investments,  Inc. incorporated by reference to Exhibit 10.24 to the General Partner’s  Annual Report on Form 10-K for the fiscal year ended December 31, 2002.#    |
|   |   |                                                                                                                                                                                                                                                     |
| 10.20  |   | Amended  and Restated Dividend Increase Unit Plan of the Services Partnership.  incorporated by reference to Exhibit 10.25 to the General Partner’s Annual  Report on Form 10-K for the fiscal year ended December 31, 2002.#                       |
|   |   |                                                                                                                                                                                                                                                     |
| 10.21  |   | Amendment  One to the Amended and Restated Dividend Increase Unit Plan of Services  Partnership incorporated by reference to Exhibit 10.26 to the General  Partner’s Annual Report on Form 10-K for the fiscal year ended December 31,  2002.#      |
|   |   |                                                                                                                                                                                                                                                     |
| 10.22  |   | Amendment  Two to the Amended and Restated Dividend Increase Unit Plan of Services  Partnership incorporated by reference to Exhibit 10.27 to the General  Partner’s Annual Report on Form 10-K for the fiscal year ended December 31,  2002.#      |
|   |   |                                                                                                                                                                                                                                                     |
| 10.23  |   | 1995  Shareholder Value Plan of the Services Partnership incorporated herein by  reference to Exhibit 10.15 to the General Partner’s Annual Report on Form  10-K for the fiscal year ended December 31, 1995.#                                      |
|   |   |                                                                                                                                                                                                                                                     |
| 10.24  |   | Amendment  One to the 1995 Shareholder Value Plan of Services Partnership incorporated  by reference to Exhibit 10.29 to the General Partner’s Annual Report on Form  10-K for the fiscal year ended December 31, 2002.#                            |
|   |   |                                                                                                                                                                                                                                                     |
| 10.25  |   | Amendment  Two to the 1995 Shareholder Value Plan of Services Partnership incorporated  by reference to Exhibit 10.30 to the General Partner’s Annual Report on Form  10-K for the fiscal year ended December 31, 2002.#                            |
|   |   |                                                                                                                                                                                                                                                     |
| 10.26  |   | Amendment  Three to the 1995 Shareholder Value Plan of Services Partnership incorporated  by reference to Exhibit 10.31 to the General Partner’s Annual Report on Form  10-K for the fiscal year ended December 31, 2002.#                          |
|   |   |                                                                                                                                                                                                                                                     |
| 10.27  |   | 1999  Duke Realty Severance Pay Plan incorporated herein by reference to Exhibit  10.18 to the General Partner’s Annual Report on Form 10-K for the fiscal year  ended December 31, 1999.#                                                          |
|   |   |                                                                                                                                                                                                                                                     |
| 10.28  |   | 2000  Directors’ Stock Option and Dividend Increase Unit Plan incorporated by  reference to Annex F to the Prospectus in the Merger Registration Statement.#                                                                                        |
|   |   |                                                                                                                                                                                                                                                     |
| 10.29  |   | 2000  Salary Replacement Stock Option and Dividend Increase Unit Plan is  incorporated by reference to Annex G to the Prospectus in the Merger  Registration Statement.#                                                                                 |

 

31

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| 10.30  |   | Third  Amended and Restated Revolving Credit Agreement dated February 28, 2002,  among the Partnership as borrower, the General Partner as General Partner and  Guarantor and Bank One as Administrative Agent and Lender incorporated by  reference to Exhibit 10.35 to the General Partner’s Annual Report on Form  10-K for the fiscal year ended December 31, 2002. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                         |
| 10.31  |   | Revolving  Credit Agreement dated July 9, 2002, among the Partnership as borrower, the  General Partner as General Partner an Bank One as Administrative Agent and  Lender incorporated by reference to Exhibit 10.23 to the General Partner’s  Annual Report on Form 10-K for the fiscal year ended December 31, 2002.                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                         |
| 11.1   |   | Statement  of Computation of Ratios of Earnings to Fixed Charges.*                                                                                                                                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                         |
| 11.2   |   | Statement  of Computation of Ratios of Earnings to Debt Service.*                                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                         |
| 21.    |   | List  of the Partnership’s Subsidiaries.*                                                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                         |
| 23.    |   | Consent  of KPMG LLP.*                                                                                                                                                                                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                         |
| 24.    |   | Executed  powers of attorney of certain directors.*                                                                                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                         |
| 99.1   |   | Certification  Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002.*                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                         |
| 99.2   |   | Certification  Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002.*                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                         |
| 99.3   |   | Selected  Quarterly Financial Information.*                                                                                                                                                                                                                                                                                                                                  |

 

----

# Represents management contract or compensatory plan or arrangement.

 

The Partnership will furnish to any security holder, upon writtenrequest, copies of any exhibit incorporated by reference, for a fee of 15 centsper page, to cover the costs of furnishing the exhibits. Written request

 

should include a representation that the person making the request wasthe beneficial owner of securities entitled to vote at the Annual Meeting ofShareholders of the General Partner.

 

**(b)****                                  Reports on Form 8-K**

 

None

 

**(c)****                                  Exhibits**

 

The exhibits required to be filed with this Annual Report Form 10-Kpursuant to Item 601 of Regulation S-K or listed under “Exhibits” in Part IV,Item 14(a)(3) of Form 10-K, which are incorporated herein by reference.

 

**(d)           FinancialStatement Schedule**

 

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

 

32

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**IndependentAuditors’ Report**

 

The Partners

Duke RealtyLimited Partnership:

 

We have auditedthe consolidated balance sheets of Duke Realty Limited Partnership andSubsidiaries as of December 31, 2002 and 2001, and the related consolidatedstatements of operations, cash flows and partners’ equity for each of the yearsin the three-year period ended December 31, 2002. In connection with our auditsof the consolidated financial statements, we also have audited the financialstatement schedule III. These consolidated financial statements and the financialstatement schedule are the responsibility of the Partnership’s management. Ourresponsibility is to express an opinion on the consolidated financialstatements and the financial statement schedule based on our audits.

 

We conducted ouraudits in accordance with auditing standards generally accepted in the UnitedStates of America. Those standards require that we plan and perform the auditto obtain reasonable assurance about whether the financial statements are freeof material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In our opinion,the consolidated financial statements referred to above present fairly, in allmaterial respects, the financial position of Duke Realty Limited Partnershipand Subsidiaries as of December 31, 2002 and 2001, and the results of theiroperations and their cash flows for each of the years in the three-year periodended December 31, 2002, in conformity with accounting principles generally acceptedin the United States of America. 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.

 

 

**KPMG LLP**

Indianapolis, Indiana

January 29, 2003

 

33

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**PART I - FINANCIAL INFORMATION**

**Item 1. Financial Statements**

**DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES**

**Condensed Consolidated Balance Sheets**

**(in thousands)**

 
|                                                                                      |   | **December 31,  2002** |          | **December 31,  2001** | ** ** |
|-------------------------------------------------------------------------------------------|--------|------------------------|---------------|------------------------|------------|
| **ASSETS**                                                                                |   |                   | ** **    |                   |       |
|                                                                                      |   |                   | ** **    |                   |       |
| Real estate investments:                                                                  |   |                   | ** **    |                   |       |
| Land and  improvements                                                                    |   | **$**                  | **608,995**   | ** **             | $          | 583,909 |   |
| Buildings and tenant improvements                                                         |   | **4,237,360**          | ** **    | 4,068,944              |       |
| Construction in progress                                                                  |   | **85,756**             | ** **    | 154,086                |       |
| Investments in unconsolidated companies                                                   |   | **315,589**            | ** **    | 323,682                |       |
| Land held for development                                                                 |   | **326,250**            | ** **    | 322,528                |       |
|                                                                                      |   | **5,573,950**          |          | 5,453,149              |       |
| Accumulated depreciation                                                                  |   | **(555,858**           | **)**         | (425,721               | )          |
|                                                                                      |   |                   | ** **    |                   |       |
| Net real estate investments                                                               |   | **5,018,092**          | ** **    | 5,027,428              |       |
|                                                                                      |   |                   | ** **    |                   |       |
| Cash and cash equivalents                                                                 |   | **17,129**             | ** **    | 10,453                 |       |
| Accounts receivable, net of allowance of $2,008 and  $2,820                               |   | **15,415**             | ** **    | 23,142                 |       |
| Straight-line rent receivable, net of allowance  of  $2,491 and $841                 |   | **52,062**             | ** **    | 42,751                 |       |
| Receivables on construction contracts                                                     |   | **23,181**             | ** **    | 30,077                 |       |
| Deferred financing costs, net of accumulated  amortization of $15,390 and $17,459         |   | **11,431**             | ** **    | 12,489                 |       |
| Deferred leasing and other costs, net of accumulated  amortization of $50,543 and $41,284 |   | **112,772**            | ** **    | 97,117                 |       |
| Escrow deposits and other assets                                                          |   | **96,973**             | ** **    | 86,789                 |       |
|                                                                                      |   | **$**                  | **5,347,055** |                   | $          | 5,330,246 |   |
| **LIABILITIES AND PARTNERS’ EQUITY**                                                 |   |                   | ** **    |                   |       |
|                                                                                      |   |                   | ** **    |                   |       |
| Indebtedness:                                                                             |   |                   | ** **    |                   |       |
| Secured debt                                                                              |   | **$**                  | **299,147**   | ** **             | $          | 318,484 |   |
| Unsecured notes                                                                           |   | **1,526,138**          | ** **    | 1,376,372              |       |
| Unsecured lines of credit                                                                 |   | **281,000**            | ** **    | 120,000                |       |
|                                                                                      |   | **2,106,285**          |          | 1,814,856              |       |
|                                                                                      |   |                   | ** **    |                   |       |
| Construction payables and amounts due subcontractors                                      |   | **43,232**             | ** **    | 54,735                 |       |
| Accounts payable                                                                          |   | **548**                | ** **    | 2,274                  |       |
| Accrued expenses:                                                                         |   |                   | ** **    |                   |       |
| Real estate taxes                                                                         |   | **51,472**             | ** **    | 51,462                 |       |
| Interest                                                                                  |   | **27,374**             | ** **    | 24,313                 |       |
| Other                                                                                     |   | **52,485**             | ** **    | 48,678                 |       |
| Other liabilities                                                                         |   | **106,893**            | ** **    | 117,577                |       |
| Tenant security deposits and prepaid rents                                                |   | **33,710**             | ** **    | 34,644                 |       |
| Total liabilities                                                                         |   | **2,421,999**          | ** **    | 2,148,539              |       |
|                                                                                      |   |                   | ** **    |                   |       |
| Minority interest                                                                         |   | **5,213**              | ** **    | 5,475                  |       |
|                                                                                      |   |                   | ** **    |                   |       |
| Partners’ equity:                                                                    |   |                   | ** **    |                   |       |
| General Partner                                                                           |   |                   | ** **    |                   |       |
| Common equity                                                                             |   | **2,203,060**          | ** **    | 2,203,291              |       |
| Preferred equity (liquidation preference of $440,889)                                     |   | **415,466**            | ** **    | 583,419                |       |
|                                                                                      |   | **2,618,526**          |          | 2,786,710              |       |
| Limited partners’ common equity                                                      |   | **235,473**            | ** **    | 286,759                |       |
| Limited partners’ preferred equity                                                   |   | **67,955**             | ** **    | 102,955                |       |
| Accumulated other comprehensive income                                                    |   | **(2,111**             | **)**         | (192                   | )          |
|                                                                                      |   | **2,919,843**          |          | 3,176,232              |       |
|                                                                                      |   | **$**                  | **5,347,055** |                   | $          | 5,330,246 |   |

 

See accompanying Notes to Consolidated Financial Statements.

 

34

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**DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES**

**Consolidated Statements of Operations**

**For the Years Ended December 31**

**(in thousands, except per unit amounts)**

 
|                                                                                    |   | **2002**     |        | **2001**   |   | **2000** |   |
|-----------------------------------------------------------------------------------------|--------|--------------|-------------|------------|--------|----------|--------|
| **RENTAL OPERATIONS:**                                                                  |   |         | ** **  |       |   |     |   |
| Revenues:                                                                               |   |         | ** **  |       |   |     |   |
| Rental income                                                                           |   | **$**        | **684,346** | ** ** | $      | 683,348  |   | $ | 692,191 |   |
| Equity  in earnings of unconsolidated companies                                         |   | **27,180**   | ** **  | 31,391     |   | 14,556   |   |
|                                                                                    |   | **711,526**  |        | 714,739    |   | 706,747  |   |
| Operating expenses:                                                                     |   |         | ** **  |       |   |     |   |
| Rental expenses                                                                         |   | **127,045**  | ** **  | 120,839    |   | 117,798  |   |
| Real estate taxes                                                                       |   | **73,392**   | ** **  | 70,415     |   | 70,894   |   |
| Interest expense                                                                        |   | **117,073**  | ** **  | 111,880    |   | 131,418  |   |
| Depreciation and amortization                                                           |   | **174,902**  | ** **  | 157,502    |   | 161,454  |   |
|                                                                                    |   | **492,142**  |        | 460,636    |   | 481,564  |   |
|                                                                                    |   |         | ** **  |       |   |     |   |
| Earnings from rental  operations                                                        |   | **219,114**  | ** **  | 254,103    |   | 225,183  |   |
|                                                                                    |   |         | ** **  |       |   |     |   |
| **SERVICE OPERATIONS:**                                                                 |   |         | ** **  |       |   |     |   |
| Revenues:                                                                               |   |         | ** **  |       |   |     |   |
| General contractor gross  revenue                                                       |   | **194,439**  | ** **  | 264,455    |   | 292,661  |   |
| General contractor costs                                                                |   | **(172,559** | **)**       | (229,845   | )      | (253,763 | )      |
|                                                                                    |   |         | ** **  |       |   |     |   |
| Net general contractor revenue                                                          |   | **21,880**   | ** **  | 34,610     |   | 38,898   |   |
|                                                                                    |   |         | ** **  |       |   |     |   |
| Property management,  maintenance and leasing fees                                      |   | **14,301**   | ** **  | 22,824     |   | 25,477   |   |
| Construction management and  development activity income                                |   | **29,428**   | ** **  | 19,142     |   | 16,965   |   |
| Other income                                                                            |   | **2,011**    | ** **  | 3,883      |   | 1,459    |   |
|                                                                                    |   |         | ** **  |       |   |     |   |
| Total revenue                                                                           |   | **67,620**   | ** **  | 80,459     |   | 82,799   |   |
|                                                                                    |   |         | ** **  |       |   |     |   |
| Operating expenses                                                                      |   | **38,100**   | ** **  | 45,344     |   | 50,039   |   |
|                                                                                    |   |         | ** **  |       |   |     |   |
| Earnings from service  operations                                                       |   | **29,520**   | ** **  | 35,115     |   | 32,760   |   |
|                                                                                    |   |         | ** **  |       |   |     |   |
| General and administrative  expense                                                     |   | **(24,735**  | **)**       | (15,553    | )      | (21,137  | )      |
|                                                                                    |   |         | ** **  |       |   |     |   |
| Operating income                                                                        |   | **223,899**  | ** **  | 273,665    |   | 236,806  |   |
|                                                                                    |   |         | ** **  |       |   |     |   |
| **OTHER INCOME (EXPENSE):**                                                             |   |         | ** **  |       |   |     |   |
| Interest income                                                                         |   | **3,849**    | ** **  | 5,308      |   | 6,866    |   |
| Earnings from land and  depreciated property dispositions, net of impairment adjustment |   | **(410**     | **)**       | 45,708     |   | 60,692   |   |
| Other expense                                                                           |   | **182**      | ** **  | (2,582     | )      | (963     | )      |
| Minority interest in earnings  of subsidiaries                                          |   | **(1,093**   | **)**       | (2,411     | )      | (2,145   | )      |
|                                                                                    |   | **226,427**  |        | 319,688    |   | 301,256  |   |
| Discontinued operations:                                                                |   |         | ** **  |       |   |     |   |
| Net income from discontinued  operations                                                |   | **3,199**    | ** **  | 3,592      |   | 1,162    |   |
| Gain on sale of discontinued  operations                                                |   | **2,733**    | ** **  | —     |   | —   |   |
| Income from discontinued  operations                                                    |   | **5,932**    | ** **  | 3,592      |   | 1,162    |   |
| Net income                                                                              |   | **232,359**  | ** **  | 323,280    |   | 302,418  |   |
| Dividends on preferred units                                                            |   | **(52,613**  | **)**       | (60,850    | )      | (57,389  | )      |
|                                                                                    |   |         | ** **  |       |   |     |   |
| Net income available for  common unitholders                                            |   | **$**        | **179,746** | ** ** | $      | 262,430  |   | $ | 245,029 |   |
|                                                                                    |   |         | ** **  |       |   |     |   |
| Basic net income per common  unit:                                                      |   |         | ** **  |       |   |     |   |
| Continuing operations                                                                   |   | **$**        | **1.16**    | ** ** | $      | 1.75     |   | $ | 1.67 |   |
| Discontinued operations                                                                 |   | **.04**      | ** **  | .02        |   | .01      |   |
| Total                                                                                   |   | **$**        | **1.20**    | ** ** | $      | 1.77     |   | $ | 1.68 |   |
| Diluted net income per common  unit:                                                    |   |         | ** **  |       |   |     |   |
| Continuing operations                                                                   |   | **$**        | **1.15**    | ** ** | $      | 1.73     |   | $ | 1.65 |   |
| Discontinued operations                                                                 |   | **.04**      | ** **  | .02        |   | .01      |   |
| Total                                                                                   |   | **$**        | **1.19**    | ** ** | $      | 1.75     |   | $ | 1.66 |   |
| Discontinued operations                                                                 |   |         | ** **  |       |   |     |   |
| Weighted average number of  common units outstanding                                    |   | **149,423**  | ** **  | 147,961    |   | 145,906  |   |
| Weighted average number of common  and dilutive potential common units                  |   | **150,839**  | ** **  | 151,710    |   | 147,441  |   |

 

See accompanying Notes to Consolidated FinancialStatements.

 

35

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**DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES**

**Consolidated Statements of Cash Flows**

**For the Years Ended December 31**

**(in thousands)**

 
|                                                                                             |   | **2002**     |        | **2001**   |   | **2000** |   |
|--------------------------------------------------------------------------------------------------|--------|--------------|-------------|------------|--------|----------|--------|
|                                                                                             |   |         |        |       |   |     |   |
| Cash  flows from operating activities:                                                           |   |         | ** **  |       |   |     |   |
| Net income                                                                                       |   | **$**        | **232,359** | ** ** | $      | 323,280  |   | $ | 302,418 |   |
| Adjustments to reconcile net  income to net cash provided by operating activities:               |   |         | ** **  |       |   |     |   |
| Depreciation of buildings and  tenant improvements                                               |   | **154,565**  | ** **  | 138,723    |   | 143,800  |   |
| Amortization of deferred  leasing and other costs                                                |   | **21,056**   | ** **  | 20,991     |   | 18,723   |   |
| Amortization of deferred  financing costs                                                        |   | **3,725**    | ** **  | 4,589      |   | 3,527    |   |
| Minority interest in earnings                                                                    |   | **1,093**    | ** **  | 2,411      |   | 2,145    |   |
| Straight-line rent adjustment                                                                    |   | **(12,500**  | **)**       | (12, 593   | )      | (14,519  | )      |
| Earnings (loss) from land and  depreciated property sales                                        |   | **(1,048**   | **)**       | (45,708    | )      | (60,692  | )      |
| Build-to-suit operations, net                                                                    |   | **168,199**  | ** **  | (79,912    | )      | (88,178  | )      |
| Construction contracts, net                                                                      |   | **(11,656**  | **)**       | 9,651      |   | 3,252    |   |
| Other accrued revenues and  expenses, net                                                        |   | **8,605**    | ** **  | (10,908    | )      | 55,645   |   |
| Operating distributions  received in excess of equity and earnings from unconsolidated companies |   | **4,575**    | ** **  | (1,844     | )      | (2,511   | )      |
| **Net cash provided by operating activities**                                                    |   | **568,973**  | ** **  | 348,680    |   | 363,610  |   |
|                                                                                             |   |         | ** **  |       |   |     |   |
| Cash flows from investing  activities:                                                           |   |         | ** **  |       |   |     |   |
| Development of real estate  investments                                                          |   | **(158,131** | **)**       | (251,405   | )      | (306,347 | )      |
| Acquisition of real estate  investments                                                          |   | **(98,062**  | **)**       | (13,927    | )      | (5,932   | )      |
| Acquisition  of land held for development and infrastructure costs                               |   | **(27,182**  | **)**       | (92,203    | )      | (99,470  | )      |
| Recurring tenant improvements                                                                    |   | **(28,011**  | **)**       | (18,416    | )      | (31,955  | )      |
| Recurring leasing costs                                                                          |   | **(17,975**  | **)**       | (13,845    | )      | (17,530  | )      |
| Recurring building improvements                                                                  |   | **(13,373**  | **)**       | (10,873    | )      | (6,804   | )      |
| Other  deferred leasing costs                                                                    |   | **(18,219**  | **)**       | (10,621    | )      | (39,018  | )      |
| Other deferred costs and other  assets                                                           |   | **(17,350**  | **)**       | 3,223      |   | (12,042  | )      |
| Tax deferred exchange escrow,  net                                                               |   | —       | ** **  | 27,260     |   | (16,207  | )      |
| Proceeds from land and  depreciated property sales, net                                          |   | **52,186**   | ** **  | 436,113    |   | 413,752  |   |
| Capital distributions from  unconsolidated companies                                             |   | —       | ** **  | 59,249     |   | 158,351  |   |
| Advances to unconsolidated  companies                                                            |   | **(11,130**  | **)**       | (21,067    | )      | (48,770  | )      |
| **Net cash provide by (used by) investing activities**                                           |   | **(337,247** | **)**       | 93,488     |   | (11,972  | )      |
|                                                                                             |   |         | ** **  |       |   |     |   |
| Cash  flows from financing activities:                                                           |   |         | ** **  |       |   |     |   |
| Contribution from General  Partner                                                               |   | **22,651**   | ** **  | 108,693    |   | 29,966   |   |
| Proceeds from indebtedness                                                                       |   | **200,000**  | ** **  | 175,000    |   | —   |   |
| Payment for redemption of preferred  equity                                                      |   | **(167,953** | **)**       | (75,018    | )      | —   |   |
| Payments for redemption of  preferred units                                                      |   | **(35,000**  | **)**       | —     |   | —   |   |
| Payments on indebtedness  including principal amortization                                       |   | **(71,953**  | **)**       | (223,578   | )      | (75,689  | )      |
| Borrowings (payments) on lines  of credit, net                                                   |   | **157,305**  | ** **  | (125,067   | )      | 14,658   |   |
| Distributions  to partners                                                                       |   | **(271,659** | **)**       | (262,236   | )      | (239,250 | )      |
| Distributions to preferred  unitholders                                                          |   | **(54,613**  | **)**       | (61,418    | )      | (57,389  | )      |
| Distributions  to minority interest                                                              |   | **(565**     | **)**       | (2,024     | )      | (1,888   | )      |
| Deferred financing costs                                                                         |   | **(3,263**   | **)**       | (5,267     | )      | (1,360   | )      |
| **Net cash provided by (used for)  financing activities**                                   |   | **(225,050** | **)**       | (470,915   | )      | (330,952 | )      |
|                                                                                             |   |         | ** **  |       |   |     |   |
| **Net increase (decrease) in cash and cash equivalents**                                         |   | **6,676**    | ** **  | (28,747    | )      | 20,686   |   |
|                                                                                             |   |         | ** **  |       |   |     |   |
| Cash and cash equivalents at  beginning of year                                                  |   | **10,453**   | ** **  | 39,200     |   | 18,514   |   |
|                                                                                             |   |         | ** **  |       |   |     |   |
| Cash and cash equivalents at  end of year                                                        |   | **$**        | **17,129**  | ** ** | $      | 10,453   |   | $ | 39,200 |   |
|                                                                                             |   |         | ** **  |       |   |     |   |
| Other non-cash items:                                                                            |   |         | ** **  |       |   |     |   |
| Assumption of debt for real  estate acquisitions                                                 |   | **$**        | **9,566**   | ** ** | $      | 16,403   |   | $ | — |   |
| Contributions of property to  unconsolidated companies                                           |   | **$**        | **—**  | ** ** | $      | 4,501    |   | $ | 245,502 |   |
| Conversion of Limited Partner  Units to common shares of General Partner                         |   | **$**        | **13,226**  | ** ** | $      | 4,259    |   | $ | 1,317 |   |
| Issuance of Limited Partner  Units for real estate acquisitions                                  |   | **$**        | **4,686**   | ** ** | $      | 3,787    |   | $ | 7,615 |   |
| Transfer of debt in sale of  depreciated property                                                |   | **$**        | **2,432**   | ** ** | $      | 16,000   |   | $ | 72,650 |   |
| Redemption of Limited Partner  Units for sale of depreciated property                            |   | **$**        | **—**  | ** ** | $      | 13,445   |   | $ | — |   |
| Impairment adjustments on  depreciable property                                                  |   | **$**        | **9,400**   | ** ** | $      | 4,800    |   | $ | 540 |   |
| Acquisition of partners’  interest in unconsolidated companies                              |   | **$**        | **12,149**  | ** ** | $      | 18,049   |   | $ | — |   |

 

See accompanying Notes toConsolidated Financial Statements.

 

36

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**DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES**

**Consolidated Statements of Partners’ Equity**

**(in thousands, except for per unit amounts)**

 
|                                                                     |   |                   |          |        |       | **Limited   Partners’   Common   Equity** |       | **Limited   Partners’   Preferred   Equity** |        | **Accumulated   Other   Comprehensive   Income (Loss)** |       | **Total**     |       |
|--------------------------------------------------------------------------|--------|------------------------|---------------|-------------|------------|------------------------------------------------|------------|---------------------------------------------------|-------------|---------------------------------------------------------|------------|---------------|------------|
|                                                                     |   |                   |
| **General Partner**                                                      |
| **Common   Equity**                                                      |   | **Preferred   Equity** |
|                                                                     |   |                   |          |        |       |                                           |       |                                              |        |                                                    |       |          |       |
| **Balance at December 31, 1999**                                         |   | **2,082,720**          | ** **    | **587,385** | ** ** | **328,929**                                    | ** ** | **102,955**                                       | ** **  | **—**                                              | ** ** | **3,101,989** |       |
| Net income                                                               |   | 212,958                |          | 48,981      |       | 32,071                                         |       | 8,408                                             |        | —                                                  |       | 302,418       |       |
| Capital contribution from General Partner                                |   | 32,022                 |          | (1,124      | )          | —                                         |       | —                                            |        | —                                                  |       | 30,898        |       |
| Acquisition of partnership interest for common stock of  General Partner |   | 8,347                  |          | —      |       | (7,030                                         | )          | —                                            |        | —                                                  |       | 1,317         |       |
| Acquisition of property in exchange for Limited Partner  Units           |   | —                 |          | —      |       | 7,615                                          |       | —                                            |        | —                                                  |       | 7,615         |       |
| Distributions to preferred unitholders                                   |   | —                 |          | (48,981     | )          | —                                         |       | (8,408                                            | )           | —                                                  |       | (57,389       | )          |
| Distributions to partners ($1.64 per Common Unit)                        |   | (207,909               | )             | —      |       | (31,341                                        | )          | —                                            |        | —                                                  |       | (239,250      | )          |
|                                                                     |   |                   |          |        |       |                                           |       |                                              |        |                                                    |       |          |       |
| **Balance at December 31, 2000**                                         |   | **2,128,138**          | ** **    | **586,261** | ** ** | **330,244**                                    | ** ** | **102,955**                                       | ** **  | **—**                                              | ** ** | **3,147,598** |       |
| Comprehensive income:                                                    |   |                   |          |        |       |                                           |       |                                              |        |                                                    |       |          |       |
| Net income                                                               |   | 229,399                |          | 53,010      |       | 32,463                                         |       | 8,408                                             |        | —                                                  |       | 323,280       |       |
| Distributions to preferred unitholders                                   |   | —                 |          | (53,010     | )          | —                                         |       | (8,408                                            | )           | —                                                  |       | (61,418       | )          |
| Transition adjustment resulting from adoption of FASB  No. 133           |   | —                 |          | —      |       | —                                         |       | —                                            |        | 398                                                     |       | 398           |       |
| Gains (losses) on derivative instruments                                 |   | —                 |          | —      |       | —                                         |       | —                                            |        | (1,138                                                  | )          | (1,138        | )          |
| Settlement of derivative instrument                                      |   | —                 |          | —      |       | —                                         |       | —                                            |        | 548                                                     |       | 548           |       |
| Comprehensive income available for common unitholders                    |   |                   |          |        |       |                                           |       |                                              |        |                                                    |       | 261,670       |       |
| Capital contribution from General Partner                                |   | 37,845                 |          | 72,210      |       | —                                         |       | —                                            |        | —                                                  |       | 110,055       |       |
| Acquisition of partnership interest for common stock of  General Partner |   | 36,351                 |          | —      |       | (32,092                                        | )          | —                                            |        | —                                                  |       | 4,259         |       |
| Acquisition of partnership interest for real estate  investments         |   | —                 |          | —      |       | (13,445                                        | )          | —                                            |        | —                                                  |       | (13,445       | )          |
| Acquisition of property in exchange for Limited Partner  Units           |   | —                 |          | —      |       | 3,787                                          |       | —                                            |        | —                                                  |       | 3,787         |       |
| General Partner’s redemption of Series A Preferred  stock           |   | —                 |          | (75,018     | )          | —                                         |       | —                                            |        | —                                                  |       | (75,018       | )          |
| Conversion of Series D Preferred equity to common units                  |   | 34                     |          | (34         | )          | —                                         |       | —                                            |        | —                                                  |       | —        |       |
| Retirement of common units                                               |   | (437                   | )             | —      |       | —                                         |       | —                                            |        | —                                                  |       | (437          | )          |
| Distributions to partners ($1.76 per Common Unit)                        |   | (228,039               | )             | —      |       | (34,198                                        | )          | —                                            |        | —                                                  |       | (262,237      | )          |
| **Balance at December 31, 2001**                                         |   | **$**                  | **2,203,291** | ** **  | **$**      | **583,419**                                    | ** ** | **$**                                             | **286,759** | ** **                                              | **$**      | **102,955**   | ** ** | **$** | **(192** | **)** | **$** | **3,176,232** |   |
| Comprehensive income:                                                    |   |                   |          |        |       |                                           |       |                                              |        |                                                    |       |          |       |
| Net income                                                               |   | 159,178                |          | 47,053      |       | 18,568                                         |       | 7,560                                             |        | —                                                  |       | 232,359       |       |
| Distributions to preferred unitholders                                   |   | —                 |          | (47,053     | )          | —                                         |       | (7,560                                            | )           | —                                                  |       | (54,613       | )          |
| Gains (losses) on derivative instruments                                 |   | —                 |          | —      |       | —                                         |       | —                                            |        | (1,919                                                  | )          | (1,919        | )          |
| Comprehensive income available for common unitholders                    |   |                   |          |        |       |                                           |       |                                              |        |                                                    |       | 175,827       |       |
| Capital contribution from General Partner                                |   | 22,651                 |          | —      |       | —                                         |       | —                                            |        | —                                                  |       | 22 651        |       |
| Acquisition of partnership interest for common stock of  General Partner |   | 60,509                 |          | —      |       | (47,283                                        | )          | —                                            |        | —                                                  |       | 13,226        |       |
| Acquisition of property in exchange for Limited Partner  Units           |   | —                 |          | —      |       | 5,439                                          |       | —                                            |        | —                                                  |       | 5,439         |       |
| General Partner’s redemption of Series D Preferred  stock           |   | —                 |          | (25         | )          | —                                         |       | —                                            |        | —                                                  |       | (25           | )          |
| General Partner’s redemption of Series B Preferred  stock           |   | —                 |          | (17,928     | )          | —                                         |       | —                                            |        | —                                                  |       | (17,928       | )          |
| General Partner’s redemption of Series F Preferred  stock           |   | —                 |          | (150,000    | )          | —                                         |       | —                                            |        | —                                                  |       | (150,000      | )          |
| Redemption of Series G Preferred units                                   |   | —                 |          | —      |       | —                                         |       | (35,000                                           | )           | —                                                  |       | (35,000       | )          |
| Tax benefits from Employee Stock Plans                                   |   | 856                    |          | —      |       | —                                         |       | —                                            |        | —                                                  |       | 856           |       |
| FASB 123 Compensation Expense                                            |   | 224                    |          | —      |       | —                                         |       | —                                            |        | —                                                  |       | 224           |       |
| Distributions to General Partner                                         |   | (1,174                 | )             | —      |       | —                                         |       | —                                            |        | —                                                  |       | (1,174        | )          |
| Distributions to partners ($1.81 per Common Unit)                        |   | (242,475               | )             | —      |       | (28,010                                        | )          | —                                            |        | —                                                  |       | (270,485      | )          |
| **Balance at December 31, 2002**                                         |   | **$**                  | **2,203,060** | ** **  | **$**      | **415,466**                                    | ** ** | **$**                                             | **235,473** | ** **                                              | **$**      | **67,955**    | ** ** | **$** | **(2,111** | **)** | **$** | **2,919,843** |   |
|                                                                     |   |                   |          |        |       |                                           |       |                                              |        |                                                    |       |          |       |
| **Common Units outstanding at December 31, 2002**                        |   | 135,007                |          |        |       | 14,900                                         |       |                                              |        |                                                    |       | 149,907       |       |

 

See accompanying Notes to Consolidated Financial Statements.

 

37

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**DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES**

 

Notes to Consolidated FinancialStatements

**(1)****             The Partnership**

 

Duke Realty Limited Partnership (the “Partnership”) was formed onOctober 4, 1993, when Duke Realty Corporation (the “General Partner”)contributed all of its properties and related assets and liabilities, alongwith the net proceeds of $309.2 million from the issuance of an additional14,000,833 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 Real EstateInvestment Trust (“REIT”) under provisions of the Internal Revenue Code.  TheGeneral Partner is the sole general partner of the Partnership, owning 90.1% ofthe partnership interest as of December 31, 2002 (“General Partner Units”). Theremaining 9.9% of the Partnership is owned by limited partners (“LimitedPartner Units” and, together with the General Partner Units, the “CommonUnits”). The Limited Partner Unitsare exchangeable for shares of the General Partner’s common stock on aone-for-one basis subject generally to a one-year holding period.

 

The Partnership owns and operates a portfolio of industrial, office andretail properties in the midwestern and southeastern United States and providesreal estate services to third-party owners. The Partnership conducts ServiceOperations through Duke Realty Services Limited Partnership (“DRSLP”) and DukeConstruction Limited Partnership (“DCLP”). The consolidated financialstatements include the accounts of the Partnership and its majority-owned orcontrolled subsidiaries.

 

**(2)****             Summary of Significant Accounting Policies**

 

**Principles ofConsolidation**

 

The consolidated financial statements include the accounts of thePartnership and its majority-owned or controlled subsidiaries. The equityinterests in these majority-owned or controlled subsidiaries not owned by thePartnership are reflected as minority interests in the consolidated financialstatements. All significant intercompany balances and transactions have beeneliminated in the consolidated financial statements. Investments in entitiesthat the Partnership does not control through majority voting interest or wherethe other owner has substantial participating rights are not consolidated andare reflected as investments in unconsolidated companies.

 

**Reclassifications**

 

Certain 2000 and 2001 balances have been reclassified to conform to2002 presentation.

 

**Real EstateInvestments**

 

Real estate investments to be held for rental are stated at the lowerof cost less accumulated depreciation or fair value if impairment isidentified. Real estate investments to be disposed of are reported at the lowerof their carrying amount or fair value less cost to sell. Buildings and landimprovements are depreciated on the straight-line method over their estimatedlife not to exceed 40 and 15 years, respectively, and tenant improvement costsare depreciated on the straight-line method over the term of the related lease.

 

Direct and indirect costs, including interest and real estate taxesassociated with the development, construction, leasing or expansion of realestate investments are capitalized as a cost of the property.  Included in indirect costs is an estimate ofinternal costs associated with development and leasing of real estateinvestments. All external costs associated with the acquisition of real estateinvestments are capitalized as a cost of the property.

 

38

----

 

Upon the acquisition of rental property, the Partnership evaluates allin-place tenant lease agreements to determine if the leases are at, below orabove market rates. If a lease is determined to be above or below market, acorresponding asset or liability is recorded and amortized into income over thelife of the lease. At the time of acquisition, a deferred lease commissionasset is also recorded and amortized over the lease’s remaining life.

 

The Partnership evaluates its real estate investments to be held andused upon occurrence of significant changes in the operations, but not lessthan annually, to assess whether any impairment indications are present,including recurring operating losses and significant adverse changes in legalfactors or business climate that affect the recovery of the recorded value. Ifany real estate investment is considered impaired, a loss is provided to reducethe carrying value of the property to its estimated fair value.

 

Acquisitions of the Partnership’s interests are recorded under thepurchase method with assets acquired reflected at the fair market value of theGeneral Partner’s common stock on the date of acquisition, net of theretirement of any minority interest liabilities. The acquisition amounts areallocated to Partnership assets based on their estimated fair values.

 

The Partnership has equity interests in unconsolidated partnerships andjoint ventures which own and operate rental properties and hold land fordevelopment. The equity method of accounting is used for these investments inwhich the Partnership has the ability to exercise significant influence, butnot control, over operating and financial policies. Any difference between thecarrying amount of these investments and the underlying equity in net assets isamortized to equity in earnings of unconsolidated companies over thedepreciable life of the property, generally 40 years.

 

**CashEquivalents**

 

Highly liquid investments with a maturity of three months or less whenpurchased are classified as cash equivalents.

 

**Deferred Costs**

 

Costs incurred in connection with obtaining financing are amortized tointerest expense on the straight-line method over the term of the related loan.All direct and indirect costs, including estimated internal costs, associatedwith the rental of real estate investments owned by the Partnership arecapitalized and amortized over the term of the related lease. Unamortized costsare charged to expense upon the early termination of the lease or upon earlypayment of the financing.

 

**Revenues**

 

Rental Operations

 

Rental income from leases with scheduled rental increases during theirterms is recognized on a straight-line basis.

 

Service Operations

 

Management fees are based on a percentage of rental receipts ofproperties managed and are recognized as the rental receipts are collected.Maintenance fees are based upon established hourly rates and are recognized asthe services are performed. Construction management and development fees forthird party contracts are recognized as earned based on the terms of thecontract, which approximate the percentage of completion method.

 

39

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ThePartnership recognizes income on long-term construction contracts where thePartnership serves as a general contractor on the percentage of completionmethod. Using this method, profits are recorded on the basis of thePartnership’s estimates of the percentage of completion of individualcontracts, commencing when progress reaches a point where experience issufficient to estimate final results with reasonable accuracy. That portion ofthe estimated earnings is accrued on the basis of the Partnership’s estimatesof the percentage of completion based on contract expenditures incurred andwork performed.

 

PropertySales

 

Gainsfrom sales of depreciated property are recognized in accordance with Statementof Financial Accounting Standards (“SFAS”) No. 66, and are included in earningsfrom sales of land and depreciable property dispositions, net of impairmentadjustment, in the Statement of Operations if identified as held for sale priorto adoption of SFAS 144 and in discontinued operations if identified as heldfor sale after adoption of SFAS 144.

 

Gainsor losses from the sale of property which is considered held for sale in DCLPare recognized in accordance with SFAS 66 and are included in constructionmanagement and development activity income in the Statement of Operations.

 

**Net Income PerCommon Unit**

 

Basic net income per common unit is computed by dividing net incomeavailable for common units by the weighted average number of common unitsoutstanding for the period. Diluted net income per common unit is computed bydividing the sum of net income available for common units by the sum of theweighted average number of common units outstanding and dilutive potentialcommon units for the period.

 

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

 

|                                                                                     |   | **2002**    |        | **2001** |   | **2000** |   |
|------------------------------------------------------------------------------------------|--------|-------------|-------------|----------|--------|----------|--------|
| Basic net income available for common unitholders                                        |   | **$**       | **179,746** |     | $      | 262,430  |   | $ | 245,029 |   |
| Joint venture partner convertible ownership net income                                   |   | **—**  |        | 3,423    |   | —   |   |
| Diluted net income available for common unitholders  and dilutive potential common units |   | **$**       | **179,746** |     | $      | 265,853  |   | $ | 245,029 |   |
|                                                                                     |   |        |        |     |   |     |   |
| Weighted average number of common units outstanding                                      |   | **149,423** |        | 147,961  |   | 145,906  |   |
| Joint venture partner convertible ownership common  unit equivalents                     |   | **—**  |        | 2,092    |   | —   |   |
| Dilutive units for stock-based compensation plans                                        |   | **1,416**   |        | 1,657    |   | 1,535    |   |
| Weighted average number of common units and dilutive  potential common units             |   | **150,839** |        | 151,710  |   | 147,441  |   |

 

The Series D Convertible Preferred equity and the Series G ConvertiblePreferred limited partner units were anti-dilutive for the years ended December31, 2002, 2001 and 2000; therefore, no conversion to common units is includedin weighted dilutive potential common units. In September 2002, the Partnershipredeemed the Series G Convertible Preferred units at their par value of $35.0million.

 

A joint venture partner in one of the Partnership’s unconsolidatedcompanies has the option to convert a portion of its ownership to the GeneralPartner’s common shares (see discussion in Investments in UnconsolidatedCompanies section). The effect of the option on earnings per unit was dilutivefor the year ended December 31, 2002; therefore, conversion to common units isincluded in weighted dilutive potential common units.

 

40

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**Federal IncomeTaxes**

 

As a partnership, theallocated share of income and loss for the year is included in the income taxreturns of the partners; accordingly, no accounting for income taxes isrequired in the accompanying consolidated financial statements.

 

**Stock BasedCompensation**

 

For all issuances prior to 2002, thePartnership applies the recognition and measurement provisions of APB OpinionNo. 25, *Accounting for Stock Issued toEmployees,*and related Interpretations in accounting for theseplans. For stock options granted prior to 2002, no compensation expense isreflected in net income as all options granted had an exercise price equal tothe market value of the underlying common stock of the General Partner’s on thedate of the grant.

 

Effective January 1, 2002, the Partnershipprospectively adopted the fair value recognition provisions of FASB StatementNo. 123, *Accounting for Stock-BasedCompensation,* to all awards granted after January 1, 2002.

 

**Fair Value OfFinancial Instruments**

 

The fair values of the Partnership’s financial instruments, other thanderivative financial instruments, are generally calculated as the present valueof estimated future cash flows using a discount rate commensurate with therisks involved. The fair value approximates the carrying value for allfinancial instruments except indebtedness, which is discussed in Footnote 6 tothe Consolidated Financial Statements.

 

## **Derivative Financial Instruments**

 

The Partnershipadopted SFAS No. 133 “*Accounting forDerivative Instruments and Hedging Activities*” as amended (“SFAS133”), on January 1, 2001. SFAS 133 requires that all derivative instruments berecorded on the balance sheet at their fair value. Gains or losses resultingfrom changes in the values of those derivatives would be accounted fordepending on the use of the derivative and whether it qualifies for hedgeaccounting. The Partnership uses derivative financial instruments such asinterest rate swaps to mitigate its interest rate risk on a related financialinstrument. SFAS 133 requires that changes in fair value of derivatives that qualifyas cash flow hedges be recognized in other comprehensive income while theineffective portion of the derivative’s change in fair value be recognizedimmediately in earnings.

 

To determine thefair value of derivative instruments, the Partnership uses standard marketconventions and techniques such as discounted cash flow analysis, optionpricing models and termination cost at each balance sheet date. All methods ofassessing fair value result in a general approximation of value, and such valuemay never actually be realized.

 

**Use OfEstimates**

 

The preparation of the consolidated financial statements in conformitywith accounting principles generally accepted in the United States of Americarequires management to make estimates and assumptions that affect the amountsreported in the consolidated financial statements and accompanying notes.Actual results could differ from those estimates.

 

**(3)****             Related Party Transactions**

 

The Partnershipprovides property management, leasing, construction and other tenant relatedservices to properties in which certain executives have ownership interests.The Partnership has an option to acquire these executive officers’ interests inthese properties (the “Option Properties”). The Partnership received

 

41

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fees totaling $1.4million, $1.7 million and $1.9 million in 2002, 2001 and 2000, respectively,for services provided to the Option Properties. The fees charged by thePartnership for such services are equivalent to those charged to third-partyowners for similar services.

 

On June 27, 2001, A. RayWeeks, Jr. resigned his position as a director and Vice Chairman of the GeneralPartner. On August 17, 2001, the Partnership redeemed 620,156 common unitsbeneficially owned by Mr. Weeks and certain members of his immediate andextended family (the “Weeks Affiliates”). The deemed value of the unitsredeemed was $15.7 million, which was based on the average closing stock priceof the General Partner’s common stock for a certain period of days precedingthe redemption date. As consideration for the redemption, the Weeks Affiliatesreceived a distribution of seven industrial rental properties and oneundeveloped tract of land located in the Atlanta, Georgia metropolitan areawith a value of $31.7 million.  TheWeeks Affiliates also assumed a loan in the amount of $16 million from WachoviaBank, N.A. to the Partnership. The value of the properties distributed to theWeeks Affiliates was based on negotiations between Mr. Weeks and members of theGeneral Partner’s executive committee, and was approved by the unaffiliatedmembers of the General Partner’s Board of Directors.

 

In 2002, the Partnershipreceived lease termination fees totaling $7.7 million from a tenant that is asubsidiary of Progress Energy. William Cavanaugh III is President and ChiefExecutive Officer of Progress Energy and a member of the General Partner’sBoard of Directors. The General Partner’s independent directors approved thetransaction and management believes that the amount received approximates avalue that would have been charged to tenants with similar lease terms andcommitments.

 

The Partnership has otherrelated party transactions that are insignificant and terms are considered tobe at arm’s-length and equal to those negotiated with independent parties.

 

**(4)****             Investments in Unconsolidated Companies**

 

The Partnership has equity interests ranging from 10 – 64% inunconsolidated partnerships and joint ventures that own and operate rentalproperties and hold land for development. The equity method of accounting isused for these investments in which the Partnership has the ability to exercisesignificant influence, but not control, over operating and financial policies.Any difference between the carrying amount of these investments and theunderlying equity in net assets is amortized to equity in earnings ofunconsolidated companies over the depreciable life of the property, generally40 years.

 

Combined summarized financial information for the investments inunconsolidated companies as of December 31, 2002 and 2001, and for the yearsended December 31, 2002, 2001, and 2000, are as follows (in thousands):

 
|                                         |   | **2002**    |          | **2001** |   | **2000**  |   |
|----------------------------------------------|--------|-------------|---------------|----------|--------|-----------|--------|
|                                         |   |        |          |     |   |      |   |
| Land, buildings and tenant improvements, net |   | **$**       | **1,232,026** |     | $      | 1,261,490 |   |   |   |
| Land held for development                    |   | **38,848**  |          | 41,962   |   |      |   |
| Other assets                                 |   | **67,590**  |          | 62,017   |   |      |   |
|                                         |   | **$**       | **1,338,464** |     | $      | 1,365,469 |   |   |   |
|                                         |   |        |          |     |   |      |   |
| Property indebtedness                        |   | **$**       | **579,893**   |     | $      | 581,477   |   |   |   |
| Other liabilities                            |   | **52,057**  |          | 60,609   |   |      |   |
|                                         |   | **631,950** |          | 642,086  |   |      |   |
| Owners’ equity                          |   | **706,514** |          | 723,383  |   |      |   |
|                                         |   | **$**       | **1,338,464** |     | $      | 1,365,469 |   |   |   |
|                                         |   |        |          |     |   |      |   |
| Rental income                                |   | **$**       | **169,683**   |     | $      | 172,257   |   | $ | 92,082 |   |
|                                         |   |        |          |     |   |      |   |
| Net income                                   |   | **$**       | **51,013**    |     | $      | 58,091    |   | $ | 32,054 |   |

 

42

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The following significant transactions involvingunconsolidated companies in which the Partnership has an equity interest haveoccurred over the past three years:

 

In 2002, the Partnership recognized a gain of $1.8 million on the saleof a “Build-to-Suit” building out of a joint venture in which the Partnershipowned a 50% interest. The gain is recorded in equity in earnings in theStatement of Operations. In addition to this sale, the Partnership receivedapproximately $29.2 million of earnings distributions from its various jointventures.

 

Also in 2002, the Partnership bought out its other partners’ interestin six separate joint ventures. The Partnership had a 50% interest in each ofthese ventures prior to their acquisition.

 

In 2001, the Partnership received approximately $50.0 million in cashdistributions resulting from secured debt financing within two joint ventures.The Partnership has a 50% interest in both ventures. The debt is entirelycollateralized by rental properties within the ventures and the Partnership isnot a guarantor on the debt.

 

Also in 2001, thePartnership recognized a gain of $2.9 million from the sale of a building outof a joint venture in which the Partnership owned a 50% interest. The gain isrecorded in equity in earnings in the Statement of Operations.

 

In October 2000,the Partnership sold or contributed industrial properties and undeveloped landwith a fair value of $487 million to a joint venture (Dugan Realty LLC) inwhich the Partnership has a 50% interest and recognized a net gain of $35.2million. This transaction expanded an existing joint venture with aninstitutional real estate investor. As a result of the total transactions, thePartnership received $363.9 million of proceeds. The joint venture financedthis transaction with $350 million of secured mortgage debt of which thePartnership has guaranteed $90 million and agreed to provide additional capitalcontributions to pay all sums due under the remaining $260 million. At December31, 2002, this $350 million of debt is collateralized by rental properties withnet carrying value substantially in excess of the outstanding debt. If requiredto make additional capital contributions, the Partnership will receiveproportionately increased ownership in the respective collateralized properties.The Partnership does not anticipate that it will be required to satisfy theguarantee or additional capital contribution obligations. In connection withthis transaction, the joint venture partners were given an option to put up to$50 million interest in the joint venture to the Partnership in exchange forcommon stock of the General Partner or cash, subject to timing and otherrestrictions. As a result of this put option, the Partnership deferred $10.2million of gain on sale of depreciated property and recorded a $50 millionliability. At December 31, 2002, the joint venture owns 130 buildings totalingapproximately 23 million square feet with a net book value of approximately$760 million. The Partnership provides real estate related services to theventure through its Service Operations.

 

In December 2000, the Partnership contributed 14 industrial properties,including five under development, totaling approximately three million squarefeet to a joint venture (Dugan Texas LLC) in which the Partnership has a 50%interest. The Partnership also contributed 145 acres of undeveloped land. ThePartnership received $33.1 million of proceeds and recorded a net gain of$686,000 as a result of the transaction. At December 31, 2002, the jointventure owns 32 buildings totaling approximately 6 million square feet with avalue of approximately $224 million. The Partnership provides real estaterelated services to the venture through its Service Operations.

 

**(5)****             Real Estate Investments**

 

The Partnership adopted Statement of Financial Accounting Standards No.144, “*Accounting for the Impairment orDisposal of Long Lived Assets*”(“SFAS 144”), on January 1, 2002. SFAS144 requires the

 

43

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Partnership to report in discontinued operations the results ofoperations of a property which has either been disposed or is classified asheld for sale, unless certain conditions are met.

The Partnershiphas classified operations of nine buildings as discontinued operations inaccordance with SFAS 144. As a result, the Partnership classified net income of$3.1 million, $3.6 million and $1.2 million as net income from discontinuedoperations for the year ended December 31, 2002, 2001 and 2000. In addition,two of the properties were sold during 2002 that were identified as held forsale post adoption of SFAS 144; therefore, the gains on disposal for these twoproperties of $2.7 million are also reported in discontinued operations.

 

At December 31, 2002, the Partnership had 3 industrial, 6 office and 6retail properties comprising approximately 1.1 million square feet held forsale. Of these properties, 3 build-to-suit office and 3 build-to-suit retailproperties were under development. Net operating income (defined as totalproperty revenues, less property expenses, which include real estate taxes,repairs and maintenance, property management, utilities, insurance and otherexpenses) of the properties held for sale for the years ended December 31,2002, 2001 and 2000 is approximately $4.3 million, $3.2 million, and $1.1million, respectively. Net book value of the properties held for sale atDecember 31, 2002, is approximately $57.1 million. There can be no assurancethat such properties held for sale will be sold.

 

In associationwith the Partnership’s assessment of its properties under SFAS 144, six of its910 properties were identified as having impairment in 2002. The Partnershiprecorded a $9.4 million impairment adjustment associated with these propertiesin 2002. The Partnership has analyzed each of its in-service properties and hasdetermined that there are no additional valuation adjustments that need to bemade at December 31, 2002. In 2001, the Partnership recorded a $4.8 millionimpairment adjustment on a single property that was sold in 2002.

 

**(6)****             Indebtedness**

 

Indebtedness at December 31, 2002 and 2002, consisted of the following(in thousands):

 
|                                                                                                                                                                    |   | **2002**      |          | **2001**  |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|---------------|-----------|--------|
| Fixed rate secured debt, weighted average interest rate  of 7.35% at December 31, 2002, and 7.79% at December 31, 2001, maturity dates  ranging from 2003  to 2017 |   | **$**         | **259,376**   |      | $      | 274,358 |   |
|                                                                                                                                                                    |   |          |          |      |   |
| Variable rate secured debt, weighted average interest  rate of 1.71% at December 31, 2002, and 2.46% at December 31, 2001, maturity  dates ranging from 2006 to 2025    |   | **39,771**    |          | 44,126    |   |
|                                                                                                                                                                    |   |          |          |      |   |
| Fixed rate unsecured notes, weighted average interest  rate of 6.95% at December 31, 2002, and 7.13% at December 31, 2001, maturity  dates ranging from 2003 to 2028    |   | **1,526,138** |          | 1,376,372 |   |
|                                                                                                                                                                    |   |          |          |      |   |
| Unsecured line of credit, interest rate of 2.07% at  December 31, 2002, and 2.58% at December 31, 2001, maturity date of 2004                                           |   | **281,000**   |          | 120,000   |   |
|                                                                                                                                                                    |   | **$**         | **2,106,285** |      | $      | 1,814,856 |   |

 

The fair value of the Partnership’s indebtedness as of December 31,2002, was $2.3 billion.

 

As of December 31, 2002, the $299.1 million of secured debt iscollateralized by rental properties with a net carrying value of $561.3million.

 

The Partnership has the following lines of credit available (inthousands):

 
| **Description**           |   | **Borrowing  Capacity** |    | **Maturity  Date** |          | **Interest  Rate** |        | **Outstanding  at December  31, 2002** |   |
|---------------------------|--------|-------------------------|---------|--------------------|---------------|--------------------|-------------|----------------------------------------|--------|
| Unsecured Line  of Credit |   | $                       | 500,000 |               | February 2004 |               | LIBOR + .65 | %                                      | $      | 281,000 |   |
| Secured Line of  Credit   |   | $                       | 50,000  |               | January 2006  |               | LIBOR + .60 | %                                      | $      | 23,895 |   |

 

The lines ofcredit are used to fund development activities, to acquire additional rentalproperties and to provide working capital.

 

44

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In December 2002,the Partnership renewed its secured line of credit by which the capacity wasreduced from $100 million to $50 million, the interest rate reduced from LIBOR+ 1.05% to LIBOR + .60%, and the maturity date extended to January 2006.

 

The $500 millionline of credit allows the Partnership an option to obtain borrowings from thefinancial institutions that participate in the line of credit at rates lowerthan the stated interest rate, subject to certain restrictions. Amountsoutstanding on the line of credit at December 31, 2002 are at LIBOR + .65%(2.07% at December 31, 2002).

 

In January 2003, the Partnership completed an issuanceof unsecured debt totaling $175 million, bearing interest at 5.25% and due2010.

 

At December 31, 2002, scheduled amortization and maturities of allindebtedness for the next five years and thereafter are as follows  (in thousands):

 

| **Year**   |   | **Amount** |      |
|------------|--------|------------|-----------|
|       |   |       |      |
| 2003       |   | $          | 259,746   |   |
| 2004       |   | 470,875    |      |
| 2005       |   | 214,172    |      |
| 2006       |   | 177,776    |      |
| 2007       |   | 120,547    |      |
| Thereafter |   | 863,169    |      |
|       |   | $          | 2,106,285 |   |

 

Cash paid for interest in 2002, 2001, and 2000 was $125.9 million,$140.5 million and $156.5 million, respectively. Total interest capitalized in2002, 2001 and 2000 was $13.5 million, $25.9 million and $33.0 million,respectively.

 

**(7)****             Segment Reporting**

 

The Partnership is engaged in four operating segments, the ownershipand rental of office, industrial, and retail real estate investments (“RentalOperations”) and the providing of various real estate services such as propertymanagement, maintenance, leasing, and construction management to third-partyproperty owners (“Service Operations”). The Partnership’s reportable segmentsoffer different products or services and are managed separately because eachrequires different operating strategies and management expertise. There are nomaterial intersegment sales or transfers.

 

Non-segment revenue to reconcile to total revenue consists mainly ofequity in earnings of joint ventures. Non- segment assets reconciliation tototal assets consists of corporate assets including cash, deferred financingcosts and investments in unconsolidated subsidiaries.

 

The accounting policies of the segments are the same as those describedin Note 2.

 

The Partnershipassesses and measures segment operating results based on a performance measurereferred to as Funds From Operations (“FFO”). The National Association of RealEstate Investment Trusts defines FFO as GAAP net income or loss, excludinggains or losses from sales of depreciated property, plus operating propertydepreciation and amortization and adjustments for minority interest andunconsolidated companies on the same basis. FFO is not a measure of operatingresults or cash flows from operating activities as measured by generallyaccepted accounting principles, is not necessarily indicative of cash availableto fund cash needs and should not be considered an alternative to cash flows asa measure of liquidity. Interest expense and other non-property specificrevenues and expenses are not allocated to individual segments in determiningthe Partnership’s performance measure.

 

45

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Therevenues and FFO for each of the reportable segments are summarized as followsfor the years ended December 31, 2002, 2001, and 2000, and the assets of eachreportable segment as of December 31, 2002 and 2001 (in thousands):

 
|                                                                      |   | **2002**     |        | **2001**   |   | **2000** |   |
|---------------------------------------------------------------------------|--------|--------------|-------------|------------|--------|----------|--------|
| Revenues                                                                  |   |         | ** **  |       |   |     |   |
| Rental Operations:                                                        |   |         | ** **  |       |   |     |   |
| Office                                                                    |   | **$**        | **398,169** | ** ** | $      | 379,272  |   | $ | 332,265 |   |
| Industrial                                                                |   | **276,353**  | ** **  | 286,088    |   | 327,697  |   |
| Retail                                                                    |   | **6,933**    | ** **  | 18,212     |   | 28,467   |   |
| Service Operations                                                        |   | **67,620**   | ** **  | 80,459     |   | 82,799   |   |
| Total Segment Revenues                                                    |   | **749,075**  | ** **  | 764,031    |   | 771,228  |   |
| Non-Segment Revenue                                                       |   | **30,071**   | ** **  | 31,167     |   | 18,318   |   |
| Consolidated Revenue from continuing operations                           |   | **779,146**  | ** **  | 795,198    |   | 789,546  |   |
| Discontinued Operations                                                   |   | **7,491**    | ** **  | 8,610      |   | 5,079    |   |
| Consolidated Revenue                                                      |   | **$**        | **786,637** | ** ** | $      | 803,808  |   | $ | 794,625 |   |
|                                                                      |   |         | ** **  |       |   |     |   |
| Funds From Operations                                                     |   |         | ** **  |       |   |     |   |
| Rental Operations:                                                        |   |         | ** **  |       |   |     |   |
| Office                                                                    |   | **$**        | **265,811** | ** ** | $      | 255,308  |   | $ | 225,496 |   |
| Industrial                                                                |   | **212,620**  | ** **  | 223,065    |   | 256,336  |   |
| Retail                                                                    |   | **5,990**    | ** **  | 15,036     |   | 23,008   |   |
| Services Operations                                                       |   | **29,520**   | ** **  | 35,115     |   | 32,760   |   |
| Total Segment FFO                                                         |   | **513,941**  | ** **  | 528,524    |   | 537,600  |   |
| Non-Segment FFO:                                                          |   |         | ** **  |       |   |     |   |
| Interest expense                                                          |   | **(117,073** | **)**       | (111,880   | )      | (131,418 | )      |
| Interest income                                                           |   | **3,849**    | ** **  | 5,308      |   | 6,866    |   |
| General and administrative expense                                        |   | **(24,735**  | **)**       | (15,553    | )      | (21,137  | )      |
| Gain on land sales                                                        |   | **4,478**    | ** **  | 5,080      |   | 9,165    |   |
| Other expenses                                                            |   | **(330**     | **)**       | (3,899     | )      | (2,826   | )      |
| Minority interest in earnings of subsidiaries                             |   | **(1,093**   | **)**       | (2,411     | )      | (2,145   | )      |
| Joint Venture FFO                                                         |   | **44,837**   | ** **  | 45,570     |   | 24,182   |   |
| Dividends on preferred units                                              |   | **(52,613**  | **)**       | (60,850    | )      | (57,389  | )      |
| Discontinued operations                                                   |   | **5,193**    | ** **  | 5,804      |   | 2,231    |   |
| Consolidated FFO                                                          |   | **376,454**  | ** **  | 395,693    |   | 365,129  |   |
|                                                                      |   |         | ** **  |       |   |     |   |
| Depreciation and amortization on continuing operations                    |   | **(174,902** | **)**       | (157,502   | )      | (161,454 | )      |
| Depreciation and amortization on discontinued  operations                 |   | **(719**     | **)**       | (2,212     | )      | (1,069   | )      |
| Share of joint venture adjustments                                        |   | **(17,657**  | **)**       | (14,177    | )      | (9,104   | )      |
| Earnings (loss) from depreciated property sales on  continuing operations |   | **(4,888**   | **)**       | 40,628     |   | 51,527   |   |
| Earnings from depreciated property sales on  discontinued operations      |   | **1,458**    | ** **  | —     |   | —   |   |
|                                                                      |   |         | ** **  |       |   |     |   |
| Net income available for common shareholders                              |   | **$**        | **179,746** | ** ** | $      | 262,430  |   | $ | 245,029 |   |

 
|                 |   | **December 31, 2002** |          | **December 31, 2001** |   |
|----------------------|--------|-----------------------|---------------|-----------------------|--------|
| Assets               |   |                  |          |                  |   |
| Rental Operations    |   |                  |          |                  |   |
| Office               |   | **$**                 | **2,677,427** |                  | $      | 2,625,015 |   |
| Industrial           |   | **2,144,686**         |          | 2,184,234             |   |
| Retail               |   | **71,072**            |          | 64,946                |   |
| Service Operations   |   | **91,399**            |          | 99,554                |   |
| Total Segment Assets |   | **4,984,584**         |          | 4,973,749             |   |
| Non-Segment Assets   |   | **362,471**           |          | 356,497               |   |
| Consolidated Assets  |   | **$**                 | **5,347,055** |                  | $      | 5,330,246 |   |

 

**(8)****             Leasing Activity**

 

Future minimum rents due to the Partnership under non-cancelableoperating leases at December 31, 2002, are as follows (in thousands):

 

| **Year**   |   | **Amount** |      |
|------------|--------|------------|-----------|
|       |   |       |      |
| 2003       |   | $          | 530,961   |   |
| 2004       |   | 495,229    |      |
| 2005       |   | 420,784    |      |
| 2006       |   | 346,385    |      |
| 2007       |   | 281,386    |      |
| Thereafter |   | 940,103    |      |
|       |   | $          | 3,014,848 |   |

 

46

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In addition to minimum rents, certain leases require reimbursements ofspecified operating expenses which amounted to $120.1 million, $115.7 million,and $114.2  million for the years endedDecember 31, 2002, 2001 and 2000, respectively.

 

**(9)****             Employee Benefit Plans**

 

The Partnership maintains a 401(k) plan for the benefit of itsfull-time employees.  The Partnershipmatches the employees’ contributions up to three percent of the employees’salary and may also make annual discretionary contributions. Total expenserecognized by the Partnership was $1.7 million, $1.3 million and $3.2 millionfor the years ended 2002, 2001 and 2000, respectively.

 

The Partnership makes contributions to a contributory health andwelfare plan as necessary to fund claims not covered by employee contributions.Total expense recognized by the Partnership related to this plan was $4.9million, $5.6 million and $6.0 million for 2002, 2001 and 2000, respectively.Included in total expense is an estimate based on historical experience of theeffect of claims incurred but not reported as of year-end.

 

**(10)****      Partners’ Equity**

 

The General Partner periodically accesses the public equity markets tofund the development and acquisition of additional rental properties.

 

The following series of preferred equity are outstanding as of December31, 2002 (in thousands, except percentages):

 
| **Description**    |   | **Shares  Outstanding** |   | **Dividend  Rate** |   | **Redemption  Date** |   | **Liquidation  Preference** |    | **Convertible** |   |
|--------------------|--------|-------------------------|--------|--------------------|--------|----------------------|--------|-----------------------------|---------|-----------------|--------|
|               |   |                    |   |               |   |                 |   |                        |    |            |   |
| Series B Preferred |   | 265                     |   | 7.990              | %      | September 30, 2007   |   | $                           | 132,250 |            | No     |   |
| Series D Preferred |   | 535                     |   | 7.375              | %      | December 31, 2003    |   | 133,639                     |    | Yes             |   |
| Series E Preferred |   | 400                     |   | 8.250              | %      | January 20, 2004     |   | 100,000                     |    | No              |   |
| Series I Preferred |   | 300                     |   | 8.450              | %      | February 6, 2006     |   | 75,000                      |    | No              |   |
|                    |        |                         |        |                    |        |                      |        |                             |         |                 |        |  |

 

All series ofpreferred equity require cumulative distributions and have no stated maturitydate.

 

The Series DPreferred equity are convertible at a conversion rate of .93677 common unitsfor each preferred unit outstanding.

 

The dividend rateon the Series B Preferred equity increases to 9.99% after September 12, 2012.The General Partner repurchased 355,000 shares of the Series B Preferred equityin September 2002. The repurchase transaction was initiated by a group ofSeries B Preferred unitholders who voluntarily approached the General Partnerand the Partnership with an opportunity to buyback these shares before theirearliest stated redemption date.

 

The GeneralPartner and the Partnership redeemed its $150.0 million Series F Preferredequity in October 2002 at par value.

 

Effective August31, 2002, the Partnership terminated a shareholder rights plan that hadincluded the potential issuance of Series C Junior Preferred equity.

 

**(11)****      StockBased Compensation**

 

At December 31,2002, the General Partner and the Partnership had nine stock-based employeecompensation plans that are described more fully below.  The General Partner and the Partnership areauthorized to issue up to 8,569,860 shares of the General Partner’s commonstock under these Plans.

 

47

----

 

Awards under theseplans generally vest over five years at 20% per year. Therefore, the expenserelated to stock-based employee compensation included in the determination ofnet income is less than that which would have been recognized if the fair valuemethod had been applied to all awards since the original effective date of SFAS123. The following table illustrates the effect on net income and earnings perunit if the fair value method had been applied to all outstanding and unvestedawards in each period.

 
|                                                                                                            |   | **2002**   |        | **2001** |   | **2000** |   |
|-----------------------------------------------------------------------------------------------------------------|--------|------------|-------------|----------|--------|----------|--------|
| Net income, as  reported                                                                                        |   | **$**      | **179,746** |     | $      | 262,430  |   | $ | 245,029 |   |
| Add:  Stock-based employee compensation expense  included in net income determined under fair value method |   | **405**    |        | 0        |   | 0        |   |
| Deduct:  Total stock based compensation expense  determined under fair value method for all awards         |   | **(1,334** | **)**       | (1,236   | )      | (593     | )      |
| Proforma Net  Income                                                                                            |   | **$**      | **178,817** |     | $      | 261,194  |   | $ | 244,436 |   |
|                                                                                                            |   |       |        |     |   |     |   |
| Basic net income  per unit                                                                                      |   |       |        |     |   |     |   |
| As reported                                                                                                     |   | **$**      | **1.20**    |     | $      | 1.77     |   | $ | 1.68 |   |
| Pro forma                                                                                                       |   | **$**      | **1.20**    |     | $      | 1.76     |   | $ | 1.67 |   |
|                                                                                                            |   |       |        |     |   |     |   |
| Diluted net  income per unit                                                                                    |   |       |        |     |   |     |   |
| As reported                                                                                                     |   | **$**      | **1.19**    |     | $      | 1.75     |   | $ | 1.66 |   |
| Pro forma                                                                                                       |   | **$**      | **1.19**    |     | $      | 1.74     |   | $ | 1.66 |   |

 

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

 

|                     |   | **2002**    |       | **2001** |   | **2000** |   |
|--------------------------|--------|-------------|------------|----------|--------|----------|--------|
| Dividend yield           |   | **7.25**    | **%**      | 7.50     | %      | 7.00     | %      |
| Volatility               |   | **20.0**    | **%**      | 20.2     | %      | 20.2     | %      |
| Risk-free  interest rate |   | **4.7**     | **%**      | 5.0      | %      | 5.8      | %      |
| Expected life            |   | **6 years** | ** ** | 6 years  |   | 6 years  |   |

 

Fixed Stock OptionPlans

 

The General Partner andthe Partnership had options outstanding under six fixed stock option plans asof December 31, 2002. Additional grants may be made under three of those plans.

 

A summary of thestatus of the fixed stock option plans as of December 31, 2002, 2001 and 2000and changes during the years ended on those dates follows:

 
|                                                            |   | **2002**   |   | **2001**                               |   | **2000**  |      |
|-----------------------------------------------------------------|--------|------------|--------|----------------------------------------|--------|-----------|-----------|
|                                                            |   | **Units**  |   | **Weighted  Average  Exercise  Price** |   | **Units** |      | **Weighted  Average  Exercise  Price** |   | **Units** |   | **Weighted  Average  Exercise  Price** |   |
| Outstanding,  beginning of year                                 |   | 4,691,659  |   | $                                      | 21.12  |      | 5,235,464 |   | $ | 19.52 |   | 5,043,965 |   | $ | 19.00 |   |
| Granted                                                         |   | 676,038    |   | 23.37                                  |   | 718,320   |      | 24.98 |   | 958,786 |   | 20.04 |   |
| Exercised                                                       |   | (1,203,534 | )      | 18.82                                  |   | (982,243  | )         | 15.21 |   | (440,924 | ) | 13.66 |   |
| Forfeited                                                       |   | (243,965   | )      | 22.96                                  |   | (279,882  | )         | 21.84 |   | (326,363 | ) | 22.95 |   |
| Outstanding, end  of year                                       |   | 3,920,198  |   | 22.09                                  |   | 4,691,659 |      | 21.12 |   | 5,235,464 |   | 19.52 |   |
| Options  exercisable, end of year                               |   | 2,297,500  |   |                                   |   | 2,965,930 |      |   |   | 3,112,706 |   |   |   |
|                                                            |   |       |   |                                   |   |      |      |   |   |   |   |   |   |
| Weighted-average  fair value of options granted during the year |   | $          | 2.05   |                                   |   |      | $         | 2.19 |   |   |   | $ | 2.18 |   |   |   |
|                                                                 |        |            |        |                                        |        |           |           |  |  |  |  |  |  |  |  |  |  |  |  |

 

The options outstandingat December 31, 2002, under the fixed stock option plans have a range ofexercise prices from $11.87 to $25.50 with a weighted average exercise price of$22.09 and a weighted average remaining contractual life of 6.41 years. Theoptions exercisable at December 31, 2002 have a weighted average exercise priceof $21.41.

 

Each option’smaximum term is ten years. With limited exceptions, options vest at 20% peryear, or, if earlier, upon the death, retirement or disability of the optioneeor a change in control of the Partnership.

 

48

----

 

Performance BasedStock Plans

 

Performance shares are granted under the 2000 Performance Share Plan,with each performance share economically equivalent to one share of the GeneralPartner’s common stock. The performance shares vest over a 5-year period withthe vesting percentage for a year dependent upon the Partnership’s attainmentof certain predefined levels of earnings growth for such year. The value ofvested performance shares are payable in cash upon the retirement ortermination of employment of the participant. At December 31, 2002, plan participants had the right to receive up to61,922 performance shares, of which 30,423 were vested and 31,499 werecontingent upon future earnings achievement.

 

For grants prior to 2002, compensation cost is basedupon the value of the vested performance shares at the end of each applicablereporting period. No grants were made in 2002 under this plan. The compensationcost that has been charged against income for this plan was $96,000,$201,000  and $962,000 for 2002, 2001and 2000, respectively.

 

In October 2002, the General Partner and thePartnership amended the Shareholder Value Plan (“SVP Plan”) and DividendIncrease Unit Plans (“DIU Plans”) by requiring that all payouts under these twoplans to be in cash only. The SVP Plan is based on the General Partner’scumulative shareholder return for a three-year period as compared to thecumulative total return of the S&P 500 and the NAREIT Equity REIT TotalReturn indices. The DIU Plans are based upon increases in the General Partner’sdividend. The total compensation cost that has been charged against income forthese two plans was $4.6 million, $6.0 million and $6.7 million for 2002, 2001and 2000, respectively.

 

## **Directors Stock Payment Plan**

 

Under the General Partner’s 1999 Directors’ StockPayment Plan, non-employee members of the General Partner’s Board of Directorsare entitled to 1,200 shares of common stock per year as partial compensationfor services as a board member. The shares are fully vested when issued and thevalue of the shares are recorded as an expense by the Partnership. The amountof that expense was $274,000, $260,000 and $230,000 for 2002, 2001 and 2000,respectively.

 

Employee Stock PurchasePlan

 

Under the General Partner and the Partnership’sEmployee Stock Purchase Plan, employees are entitled to purchase common stockat a 15% discount through payroll deductions. Under SFAS 123, the Partnershipis required to record the amount of the discount as compensation expense. Theamount of that expense for 2002 was $181,496.

 

**(12)****      DerivativeInstruments**

 

The Partnership is exposed to capital market risk,such as changes in interest rates.  Inorder to manage the volatility relating to interest rate risk, the Partnershipmay enter into interest rate hedging arrangements from time to time. ThePartnership does not utilize derivative financial instruments for trading orspeculative purposes. On January 1, 2001, the Partnership adopted Statement ofFinancial Accounting Standard No. 133, “*Accountingfor Derivative Instruments and Hedging Activities*” as amended (“SFAS133”). SFAS 133 establishes accounting and reporting standards for derivativeinstruments and requires that entities recognize all derivatives as eitherassets or liabilities and measure those instruments at fair value. Thecumulative effect of adopting SFAS 133 was not material to the Partnership’sfinancial statements.

 

During the years ended December 31, 2002 and 2001, thePartnership recorded a $1.4 million gain and a $1.4 million loss, respectively,associated with an interest rate contract that did not qualify for hedgeaccounting. The contract expired on December 30, 2002.

 

49

----

 

In December 2002, the Partnership simultaneouslyentered into two $50 million forward-starting interest rate swaps. ThePartnership designated the aggregate $100 million swaps as a hedge toeffectively fix the rate on financing expected in 2003. The Partnership expectsand intends that the financing will be a ten-year fixed-rate semi-annualfinancing, pricing between May 1, 2003 and November 1, 2003. The fair value ofthe swaps was a liability of ($2.1) million as of December 31, 2002, and isrecorded in other liabilities in the accompanying balance sheet. The swapsqualify for hedge accounting under SFAS 133, therefore, changes in fair value willbe recorded in other comprehensive income.

 

In July 2001, the Partnership terminated threeinterest rate swaps that were tied to an $85 million unsecured term loan. Theswaps qualified for hedge accounting under SFAS 133. The costs to terminate the swaps was $548,000, which was recordedas interest expense and reversed out of other comprehensive income.

 

**(13)****      Commitmentsand Contingencies**

 

In 1998 and 1999, members of management and the Boardof Directors of the General Partner purchased $69 million of the GeneralPartner’s common stock in connection with an Executive and Senior Officer StockPurchase Plan. The purchases were financed by five-year personal loans atmarket interest rates from financial institutions. As of December 31, 2002, theoutstanding balance on these loans is $33.5 million as some participants haveexited the program and repaid their principal balance. These loans are securedby $41.0 million of common shares purchased through this program and held atDecember 31, 2002, by the remaining plan participants. As a condition of thefinancing agreement with the financial institution, the Partnership hasguaranteed repayment of principal, interest and other obligations for eachparticipant, but is fully indemnified by the participants. In the opinion ofmanagement, it is not probable that the Partnership will be required to satisfythese guarantees.

 

The Partnership has entered into agreements, subjectto the completion of due diligence requirements, resolution of certaincontingencies and completion of customary closing conditions, for the futureacquisition of land totaling $26.2 million. The acquisitions are scheduled toclose periodically through 2003 and will be paid for through a combination ofcash or common units.

 

The Partnership renewed all major insurance programsfor 2002-2003, including obtaining coverage for acts of terrorism for itsproperties. The Partnership believes that insurance is in place that providesadequate coverage to provide financial protection against normal insurancerisks such that it believes that any loss experienced would not have asignificant impact on the Partnership’s liquidity, financial position, orresults of operations.

 

The Partnership is subject to various legalproceedings and claims that arise in the ordinary course of business.  In the opinion of management, the amount ofany ultimate liability with respect to these actions will not materially affectthe Partnership’s consolidated financial statements or results of operations.

 

50

----

 
| DUKE REALTY LIMITED PARTNERSHIP           |   | **Schedule  3** |
|-------------------------------------------|--------|-----------------|
| REAL ESTATE AND  ACCUMULATED DEPRECIATION |   |
| DECEMBER 31, 2002                         |   |            |
| (IN THOUSANDS)                            |   |            |

 
| **Development**                  |                          | **Name**                       |              | **Building  Type** |         | **Encumbrances** |       | ** **

** **

  |       | **Cost Capitalized  Subsequent to  Development  to Acquisition** |       |   |       | **Accumulated  Depreciation(1)** |       | **Year  Constructed** |       | **Year  Acquired** |       |
|----------------------------------|-------------------------------|--------------------------------|-------------------|--------------------|--------------|------------------|------------|--------------------------------|------------|------------------------------------------------------------------|------------|--------|------------|----------------------------------|------------|-----------------------|------------|--------------------|------------|
|                             |                          |                           |              |               |         |             |       |
| **Initial Cost**                 | **Gross Book Value 12/31/02** |
| **Land**                         |                          | **Buildings**                  | **Land/Land Imp** |               | **Bldgs/TI** |             | **Total**  |
|                             |                          |                           | ** **        |               | ** **   |             | ** ** |                           | ** ** |                                                             | ** ** |   | ** ** |                             | ** ** |                  | ** ** |               | ** ** |   | ** ** |   | ** ** |   | ** ** |
| **ALPHARETTA, GEORGIA**          |                          |                           | ** **        |               | ** **   |             | ** ** |                           | ** ** |                                                             | ** ** |   | ** ** |                             | ** ** |                  | ** ** |               | ** ** |   | ** ** |   | ** ** |   | ** ** |
| Brookside Office Park            |                          | 3925  Brookside Parkway        |              | Office             |         | —           |       | 1,269                          |       | 14,705                                                           |       | 7      |       | 1,269                            |       | 14,711                |       | 15,980             |       | 1,294 |   | 1998 |   | 1999 |   |
| Brookside Office Park            |                          | 3625  Brookside Parkway        |              | Office             |         | —           |       | 1,625                          |       | 10,984                                                           |       | 2,690  |       | 1,625                            |       | 13,675                |       | 15,300             |       | 1,931 |   | 1999 |   | 1999 |   |
| Brookside Office Park            |                          | Radiant  II                    |              | Office             |         | —           |       | 831                            |       | 7,265                                                            |       | 115    |       | 831                              |       | 7,380                 |       | 8,211              |       | 332 |   | 2000 |   | 2000 |   |
| Brookside Office Park            |                          | Brookside  II                  |              | Office             |         | —           |       | 1,381                          |       | 12,250                                                           |       | — |       | 1,381                            |       | 12,250                |       | 13,632             |       | 512 |   | 2000 |   | 2001 |   |
| Hembree Crest                    |                          | 11800  Wills Road              |              | Industrial         |         | —           |       | 304                            |       | 2,146                                                            |       | 336    |       | 304                              |       | 2,482                 |       | 2,786              |       | 299 |   | 1987 |   | 1999 |   |
| Hembree Crest                    |                          | 11810  Wills Road              |              | Industrial         |         | —           |       | 296                            |       | 2,254                                                            |       | 228    |       | 296                              |       | 2,482                 |       | 2,778              |       | 305 |   | 1987 |   | 1999 |   |
| Hembree Crest                    |                          | 11820  Wills Road              |              | Industrial         |         | —           |       | 488                            |       | 2,277                                                            |       | 860    |       | 488                              |       | 3,137                 |       | 3,625              |       | 271 |   | 1987 |   | 1999 |   |
| Hembree Crest                    |                          | 11415  Old Roswell Road        |              | Industrial         |         | —           |       | 648                            |       | 2,454                                                            |       | 1,066  |       | 648                              |       | 3,521                 |       | 4,169              |       | 415 |   | 1991 |   | 1999 |   |
| Hembree Park                     |                          | 1750  Founders                 |              | Industrial         |         | —           |       | 1,936                          |       | 7,731                                                            |       | 1      |       | 1,936                            |       | 7,732                 |       | 9,668              |       | 1,077 |   | 1999 |   | 2000 |   |
| Hembree Park                     |                          | NMeadow  SC II @ Founders      |              | Industrial         |         | —           |       | 1,369                          |       | 3,591                                                            |       | 216    |       | 1,369                            |       | 3,807                 |       | 5,176              |       | 126 |   | 2001 |   | 2001 |   |
| North Meadow                     |                          | 1350  Northmeadow Parkway      |              | Industrial         |         | —           |       | 672                            |       | 3,648                                                            |       | 260    |       | 672                              |       | 3,908                 |       | 4,580              |       | 419 |   | 1994 |   | 1999 |   |
| North Meadow                     |                          | 11835  Alpharetta Highway      |              | Retail             |         | —           |       | 524                            |       | 2,861                                                            |       | 5      |       | 524                              |       | 2,866                 |       | 3,390              |       | 249 |   | 1994 |   | 1999 |   |
| Northwinds Pointe                |                          | 2550  Northwinds Parkway       |              | Office             |         | —           |       | 2,271                          |       | 20,017                                                           |       | 250    |       | 2,271                            |       | 20,267                |       | 22,538             |       | 1,849 |   | 1998 |   | 1999 |   |
| Ridgeland                        |                          | 1320  Ridgeland Pkwy           |              | Industrial         |         | —           |       | 998                            |       | 5,874                                                            |       | 37     |       | 998                              |       | 5,911                 |       | 6,909              |       | 508 |   | 1999 |   | 1999 |   |
| Ridgeland                        |                          | Ridgeland  Business Dist I     |              | Industrial         |         | —           |       | 488                            |       | 2,937                                                            |       | 1,332  |       | 488                              |       | 4,268                 |       | 4,757              |       | 1,016 |   | 1999 |   | 1999 |   |
| Ridgeland                        |                          | Ridgeland  Business Dist. II   |              | Industrial         |         | —           |       | 579                            |       | 2,529                                                            |       | 28     |       | 579                              |       | 2,557                 |       | 3,136              |       | 310 |   | 1999 |   | 2000 |   |
|                             |                          |                           |              |               |         |             |       |                           |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **ANTIOCH, TENNESSEE**           |                          |                           |              |               |         |             |       |                           |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Jackson Business Center          |                          | Keebler                        |              | Industrial         |         | —           |       | 307                            |       | 1,299                                                            |       | 20     |       | 307                              |       | 1,319                 |       | 1,626              |       | 248 |   | 1985 |   | 1995 |   |
|                             |                          |                           |              |               |         |             |       |                           |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **ARLINGTON HEIGHTS,  ILLINOIS** |                          |                           |              |               |         |             |       |                           |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Arlington Business Park          |                          | Atrium  II                     |              | Office             |         | —           |       | 776                            |       | 7,209                                                            |       | 1,128  |       | 776                              |       | 8,337                 |       | 9,113              |       | 1,221 |   | 1986 |   | 1998 |   |
|                             |                          |                           |              |               |         |             |       |                           |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **ATLANTA, GEORGIA**             |                          |                           |              |               |         |             |       |                           |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Druid Chase                      |                          | 6  W. Druid Hills Drive        |              | Office             |         | —           |       | 473                            |       | 6,758                                                            |       | 555    |       | 473                              |       | 7,313                 |       | 7,786              |       | 629 |   | 1968 |   | 1999 |   |
| Druid Chase                      |                          | 2801  Buford Highway           |              | Office             |         | —           |       | 794                            |       | 9,905                                                            |       | 1,400  |       | 794                              |       | 11,305                |       | 12,099             |       | 1,086 |   | 1977 |   | 1999 |   |
| Druid Chase                      |                          | 1190  W. Druid Hills Drive     |              | Office             |         | —           |       | 689                            |       | 6,631                                                            |       | 412    |       | 689                              |       | 7,043                 |       | 7,732              |       | 598 |   | 1980 |   | 1999 |   |
| Druid Chase                      |                          | 2071  N. Druid Hills Drive     |              | Retail             |         | —           |       | 98                             |       | 321                                                              |       | — |       | 98                               |       | 321                   |       | 419                |       | 28 |   | 1968 |   | 1999 |   |
|                             |                          |                           |              |               |         |             |       |                           |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **AURORA, ILLINOIS**             |                          |                           |              |               |         |             |       |                           |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Meridian Business Campus         |                          | 535  Exchange                  |              | Industrial         |         | —           |       | 386                            |       | 920                                                              |       | — |       | 386                              |       | 920                   |       | 1,306              |       | 82 |   | 1984 |   | 1999 |   |
| Meridian Business Campus         |                          | 515-525  North Enterprise      |              | Industrial         |         | —           |       | 342                            |       | 1,678                                                            |       | 90     |       | 342                              |       | 1,768                 |       | 2,110              |       | 198 |   | 1984 |   | 1999 |   |
| Meridian Business Campus         |                          | 615  Enterprise                |              | Industrial         |         | —           |       | 468                            |       | 2,824                                                            |       | 123    |       | 468                              |       | 2,947                 |       | 3,415              |       | 306 |   | 1984 |   | 1999 |   |
| Meridian Business Campus         |                          | 3615  Exchange                 |              | Industrial         |         | —           |       | 410                            |       | 1,603                                                            |       | 50     |       | 410                              |       | 1,653                 |       | 2,063              |       | 157 |   | 1986 |   | 1999 |   |
| Meridian Business Campus         |                          | 4000  Sussex                   |              | Industrial         |         | —           |       | 417                            |       | 1,940                                                            |       | 32     |       | 417                              |       | 1,972                 |       | 2,389              |       | 185 |   | 1990 |   | 1999 |   |
| Meridian Business Campus         |                          | 3737  East Exchange            |              | Industrial         |         | —           |       | 598                            |       | 2,543                                                            |       | 16     |       | 598                              |       | 2,559                 |       | 3,157              |       | 236 |   | 1985 |   | 1999 |   |
| Meridian Business Campus         |                          | 444  North Commerce            |              | Industrial         |         | —           |       | 722                            |       | 5,411                                                            |       | 411    |       | 722                              |       | 5,823                 |       | 6,545              |       | 583 |   | 1985 |   | 1999 |   |
| Meridian Business Campus         |                          | Meridian  I                    |              | Industrial         |         | —           |       | 1,150                          |       | 6,673                                                            |       | 260    |       | 1,150                            |       | 6,934                 |       | 8,083              |       | 1,056 |   | 1999 |   | 2000 |   |
| Meridian Business Campus         |                          | Meridian  II                   |              | Industrial         |         |             |       | 567                            |       | 164                                                              |       | — |       | 567                              |       | 164                   |       | 731                |       | 43 |   | 2001 |   | 2001 |   |
| Meridian Business Campus         |                          | Meridian  II                   |              | Industrial         |         | —           |       | 567                            |       | 1,508                                                            |       | — |       | 567                              |       | 1,508                 |       | 2,075              |       | — |   | 2001 |   | 2001 |   |
| Meridian Business Campus         |                          | Meridian  Outlot               |              | Grounds            |         | —           |       | 894                            |       | —                                                           |       | — |       | 894                              |       | —                |       | 894                |       | — |   |   |   | 2000 |   |
|                             |                          |                           |              |               |         |             |       |                           |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **BEACHWOOD, OHIO**              |                          |                           |              |               |         |             |       |                           |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Corporate Exchange               |                          | One  Corporate Exchange        |              | Office             |         | 5,048            |       | 1,287                          |       | 8,726                                                            |       | 961    |       | 1,287                            |       | 9,687                 |       | 10,974             |       | 1,665 |   | 1989 |   | 1996 |   |
| Corporate Place                  |                          | Corporate  Place               |              | Office             |         | —           |       | 1,161                          |       | 7,838                                                            |       | 650    |       | 1,163                            |       | 8,486                 |       | 9,649              |       | 1,372 |   | 1988 |   | 1996 |   |
|                             |                          |                           |              |               |         |             |       |                           |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **BLOOMINGTON, MINNESOTA**       |                          |                           |              |               |         |             |       |                           |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Alpha Buildings                  |                          | Alpha  Business Ctr I&II   |              | Office             |         | —           |       | 280                            |       | 1,615                                                            |       | 281    |       | 280                              |       | 1,896                 |       | 2,176              |       | 196 |   | 1980 |   | 1999 |   |
| Alpha Buildings                  |                          | Alpha  Business Ctr III&IV |              | Industrial         |         | —           |       | 341                            |       | 1,965                                                            |       | 174    |       | 341                              |       | 2,138                 |       | 2,479              |       | 216 |   | 1980 |   | 1999 |   |
| Alpha Buildings                  |                          | Alpha  Business Ctr V          |              | Industrial         |         | —           |       | 537                            |       | 3,089                                                            |       | 149    |       | 538                              |       | 3,237                 |       | 3,775              |       | 302 |   | 1980 |   | 1999 |   |
| Bloomington Industrial Center    |                          | Bloomington  Industrial Center |              | Industrial         |         | 1,508            |       | 621                            |       | 3,650                                                            |       | 764    |       | 621                              |       | 4,414                 |       | 5,035              |       | 822 |   | 1963 |   | 1997 |   |
| Hampshire Dist. Center           |                          | Hampshire  Dist Center North   |              | Industrial         |         | 2,224            |       | 779                            |       | 4,500                                                            |       | 56     |       | 779                              |       | 4,556                 |       | 5,334              |       | 582 |   | 1979 |   | 1997 |   |
| Hampshire Dist. Center           |                          | Hampshire  Dist Center South   |              | Industrial         |         | 2,666            |       | 901                            |       | 5,234                                                            |       | 262    |       | 901                              |       | 5,495                 |       | 6,397              |       | 703 |   | 1979 |   | 1997 |   |

 

51

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| **Development**              |                          | **Name**                     |              | **Building  Type** |         | **Encumbrances** |       | ****   |       | **Cost Capitalized  Subsequent to  Development  to Acquisition** |       |   |       | **Accumulated  Depreciation(1)** |       | **Year  Constructed** |       | **Year  Acquired** |       |
|------------------------------|-------------------------------|------------------------------|-------------------|--------------------|--------------|------------------|------------|--------|------------|------------------------------------------------------------------|------------|--------|------------|----------------------------------|------------|-----------------------|------------|--------------------|------------|
|                         |                          |                         |              |               |         |             |       |
| **Initial Cost**             | **Gross Book Value 12/31/02** |
| **Land**                     |                          | **Buildings**                | **Land/Land Imp** |               | **Bldgs/TI** |             | **Total**  |
|                         |                          |                         | ** **        |               | ** **   |             | ** ** |   | ** ** |                                                             | ** ** |   | ** ** |                             | ** ** |                  | ** ** |               | ** ** |   | ** ** |   | ** ** |   | ** ** |
| Hampshire Tech Center        |                          | Hampshire  Tech Center       |              | Industrial         |         | —           |       | 2,124  |       | 13,102                                                           |       | 645    |       | 2,223                            |       | 13,647                |       | 15,870             |       | 1,919 |   | 1998 |   | 1998 |   |
| Lyndale Commons              |                          | Lyndale  Commons I           |              | Industrial         |         | —           |       | 247    |       | 1,443                                                            |       | 214    |       | 247                              |       | 1,656                 |       | 1,903              |       | 244 |   | 1981 |   | 1998 |   |
| Lyndale Commons              |                          | Lyndale  Commons II          |              | Industrial         |         | —           |       | 181    |       | 1,048                                                            |       | 201    |       | 183                              |       | 1,247                 |       | 1,430              |       | 160 |   | 1985 |   | 1998 |   |
| Norman Center                |                          | Norman  Center 2             |              | Office             |         | —           |       | 782    |       | 4,489                                                            |       | 141    |       | 807                              |       | 4,605                 |       | 5,412              |       | 522 |   | 1970 |   | 1998 |   |
| Norman Center                |                          | Norman  Center 4             |              | Office             |         | —           |       | 562    |       | 3,265                                                            |       | 333    |       | 579                              |       | 3,581                 |       | 4,159              |       | 500 |   | 1967 |   | 1998 |   |
| Norman Center Plaza          |                          | Norman  Pointe I             |              | Office             |         | —           |       | 3,660  |       | 28,229                                                           |       | — |       | 3,660                            |       | 28,229                |       | 31,889             |       | 1,118 |   | 2000 |   | 2000 |   |
| Penn Corporate Building      |                          | Penn  Corporate Bldg         |              | Industrial         |         | —           |       | 312    |       | 1,801                                                            |       | 68     |       | 312                              |       | 1,869                 |       | 2,181              |       | 235 |   | 1977 |   | 1997 |   |
|                         |                          |                         |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **BLUE ASH, OHIO**           |                          |                         |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Alliance Woods               |                          | McAuley  Place               |              | Office             |         |             |       | 2,331  |       | 18,596                                                           |       | — |       | 2,331                            |       | 18,596                |       | 20,926             |       | 624 |   | 2000 |   | 2001 |   |
| Cornell Commerce Center      |                          | Cornell  Commerce Center     |              | Industrial         |         | —           |       | 495    |       | 4,787                                                            |       | 187    |       | 495                              |       | 4,974                 |       | 5,469              |       | 884 |   | 1989 |   | 1996 |   |
| Creek Road                   |                          | Creek  Road Bldg 1           |              | Industrial         |         | —           |       | 103    |       | 833                                                              |       | 36     |       | 103                              |       | 870                   |       | 972                |       | 134 |   | 1971 |   | 1996 |   |
| Creek Road                   |                          | Creek  Road Bldg 2           |              | Industrial         |         | —           |       | 132    |       | 1,149                                                            |       | 62     |       | 132                              |       | 1,211                 |       | 1,343              |       | 186 |   | 1971 |   | 1996 |   |
| Huntington Bank Building     |                          | Huntington  Bank Building    |              | Office             |         | —           |       | 175    |       | 241                                                              |       | — |       | 175                              |       | 241                   |       | 416                |       | 37 |   | 1986 |   | 1996 |   |
| Lake Forest/Westlake         |                          | Lake  Forest Place           |              | Office             |         | —           |       | 1,953  |       | 20,207                                                           |       | 1,821  |       | 1,953                            |       | 22,028                |       | 23,981             |       | 3,933 |   | 1985 |   | 1996 |   |
| Lake Forest/Westlake         |                          | Westlake  Center             |              | Office             |         | —           |       | 2,459  |       | 16,884                                                           |       | 1,414  |       | 2,459                            |       | 18,299                |       | 20,757             |       | 3,263 |   | 1981 |   | 1996 |   |
|                         |                          |                         |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **BOLINGBROOK, ILLINOIS**    |                          |                         |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Bolingbrook (ComEd)          |                          | 555  Joliet Road             |              | Industrial         |         |             |       | 2,184  |       | 9,284                                                            |       | — |       | 2,184                            |       | 9,284                 |       | 11,468             |       | 167 |   | 1967 |   | 2002 |   |
|                         |                          |                         |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **BRANDON, FLORIDA**         |                          |                         |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Regency Park North           |                          | Regency  I                   |              | Office             |         | —           |       | 1,048  |       | 4,230                                                            |       | 105    |       | 1,048                            |       | 4,336                 |       | 5,384              |       | 523 |   | 2000 |   | 2000 |   |
| Regency Park North           |                          | Regency  II                  |              | Office             |         |             |       | 1,411  |       | 3,797                                                            |       | — |       | 1,411                            |       | 3,797                 |       | 5,208              |       | 178 |   | 2001 |   | 2002 |   |
|                         |                          |                         |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **BRASELTON, GEORGIA**       |                          |                         |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Braselton                    |                          | Braselton  II                |              | Industrial         |         | —           |       | 1,365  |       | 9,505                                                            |       | — |       | 1,365                            |       | 9,505                 |       | 10,871             |       | 250 |   | 2001 |   | 2001 |   |
|                         |                          |                         |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **BRENTOOD, TENNESSEE**      |                          |                         |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Brentwood South Bus. Center  |                          | 7104  Crossroads Blvd        |              | Industrial         |         | —           |       | 1,065  |       | 5,994                                                            |       | 481    |       | 1,065                            |       | 6,475                 |       | 7,540              |       | 565 |   | 1987 |   | 1999 |   |
| Brentwood South Bus. Center  |                          | 7106  Crossroads Blvd        |              | Industrial         |         | —           |       | 1,065  |       | 2,836                                                            |       | 940    |       | 1,065                            |       | 3,775                 |       | 4,840              |       | 344 |   | 1987 |   | 1999 |   |
| Brentwood South Bus. Center  |                          | 7108  Crossroads Blvd        |              | Industrial         |         | —           |       | 848    |       | 4,141                                                            |       | 201    |       | 848                              |       | 4,341                 |       | 5,189              |       | 383 |   | 1989 |   | 1999 |   |
| Creekside Crossing           |                          | Creekside  Crossing One      |              | Office             |         | —           |       | 1,900  |       | 8,445                                                            |       | 972    |       | 1,901                            |       | 9,416                 |       | 11,317             |       | 2,136 |   | 1997 |   | 1998 |   |
| Creekside Crossing           |                          | Creekside  Crossing Two      |              | Office             |         | —           |       | 2,087  |       | 9,642                                                            |       | 522    |       | 2,087                            |       | 10,164                |       | 12,251             |       | 1,345 |   | 1999 |   | 2000 |   |
|                         |                          |                         |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **BROOKLYN PARK, MINNESOTA** |                          |                         |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| 7300 Northland Drive         |                          | 7300  Northland Drive        |              | Industrial         |         | —           |       | 700    |       | 6,635                                                            |       | 53     |       | 703                              |       | 6,686                 |       | 7,389              |       | 1,121 |   | 1980 |   | 1998 |   |
| Crosstown North              |                          | Crosstown  North Bus. Ctr. 1 |              | Industrial         |         | —           |       | 835    |       | 5,459                                                            |       | 828    |       | 1,091                            |       | 6,031                 |       | 7,122              |       | 725 |   | 1998 |   | 1999 |   |
| Crosstown North              |                          | Crosstown  North Bus. Ctr. 2 |              | Industrial         |         | —           |       | 449    |       | 2,961                                                            |       | 294    |       | 525                              |       | 3,179                 |       | 3,704              |       | 387 |   | 1998 |   | 1999 |   |
| Crosstown North              |                          | Crosstown  North Bus. Ctr. 3 |              | Industrial         |         | —           |       | 758    |       | 2,741                                                            |       | 77     |       | 784                              |       | 2,791                 |       | 3,575              |       | 576 |   | 1999 |   | 1999 |   |
| Crosstown North              |                          | Crosstown  North Bus. Ctr. 4 |              | Industrial         |         | —           |       | 2,079  |       | 8,138                                                            |       | 777    |       | 2,206                            |       | 8,788                 |       | 10,994             |       | 1,230 |   | 1999 |   | 1999 |   |
| Crosstown North              |                          | Crosstown  North Bus. Ctr. 5 |              | Industrial         |         | —           |       | 1,079  |       | 5,595                                                            |       | 120    |       | 1,191                            |       | 5,602                 |       | 6,794              |       | 751 |   | 1999 |   | 2000 |   |
| Crosstown North              |                          | Crosstown  North Bus. Ctr. 6 |              | Industrial         |         | —           |       | 788    |       | 3,651                                                            |       | 45     |       | 788                              |       | 3,696                 |       | 4,484              |       | 398 |   | 2000 |   | 2000 |   |
|                         |                          |                         |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **BURNSVILLE, MINNESOTA**    |                          |                         |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Cliff Road Industrial Center |                          | Cliff  Road Industrial Ctr   |              | Industrial         |         | —           |       | 256    |       | 1,493                                                            |       | 66     |       | 256                              |       | 1,559                 |       | 1,816              |       | 191 |   | 1972 |   | 1998 |   |
| Larc Industrial Park         |                          | Larc  Industrial Park I      |              | Industrial         |         | —           |       | 280    |       | 1,644                                                            |       | 131    |       | 280                              |       | 1,776                 |       | 2,055              |       | 252 |   | 1977 |   | 1997 |   |
| Larc Industrial Park         |                          | Larc  Industrial Park II     |              | Industrial         |         | —           |       | 224    |       | 1,327                                                            |       | 144    |       | 224                              |       | 1,470                 |       | 1,695              |       | 209 |   | 1976 |   | 1997 |   |
| Larc Industrial Park         |                          | Larc  Industrial Park III    |              | Industrial         |         | —           |       | 135    |       | 800                                                              |       | 48     |       | 135                              |       | 848                   |       | 983                |       | 109 |   | 1980 |   | 1997 |   |
| Larc Industrial Park         |                          | Larc  Industrial Park IV     |              | Industrial         |         | —           |       | 90     |       | 539                                                              |       | 6      |       | 90                               |       | 545                   |       | 635                |       | 77 |   | 1980 |   | 1997 |   |
| Larc Industrial Park         |                          | Larc  Industrial Park V      |              | Industrial         |         | —           |       | 96     |       | 555                                                              |       | 242    |       | 96                               |       | 797                   |       | 893                |       | 125 |   | 1980 |   | 1997 |   |
| Larc Industrial Park         |                          | Larc  Industrial Park VI     |              | Industrial         |         | —           |       | 373    |       | 2,149                                                            |       | 277    |       | 373                              |       | 2,426                 |       | 2,799              |       | 309 |   | 1975 |   | 1997 |   |
| Larc Industrial Park         |                          | Larc  Industrial Park VII    |              | Industrial         |         | —           |       | 242    |       | 1,394                                                            |       | 213    |       | 242                              |       | 1,607                 |       | 1,849              |       | 255 |   | 1973 |   | 1997 |   |
| Professional Plaza           |                          | Professional  Plaza III      |              | Industrial         |         | —           |       | 237    |       | 1,359                                                            |       | 277    |       | 241                              |       | 1,632                 |       | 1,873              |       | 253 |   | 1985 |   | 1998 |   |
| Professional Plaza           |                          | Professional  Plaza II       |              | Industrial         |         | —           |       | 216    |       | 1,272                                                            |       | 285    |       | 216                              |       | 1,557                 |       | 1,773              |       | 240 |   | 1984 |   | 1998 |   |
| SE Submarket-Burnsville      |                          | Professional  Plaza I        |              | Office             |         | —           |       | 467    |       | 2,731                                                            |       | 285    |       | 467                              |       | 3,016                 |       | 3,483              |       | 421 |   | 1986 |   | 1998 |   |

 

52

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| **Development**                  |                          | **Name**                        |              | **Building  Type** |         | **Encumbrances** |       | ****   |       | **Cost Capitalized  Subsequent to  Development  to Acquisition** |       |   |       | **Accumulated  Depreciation(1)** |       | **Year  Constructed** |       | **Year  Acquired** |       |
|----------------------------------|-------------------------------|---------------------------------|-------------------|--------------------|--------------|------------------|------------|--------|------------|------------------------------------------------------------------|------------|--------|------------|----------------------------------|------------|-----------------------|------------|--------------------|------------|
|                             |                          |                            |              |               |         |             |       |
| **Initial Cost**                 | **Gross Book Value 12/31/02** |
| **Land**                         |                          | **Buildings**                   | **Land/Land Imp** |               | **Bldgs/TI** |             | **Total**  |
|                             |                          |                            | ** **        |               | ** **   |             | ** ** |   | ** ** |                                                             | ** ** |   | ** ** |                             | ** ** |                  | ** ** |               | ** ** |   | ** ** |   | ** ** |   | ** ** |
| **CANAL WINCHESTER, OHIO**       |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Nifco at Canal Winchester        |                          | Nifco  at Canal Winchester      |              | Industrial         |         | —           |       | 400    |       | 3,386                                                            |       | 6      |       | 400                              |       | 3,392                 |       | 3,792              |       | 197 |   | 2000 |   | 2000 |   |
|                             |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **CARMEL, INDIANA**              |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Hamilton Crossing                |                          | Hamilton  Crossing Bldg 1       |              | Industrial         |         | —           |       | 835    |       | 4,881                                                            |       | 1,911  |       | 847                              |       | 6,780                 |       | 7,627              |       | 1,224 |   | 1989 |   | 1993 |   |
| Hamilton Crossing                |                          | Hamilton  Crossing Bldg 2       |              | Office             |         | —           |       | 313    |       | 1,410                                                            |       | 833    |       | 384                              |       | 2,172                 |       | 2,556              |       | 488 |   | 1997 |   | 1997 |   |
| Hamilton Crossing                |                          | Hamilton  Crossing Bldg 3       |              | Office             |         | —           |       | 890    |       | 10,040                                                           |       | 316    |       | 890                              |       | 10,356                |       | 11,246             |       | 918 |   | 2000 |   | 2000 |   |
| Hamilton Crossing                |                          | Hamilton  Crossing Bldg 4       |              | Office             |         | —           |       | 515    |       | 6,491                                                            |       | 26     |       | 598                              |       | 6,434                 |       | 7,032              |       | 1,338 |   | 1999 |   | 1999 |   |
| Hamilton Crossing Retail         |                          | Hamilton  Crossing Retail Bld 1 |              | Retail             |         | —           |       | 728    |       | 6,763                                                            |       | 186    |       | 898                              |       | 6,779                 |       | 7,677              |       | 731 |   | 1999 |   | 1999 |   |
| Hamilton Crossing Retail         |                          | Hampton  Inn Land Lease         |              | Grounds            |         | —           |       | 137    |       | —                                                           |       | 72     |       | 209                              |       | —                |       | 209                |       | — |   |   |   | 1999 |   |
| Hamilton Crossing Retail         |                          | Max  & Ermas                |              | Grounds            |         | —           |       | 167    |       | —                                                           |       | — |       | 167                              |       | —                |       | 167                |       | — |   |   |   | 2000 |   |
| Meridian Technology Center       |                          | Meridian  Tech Center           |              | Office             |         |             |       | 600    |       | 2,695                                                            |       | — |       | 600                              |       | 2,695                 |       | 3,295              |       | 34 |   | 1986 |   | 2002 |   |
|                             |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **CARY, NORTH CAROLINA**         |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Regency Forest                   |                          | 200  Regency Forest Dr.         |              | Office             |         | —           |       | 1,230  |       | 13,501                                                           |       | 295    |       | 1,230                            |       | 13,796                |       | 15,026             |       | 1,346 |   | 1999 |   | 1999 |   |
| Regency Forest                   |                          | 100  Regency Forest Dr.         |              | Office             |         | —           |       | 1,538  |       | 10,756                                                           |       | 1,664  |       | 1,618                            |       | 12,339                |       | 13,958             |       | 1,703 |   | 1997 |   | 1999 |   |
| Regency Forest                   |                          | Regency  Forest III             |              | Office             |         | —           |       | 1,134  |       | 9,604                                                            |       | 117    |       | 1,134                            |       | 9,721                 |       | 10,855             |       | 388 |   | 2000 |   | 2001 |   |
| Weston Parkway                   |                          | 6501  Weston Parkway            |              | Office             |         | 7,317            |       | 1,775  |       | 10,668                                                           |       | 56     |       | 1,775                            |       | 10,724                |       | 12,499             |       | 943 |   | 1996 |   | 1999 |   |
|                             |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **CELEBRATION, FLORIDA**         |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Celebration Business Center      |                          | Celebration  Business Center I  |              | Office             |         | —           |       | 1,102  |       | 4,843                                                            |       | 868    |       | 1,308                            |       | 5,505                 |       | 6,813              |       | 770 |   | 1997 |   | 1999 |   |
| Celebration Business Center      |                          | Celebration  Business Center II |              | Office             |         | —           |       | 771    |       | 3,590                                                            |       | 190    |       | 961                              |       | 3,590                 |       | 4,551              |       | 321 |   | 1997 |   | 1999 |   |
| Celebration Business Center      |                          | Celebration  Office Center I    |              | Office             |         |             |       | 1,382  |       | 7,921                                                            |       | — |       | 1,382                            |       | 7,921                 |       | 9,303              |       | 872 |   | 2000 |   | 2000 |   |
| Celebration Business Center      |                          | Celebration  Office Center II   |              | Office             |         | —           |       | 1,382  |       | 6,254                                                            |       | — |       | 1,382                            |       | 6,254                 |       | 7,636              |       | 172 |   | 2001 |   | 2001 |   |
|                             |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **CHANHASSEN, MINNESOTA**        |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Chanhassen Lakes                 |                          | Chanhassen  Lakes I             |              | Industrial         |         | —           |       | 357    |       | 2,078                                                            |       | 667    |       | 370                              |       | 2,733                 |       | 3,103              |       | 406 |   | 1983 |   | 1998 |   |
| Chanhassen Lakes                 |                          | Chanhassen  Lakes II            |              | Industrial         |         | —           |       | 438    |       | 2,542                                                            |       | 165    |       | 453                              |       | 2,693                 |       | 3,145              |       | 319 |   | 1986 |   | 1998 |   |
|                             |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **CHAPEL HILL, NORTH  CAROLINA** |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Governors Village                |                          | Governors  Village              |              | Office             |         |             |       | 515    |       | 5,664                                                            |       | — |       | 515                              |       | 5,664                 |       | 6,178              |       | 159 |   | 2000 |   | 2001 |   |
|                             |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **CHICAGO, ILLINOIS**            |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| King’s Mall                 |                          | Applebee’s  Ground Lease   |              | Grounds            |         | —           |       | 338    |       | —                                                           |       | — |       | 338                              |       | —                |       | 338                |       | — |   |   |   | 1997 |   |
|                             |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **CINCINNATI, OHIO**             |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| 312 Elm                          |                          | 312  Elm                        |              | Office             |         | 38,366           |       | 4,750  |       | 47,227                                                           |       | 4,566  |       | 5,428                            |       | 51,114                |       | 56,542             |       | 13,074 |   | 1992 |   | 1993 |   |
| 312 Plum                         |                          | 312  Plum                       |              | Office             |         | —           |       | 2,539  |       | 24,796                                                           |       | 2,075  |       | 2,590                            |       | 26,821                |       | 29,411             |       | 6,428 |   | 1987 |   | 1993 |   |
| Blue Ash Office Center           |                          | Blue  Ash Office Ctr VI         |              | Office             |         | —           |       | 518    |       | 2,852                                                            |       | 253    |       | 518                              |       | 3,104                 |       | 3,622              |       | 424 |   | 1989 |   | 1997 |   |
| Executive Plaza                  |                          | Executive  Plaza I              |              | Office             |         | —           |       | 728    |       | 5,525                                                            |       | 328    |       | 728                              |       | 5,854                 |       | 6,582              |       | 869 |   | 1980 |   | 1996 |   |
| Executive Plaza                  |                          | Executive  Plaza II             |              | Office             |         | —           |       | 728    |       | 5,628                                                            |       | — |       | 728                              |       | 5,628                 |       | 6,356              |       | 821 |   | 1981 |   | 1996 |   |
| Executive Plaza                  |                          | Executive  Plaza III            |              | Office             |         | —           |       | 509    |       | 4,992                                                            |       | 1,360  |       | 509                              |       | 6,352                 |       | 6,861              |       | 1,467 |   | 1998 |   | 1998 |   |
| Governors Hill                   |                          | 8790  Governor’s Hill      |              | Office             |         | —           |       | 400    |       | 4,784                                                            |       | 547    |       | 408                              |       | 5,323                 |       | 5,731              |       | 1,212 |   | 1985 |   | 1993 |   |
| Governors Hill                   |                          | 8800  Governor’s Hill      |              | Office             |         | —           |       | 225    |       | 2,298                                                            |       | 12     |       | 231                              |       | 2,305                 |       | 2,536              |       | 955 |   | 1985 |   | 1986 |   |
| Governors Hill                   |                          | 8600  Governor’s Hill      |              | Office             |         | —           |       | 1,220  |       | 18,998                                                           |       | 1,228  |       | 1,245                            |       | 20,202                |       | 21,447             |       | 4,544 |   | 1986 |   | 1993 |   |
| Iams Industrial Park             |                          | Cincinnati  Bell Supply         |              | Industrial         |         | —           |       | 606    |       | 3,237                                                            |       | — |       | 606                              |       | 3,238                 |       | 3,843              |       | 230 |   | 1999 |   | 2000 |   |
| Kenwood Commons                  |                          | 8230  Kenwood Commons           |              | Office             |         | 4,557            |       | 638    |       | 3,308                                                            |       | 786    |       | 638                              |       | 4,095                 |       | 4,732              |       | 2,037 |   | 1986 |   | 1986 |   |
| Kenwood Commons                  |                          | 8280  Kenwood Commons           |              | Office             |         | 2,443            |       | 638    |       | 1,863                                                            |       | 35     |       | 638                              |       | 1,899                 |       | 2,537              |       | 894 |   | 1986 |   | 1986 |   |
| Kenwood Executive Center         |                          | Kenwood  Executive Center       |              | Office             |         | —           |       | 606    |       | 4,037                                                            |       | 441    |       | 606                              |       | 4,479                 |       | 5,084              |       | 597 |   | 1981 |   | 1997 |   |
| Kenwood MOB                      |                          | Kenwood  MOB                    |              | Office             |         |             |       |   |       | 7,798                                                            |       | — |       | —                           |       | 7,798                 |       | 7,798              |       | 627 |   | 1994 |   | 1999 |   |
| One Ashview Place                |                          | One  Ashview Place              |              | Office             |         | —           |       | 1,204  |       | 12,659                                                           |       | 449    |       | 1,204                            |       | 13,108                |       | 14,312             |       | 1,756 |   | 1989 |   | 1997 |   |
| Park 50                          |                          | Dun  & Bradstreet Bldg      |              | Office             |         | 1,577            |       | 270    |       | 2,718                                                            |       | 447    |       | 466                              |       | 2,970                 |       | 3,435              |       | 1,200 |   | 1972 |   | 1986 |   |
| Pfeiffer Place                   |                          | Pfeiffer  Place                 |              | Office             |         | —           |       | 3,608  |       | 14,945                                                           |       | — |       | 3,608                            |       | 14,945                |       | 18,553             |       | 358 |   | 2001 |   | 2001 |   |
| Pfeiffer Woods                   |                          | Pfeiffer  Woods                 |              | Office             |         | 6,457            |       | 1,450  |       | 12,322                                                           |       | 266    |       | 1,450                            |       | 12,588                |       | 14,038             |       | 1,065 |   | 1998 |   | 1999 |   |

 

53

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| **Development**             |                          | **Name**                        |              | **Building  Type** |         | **Encumbrances** |       | ****   |       | **Cost Capitalized  Subsequent to  Development  to Acquisition** |       |   |       | **Accumulated  Depreciation(1)** |       | **Year  Constructed** |       | **Year  Acquired** |       |
|-----------------------------|-------------------------------|---------------------------------|-------------------|--------------------|--------------|------------------|------------|--------|------------|------------------------------------------------------------------|------------|--------|------------|----------------------------------|------------|-----------------------|------------|--------------------|------------|
|                        |                          |                            |              |               |         |             |       |
| **Initial Cost**            | **Gross Book Value 12/31/02** |
| **Land**                    |                          | **Buildings**                   | **Land/Land Imp** |               | **Bldgs/TI** |             | **Total**  |
|                        |                          |                            | ** **        |               | ** **   |             | ** ** |   | ** ** |                                                             | ** ** |   | ** ** |                             | ** ** |                  | ** ** |               | ** ** |   | ** ** |   | ** ** |   | ** ** |
| Remington Office Park       |                          | Remington  Park Bldg A          |              | Office             |         | —           |       | 560    |       | 1,469                                                            |       | 164    |       | 560                              |       | 1,633                 |       | 2,193              |       | 247 |   | 1982 |   | 1997 |   |
| Remington Office Park       |                          | Remington  Park Bldg B          |              | Office             |         | —           |       | 560    |       | 1,543                                                            |       | 180    |       | 560                              |       | 1,723                 |       | 2,283              |       | 222 |   | 1982 |   | 1997 |   |
| Triangle Office Park        |                          | Triangle  Office Park           |              | Office             |         | 4,935            |       | 1,018  |       | 11,511                                                           |       | — |       | 1,018                            |       | 11,511                |       | 12,530             |       | 4,724 |   | 1965 |   | 1986 |   |
| World Park                  |                          | World  Park Bldg 5              |              | Industrial         |         | 1,698            |       | 270    |       | 3,398                                                            |       | 24     |       | 276                              |       | 3,416                 |       | 3,691              |       | 1,221 |   | 1987 |   | 1988 |   |
| World Park                  |                          | World  Park Bldg 6              |              | Industrial         |         | 1,994            |       | 378    |       | 3,845                                                            |       | 111    |       | 385                              |       | 3,950                 |       | 4,335              |       | 1,365 |   | 1987 |   | 1988 |   |
| World Park                  |                          | World  Park Bldg 7              |              | Industrial         |         | 2,387            |       | 525    |       | 4,522                                                            |       | 144    |       | 537                              |       | 4,653                 |       | 5,190              |       | 1,600 |   | 1987 |   | 1988 |   |
| Zussman Building            |                          | Zussman  Bldg                   |              | Office             |         | —           |       | 339    |       | 6,864                                                            |       | 818    |       | 346                              |       | 7,675                 |       | 8,021              |       | 2,565 |   | 1986 |   | 1993 |   |
|                        |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **COLUMBUS, OHIO**          |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Easton                      |                          | Easton  Way One                 |              | Office             |         | —           |       | 1,874  |       | 10,338                                                           |       | 180    |       | 1,874                            |       | 10,518                |       | 12,392             |       | 1,074 |   | 2000 |   | 2000 |   |
| Easton                      |                          | Easton  Way Two                 |              | Office             |         |             |       | 2,005  |       | 10,287                                                           |       | — |       | 2,005                            |       | 10,287                |       | 12,291             |       | 312 |   | 2001 |   | 2001 |   |
| Easton Oval                 |                          | One  Easton Oval                |              | Office             |         | —           |       | 2,789  |       | 12,109                                                           |       | 208    |       | 2,789                            |       | 12,317                |       | 15,105             |       | 2,342 |   | 1998 |   | 1999 |   |
| Easton Oval                 |                          | Two  Easton Oval                |              | Office             |         | —           |       | 2,489  |       | 16,828                                                           |       | 310    |       | 2,489                            |       | 17,138                |       | 19,627             |       | 1,985 |   | 1996 |   | 1998 |   |
| Polaris                     |                          | 1000  Polaris Parkway           |              | Office             |         | —           |       | 1,200  |       | 6,636                                                            |       | 1,425  |       | 1,293                            |       | 7,968                 |       | 9,261              |       | 808 |   | 1992 |   | 1999 |   |
| Westbelt Drive              |                          | 2190-2200  Westbelt Drive       |              | Industrial         |         | —           |       | 300    |       | 1,963                                                            |       | 84     |       | 300                              |       | 2,047                 |       | 2,347              |       | 221 |   | 1986 |   | 1998 |   |
| Westbelt West               |                          | Westbelt  West #1               |              | Industrial         |         | —           |       | 432    |       | 4,165                                                            |       | 872    |       | 432                              |       | 5,037                 |       | 5,469              |       | 736 |   | 1999 |   | 1999 |   |
| Westbelt West               |                          | Westbelt  West #2               |              | Industrial         |         | —           |       | 509    |       | 5,230                                                            |       | 322    |       | 509                              |       | 5,552                 |       | 6,061              |       | 496 |   | 1999 |   | 2000 |   |
| Zane Trace                  |                          | 3800  Zane Trace Drive          |              | Industrial         |         | —           |       | 170    |       | 2,097                                                            |       | 411    |       | 170                              |       | 2,508                 |       | 2,678              |       | 550 |   | 1978 |   | 1994 |   |
| Zane Trace                  |                          | 3635  Zane Trace Drive          |              | Industrial         |         | —           |       | 236    |       | 1,813                                                            |       | 257    |       | 236                              |       | 2,070                 |       | 2,306              |       | 293 |   | 1980 |   | 1998 |   |
|                        |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **CREVE COUER, MISSOURI**   |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Twin Oaks Office Ctr        |                          | Twin  Oaks                      |              | Office             |         | —           |       | 566    |       | 8,304                                                            |       | 1,403  |       | 566                              |       | 9,707                 |       | 10,273             |       | 1,444 |   | 1995 |   | 1997 |   |
|                        |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **CRYSTAL, MINNESOTA**      |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Crystal Industrial Center   |                          | Crystal  Industrial Center      |              | Industrial         |         | —           |       | 456    |       | 2,621                                                            |       | 528    |       | 480                              |       | 3,125                 |       | 3,605              |       | 534 |   | 1974 |   | 1997 |   |
|                        |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **DES PLAINES, ILLINOIS**   |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| 105 East Oakton             |                          | 105  East Oakton                |              | Industrial         |         | —           |       | 1,132  |       | 4,279                                                            |       | 370    |       | 1,132                            |       | 4,649                 |       | 5,781              |       | 467 |   | 1974 |   | 1999 |   |
| Deckbrand Building          |                          | Wolf  Road Building             |              | Industrial         |         | —           |       | 179    |       | 1,632                                                            |       | 232    |       | 179                              |       | 1,864                 |       | 2,043              |       | 217 |   | 1966 |   | 1998 |   |
|                        |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **DOWNERS GROVE, ILLINOIS** |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Executive Towers            |                          | Executive  Towers I             |              | Office             |         | —           |       | 2,652  |       | 24,464                                                           |       | 2,899  |       | 2,652                            |       | 27,363                |       | 30,015             |       | 3,895 |   | 1983 |   | 1997 |   |
| Executive Towers            |                          | Executive  Towers II            |              | Office             |         | —           |       | 3,386  |       | 31,876                                                           |       | 5,389  |       | 3,386                            |       | 37,265                |       | 40,651             |       | 5,822 |   | 1984 |   | 1997 |   |
| Executive Towers            |                          | Executive  Towers III           |              | Office             |         | —           |       | 3,512  |       | 32,989                                                           |       | 2,688  |       | 3,512                            |       | 35,676                |       | 39,188             |       | 5,227 |   | 1987 |   | 1997 |   |
|                        |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **DUBLIN, OHIO**            |                          |                            |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Scioto Corporate Center     |                          | Scioto  Corporate Center        |              | Office             |         | —           |       | 1,100  |       | 3,350                                                            |       | 771    |       | 1,100                            |       | 4,121                 |       | 5,221              |       | 670 |   | 1987 |   | 1996 |   |
| Tuttle Crossing             |                          | Metrocenter  III                |              | Office             |         | —           |       | 887    |       | 3,012                                                            |       | 436    |       | 887                              |       | 3,448                 |       | 4,334              |       | 562 |   | 1983 |   | 1996 |   |
| Tuttle Crossing             |                          | Qwest  (LCI)                    |              | Office             |         | —           |       | 2,618  |       | 18,942                                                           |       | 931    |       | 2,670                            |       | 19,821                |       | 22,491             |       | 4,559 |   | 1990 |   | 1993 |   |
| Tuttle Crossing             |                          | Sterling  1                     |              | Office             |         | —           |       | 1,494  |       | 12,858                                                           |       | 331    |       | 1,524                            |       | 13,159                |       | 14,683             |       | 2,983 |   | 1990 |   | 1993 |   |
| Tuttle Crossing             |                          | 4700  Lakehurst Ct.             |              | Office             |         | —           |       | 717    |       | 2,463                                                            |       | 405    |       | 717                              |       | 2,868                 |       | 3,585              |       | 793 |   | 1994 |   | 1994 |   |
| Tuttle Crossing             |                          | Sterling  2                     |              | Office             |         | —           |       | 605    |       | 5,873                                                            |       | 71     |       | 605                              |       | 5,944                 |       | 6,549              |       | 1,124 |   | 1995 |   | 1995 |   |
| Tuttle Crossing             |                          | John  Alden Life Ins.           |              | Office             |         | —           |       | 1,066  |       | 7,711                                                            |       | 31     |       | 1,066                            |       | 7,743                 |       | 8,809              |       | 1,444 |   | 1995 |   | 1995 |   |
| Tuttle Crossing             |                          | 5555  Glendon Court             |              | Office             |         | —           |       | 1,600  |       | 10,864                                                           |       | 1,093  |       | 1,773                            |       | 11,783                |       | 13,557             |       | 4,256 |   | 1995 |   | 1995 |   |
| Tuttle Crossing             |                          | Sterling  3                     |              | Office             |         | —           |       | 1,601  |       | 8,725                                                            |       | 71     |       | 1,601                            |       | 8,796                 |       | 10,397             |       | 2,229 |   | 1996 |   | 1996 |   |
| Tuttle Crossing             |                          | Compmanagement                  |              | Office             |         | —           |       | 867    |       | 4,408                                                            |       | 545    |       | 867                              |       | 4,953                 |       | 5,820              |       | 848 |   | 1997 |   | 1997 |   |
| Tuttle Crossing             |                          | Sterling  4                     |              | Office             |         | —           |       | 483    |       | 9,349                                                            |       | 892    |       | 483                              |       | 10,242                |       | 10,725             |       | 1,661 |   | 1998 |   | 1998 |   |
| Tuttle Crossing             |                          | Xerox  Bldg-5555 Parkcenter Cir |              | Office             |         | —           |       | 1,580  |       | 9,375                                                            |       | 449    |       | 1,580                            |       | 9,824                 |       | 11,404             |       | 2,203 |   | 1992 |   | 1994 |   |
| Tuttle Crossing             |                          | Parkwood  Place                 |              | Office             |         | —           |       | 1,690  |       | 11,570                                                           |       | 847    |       | 1,690                            |       | 12,417                |       | 14,106             |       | 2,390 |   | 1997 |   | 1997 |   |
| Tuttle Crossing             |                          | Nationwide                      |              | Office             |         | —           |       | 4,815  |       | 19,199                                                           |       | 96     |       | 4,815                            |       | 19,295                |       | 24,110             |       | 4,872 |   | 1996 |   | 1996 |   |
| Tuttle Crossing             |                          | Emerald  II                     |              | Office             |         | —           |       | 495    |       | 3,399                                                            |       | 17     |       | 495                              |       | 3,416                 |       | 3,911              |       | 832 |   | 1998 |   | 1998 |   |
| Tuttle Crossing             |                          | Atrium  II, Phase I             |              | Office             |         | —           |       | 1,649  |       | 11,523                                                           |       | 1      |       | 1,649                            |       | 11,524                |       | 13,173             |       | 2,890 |   | 1997 |   | 1998 |   |
| Tuttle Crossing             |                          | Atrium  II, Phase II            |              | Office             |         | —           |       | 1,597  |       | 10,292                                                           |       | 904    |       | 1,597                            |       | 11,196                |       | 12,793             |       | 2,680 |   | 1998 |   | 1999 |   |
| Tuttle Crossing             |                          | Blazer  I                       |              | Office             |         | —           |       | 904    |       | 5,728                                                            |       | 579    |       | 904                              |       | 6,308                 |       | 7,212              |       | 1,417 |   | 1999 |   | 1999 |   |
| Tuttle Crossing             |                          | Parkwood  II                    |              | Office             |         | —           |       | 1,848  |       | 14,030                                                           |       | 45     |       | 1,848                            |       | 14,075                |       | 15,923             |       | 1,405 |   | 2000 |   | 2000 |   |

 

54

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| **Development**             |                          | **Name**                      |              | **Building  Type** |         | **Encumbrances** |       | ****   |       | **Cost Capitalized  Subsequent to  Development  to Acquisition** |       |   |       | **Accumulated  Depreciation(1)** |       | **Year  Constructed** |       | **Year  Acquired** |       |
|-----------------------------|-------------------------------|-------------------------------|-------------------|--------------------|--------------|------------------|------------|--------|------------|------------------------------------------------------------------|------------|--------|------------|----------------------------------|------------|-----------------------|------------|--------------------|------------|
|                        |                          |                          |              |               |         |             |       |
| **Initial Cost**            | **Gross Book Value 12/31/02** |
| **Land**                    |                          | **Buildings**                 | **Land/Land Imp** |               | **Bldgs/TI** |             | **Total**  |
|                        |                          |                          | ** **        |               | ** **   |             | ** ** |   | ** ** |                                                             | ** ** |   | ** ** |                             | ** ** |                  | ** ** |               | ** ** |   | ** ** |   | ** ** |   | ** ** |
| Tuttle Crossing             |                          | Blazer  II                    |              | Office             |         | —           |       | 1,016  |       | 6,901                                                            |       | 17     |       | 1,016                            |       | 6,917                 |       | 7,934              |       | 720 |   | 2000 |   | 2000 |   |
| Tuttle Crossing             |                          | Emerald  III                  |              | Office             |         | —           |       | 1,685  |       | 9,862                                                            |       | — |       | 1,685                            |       | 9,862                 |       | 11,547             |       | 427 |   | 2001 |   | 2001 |   |
|                        |                          |                          |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **DULUTH, GEORGIA**         |                          |                          |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Breckinridge                |                          | 2825  Breckinridge Blvd       |              | Industrial         |         | —           |       | 317    |       | 3,626                                                            |       | 208    |       | 317                              |       | 3,833                 |       | 4,151              |       | 394 |   | 1986 |   | 1999 |   |
| Breckinridge                |                          | 2875  Breckinridge Blvd       |              | Industrial         |         | —           |       | 476    |       | 4,797                                                            |       | 11     |       | 476                              |       | 4,807                 |       | 5,284              |       | 417 |   | 1986 |   | 1999 |   |
| Breckinridge                |                          | 2885  Breckinridge Blvd       |              | Industrial         |         | —           |       | 487    |       | 6,893                                                            |       | 563    |       | 487                              |       | 7,456                 |       | 7,942              |       | 733 |   | 1997 |   | 1999 |   |
| Business Park At Sugarloaf  |                          | 2775  Premiere Parkway        |              | Industrial         |         | —           |       | 560    |       | 4,697                                                            |       | 21     |       | 560                              |       | 4,719                 |       | 5,279              |       | 417 |   | 1997 |   | 1999 |   |
| Business Park At Sugarloaf  |                          | 3079  Premiere Parkway        |              | Industrial         |         | —           |       | 776    |       | 6,520                                                            |       | 381    |       | 776                              |       | 6,902                 |       | 7,678              |       | 625 |   | 1998 |   | 1999 |   |
| Business Park At Sugarloaf  |                          | Sugarloaf  Office I           |              | Industrial         |         | —           |       | 1,042  |       | 8,685                                                            |       | 275    |       | 1,042                            |       | 8,960                 |       | 10,002             |       | 797 |   | 1998 |   | 1999 |   |
| Business Park At Sugarloaf  |                          | Sugarloaf  Office II          |              | Industrial         |         |             |       | 972    |       | 3,842                                                            |       | — |       | 972                              |       | 3,842                 |       | 4,814              |       | 21 |   | 1999 |   | 2002 |   |
| Business Park At Sugarloaf  |                          | Sugarloaf  Office III         |              | Industrial         |         |             |       | 696    |       | 3,896                                                            |       | — |       | 696                              |       | 3,896                 |       | 4,591              |       | 20 |   | 1999 |   | 2002 |   |
| Business Park At Sugarloaf  |                          | Sugarloaf  Office IV          |              | Industrial         |         | —           |       | 623    |       | 4,182                                                            |       | 10     |       | 623                              |       | 4,192                 |       | 4,816              |       | 824 |   | 2000 |   | 2000 |   |
| Business Park At Sugarloaf  |                          | Sugarloaf  Office V           |              | Industrial         |         |             |       | 744    |       | 3,958                                                            |       | — |       | 744                              |       | 3,958                 |       | 4,702              |       | 349 |   | 2001 |   | 2001 |   |
| Business Park At Sugarloaf  |                          | 2850  Premiere Parkway        |              | Industrial         |         |             |       | 621    |       | 4,698                                                            |       | — |       | 621                              |       | 4,698                 |       | 5,319              |       | 19 |   | 1997 |   | 2002 |   |
| Business Park At Sugarloaf  |                          | 2855  Premiere Parkway        |              | Industrial         |         | —           |       | 765    |       | 3,959                                                            |       | 186    |       | 765                              |       | 4,145                 |       | 4,911              |       | 444 |   | 1999 |   | 1999 |   |
| Business Park At Sugarloaf  |                          | 6655  Sugarloaf               |              | Industrial         |         | —           |       | 1,651  |       | 6,449                                                            |       | 4      |       | 1,651                            |       | 6,453                 |       | 8,104              |       | 175 |   | 1998 |   | 2001 |   |
| Crestwood Pointe            |                          | 3805  Crestwood Parkway       |              | Office             |         | —           |       | 877    |       | 15,158                                                           |       | 244    |       | 877                              |       | 15,403                |       | 16,279             |       | 1,356 |   | 1997 |   | 1999 |   |
| Crestwood Pointe            |                          | 3885  Crestwood Parkway       |              | Office             |         | —           |       | 878    |       | 14,153                                                           |       | 958    |       | 878                              |       | 15,110                |       | 15,988             |       | 1,777 |   | 1998 |   | 1999 |   |
| Hampton Green               |                          | Hampton  Green Off I          |              | Office             |         | —           |       | 1,388  |       | 12,361                                                           |       | — |       | 1,388                            |       | 12,361                |       | 13,748             |       | 772 |   | 2000 |   | 2000 |   |
| Meadowbrook                 |                          | 2475  Meadowbrook Parkway     |              | Industrial         |         | —           |       | 529    |       | 3,477                                                            |       | 78     |       | 529                              |       | 3,555                 |       | 4,084              |       | 307 |   | 1986 |   | 1999 |   |
| Meadowbrook                 |                          | 2505  Meadowbrook Parkway     |              | Industrial         |         | —           |       | 606    |       | 1,555                                                            |       | 4      |       | 606                              |       | 1,559                 |       | 2,165              |       | 209 |   | 1990 |   | 1999 |   |
| River Green                 |                          | 3450  River Green Court       |              | Industrial         |         | —           |       | 194    |       | 2,191                                                            |       | 195    |       | 194                              |       | 2,386                 |       | 2,580              |       | 260 |   | 1989 |   | 1999 |   |
|                        |                          |                          |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **EAGAN, MINNESOTA**        |                          |                          |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Apollo Distribution Center  |                          | Apollo  Industrial Ctr I      |              | Industrial         |         | —           |       | 866    |       | 4,976                                                            |       | 737    |       | 882                              |       | 5,698                 |       | 6,579              |       | 745 |   | 1997 |   | 1997 |   |
| Apollo Distribution Center  |                          | Apollo  Industrial Ctr II     |              | Industrial         |         | —           |       | 474    |       | 3,142                                                            |       | — |       | 474                              |       | 3,142                 |       | 3,616              |       | 407 |   | 2000 |   | 2000 |   |
| Apollo Distribution Center  |                          | Apollo  Industrial Ctr III    |              | Industrial         |         | —           |       | 1,432  |       | 6,905                                                            |       | — |       | 1,432                            |       | 6,905                 |       | 8,337              |       | 509 |   | 2000 |   | 2000 |   |
| Eagandale Crossing          |                          | Eagandale  Crossing           |              | Industrial         |         | —           |       | 974    |       | 4,818                                                            |       | 10     |       | 987                              |       | 4,815                 |       | 5,802              |       | 1,519 |   | 1998 |   | 1998 |   |
| Eagandale Tech Center       |                          | Eagandale  Tech Center        |              | Industrial         |         | —           |       | 987    |       | 5,709                                                            |       | 1,023  |       | 997                              |       | 6,721                 |       | 7,719              |       | 1,193 |   | 1998 |   | 1998 |   |
| Lunar Pointe                |                          | Lunar  Pointe                 |              | Industrial         |         |             |       | 982    |       | 4,448                                                            |       | — |       | 982                              |       | 4,448                 |       | 5,430              |       | 209 |   | 2001 |   | 2001 |   |
| Sibley Industrial Center    |                          | Sibley  Industrial Center I   |              | Industrial         |         | —           |       | 356    |       | 2,050                                                            |       | 234    |       | 380                              |       | 2,260                 |       | 2,639              |       | 327 |   | 1973 |   | 1997 |   |
| Sibley Industrial Center    |                          | Sibley  Industrial Center II  |              | Industrial         |         | —           |       | 225    |       | 1,197                                                            |       | 105    |       | 225                              |       | 1,301                 |       | 1,526              |       | 231 |   | 1972 |   | 1997 |   |
| Sibley Industrial Center    |                          | Sibley  Industrial Center III |              | Industrial         |         | —           |       | 213    |       | 1,223                                                            |       | 251    |       | 217                              |       | 1,470                 |       | 1,687              |       | 225 |   | 1968 |   | 1997 |   |
| Silverbell Commons          |                          | Silverbell  Commons           |              | Industrial         |         | —           |       | 1,807  |       | 6,804                                                            |       | 256    |       | 1,807                            |       | 7,060                 |       | 8,867              |       | 907 |   | 1999 |   | 1999 |   |
| Trapp Road                  |                          | Trapp  Road Commerce I        |              | Industrial         |         | —           |       | 671    |       | 3,893                                                            |       | 367    |       | 700                              |       | 4,231                 |       | 4,931              |       | 619 |   | 1996 |   | 1998 |   |
| Trapp Road                  |                          | Trapp  Road Commerce II       |              | Industrial         |         | —           |       | 1,250  |       | 7,022                                                            |       | 490    |       | 1,266                            |       | 7,496                 |       | 8,762              |       | 1,096 |   | 1998 |   | 1998 |   |
|                        |                          |                          |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **EARTH CITY, MISSOURI**    |                          |                          |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Earth City                  |                          | 3322  NGIC                    |              | Office             |         | 6,311            |       | 2,615  |       | 10,877                                                           |       | 811    |       | 2,615                            |       | 11,688                |       | 14,303             |       | 1,737 |   | 1987 |   | 1997 |   |
| Earth City                  |                          | Corporate  Center, Earth City |              | Industrial         |         | —           |       | 783    |       | 4,517                                                            |       | 693    |       | 783                              |       | 5,210                 |       | 5,993              |       | 594 |   | 2000 |   | 2000 |   |
|                        |                          |                          |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **EAST POINTE, GEORGIA**    |                          |                          |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Camp Creek                  |                          | Camp  Creek Bldg 1400         |              | Industrial         |         | —           |       | 561    |       | 3,398                                                            |       | — |       | 561                              |       | 3,398                 |       | 3,959              |       | 167 |   | 1988 |   | 2001 |   |
| Camp Creek                  |                          | Camp  Creek Bldg 1800         |              | Industrial         |         | —           |       | 462    |       | 3,022                                                            |       | — |       | 462                              |       | 3,022                 |       | 3,484              |       | 232 |   | 1989 |   | 2001 |   |
| Camp Creek                  |                          | Camp  Creek Bldg 2000         |              | Industrial         |         | —           |       | 395    |       | 2,292                                                            |       | — |       | 395                              |       | 2,292                 |       | 2,688              |       | 114 |   | 1989 |   | 2001 |   |
| Camp Creek                  |                          | Camp  Creek Bldg 2400         |              | Industrial         |         | —           |       | 296    |       | 1,840                                                            |       | — |       | 296                              |       | 1,840                 |       | 2,135              |       | 114 |   | 1988 |   | 2001 |   |
| Camp Creek                  |                          | Camp  Creek Bldg 2600         |              | Industrial         |         | —           |       | 364    |       | 2,346                                                            |       | — |       | 364                              |       | 2,346                 |       | 2,710              |       | 127 |   | 1990 |   | 2001 |   |
|                        |                          |                          |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **EDEN PRAIRIE, MINNESOTA** |                          |                          |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| Edenvale Executive Center   |                          | Edenvale  Executive Center    |              | Industrial         |         | —           |       | 1,184  |       | 6,734                                                            |       | 486    |       | 1,185                            |       | 7,220                 |       | 8,404              |       | 676 |   | 1987 |   | 1999 |   |
| Golden Triangle Tech Center |                          | Golden  Triangle Tech Ctr     |              | Industrial         |         | —           |       | 1,446  |       | 8,284                                                            |       | 268    |       | 1,458                            |       | 8,540                 |       | 9,998              |       | 974 |   | 1997 |   | 1998 |   |
| Valley Gate/Green           |                          | Valley  Gate North            |              | Industrial         |         | —           |       | 548    |       | 3,133                                                            |       | 553    |       | 556                              |       | 3,678                 |       | 4,234              |       | 431 |   | 1986 |   | 1999 |   |
|                        |                          |                          |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |
| **EDINA, MINNESOTA**        |                          |                          |              |               |         |             |       |   |       |                                                             |       |   |       |                             |       |                  |       |               |       |   |   |   |   |   |   |

 

55

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| **Development**             |                          | **Name**                      |              | **Building  Type** |         | **Encumbrances** |      | ****   |   | **Cost Capitalized  Subsequent to  Development  to Acquisition** |   |   |   | **Accumulated  Depreciation(1)** |   | **Year  Constructed** |   | **Year  Acquired** |   |
|-----------------------------|-------------------------------|-------------------------------|-------------------|--------------------|--------------|------------------|-----------|--------|--------|------------------------------------------------------------------|--------|--------|--------|----------------------------------|--------|-----------------------|--------|--------------------|--------|
|                        |                          |                          |              |               |         |             |      |
| **Initial Cost**            | **Gross Book Value 12/31/02** |
| **Land**                    |                          | **Buildings**                 | **Land/Land Imp** |               | **Bldgs/TI** |             | **Total** |
|                        |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Cahill Business  Center     |                          | Cahill Business Center        |              | Industrial         |         | —           |      | 507    |   | 2,963                                                            |   | 361    |   | 507                              |   | 3,324                 |   | 3,831              |   | 557 |   | 1980 |   | 1997 |   |
| Edina Interchange           |                          | Edina  Interchange I          |              | Industrial         |         | 1,630            |      | 630    |   | 3,660                                                            |   | 411    |   | 630                              |   | 4,071                 |   | 4,701              |   | 606 |   | 1995 |   | 1997 |   |
| Edina Interchange           |                          | Edina  Interchange II         |              | Industrial         |         | 1,044            |      | 432    |   | 2,512                                                            |   | 65     |   | 432                              |   | 2,577                 |   | 3,010              |   | 325 |   | 1980 |   | 1997 |   |
| Edina Interchange           |                          | Edina  Interchange III        |              | Industrial         |         | 1,176            |      | 487    |   | 2,833                                                            |   | 71     |   | 487                              |   | 2,904                 |   | 3,391              |   | 370 |   | 1981 |   | 1997 |   |
| Edina Interchange           |                          | Edina  Interchange IV         |              | Industrial         |         | —           |      | 228    |   | 1,322                                                            |   | 367    |   | 228                              |   | 1,690                 |   | 1,917              |   | 345 |   | 1974 |   | 1997 |   |
| Edina Interchange           |                          | Edina  Interchange V          |              | Industrial         |         | —           |      | 971    |   | 5,666                                                            |   | 368    |   | 971                              |   | 6,034                 |   | 7,005              |   | 878 |   | 1974 |   | 1997 |   |
| Edina Interchange           |                          | Edina  Interchange VII        |              | Industrial         |         | —           |      | 180    |   | 1,060                                                            |   | 241    |   | 180                              |   | 1,300                 |   | 1,480              |   | 220 |   | 1970 |   | 1998 |   |
| Pakwa                       |                          | Pakwa  I                      |              | Industrial         |         | —           |      | 347    |   | 2,029                                                            |   | 359    |   | 347                              |   | 2,388                 |   | 2,735              |   | 428 |   | 1979 |   | 1997 |   |
| Pakwa                       |                          | Pakwa  II                     |              | Industrial         |         | —           |      | 215    |   | 1,241                                                            |   | 182    |   | 215                              |   | 1,423                 |   | 1,637              |   | 200 |   | 1979 |   | 1997 |   |
| Pakwa                       |                          | Pakwa  III                    |              | Office             |         | —           |      | 248    |   | 1,433                                                            |   | 117    |   | 248                              |   | 1,549                 |   | 1,798              |   | 216 |   | 1979 |   | 1997 |   |
|                        |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **FAIRFIELD, OHIO**         |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Faifield Business Center    |                          | Fairfield  Bus. Ctr. D        |              | Industrial         |         | —           |      | 135    |   | 1,744                                                            |   | 134    |   | 135                              |   | 1,878                 |   | 2,012              |   | 348 |   | 1990 |   | 1995 |   |
| Faifield Business Center    |                          | Fairfield  Bus. Ctr. E        |              | Industrial         |         | —           |      | 398    |   | 2,594                                                            |   | 88     |   | 398                              |   | 2,682                 |   | 3,080              |   | 514 |   | 1990 |   | 1995 |   |
| University Moving           |                          | Thunderbird  Bldg 1           |              | Industrial         |         | —           |      | 248    |   | 1,760                                                            |   | 24     |   | 248                              |   | 1,784                 |   | 2,031              |   | 340 |   | 1991 |   | 1995 |   |
|                        |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **FENTON, MISSOURI**        |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Fenton Interstate Buildings |                          | Fenton  Interstate Building C |              | Industrial         |         | —           |      | 519    |   | 1,978                                                            |   | 37     |   | 519                              |   | 2,014                 |   | 2,534              |   | 173 |   | 1986 |   | 1999 |   |
| Fenton Interstate Buildings |                          | Fenton  Interstate Building D |              | Industrial         |         | —           |      | 1,286  |   | 5,178                                                            |   | 160    |   | 1,286                            |   | 5,338                 |   | 6,624              |   | 544 |   | 1987 |   | 1999 |   |
| Fenton Interstate Buildings |                          | Fenton  Industrial Bldg A     |              | Industrial         |         | —           |      | 603    |   | 2,622                                                            |   | — |   | 603                              |   | 2,622                 |   | 3,225              |   | 224 |   | 1987 |   | 2000 |   |
| Fenton Interstate Buildings |                          | Fenton  Industrial Bldg B     |              | Industrial         |         | —           |      | 702    |   | 2,319                                                            |   | — |   | 702                              |   | 2,319                 |   | 3,022              |   | 155 |   | 1986 |   | 2000 |   |
| Southport                   |                          | Southport  I                  |              | Industrial         |         | —           |      | 192    |   | 834                                                              |   | 45     |   | 192                              |   | 878                   |   | 1,070              |   | 117 |   | 1977 |   | 1997 |   |
| Southport                   |                          | Southport  II                 |              | Industrial         |         | —           |      | 151    |   | 659                                                              |   | 49     |   | 151                              |   | 709                   |   | 860                |   | 102 |   | 1978 |   | 1997 |   |
| Southport                   |                          | Southport  Commerce Ctr       |              | Industrial         |         | —           |      | 233    |   | 1,016                                                            |   | 173    |   | 233                              |   | 1,189                 |   | 1,422              |   | 197 |   | 1978 |   | 1997 |   |
|                        |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **FISHERS, INDIANA**        |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Exit 5                      |                          | Exit  5 Bldg I                |              | Industrial         |         | —           |      | 833    |   | 2,695                                                            |   | 113    |   | 833                              |   | 2,807                 |   | 3,641              |   | 269 |   | 1999 |   | 1999 |   |
| Exit 5                      |                          | Exit  5 Bldg. II              |              | Industrial         |         | —           |      | 760    |   | 4,611                                                            |   | 203    |   | 760                              |   | 4,815                 |   | 5,575              |   | 594 |   | 1999 |   | 2000 |   |
|                        |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **FLORENCE, KENTUCKY**      |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Florence                    |                          | Sofa  Express - Florence      |              | Retail             |         | —           |      | 735    |   | 781                                                              |   | 342    |   | 735                              |   | 1,124                 |   | 1,859              |   | 150 |   | 1997 |   | 1997 |   |
| Florence                    |                          | Turfway  Crossing             |              | Retail             |         |             |      | 4,664  |   | 4,725                                                            |   | — |   | 4,664                            |   | 4,725                 |   | 9,389              |   | — |   | 2001 |   | 2002 |   |
|                        |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **FRANKLIN, TENNESSEE**     |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Aspen Grove Business Center |                          | 277  Mallory Station          |              | Industrial         |         | —           |      | 936    |   | 6,539                                                            |   | 69     |   | 936                              |   | 6,608                 |   | 7,544              |   | 581 |   | 1996 |   | 1999 |   |
| Aspen Grove Business Center |                          | 320  Premier Court            |              | Industrial         |         | —           |      | 1,151  |   | 6,521                                                            |   | 347    |   | 1,151                            |   | 6,869                 |   | 8,019              |   | 610 |   | 1996 |   | 1999 |   |
| Aspen Grove Business Center |                          | 305  Seaboard Lane            |              | Industrial         |         | —           |      | 970    |   | 6,318                                                            |   | 566    |   | 970                              |   | 6,884                 |   | 7,854              |   | 1,189 |   | 1998 |   | 1999 |   |
| Aspen Grove Business Center |                          | Aspen  Grove 4                |              | Industrial         |         | —           |      | 492    |   | 2,416                                                            |   | — |   | 492                              |   | 2,416                 |   | 2,908              |   | 32 |   | 2002 |   | 2002 |   |
| Aspen Grove Business Center |                          | 416  Mary Lindsay Polk Dr     |              | Industrial         |         | —           |      | 943    |   | 5,288                                                            |   | 699    |   | 943                              |   | 5,987                 |   | 6,930              |   | 604 |   | 1996 |   | 1999 |   |
| Aspen Grove Business Center |                          | 318  Seaboard Lane Bldg 200   |              | Industrial         |         | —           |      | 240    |   | 1,385                                                            |   | 555    |   | 240                              |   | 1,940                 |   | 2,180              |   | 336 |   | 1999 |   | 1999 |   |
| Aspen Grove Business Center |                          | 341  Cool Springs Blvd        |              | Office             |         | —           |      | 950    |   | 7,468                                                            |   | 1,600  |   | 950                              |   | 9,069                 |   | 10,018             |   | 1,105 |   | 1999 |   | 1999 |   |
| Aspen Grove Business Center |                          | 318  Seaboard Lane Bldg 100   |              | Industrial         |         | —           |      | 301    |   | 1,684                                                            |   | 755    |   | 301                              |   | 2,439                 |   | 2,740              |   | 522 |   | 1999 |   | 1999 |   |
| Aspen Grove Business Center |                          | Aspen  Grove Flex Ctr III     |              | Industrial         |         |             |      | 327    |   | 2,027                                                            |   | — |   | 327                              |   | 2,027                 |   | 2,354              |   | 15 |   | 2001 |   | 2001 |   |
| Aspen Grove Business Center |                          | Aspen  Grove Flex Ctr IV      |              | Industrial         |         |             |      | 205    |   | 1,528                                                            |   | — |   | 205                              |   | 1,528                 |   | 1,733              |   | 115 |   | 2001 |   | 2001 |   |
| Brentwood South Bus. Center |                          | 119  Seaboard Lane            |              | Industrial         |         | —           |      | 569    |   | 2,435                                                            |   | 22     |   | 569                              |   | 2,457                 |   | 3,027              |   | 213 |   | 1990 |   | 1999 |   |
| Brentwood South Bus. Center |                          | 121  Seaboard Lane            |              | Industrial         |         | —           |      | 445    |   | 1,932                                                            |   | 12     |   | 445                              |   | 1,944                 |   | 2,389              |   | 179 |   | 1990 |   | 1999 |   |
| Brentwood South Bus. Center |                          | 123  Seaboard Lane            |              | Industrial         |         | —           |      | 489    |   | 1,243                                                            |   | 407    |   | 489                              |   | 1,651                 |   | 2,139              |   | 156 |   | 1990 |   | 1999 |   |
|                        |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **FRIDLEY, MINNESOTA**      |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| River Road                  |                          | River  Road Business Ctr. S.  |              | Industrial         |         | 3,510            |      | 1,083  |   | 6,379                                                            |   | 427    |   | 1,112                            |   | 6,777                 |   | 7,889              |   | 815 |   | 1986 |   | 1999 |   |
| University Center           |                          | University  Center I&II   |              | Industrial         |         | —           |      | 220    |   | 1,273                                                            |   | 354    |   | 226                              |   | 1,620                 |   | 1,847              |   | 164 |   | 1983 |   | 1999 |   |
|                        |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **FT. LAUDERDALE, FLORIDA** |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Sawgrass                    |                          | Sawgrass  - Building 1        |              | Office             |         | —           |      | 1,211  |   | 6,424                                                            |   | 75     |   | 1,211                            |   | 6,499                 |   | 7,710              |   | 1,041 |   | 1999 |   | 2000 |   |

 

56

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| **Development**              |                          | **Name**                      |              | **Building  Type** |         | **Encumbrances** |      | ****   |   | **Cost Capitalized  Subsequent to  Development  to Acquisition** |   |   |   | **Accumulated  Depreciation(1)** |   | **Year  Constructed** |   | **Year  Acquired** |   |
|------------------------------|-------------------------------|-------------------------------|-------------------|--------------------|--------------|------------------|-----------|--------|--------|------------------------------------------------------------------|--------|--------|--------|----------------------------------|--------|-----------------------|--------|--------------------|--------|
|                         |                          |                          |              |               |         |             |      |
| **Initial Cost**             | **Gross Book Value 12/31/02** |
| **Land**                     |                          | **Buildings**                 | **Land/Land Imp** |               | **Bldgs/TI** |             | **Total** |
| **GLENWILLOW, OHIO**         |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Emerald Valley               |                          | Emerald  Valley Bldg 1        |              | Industrial         |         | —           |      | 555    |   | 6,398                                                            |   | 132    |   | 556                              |   | 6,529                 |   | 7,085              |   | 497 |   | 1999 |   | 1999 |   |
| Emerald  Valley              |                          | Emerald  Valley Bldg 2        |              | Industrial         |         |             |      | 519    |   | 5,052                                                            |   | — |   | 519                              |   | 5,052                 |   | 5,571              |   | 245 |   | 2001 |   | 2002 |   |
|                         |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **GOLDEN VALLEY, MINNESOTA** |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Edina Realty                 |                          | Edina  Realty                 |              | Office             |         | —           |      | 330    |   | 1,282                                                            |   | 186    |   | 349                              |   | 1,449                 |   | 1,798              |   | 231 |   | 1965 |   | 1998 |   |
| Golden Hills                 |                          | Golden  Hills 1               |              | Industrial         |         | —           |      | 1,081  |   | 6,281                                                            |   | 249    |   | 1,105                            |   | 6,506                 |   | 7,611              |   | 749 |   | 1996 |   | 1998 |   |
| Golden Hills                 |                          | Golden  Hills 2               |              | Industrial         |         | —           |      | 1,741  |   | 4,315                                                            |   | 388    |   | 1,742                            |   | 4,703                 |   | 6,444              |   | 1,068 |   | 1999 |   | 1999 |   |
| Golden Hills                 |                          | Golden  Hills 3               |              | Industrial         |         | —           |      | 1,813  |   | 4,845                                                            |   | 366    |   | 1,815                            |   | 5,210                 |   | 7,024              |   | 1,008 |   | 1999 |   | 1999 |   |
| 5075 Building                |                          | 5075  Building                |              | Office             |         | —           |      | 506    |   | 2,389                                                            |   | 356    |   | 539                              |   | 2,711                 |   | 3,251              |   | 390 |   | 1965 |   | 1998 |   |
| Tyrol West                   |                          | Tyrol  West                   |              | Office             |         | —           |      | 350    |   | 2,016                                                            |   | 348    |   | 380                              |   | 2,334                 |   | 2,714              |   | 326 |   | 1968 |   | 1998 |   |
| Sandburg Industrial Center   |                          | Sandburg  Industrial Center   |              | Industrial         |         | —           |      | 451    |   | 2,629                                                            |   | 415    |   | 451                              |   | 3,044                 |   | 3,495              |   | 357 |   | 1973 |   | 1997 |   |
|                         |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **GREENWOOD, INDIANA**       |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| South Park-Indiana           |                          | South  Park Bldg 1            |              | Office             |         | —           |      | 287    |   | 2,577                                                            |   | 325    |   | 292                              |   | 2,897                 |   | 3,189              |   | 656 |   | 1989 |   | 1993 |   |
| South Park-Indiana           |                          | South  Park Bldg 2            |              | Industrial         |         | —           |      | 334    |   | 3,424                                                            |   | 708    |   | 341                              |   | 4,125                 |   | 4,465              |   | 1,118 |   | 1990 |   | 1993 |   |
| South Park-Indiana           |                          | South  Park Bldg 3            |              | Office             |         | —           |      | 208    |   | 2,378                                                            |   | 319    |   | 212                              |   | 2,693                 |   | 2,905              |   | 709 |   | 1990 |   | 1993 |   |
| South Park-Indiana           |                          | Brylane  Parking Lot          |              | Grounds            |         | —           |      | 54     |   | —                                                           |   | 3      |   | 57                               |   | —                |   | 57                 |   | — |   |   |   | 1994 |   |
|                         |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **GROVE CITY, OHIO**         |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| South Pointe                 |                          | South  Pointe Bldg D          |              | Industrial         |         | —           |      | 276    |   | 3,176                                                            |   | 323    |   | 276                              |   | 3,500                 |   | 3,776              |   | 713 |   | 1997 |   | 1997 |   |
| South Pointe                 |                          | South  Pointe Bldg E          |              | Industrial         |         | —           |      | 279    |   | 2,450                                                            |   | 920    |   | 279                              |   | 3,371                 |   | 3,649              |   | 826 |   | 1997 |   | 1997 |   |
|                         |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **GROVEPORT, OHIO**          |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| 6600 Port Road               |                          | 6600  Port Road               |              | Industrial         |         | —           |      | 2,725  |   | 23,547                                                           |   | 145    |   | 2,725                            |   | 23,691                |   | 26,417             |   | 3,524 |   | 1995 |   | 1997 |   |
| Groveport Commerce Ctr       |                          | Groveport  Comm Ctr #2        |              | Industrial         |         | —           |      | 1,049  |   | 7,610                                                            |   | 1,015  |   | 1,049                            |   | 8,625                 |   | 9,674              |   | 905 |   | 1999 |   | 1999 |   |
| Groveport Commerce Ctr       |                          | Groveport  Comm Ctr #3        |              | Industrial         |         | —           |      | 510    |   | 3,886                                                            |   | 218    |   | 510                              |   | 4,104                 |   | 4,614              |   | 294 |   | 1999 |   | 2000 |   |
| Groveport Commerce Ctr       |                          | Groveport  Comm Ctr #4        |              | Industrial         |         | —           |      | 1,114  |   | 8,687                                                            |   | 8      |   | 1,114                            |   | 8,695                 |   | 9,809              |   | 623 |   | 2000 |   | 2000 |   |
| Groveport Commerce Ctr       |                          | Groveport  Commerce Ctr. #345 |              | Industrial         |         | —           |      | 1,045  |   | 7,349                                                            |   | 555    |   | 1,045                            |   | 7,904                 |   | 8,949              |   | 417 |   | 2000 |   | 2000 |   |
|                         |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **HEBRON, KENTUCKY**         |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| KY, Southpark                |                          | Ky.  Southpark Bldg 4         |              | Industrial         |         | —           |      | 779    |   | 3,372                                                            |   | 38     |   | 779                              |   | 3,410                 |   | 4,189              |   | 712 |   | 1994 |   | 1994 |   |
| KY, Southpark                |                          | CR  Services                  |              | Industrial         |         | —           |      | 1,085  |   | 4,214                                                            |   | 1,186  |   | 1,085                            |   | 5,400                 |   | 6,485              |   | 1,121 |   | 1994 |   | 1994 |   |
|                         |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **HIGHLAND HEIGHTS, OHIO**   |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Avion  Park                  |                          | 5335  Avion Park Drive        |              | Industrial         |         |             |      | 606    |   | 2,534                                                            |   | — |   | 606                              |   | 2,534                 |   | 3,140              |   | 43 |   | 1994 |   | 2002 |   |
|                         |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **HOPKINS, MINNESOTA**       |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Cornerstone Business Center  |                          | Cornerstone  Business Center  |              | Industrial         |         | 5,949            |      | 1,469  |   | 8,455                                                            |   | 239    |   | 1,543                            |   | 8,620                 |   | 10,163             |   | 1,096 |   | 1996 |   | 1997 |   |
| Westside Business Park       |                          | Westside  Business Park       |              | Industrial         |         | —           |      | 1,176  |   | 6,842                                                            |   | 586    |   | 1,170                            |   | 7,434                 |   | 8,604              |   | 1,036 |   | 1987 |   | 1997 |   |
|                         |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **INDEPENDENCE, OHIO**       |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| 6111 Oak Tree                |                          | Oak  Tree Place               |              | Office             |         | —           |      | 703    |   | 4,667                                                            |   | 469    |   | 703                              |   | 5,136                 |   | 5,839              |   | 832 |   | 1979 |   | 1997 |   |
| Corporate Plaza              |                          | Corporate  Plaza I            |              | Office             |         | 7,842            |      | 2,116  |   | 14,224                                                           |   | 710    |   | 2,116                            |   | 14,934                |   | 17,049             |   | 2,700 |   | 1989 |   | 1996 |   |
| Corporate Plaza              |                          | Corporate  Plaza II           |              | Office             |         | 6,887            |      | 1,841  |   | 12,387                                                           |   | 746    |   | 1,841                            |   | 13,133                |   | 14,974             |   | 2,435 |   | 1991 |   | 1996 |   |
| Freedom Square               |                          | Freedom  Square I             |              | Office             |         | —           |      | 595    |   | 3,994                                                            |   | 345    |   | 595                              |   | 4,339                 |   | 4,934              |   | 800 |   | 1980 |   | 1996 |   |
| Freedom Square               |                          | Freedom  Square II            |              | Office             |         | 6,580            |      | 1,746  |   | 11,774                                                           |   | 787    |   | 1,746                            |   | 12,560                |   | 14,306             |   | 2,313 |   | 1987 |   | 1996 |   |
| Freedom Square               |                          | Freedom  Square III           |              | Office             |         | —           |      | 701    |   | 6,536                                                            |   | 78     |   | 701                              |   | 6,613                 |   | 7,315              |   | 1,581 |   | 1997 |   | 1997 |   |
| Park Center                  |                          | Park  Center Bldg I           |              | Office             |         | —           |      | 2,193  |   | 13,968                                                           |   | 125    |   | 2,193                            |   | 14,092                |   | 16,285             |   | 2,800 |   | 1998 |   | 1998 |   |
| Park Center                  |                          | Park  Center Bldg II          |              | Office             |         | —           |      | 2,190  |   | 13,722                                                           |   | 201    |   | 2,190                            |   | 13,922                |   | 16,112             |   | 2,144 |   | 1999 |   | 1999 |   |
| Park Center                  |                          | Park  Center Bldg III         |              | Office             |         | —           |      | 2,190  |   | 12,812                                                           |   | 396    |   | 2,190                            |   | 13,208                |   | 15,398             |   | 1,213 |   | 2000 |   | 2000 |   |
|                         |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **INDIANAPOLIS, INDIANA**    |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Franklin Road Business Park  |                          | Franklin  Road Bus. Ctr.      |              | Industrial         |         | —           |      | 594    |   | 10,743                                                           |   | 74     |   | 594                              |   | 10,817                |   | 11,411             |   | 2,379 |   | 1962 |   | 1995 |   |
| Hillsdale                    |                          | Hillsdale  Bldg 4             |              | Industrial         |         | —           |      | 366    |   | 5,122                                                            |   | 232    |   | 366                              |   | 5,354                 |   | 5,720              |   | 1,207 |   | 1987 |   | 1993 |   |

 

57

----

 
| **Development**           |                          | **Name**                     |              | **Building  Type** |         | **Encumbrances** |      | ****   |   | **Cost Capitalized  Subsequent to  Development  to Acquisition** |   |   |   | **Accumulated  Depreciation(1)** |   | **Year  Constructed** |   | **Year  Acquired** |   |
|---------------------------|-------------------------------|------------------------------|-------------------|--------------------|--------------|------------------|-----------|--------|--------|------------------------------------------------------------------|--------|--------|--------|----------------------------------|--------|-----------------------|--------|--------------------|--------|
|                      |                          |                         |              |               |         |             |      |
| **Initial Cost**          | **Gross Book Value 12/31/02** |
| **Land**                  |                          | **Buildings**                | **Land/Land Imp** |               | **Bldgs/TI** |             | **Total** |
| Hillsdale                 |                          | Hillsdale  Bldg 5            |              | Industrial         |         | —           |      | 251    |   | 3,250                                                            |   | 631    |   | 251                              |   | 3,882                 |   | 4,133              |   | 925 |   | 1987 |   | 1993 |   |
| Hillsdale                 |                          | Hillsdale  Bldg 6            |              | Industrial         |         | —           |      | 315    |   | 4,334                                                            |   | 1,239  |   | 315                              |   | 5,573                 |   | 5,888              |   | 1,043 |   | 1987 |   | 1993 |   |
| KATC - North              |                          | 3520  Commerce Crossing      |              | Office             |         | —           |      | 950    |   | 2,063                                                            |   | 36     |   | 950                              |   | 2,099                 |   | 3,049              |   | 444 |   | 1976 |   | 1993 |   |
| KATC - South              |                          | 8465  Keystone Crossing      |              | Office             |         | —           |      | 89     |   | 1,381                                                            |   | 173    |   | 89                               |   | 1,554                 |   | 1,643              |   | 308 |   | 1983 |   | 1995 |   |
| KATC - South              |                          | F.C.  Tucker                 |              | Office             |         | —           |      | — |   | 290                                                              |   | 7      |   | —                           |   | 297                   |   | 297                |   | 65 |   | 1978 |   | 1993 |   |
| Keystone Crossing         |                          | 8555  Keystone Crossing      |              | Office             |         | —           |      | — |   | 6,038                                                            |   | 515    |   | —                           |   | 6,553                 |   | 6,553              |   | 1,019 |   | 1985 |   | 1997 |   |
| Nampac Building           |                          | 6061  Guion Rd               |              | Industrial         |         | —           |      | 274    |   | 1,798                                                            |   | 124    |   | 274                              |   | 1,922                 |   | 2,196              |   | 386 |   | 1974 |   | 1995 |   |
| 4750 Kentucky Avenue      |                          | 4750  Kentucky Avenue        |              | Industrial         |         | —           |      | 246    |   | 2,383                                                            |   | 220    |   | 246                              |   | 2,604                 |   | 2,849              |   | 400 |   | 1974 |   | 1996 |   |
| Software Artistry         |                          | River  Road Bldg I           |              | Office             |         | —           |      | 856    |   | 7,727                                                            |   | 116    |   | 856                              |   | 7,843                 |   | 8,699              |   | 1,365 |   | 1997 |   | 1998 |   |
| 4316 West Minnesota       |                          | 4316  West Minnesota         |              | Industrial         |         | —           |      | 287    |   | 2,283                                                            |   | 294    |   | 287                              |   | 2,577                 |   | 2,864              |   | 396 |   | 1970 |   | 1996 |   |
| One  North Capital        |                          | One  North Capital           |              | Office             |         |             |      | 1,439  |   | 9,651                                                            |   | — |   | 1,439                            |   | 9,651                 |   | 11,091             |   | 1,059 |   | 1980 |   | 1998 |   |
| Park 100                  |                          | 6060  Guion Rd               |              | Industrial         |         | —           |      | 411    |   | 2,856                                                            |   | 810    |   | 511                              |   | 3,566                 |   | 4,076              |   | 733 |   | 1968 |   | 1996 |   |
| Park 100                  |                          | Silver  Burdett              |              | Industrial         |         | —           |      | 1,414  |   | 13,835                                                           |   | 725    |   | 1,667                            |   | 14,307                |   | 15,974             |   | 3,202 |   | 1994 |   | 1995 |   |
| Park 100                  |                          | Park  100 Bldg 98            |              | Industrial         |         | —           |      | 273    |   | 8,296                                                            |   | 1,347  |   | 273                              |   | 9,643                 |   | 9,916              |   | 1,754 |   | 1968 |   | 1994 |   |
| Park 100                  |                          | Park  100 Bldg 100           |              | Industrial         |         | 1,457            |      | 103    |   | 2,471                                                            |   | 595    |   | 103                              |   | 3,065                 |   | 3,168              |   | 764 |   | 1995 |   | 1995 |   |
| Park 100                  |                          | Park  100 Bldg 107           |              | Industrial         |         | —           |      | 99     |   | 1,698                                                            |   | 51     |   | 99                               |   | 1,750                 |   | 1,848              |   | 334 |   | 1984 |   | 1995 |   |
| Park 100                  |                          | Park  100 Bldg 109           |              | Industrial         |         | 965              |      | 240    |   | 1,845                                                            |   | 12     |   | 246                              |   | 1,851                 |   | 2,097              |   | 738 |   | 1985 |   | 1986 |   |
| Park 100                  |                          | Park  100 Bldg 116           |              | Office             |         | —           |      | 341    |   | 3,215                                                            |   | 59     |   | 348                              |   | 3,267                 |   | 3,615              |   | 1,153 |   | 1988 |   | 1988 |   |
| Park 100                  |                          | Park  100 Bldg 118           |              | Office             |         | —           |      | 226    |   | 2,427                                                            |   | 390    |   | 230                              |   | 2,813                 |   | 3,043              |   | 642 |   | 1988 |   | 1993 |   |
| Park 100                  |                          | Park  100 Bldg 119           |              | Office             |         | —           |      | 388    |   | 3,719                                                            |   | 1,205  |   | 395                              |   | 4,917                 |   | 5,312              |   | 1,076 |   | 1989 |   | 1993 |   |
| Park 100                  |                          | Park  100 Bldg 121, Retail   |              | Retail             |         | —           |      | 592    |   | 1,074                                                            |   | 128    |   | 604                              |   | 1,190                 |   | 1,794              |   | 247 |   | 1989 |   | 1993 |   |
| Park 100                  |                          | Park  100 Bldg 122           |              | Industrial         |         | —           |      | 284    |   | 3,744                                                            |   | 225    |   | 290                              |   | 3,963                 |   | 4,253              |   | 932 |   | 1990 |   | 1993 |   |
| Park 100                  |                          | Park  100 Bldg 124           |              | Office             |         |             |      | 227    |   | 2,852                                                            |   | — |   | 227                              |   | 2,852                 |   | 3,079              |   | 67 |   | 1992 |   | 2002 |   |
| Park 100                  |                          | Park  100 Bldg 127           |              | Industrial         |         | —           |      | 96     |   | 1,934                                                            |   | 298    |   | 96                               |   | 2,232                 |   | 2,328              |   | 540 |   | 1995 |   | 1995 |   |
| Park 100                  |                          | Park  100 Bldg 132           |              | Office             |         | —           |      | 446    |   | 1,217                                                            |   | 456    |   | 446                              |   | 1,673                 |   | 2,119              |   | 497 |   | 1997 |   | 1997 |   |
| Park 100                  |                          | Norco  Windows Parking Lot   |              | Grounds            |         | —           |      | 37     |   | —                                                           |   | — |   | 37                               |   | —                |   | 37                 |   | — |   |   |   | 1999 |   |
| Park 100                  |                          | Ups  Parking                 |              | Grounds            |         | —           |      | 270    |   | —                                                           |   | — |   | 270                              |   | —                |   | 270                |   | — |   |   |   | 1997 |   |
| Park 100                  |                          | Norgate  Ground Lease        |              | Grounds            |         | —           |      | 51     |   | —                                                           |   | — |   | 51                               |   | —                |   | 51                 |   | — |   |   |   | 1995 |   |
| Park 100                  |                          | Zollman  Ground Lease        |              | Grounds            |         | —           |      | 115    |   | —                                                           |   | — |   | 115                              |   | —                |   | 115                |   | — |   |   |   | 1994 |   |
| Park 100                  |                          | Becton  Dickinson Lot        |              | Grounds            |         | —           |      | — |   | —                                                           |   | 13     |   | 13                               |   | —                |   | 13                 |   | — |   |   |   | 1993 |   |
| Park Fletcher             |                          | Park  Fletcher Bldg 14       |              | Industrial         |         | —           |      | 76     |   | 740                                                              |   | 65     |   | 76                               |   | 805                   |   | 881                |   | 135 |   | 1978 |   | 1996 |   |
| Parkwood Crossing         |                          | One  Parkwood                |              | Office             |         | —           |      | 1,018  |   | 10,212                                                           |   | 217    |   | 1,028                            |   | 10,419                |   | 11,446             |   | 1,805 |   | 1989 |   | 1995 |   |
| Parkwood Crossing         |                          | Two  Parkwood                |              | Office             |         | —           |      | 861    |   | 7,652                                                            |   | 25     |   | 871                              |   | 7,667                 |   | 8,539              |   | 2,099 |   | 1996 |   | 1996 |   |
| Parkwood Crossing         |                          | Three  Parkwood              |              | Office             |         | —           |      | 1,377  |   | 9,777                                                            |   | 355    |   | 1,387                            |   | 10,122                |   | 11,509             |   | 2,136 |   | 1997 |   | 1997 |   |
| Parkwood Crossing         |                          | Four  Parkwood               |              | Office             |         | —           |      | 1,489  |   | 11,709                                                           |   | 673    |   | 1,499                            |   | 12,371                |   | 13,870             |   | 2,753 |   | 1998 |   | 1998 |   |
| Parkwood Crossing         |                          | Five  Parkwood               |              | Office             |         | —           |      | 1,485  |   | 13,641                                                           |   | 516    |   | 1,528                            |   | 14,113                |   | 15,641             |   | 2,314 |   | 1999 |   | 1999 |   |
| Parkwood Crossing         |                          | Six  Parkwood                |              | Office             |         | —           |      | 1,960  |   | 15,580                                                           |   | 378    |   | 1,960                            |   | 15,957                |   | 17,918             |   | 1,495 |   | 2000 |   | 2000 |   |
| Parkwood Crossing         |                          | Duke  Fitness Centers LLC    |              | Grounds            |         |             |      | — |   | 61                                                               |   | — |   | —                           |   | 61                    |   | 61                 |   | — |   |   |   | 2002 |   |
| Woodfield                 |                          | Two  Woodfield Crossing      |              | Office             |         | —           |      | 719    |   | 9,480                                                            |   | 1,236  |   | 733                              |   | 10,702                |   | 11,435             |   | 2,572 |   | 1987 |   | 1993 |   |
| Woodfield                 |                          | Three  Woodfield Crossing    |              | Office             |         | —           |      | 3,767  |   | 21,236                                                           |   | 2,912  |   | 3,843                            |   | 24,073                |   | 27,916             |   | 5,830 |   | 1989 |   | 1993 |   |
| Woodland Corporate Park   |                          | Woodland  Corporate Park I   |              | Office             |         | —           |      | 290    |   | 4,598                                                            |   | 602    |   | 320                              |   | 5,170                 |   | 5,490              |   | 1,032 |   | 1998 |   | 1998 |   |
| Woodland Corporate Park   |                          | Woodland  Corporate Park II  |              | Office             |         | —           |      | 271    |   | 3,618                                                            |   | 818    |   | 297                              |   | 4,410                 |   | 4,707              |   | 543 |   | 1999 |   | 1999 |   |
| Woodland Corporate Park   |                          | Woodland  Corporate Park III |              | Office             |         | —           |      | 1,227  |   | 4,432                                                            |   | 71     |   | 1,227                            |   | 4,504                 |   | 5,730              |   | 499 |   | 1999 |   | 2000 |   |
| Woodland Corporate Park   |                          | Woodland  Corporate Park IV  |              | Office             |         | —           |      | 715    |   | 7,245                                                            |   | 144    |   | 715                              |   | 7,389                 |   | 8,104              |   | 558 |   | 2000 |   | 2000 |   |
|                      |                          |                         |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **JACKSONVILLE, FLORIDA** |                          |                         |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| 7011 A.C. Skinner Pkwy    |                          | 7011  A.C. Skinner Pkwy      |              | Office             |         | —           |      | 1,007  |   | 4,200                                                            |   | — |   | 1,007                            |   | 4,200                 |   | 5,207              |   | 485 |   | 1999 |   | 1999 |   |
|                      |                          |                         |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **KENNESAW, GEORGIA**     |                          |                         |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Town Point                |                          | 3391  Town Point Drive       |              | Office             |         | —           |      | 797    |   | 8,425                                                            |   | 1,124  |   | 797                              |   | 9,549                 |   | 10,346             |   | 1,332 |   | 1999 |   | 1999 |   |
|                      |                          |                         |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **LAKE FOREST, ILLINOIS** |                          |                         |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Bradley Business Center   |                          | Ballard  Drive Building      |              | Industrial         |         | —           |      | 186    |   | 1,751                                                            |   | 89     |   | 186                              |   | 1,840                 |   | 2,026              |   | 235 |   | 1985 |   | 1998 |   |
| Bradley Business Center   |                          | Laurel  Drive Building       |              | Industrial         |         | —           |      | 98     |   | 913                                                              |   | 53     |   | 98                               |   | 965                   |   | 1,064              |   | 116 |   | 1981 |   | 1998 |   |
| Bradley Business Center   |                          | 13825  W. Laurel Dr.         |              | Industrial         |         | —           |      | 750    |   | 1,874                                                            |   | 816    |   | 750                              |   | 2,690                 |   | 3,440              |   | 294 |   | 1978 |   | 1999 |   |

 

58

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| **Development**                |                          | **Name**                    |              | **Building  Type** |         | **Encumbrances** |      | ****   |   | **Cost Capitalized  Subsequent to  Development  to Acquisition** |   |   |   | **Accumulated  Depreciation(1)** |   | **Year  Constructed** |   | **Year  Acquired** |   |
|--------------------------------|-------------------------------|-----------------------------|-------------------|--------------------|--------------|------------------|-----------|--------|--------|------------------------------------------------------------------|--------|--------|--------|----------------------------------|--------|-----------------------|--------|--------------------|--------|
|                           |                          |                        |              |               |         |             |      |
| **Initial Cost**               | **Gross Book Value 12/31/02** |
| **Land**                       |                          | **Buildings**               | **Land/Land Imp** |               | **Bldgs/TI** |             | **Total** |
| Conway Park                    |                          | One  Conway Park            |              | Office             |         | —           |      | 1,901  |   | 18,370                                                           |   | 1,136  |   | 1,901                            |   | 19,506                |   | 21,407             |   | 2,633 |   | 1989 |   | 1998 |   |
|                           |                          |                        |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **LAKE MARY, FLORIDA**         |                          |                        |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Northpoint                     |                          | Northpoint  Center I        |              | Office             |         | —           |      | 1,087  |   | 11,546                                                           |   | 155    |   | 1,087                            |   | 11,701                |   | 12,788             |   | 1,912 |   | 1998 |   | 1999 |   |
| Northpoint                     |                          | Northpoint  Center II       |              | Office             |         | —           |      | 1,202  |   | 10,891                                                           |   | 103    |   | 1,202                            |   | 10,994                |   | 12,196             |   | 1,237 |   | 1999 |   | 2000 |   |
| Northpoint                     |                          | Northpoint  III             |              | Office             |         | —           |      | 1,552  |   | 10,987                                                           |   | — |   | 1,552                            |   | 10,987                |   | 12,539             |   | 411 |   | 2001 |   | 2001 |   |
| Northpoint                     |                          | Northpoint  IV              |              | Office             |         |             |      | 1,605  |   | 8,583                                                            |   | — |   | 1,605                            |   | 8,583                 |   | 10,187             |   | 254 |   | 2002 |   | 2002 |   |
| Technology Park                |                          | Technology  Park I          |              | Industrial         |         | —           |      | 641    |   | 3,519                                                            |   | 205    |   | 641                              |   | 3,725                 |   | 4,366              |   | 368 |   | 1986 |   | 1999 |   |
| Technology Park                |                          | Technology  Park II         |              | Industrial         |         | —           |      | 835    |   | 4,306                                                            |   | 277    |   | 835                              |   | 4,582                 |   | 5,417              |   | 434 |   | 1998 |   | 1999 |   |
| Technology Park                |                          | Technology  Park III        |              | Industrial         |         | —           |      | 477    |   | 3,859                                                            |   | 113    |   | 477                              |   | 3,972                 |   | 4,449              |   | 392 |   | 1998 |   | 1999 |   |
| Technology Park                |                          | Technology  Park IV         |              | Industrial         |         | —           |      | 669    |   | 2,905                                                            |   | 285    |   | 669                              |   | 3,190                 |   | 3,859              |   | 331 |   | 1999 |   | 1999 |   |
| Technology Park                |                          | Technology  Park V          |              | Industrial         |         | —           |      | 547    |   | 2,878                                                            |   | 244    |   | 547                              |   | 3,121                 |   | 3,669              |   | 289 |   | 1999 |   | 1999 |   |
|                           |                          |                        |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **LAKELAND, FLORIDA**          |                          |                        |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Lakeland Interstate Park       |                          | Lakeland  Interstate Park I |              | Industrial         |         | —           |      | 864    |   | 4,263                                                            |   | — |   | 864                              |   | 4,263                 |   | 5,127              |   | 131 |   | 2001 |   | 2001 |   |
|                           |                          |                        |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **LAWRENCEVILLE, GEORGIA**     |                          |                        |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Hillside at Huntcrest          |                          | Huntcrest  I                |              | Office             |         | —           |      | 1,193  |   | 9,897                                                            |   | — |   | 1,193                            |   | 9,897                 |   | 11,089             |   | 543 |   | 2000 |   | 2001 |   |
| Hillside at Huntcrest          |                          | Huntcrest  II               |              | Office             |         | —           |      | 927    |   | 10,562                                                           |   | — |   | 927                              |   | 10,562                |   | 11,489             |   | 709 |   | 2000 |   | 2001 |   |
| Hillside at Huntcrest          |                          | Huntcrest  III              |              | Office             |         | —           |      | 1,358  |   | 9,535                                                            |   | — |   | 1,358                            |   | 9,535                 |   | 10,893             |   | — |   | 2001 |   | 2002 |   |
|                           |                          |                        |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **LEBANON, INDIANA**           |                          |                        |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Lebanon Bus. Park              |                          | Lebanon  Building 4         |              | Industrial         |         | —           |      | 305    |   | 9,672                                                            |   | 89     |   | 305                              |   | 9,760                 |   | 10,066             |   | 1,245 |   | 1997 |   | 1997 |   |
| Lebanon Bus. Park              |                          | Lebanon  Building 9         |              | Industrial         |         | —           |      | 554    |   | 6,891                                                            |   | 644    |   | 554                              |   | 7,535                 |   | 8,089              |   | 617 |   | 1999 |   | 1999 |   |
|                           |                          |                        |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **LEWIS CENTER, OHIO**         |                          |                        |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Orange Point Commerce Park     |                          | Orange  Point #73           |              | Industrial         |         | —           |      | 551    |   | 3,274                                                            |   | — |   | 551                              |   | 3,274                 |   | 3,825              |   | 155 |   | 2001 |   | 2001 |   |
| Orange Point Commerce Park     |                          | Orange  Point 144           |              | Industrial         |         | —           |      | 886    |   | 4,955                                                            |   | — |   | 886                              |   | 4,955                 |   | 5,841              |   | 243 |   | 2001 |   | 2001 |   |
|                           |                          |                        |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **MARIETTA, GEORGIA**          |                          |                        |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Franklin Forest                |                          | 805  Franklin Court         |              | Industrial         |         | —           |      | 313    |   | 1,932                                                            |   | 46     |   | 313                              |   | 1,977                 |   | 2,291              |   | 177 |   | 1983 |   | 1999 |   |
| Franklin Forest                |                          | 810  Franklin Court         |              | Industrial         |         | —           |      | 255    |   | 1,653                                                            |   | 68     |   | 255                              |   | 1,721                 |   | 1,976              |   | 174 |   | 1983 |   | 1999 |   |
| Franklin Forest                |                          | 811  Livingston Court       |              | Industrial         |         | —           |      | 193    |   | 1,424                                                            |   | 252    |   | 193                              |   | 1,676                 |   | 1,869              |   | 174 |   | 1983 |   | 1999 |   |
| Franklin Forest                |                          | 825  Franklin Court         |              | Industrial         |         | —           |      | 358    |   | 558                                                              |   | 1,118  |   | 358                              |   | 1,677                 |   | 2,034              |   | 192 |   | 1983 |   | 1999 |   |
| Franklin Forest                |                          | 830  Franklin Court         |              | Industrial         |         | —           |      | 133    |   | 757                                                              |   | 16     |   | 133                              |   | 773                   |   | 906                |   | 67 |   | 1983 |   | 1999 |   |
| Franklin Forest                |                          | 835  Franklin Court         |              | Industrial         |         | —           |      | 393    |   | 633                                                              |   | 1,003  |   | 393                              |   | 1,635                 |   | 2,029              |   | 195 |   | 1983 |   | 1999 |   |
| Franklin Forest                |                          | 840  Franklin Court         |              | Industrial         |         | —           |      | 242    |   | 890                                                              |   | 6      |   | 242                              |   | 896                   |   | 1,138              |   | 77 |   | 1983 |   | 1999 |   |
| Franklin Forest                |                          | 821  Livingston Court       |              | Industrial         |         | —           |      | 145    |   | 973                                                              |   | 47     |   | 145                              |   | 1,019                 |   | 1,164              |   | 92 |   | 1983 |   | 1999 |   |
| Franklin Forest                |                          | 841  Livingston Court       |              | Industrial         |         | —           |      | 275    |   | 2,729                                                            |   | 6      |   | 275                              |   | 2,736                 |   | 3,010              |   | 237 |   | 1983 |   | 1999 |   |
| Northwest Business Center      |                          | 1335  Capital Circle        |              | Industrial         |         | —           |      | 416    |   | 2,112                                                            |   | 86     |   | 416                              |   | 2,198                 |   | 2,614              |   | 198 |   | 1985 |   | 1999 |   |
| Northwest Business Center      |                          | 1337-41-51  Capital Circle  |              | Industrial         |         | —           |      | 558    |   | 5,364                                                            |   | 487    |   | 558                              |   | 5,851                 |   | 6,409              |   | 514 |   | 1985 |   | 1999 |   |
| Northwest Business Center      |                          | 2260  Northwest Parkway     |              | Industrial         |         | —           |      | 320    |   | 1,826                                                            |   | 462    |   | 320                              |   | 2,288                 |   | 2,608              |   | 236 |   | 1982 |   | 1999 |   |
| Northwest Business Center      |                          | 2252  Northwest Parkway     |              | Industrial         |         | —           |      | 92     |   | 982                                                              |   | 60     |   | 92                               |   | 1,042                 |   | 1,134              |   | 96 |   | 1982 |   | 1999 |   |
| Northwest Business Center      |                          | 2242  Northwest Parkway     |              | Industrial         |         | —           |      | 175    |   | 1,444                                                            |   | 133    |   | 175                              |   | 1,577                 |   | 1,752              |   | 157 |   | 1982 |   | 1999 |   |
| Northwest Business Center      |                          | 2256  Northwest Parkway     |              | Industrial         |         | —           |      | 85     |   | 916                                                              |   | 118    |   | 85                               |   | 1,035                 |   | 1,119              |   | 106 |   | 1982 |   | 1999 |   |
| Northwest Business Center      |                          | 2244  Northwest Parkway     |              | Industrial         |         | —           |      | 47     |   | 492                                                              |   | 50     |   | 47                               |   | 542                   |   | 589                |   | 52 |   | 1982 |   | 1999 |   |
| Northwest Business Center      |                          | 2150  Northwest Parkway     |              | Industrial         |         | —           |      | 294    |   | 3,087                                                            |   | 199    |   | 294                              |   | 3,286                 |   | 3,580              |   | 302 |   | 1982 |   | 1999 |   |
| Northwest Business Center      |                          | 2152  Northwest Parkway     |              | Industrial         |         | —           |      | 161    |   | 1,637                                                            |   | 77     |   | 161                              |   | 1,714                 |   | 1,875              |   | 159 |   | 1982 |   | 1999 |   |
| Northwest Business Center      |                          | 2130  Northwest Parkway     |              | Industrial         |         | —           |      | 353    |   | 2,885                                                            |   | 196    |   | 353                              |   | 3,081                 |   | 3,434              |   | 311 |   | 1982 |   | 1999 |   |
| Northwest Business Center      |                          | 2270  Northwest Parkway     |              | Industrial         |         | 1,741            |      | 483    |   | 3,887                                                            |   | 176    |   | 483                              |   | 4,063                 |   | 4,546              |   | 362 |   | 1988 |   | 1999 |   |
| Northwest Business Center      |                          | 2275  Northwest Parkway     |              | Industrial         |         | 1,182            |      | 327    |   | 2,641                                                            |   | 120    |   | 327                              |   | 2,761                 |   | 3,088              |   | 241 |   | 1988 |   | 1999 |   |
|                           |                          |                        |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **MARYLAND HEIGHTS, MISSOURI** |                          |                        |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Riverport Business Park        |                          | Riverport  Tower            |              | Office             |         | —           |      | 3,549  |   | 30,135                                                           |   | 2,017  |   | 3,929                            |   | 31,772                |   | 35,701             |   | 4,198 |   | 1991 |   | 1997 |   |
| Riverport Business Park        |                          | Riverport  Distribution A   |              | Industrial         |         | —           |      | 242    |   | 2,244                                                            |   | 110    |   | 242                              |   | 2,354                 |   | 2,596              |   | 305 |   | 1990 |   | 1997 |   |

 

59

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| **Development**                 |                          | **Name**                        |              | **Building  Type** |         | **Encumbrances** |      | ****   |   | **Cost Capitalized  Subsequent to  Development  to Acquisition** |   |   |   | **Accumulated  Depreciation(1)** |   | **Year  Constructed** |   | **Year  Acquired** |   |
|---------------------------------|-------------------------------|---------------------------------|-------------------|--------------------|--------------|------------------|-----------|--------|--------|------------------------------------------------------------------|--------|--------|--------|----------------------------------|--------|-----------------------|--------|--------------------|--------|
|                            |                          |                            |              |               |         |             |      |
| **Initial Cost**                | **Gross Book Value 12/31/02** |
| **Land**                        |                          | **Buildings**                   | **Land/Land Imp** |               | **Bldgs/TI** |             | **Total** |
| Riverport Business Park         |                          | Express  Scripts HQ             |              | Office             |         | —           |      | 2,285  |   | 12,424                                                           |   | 156    |   | 2,285                            |   | 12,580                |   | 14,865             |   | 2,391 |   | 1999 |   | 1999 |   |
| Riverport Business Park         |                          | Riverport  1                    |              | Industrial         |         | —           |      | 900    |   | 4,399                                                            |   | 106    |   | 900                              |   | 4,506                 |   | 5,405              |   | 1,116 |   | 1999 |   | 1999 |   |
| Riverport Business Park         |                          | Riverport  2                    |              | Industrial         |         | —           |      | 1,238  |   | 6,988                                                            |   | 2      |   | 1,238                            |   | 6,990                 |   | 8,228              |   | 1,401 |   | 2000 |   | 2000 |   |
| Riverport Business Park         |                          | Riverport  3                    |              | Industrial         |         | —           |      | 1,269  |   | 4,514                                                            |   | — |   | 1,269                            |   | 4,514                 |   | 5,783              |   | 166 |   | 2001 |   | 2001 |   |
| Riverport Distribution          |                          | Express  Scripts Service Center |              | Industrial         |         | —           |      | 1,197  |   | 8,755                                                            |   | 172    |   | 1,197                            |   | 8,927                 |   | 10,124             |   | 1,180 |   | 1992 |   | 1997 |   |
| West Port Center                |                          | Westport  Center I              |              | Industrial         |         | —           |      | 1,707  |   | 6,246                                                            |   | 831    |   | 1,707                            |   | 7,077                 |   | 8,784              |   | 1,754 |   | 1998 |   | 1998 |   |
| West Port Center                |                          | Westport  Center II             |              | Industrial         |         | —           |      | 915    |   | 2,871                                                            |   | 245    |   | 914                              |   | 3,117                 |   | 4,031              |   | 807 |   | 1998 |   | 1998 |   |
| West Port Center                |                          | Westport  Center III            |              | Industrial         |         | —           |      | 1,207  |   | 2,976                                                            |   | 442    |   | 1,206                            |   | 3,418                 |   | 4,625              |   | 466 |   | 1998 |   | 1999 |   |
|                            |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **MASON, OHIO**                 |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Deerfield Crossing              |                          | Deerfield  Crossing Bldg 1      |              | Office             |         | —           |      | 1,493  |   | 14,354                                                           |   | 428    |   | 1,493                            |   | 14,782                |   | 16,275             |   | 2,550 |   | 1999 |   | 1999 |   |
| Deerfield Crossing              |                          | Deerfield  Crossing Bldg 2      |              | Office             |         | —           |      | 1,069  |   | 14,119                                                           |   | — |   | 1,069                            |   | 14,119                |   | 15,188             |   | 942 |   | 2001 |   | 2001 |   |
| Governor’s Pointe          |                          | Governor’s  Pointe 4770    |              | Office             |         | 3,950            |      | 586    |   | 7,980                                                            |   | 21     |   | 596                              |   | 7,991                 |   | 8,587              |   | 2,765 |   | 1986 |   | 1988 |   |
| Governor’s Pointe          |                          | Governor’s  Pointe 4700    |              | Industrial         |         | 3,055            |      | 584    |   | 5,833                                                            |   | 225    |   | 595                              |   | 6,048                 |   | 6,642              |   | 2,195 |   | 1987 |   | 1988 |   |
| Governor’s Pointe          |                          | Governor’s  Pointe 4900    |              | Industrial         |         | 2,410            |      | 654    |   | 4,349                                                            |   | 235    |   | 673                              |   | 4,565                 |   | 5,239              |   | 1,449 |   | 1987 |   | 1989 |   |
| Governor’s Pointe          |                          | Governor’s  Pointe 4705    |              | Office             |         | —           |      | 719    |   | 7,876                                                            |   | 2,331  |   | 987                              |   | 9,939                 |   | 10,925             |   | 2,807 |   | 1988 |   | 1993 |   |
| Governor’s Pointe          |                          | Governor’s  Pointe 4605    |              | Office             |         | —           |      | 630    |   | 17,668                                                           |   | 1,156  |   | 909                              |   | 18,545                |   | 19,454             |   | 4,503 |   | 1990 |   | 1993 |   |
| Governor’s Pointe          |                          | Governor’s  Pointe 8990    |              | Office             |         | —           |      | 594    |   | 6,134                                                            |   | 436    |   | 594                              |   | 6,570                 |   | 7,164              |   | 1,678 |   | 1997 |   | 1997 |   |
| Governor’s Pointe          |                          | Governor’s  Pointe 4660    |              | Office             |         | —           |      | 385    |   | 4,807                                                            |   | 24     |   | 529                              |   | 4,687                 |   | 5,216              |   | 899 |   | 1997 |   | 1997 |   |
| Governor’s Pointe          |                          | Governor’s  Pointe 4680    |              | Office             |         | —           |      | 1,115  |   | 8,614                                                            |   | 997    |   | 1,115                            |   | 9,611                 |   | 10,726             |   | 2,330 |   | 1998 |   | 1998 |   |
| Governor’s  Pointe         |                          | Governor’s  Pointe 4690    |              | Office             |         |             |      | 907    |   | 3,469                                                            |   | — |   | 907                              |   | 3,469                 |   | 4,375              |   |   |   | 2002 |   | 2002 |   |
| Governors Pointe Retail         |                          | Bigg’s  Supercenter        |              | Retail             |         | —           |      | 2,107  |   | 9,927                                                            |   | 54     |   | 4,227                            |   | 7,860                 |   | 12,087             |   | 1,170 |   | 1996 |   | 1996 |   |
| Governors Pointe Retail         |                          | Lowes                           |              | Retail             |         | —           |      | 3,750  |   | 6,529                                                            |   | 224    |   | 3,750                            |   | 6,754                 |   | 10,504             |   | 800 |   | 1997 |   | 1997 |   |
|                            |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **MAYFIELD HEIGHTS, OHIO**      |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Landerbrook Corporate Ctr       |                          | Landerbrook  Corp. Center One   |              | Office             |         | —           |      | 1,807  |   | 10,863                                                           |   | 122    |   | 1,808                            |   | 10,984                |   | 12,792             |   | 2,340 |   | 1997 |   | 1997 |   |
| Landerbrook Corporate Ctr       |                          | Landerbrook  Corp. Center Two   |              | Office             |         | —           |      | 1,382  |   | 10,130                                                           |   | 940    |   | 1,382                            |   | 11,070                |   | 12,452             |   | 1,820 |   | 1998 |   | 1998 |   |
| Landerbrook Corporate Ctr       |                          | Landerbrook  Corp. Center Three |              | Office             |         | —           |      | 1,528  |   | 8,505                                                            |   | 460    |   | 1,528                            |   | 8,965                 |   | 10,493             |   | 283 |   | 2000 |   | 2001 |   |
|                            |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **MCDONOUGH, GEORGIA**          |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Liberty Dist. Center            |                          | 120  Declaration Drive          |              | Industrial         |         | —           |      | 615    |   | 8,582                                                            |   | 30     |   | 615                              |   | 8,612                 |   | 9,227              |   | 750 |   | 1997 |   | 1999 |   |
| Liberty Dist. Center            |                          | Liberty  III                    |              | Industrial         |         |             |      | 2,273  |   | 14,500                                                           |   | — |   | 2,273                            |   | 14,500                |   | 16,773             |   | 625 |   | 2001 |   | 2001 |   |
|                            |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **MENDOTA HEIGHTS,  MINNESOTA** |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Enterprise Industrial Center    |                          | Enterprise  Industrial Center   |              | Industrial         |         | 2,126            |      | 864    |   | 5,039                                                            |   | 636    |   | 864                              |   | 5,674                 |   | 6,538              |   | 790 |   | 1979 |   | 1997 |   |
|                            |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **MIDDLETOWN, OHIO**            |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Monroe  Business Center         |                          | Monroe  Business Center 2       |              | Industrial         |         |             |      | 767    |   | 11,546                                                           |   | — |   | 767                              |   | 11,546                |   | 12,313             |   | 392 |   | 2000 |   | 2001 |   |
|                            |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **MILFORD, OHIO**               |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Park 50                         |                          | Park  50 Bldg 17                |              | Office             |         | —           |      | 500    |   | 5,488                                                            |   | 176    |   | 510                              |   | 5,654                 |   | 6,164              |   | 2,304 |   | 1985 |   | 1986 |   |
| Park 50                         |                          | Park  50 Bldg 20                |              | Industrial         |         | 3,493            |      | 461    |   | 7,079                                                            |   | 55     |   | 469                              |   | 7,126                 |   | 7,595              |   | 2,972 |   | 1987 |   | 1988 |   |
| Park 50                         |                          | Park  50 Bldg 25                |              | Industrial         |         | —           |      | 1,161  |   | 4,146                                                            |   | 535    |   | 1,184                            |   | 4,657                 |   | 5,841              |   | 1,133 |   | 1989 |   | 1993 |   |
|                            |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **MINNEAPOLIS, MINNESOTA**      |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Broadway Business Center        |                          | Broadway  Business Ctr III      |              | Industrial         |         | —           |      | 140    |   | 813                                                              |   | 77     |   | 144                              |   | 886                   |   | 1,030              |   | 108 |   | 1983 |   | 1998 |   |
| Broadway Business Center        |                          | Broadway  Business Ctr IV       |              | Industrial         |         | —           |      | 194    |   | 1,154                                                            |   | 194    |   | 200                              |   | 1,342                 |   | 1,542              |   | 204 |   | 1983 |   | 1998 |   |
| Broadway Business Center        |                          | Broadway  Business Ctr VI       |              | Industrial         |         | —           |      | 433    |   | 2,518                                                            |   | 239    |   | 447                              |   | 2,742                 |   | 3,190              |   | 353 |   | 1983 |   | 1998 |   |
| Broadway Business Center        |                          | Broadway  Business Ctr VII      |              | Industrial         |         | —           |      | 233    |   | 1,369                                                            |   | 169    |   | 241                              |   | 1,531                 |   | 1,772              |   | 253 |   | 1983 |   | 1998 |   |
| Minneapolis                     |                          | Chilies  Ground Lease           |              | Grounds            |         | —           |      | 921    |   | —                                                           |   | 69     |   | 990                              |   | —                |   | 990                |   | — |   |   |   | 1998 |   |
| Minneapolis                     |                          | Olive  Garden Ground Lease      |              | Grounds            |         | —           |      | 921    |   | —                                                           |   | — |   | 921                              |   | —                |   | 921                |   | — |   |   |   | 1998 |   |
| 10801 Red Circle Drive          |                          | 10801  Red Circle Dr.           |              | Office             |         | —           |      | 527    |   | 3,478                                                            |   | 747    |   | 527                              |   | 4,224                 |   | 4,752              |   | 1,108 |   | 1977 |   | 1997 |   |
| Encore Park                     |                          | Encore  Park                    |              | Industrial         |         | —           |      | 947    |   | 5,668                                                            |   | 426    |   | 974                              |   | 6,067                 |   | 7,041              |   | 839 |   | 1977 |   | 1997 |   |
|                            |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **MONROE, OHIO**                |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |

 

60

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| **Development**                  |                          | **Name**                        |              | **Building  Type** |         | **Encumbrances** |      | ****   |   | **Cost Capitalized  Subsequent to  Development  to Acquisition** |   |   |   | **Accumulated  Depreciation(1)** |   | **Year  Constructed** |   | **Year  Acquired** |   |
|----------------------------------|-------------------------------|---------------------------------|-------------------|--------------------|--------------|------------------|-----------|--------|--------|------------------------------------------------------------------|--------|--------|--------|----------------------------------|--------|-----------------------|--------|--------------------|--------|
|                             |                          |                            |              |               |         |             |      |
| **Initial Cost**                 | **Gross Book Value 12/31/02** |
| **Land**                         |                          | **Buildings**                   | **Land/Land Imp** |               | **Bldgs/TI** |             | **Total** |
| Monroe Business Center           |                          | Monroe  Business Center Bldg. 1 |              | Industrial         |         | —           |      | 660    |   | 5,435                                                            |   | 304    |   | 660                              |   | 5,739                 |   | 6,399              |   | 520 |   | 1992 |   | 1999 |   |
|                             |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **MORRISVILLE, NORTH  CAROLINA** |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Perimeter Park                   |                          | 507  Airport Blvd               |              | Industrial         |         | 5,274            |      | 1,327  |   | 8,442                                                            |   | 378    |   | 1,351                            |   | 8,796                 |   | 10,147             |   | 918 |   | 1993 |   | 1999 |   |
| Perimeter Park                   |                          | 5151  McCrimmon Pkwy            |              | Industrial         |         | —           |      | 1,318  |   | 8,219                                                            |   | 412    |   | 1,342                            |   | 8,607                 |   | 9,949              |   | 892 |   | 1995 |   | 1999 |   |
| Perimeter Park                   |                          | 2600  Perimeter Park Dr         |              | Industrial         |         | —           |      | 975    |   | 5,392                                                            |   | 256    |   | 991                              |   | 5,632                 |   | 6,623              |   | 486 |   | 1997 |   | 1999 |   |
| Perimeter Park                   |                          | 5150  McCrimmon Pkwy            |              | Industrial         |         | —           |      | 1,739  |   | 12,249                                                           |   | 99     |   | 1,773                            |   | 12,313                |   | 14,086             |   | 1,065 |   | 1998 |   | 1999 |   |
| Perimeter Park                   |                          | 2400  Perimeter Park Dr.        |              | Office             |         | —           |      | 760    |   | 6,305                                                            |   | 198    |   | 778                              |   | 6,485                 |   | 7,263              |   | 586 |   | 1999 |   | 1999 |   |
| Perimeter Park                   |                          | 3000  Perimeter Park Dr         |              | Industrial         |         | 1,895            |      | 482    |   | 3,156                                                            |   | 595    |   | 491                              |   | 3,742                 |   | 4,233              |   | 389 |   | 1989 |   | 1999 |   |
| Perimeter Park                   |                          | 2900  Perimeter Park Dr         |              | Industrial         |         | 1,430            |      | 235    |   | 2,340                                                            |   | 618    |   | 241                              |   | 2,952                 |   | 3,193              |   | 361 |   | 1990 |   | 1999 |   |
| Perimeter Park                   |                          | 2800  Perimeter Park Dr         |              | Industrial         |         | 2,624            |      | 777    |   | 4,927                                                            |   | 157    |   | 791                              |   | 5,070                 |   | 5,861              |   | 474 |   | 1992 |   | 1999 |   |
| Perimeter Park                   |                          | 100  Perimeter Park Drive       |              | Industrial         |         | —           |      | 477    |   | 3,239                                                            |   | 188    |   | 477                              |   | 3,427                 |   | 3,904              |   | 302 |   | 1987 |   | 1999 |   |
| Perimeter Park                   |                          | 200  Perimeter Park Drive       |              | Industrial         |         | —           |      | 567    |   | 3,149                                                            |   | 70     |   | 567                              |   | 3,219                 |   | 3,786              |   | 296 |   | 1987 |   | 1999 |   |
| Perimeter Park                   |                          | 300  Perimeter Park Drive       |              | Industrial         |         | —           |      | 567    |   | 3,148                                                            |   | 129    |   | 567                              |   | 3,278                 |   | 3,845              |   | 296 |   | 1986 |   | 1999 |   |
| Perimeter Park                   |                          | 400  Perimeter Park Drive       |              | Industrial         |         | 3,857            |      | 486    |   | 4,455                                                            |   | 104    |   | 486                              |   | 4,560                 |   | 5,046              |   | 415 |   | 1983 |   | 1999 |   |
| Perimeter Park                   |                          | 500  Perimeter Park Drive       |              | Industrial         |         | —           |      | 522    |   | 4,421                                                            |   | 113    |   | 522                              |   | 4,534                 |   | 5,056              |   | 417 |   | 1985 |   | 1999 |   |
| Perimeter Park                   |                          | 800  Perimeter Park Drive       |              | Industrial         |         | 2,852            |      | 405    |   | 3,309                                                            |   | 378    |   | 405                              |   | 3,687                 |   | 4,092              |   | 318 |   | 1984 |   | 1999 |   |
| Perimeter Park                   |                          | 900  Perimeter Park Drive       |              | Industrial         |         | —           |      | 629    |   | 1,908                                                            |   | 842    |   | 629                              |   | 2,750                 |   | 3,379              |   | 254 |   | 1982 |   | 1999 |   |
| Perimeter Park                   |                          | 1000  Perimeter Park Drive      |              | Industrial         |         | —           |      | 405    |   | 3,259                                                            |   | 833    |   | 405                              |   | 4,091                 |   | 4,496              |   | 389 |   | 1982 |   | 1999 |   |
| Perimeter Park                   |                          | 1100  Perimeter Park Drive      |              | Industrial         |         | —           |      | 777    |   | 6,037                                                            |   | 486    |   | 794                              |   | 6,506                 |   | 7,301              |   | 650 |   | 1990 |   | 1999 |   |
| Perimeter Park                   |                          | 1400  Perimeter Park Drive      |              | Office             |         | —           |      | 666    |   | 4,603                                                            |   | 58     |   | 691                              |   | 4,636                 |   | 5,327              |   | 396 |   | 1991 |   | 1999 |   |
| Perimeter Park                   |                          | 1500  Perimeter Park Drive      |              | Office             |         | —           |      | 1,148  |   | 10,397                                                           |   | 373    |   | 1,177                            |   | 10,741                |   | 11,918             |   | 1,095 |   | 1996 |   | 1999 |   |
| Perimeter Park                   |                          | 1600  Perimeter Park Drive      |              | Office             |         | 6,164            |      | 1,463  |   | 10,134                                                           |   | 263    |   | 1,492                            |   | 10,368                |   | 11,860             |   | 912 |   | 1994 |   | 1999 |   |
| Perimeter Park                   |                          | 1800  Perimeter Park Drive      |              | Office             |         | 3,540            |      | 907    |   | 5,751                                                            |   | 152    |   | 955                              |   | 5,855                 |   | 6,810              |   | 498 |   | 1994 |   | 1999 |   |
| Perimeter Park                   |                          | 2000  Perimeter Park Drive      |              | Office             |         | —           |      | 788    |   | 8,210                                                            |   | 254    |   | 842                              |   | 8,410                 |   | 9,251              |   | 720 |   | 1997 |   | 1999 |   |
| Perimeter Park                   |                          | 1700  Perimeter Center West     |              | Office             |         | —           |      | 1,230  |   | 10,780                                                           |   | 25     |   | 1,260                            |   | 10,775                |   | 12,035             |   | 951 |   | 1997 |   | 1999 |   |
| Perimeter Park                   |                          | 3900  N. Paramount Parkway      |              | Office             |         | —           |      | 540    |   | 13,296                                                           |   | 142    |   | 574                              |   | 13,403                |   | 13,978             |   | 1,175 |   | 1998 |   | 1999 |   |
| Perimeter Park                   |                          | 3900  S.Paramount Pkwy          |              | Office             |         | —           |      | 1,575  |   | 12,455                                                           |   | 682    |   | 1,612                            |   | 13,101                |   | 14,713             |   | 1,504 |   | 2000 |   | 1999 |   |
| Perimeter Park                   |                          | 5200  East Paramount            |              | Office             |         | —           |      | 1,748  |   | 17,735                                                           |   | 228    |   | 1,797                            |   | 17,914                |   | 19,711             |   | 2,085 |   | 1999 |   | 1999 |   |
| Perimeter Park                   |                          | 3500  Paramount Pkwy            |              | Office             |         | —           |      | 755    |   | 12,948                                                           |   | 2      |   | 755                              |   | 12,950                |   | 13,705             |   | 1,218 |   | 1999 |   | 2000 |   |
| Perimeter Park                   |                          | 2700  Perimeter Park            |              | Industrial         |         | —           |      | 662    |   | 3,209                                                            |   | — |   | 662                              |   | 3,209                 |   | 3,871              |   | 95 |   | 2001 |   | 2001 |   |
| Perimeter Park                   |                          | 5200  West Paramount            |              | Office             |         | —           |      | 1,831  |   | 13,288                                                           |   | — |   | 1,831                            |   | 13,288                |   | 15,119             |   | — |   | 2000 |   | 2001 |   |
| Perimeter  Park                  |                          | 2450  Perimeter Park            |              | Office             |         |             |      | 669    |   | 4,003                                                            |   | — |   | 669                              |   | 4,003                 |   | 4,672              |   | 238 |   | 2001 |   | 2001 |   |
| Research Triangle Ind. Ctr       |                          | 409  Airport Blvd Bldg A        |              | Industrial         |         | 801              |      | 296    |   | 1,286                                                            |   | 2      |   | 300                              |   | 1,284                 |   | 1,584              |   | 115 |   | 1983 |   | 1999 |   |
| Research Triangle Ind. Ctr       |                          | 409  Airport Blvd Bldg B        |              | Industrial         |         | 495              |      | 175    |   | 769                                                              |   | 35     |   | 177                              |   | 802                   |   | 979                |   | 74 |   | 1986 |   | 1999 |   |
| Research Triangle Ind. Ctr       |                          | 409  Airport Blvd bldg C        |              | Industrial         |         | 1,718            |      | 185    |   | 2,849                                                            |   | 363    |   | 193                              |   | 3,204                 |   | 3,397              |   | 422 |   | 1982 |   | 1999 |   |
| Woodlake Center                  |                          | 100  Innovation Avenue          |              | Industrial         |         | —           |      | 633    |   | 4,003                                                            |   | 261    |   | 633                              |   | 4,264                 |   | 4,897              |   | 445 |   | 1994 |   | 1999 |   |
| Woodlake Center                  |                          | 101  Innovation Ave             |              | Industrial         |         | —           |      | 615    |   | 4,095                                                            |   | 98     |   | 615                              |   | 4,193                 |   | 4,808              |   | 379 |   | 1997 |   | 1999 |   |
| Woodlake Center                  |                          | 200  Innovation Drive           |              | Industrial         |         | —           |      | 357    |   | 4,503                                                            |   | — |   | 357                              |   | 4,503                 |   | 4,859              |   | 694 |   | 1999 |   | 1999 |   |
| Woodlake Center                  |                          | 501  Innovation Ave.            |              | Industrial         |         | —           |      | 640    |   | 7,063                                                            |   | 47     |   | 640                              |   | 7,110                 |   | 7,750              |   | 1,179 |   | 1999 |   | 1999 |   |
| Woodlake  Center                 |                          | 1000  Innovation                |              | Industrial         |         |             |      | 514    |   | 2,927                                                            |   | — |   | 514                              |   | 2,927                 |   | 3,441              |   | 61 |   | 1996 |   | 2002 |   |
| Woodlake  Center                 |                          | 1200  Innovation                |              | Industrial         |         |             |      | 740    |   | 4,212                                                            |   | — |   | 740                              |   | 4,212                 |   | 4,952              |   | 88 |   | 1996 |   | 2002 |   |
|                             |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **NASHVILLE, TENNESSEE**         |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Airpark Business Center          |                          | 1420  Donelson Pike             |              | Industrial         |         | 570              |      | 1,331  |   | 5,401                                                            |   | 612    |   | 1,357                            |   | 5,987                 |   | 7,344              |   | 562 |   | 1985 |   | 1999 |   |
| Airpark Business Center          |                          | 1410  Donelson Pike             |              | Industrial         |         | 659              |      | 1,411  |   | 6,898                                                            |   | 182    |   | 1,411                            |   | 7,080                 |   | 8,491              |   | 650 |   | 1986 |   | 1999 |   |
| Airpark Business Center          |                          | 1400  Donelson Pike             |              | Industrial         |         | 511              |      | 1,276  |   | 5,042                                                            |   | 269    |   | 1,276                            |   | 5,312                 |   | 6,588              |   | 530 |   | 1996 |   | 1999 |   |
| Airpark Business Center          |                          | 400  Airpark Center             |              | Industrial         |         | 1,852            |      | 419    |   | 2,182                                                            |   | 8      |   | 419                              |   | 2,190                 |   | 2,609              |   | 196 |   | 1989 |   | 1999 |   |
| Airpark Business Center          |                          | 500  Airpark Center Dr.         |              | Industrial         |         | 3,011            |      | 923    |   | 2,456                                                            |   | 862    |   | 923                              |   | 3,318                 |   | 4,241              |   | 361 |   | 1988 |   | 1999 |   |
| Airpark Business Center          |                          | 600  Airport Center Dr          |              | Industrial         |         | 2,915            |      | 729    |   | 3,331                                                            |   | 46     |   | 729                              |   | 3,377                 |   | 4,106              |   | 291 |   | 1990 |   | 1999 |   |
| Airpark Business Center          |                          | 700  Airpark Center Dr.         |              | Industrial         |         | 2,837            |      | 801    |   | 2,840                                                            |   | 356    |   | 801                              |   | 3,197                 |   | 3,997              |   | 280 |   | 1992 |   | 1999 |   |
| Airpark Business Center          |                          | 800  Airpark Center Dr.         |              | Industrial         |         | 2,450            |      | 924    |   | 4,010                                                            |   | 221    |   | 924                              |   | 4,231                 |   | 5,155              |   | 417 |   | 1995 |   | 1999 |   |
| Airpark Business Center          |                          | 900  Airpark Center Dr          |              | Industrial         |         | 2,103            |      | 798    |   | 3,414                                                            |   | 212    |   | 798                              |   | 3,626                 |   | 4,424              |   | 343 |   | 1995 |   | 1999 |   |
| Airpark Business Center          |                          | 1000  Airpark Center Dr.        |              | Industrial         |         | —           |      | 1,300  |   | 9,624                                                            |   | 25     |   | 1,300                            |   | 9,649                 |   | 10,950             |   | 837 |   | 1997 |   | 1999 |   |
| Airpark Business Center          |                          | 5270  Harding place             |              | Industrial         |         | 1,160            |      | 535    |   | 2,494                                                            |   | 8      |   | 535                              |   | 2,502                 |   | 3,038              |   | 217 |   | 1996 |   | 1999 |   |

 

61

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| **Development**             |                          | **Name**                      |              | **Building  Type** |         | **Encumbrances** |      | ****   |   | **Cost Capitalized  Subsequent to  Development  to Acquisition** |   |   |   | **Accumulated  Depreciation(1)** |   | **Year  Constructed** |   | **Year  Acquired** |   |
|-----------------------------|-------------------------------|-------------------------------|-------------------|--------------------|--------------|------------------|-----------|--------|--------|------------------------------------------------------------------|--------|--------|--------|----------------------------------|--------|-----------------------|--------|--------------------|--------|
|                        |                          |                          |              |               |         |             |      |
| **Initial Cost**            | **Gross Book Value 12/31/02** |
| **Land**                    |                          | **Buildings**                 | **Land/Land Imp** |               | **Bldgs/TI** |             | **Total** |
| Airpark Business Center     |                          | 1415  Donelson Pike           |              | Industrial         |         | 3,918            |      | 1,308  |   | 8,799                                                            |   | 150    |   | 1,308                            |   | 8,949                 |   | 10,257             |   | 757 |   | 1996 |   | 1999 |   |
| Airpark Business Center     |                          | 1413  Donelson Pike           |              | Industrial         |         | 1,271            |      | 549    |   | 2,743                                                            |   | 37     |   | 549                              |   | 2,780                 |   | 3,329              |   | 242 |   | 1996 |   | 1999 |   |
| Airpark Business Center     |                          | 5233  Harding Place           |              | Industrial         |         | —           |      | 628    |   | 3,075                                                            |   | — |   | 628                              |   | 3,075                 |   | 3,703              |   | 437 |   | 1998 |   | 1999 |   |
| Airpark  East               |                          | Airpark  East-Eagle Bldg      |              | Industrial         |         |             |      | 1,564  |   | 3,341                                                            |   | — |   | 1,564                            |   | 3,341                 |   | 4,905              |   | 249 |   | 2001 |   | 2002 |   |
| Cumberland Business Center  |                          | Cumberland  Business Center I |              | Industrial         |         | —           |      | 1,461  |   | 6,938                                                            |   | — |   | 1,461                            |   | 6,938                 |   | 8,399              |   | 974 |   | 1999 |   | 1999 |   |
| Four-Forty Business Center  |                          | 700  Melrose Avenue           |              | Industrial         |         | 3,519            |      | 938    |   | 6,464                                                            |   | 1      |   | 938                              |   | 6,464                 |   | 7,403              |   | 562 |   | 1997 |   | 1999 |   |
| Four-Forty Business Center  |                          | 684  Melrose Ave              |              | Industrial         |         | —           |      | 1,812  |   | 7,583                                                            |   | 390    |   | 1,812                            |   | 7,974                 |   | 9,786              |   | 801 |   | 1998 |   | 1999 |   |
| Four-Forty Business Center  |                          | 782  Melrose Avenue           |              | Industrial         |         | —           |      | 1,522  |   | 5,750                                                            |   | 196    |   | 1,522                            |   | 5,946                 |   | 7,467              |   | 545 |   | 1997 |   | 1999 |   |
| Four-Forty Business Center  |                          | 784  Melrose Ave.             |              | Industrial         |         | —           |      | 471    |   | 3,321                                                            |   | 256    |   | 471                              |   | 3,577                 |   | 4,048              |   | 464 |   | 1999 |   | 1999 |   |
| Greenbriar                  |                          | Greenbriar  Business Park     |              | Industrial         |         | —           |      | 1,445  |   | 5,160                                                            |   | 597    |   | 1,445                            |   | 5,757                 |   | 7,202              |   | 1,254 |   | 1986 |   | 1994 |   |
| Haywood Oaks                |                          | Haywood  Oaks Bldg 2          |              | Industrial         |         | —           |      | 395    |   | 1,928                                                            |   | 50     |   | 395                              |   | 1,978                 |   | 2,373              |   | 446 |   | 1988 |   | 1993 |   |
| Haywood Oaks                |                          | Haywood  Oaks Bldg 3          |              | Industrial         |         | —           |      | 346    |   | 1,752                                                            |   | 296    |   | 346                              |   | 2,048                 |   | 2,394              |   | 472 |   | 1988 |   | 1993 |   |
| Haywood Oaks                |                          | Haywood  Oaks Bldg 4          |              | Industrial         |         | —           |      | 435    |   | 2,104                                                            |   | 303    |   | 435                              |   | 2,407                 |   | 2,842              |   | 672 |   | 1988 |   | 1993 |   |
| Haywood Oaks                |                          | Haywood  Oaks Bldg 5          |              | Industrial         |         | —           |      | 629    |   | 3,060                                                            |   | 141    |   | 629                              |   | 3,202                 |   | 3,830              |   | 752 |   | 1988 |   | 1993 |   |
| Haywood Oaks                |                          | Haywood  Oaks Bldg 6          |              | Industrial         |         | —           |      | 924    |   | 6,371                                                            |   | 425    |   | 946                              |   | 6,774                 |   | 7,720              |   | 1,522 |   | 1989 |   | 1993 |   |
| Haywood Oaks                |                          | Haywood  Oaks Bldg 7          |              | Industrial         |         | —           |      | 456    |   | 1,858                                                            |   | 189    |   | 456                              |   | 2,046                 |   | 2,503              |   | 349 |   | 1995 |   | 1995 |   |
| Haywood Oaks                |                          | Haywood  Oaks Bldg 8          |              | Industrial         |         | —           |      | 617    |   | 3,514                                                            |   | 419    |   | 751                              |   | 3,800                 |   | 4,550              |   | 1,041 |   | 1997 |   | 1997 |   |
| Haywood Oaks East           |                          | Haywood  Oaks East            |              | Industrial         |         | —           |      | 969    |   | 5,866                                                            |   | 239    |   | 969                              |   | 6,106                 |   | 7,075              |   | 694 |   | 2000 |   | 2000 |   |
| Lakeview Place              |                          | Three  Lakeview               |              | Office             |         | —           |      | 2,126  |   | 13,915                                                           |   | 1,602  |   | 2,126                            |   | 15,518                |   | 17,644             |   | 1,711 |   | 1999 |   | 1999 |   |
| Lakeview Place              |                          | One  Lakeview Place           |              | Office             |         | —           |      | 2,046  |   | 11,828                                                           |   | 1,222  |   | 2,123                            |   | 12,973                |   | 15,096             |   | 1,441 |   | 1986 |   | 1998 |   |
| Lakeview Place              |                          | Two  Lakeview Place           |              | Office             |         | —           |      | 2,046  |   | 11,858                                                           |   | 1,005  |   | 2,046                            |   | 12,863                |   | 14,909             |   | 1,529 |   | 1988 |   | 1998 |   |
| Metro Center                |                          | 545  Mainstream Dr.           |              | Office             |         | —           |      | 847    |   | 6,310                                                            |   | 464    |   | 847                              |   | 6,774                 |   | 7,621              |   | 636 |   | 1983 |   | 1999 |   |
| Metro Center                |                          | 566  Mainstream Dr.           |              | Industrial         |         | —           |      | 454    |   | 3,927                                                            |   | 271    |   | 454                              |   | 4,198                 |   | 4,652              |   | 400 |   | 1982 |   | 1999 |   |
| Metro Center                |                          | 621  Mainstream Dr.           |              | Industrial         |         | —           |      | 428    |   | 2,860                                                            |   | 63     |   | 428                              |   | 2,924                 |   | 3,352              |   | 249 |   | 1984 |   | 1999 |   |
| Metro Center                |                          | Riverview  Business Center I  |              | Industrial         |         | —           |      | 497    |   | 2,848                                                            |   | 57     |   | 497                              |   | 2,906                 |   | 3,403              |   | 332 |   | 2000 |   | 2000 |   |
| Metro  Center               |                          | Riverview  Business Center II |              | Industrial         |         |             |      | 685    |   | 2,710                                                            |   | — |   | 685                              |   | 2,710                 |   | 3,395              |   | 134 |   | 2001 |   | 2001 |   |
| Metropolitan Airport Center |                          | Metro  Airport Center Bldg 1  |              | Industrial         |         | —           |      | 1,180  |   | 4,808                                                            |   | 52     |   | 1,190                            |   | 4,850                 |   | 6,040              |   | 978 |   | 1999 |   | 1999 |   |
| Metropolitan Airport Center |                          | Metro  Airport Bus Ctr C      |              | Industrial         |         | —           |      | 1,053  |   | 6,582                                                            |   | — |   | 1,053                            |   | 6,582                 |   | 7,635              |   | 148 |   | 2001 |   | 2001 |   |
| Nashville Business Center   |                          | 3300  Briley Park Blvd        |              | Industrial         |         | —           |      | 936    |   | 7,138                                                            |   | — |   | 936                              |   | 7,138                 |   | 8,074              |   | 1,289 |   | 1997 |   | 1999 |   |
| Royal Parkway Center        |                          | 2515  Perimeter Park          |              | Industrial         |         | —           |      | 731    |   | 4,753                                                            |   | 195    |   | 734                              |   | 4,945                 |   | 5,679              |   | 431 |   | 1990 |   | 1999 |   |
| Royal Parkway Center        |                          | 500  Royal Parkway            |              | Industrial         |         | —           |      | 599    |   | 4,636                                                            |   | — |   | 603                              |   | 4,632                 |   | 5,235              |   | 403 |   | 1990 |   | 1999 |   |
|                        |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **NEW HOPE, MINNESOTA**     |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Bass Lake Business Building |                          | Bass  Lake Business Bldg      |              | Industrial         |         | 872              |      | 298    |   | 1,715                                                            |   | 80     |   | 298                              |   | 1,795                 |   | 2,093              |   | 242 |   | 1981 |   | 1997 |   |
|                        |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **NORCROSS, GEORGIA**       |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Gwinnett Park               |                          | 1750  Beaver Ruin             |              | Industrial         |         | —           |      | 640    |   | 6,793                                                            |   | 490    |   | 640                              |   | 7,283                 |   | 7,922              |   | 614 |   | 1997 |   | 1999 |   |
| Gwinnett Park               |                          | 4258  Communications Drive    |              | Industrial         |         | —           |      | 29     |   | 2,388                                                            |   | 103    |   | 29                               |   | 2,491                 |   | 2,520              |   | 208 |   | 1981 |   | 1999 |   |
| Gwinnett Park               |                          | 4261  Communications Drive    |              | Industrial         |         | —           |      | 254    |   | 1,916                                                            |   | 109    |   | 254                              |   | 2,026                 |   | 2,280              |   | 172 |   | 1981 |   | 1999 |   |
| Gwinnett Park               |                          | 4291  Communications Drive    |              | Industrial         |         | —           |      | 4      |   | 1,467                                                            |   | 5      |   | 16                               |   | 1,460                 |   | 1,476              |   | 127 |   | 1981 |   | 1999 |   |
| Gwinnett Park               |                          | 1826  Doan Way                |              | Industrial         |         | —           |      | 51     |   | 3,065                                                            |   | 122    |   | 51                               |   | 3,187                 |   | 3,238              |   | 299 |   | 1984 |   | 1999 |   |
| Gwinnett Park               |                          | 1857  Doan Way                |              | Industrial         |         | —           |      | 23     |   | 397                                                              |   | 45     |   | 56                               |   | 408                   |   | 464                |   | 36 |   | 1970 |   | 1999 |   |
| Gwinnett Park               |                          | 1650  International Blvd      |              | Industrial         |         | —           |      | 69     |   | 2,211                                                            |   | 34     |   | 69                               |   | 2,246                 |   | 2,314              |   | 195 |   | 1984 |   | 1999 |   |
| Gwinnett Park               |                          | 4245  International Blvd      |              | Industrial         |         | —           |      | 192    |   | 10,848                                                           |   | — |   | 192                              |   | 10,849                |   | 11,041             |   | 944 |   | 1985 |   | 1999 |   |
| Gwinnett Park               |                          | 4250  International Blvd      |              | Industrial         |         | —           |      | 193    |   | 3,042                                                            |   | 37     |   | 216                              |   | 3,056                 |   | 3,272              |   | 265 |   | 1986 |   | 1999 |   |
| Gwinnett Park               |                          | 4295  International Blvd      |              | Industrial         |         | —           |      | 58     |   | 2,330                                                            |   | 45     |   | 58                               |   | 2,376                 |   | 2,434              |   | 216 |   | 1984 |   | 1999 |   |
| Gwinnett Park               |                          | 4320  International Blvd      |              | Industrial         |         | —           |      | 44     |   | 2,058                                                            |   | 180    |   | 44                               |   | 2,237                 |   | 2,282              |   | 182 |   | 1984 |   | 1999 |   |
| Gwinnett Park               |                          | 4350  International Blvd      |              | Industrial         |         | —           |      | 78     |   | 3,061                                                            |   | 243    |   | 78                               |   | 3,305                 |   | 3,383              |   | 298 |   | 1982 |   | 1999 |   |
| Gwinnett Park               |                          | 4355  International Blvd      |              | Industrial         |         | —           |      | 233    |   | 2,969                                                            |   | 262    |   | 233                              |   | 3,232                 |   | 3,465              |   | 332 |   | 1983 |   | 1999 |   |
| Gwinnett Park               |                          | 4405A  International Blvd     |              | Industrial         |         | —           |      | 97     |   | 2,680                                                            |   | 618    |   | 97                               |   | 3,298                 |   | 3,395              |   | 285 |   | 1984 |   | 1999 |   |
| Gwinnett Park               |                          | 4405B  International Blvd     |              | Industrial         |         | —           |      | 118    |   | 3,900                                                            |   | 190    |   | 118                              |   | 4,091                 |   | 4,208              |   | 362 |   | 1984 |   | 1999 |   |
| Gwinnett Park               |                          | 4405C  International Blvd     |              | Industrial         |         | —           |      | 21     |   | 800                                                              |   | 70     |   | 21                               |   | 871                   |   | 892                |   | 74 |   | 1984 |   | 1999 |   |
| Gwinnett Park               |                          | 1828  Meca Way                |              | Industrial         |         | —           |      | 16     |   | 2,621                                                            |   | 22     |   | 16                               |   | 2,643                 |   | 2,659              |   | 230 |   | 1975 |   | 1999 |   |
| Gwinnett Park               |                          | 1858  Meca Way                |              | Industrial         |         | —           |      | 20     |   | 1,828                                                            |   | 171    |   | 27                               |   | 1,991                 |   | 2,019              |   | 188 |   | 1975 |   | 1999 |   |
| Gwinnett Park               |                          | 4316  Park Drive              |              | Industrial         |         | —           |      | 262    |   | 1,420                                                            |   | 275    |   | 262                              |   | 1,695                 |   | 1,957              |   | 195 |   | 1980 |   | 1999 |   |

 

62

----

 
| **Development**               |                          | **Name**                        |              | **Building  Type** |         | **Encumbrances** |      | ****   |   | **Cost Capitalized  Subsequent to  Development  to Acquisition** |   |   |   | **Accumulated  Depreciation(1)** |   | **Year  Constructed** |   | **Year  Acquired** |   |
|-------------------------------|-------------------------------|---------------------------------|-------------------|--------------------|--------------|------------------|-----------|--------|--------|------------------------------------------------------------------|--------|--------|--------|----------------------------------|--------|-----------------------|--------|--------------------|--------|
|                          |                          |                            |              |               |         |             |      |
| **Initial Cost**              | **Gross Book Value 12/31/02** |
| **Land**                      |                          | **Buildings**                   | **Land/Land Imp** |               | **Bldgs/TI** |             | **Total** |
| Gwinnett Park                 |                          | 4357  Park Drive                |              | Industrial         |         | —           |      | 12     |   | 2,251                                                            |   | 292    |   | 12                               |   | 2,544                 |   | 2,555              |   | 256 |   | 1979 |   | 1999 |   |
| Gwinnett Park                 |                          | 4366  Park Drive                |              | Office             |         | —           |      | 6      |   | 205                                                              |   | 299    |   | 22                               |   | 488                   |   | 510                |   | 42 |   | 1981 |   | 1999 |   |
| Gwinnett Park                 |                          | 4386  Park Drive                |              | Industrial         |         | —           |      | 17     |   | 986                                                              |   | 411    |   | 17                               |   | 1,397                 |   | 1,415              |   | 146 |   | 1973 |   | 1999 |   |
| Gwinnett Park                 |                          | 4436  Park Drive                |              | Industrial         |         | —           |      | 18     |   | 2,279                                                            |   | 27     |   | 18                               |   | 2,306                 |   | 2,324              |   | 199 |   | 1968 |   | 1999 |   |
| Gwinnett Park                 |                          | 4437  Park Drive                |              | Industrial         |         | —           |      | 21     |   | 2,644                                                            |   | 177    |   | 21                               |   | 2,821                 |   | 2,842              |   | 251 |   | 1978 |   | 1999 |   |
| Gwinnett Park                 |                          | 4467  Park Drive                |              | Industrial         |         | —           |      | 6      |   | 1,630                                                            |   | 56     |   | 6                                |   | 1,685                 |   | 1,691              |   | 162 |   | 1978 |   | 1999 |   |
| Gwinnett Park                 |                          | 4487  Park Drive                |              | Industrial         |         | —           |      | 6      |   | 3,407                                                            |   | 359    |   | 6                                |   | 3,767                 |   | 3,773              |   | 366 |   | 1978 |   | 1999 |   |
| Gwinnett Park                 |                          | 1835  Shackleford Court         |              | Office             |         | —           |      | 29     |   | 6,309                                                            |   | 325    |   | 29                               |   | 6,634                 |   | 6,662              |   | 635 |   | 1990 |   | 1999 |   |
| Gwinnett Park                 |                          | 1854  Shackleford Road          |              | Office             |         | —           |      | 52     |   | 10,387                                                           |   | 918    |   | 52                               |   | 11,305                |   | 11,357             |   | 1,069 |   | 1985 |   | 1999 |   |
| Gwinnett Park                 |                          | 4274  Shackleford Road          |              | Industrial         |         | —           |      | 27     |   | 3,626                                                            |   | 180    |   | 27                               |   | 3,805                 |   | 3,832              |   | 333 |   | 1974 |   | 1999 |   |
| Gwinnett Park                 |                          | 4275  Shackleford Court         |              | Office             |         | 430              |      | 8      |   | 2,125                                                            |   | 312    |   | 12                               |   | 2,433                 |   | 2,445              |   | 224 |   | 1985 |   | 1999 |   |
| Gwinnett Park                 |                          | 4344  Shackleford Road          |              | Industrial         |         | —           |      | 286    |   | 2,221                                                            |   | 167    |   | 286                              |   | 2,387                 |   | 2,673              |   | 291 |   | 1975 |   | 1999 |   |
| Gwinnett Park                 |                          | 4355  Shackleford Road          |              | Industrial         |         | —           |      | 7      |   | 1,904                                                            |   | 67     |   | 70                               |   | 1,909                 |   | 1,979              |   | 597 |   | 1972 |   | 1999 |   |
| Gwinnett Park                 |                          | 4364  Shackleford Road          |              | Industrial         |         | —           |      | 9      |   | 982                                                              |   | 6      |   | 9                                |   | 987                   |   | 997                |   | 85 |   | 1973 |   | 1999 |   |
| Gwinnett Park                 |                          | 4366  Shackleford Road          |              | Industrial         |         | —           |      | 20     |   | 2,567                                                            |   | 315    |   | 26                               |   | 2,875                 |   | 2,901              |   | 314 |   | 1981 |   | 1999 |   |
| Gwinnett Park                 |                          | 4388  Shackelford Road          |              | Industrial         |         | —           |      | 33     |   | 4,002                                                            |   | 240    |   | 43                               |   | 4,233                 |   | 4,276              |   | 363 |   | 1981 |   | 1999 |   |
| Gwinnett Park                 |                          | 4400  Shackleford Road          |              | Industrial         |         | —           |      | 14     |   | 1,567                                                            |   | 1      |   | 18                               |   | 1,563                 |   | 1,582              |   | 127 |   | 1981 |   | 1999 |   |
| Gwinnett Park                 |                          | 4444  Shackleford Road          |              | Industrial         |         | —           |      | 31     |   | 2,632                                                            |   | 336    |   | 31                               |   | 2,967                 |   | 2,999              |   | 339 |   | 1979 |   | 1999 |   |
| Gwinnett Pavilion             |                          | 1505  Pavillion Place           |              | Industrial         |         | —           |      | 448    |   | 3,996                                                            |   | 510    |   | 448                              |   | 4,506                 |   | 4,955              |   | 701 |   | 1988 |   | 1999 |   |
| Gwinnett Pavilion             |                          | 3883  Steve Reynolds Blvd.      |              | Industrial         |         | —           |      | 612    |   | 4,928                                                            |   | 27     |   | 612                              |   | 4,955                 |   | 5,567              |   | 429 |   | 1990 |   | 1999 |   |
| Gwinnett Pavilion             |                          | 3890  Steve Reynolds Blvd       |              | Industrial         |         | —           |      | 519    |   | 3,028                                                            |   | 1      |   | 519                              |   | 3,028                 |   | 3,548              |   | 267 |   | 1991 |   | 1999 |   |
| Gwinnett Pavilion             |                          | 3950  Steve Reynolds Blvd.      |              | Industrial         |         | —           |      | 684    |   | 2,825                                                            |   | 21     |   | 684                              |   | 2,846                 |   | 3,530              |   | 251 |   | 1992 |   | 1999 |   |
| Northeast I85                 |                          | 6525-27  Jimmy Carter Blvd      |              | Industrial         |         | —           |      | 509    |   | 2,324                                                            |   | 376    |   | 509                              |   | 2,700                 |   | 3,209              |   | 447 |   | 1983 |   | 1999 |   |
| Northeast I85                 |                          | 5755  Peachtree Industrial Blvd |              | Office             |         | —           |      | 800    |   | 3,652                                                            |   | 229    |   | 800                              |   | 3,881                 |   | 4,681              |   | 337 |   | 1997 |   | 1999 |   |
| Northeast I85                 |                          | 5765  Peachtree Industrial Blvd |              | Industrial         |         | —           |      | 521    |   | 4,671                                                            |   | — |   | 521                              |   | 4,671                 |   | 5,192              |   | 407 |   | 1997 |   | 1999 |   |
| Northeast I85                 |                          | 5775  Peachtree Industrial Blvd |              | Industrial         |         | —           |      | 521    |   | 4,695                                                            |   | 36     |   | 521                              |   | 4,730                 |   | 5,251              |   | 420 |   | 1997 |   | 1999 |   |
| Northwoods                    |                          | 2915  Courtyards Drive          |              | Industrial         |         | —           |      | 268    |   | 1,961                                                            |   | 32     |   | 268                              |   | 1,994                 |   | 2,262              |   | 172 |   | 1986 |   | 1999 |   |
| Northwoods                    |                          | 2925  Courtyards Drive          |              | Industrial         |         | —           |      | 333    |   | 3,235                                                            |   | — |   | 333                              |   | 3,235                 |   | 3,568              |   | 281 |   | 1986 |   | 1999 |   |
| Northwoods                    |                          | 2975  Courtyards Drive          |              | Industrial         |         | —           |      | 144    |   | 1,264                                                            |   | 104    |   | 144                              |   | 1,368                 |   | 1,512              |   | 126 |   | 1986 |   | 1999 |   |
| Northwoods                    |                          | 2995  Courtyards Drive          |              | Industrial         |         | —           |      | 109    |   | 892                                                              |   | — |   | 109                              |   | 892                   |   | 1,001              |   | 78 |   | 1986 |   | 1999 |   |
| Northwoods                    |                          | 2725  Northwoods Pkwy           |              | Industrial         |         | —           |      | 440    |   | 2,568                                                            |   | 552    |   | 440                              |   | 3,120                 |   | 3,560              |   | 320 |   | 1984 |   | 1999 |   |
| Northwoods                    |                          | 2755  Northwoods Pkwy           |              | Industrial         |         | —           |      | 249    |   | 2,880                                                            |   | 150    |   | 249                              |   | 3,029                 |   | 3,278              |   | 266 |   | 1986 |   | 1999 |   |
| Northwoods                    |                          | 2775  Northwoods Pkwy           |              | Industrial         |         | —           |      | 322    |   | 2,425                                                            |   | — |   | 322                              |   | 2,425                 |   | 2,747              |   | 211 |   | 1986 |   | 1999 |   |
| Northwoods                    |                          | 2850  Colonnades Court          |              | Industrial         |         | —           |      | 562    |   | 5,280                                                            |   | — |   | 562                              |   | 5,280                 |   | 5,842              |   | 459 |   | 1988 |   | 1999 |   |
| Northwoods                    |                          | 3040  Northwoods Pkwy           |              | Industrial         |         | —           |      | 298    |   | 1,801                                                            |   | 155    |   | 298                              |   | 1,956                 |   | 2,254              |   | 213 |   | 1984 |   | 1999 |   |
| Northwoods                    |                          | 3044  Northwoods Circle         |              | Industrial         |         | —           |      | 167    |   | 718                                                              |   | 34     |   | 167                              |   | 752                   |   | 919                |   | 66 |   | 1984 |   | 1999 |   |
| Northwoods                    |                          | 3055  Northwoods Pkwy           |              | Industrial         |         | —           |      | 213    |   | 1,556                                                            |   | 99     |   | 213                              |   | 1,656                 |   | 1,869              |   | 185 |   | 1985 |   | 1999 |   |
| Northwoods                    |                          | 3075  Northwoods Pkwy           |              | Industrial         |         | —           |      | 374    |   | 2,865                                                            |   | 97     |   | 374                              |   | 2,962                 |   | 3,335              |   | 285 |   | 1985 |   | 1999 |   |
| Northwoods                    |                          | 3100  Northwoods Pkwy           |              | Industrial         |         | —           |      | 393    |   | 2,543                                                            |   | 6      |   | 393                              |   | 2,549                 |   | 2,942              |   | 221 |   | 1985 |   | 1999 |   |
| Northwoods                    |                          | 3155  Northwoods Pkwy           |              | Industrial         |         | —           |      | 331    |   | 2,504                                                            |   | 12     |   | 331                              |   | 2,516                 |   | 2,847              |   | 218 |   | 1985 |   | 1999 |   |
| Northwoods                    |                          | 3175  Northwoods Pkwy           |              | Industrial         |         | —           |      | 250    |   | 2,071                                                            |   | 23     |   | 250                              |   | 2,094                 |   | 2,344              |   | 181 |   | 1985 |   | 1999 |   |
| Peachtree Corners Tech Center |                          | 3170  Reps Miller Road          |              | Industrial         |         | —           |      | 500    |   | 3,662                                                            |   | 18     |   | 500                              |   | 3,680                 |   | 4,180              |   | 320 |   | 1998 |   | 1999 |   |
| Peachtree Corners Tech Center |                          | 3180  Reps Miller Road          |              | Industrial         |         | —           |      | 500    |   | 2,943                                                            |   | 38     |   | 500                              |   | 2,981                 |   | 3,481              |   | 261 |   | 1998 |   | 1999 |   |
| Peachtree Corners Tech Center |                          | 3190  Reps Miller Road          |              | Industrial         |         | —           |      | 525    |   | 2,363                                                            |   | 215    |   | 525                              |   | 2,579                 |   | 3,104              |   | 238 |   | 1998 |   | 1999 |   |
|                          |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **NORTHLAKE, ILLINOIS**       |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Northlake                     |                          | Northlake  I                    |              | Industrial         |         |             |      | 5,721  |   | 9,690                                                            |   | — |   | 5,721                            |   | 9,690                 |   | 15,411             |   |   |   | 2002 |   | 2002 |   |
|                          |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **NORTH OLMSTED, OHIO**       |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Great Northern Corp Center    |                          | Great  Northern Corp Center I   |              | Office             |         | —           |      | 1,048  |   | 7,146                                                            |   | 564    |   | 1,040                            |   | 7,718                 |   | 8,758              |   | 1,301 |   | 1985 |   | 1996 |   |
| Great Northern Corp Center    |                          | Great  Northern Corp Center II  |              | Office             |         | —           |      | 1,048  |   | 7,232                                                            |   | 812    |   | 1,048                            |   | 8,045                 |   | 9,093              |   | 1,512 |   | 1987 |   | 1996 |   |
| Great Northern Corp Center    |                          | Great  Northern Corp Center III |              | Office             |         | —           |      | 604    |   | 5,693                                                            |   | 892    |   | 604                              |   | 6,585                 |   | 7,189              |   | 1,253 |   | 1999 |   | 1999 |   |
|                          |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **OLIVETTE, MISSOURI**        |                          |                            |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| I-170 Center                  |                          | I-170  Center                   |              | Industrial         |         | —           |      | 950    |   | 4,184                                                            |   | 530    |   | 1,018                            |   | 4,646                 |   | 5,665              |   | 797 |   | 1986 |   | 1996 |   |

 

63

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| **Development**                   |                          | **Name**                       |              | **Building  Type** |         | **Encumbrances** |      | ****   |   | **Cost Capitalized  Subsequent to  Development  to Acquisition** |   |   |   | **Accumulated  Depreciation(1)** |   | **Year  Constructed** |   | **Year  Acquired** |   |
|-----------------------------------|-------------------------------|--------------------------------|-------------------|--------------------|--------------|------------------|-----------|--------|--------|------------------------------------------------------------------|--------|--------|--------|----------------------------------|--------|-----------------------|--------|--------------------|--------|
|                              |                          |                           |              |               |         |             |      |
| **Initial Cost**                  | **Gross Book Value 12/31/02** |
| **Land**                          |                          | **Buildings**                  | **Land/Land Imp** |               | **Bldgs/TI** |             | **Total** |
| Warson Commerce Center            |                          | Warson  Commerce Center        |              |               |         |             |      | 749    |   | 5,405                                                            |   | 340    |   | 749                              |   | 5,745                 |   | 6,494              |   | 736 |   | 1987 |   | 1998 |   |
|                              |                          |                           |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **ORLANDO, FLORIDA**              |                          |                           |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Business Centre at Lee Vista      |                          | Lee  Vista Distribution Ctr I  |              |               |         |             |      | 819    |   | 4,545                                                            |   | 438    |   | 819                              |   | 4,983                 |   | 5,802              |   | 1,058 |   | 1998 |   | 1999 |   |
| Business Centre at Lee Vista      |                          | Lee  Vista Distribution Ctr II |              |               |         |             |      | 740    |   | 3,914                                                            |   | 95     |   | 740                              |   | 4,009                 |   | 4,749              |   | 577 |   | 1999 |   | 2000 |   |
| Business Centre at Lee Vista      |                          | Lee  Vista Service Center I    |              |               |         |             |      | 926    |   | 2,344                                                            |   | 99     |   | 926                              |   | 2,444                 |   | 3,369              |   | 78 |   | 2000 |   | 2001 |   |
| Business  Centre at Lee Vista-Gen |                          | Lee  Vista Distrib. Center III |              |               |         |             |      | 841    |   | 3,580                                                            |   | — |   | 841                              |   | 3,580                 |   | 4,421              |   | 33 |   | 2001 |   | 2002 |   |
| Parksouth Dist. Center            |                          | Parksouth  Dist. Ctr-Bldg B    |              |               |         |             |      | 565    |   | 4,893                                                            |   | — |   | 565                              |   | 4,893                 |   | 5,458              |   | 426 |   | 1996 |   | 1999 |   |
| Parksouth Dist. Center            |                          | Parksouth  Dist. Ctr-Bldg A    |              |               |         |             |      | 493    |   | 4,545                                                            |   | — |   | 493                              |   | 4,545                 |   | 5,038              |   | 402 |   | 1997 |   | 1999 |   |
| Parksouth Dist. Center            |                          | Parksouth  Dist. Ctr-Bldg D    |              | Industrial         |         | —           |      | 593    |   | 4,131                                                            |   | — |   | 593                              |   | 4,131                 |   | 4,724              |   | 375 |   | 1998 |   | 1999 |   |
| Parksouth Dist. Center            |                          | Parksouth  Dist. Ctr-Bldg E    |              | Industrial         |         | —           |      | 649    |   | 4,654                                                            |   | 42     |   | 649                              |   | 4,696                 |   | 5,345              |   | 426 |   | 1997 |   | 1999 |   |
| Parksouth Dist. Center            |                          | Parksouth  Dist. Ctr-Bldg F    |              | Industrial         |         | —           |      | 1,030  |   | 5,525                                                            |   | 895    |   | 1,030                            |   | 6,420                 |   | 7,450              |   | 715 |   | 1999 |   | 1999 |   |
| Parksouth  Dist. Center           |                          | Parksouth  Dist. Ctr-Bldg H    |              | Industrial         |         |             |      | 725    |   | 3,950                                                            |   | — |   | 725                              |   | 3,950                 |   | 4,675              |   | 255 |   | 2000 |   | 2000 |   |
| Parksouth  Dist. Center           |                          | Chase  BTS-Orlando             |              | Industrial         |         |             |      | 598    |   | 2,032                                                            |   | — |   | 598                              |   | 2,032                 |   | 2,629              |   | 69 |   | 2000 |   | 2001 |   |
|                              |                          |                           |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **PEPPER PIKE, OHIO**             |                          |                           |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Corporate Circle                  |                          | Corporate  Circle              |              | Office             |         | —           |      | 1,696  |   | 11,429                                                           |   | 1,379  |   | 1,698                            |   | 12,807                |   | 14,504             |   | 2,083 |   | 1983 |   | 1996 |   |
|                              |                          |                           |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **PLAINFIELD, INDIANA**           |                          |                           |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Plainfield Business Park          |                          | Plainfield  Building 1         |              | Industrial         |         | 6,254            |      | 1,104  |   | 11,151                                                           |   | 10     |   | 1,104                            |   | 11,161                |   | 12,265             |   | 751 |   | 2000 |   | 2000 |   |
| Plainfield  Business Park         |                          | Plainfield  Building 2         |              | Industrial         |         |             |      | 1,387  |   | 9,668                                                            |   | — |   | 1,387                            |   | 9,668                 |   | 11,055             |   | 683 |   | 2000 |   | 2000 |   |
| Plainfield Business Park          |                          | Plainfield  Building 3         |              | Industrial         |         |             |      | 2,016  |   | 10,491                                                           |   | — |   | 2,016                            |   | 10,491                |   | 12,507             |   | 197 |   | 2002 |   | 2002 |   |
|                              |                          |                           |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **PLANO, TEXAS**                  |                          |                           |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Legacy Business Park              |                          | Metasolv  Building Phase I     |              | Office             |         | —           |      | 1,527  |   | 5,831                                                            |   | 706    |   | 1,527                            |   | 6,538                 |   | 8,064              |   | 633 |   | 1997 |   | 1999 |   |
| Legacy Business Park              |                          | Metasolv  Building Phase II    |              | Office             |         | —           |      | 1,181  |   | 11,154                                                           |   | 65     |   | 1,181                            |   | 11,219                |   | 12,399             |   | 1,129 |   | 1999 |   | 1999 |   |
|                              |                          |                           |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **PLYMOUTH, MINNESOTA**           |                          |                           |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Medicine Lake                     |                          | Medicine  Lake Indus. Center   |              | Industrial         |         | 3,638            |      | 1,158  |   | 6,676                                                            |   | 816    |   | 1,145                            |   | 7,504                 |   | 8,649              |   | 888 |   | 1970 |   | 1997 |   |
| Plymouth Office/Tech Center       |                          | Plymouth  Office/Tech Center   |              | Industrial         |         | —           |      | 428    |   | 2,442                                                            |   | 300    |   | 431                              |   | 2,738                 |   | 3,170              |   | 395 |   | 1986 |   | 1998 |   |
| Plymouth Service Center           |                          | Plymouth  Service Center       |              | Industrial         |         | —           |      | 345    |   | 1,993                                                            |   | 732    |   | 351                              |   | 2,719                 |   | 3,070              |   | 340 |   | 1978 |   | 1999 |   |
| Westpoint Buildings               |                          | Westpoint  Business Ctr        |              | Office             |         | —           |      | 98     |   | 569                                                              |   | 157    |   | 114                              |   | 710                   |   | 825                |   | 69 |   | 1978 |   | 1999 |   |
| Westpoint Buildings               |                          | Westpoint  Bldg B&C        |              | Industrial         |         | —           |      | 370    |   | 2,135                                                            |   | 414    |   | 370                              |   | 2,549                 |   | 2,919              |   | 303 |   | 1978 |   | 1999 |   |
| Westpoint Buildings               |                          | Westpoint  Bldg D&E        |              | Industrial         |         | —           |      | 362    |   | 2,095                                                            |   | 588    |   | 362                              |   | 2,682                 |   | 3,045              |   | 363 |   | 1978 |   | 1999 |   |
|                              |                          |                           |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **RALEIGH, NORTH CAROLINA**       |                          |                           |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Brook Forest                      |                          | Brook  Forest I                |              | Office             |         | —           |      | 1,242  |   | 6,181                                                            |   | — |   | 1,242                            |   | 6,181                 |   | 7,423              |   | 448 |   | 2000 |   | 2000 |   |
| Crabtree Overlook                 |                          | Crabtree  Overlook             |              | Office             |         | —           |      | 2,164  |   | 17,692                                                           |   | — |   | 2,164                            |   | 17,692                |   | 19,856             |   | 760 |   | 2000 |   | 2001 |   |
| Interchange Plaza                 |                          | 6525  West Campus Oval         |              | Office             |         | 5,143            |      | 842    |   | 3,796                                                            |   | 1,909  |   | 881                              |   | 5,666                 |   | 6,547              |   | 172 |   | 1993 |   | 1999 |   |
| Interchange Plaza                 |                          | 801  Jones Franklin Rd         |              | Office             |         | —           |      | 1,351  |   | 7,778                                                            |   | 45     |   | 1,351                            |   | 7,823                 |   | 9,174              |   | 687 |   | 1995 |   | 1999 |   |
| Interchange Plaza                 |                          | 5520  Capital Ctr. Dr          |              | Office             |         |             |      | 842    |   | 4,395                                                            |   | — |   | 842                              |   | 4,395                 |   | 5,237              |   | 400 |   | 1993 |   | 1999 |   |
| Spring Forest Business Center     |                          | 3200  Spring Forest Road       |              | Industrial         |         | —           |      | 561    |   | 5,240                                                            |   | 109    |   | 561                              |   | 5,350                 |   | 5,911              |   | 500 |   | 1986 |   | 1999 |   |
| Spring Forest Business Center     |                          | 3100  Spring Forest Road       |              | Industrial         |         | —           |      | 616    |   | 4,220                                                            |   | 113    |   | 616                              |   | 4,333                 |   | 4,949              |   | 408 |   | 1992 |   | 1999 |   |
| Spring Forest Business Center     |                          | Spring  Forest Bus Center III  |              | Office             |         |             |      | 462    |   | 3,124                                                            |   | — |   | 462                              |   | 3,124                 |   | 3,586              |   | 2002 |   | 2002 |   |   |   |
| Walnut Creek                      |                          | Walnut  Creek Business Park #1 |              | Industrial         |         |             |      | 419    |   | 3,100                                                            |   | — |   | 419                              |   | 3,100                 |   | 3,519              |   | 176 |   | 2001 |   | 2001 |   |
| Walnut  Creek                     |                          | Walnut  Creek Business Park #2 |              | Industrial         |         |             |      | 456    |   | 3,774                                                            |   | — |   | 456                              |   | 3,774                 |   | 4,230              |   | 171 |   | 2001 |   | 2001 |   |
| Walnut Creek                      |                          | Walnut  Creek Business Park #3 |              | Industrial         |         | —           |      | 679    |   | 4,345                                                            |   | — |   | 679                              |   | 4,345                 |   | 5,025              |   | 252 |   | 2001 |   | 2001 |   |
|                              |                          |                           |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **ROMEOVILLE, ILLINOIS**          |                          |                           |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Crossroads Business Park          |                          | Chapco  Carton Company         |              | Industrial         |         |             |      | 917    |   | 5,217                                                            |   | — |   | 917                              |   | 5,217                 |   | 6,133              |   | 120 |   | 1999 |   | 2002 |   |
|                              |                          |                           |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **ROSWELL, GEORGIA**              |                          |                           |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Hembree Crest                     |                          | 11545  Wills Road              |              | Industrial         |         | —           |      | 1,225  |   | 6,461                                                            |   | 147    |   | 1,225                            |   | 6,608                 |   | 7,833              |   | 566 |   | 1998 |   | 1999 |   |
| Hembree Park                      |                          | 105  Hembree Park Drive        |              | Industrial         |         | —           |      | 288    |   | 1,791                                                            |   | 329    |   | 288                              |   | 2,119                 |   | 2,407              |   | 211 |   | 1988 |   | 1999 |   |
| Hembree Park                      |                          | 150  Hembree Park Drive        |              | Industrial         |         | —           |      | 824    |   | 3,751                                                            |   | 63     |   | 824                              |   | 3,814                 |   | 4,638              |   | 332 |   | 1985 |   | 1999 |   |

 

64

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| **Development**           |                          | **Name**                       |              | **Building  Type** |         | **Encumbrances** |      | ****   |   | **Cost Capitalized  Subsequent to  Development  to Acquisition** |   |   |   | **Accumulated  Depreciation(1)** |   | **Year  Constructed** |   | **Year  Acquired** |   |
|---------------------------|-------------------------------|--------------------------------|-------------------|--------------------|--------------|------------------|-----------|--------|--------|------------------------------------------------------------------|--------|--------|--------|----------------------------------|--------|-----------------------|--------|--------------------|--------|
|                      |                          |                           |              |               |         |             |      |
| **Initial Cost**          | **Gross Book Value 12/31/02** |
| **Land**                  |                          | **Buildings**                  | **Land/Land Imp** |               | **Bldgs/TI** |             | **Total** |
| Hembree Park              |                          | 200  Hembree Park Drive        |              |               |         |             |      | 160    |   | 2,059                                                            |   | 86     |   | 160                              |   | 2,145                 |   | 2,305              |   | 191 |   | 1985 |   | 1999 |   |
| Hembree Park              |                          | 645  Hembree Parkway           |              |               |         |             |      | 248    |   | 2,620                                                            |   | 421    |   | 248                              |   | 3,041                 |   | 3,289              |   | 343 |   | 1986 |   | 1999 |   |
| Hembree Park              |                          | 655  Hembree Parkway           |              |               |         |             |      | 248    |   | 2,755                                                            |   | 145    |   | 248                              |   | 2,900                 |   | 3,148              |   | 260 |   | 1986 |   | 1999 |   |
| Hembree Park              |                          | 250  Hembree Park Drive        |              |               |         |             |      | 686    |   | 5,255                                                            |   | 322    |   | 686                              |   | 5,578                 |   | 6,263              |   | 461 |   | 1996 |   | 1999 |   |
| Hembree Park              |                          | 660  Hembree Park Drive        |              |               |         |             |      | 785    |   | 5,070                                                            |   | 360    |   | 785                              |   | 5,430                 |   | 6,215              |   | 450 |   | 1998 |   | 1999 |   |
| Hembree Park              |                          | 245  Hembree Park Drive        |              |               |         |             |      | 616    |   | 6,375                                                            |   | 645    |   | 616                              |   | 7,020                 |   | 7,636              |   | 1,057 |   | 1999 |   | 1999 |   |
| Mansell Commons           |                          | 993  Mansell Road              |              |               |         |             |      | 136    |   | 1,285                                                            |   | — |   | 136                              |   | 1,285                 |   | 1,421              |   | 112 |   | 1987 |   | 1999 |   |
| Mansell Commons           |                          | 995  Mansell Road              |              |               |         |             |      | 80     |   | 915                                                              |   | 56     |   | 80                               |   | 971                   |   | 1,051              |   | 106 |   | 1987 |   | 1999 |   |
| Mansell Commons           |                          | 997  Mansell Road              |              | Industrial         |         | —           |      | 72     |   | 664                                                              |   | 44     |   | 72                               |   | 708                   |   | 780                |   | 71 |   | 1987 |   | 1999 |   |
| Mansell Commons           |                          | 999  Mansell Road              |              | Industrial         |         | —           |      | 104    |   | 953                                                              |   | 5      |   | 104                              |   | 958                   |   | 1,062              |   | 83 |   | 1987 |   | 1999 |   |
| Mansell Commons           |                          | 1003  Mansell Road             |              | Industrial         |         | —           |      | 136    |   | 1,362                                                            |   | 121    |   | 136                              |   | 1,482                 |   | 1,618              |   | 158 |   | 1987 |   | 1999 |   |
| Mansell Commons           |                          | 1005  Mansell Road             |              | Industrial         |         | —           |      | 72     |   | 946                                                              |   | 3      |   | 72                               |   | 950                   |   | 1,022              |   | 88 |   | 1987 |   | 1999 |   |
| Mansell Commons           |                          | 1007  Mansell Road             |              | Industrial         |         | —           |      | 168    |   | 2,129                                                            |   | 278    |   | 168                              |   | 2,407                 |   | 2,575              |   | 228 |   | 1987 |   | 1999 |   |
| Mansell Commons           |                          | 1009  Mansell Road             |              | Industrial         |         | —           |      | 264    |   | 2,539                                                            |   | 295    |   | 264                              |   | 2,834                 |   | 3,098              |   | 282 |   | 1986 |   | 1999 |   |
| Mansell Commons           |                          | 1011  Mansell Road             |              | Industrial         |         | —           |      | 256    |   | 2,655                                                            |   | 373    |   | 256                              |   | 3,028                 |   | 3,284              |   | 329 |   | 1984 |   | 1999 |   |
| North Meadow              |                          | 1100  Northmeadow Parkway      |              | Industrial         |         | —           |      | 552    |   | 3,955                                                            |   | 332    |   | 552                              |   | 4,287                 |   | 4,839              |   | 453 |   | 1989 |   | 1999 |   |
| North Meadow              |                          | 1150  Northmeadow Parkway      |              | Industrial         |         | —           |      | 464    |   | 3,230                                                            |   | 158    |   | 464                              |   | 3,388                 |   | 3,852              |   | 328 |   | 1988 |   | 1999 |   |
| North Meadow              |                          | 1125  Northmeadow Parkway      |              | Industrial         |         | —           |      | 320    |   | 3,638                                                            |   | 327    |   | 320                              |   | 3,965                 |   | 4,285              |   | 381 |   | 1987 |   | 1999 |   |
| North Meadow              |                          | 1175  Northmeadow Parkway      |              | Industrial         |         | —           |      | 328    |   | 3,409                                                            |   | 497    |   | 328                              |   | 3,907                 |   | 4,235              |   | 392 |   | 1987 |   | 1999 |   |
| North Meadow              |                          | 1250  Northmeadow Parkway      |              | Industrial         |         | —           |      | 312    |   | 4,359                                                            |   | 293    |   | 312                              |   | 4,652                 |   | 4,964              |   | 473 |   | 1989 |   | 1999 |   |
| North Meadow              |                          | 1225  Northmeadow Parkway      |              | Industrial         |         | —           |      | 336    |   | 3,518                                                            |   | 204    |   | 336                              |   | 3,721                 |   | 4,057              |   | 353 |   | 1989 |   | 1999 |   |
| North Meadow              |                          | 1325  Northmeadow Parkway      |              | Industrial         |         | —           |      | 472    |   | 6,432                                                            |   | 314    |   | 472                              |   | 6,746                 |   | 7,218              |   | 730 |   | 1990 |   | 1999 |   |
| North Meadow              |                          | 1335  Northmeadow Parkway      |              | Industrial         |         | —           |      | 946    |   | 8,174                                                            |   | 130    |   | 946                              |   | 8,304                 |   | 9,250              |   | 728 |   | 1996 |   | 1999 |   |
| North Meadow              |                          | 11390  Old Roswell Road        |              | Industrial         |         | —           |      | 530    |   | 3,595                                                            |   | — |   | 530                              |   | 3,595                 |   | 4,126              |   | 316 |   | 1997 |   | 1999 |   |
| North Meadow              |                          | 1400  Hembree Road             |              | Industrial         |         | —           |      | 545    |   | 3,258                                                            |   | 3      |   | 545                              |   | 3,261                 |   | 3,806              |   | 290 |   | 1998 |   | 1999 |   |
| North Meadow              |                          | 1357  Hembree Road             |              | Office             |         | —           |      | 471    |   | 4,560                                                            |   | 426    |   | 471                              |   | 4,985                 |   | 5,457              |   | 1,388 |   | 1999 |   | 1999 |   |
| North Meadow              |                          | Northmeadow  BD IV             |              | Industrial         |         | —           |      | 694    |   | 5,693                                                            |   | 1      |   | 694                              |   | 5,693                 |   | 6,388              |   | 466 |   | 1999 |   | 1999 |   |
| North Meadow              |                          | Northmeadow  Service Ctr V     |              | Industrial         |         | —           |      | 705    |   | 3,256                                                            |   | — |   | 705                              |   | 3,256                 |   | 3,961              |   | 288 |   | 1999 |   | 1999 |   |
| North Meadow              |                          | Northmeadow  BD VI             |              | Industrial         |         | —           |      | 423    |   | 3,046                                                            |   | 38     |   | 423                              |   | 3,084                 |   | 3,507              |   | 388 |   | 2000 |   | 2000 |   |
| Northbrook                |                          | Northbrook  Business Dist II   |              | Industrial         |         | —           |      | 267    |   | 2,223                                                            |   | 301    |   | 267                              |   | 2,525                 |   | 2,791              |   | 139 |   | 2000 |   | 2000 |   |
| Other North Central Prop. |                          | 10745  Westside Parkway        |              | Office             |         | —           |      | 925    |   | 7,177                                                            |   | 292    |   | 925                              |   | 7,469                 |   | 8,394              |   | 699 |   | 1995 |   | 1999 |   |
|                      |                          |                           |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **SEVEN HILLS, OHIO**     |                          |                           |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Rock Run                  |                          | Rock  Run - North              |              | Office             |         | 3,122            |      | 837    |   | 5,637                                                            |   | 314    |   | 837                              |   | 5,950                 |   | 6,787              |   | 1,048 |   | 1984 |   | 1996 |   |
| Rock Run                  |                          | Rock  Run - Center             |              | Office             |         | 4,160            |      | 1,046  |   | 6,991                                                            |   | 1,007  |   | 1,046                            |   | 7,998                 |   | 9,044              |   | 1,771 |   | 1985 |   | 1996 |   |
| Rock Run                  |                          | Rock  Run - South              |              | Office             |         | 3,260            |      | 877    |   | 5,909                                                            |   | 301    |   | 877                              |   | 6,210                 |   | 7,087              |   | 1,115 |   | 1986 |   | 1996 |   |
|                      |                          |                           |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **SHARONVILLE, OHIO**     |                          |                           |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Enterprise Park           |                          | Enterprise  Bldg 1             |              | Industrial         |         | —           |      | 1,030  |   | 6,035                                                            |   | 288    |   | 1,051                            |   | 6,302                 |   | 7,353              |   | 1,470 |   | 1990 |   | 1993 |   |
| Enterprise Park           |                          | Enterprise  Bldg 2             |              | Industrial         |         | —           |      | 733    |   | 3,903                                                            |   | 723    |   | 747                              |   | 4,611                 |   | 5,358              |   | 1,239 |   | 1990 |   | 1993 |   |
| Enterprise Park           |                          | Enterprise  Bldg A             |              | Industrial         |         | —           |      | 119    |   | 728                                                              |   | 85     |   | 119                              |   | 814                   |   | 933                |   | 158 |   | 1987 |   | 1995 |   |
| Enterprise Park           |                          | Enterprise  Bldg B             |              | Industrial         |         | —           |      | 119    |   | 1,237                                                            |   | 74     |   | 119                              |   | 1,311                 |   | 1,430              |   | 258 |   | 1988 |   | 1995 |   |
| Enterprise Park           |                          | Enterprise  Bldg D             |              | Industrial         |         | —           |      | 243    |   | 1,990                                                            |   | 89     |   | 243                              |   | 2,079                 |   | 2,322              |   | 435 |   | 1989 |   | 1995 |   |
| Mosteller Dist. Center    |                          | Mosteller  Distribution Ctr I  |              | Industrial         |         | —           |      | 1,327  |   | 6,316                                                            |   | 275    |   | 1,327                            |   | 6,591                 |   | 7,918              |   | 1,346 |   | 1957 |   | 1996 |   |
| Mosteller Dist. Center    |                          | Mosteller  Distribution Ctr II |              | Industrial         |         | —           |      | 828    |   | 4,761                                                            |   | 1,147  |   | 828                              |   | 5,908                 |   | 6,736              |   | 1,160 |   | 1997 |   | 1997 |   |
| Perimeter Park            |                          | Perimeter  Park Bldg A         |              | Industrial         |         | —           |      | 229    |   | 1,343                                                            |   | 182    |   | 229                              |   | 1,525                 |   | 1,754              |   | 262 |   | 1991 |   | 1996 |   |
| Perimeter Park            |                          | Perimeter  Park Bldg B         |              | Industrial         |         | —           |      | 244    |   | 1,063                                                            |   | 150    |   | 244                              |   | 1,212                 |   | 1,457              |   | 232 |   | 1991 |   | 1996 |   |
|                      |                          |                           |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **SOLON, OHIO**           |                          |                           |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Fountain Parkway          |                          | Fountain  Parkway Bldg 2       |              | Industrial         |         | —           |      | 1,138  |   | 8,725                                                            |   | 37     |   | 1,138                            |   | 8,762                 |   | 9,900              |   | 870 |   | 1998 |   | 1999 |   |
| Fountain Parkway          |                          | Fountain  Parkway Bldg 1       |              | Industrial         |         | —           |      | 527    |   | 2,907                                                            |   | 41     |   | 527                              |   | 2,948                 |   | 3,475              |   | 351 |   | 1997 |   | 1998 |   |
| Solon                     |                          | 30600  Carter                  |              | Industrial         |         | —           |      | 819    |   | 3,425                                                            |   | 289    |   | 821                              |   | 3,712                 |   | 4,533              |   | 499 |   | 1971 |   | 1997 |   |
| Solon                     |                          | 6230  Cochran                  |              | Industrial         |         | —           |      | 600    |   | 2,496                                                            |   | 714    |   | 602                              |   | 3,209                 |   | 3,810              |   | 658 |   | 1977 |   | 1997 |   |
| Solon                     |                          | 5821  Harper                   |              | Industrial         |         | —           |      | 554    |   | 2,301                                                            |   | 286    |   | 555                              |   | 2,586                 |   | 3,141              |   | 410 |   | 1970 |   | 1997 |   |
| Solon                     |                          | 6161  Cochran                  |              | Industrial         |         | —           |      | 395    |   | 1,642                                                            |   | 498    |   | 396                              |   | 2,139                 |   | 2,535              |   | 316 |   | 1978 |   | 1997 |   |

 

65

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| **Development**               |                          | **Name**                      |              | **Building  Type** |         | **Encumbrances** |      | ****   |   | **Cost Capitalized  Subsequent to  Development  to Acquisition** |   |   |   | **Accumulated  Depreciation(1)** |   | **Year  Constructed** |   | **Year  Acquired** |   |
|-------------------------------|-------------------------------|-------------------------------|-------------------|--------------------|--------------|------------------|-----------|--------|--------|------------------------------------------------------------------|--------|--------|--------|----------------------------------|--------|-----------------------|--------|--------------------|--------|
|                          |                          |                          |              |               |         |             |      |
| **Initial Cost**              | **Gross Book Value 12/31/02** |
| **Land**                      |                          | **Buildings**                 | **Land/Land Imp** |               | **Bldgs/TI** |             | **Total** |
| Solon                         |                          | 5901  Harper                  |              | Industrial         |         | —           |      | 349    |   | 1,441                                                            |   | 163    |   | 350                              |   | 1,603                 |   | 1,953              |   | 222 |   | 1970 |   | 1997 |   |
| Solon                         |                          | 29125  Solon                  |              | Industrial         |         | —           |      | 504    |   | 2,072                                                            |   | 421    |   | 505                              |   | 2,492                 |   | 2,997              |   | 320 |   | 1980 |   | 1997 |   |
| Solon                         |                          | 6661  Cochran                 |              | Industrial         |         | —           |      | 244    |   | 1,012                                                            |   | 136    |   | 245                              |   | 1,147                 |   | 1,392              |   | 164 |   | 1979 |   | 1997 |   |
| Solon                         |                          | 6521  Davis                   |              | Industrial         |         | —           |      | 128    |   | 529                                                              |   | 71     |   | 128                              |   | 600                   |   | 728                |   | 78 |   | 1979 |   | 1997 |   |
| Solon                         |                          | 30301  Carter Street          |              | Industrial         |         | —           |      | 650    |   | 4,974                                                            |   | 231    |   | 650                              |   | 5,204                 |   | 5,855              |   | 821 |   | 1972 |   | 1999 |   |
|                          |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **ST. LOUIS PARK, MINNESOTA** |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Cedar Lake Business Center    |                          | Cedar  Lake Business Center   |              | Industrial         |         | —           |      | 332    |   | 1,931                                                            |   | 107    |   | 332                              |   | 2,038                 |   | 2,370              |   | 283 |   | 1976 |   | 1997 |   |
| Minneapolis-West              |                          | 1600  Tower                   |              | Office             |         | —           |      | 2,321  |   | 31,868                                                           |   | 1,705  |   | 2,321                            |   | 33,574                |   | 35,894             |   | 2,736 |   | 2000 |   | 2000 |   |
| North Plaza                   |                          | North  Plaza                  |              | Office             |         | —           |      | 374    |   | 1,662                                                            |   | 241    |   | 374                              |   | 1,904                 |   | 2,278              |   | 256 |   | 1966 |   | 1998 |   |
| South Plaza                   |                          | South  Plaza                  |              | Office             |         | —           |      | 397    |   | 1,730                                                            |   | 95     |   | 397                              |   | 1,826                 |   | 2,222              |   | 281 |   | 1966 |   | 1998 |   |
| Travelers Express Tower       |                          | Travelers  Express Tower      |              | Office             |         | —           |      | 3,039  |   | 36,060                                                           |   | 631    |   | 3,091                            |   | 36,640                |   | 39,731             |   | 3,309 |   | 1987 |   | 1999 |   |
| Novartis                      |                          | Novartis  Warehouse           |              | Industrial         |         | —           |      | 2,005  |   | 10,948                                                           |   | 443    |   | 2,005                            |   | 11,391                |   | 13,396             |   | 1,328 |   | 1960 |   | 1998 |   |
| SW Submkt-Minneapolis West BC |                          | 5219  Building                |              | Office             |         | —           |      | 99     |   | 574                                                              |   | 60     |   | 102                              |   | 631                   |   | 733                |   | 74 |   | 1965 |   | 1998 |   |
|                          |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **ST. LOUIS, MISSOURI**       |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Clayton                       |                          | Interco  Corporate Tower      |              | Office             |         |             |      | 6,150  |   | 43,371                                                           |   | — |   | 6,150                            |   | 43,371                |   | 49,521             |   |   |   | 1986 |   | 2002 |   |
| Craig Park Center             |                          | Craig  Park Center            |              | Industrial         |         | —           |      | 254    |   | 2,309                                                            |   | 220    |   | 254                              |   | 2,529                 |   | 2,783              |   | 283 |   | 1984 |   | 1998 |   |
| Earth City                    |                          | 3300  Pointe 70               |              | Office             |         | 4,143            |      | 1,186  |   | 7,586                                                            |   | 618    |   | 1,186                            |   | 8,204                 |   | 9,390              |   | 1,146 |   | 1989 |   | 1997 |   |
| Hawthorn Office Park          |                          | Hawthorn  Office#1            |              | Office             |         | —           |      | 2,600  |   | 15,239                                                           |   | — |   | 2,600                            |   | 15,239                |   | 17,839             |   | 247 |   | 1997 |   | 2002 |   |
| Lakeside Crossing             |                          | Lakeside  Crossing I          |              | Industrial         |         |             |      | 574    |   | 2,272                                                            |   | — |   | 574                              |   | 2,272                 |   | 2,846              |   | 207 |   | 2001 |   | 2002 |   |
| Lakeside Crossing             |                          | Lakeside  Crossing III        |              | Industrial         |         |             |      | 1,851  |   | 4,881                                                            |   | — |   | 1,851                            |   | 4,881                 |   | 6,733              |   | 429 |   | 2001 |   | 2002 |   |
| Lakeside Crossing             |                          | Lakeside  Crossing 6          |              | Industrial         |         |             |      | 1,074  |   | 2,125                                                            |   | — |   | 1,074                            |   | 2,125                 |   | 3,199              |   | 8 |   | 2002 |   | 2002 |   |
| Laumeier Office Park          |                          | Laumeier  I                   |              | Office             |         | —           |      | 1,384  |   | 10,063                                                           |   | 1,344  |   | 1,384                            |   | 11,408                |   | 12,791             |   | 2,113 |   | 1987 |   | 1995 |   |
| Laumeier Office Park          |                          | Laumeier  II                  |              | Office             |         | —           |      | 1,421  |   | 10,033                                                           |   | 847    |   | 1,421                            |   | 10,879                |   | 12,300             |   | 2,100 |   | 1988 |   | 1995 |   |
| Laumeier Office Park          |                          | Laumeier  IV                  |              | Office             |         | —           |      | 1,029  |   | 7,393                                                            |   | 820    |   | 1,029                            |   | 8,212                 |   | 9,241              |   | 1,023 |   | 1987 |   | 1998 |   |
| Maryville Center              |                          | 500-510  Maryville Centre     |              | Office             |         | —           |      | 3,402  |   | 24,779                                                           |   | 592    |   | 3,402                            |   | 25,372                |   | 28,774             |   | 3,360 |   | 1984 |   | 1997 |   |
| Maryville Center              |                          | 530  Maryville Centre         |              | Office             |         | 7,176            |      | 2,219  |   | 15,733                                                           |   | 1,509  |   | 2,219                            |   | 17,243                |   | 19,461             |   | 2,512 |   | 1990 |   | 1997 |   |
| Maryville Center              |                          | 550  Maryville Centre         |              | Office             |         | 9,580            |      | 1,996  |   | 12,532                                                           |   | 28     |   | 1,996                            |   | 12,560                |   | 14,556             |   | 1,636 |   | 1988 |   | 1997 |   |
| Maryville Center              |                          | 635-645  Maryville Centre     |              | Office             |         | 11,133           |      | 3,048  |   | 18,452                                                           |   | 424    |   | 3,048                            |   | 18,876                |   | 21,924             |   | 2,822 |   | 1987 |   | 1997 |   |
| Maryville Center              |                          | 655  Maryville Centre         |              | Office             |         | 7,651            |      | 1,860  |   | 13,258                                                           |   | 15     |   | 1,860                            |   | 13,273                |   | 15,133             |   | 1,722 |   | 1994 |   | 1997 |   |
| Maryville Center              |                          | 540  Maryville Centre         |              | Office             |         | —           |      | 2,219  |   | 14,933                                                           |   | 357    |   | 2,219                            |   | 15,290                |   | 17,509             |   | 2,090 |   | 1990 |   | 1997 |   |
| Maryville Center              |                          | 520  Maryville Centre         |              | Office             |         | —           |      | 2,404  |   | 16,010                                                           |   | 98     |   | 2,404                            |   | 16,108                |   | 18,512             |   | 2,628 |   | 1998 |   | 1999 |   |
| Maryville Center              |                          | 700  Maryville Centre         |              | Office             |         | —           |      | 4,556  |   | 28,599                                                           |   | 24     |   | 4,556                            |   | 28,624                |   | 33,179             |   | 2,673 |   | 1999 |   | 2000 |   |
| Maryville Center              |                          | 533  Maryville Centre         |              | Office             |         | —           |      | 3,230  |   | 17,921                                                           |   | 12     |   | 3,230                            |   | 17,932                |   | 21,162             |   | 1,128 |   | 2000 |   | 2000 |   |
| Maryville Center              |                          | 555  Maryville Centre         |              | Office             |         | —           |      | 3,226  |   | 15,799                                                           |   | — |   | 3,226                            |   | 15,799                |   | 19,025             |   | 221 |   | 2000 |   | 2001 |   |
| Maryville Center              |                          | 625  Maryville Centre         |              | Office             |         | 6,779            |      | 2,509  |   | 12,260                                                           |   | — |   | 2,509                            |   | 12,260                |   | 14,768             |   | 311 |   | 1996 |   | 2002 |   |
| Riverport                     |                          | Duke  Fitness Centers LLC-STL |              | Grounds            |         |             |      | — |   | 21                                                               |   | — |   | —                           |   | 21                    |   | 21                 |   | — |   |   |   | 2002 |   |
| St. Louis Business Center     |                          | St.  Louis Business Center A  |              | Industrial         |         | —           |      | 194    |   | 1,768                                                            |   | 298    |   | 194                              |   | 2,066                 |   | 2,260              |   | 239 |   | 1987 |   | 1998 |   |
| St. Louis Business Center     |                          | St.  Louis Business Center B  |              | Industrial         |         | —           |      | 250    |   | 2,274                                                            |   | 1,073  |   | 250                              |   | 3,347                 |   | 3,597              |   | 544 |   | 1986 |   | 1998 |   |
| St. Louis Business Center     |                          | St.  Louis Business Center C  |              | Industrial         |         | —           |      | 166    |   | 1,511                                                            |   | 406    |   | 166                              |   | 1,918                 |   | 2,084              |   | 290 |   | 1986 |   | 1998 |   |
| St. Louis Business Center     |                          | St.  Louis Business Center D  |              | Industrial         |         | —           |      | 168    |   | 1,532                                                            |   | 346    |   | 168                              |   | 1,878                 |   | 2,046              |   | 238 |   | 1987 |   | 1998 |   |
| Southridge                    |                          | Southridge  Business Center   |              | Industrial         |         |             |      | 1,158  |   | 4,234                                                            |   | — |   | 1,158                            |   | 4,234                 |   | 5,392              |   | 161 |   | 2002 |   | 2002 |   |
| West Port Center              |                          | Westport  Center IV           |              | Industrial         |         | —           |      | 1,440  |   | 5,526                                                            |   | — |   | 1,440                            |   | 5,526                 |   | 6,966              |   | 653 |   | 2000 |   | 2000 |   |
| West Port Center              |                          | Westport  Center V            |              | Industrial         |         | —           |      | 493    |   | 1,591                                                            |   | — |   | 493                              |   | 1,591                 |   | 2,085              |   | 200 |   | 1999 |   | 2000 |   |
| West Port Center              |                          | Westport  Place               |              | Office             |         | —           |      | 1,990  |   | 7,824                                                            |   | 259    |   | 1,990                            |   | 8,083                 |   | 10,073             |   | 1,296 |   | 1999 |   | 2000 |   |
| Westmark                      |                          | Westmark                      |              | Office             |         | —           |      | 1,497  |   | 10,874                                                           |   | 2,220  |   | 1,488                            |   | 13,102                |   | 14,590             |   | 2,530 |   | 1987 |   | 1995 |   |
| Westview Place                |                          | Westview  Place               |              | Office             |         | —           |      | 669    |   | 9,357                                                            |   | 1,782  |   | 669                              |   | 11,139                |   | 11,808             |   | 2,253 |   | 1988 |   | 1995 |   |
|                          |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **ST. PAUL, MINNESOTA**       |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| University Crossing           |                          | University  Crossing          |              | Industrial         |         | —           |      | 874    |   | 5,047                                                            |   | 772    |   | 911                              |   | 5,782                 |   | 6,693              |   | 767 |   | 1990 |   | 1998 |   |
|                          |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **ST. PETERS, MISSOURI**      |                          |                          |              |               |         |             |      |   |   |                                                             |   |   |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Horizon Business Ctr          |                          | Horizon  Business Center      |              | Industrial         |         | —           |      | 344    |   | 2,483                                                            |   | 165    |   | 344                              |   | 2,649                 |   | 2,993              |   | 310 |   | 1985 |   | 1998 |   |

 

66

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| **Development**               |                          | **Name**                        |              | **Building  Type** |         | **Encumbrances** |      | ****    |   | **Cost Capitalized  Subsequent to  Development  to Acquisition** |   |    |   | **Accumulated  Depreciation(1)** |   | **Year  Constructed** |   | **Year  Acquired** |   |
|-------------------------------|-------------------------------|---------------------------------|-------------------|--------------------|--------------|------------------|-----------|---------|--------|------------------------------------------------------------------|--------|---------|--------|----------------------------------|--------|-----------------------|--------|--------------------|--------|
|                          |                          |                            |              |               |         |             |      |
| **Initial Cost**              | **Gross Book Value 12/31/02** |
| **Land**                      |                          | **Buildings**                   | **Land/Land Imp** |               | **Bldgs/TI** |             | **Total** |
| **STRONGSVILLE, OHIO**        |                          |                            |              |               |         |             |      |    |   |                                                             |   |    |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Commerce Parkway              |                          | Commerce  Parkway Bldg 1        |              |               |         |             |      | 594     |   | 3,754                                                            |   | —  |   | 594                              |   | 3,754                 |   | 4,348              |   | 23 |   | 2002 |   | 2002 |   |
| Dymet                         |                          | Dyment                          |              |               |         |             |      | 816     |   | 5,368                                                            |   | 39      |   | 816                              |   | 5,406                 |   | 6,223              |   | 754 |   | 1988 |   | 1997 |   |
| Johnson Controls              |                          | Johnson  Controls               |              |               |         |             |      | 364     |   | 2,401                                                            |   | 75      |   | 364                              |   | 2,476                 |   | 2,840              |   | 346 |   | 1972 |   | 1997 |   |
| Park 82                       |                          | Park  82 Bldg 2                 |              |               |         |             |      | 322     |   | 2,899                                                            |   | 595     |   | 294                              |   | 3,522                 |   | 3,815              |   | 614 |   | 1998 |   | 1998 |   |
| Park 82                       |                          | Park  82 Bldg 1                 |              |               |         |             |      | 243     |   | 1,968                                                            |   | 280     |   | 215                              |   | 2,276                 |   | 2,491              |   | 346 |   | 1998 |   | 1998 |   |
| Park 82                       |                          | Park  82 Bldg 3                 |              |               |         |             |      | 298     |   | 2,679                                                            |   | 712     |   | 270                              |   | 3,419                 |   | 3,689              |   | 371 |   | 1999 |   | 1999 |   |
| Park 82                       |                          | Park  82 Bldg 4                 |              |               |         |             |      | 360     |   | 5,466                                                            |   | 95      |   | 357                              |   | 5,564                 |   | 5,921              |   | 453 |   | 2000 |   | 2000 |   |
| Park 82                       |                          | Park  82 Bldg 5                 |              | Industrial         |         | —           |      | 351     |   | 4,424                                                            |   | 150     |   | 349                              |   | 4,577                 |   | 4,925              |   | 188 |   | 2000 |   | 2000 |   |
| Srague Rd. Industrial         |                          | Mohawk  Dr. Bldg. 1             |              | Industrial         |         | —           |      | 564     |   | 4,456                                                            |   | —  |   | 564                              |   | 4,456                 |   | 5,020              |   | 221 |   | 2000 |   | 2000 |   |
|                          |                          |                            |              |               |         |             |      |    |   |                                                             |   |    |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **SUNRISE, FLORIDA**          |                          |                            |              |               |         |             |      |    |   |                                                             |   |    |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Sawgrass                      |                          | Sawgrass  Commerce Ctr Phase II |              | Office             |         | —           |      | 1,147   |   | 6,112                                                            |   | —  |   | 1,147                            |   | 6,112                 |   | 7,260              |   | 424 |   | 2000 |   | 2001 |   |
| Sawgrass                      |                          | Sawgrass  Pointe                |              | Office             |         |             |      | 3,484   |   | 21,827                                                           |   | —  |   | 3,484                            |   | 21,827                |   | 25,311             |   | 461 |   | 2001 |   | 2002 |   |
|                          |                          |                            |              |               |         |             |      |    |   |                                                             |   |    |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **SUWANEE, GEORGIA**          |                          |                            |              |               |         |             |      |    |   |                                                             |   |    |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
|                          |                          |                            |              |               |         |             |      |    |   |                                                             |   |    |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **TAMPA, FLORIDA**            |                          |                            |              |               |         |             |      |    |   |                                                             |   |    |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Fairfield Distribution Center |                          | Fairfield  Distribution Ctr I   |              | Industrial         |         | —           |      | 483     |   | 2,658                                                            |   | 3       |   | 487                              |   | 2,657                 |   | 3,144              |   | 237 |   | 1998 |   | 1999 |   |
| Fairfield Distribution Center |                          | Fairfield  Distribution Ctr II  |              | Industrial         |         | —           |      | 530     |   | 4,901                                                            |   | 11      |   | 534                              |   | 4,908                 |   | 5,441              |   | 436 |   | 1998 |   | 1999 |   |
| Fairfield Distribution Center |                          | Fairfield  Distribution Ctr III |              | Industrial         |         | —           |      | 334     |   | 2,771                                                            |   | 39      |   | 338                              |   | 2,806                 |   | 3,144              |   | 243 |   | 1999 |   | 1999 |   |
| Fairfield Distribution Center |                          | Fairfield  Distribution Ctr IV  |              | Industrial         |         | —           |      | 600     |   | 2,543                                                            |   | 874     |   | 604                              |   | 3,413                 |   | 4,017              |   | 568 |   | 1999 |   | 1999 |   |
| Fairfield Distribution Center |                          | Fairfield  Distribution Ctr V   |              | Industrial         |         | —           |      | 488     |   | 3,538                                                            |   | —  |   | 488                              |   | 3,538                 |   | 4,026              |   | 208 |   | 2000 |   | 2000 |   |
| Fairfield Distribution Center |                          | Fairfield  Distribution Ctr VI  |              | Industrial         |         | —           |      | 555     |   | 4,517                                                            |   | —  |   | 555                              |   | 4,517                 |   | 5,072              |   | 187 |   | 2001 |   | 2001 |   |
| Fairfield Distribution Center |                          | Fairfield  Distribution Ctr VII |              | Industrial         |         | —           |      | 394     |   | 4,027                                                            |   | —  |   | 394                              |   | 4,027                 |   | 4,420              |   | 244 |   | 2001 |   | 2001 |   |
| Highland Oaks                 |                          | Highland  Oaks I                |              | Office             |         | —           |      | 1,525   |   | 14,176                                                           |   | 450     |   | 1,525                            |   | 14,625                |   | 16,150             |   | 2,020 |   | 1999 |   | 1999 |   |
| Highland Oaks                 |                          | Highland  Oaks II               |              | Office             |         | —           |      | 1,605   |   | 11,820                                                           |   | —  |   | 1,605                            |   | 11,820                |   | 13,425             |   | 747 |   | 1999 |   | 2000 |   |
|                          |                          |                            |              |               |         |             |      |    |   |                                                             |   |    |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **TWINSBURG, OHIO**           |                          |                            |              |               |         |             |      |    |   |                                                             |   |    |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Enterprise Parkway            |                          | Enterprise  Parkway #1          |              | Industrial         |         | —           |      | 198     |   | 1,585                                                            |   | 190     |   | 198                              |   | 1,774                 |   | 1,972              |   | 195 |   | 1974 |   | 1998 |   |
| Enterprise Parkway            |                          | Enterprise  Parkway Bldg 2      |              | Industrial         |         | —           |      | 610     |   | 7,391                                                            |   | 5       |   | 610                              |   | 7,396                 |   | 8,006              |   | 570 |   | 2000 |   | 2000 |   |
|                          |                          |                            |              |               |         |             |      |    |   |                                                             |   |    |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **WEST CHESTER, OHIO**        |                          |                            |              |               |         |             |      |    |   |                                                             |   |    |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| World Park Union Centre       |                          | World  Park at Union Ctr 12     |              | Industrial         |         | —           |      | 306     |   | 3,461                                                            |   | —  |   | 306                              |   | 3,461                 |   | 3,767              |   | 397 |   | 2000 |   | 2000 |   |
|                          |                          |                            |              |               |         |             |      |    |   |                                                             |   |    |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **WESTERVILLE, OHIO**         |                          |                            |              |               |         |             |      |    |   |                                                             |   |    |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Westerville Executive Campus  |                          | Liebert                         |              | Office             |         | —           |      | 755     |   | 4,510                                                            |   | 903     |   | 755                              |   | 5,413                 |   | 6,169              |   | 1,217 |   | 1999 |   | 1999 |   |
|                          |                          |                            |              |               |         |             |      |    |   |                                                             |   |    |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **WESTMONT, ILLINOIS**        |                          |                            |              |               |         |             |      |    |   |                                                             |   |    |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Oakmont Corporate Center      |                          | Oakmont  Tech Center            |              | Industrial         |         | —           |      | 1,501   |   | 8,712                                                            |   | 152     |   | 1,501                            |   | 8,864                 |   | 10,365             |   | 921 |   | 1989 |   | 1998 |   |
| Oakmont Corporate Center      |                          | Oakmont  Circle Office          |              | Office             |         | —           |      | 3,177   |   | 14,187                                                           |   | 1,060   |   | 3,492                            |   | 14,932                |   | 18,424             |   | 1,664 |   | 1990 |   | 1998 |   |
|                          |                          |                            |              |               |         |             |      |    |   |                                                             |   |    |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| **WOODLAWN, OHIO**            |                          |                            |              |               |         |             |      |    |   |                                                             |   |    |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
| Glenwood Crossing             |                          | Glenwood  Crossing              |              | Retail             |         | —           |      | 3,651   |   | 1,383                                                            |   | 228     |   | 3,651                            |   | 1,610                 |   | 5,262              |   | 117 |   | 1999 |   | 2000 |   |
|                          |                          | McDonalds  Ground Lease         |              | Grounds            |         | —           |      | 480     |   | —                                                           |   | —  |   | 480                              |   | —                |   | 480                |   | — |   |   |   | 2000 |   |
|                          |                          | Eliminations                    |              |               |         |             |      | —  |   | —                                                           |   | (23,751 | )      | (750                             | )      | (23,002               | )      | (23,751            | )      | 1,294 |   |   |   |   |   |
|                          |                          | MV  Construction Loan Payable   |              |               |         | 23,895           |      |    |   |                                                             |   |    |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
|                          |                          |                            |              |               |         |             |      |    |   |                                                             |   |    |   |                             |   |                  |   |               |   |   |   |   |   |   |   |
|                          |                          |                            |              |               |         | 299,147          |      | 600,885 |   | 4,037,690                                                        |   | 207,780 |   | 608,995                          |   | 4,237,360             |   | 4,846,355          |   | 555,858 |   |   |   |   |   |

 

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(1)Depreciation of real estate is computed using the straight-line method over 40years for buildings, 15 years for landimprovements and shorter periods based on lease terms (generally 3 to 10 years)for tenant improvements.

 

67

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| **Development**                            |                          | **Name**      |              | **Building  Type**     |            | **Encumbrances** |      | ****                         |   | **Cost Capitalized  Subsequent to  Development  to Acquisition** |   | ****      |   | **Accumulated  Depreciation(1)** |            | **Year  Constructed** |   | **Year  Acquired** |   |
|--------------------------------------------|-------------------------------|---------------|-------------------|------------------------|-----------------|------------------|-----------|------------------------------|--------|------------------------------------------------------------------|--------|-----------|--------|----------------------------------|-----------------|-----------------------|--------|--------------------|--------|
|                                       |                          |          |              |                   |            |             |      |
| **Initial Cost**                           | **Gross Book Value 12/31/02** |
| **Land**                                   |                          | **Buildings** | **Land/Land Imp** |                   | **Bldgs/TI**    |             | **Total** |
|                                       |                          |          |              | **Real Estate Assets** |            |             |      | **Accumulated Depreciation** |   |
|                                       |                          |          |              | **2002**               |            |             |      | **2001**                     |   |                                                             |   | **2000**  |   |                             |            | **2002**              |   |               |   | **2001** |   |   |   | **2000** |   |
|                                       |                          |          |              |                   |            |             |      |                         |   |                                                             |   |      |   |                             |            |                  |   |               |   |   |   |   |   |   |   |
| Balance at beginning of year               |                          |          |              | $                      |  4,652,853 |             |      |                         | $      |  4,570,563                                                  |   |      |   | $                                |  4,726,906 |                  |   |               | $      |  425,721 |   |   |   | $ |  338,426 |   |   |   | $ |  254,574 |   |
| Acquisitions                               |                          |          |              | 137,706                |            |             |      | 13,927                       |   |                                                             |   | 6,104     |   |                             |            | —                |   |               |   | — |   |   |   | — |   |
| Construction costs and tenant improvements |                          |          |              | 275,020                |            |             |      | 467,285                      |   |                                                             |   | 603,194   |   |                             |            | —                |   |               |   | — |   |   |   | — |   |
| Depreciation expense                       |                          |          |              | —                 |            |             |      | —                       |   |                                                             |   | —    |   |                             |            | 154,565               |   |               |   | 138,723 |   |   |   | 143,800 |   |
| Acquisition of minority interest           |                          |          |              | 13,163                 |            |             |      | 4,259                        |   |                                                             |   | 1,317     |   |                             |            | —                |   |               |   | — |   |   |   | — |   |
|                                       |                          |          |              | 5,078,742              |            |             |      | 5,056,034                    |   |                                                             |   | 5,337,521 |   |                             |            | 580,286               |   |               |   | 477,149 |   |   |   | 398,374 |   |
|                                       |                          |          |              |                   |            |             |      |                         |   |                                                             |   |      |   |                             |            |                  |   |               |   |   |   |   |   |   |   |
| Deductions during year:                    |                          |          |              |                   |            |             |      |                         |   |                                                             |   |      |   |                             |            |                  |   |               |   |   |   |   |   |   |   |
| Cost of real estate sold or contributed    |                          |          |              | (204,248               | )               |             |      | (386,495                     | )      |                                                             |   | (745,554  | )      |                             |            | (5,668                | )      |               |   | (39,542 | ) |   |   | (39,085 | ) |
| Impairment Allowance                       |                          |          |              | (9,379                 | )               |             |      | (4,800                       | )      |                                                             |   | (541      | )      |                             |            |                  |   |               |   |   |   |   |   |   |   |
| Write-off of fully amortized assets        |                          |          |              | (18,760                | )               |             |      | (11,886                      | )      |                                                             |   | (20,863   | )      |                             |            | (18,760               | )      |               |   | (11,886 | ) |   |   | (20,863 | ) |
| Balance at end of year                     |                          |          |              | $                      |  4,846,355 |             |      |                         | $      |  4,652,853                                                  |   |      |   | $                                |  4,570,563 |                  |   |               | $      |  555,858 |   |   |   | $ |  425,721 |   |   |   | $ |  338,426 |   |
|                                            |                               |               |                   |                        |                 |                  |           |                              |        |                                                                  |        |           |        |                                  |                 |                       |        |                    |        |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

68

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**SIGNATURES**

 

Pursuant to the requirements of Section 13 or 15(d) of the SecuritiesExchange Act of 1934, the registrant has duly caused this report to be signedon its behalf by the undersigned, thereunto duly authorized.

 
|           |   |                       |                                  | DUKE REALTY LIMITED PARTNERSHIP |
|----------------|--------|----------------------------|---------------------------------------|---------------------------------|
|           |   |                       |                                  | By:                             |  Duke Realty Corporation |   |
|           |   |                       |                                  |                            | Its General Partner |   |
|           |   |                       |                                  |                            |   |
| March 25, 2003 | By:    | /s/  Thomas L. Hefner |                                  |                            |
|           |   |                       | Thomas L. Hefner                      |                            |
|           |   |                       | Chairman of the Board,                |                            |
|           |   |                       | President and Chief Executive Officer |                            |
|           |   |                       |                                  |                            |   |   |   |   |
|           |   | By:                        | /s/ Darell E. Zink, Jr.               |                            |   |
|           |   |                       | Darell E. Zink, Jr.                   |                            |
|           |   |                       | Executive Vice President and          |                            |
|           |   |                       | Chief Financial Officer               |                            |
|           |   |                       | (Principal Financial Officer)         |                            |
|           |   |                       |                                  |                            |   |   |   |   |
|           |   | By:                        | /s/ Matthew A. Cohoat                 |                            |   |
|           |   |                       | Matthew A. Cohoat                     |                            |
|           |   |                       | Senior Vice President and             |                            |
|           |   |                       | Corporate Controller                  |                            |
|                |        |                            |                                       |                                 |  |  |  |  |  |  |  |  |

 

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/ Thomas L. Hefner*    |   | 3/25/03  |   | Chairman of the Board,                                                      |
| Thomas L. Hefner         |   |     |   | President and Chief Executive

Officer and Director of the  General Partner |
|                     |   |     |   |                                                                        |
| /s/ Darell E. Zink, Jr.* |   | 3/25/03  |   | Executive Vice President and Chief                                          |
| Darell E. Zink, Jr.      |   |     |   | Financial Officer and Director  of the  General Partner                     |
|                     |   |     |   |                                                                        |
| /s/ Matthew A. Cohoat*   |   | 3/25/03  |   | Senior Vice President and                                                   |
| Matthew A. Cohoat        |   |     |   | Corporate Controller of the  General Partner                                |

 

69

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| /s/ Barrington H. Branch*   |   | 3/25/03 |   | Director of the General Partner |
|-----------------------------|--------|---------|--------|---------------------------------|
| Barrington H. Branch        |   |    |   |                            |
|                        |   |    |   |                            |
| /s/ Gary A. Burk            |   | 3/25/03 |   | Director of the General Partner |
| Gary A. Burk                |   |    |   |                            |
|                        |   |    |   |                            |
| /s/ Geoffrey Button*        |   | 3/25/03 |   | Director of the General Partner |
| Geoffrey Button             |   |    |   |                            |
|                        |   |    |   |                            |
| /s/ William Cavanaugh, III* |   | 3/25/03 |   | Director of the General Partner |
| William Cavanaugh, III      |   |    |   |                            |
|                        |   |    |   |                            |
| /s/ Ngaire E. Cuneo*        |   | 3/25/03 |   | Director of the General Partner |
| Ngaire E. Cuneo             |   |    |   |                            |
|                        |   |    |   |                            |
| /s/ Charles R. Eitel*       |   | 3/25/03 |   | Director of the General Partner |
| Charles R. Eitel            |   |    |   |                            |
|                        |   |    |   |                            |
| /s/ L. Ben Lytle*           |   | 3/25/03 |   | Director of the General Partner |
| L. Ben Lytle                |   |    |   |                            |
|                        |   |    |   |                            |
| /s/ William O. McCoy*       |   | 3/25/03 |   | Director of the General Partner |
| William O. McCoy            |   |    |   |                            |
|                        |   |    |   |                            |
| /s/ John W. Nelley, Jr.*    |   | 3/25/03 |   | Director of the General Partner |
| John W. Nelley, Jr.         |   |    |   |                            |
|                        |   |    |   |                            |
| /s/ James E. Rogers*        |   | 3/25/03 |   | Director of the General Partner |
| James E. Rogers             |   |    |   |                            |
|                        |   |    |   |                            |
| /s/ Robert J. Woodward*     |   | 3/25/03 |   | Director of the General Partner |
| Robert J. Woodward          |   |    |   |                            |

 

----

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

 

70

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**SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS**

**FILED PURSUANT TO SECTION 15(d) OF THE ACT BYREGISTRANTS**

**WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TOSECTION 12**

**OF THE ACT**

 

 

No annual report or proxy statement has been sent to security holdersof the Registrant. The General Partner of the Registrant has mailed its annualreport and its proxy statement to holders of common stock of the GeneralPartner. Portions of the General Partner’s proxy statement are incorporated byreference herein in Items 10-13 of Part III.

 

----

 

**CERTIFICATIONPURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

 

I, Thomas L. Hefner,certify that:

 

1.             I have reviewed this annual report on Form 10-K of DukeRealty Limited Partnership;

 

2.                                       Basedon my knowledge, this annual report does not contain any untrue statement of amaterial fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, notmisleading with respect to the period covered by this annual report;

 

3.                                       Basedon my knowledge, the financial statements, and other financial informationincluded in this annual report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the Partnership asof, and for, the periods presented in this annual report;

 

4.                                       ThePartnership’s other certifying officers and I are responsible for establishingand maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-14 and 15d-14) for the registrant and we have:

 

(a)               designed such disclosure controls and procedures toensure that material information relating to the Partnership, including itsconsolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this annual report is being prepared;

(b)              evaluated the effectiveness of the Partnership’sdisclosure controls and procedures as of a date within 90 days prior to thefiling date of this annual report (the “Evaluation Date”); and

(c)               presented in this annual report our conclusions aboutthe effectiveness of the disclosure controls and procedures based on ourevaluation as of the Evaluation Date;

 

5.                                       ThePartnership’s other certifying officers and I have disclosed, based on our mostrecent evaluation, to the Partnership’s auditors and the audit committee of theGeneral Partner’s board of directors (or persons performing the equivalentfunction):

 

(a)               all significant deficiencies in the design oroperation of internal controls which could adversely affect the Partnership’sability to record, process, summarize and report financial data and haveidentified for the Partnership’s auditors any material weaknesses in internalcontrols; and

(b)              any fraud, whether or not material, that involvesmanagement or other employees who have a significant role in the Partnership’sinternal controls; and

 

6.                                       ThePartnership’s other certifying officers and I have indicated in this annualreport whether or not there were significant changes in internal controls or inother factors that could significantly affect internal controls subsequent tothe date of our most recent evaluation, including any corrective actions withregard to significant deficiencies and material weaknesses.

 
| Date:  March 25, 2003                                     |
|----------------------------------------------------------------|
|                                                           |
|                                                           |   |
| Thomas L. Hefner                                               |
| President  and Chief Executive Officer  of the General Partner |

 

----

 

**CERTIFICATIONPURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

 

I, Darell E. Zink, Jr.,certify that:

 

1.             I have reviewed this annual report on Form 10-K of DukeRealty Limited Partnership;

 

2.                                       Basedon my knowledge, this annual report does not contain any untrue statement of amaterial fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, notmisleading with respect to the period covered by this annual report;

 

3.                                       Basedon my knowledge, the financial statements, and other financial informationincluded in this annual report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the Partnership asof, and for, the periods presented in this annual report;

 

4.                                       ThePartnership’s other certifying officers and I are responsible for establishingand maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-14 and 15d-14) for the Partnership and we have:

 

(a)               designed such disclosure controls and procedures toensure that material information relating to the Partnership, including itsconsolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this annual report is being prepared;

(b)              evaluated the effectiveness of the Partnership’sdisclosure controls and procedures as of a date within 90 days prior to thefiling date of this annual report (the “Evaluation Date”); and

(c)               presented in this annual report our conclusions aboutthe effectiveness of the disclosure controls and procedures based on ourevaluation as of the Evaluation Date;

 

5.                                       ThePartnership’s other certifying officers and I have disclosed, based on our mostrecent evaluation, to the Partnership’s auditors and the audit committee of theGeneral Partner's board of directors (or persons performing the equivalentfunction):

 

(a)               all significant deficiencies in the design oroperation of internal controls which could adversely affect the Partnership’sability to record, process, summarize and report financial data and haveidentified for the Partnership’s auditors any material weaknesses in internalcontrols; and

(b)              any fraud, whether or not material, that involvesmanagement or other employees who have a significant role in the Partnership’sinternal controls; and

 

6.                                       ThePartnership’s other certifying officers and I have indicated in this annualreport whether or not there were significant changes in internal controls or inother factors that could significantly affect internal controls subsequent tothe date of our most recent evaluation, including any corrective actions withregard to significant deficiencies and material weaknesses.

 
| Date:  March 25, 2003                                                    |
|-------------------------------------------------------------------------------|
|                                                                          |
|                                                                          |   |
| Darell E. Zink, Jr.                                                           |
| Executive  Vice President and Chief Financial Officer  of the General Partner |

 

----