**UNITEDSTATES**

**SECURITIESAND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

**FORM 10-K**

**(MarkOne)**
| **x**      | **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF  THE**                                                                                                                                                                                            |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** ** | **SECURITIES EXCHANGE ACT OF 1934**                                                                                                                                                                                                                  |
| ** ** | ** **                                                                                                                                                                                                                                           |
| ** ** | **For the fiscal year ended December 31, 2006**                                                                                                                                                                                                      |
|       |                                                                                                                                                                                                                                                 |
| **OR**     |
| ** ** |
| **o**      | **TRANSITION REPORT PURSUANT TO SECTION 13 OR  15(d) OF THE**                                                                                                                                                                                        |
| ** ** | **SECURITIES EXCHANGE ACT OF 1934**                                                                                                                                                                                                                  |
| ** ** | ** **                                                                                                                                                                                                                                           |
| ** ** | **For the transition period from                  to                   .** |

 

**CommissionFile Number: 0-20625**

**DUKEREALTY LIMITED PARTNERSHIP**

(Exact Name ofRegistrant as Specified in Its Charter)

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

 

Registrant’stelephone number, including area code: **(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**

Indicate by check mark whether the registrant isa well-known seasoned issuer, as defined in Rule 405 of the Securities Act.**                 **Yes  x   No  o

Indicate by check mark if theregistrant is not required to file reports pursuant to Section 13 or Section15(d) of the Act. Yes  o    No  x

Indicate by check mark whetherthe registrant: (1) has filed all reports required to be filed by Section 13 or15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (orfor such shorter period that the registrant was required to file such reports),and (2) has been subject to such filing requirements for the past 90 days.**           ** Yes  x   No  o

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

Indicateby check mark whether the registrant is a large accelerated filer, anaccelerated filer, or a non-accelerated filer. See definition of “acceleratedfiler and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Checkone):

Large accelerated filer     o     Accelerated filer     o     Non-accelerated filer     x

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

The aggregate market value of Limited Partner Units heldby non-affiliates of the Registrant is $464.5 million based on the lastreported sale price of the common shares of Duke Realty Corporation into whichLimited Partner Units are exchangeable on June 30, 2006.

The aggregate number of Limited Partnership Unitsoutstanding as of February 28, 2007 was 146,677,176.

**DOCUMENTS INCORPORATED BY REFERENCE**

Certainportions of the registrant’s General Partner’s Definitive Proxy Statement forits 2007 Annual Meeting of Shareholders (the “Proxy Statement”) to be filedpursuant to Rule 14a-6 of the Securities Exchange Act of 1934, as amended, areincorporated by reference into this Form 10-K. Other than those portions of theProxy Statement specifically incorporated by reference pursuant to Items 10through 14 of Part III hereof, no other portions of the Proxy Statement shallbe deemed so incorporated.

 

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**TABLE OF CONTENTS**

**Form 10-K**
| Item No.   | ** ** | ** **                                                                                                                    | ** ** | ** ** |
|------------|------------|-------------------------------------------------------------------------------------------------------------------------------|------------|------------|
|       |       |                                                                                                                          |       |       |
| PART I     |       |                                                                                                                          |       |       |
|       |       |                                                                                                                          |       |       |
| 1.         |       | Business                                                                                                                      |       |       |
| 1A.        |       | Risk Factors                                                                                                                  |       |       |
| 1B.        |       | Unresolved Staff  Comments                                                                                                    |       |       |
| 2.         |       | Properties                                                                                                                    |       |       |
| 3.         |       | Legal Proceedings                                                                                                             |       |       |
| 4.         |       | Submission of  Matters to a Vote of Security Holders                                                                          |       |       |
|       |       |                                                                                                                          |       |       |
| PART II    |       |                                                                                                                          |       |       |
|       |       |                                                                                                                          |       |       |
| 5.         |       | Market for the  Registrant’s Common Equity, Related Stockholder  Matters and Issuer Purchases of Equity  Securities |       |       |
| 6.         |       | Selected 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                                  |       |       |
| 9A.        |       | Controls and  Procedures.                                                                                                     |       |       |
| 9B.        |       | Other Information                                                                                                             |       |       |
|       |       |                                                                                                                          |       |       |
| PART III   |       |                                                                                                                          |       |       |
|       |       |                                                                                                                          |       |       |
| 10.        |       | Directors and  Executive Officers of the General Partner.                                                                     |       |       |
| 11.        |       | Executive  Compensation                                                                                                       |       |       |
| 12.        |       | Security  Ownership of Certain Beneficial Owners and   Management and Related Unitholder Matters                         |       |       |
| 13.        |       | Certain  Relationships and Related Transactions                                                                               |       |       |
| 14.        |       | Principal  Accountant Fees and Services                                                                                       |       |       |
|       |       |                                                                                                                          |       |       |
| PART IV    |       |                                                                                                                          |       |       |
|       |       |                                                                                                                          |       |       |
| 15.        |       | Exhibits and  Financial Statement Schedules.                                                                                  |       |       |
|       |       |                                                                                                                          |       |       |
| Signatures |       |                                                                                                                          |       |       |

 

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**Cautionary Statement Regarding Forward-Looking Statements**

Certain statements contained in or incorporated by reference into thisReport, including, without limitation, those related to our future operations,constitute “forward-looking statements” within the meaning of Section 27A ofthe Securities Act, and Section 21E of the Exchange Act. The words “believe”, “estimate”,“expect”, “anticipate”, “intend”, “plan”, “seek”, “may” and similar expressionsor statements regarding future periods are intended to identify forward-lookingstatements.

These forward-looking statements involve known and unknown risks,uncertainties and other important factors that could cause our actual results,performance or achievements, or industry results, to differ materially from anypredictions of future results, performance or achievements that we express orimply in this Report or in the information incorporated by reference into thisReport. Some of the risks, uncertainties and other important factors that mayaffect future results include, among others:

·                  Changesin general economic and business conditions, including performance of financialmarkets;

·                  TheGeneral Partner’s continued qualification as a REIT;

·                  Heightenedcompetition for tenants and potential decreases in property occupancy;

·                  Potentialincreases in real estate construction costs;

·                  Potentialchanges in the financial markets and interest rates;

·                  Ourcontinuing ability to favorably raise funds through the issuance of debt andequity in the capital markets;

·                  Ourability to successfully identify, acquire, develop and/or manage properties onterms that are favorable to us;

·                  Ourability to successfully dispose of properties on terms that are favorable tous;

·                  Inherentrisks in the real estate business including tenant defaults, potentialliability relating to environmental matters and liquidity of real estateinvestments; and

·                  Otherrisks and uncertainties described or incorporated by reference herein,including, without limitation, those risks and uncertainties discussed fromtime to time in the Partnership’s and the General Partner’s other reports andother public filings with the SEC.

This list of risks and uncertainties, however, is only a summary ofsome of the most important factors and is not intended to be exhaustive.Additional information regarding risk factors that may affect us is includedunder the caption “Risk Factors” in this Report, and is updated by us from timeto time in Quarterly Reports on Form 10-Q, Current Reports on Form 8-K andother filings that we make with the SEC.

Although we presently believe that the plans, expectations and resultsexpressed in or suggested by the forward-looking statements are reasonable, allforward-looking statements are inherently uncertain, and subject to change, asthey involve substantial risks and uncertainties beyond our control. Newfactors emerge from time to time, and it is not possible for us to predict thenature, or assess the potential impact, of each new factor on our business.Given these uncertainties, we caution you not to place undue reliance on theseforward-looking statements. We undertake no obligation to update or revise anyof our forward-looking statements for events or circumstances that arise afterthe statement is made, except as required by law.

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**PART I**

**Item 1.  Business**

**Background**

The Partnership was formed on October 4, 1993, when DukeRealty Corporation (the “General Partner”) contributed all of its propertiesand related assets and liabilities, along with the net proceeds of $309.2million from the issuance of an additional 14,000,833 shares 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 91.5% ofthe common Partnership interest as of December 31, 2006 (“General Partner Units”).The remaining 8.5% of the Partnership’s common interest is owned by limitedpartners (“Limited Partner Units” and, together with the General Partner Units,the “Common Units”). The Limited Partner Units are exchangeable for shares ofthe General Partner’s common stock on a one-for-one basis subject generally toa one-year holding period, or under certain circumstances, the General Partnermay repurchase the Limited Partner Units for cash. The General Partner alsoowns preferred partnership interests in the Partnership (“Preferred Units”). Asof December 31, 2006, our diversified portfolio of 721 rental properties(including 28 properties totaling approximately 4.5 million square feet underdevelopment) encompassed approximately 113.8 million rentable square feet andare leased by a diverse and stable base of more than 3,500 tenants whosebusinesses include manufacturing, retailing, wholesale trade, distribution andprofessional services. We also own or control more than 6,400 acres ofunencumbered land ready for development.

Through our Service Operations, we provide, on a feebasis, leasing, property and asset management, development, construction,build-to-suit and other tenant-related services. See Item 7, “Management’sDiscussion and Analysis of Financial Condition and Results of Operations” andItem 8, “Financial Statements and Supplementary Data” for financialinformation. Our Rental Operations are conducted through Duke Realty LimitedPartnership (“DRLP”). In addition, we conduct our Service Operations throughDuke Realty Services LLC, Duke Realty Services Limited Partnership and DukeConstruction Limited Partnership. In this Form 10-K Report, the terms “we,” “us”and “our” refer to Duke Realty Limited Partnership and subsidiaries (the “Partnership”) and those entities owned or controlled by the Partnership.

Our headquarters and executive offices are located inIndianapolis, Indiana. In addition, we have 16 regional offices located inAlexandria, Virginia; Atlanta, Georgia; Cincinnati, Ohio; Columbus, Ohio;Cleveland, Ohio; Chicago, Illinois; Dallas, Texas; Houston, Texas; Minneapolis,Minnesota; Nashville, Tennessee; Orlando, Florida; Phoenix, Arizona; Raleigh,North Carolina; St. Louis, Missouri; Tampa, Florida; and Weston, Florida. Wehad approximately 1,250 employees as of December 31, 2006.

**Business Strategy**

Our business objective is to increase Funds From Operations (“FFO”) by(i) maintaining and increasing property occupancy and rental rates through themanagement of our portfolio of existing properties; (ii) developing andacquiring new properties for rental operations in our existing markets; (iii)expanding geographically by acquiring and developing properties in new markets;(iv) using our construction expertise to act as a general contractor in ourexisting markets and other domestic markets on a fee basis; (v) developingproperties in our existing markets and other markets which we will sell throughour merchant building development program and (vi) providing a full line ofreal estate services to our tenants and to third parties. FFO is used byindustry analysts and investors as a supplemental operating performance measureof an equity REIT like our General Partner. FFO is calculated in accordancewith the definition that was adopted by the Board of Governors of the NationalAssociation of Real Estate Investment Trusts (“NAREIT”). NAREIT created FFO asa supplemental measure of REIT operating performance that excludes historicalcost depreciation, among other items, from net income determined in accordancewith United States generally

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acceptedaccounting principles (“GAAP”). FFO is a non-GAAP financial measure developedby NAREIT to compare the operating performance of REITs. The most comparableGAAP measure is net income (loss). FFO should not be considered as a substitutefor net income or any other measures derived in accordance with GAAP and maynot be comparable to other similarly titled measures of other companies.

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

Managementbelieves that the use of FFO, combined with the required primary GAAPpresentations, has improved the understanding of operating results of REITsamong the investing public and has made comparisons of REIT operating resultsmore meaningful. Management considers FFO to be a useful measure for reviewingcomparative operating and financial performance (although FFO should bereviewed in conjunction with net income which remains the primary measure ofperformance) because, by excluding gains or losses related to sales ofpreviously depreciated operating real estate assets and excluding real estateasset depreciation and amortization, FFO assists in comparing the operatingperformance of our real estate between periods or as compared to different companies.

As a fully integrated commercial real estate firm, weprovide in-house leasing, management, development and construction serviceswhich, coupled with our significant base of commercially zoned and unencumberedland in existing business parks, should give us a competitive advantage both asa real estate operator and in future development activities.

We believe that the management of real estateopportunities and risks can be done most effectively at regional or locallevels. As a result, we intend to continue our emphasis on increasing ourmarket share and effective rents in the primary markets where we ownproperties. We also expect to utilize approximately 6,400 acres of unencumberedland and our many business relationships with our 3,500 commercial tenants toexpand our build-to-suit business (development projects substantiallypre-leased to a single tenant) and to pursue other development and acquisitionopportunities in our primary markets. We believe that this regional focus willallow us to assess market supply and demand for real estate more effectively aswell as to capitalize on the strong relationships with our tenant base. Inaddition, we seek to further capitalize on strong customer relationships toprovide third-party construction and build-for-sale services outside ourprimary markets and to expand into high growth and seaport markets across theUnited States.

Our strategy is to seek to develop and acquire primarilyClass A commercial properties located in markets with high growth potential forlarge national and international companies and other quality regional and localfirms. Our industrial and suburban office development focuses on business parksand mixed-use developments suitable for multiple projects on a single sitewhere we can create and control the business environment. These business parksand mixed-use developments often include restaurants and other amenities, whichwe believe will create an atmosphere that is particularly efficient anddesirable. Our retail development focuses on lifestyle, community andneighborhood centers in our existing markets and is developed primarily forheld-for-sale opportunities. As a fully integrated real estate company, we areable to arrange for or provide to our industrial, office, medical and retailcustomers not only well located and well maintained facilities, but alsoadditional services such as build-to-suit construction, tenant finishconstruction, and expansion flexibility.

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All of our properties are located in areas that includecompetitive properties. Institutional investors, other REITs or local realestate operators generally own such properties; however, no single competitoror small group of competitors is dominant in our current markets. The supplyand demand of similar available rental properties may affect the rental rateswe will receive on our properties.

**Financing Strategy**

We seek to maintain a well-balanced, conservative andflexible capital structure by: (i) extending and sequencing the maturity datesof debt; (ii) borrowing primarily at fixed rates by targeting a variable ratecomponent of total debt less than 20%; (iii) pursuing current and futurelong-term debt financings and refinancing on an unsecured basis;  (iv) maintaining conservative debt serviceand fixed charge coverage ratios; and (v) issuing attractively priced perpetualpreferred equity for 5-10% of our total capital structure.

Management believes that these strategies have enabledand should continue to enable us to favorably access capital markets for ourlong-term requirements such as debt refinancing and financing development andacquisitions of additional rental properties. In addition, as discussed underItem 7, “Management’s Discussion and Analysis of Financial Condition andResults of Operations,” we have a $1.0 billion unsecured line of creditavailable for short-term fundings of development and acquisition of additionalrental properties. Further, we pursue favorable opportunities to dispose ofassets that no longer meet our long-term investment criteria and recycle theproceeds into new investments that we believe have excellent long-term growthprospects. Our 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, 2006was 37.4%. Our ratio of earnings to debt service and ratio of earnings to fixedcharges for the year ended December 31, 2006 were 1.54x and 1.59x,respectively. In computing the ratio of earnings to debt service, earnings havebeen calculated by adding interest expense (excluding amortization of debtissuance costs) to income from continuing operations, less preferreddistributions. Debt service consists of interest expense and recurring principalamortization (excluding maturities) and excludes amortization of debt issuancecosts. In computing the ratio of earnings to fixed charges, earnings have beencalculated by adding interest expense to income from continuing operations.Fixed charges consist of interest costs, whether expensed or capitalized, theinterest component of rental expense and amortization of debt issuance costs.

**Corporate Governance**

As a limited partnership that has one general partnerowning over 90% of the Partnership’s common interest, the governance of thePartnership is necessarily linked to the corporate governance of the GeneralPartner. The General Partner has and continues to be a leader in issuesimportant to investors such as disclosure and corporate governance initiatives.Summarized below are the highlights of the General Partner’s CorporateGovernance initiatives.
| **Board Composition** | ·                  The  General Partner’s Board is controlled by supermajority (91.7%) of Independent  Directors as of January 25, 2006 and thereafter

  |
|-----------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Board Committees**  | ·                  The  General Partner’s Board Committee members are all Independent Directors

                                                         |
| **Lead Director**     | ·                  The  Chairman of the Corporate Governance Committee serves as Lead Director of the  General Partner’s Independent Directors                 |

 

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| **Board Policies** | ·                  No Shareholder Rights  Plan (Poison Pill)

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

·                  Effective orientation  program for new Directors of the General Partner

·                  Independence of  Directors of the General Partner is reviewed annually

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

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

 

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

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

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

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

·                  Policy governing  retirement age for Directors of the General Partner

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

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

·                  Majority voting for  election of Directors of the General Partner

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

 

The General Partner’s Code of Conduct (which applies toall Directors of the General Partner and employees, including the ChiefExecutive Officer and senior financial officers) and the Corporate GovernanceGuidelines are available in the investor information/corporate governancesection of the General Partner’s website at www.dukerealty.com. A copy of thesedocuments may also be obtained without charge by writing to Duke RealtyCorporation, 600 East 96th Street, Suite 100, Indianapolis, Indiana 46240,Attention: Investor Relations.

**Other**

For additional information regarding our investments andoperations, see Item 7, “Management’s Discussion and Analysis of FinancialCondition and Results of Operations,” and Item 8, “Financial Statements andSupplementary Data.” For additional information about our business segments,see Item 8, “Financial Statements and Supplementary Data.”

**Available Information and ExchangeCertifications**

In addition tothis Annual Report, we file quarterly and special reports, proxy statements andother information with theSecurities and Exchange Commission (the “SEC”). All documents that are filedwith the SEC are available free of charge on the General Partner’s corporatewebsite at www.dukerealty.com. You may also read and copy any document filed atthe public reference facilities of the SEC at 450 Fifth Street, N.W.,Washington, D.C. 25049. Please call the SEC at (800) SEC-0330 for furtherinformation about the public reference facilities. These documents also may beaccessed through the

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SEC’s electronicdata gathering, analysis and retrieval system (“EDGAR”) via electronic means,including the SEC’s home page on the Internet (http://www.sec.gov). Inaddition, since some of the General Partner’s securities are listed on the NewYork Stock Exchange (“NYSE”), you may read SEC filings at the offices of theNew York Stock Exchange, 20 Broad Street, New York, New York 10005.

The NYSE requiresthat the Chief Executive Officer of each listed company certify annually to theNYSE that he or she is not aware of any violation by the company of NYSEcorporate governance listing standards as of the date of such certification.The General Partner submitted the certification of its Chairman and ChiefExecutive Officer, Dennis D. Oklak, with its 2006 Annual Written Affirmation tothe NYSE on May 8, 2006.

The GeneralPartner included the certifications of its Chief Executive Officer and itsChief Financial Officer required by Sections 302 and 906 of the Sarbanes-OxleyAct of 2002 and related rules, relating to the quality of the General Partner’spublic disclosure, in this report as Exhibits 31.1, 31.2, 32.1 and 32.2.

**Item 1A.  Risk Factors**

Our operationsinvolve various risks that could adversely affect our financial condition,results of operations, cash flows, ability to pay distribution on our commonunits and the market price of our common units. In addition to the otherinformation contained in this Annual Report, you should carefully consider thefollowing risk factors in evaluating an investment in our securities.

**Ifthe General Partner were to cease to qualify as a real estate investment trust,the General Partner and its shareholders would lose significant tax benefits.**

The GeneralPartner intends to continue to operate so as to qualify as a real estateinvestment trust (a “REIT”) under the Internal Revenue Code of 1986, as amended(the “Code”). Qualification as a REIT provides significant tax advantages tothe General Partner and its shareholders. However, in order for the GeneralPartner to continue to qualify as a REIT, it must satisfy numerous requirementsestablished under highly technical and complex Code provisions for which thereare only limited judicial and administrative interpretations. Satisfaction ofthese requirements also depends on various factual circumstances not entirelywithin the General Partner’s control. The fact that the General Partner holdsits assets through us further complicates the application of the REITrequirements. Even a technical or inadvertent mistake could jeopardize theGeneral Partner’s REIT status. Although the General Partner believes that itcan continue to operate so as to qualify as a REIT, we cannot offer anyassurance that it can continue to do so or that legislation, new regulations,administrative interpretations or court decisions will not significantly changethe qualification requirements or the federal income tax consequences ofqualification. If the General Partner were to fail to qualify as a REIT in anytaxable year, it would have the following effects:

·                 The GeneralPartner would not be allowed a deduction for distributions to its shareholdersand would be subject to federal income tax (includingany applicable alternative minimum tax) on its taxable income at regularcorporate rates;

·                 Unless the General Partner was entitled to relief under certain statutoryprovisions, it would be disqualified from treatment as a REIT for the fourtaxable years following the year during which it ceased to qualify as a REIT;

·                 The GeneralPartner’s net earnings available forinvestment or distribution to its shareholders would decrease due to theadditional tax liability for the year or years involved; and

·                 The GeneralPartner would no longer be required to makeany distributions to shareholders in order to qualify as a REIT.

As such, theGeneral Partner’s failure to qualify as a REIT would likely have a significantadverse effect on the value of our securities.

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

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

**U.S. federal income tax developments couldaffect the desirability of investing in the General Partner****forindividual taxpayers.**

In May 2003, federal legislation was enacted that reducedthe maximum tax rate for dividends payable to individual taxpayers generallyfrom 38.6% to 15% (from January 1, 2003 through 2008). However, dividendspayable by REITs are not eligible for this treatment, except in limitedcircumstances. Although this legislation did not have a direct adverse effecton the taxation of REITs or dividends paid by REITs, the more favorabletreatment for non-REIT dividends could cause individual investors to consider investmentsin non-REIT corporations as more attractive relative to an investment in theGeneral Partneras a REIT.

**U.S. federal income tax treatment of REITsand investments in REITs may change, which may result in the loss of theGeneral Partner’s****tax benefits of operating as a REIT.**

The present U.S. federal income tax treatment of a REIT andan investment in a REIT may be modified by legislative, judicial oradministrative action at any time. Revisions in U.S. federal income tax lawsand interpretations of these laws could adversely affect us and the GeneralPartner and the tax consequences of an investment in the General Partner’s common shares.

**Ournet earnings available for investment or distribution to unitholders coulddecrease as a result of factors outside of our control.**

Our business issubject to the risks incident to the ownership and operation of commercial realestate, many of which involve circumstances not within our control. Such risksinclude the following:

·                 Changes in the general economic climate;

·                 Increases in interest rates;

·                 Local conditions such as oversupply of propertyor a reduction in demand;

·                 Competition for tenants;

·                 Changes in market rental rates;

·                 Oversupply or reduced demand for space in theareas where our properties are located;

·                 Delay or inability to collect rent from tenantswho are bankrupt, insolvent or otherwise unwilling or unable to pay;

·                 Difficulty in leasing or re-leasing space quicklyor on favorable terms;

·                 Costs associated with periodically renovating,repairing and reletting rental space;

·                 Our ability to provide adequate maintenance andinsurance on our properties;

·                 Our ability to control variable operating costs;

·                 Changes in government regulations;

·                 Changes in interest rate levels;

·                 The availability of financing on favorable terms;and

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

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

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**Manyreal estate costs are fixed, even if income from properties decreases.**

Our financialresults depend on leasing space in our real estate to tenants on termsfavorable to us. Our income and funds available for distribution to ourunitholders will decrease if a significant number of our tenants cannot paytheir rent or we are unable to lease properties on favorable terms. Inaddition, if a tenant does not pay its rent, we may not be able to enforce ourrights as landlord without delays and we may incur substantial legal costs.Costs associated with real estate investment, such as real estate taxes andmaintenance costs, generally are not reduced when circumstances cause areduction in income from the investment.

**Ourreal estate development activities are subject to risks particular todevelopment.**

We intend tocontinue to pursue development activities as opportunities arise. Thesedevelopment activities generally require various government and otherapprovals. We may not receive the necessary approvals. We are subject to therisks associated with development activities. These risks include:

·                 Unsuccessful development opportunities couldresult in direct expenses to us;

·                 Construction costs of a project may exceedoriginal estimates, possibly making the project less profitable than originallyestimated, or possibly unprofitable;

·                 Time required to complete the construction of aproject or to lease up the completed project may be greater than originallyanticipated, thereby adversely affecting our cash flow and liquidity;

·                 Occupancy rates and rents of a completed projectmay not be sufficient to make the project profitable; and

·                 Favorable sources to fund our developmentactivities may not be available.

**We are exposed to risks associated withentering new markets.**

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

**Wemay be unsuccessful in operating completed real estate projects.**

We face the riskthat the real estate projects we develop or acquire will not perform inaccordance with our expectations. This risk exists because of factors such asthe following:

·                 Prices paid for acquired facilities are basedupon a series of market judgments; and

·                 Costs of any improvements required to bring anacquired facility up to standards to establish the market position intended forthat facility might exceed budgeted costs.

Further, we cangive no assurance that acquisition targets meeting our guidelines for qualityand yield will be available when we seek them.

**Weare exposed to the risks of defaults by tenants.**

Any of our tenantsmay experience a downturn in their businesses that may weaken their financialcondition. In the event of default or the insolvency of a significant number ofour tenants, we may experience a substantial loss of rental revenue and/ordelays in collecting rent and incur substantial costs in enforcing our rightsas landlord. If a tenant files for bankruptcy protection, a court could allowthe tenant to reject and terminate its lease with us. Our income anddistributable cash flow would be adversely affected if a significant number ofour tenants became unable to meet their obligations to us, became insolvent ordeclared bankruptcy.

8

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**Wemay be unable to renew leases or relet space.**

When our tenantsdecide not to renew their leases upon their expiration, we may not be able torelet the space. Even if our tenants do renew or we are able to relet thespace, the terms of renewal or reletting (including the cost of renovations, ifnecessary) may be less favorable than current lease terms. If we are unable topromptly renew the leases or relet the space, or if the rental rates upon suchrenewal or reletting are significantly lower than current rates, then ourincome and distributable cash flow would be adversely affected, especially ifwe were unable to lease a significant amount of the space vacated by tenants inour properties.

**Ourinsurance coverage on our properties may be inadequate.**

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

**Acquiredproperties may expose us to unknown liability.**

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

·                  liabilities forclean-up of undisclosed environmental contamination;

·                  claims bytenants, vendors or other persons against the former owners of the properties;

·                  liabilitiesincurred in the ordinary course of business; and

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

**Wecould be exposed to significant environmental liabilities as a result ofconditions of which we currently are not aware.**

As an owner andoperator of real property, we may be liable under various federal, state andlocal laws for the costs of removal or remediation of certain hazardoussubstances released on or in our property. Such laws often impose liabilitywithout regard to whether the owner or operator knew of, or was responsiblefor, the release of the hazardous substances. In addition, we could havegreater difficulty in selling real estate on which hazardous substances werepresent or in obtaining borrowings using such real estate as collateral. It isour general policy to have Phase I environmental audits performed for all ofour properties and land by qualified environmental consultants. These Phase Ienvironmental audits have not revealed any environmental liability that wouldhave a material adverse effect on our business. However, a Phase Ienvironmental audit does not involve invasive procedures such as soil samplingor ground water analysis,

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and we cannot besure that the Phase I environmental audits did not fail to reveal a significantenvironmental liability or that a prior owner did not create a materialenvironmental condition on our properties or land which has not yet beendiscovered. We could also incur environmental liability as a result of futureuses or conditions of such real estate or changes in applicable environmentallaws.

**Certainof the General Partner’s officers hold units in the Partnership and may nothave the same interests as the General Partner’s****shareholders with regard to certain tax matters.**

Certain of theGeneral Partner’s officers own Limited Partnership Units in the Partnership.Owners of limited partnership units may suffer adverse tax consequences uponthe sale of certain of our properties, the refinancing of debt related to thoseproperties or in the event we are the subject of a tender offer or merger. Assuch, owners of Limited Partnership Units, including certain of the GeneralPartner’s officers, may have different objectives regarding the appropriatenessof the pricing and timing of these transactions. Though the General Partner isthe sole general partner of the Partnership and has the exclusive authority tosell all of our wholly-owned properties or to refinance such properties,officers who hold Limited Partnership Units may influence us not to sell orrefinance certain properties even if such sale may be financially advantageousto the General Partner’s shareholders. Adverse tax consequences may alsoinfluence the decisions of these officers in the event we are the subject of atender offer or merger.

**Wedo not have exclusive control over our joint venture investments.**

We have interestsin joint ventures and partnerships and may in the future conduct businessthrough joint ventures and partnerships. These investments involve risks thatare not present in our wholly-owned projects. For example, co-investors orpartners may become bankrupt or have business interests or goals inconsistentwith ours. Further, our co-investors or partners may be in a position to takeaction contrary to our instructions and our interests, including action thatmay jeopardize the General Partner’s qualification as a REIT.

**Ouruse of debt financing could have a material adverse effect on our financial condition.**

We are subject tothe risks normally associated with debt financing, including the risk that ourcash flow will be insufficient to meet required principal and interest paymentsand the risk that we will be unable to refinance our existing indebtedness, orthat the terms of such refinancing will not be as favorable as the terms of ourexisting indebtedness. If our debt cannot be paid, refinanced or extended, wemay not be able to make distributions to unitholders at expected levels or atall. Further, if prevailing interest rates or other factors at the time of arefinancing result in higher interest rates or other restrictive financialcovenants upon the refinancing, then such refinancing would adversely affectour cash flow and funds available for operation, development and distribution.We are also subject to financial covenants under our existing debt instruments.Should we fail to comply with the covenants in our existing debt instruments,then we would not only be in breach under the applicable debt instruments butwe would also likely be unable to borrow any further amounts under theseinstruments, which could adversely affect our ability to fund operations. Wealso have incurred and may incur in the future indebtedness that bears interestat variable rates. Thus, as market interest rates increase, so will our debtexpense, affecting our cash flow and our ability to make distributions tounitholders.

**Weare subject to various financial covenants under existing credit agreements.**

The terms of our variouscredit agreements and other indebtedness require that we comply with a numberof customary financial and other covenants, such as maintaining debt servicecoverage and leverage ratios and maintaining insurance coverage. Thesecovenants may limit our flexibility in our operations, and breaches of thesecovenants could result in defaults under the instruments governing theapplicable indebtedness even if we have satisfied our payment obligations. Ifwe are unable to refinance our indebtedness at maturity or meet our paymentobligations, the amount of our distributable cash flow would be adverselyaffected.

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**Weare subject to certain provisions that could discourage change-of-controltransactions, which may reduce the likelihood of the General Partner’s shareholdersreceiving a control premium for their shares.**

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

*UnissuedPreferred Stock.*  the General Partner’s charterpermits its board of directors to classify unissued preferred stock by settingthe rights and preferences of the shares at the time of issuance. This powerenables the General Partner’s board to adopt a shareholder rights plan, alsoknown as a poison pill. Although the General Partner has repealed itspreviously existing poison pill and its current board of directors has adopteda policy not to issue preferred stock as an anti-takeover measure, the GeneralPartner’s board can change this policy at any time. The adoption of a poisonpill would discourage a potential bidder from acquiring a significant positionat the General Partner without the approval of its board.

*Business-CombinationProvisions of Indiana Law.*  We have not opted outof the business-combination provisions of the Indiana Business Corporation Law.As a result, potential bidders may have to negotiate with the General Partner’sboard of directors before acquiring 10% of its stock. Without securing boardapproval of the proposed business combination before crossing the 10% ownershipthreshold, a bidder would not be permitted to complete a business combinationfor five years after becoming a 10% shareholder. Even after the five-yearperiod, a business combination with the significant shareholder would require a“fair price” as defined in the Indiana Business Corporation Law or the approvalof a majority of the disinterested shareholders.

*Control-Share-AcquisitionProvisions of Indiana Law.*  We have not opted out of theprovisions of the Indiana Business Corporation Law regarding acquisitions ofcontrol shares. Therefore, those who acquire a significant block (at least 20%)of the General Partner’s shares may only vote a portion of their shares unlessour other shareholders vote to accord full voting rights to the acquiringperson. Moreover, if the other shareholders vote to give full voting rightswith respect to the control shares and the acquiring person has acquired amajority of the General Partner’s outstanding shares, the other shareholderswould be entitled to special dissenters’ rights.

*SupermajorityVoting Provisions.*  The General Partner’s charterprohibits business combinations or significant disposition transactions with aholder of 10% of its shares unless:

·                 The holders of 80% of the General Partner’s outstanding shares of capital stock approve thetransaction;

·                 The transaction has been approved bythree-fourths of those directors who served on the General Partner’s board before the shareholder became a 10% owner;or

·                 The significant shareholder complies withthe “fair price” provisions of the General Partner’s charter.

Among thetransactions with large shareholders requiring the supermajority shareholderapproval are dispositions of assets with a value of $1,000,000 and businesscombinations.

*PartnershipProvisions.* The limited partnership agreement of thePartnership contains provisions that could discourage change-of-controltransactions, including a requirement that holders of at least 90% of theoutstanding partnership units held by us and other unit holders approve:

·                 Any voluntary sale, exchange, merger, consolidationor other disposition of all or substantially all of the assets of thePartnership in one or more transactions other than a disposition occurring upona financing or refinancing of the Partnership;

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·                 The GeneralPartner’s merger, consolidation or other businesscombination with another entity unless after the transaction substantially allof the assets of the surviving entity are contributed to the Partnership inexchange for units;

·                 The GeneralPartner’s transfer of its interests in thePartnership other than to one of our wholly owned subsidiaries; and

·                 Anyreclassification or recapitalizationor change of outstanding shares of the General Partner’s common stock otherthan certain changes in par value, stock splits, stock dividends orcombinations.

**We are dependent on key personnel.**

The GeneralPartner’s executive officers and other senior officers have a significant rolein the success of the Partnership. Our ability to retain our management groupor to attract suitable replacements should any members of the management groupleave the General Partner is dependent on the competitive nature of theemployment market. The loss of services from key members of the managementgroup or a limitation in their availability could adversely impact ourfinancial condition and cash flow. Further, such a loss could be negativelyperceived in the capital markets.

**Item 1B.  Unresolved StaffComments**

The Partnership has no unresolved comments with the SEC staffregarding its periodic or current reports under the Exchange Act.

**Item 2.  Properties**

**Product Review**

As of December 31, 2006, we own an interest in adiversified portfolio of 721 commercial properties encompassing approximately113.8 million net rentable square feet (including 28 properties comprising 4.5million square feet under development) and more than 6,400 acres of land forfuture development.

**Industrial Properties:** We own interests in 421 industrial properties encompassingapproximately 79.2 million square feet (70% of total square feet) morespecifically described as follows:

·                  **Bulk Warehouses –**Industrial warehouse/distribution buildings withclear ceiling heights of 20 feet or more. We own 344 buildings totaling morethan 74.0 million square feet of such properties.

·                  **Service Center/Other Properties –** Also known as flex buildings or lightindustrial, this product type has 12-18 foot clear ceiling heights and acombination of drive-up and dock-height loading access. We own 77 buildingstotaling approximately 5.2 million square feet of such properties.

**Office Properties:**  We owninterests in 300 office buildings totaling approximately 34.6 million squarefeet (30% of total square feet). These properties include primarily suburbanoffice properties.

**Land:**  We own or control approximately 6,400 acresof land located primarily in existing business parks. The land is ready forimmediate use and is unencumbered. More than 93 million square feet ofadditional space can be developed on these sites and substantially all of theland is zoned for either office, industrial or retail development.

**ServiceOperations:**  We provide property and assetmanagement, development, leasing and construction services to third partyowners in addition to our own properties.

**Property Descriptions**

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

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**DukeRealty Limited Partnership**

**Geographic Highlights**

**In Service Properties as ofDecember 31, 2006**
|             |   | Square Feet (1) |   |                   |   |             | Percent of |    |
|------------------|--------|---------------------------|--------|------------------------|--------|------------------|-----------------|---------|
|             |   |                      |   |                   |   |             |            |    |   |   |   |   |   |   | Annual Net |   | Annual Net |   |
|             |   | Industrial                |   |                   |   |             |            |    |   | Percent of |   |   | Effective |   | Effective |   |
|             |   | Service Center       |   | Bulk Distribution |   | Suburban  Office |            | Other   |   | Overall |   | Overall |   |   | Rent (2) |   | Rent |   |
| Primary  Market  |   |                      |   |                   |   |             |            |    |   |   |   |   |   |   |   |   |   |   |
|             |   |                      |   |                   |   |             |            |    |   |   |   |   |   |   |   |   |   |   |
| Indianapolis     |   | 1,400,105                 |   | 16,976,763             |   | 3,178,369        |            | -       |   | 21,555,237 |   | 19.73% |   | $ | 81,476,319 |   | 13.11 | % |
| Cincinnati       |   | 239,200                   |   | 9,600,072              |   | 4,701,576        |            | 566,316 |   | 15,107,164 |   | 13.82% |   |   | 77,335,808 |   | 12.45 | % |
| Atlanta          |   | -                         |   | 8,314,475              |   | 4,000,580        |            | 25,881  |   | 12,340,936 |   | 11.29% |   |   | 64,206,858 |   | 10.33 | % |
| St.  Louis       |   | 1,223,194                 |   | 2,907,640              |   | 3,467,455        |            | -       |   | 7,598,289 |   | 6.95% |   |   | 61,552,354 |   | 9.91 | % |
| Chicago          |   | 164,685                   |   | 5,386,585              |   | 2,856,179        |            | 18,370  |   | 8,425,819 |   | 7.71% |   |   | 58,969,251 |   | 9.49 | % |
| Columbus         |   | -                         |   | 3,561,480              |   | 3,390,451        |            | -       |   | 6,951,931 |   | 6.36% |   |   | 49,488,027 |   | 7.96 | % |
| Raleigh          |   | 575,008                   |   | 1,531,214              |   | 2,293,857        |            | -       |   | 4,400,079 |   | 4.03% |   |   | 39,214,220 |   | 6.31 | % |
| Washington  DC   |   | -                         |   | 654,918                |   | 2,265,040        |            | -       |   | 2,919,958 |   | 2.67% |   |   | 30,789,972 |   | 4.95 | % |
| Minneapolis      |   | 259,185                   |   | 3,518,328              |   | 805,889          |            | -       |   | 4,583,402 |   | 4.19% |   |   | 27,678,796 |   | 4.45 | % |
| Central  Florida |   | -                         |   | 2,626,631              |   | 1,268,476        |            | -       |   | 3,895,107 |   | 3.56% |   |   | 26,827,186 |   | 4.32 | % |
| Cleveland        |   | -                         |   | -                      |   | 2,218,660        |            | -       |   | 2,218,660 |   | 2.03% |   |   | 25,907,783 |   | 4.17 | % |
| Nashville        |   | 230,523                   |   | 2,959,887              |   | 1,004,263        |            | -       |   | 4,194,673 |   | 3.84% |   |   | 25,620,898 |   | 4.12 | % |
| Dallas           |   | 470,754                   |   | 8,128,884              |   | 152,000          |            | -       |   | 8,751,638 |   | 8.01% |   |   | 22,450,067 |   | 3.61 | % |
| Savannah         |   | -                         |   | 5,140,388              |   |  -          |            | -       |   | 5,140,388 |   | 4.70% |   |   | 16,998,379 |   | 2.74 | % |
| South  Florida   |   | -                         |   | -                      |   | 773,923          |            | -       |   | 773,923 |   | 0.71% |   |   | 12,336,028 |   | 1.99 | % |
| Others  (3)      |   | -                         |   | 436,139                |   |  -          |            | -       |   | 436,139 |   | 0.40% |   |   | 557,916 |   | 0.09 | % |
|             |   |                      |   |                   |   |             |            |    |   |   |   |   |   |   |   |   |   |   |
| Total            |   | 4,562,654                 |   | 71,743,404             |   | 32,376,718       |            | 610,567 |   | 109,293,343 |   | 100.00% |   | $ | 621,409,862 |   | 100.00 | % |
|             |   | 4.17%                     |   | 65.64%                 |   | 29.62%           |            | 0.56%   |   | 100.00% |   |   |   |   |   |   |   |   |
|                  |        |                           |        |                        |        |                  |                 |         |  |  |  |  |  |  |  |  |  |  |  |

 
|                 |   | Occupancy %    |   |
|-----------------|--------|---------------------|--------|
|            |   | Industrial          |   | Suburban |   |   |   |   |   |
|            |   | Service Center |   | Bulk Distribution |   | Office |   | Other |   | Overall |   |
| Primary Market  |   |                |   |   |   |   |   |   |   |   |   |
|            |   |                |   |   |   |   |   |   |   |   |   |
| Indianapolis    |   | 89.72%              |   | 94.48% |   | 92.79% |   | - |   | 93.92% |   |
| Cincinnati      |   | 89.02%              |   | 93.07% |   | 91.49% |   | 99.29% |   | 92.75% |   |
| Atlanta         |   | -                   |   | 82.55% |   | 86.56% |   | 100.00% |   | 83.88% |   |
| St. Louis       |   | 94.30%              |   | 91.45% |   | 93.15% |   | - |   | 92.69% |   |
| Chicago         |   | 100.00%             |   | 96.36% |   | 95.43% |   | 91.04% |   | 96.10% |   |
| Columbus        |   | -                   |   | 100.00% |   | 94.96% |   | - |   | 97.54% |   |
| Raleigh         |   | 85.93%              |   | 100.00% |   | 96.60% |   | - |   | 96.39% |   |
| Washington DC   |   | -                   |   | 100.00% |   | 95.53% |   | - |   | 96.53% |   |
| Minneapolis     |   | 82.63%              |   | 96.26% |   | 89.30% |   | - |   | 94.27% |   |
| Central Florida |   | -                   |   | 96.22% |   | 94.54% |   | - |   | 95.67% |   |
| Cleveland       |   | -                   |   | - |   | 85.11% |   | - |   | 85.11% |   |
| Nashville       |   | 96.48%              |   | 67.60% |   | 85.93% |   | - |   | 73.57% |   |
| Dallas          |   | 98.34%              |   | 97.73% |   | 100.00% |   | - |   | 97.80% |   |
| Savannah        |   | -                   |   | 100.00% |   | - |   | - |   | 100.00% |   |
| South Florida   |   | -                   |   | - |   | 96.41% |   | - |   | 96.41% |   |
| Others (3)      |   | -                   |   | 100.00% |   | - |   | - |   | 100.00% |   |
|            |   |                |   |   |   |   |   |   |   |   |   |
| Total           |   | 91.63%              |   | 93.21% |   | 92.15% |   | 99.08% |   | 92.86% |   |

 

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(1)          Includesall wholly owned and joint venture projects shown at 100% as of report date.

(2)          Representsthe average annual rental property revenue due from tenants in occupancy as ofthe date of this report, excluding additional rent due as operating expensereimbursements, landlord allowances for operating expenses and percentagerents.  Joint Venture properties areshown at the Partnership's ownership percentage.

(3)          Representsproperties not located in the Partnership's primary markets.  These properties are located in similarmidwest or southeast markets.

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

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**Item 3.  Legal Proceedings**

We are not subject to anymaterial pending legal proceedings, other than ordinary routine litigationarising in the ordinary course of business. Our management expects that theseordinary routine legal proceedings will be covered by insurance and does notexpect these legal proceedings to have a material adverse effect on ourfinancial condition, results of operations, or liquidity.

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

No matters were submitted to a vote of security holdersof the General Partner during the quarter ended December 31, 2006.

**PART II**

**Item 5.  Market for theRegistrant’s Common Equity, Related Stockholder Matters and Issuer Purchases ofEquity Securities**

There is noestablished trading market for the Common Units. The following table sets forththe cash distributions paid during each quarter. As of February 20, 2007, therewere 172 record holders of Common Units.
|                    | ** ** | **2006 Distributions** | ** ** | **2005 Distributions** | ** ** |
|--------------------|------------|------------------------|------------|------------------------|------------|
| **Quarter  Ended** | ** ** | **Per Common Unit**    | ** ** | **Per Common Unit**    | ** ** |
|               |       |                   |       |                   |       |
| December 31        |       | $.475                  |       | $.470                  |       |
| September 30       |       | $.475                  |       | $.470                  |       |
| June 30            |       | $.470                  |       | $.465                  |       |
| March 31           |       | $.470                  |       | $.465                  |       |

 

On January 31, 2007, the General Partner declared a quarterlycash dividend of $0.475 per Common Unit, payable on February 28, 2007, toCommon Unitholders of record on February 14, 2007.

SecuritiesAuthorized for Issuance Under Equity Compensation Plans

The information requiredby this Item concerning securities authorized for issuance under the GeneralPartner’s equity compensation plans is set forth or incorporated herein byreference to Part III, Item 12 of this Annual Report.

Sales ofUnregistered Securities

The General Partner didnot sell any of its securities during the three months ended December 31, 2006that were not registered under the Securities Act.

Issuer Purchasesof Equity Securities

From time to time, the General Partner may repurchase itscommon shares under a $750 million share repurchase program that initially wasapproved by the General Partner’sboard of directors and publicly announced in October 2001 (the “RepurchaseProgram”). In July 2005, the GeneralPartner’s board of directors authorized management to purchase up to$750 million of common shares pursuant to this plan. Under the RepurchaseProgram, the General Partner also executes share repurchases on an ongoingbasis associated with certain employee elections under its compensation andbenefit programs.

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The following table showsthe share repurchase activity for each of the three months in the quarter endedDecember 31, 2006:
|            | ** ** |                      | ** ** | ** **          | ** ** | ** **               | ** ** | **Maximum  Number**     |
|------------|------------|----------------------|------------|---------------------|------------|--------------------------|------------|-------------------------|
| ** ** | ** ** | ** **           | ** ** | ** **          | ** ** | ** **               | ** ** | **(or  Approximate**    |
| ** ** | ** ** | ** **           | ** ** | ** **          | ** ** | **Total  Number of**     | ** ** | **Dollar  Value) of**   |
| ** ** | ** ** | ** **           | ** ** | ** **          | ** ** | **Shares  Purchased as** | ** ** | **Shares  that May**    |
| ** ** | ** ** | **Total  Number of** | ** ** | ** **          | ** ** | **Part of  Publicly**    | ** ** | **Yet be  Purchased**   |
| ** ** | ** ** | **Shares**           | ** ** | **Average  Price**  | ** ** | **Announced  Plans or**  | ** ** | **Under  the Plans or** |
| **Month**  | ** ** | **Purchased  (1)**   | ** ** | **Paid per  Share** | ** ** | **Programs**             | ** ** | **Programs  (2)**       |
|       |       |                 |       |                |       |                     |       |                    |
| October    |       | 67,653               |       |                | $38.12     |                     | 67,653     |                    |   |   |
| November   |       | 2,274,639            |       |                | $40.82     |                     | 2,274,639  |                    |   |   |
| December   |       | 14,827               |       |                | $42.78     |                     | 14,827     |                    |   |   |
|       |       |                 |       |                |       |                     |       |                    |   |   |
| Total      |       | 2,357,119            |       |                | $40.75     |                     | 2,357,119  |                    |   |   |

 

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(1)Includes 16,499 common shares of theGeneral Partner repurchased under its Employee Stock Purchase Plan,148,935 shares of the General Partner swapped to pay the exercise price ofstock options and 2,191,684 common shares of theGeneral Partner repurchased under its Repurchase Program.

(2) The number ofcommon shares of the General Partnerthat may yet be repurchased in the open market to fund shares purchased underits Employee Stock Purchase Plan, as amended, was 142,706 on December 31, 2006.The approximate dollar value of the General Partner’s common shares that mayyet be purchased under the Repurchase Program was $361.0 million as of December31, 2006.

**Item 6.  Selected Financial Data**

The following setsforth selected financial and operating information on a historical basis foreach of the years in the five-year period ended December 31, 2006. The followinginformation should be read in conjunction with Item 7, “Management’s Discussionand Analysis of Financial Condition and Results of Operations” and Item 8, “FinancialStatements and Supplementary Data” included in this Form 10-K (in thousands,except per unit amounts):
|                                                                          |       | **2006**      |   | 2005      |   | 2004      |   | 2003      |   | 2002      |
|--------------------------------------------------------------------------|------------|---------------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|
| **Results  of Operations:**                                              |       |          |   |      |   |      |   |      |   |      |
| Revenues:                                                                |       |          |   |      |   |      |   |      |   |      |
| Rental Operations from Continuing Operations                             | **$**      | **818,670**   | $      | 668,607   | $      | 603,817   | $      | 552,788   | $      | 523,235   |
| Service Operations from Continuing Operations                            | ** ** | **90,125**    |   | 81,941    |   | 70,803    |   | 58,496    |   | 67,860    |
| **Total Revenues from Continuing Operations**                            | **$**      | **908,795**   | $      | 750,548   | $      | 674,620   | $      | 611,284   | $      | 591,095   |
| ** **                                                               | ** ** | ** **    |   |      |   |      |   |      |   |      |
| **Income  from Continuing Operations**                                   | **$**      | **163,343**   | $      | 144,422   | $      | 147,016   | $      | 158,028   | $      | 189,706   |
| ** **                                                               | ** ** | ** **    |   |      |   |      |   |      |   |      |
| **Net Income Available for common unitholders**                          | **$**      | **159,799**   | $      | 339,239   | $      | 167,212   | $      | 179,587   | $      | 171,601   |
| ** **                                                               | ** ** | ** **    |   |      |   |      |   |      |   |      |
| **Per Unit  Data**:                                                      | ** ** | ** **    |   |      |   |      |   |      |   |      |
| Basic income per common unit:                                            | ** ** | ** **    |   |      |   |      |   |      |   |      |
| Continuing operations                                                    | **$**      | **0.70**      | $      | 0.63      | $      | 0.71      | $      | 0.80      | $      | 0.87      |
| Discontinued operations                                                  | ** ** | **0.38**      |   | 1.56      |   | 0.37      |   | 0.40      |   | 0.28      |
| Diluted income per common unit:                                          |       |          |   |      |   |      |   |      |   |      |
| Continuing operations                                                    | ** ** | **0.70**      |   | 0.63      |   | 0.70      |   | 0.79      |   | 0.87      |
| Discontinued operations                                                  | ** ** | **0.37**      |   | 1.55      |   | 0.37      |   | 0.40      |   | 0.27      |
| Distributions paid per common unit                                       | ** ** | **1.89**      |   | 1.87      |   | 1.85      |   | 1.83      |   | 1.81      |
| Distributions paid per common unit – special                        |       | -             |   | 1.05      |   | -         |   | -         |   | -         |
| Weighted average common units outstanding                                | ** ** | **148,069**   |   | 155,059   |   | 155,281   |   | 150,280   |   | 149,423   |
| Weighted average common units and potential dilutive  common equivalents |       | **149,393**   |   | 155,877   |   | 157,062   |   | 151,141   |   | 150,839   |
| **Balance  Sheet Data (at December 31):**                                |       |          |   |      |   |      |   |      |   |      |
| Total Assets                                                             | **$**      | **7,247,296** | $      | 5,646,687 | $      | 5,894,644 | $      | 5,558,711 | $      | 5,347,055 |
| Total Debt (1)                                                           | ** ** | **4,109,154** |   | 2,600,651 |   | 2,518,704 |   | 2,335,536 |   | 2,106,285 |
| Total Preferred Equity                                                   | ** ** | **825,774**   |   | 616,780   |   | 616,780   |   | 511,785   |   | 415,466   |
| Total Partners’ Equity                                              | ** ** | **2,659,243** |   | 2,635,244 |   | 3,021,128 |   | 2,878,320 |   | 2,919,843 |
| Total Common Units Outstanding                                           | ** ** | **146,328**   |   | 148,095   |   | 156,490   |   | 150,705   |   | 149,907   |
| ** **                                                               |       |          |   |      |   |      |   |      |   |      |
| **Other  Data:**                                                         |       |          |   |      |   |      |   |      |   |      |
| Funds From Operations (2)                                                | **$**      | **371,570**   | $      | 374,310   | $      | 388,185   | $      | 372,519   | $      | 358,871   |

 

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(1)          Includes $147,309 ofsecured debt classified as liabilities of properties held for sale at December31, 2006.

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(2) FFO is used byindustry analysts and investors as a supplemental operating performance measureof an equity REIT like our General Partner. FFO is calculated in accordancewith the definition that was adopted by the Board of Governors of NAREIT.NAREIT created FFO as a supplemental measure of REIT operating performance thatexcludes historical cost depreciation, among other items, from net incomedetermined in accordance with GAAP. FFO is a non-GAAP financial measuredeveloped by NAREIT to compare the operating performance of REITs. The mostcomparable GAAP measure is net income (loss). FFO should not be considered as asubstitute for net income or any other measures derived in accordance with GAAPand may not be comparable to other similarly titled measures of othercompanies.

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

Management believes that the useof FFO, combined with the required primary GAAP presentations, has improved theunderstanding of operating results of REITs among the investing public and hasmade comparisons of REIT operating results more meaningful. Managementconsiders FFO to be a useful measure for reviewing comparative operating andfinancial performance (although FFO should be reviewed in conjunction with netincome which remains the primary measure of performance) because, by excludinggains or losses related to sales of previously depreciated operating realestate assets and excluding real estate asset depreciation and amortization,FFO assists in comparing the operating performance of our real estate betweenperiods or as compared to different companies.

See reconciliation of FFO to GAAP net income underYear in Review section of Management’s Discussion and Analysis of FinancialCondition and Results of Operations.

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

**Business Overview**

As of December 31, 2006, we:

·                  Owned or jointly controlled 721 industrial,office and retail properties (including properties under development),consisting of approximately 113.8 million square feet; and

·                  Owned or jointly controlled more than 6,400 acresof unencumbered land with an estimated future development potential of morethan 93 million square feet of industrial, office and retail properties.

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

·                                                      Property leasing;

·                                                      Property management;

·                                                      Construction;

·                                                      Development; and

·                                                      Other tenant-related services.

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**Management Philosophy and Priorities**

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

·                  Our business objective is to increase FFO by (i)maintaining and increasing property occupancy and rental rates through themanagement of our portfolio of existing properties; (ii) developing andacquiring new properties for rental operations in our existing markets; (iii)expanding geographically by acquiring and developing properties in new markets;(iv) using our construction expertise to act as a general contractor in our existingmarkets and other domestic markets on a fee basis; (v) developing andrepositioning properties in our existing markets and other markets which wewill sell through our Service Operations property sale program; and (vi)providing a full line of real estate services to our tenants and to thirdparties.

See the Year in Review section below for further explanation anddefinition of FFO.

·                  Ourfinancing strategy is to actively manage the components of our capitalstructure including common and preferred equity and debt to maintain aconservatively leveraged balance sheet and investment grade ratings from ourcredit rating agencies. This strategy provides us with the financialflexibility to fund both development and acquisition opportunities. We seek to maintain a well-balanced, conservativeand flexible capital structure by: (i) extending and sequencing the maturitydates of debt; (ii) borrowing primarily at fixed rates by targeting a variablerate component of total debt less than 20%; (iii) pursuing current and futurelong-term debt financings and refinancing generally on an unsecured basis;  (iv) maintaining conservative debt serviceand fixed charge coverage ratios; and (v) issuing attractively priced perpetualpreferred equity for 5-10% of our total capital structure.

**Year in Review**

**During 2006, we successfullyexecuted on our strategy that we began in earnest in 2005 to improve ourportfolio of held for investment buildings through our capital recyclingprogram, increasing our development pipeline to over $1.2 billion, andinitiating geographic expansion that we anticipate will provide future earningsgrowth. As a result of these accomplishments, we achieved steady operatingresults while maintaining a strong balance sheet.**

Net income available for common unitholders for the year ended December31, 2006, was $159.8 million, or $1.07 per unit (diluted), compared to netincome of $339.2 million, or $2.18 per unit (diluted) for the year ended 2005.The decrease is primarily attributable to the $201.5 million gain fromthe sale of a portfolio of 212 real estate properties (the “IndustrialPortfolio Sale”) that occurred in 2005 which was partially offset by incomegenerated by current year building sales, acquired properties and organicgrowth. Through increased leasing activity,we achieved a growth in rental revenues from continuing operations in 2006 over2005 as our in-service portfolio occupancy increased from 92.7% at the end of2005 to 92.9% at the end of 2006.

As an important performance metric for us as a real estate company, FFOavailable to common unitholders totaled $371.6 million for the year endedDecember 31, 2006, compared to $374.3 million for the same period in 2005 whichis the result of the time necessary to redeploy the proceeds from the IndustrialPortfolio Sale noted above into FFO generating assets. Industry analysts andinvestors use FFO as a supplemental operating performance measure of an equityREIT. FFO is calculated in accordance with the definition that was adopted bythe Board of Governors of the NAREIT. FFO, as defined by NAREIT, represents netincome (loss) determined in accordance with GAAP, excluding extraordinary itemsas defined under GAAP and gains or losses from sales of previously depreciatedoperating real estate assets, plus certain non-cash items such as real estateasset depreciation and amortization, and after similar adjustments forunconsolidated partnerships and joint ventures.

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Historical costaccounting for real estate assets in accordance with GAAP implicitly assumesthat the value of real estate assets diminishes predictably over time. Sincereal estate values instead have historically risen or fallen with marketconditions, many industry investors and analystshave considered presentation of operating results for real estate companiesthat use historical cost accounting to be insufficient by themselves. Thus,NAREIT created FFO as a supplemental measure of REIT operating performance thatexcludes historical cost depreciation, among other items, from GAAP net income.Management believes that the use of FFO, combined with the required primaryGAAP presentations, improves the understanding of operating results of REITsamong the investing public and makes comparisons of REIT operating results moremeaningful. Management considers FFO to be a useful measure for reviewingcomparative operating and financial performance (although FFO should bereviewed in conjunction with net income which remains the primary measure ofperformance) because by excluding gains or losses related to sales ofpreviously depreciated operating real estate assets and excluding real estateasset depreciation and amortization, FFO assists in comparing the operatingperformance of a company’s real estate between periods or as compared todifferent companies.

The following table summarizes the calculation of FFO for the yearsended December 31 (in thousands):
|                                                                         | ** ** | **2006**         |   | 2005      |   | 2004     |   |
|-------------------------------------------------------------------------|------------|------------------|--------|-----------|--------|----------|--------|
| Net income available for  common unitholders                            | **$**      | **159,799**      | $      | 339,239   | $      | 167,212  |   |
| Adjustments:                                                            |       |             |   |      |   |     |   |
| Depreciation and  amortization                                          | ** ** | **254,268**      |   | 254,170   |   | 228,582  |   |
| Partnership share of  joint venture depreciation and amortization       | ** ** | **18,394**       |   | 19,510    |   | 18,901   |   |
| Earnings from  depreciable property sales – wholly owned           | ** ** | **(42,089)**     |   | (227,513) |   | (26,510) |   |
| Earnings from  depreciable property sales – share of joint venture |       | **(****18,802)** |   | (11,096)  |   | -        |   |
| Funds From Operations                                                   | **$**      | **371,570**      | $      | 374,310   | $      | 388,185  |   |

 

Throughout 2006, we continued to maintain a conservative balance sheetand investment grade debt ratings from Moody’s (Baa1), Standard & Poors(BBB+) and Fitch (BBB+). Our debt to total market capitalization ratio (totalmarket capitalization is defined as the total market value of all outstandingCommon Units and Preferred equity plus outstanding indebtedness) of 37.4% atDecember 31, 2006 compared to 31.8% at December 31, 2005 continues to provideus financial flexibility to fund new investments.

Highlights of our debt financing activity in 2006 are as follows:

·                  InJanuary 2006, we renewed our line of credit, including the extension of thematurity date to January 2010 and the increase of borrowing capacity by $500.0million to $1.0 billion with interest rates ranging from LIBOR +. 17% to LIBOR+. 525% as of December 31, 2006.

·                  Wehad $317.0 million outstanding on our line of credit as of December 31, 2006.

·                  Throughnew issuances, as well as assumptions of debt in conjunction with our 2006acquisitions, we added $540.6 million of new secured debt in 2006 at a weightedaverage interest rate of 6.09% and we retired $40.6 million of secured debt ofwhich $25.0 million was variable rate.

·                  Weissued $854.5 million of unsecured debt at a weighted average interest rate of4.97% and retired $350.0 million of unsecured debt with a weighted averageinterest rate of 6.05%.

·                  Weissued $575.0 million of 3.75% Exchangeable Senior Notes (“Exchangeable Notes”)in November 2006.  The Exchangeable Notescan be exchanged for shares of the General Partner’s common stock upon certainevents as well as at any time beginning on August 1, 2011 and ending on thesecond business day prior to the maturity date. The Exchangeable Notes will have an initial exchange rate of approximately20.4298 common shares per $1,000 principal amount of the notes, representing anexchange price of approximately $48.95 per share of the General Partner’scommon stock and an exchange premium of approximately 20.0% based on the lastreported sale price of $40.79 per share of the General Partner’s common stockon the date of issuance.  The initialexchange rate is subject to adjustment under certain circumstances, includingincreases in

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the GeneralPartner’s rate of dividends.  Uponexchange, the holders of the Exchangeable Notes would receive cash equal to theprincipal amount of the note and, at the General Partner’s option, either cashor shares of its common stock for the remaining balance due.

In order to reducepotential dilution of the General Partner’s common stock, we purchased a cappedcall option with the proceeds of the Exchangeable Notes offering that allows usto buy the General Partner’s common shares, up to a maximum of approximately11.7 million shares or the General Partner’s common stock, from the optioncounterparties at prescribed prices.  Thecapped call option will terminate upon the earlier of the maturity date of therelated Exchangeable Notes or the first day all of the related ExchangeableNotes are no longer outstanding due to exchange or otherwise.  The capped call option, which cost $27.0million, was recorded as a reduction of partners’ equity and effectively increased the exchange priceto 40% above the General Partner’s stock price on the issuance date.

On the equity sideof our balance sheet, the GeneralPartner repurchased approximately 2.2 million of its common shares forapproximately $89.4 million from the proceeds of our Exchangeable Notesissuance. Additionally, the General Partner issued two new series of preferredequity securities, 6.95% Series M Cumulative Redeemable Preferred Shares and7.25% Series N Cumulative Redeemable Preferred Shares, for total gross proceedsof $294.0 million while the General Partner redeemed its 8.45% Series ICumulative Redeemable Preferred Shares of $75.0 million.

We continued strategic initiatives to expand geographically andprojects to leverage our development, construction and management capabilitiesas follows:

·                  Wecompleted the acquisition of a Washington D.C. metropolitan area portfolio of32 suburban in-service office and light industrial properties, the assets of arelated real estate management company, as well as significant undeveloped landpositions (all referred to as the “Mark Winkler Portfolio”) for a purchaseprice of approximately $867.6 million. In December 2006, we contributed 23 of the in-service properties tojoint ventures in which we hold a 30% continuing interest.  We will contribute eight in-serviceproperties to the joint ventures in the first quarter of 2007.

·                  We completed the purchase of a portfolio ofindustrial real estate properties in Savannah, Georgia consisting of 18buildings for a purchase price of approximately $196.2 million.

·                  We increased our investment in undeveloped land to provide greater opportunities to useour development and construction expertise in the improving economic cycle.Throughout 2006, we completed land acquisitions totaling $436.7 million. Thenew land positions include industrial, office and retail positions in severalmarkets, including the Washington D.C., Baltimore, Houston, and Phoenixmarkets, which we entered during 2006.

·                  Wedisposed of 19 non-strategic wholly owned held for rental properties, mostnotably our entire Cleveland industrial portfolio, for $139.9 million of grossproceeds.  Additionally, unconsolidatedsubsidiaries disposed of 22 non-strategic held for rental properties of whichour share of the gross proceeds totaled $91.9 million.  These transactions were a continuation of ourlong-term strategy of recycling assets into higher yielding new developments.

·                  Finally, we will continue to develop long-terminvestment assets to be held in our portfolio and develop assets to be soldupon completion. With over $1.2 billion in our development pipeline at December31, 2006, we are encouraged about the long-term growth opportunities in ourbusiness.

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**Key Performance Indicators**

Our operating results depend primarily upon rental income from ouroffice and industrial properties (“Rental Operations”). The followinghighlights the areas of Rental Operations that we consider critical for futurerevenue growth. (All square footage totals and occupancy percentages reflectboth wholly-owned properties and properties in joint ventures.)

***Occupancy Analysis:*** As discussed above, our ability to maintainoccupancy rates is a principal driver of our results of operations. Thefollowing table sets forth occupancy information regarding our in-serviceportfolio of rental properties as of December 31  (in thousands, except percentage data):
|                 |       | Total            |   | Percent of             |       |                  |   |
|-----------------|------------|------------------|--------|-----------------------------|------------|-----------------------|--------|
|            |       | Square Feet |   | Total Square Feet |       | Percent Occupied |
| Type            | ** ** | **2006**         |   | 2005                        | ** ** | **2006**              |   | 2005 | ** ** | **2006** |   | 2005 |   |
| **Industrial**  |       |             |   |                        |       |                  |   |   |   |   |   |   |   |
| Service Centers | ** ** | **4,562**        |   | 4,724                       | ** ** | **4.2**               | **%**  | 4.8 | % | **91.6** | **%** | 91.7 | % |
| Bulk            | ** ** | **71,743**       |   | 62,377                      | ** ** | **65.6**              | **%**  | 63.8 | % | **93.2** | **%** | 94.3 | % |
| **Office**      | ** ** | **32,377**       |   | 30,123                      | ** ** | **29.6**              | **%**  | 30.8 | % | **92.2** | **%** | 89.3 | % |
| **Other**       | ** ** | **611**          |   | 611                         | ** ** | **0.6**               | **%**  | 0.6 | % | **99.1** | **%** | 96.0 | % |
| Total           | ** ** | **109,293**      |   | 97,835                      | ** ** | **100.0**             | **%**  | 100.0 | % | **92.9** | **%** | 92.7 | % |

 

We experiencedcontinued strong occupancy in our in-service portfolio with the overallincrease driven primarily by a 3.1% increase in the occupancy of our officeportfolio.

***Lease Expiration and Renewals:*** Our ability to maintain and grow occupancy ratesprimarily depends upon our continuing ability to re-lease expiring space. Thefollowing table reflects our in-service portfolio lease expiration schedule byproperty type as of December 31, 2006. The table indicates square footage andannualized net effective rents (based on December 2006 rental revenue) underexpiring leases (in thousands, except percentage data):

|                              |   | Total Portfolio |   | Industrial |    | Office  |   | Other  |
|------------------------------|--------|-----------------|--------|------------|---------|---------|--------|--------|
|                         |   | Square          |   | Ann. Rent  |    | % of    |   | Square |   | Ann. Rent |   | Square |   | Ann. Rent |   | Square |   | Ann. Rent |
| Year of Expiration           |   | Feet            |   | Revenue    |    | Revenue |   | Feet   |   | Revenue |   | Feet |   | Revenue |   | Feet |   | Revenue |
|                         |   |            |   |       |    |    |   |   |   |   |   |   |   |   |   |   |   |   |
| 2007                         |   | 10,107          |   | $          | 59,430  |    | 8      | %      | 7,819 |   | $ | 29,949 |   | 2,279 |   | $ | 29,358 |   | 9 |   | $ | 123 |
| 2008                         |   | 14,050          |   |       | 83,872  |    | 12     | %      | 10,665 |   |   | 41,892 |   | 3,366 |   |   | 41,645 |   | 19 |   |   | 335 |
| 2009                         |   | 12,649          |   |       | 80,767  |    | 12     | %      | 9,190 |   |   | 36,105 |   | 3,455 |   |   | 44,584 |   | 4 |   |   | 78 |
| 2010                         |   | 12,131          |   |       | 95,888  |    | 14     | %      | 7,714 |   |   | 33,852 |   | 4,410 |   |   | 61,931 |   | 7 |   |   | 105 |
| 2011                         |   | 13,516          |   |       | 86,772  |    | 12     | %      | 9,911 |   |   | 38,246 |   | 3,565 |   |   | 47,803 |   | 40 |   |   | 723 |
| 2012                         |   | 8,898           |   |       | 61,373  |    | 9      | %      | 5,928 |   |   | 21,701 |   | 2,963 |   |   | 39,339 |   | 7 |   |   | 333 |
| 2013                         |   | 6,809           |   |       | 62,422  |    | 9      | %      | 3,568 |   |   | 15,043 |   | 3,207 |   |   | 46,800 |   | 34 |   |   | 579 |
| 2014                         |   | 5,301           |   |       | 30,841  |    | 4      | %      | 4,011 |   |   | 13,815 |   | 1,290 |   |   | 17,026 |   | - |   |   | - |
| 2015                         |   | 6,890           |   |       | 53,697  |    | 8      | %      | 4,736 |   |   | 18,778 |   | 2,154 |   |   | 34,919 |   | - |   |   | - |
| 2016                         |   | 3,743           |   |       | 25,029  |    | 4      | %      | 2,690 |   |   | 9,562 |   | 879 |   |   | 13,795 |   | 174 |   |   | 1,672 |
| 2017 and Thereafter          |   | 7,399           |   |       | 56,894  |    | 8      | %      | 4,821 |   |   | 20,336 |   | 2,268 |   |   | 34,931 |   | 310 |   |   | 1,627 |
|                         |   | 101,493         |   | $          | 696,985 |    | 100    | %      | 71,053 |   | $ | 279,279 |   | 29,836 |   | $ | 412,131 |   | 604 |   | $ | 5,575 |
|                         |   |            |   |       |    |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Portfolio Square  Feet |   | 109,293         |   |       |    |    |   | 76,305 |   |   |   | 32,377 |   |   |   | 611 |   |   |
|                         |   |            |   |       |    |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Percent Occupied             |   | 92.9            | %      |       |    |    |   |   | 93.1 | % |   |   |   | 92.2 | % |   |   |   | 99.1 | % |   |   |
|                              |        |                 |        |            |         |         |        |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

We renewed 79.9% and74.3% of our leases up for renewal totaling approximately 7.5 million and 10.0million square feet in 2006 and 2005, respectively. Our lease renewalpercentages over the past three years have remained relatively consistent at a70-80% success rate. We do not presently expect this renewal percentage in 2007to differ from that experienced in 2006.

***Future Development:***Another source ofgrowth in earnings is the development of additional properties. Theseproperties should provide future earnings through income upon sale or fromRental Operations growth as they are placed in service. We had 10.6 millionsquare feet of property under development with total estimated costs of $1.1billion at December 31, 2006, compared to 9.0 million square feet and totalcosts of $658.7 million at December 31, 2005. We have increased our developmentpipeline significantly through 2006 and will continue to focus on thedevelopment side of our business in 2007.

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The following tablesummarizes our properties under development as of December 31, 2006 (inthousands, except percentage data):

| Anticipated   In-Service  Date | ** ** | **Square  Feet** | ** **  | **Percent  Leased** | ** ** | **Project  Costs** | ** ** | **Anticipated  Stabilized  Return** | ** ** |
|--------------------------------|------------|------------------|-------------|---------------------|------------|--------------------|------------|-------------------------------------|------------|
| Held for Rental:               |       |             |        |                |       |               |       |                                |       |
| 1st Quarter 2007          |       |             | 1,064       |                |       | 19                 | %          |                                | $          | 116,135 |   |   | 9.60 | % |   |
| 2nd Quarter 2007          |       |             | 559         |                |       | 12                 | %          |                                |       | 60,286 |   |   | 9.13 | % |   |
| 3rd Quarter 2007          |       |             | 2,015       |                |       | 4                  | %          |                                |       | 137,426 |   |   | 9.40 | % |   |
| Thereafter                     |       |             | 846         |                |       | 4                  | %          |                                |       | 120,789 |   |   | 9.38 | % |   |
|                           |       |             |  4,484 |                |       | 9                  | %          |                                |       | 434,636 |   |   | 9.41 | % |   |
| Service Operations  Buildings: |       |             |        |                |       |               |       |                                |       |   |
| 1st Quarter 2007          |       |             | 1,533       |                |       | 51                 | %          |                                |       | 130,947 |   |   | 8.87 | % |   |
| 2nd Quarter 2007          |       |             | 2,684       |                |       | 37                 | %          |                                |       | 122,038 |   |   | 8.72 | % |   |
| 3rd Quarter 2007          |       |             | 1,237       |                |       | 81                 | %          |                                |       | 240,446 |   |   | 8.72 | % |   |
| Thereafter                     |       |             | 647         |                |       | 63                 | %          |                                |       | 173,954 |   |   | 8.07 | % |   |
|                           |       |             | 6,101       |                |       | 52                 | %          |                                |       | 667,385 |   |   | 8.57 | % |   |
| Total                          |       |             | 10,585      |                |       | 34                 | %          |                                | $          | 1,102,021 |   |   | 8.91 | % |   |

 

***Acquisition and Disposition Activity:***We continued to selectively dispose of non-strategicproperties in 2006.  Sales proceedsrelated to the dispositions of wholly owned held for rental properties were$139.9 million, which included the disposition of our entire portfolio ofindustrial properties in the Cleveland market. Our share of proceeds from sales of properties within unconsolidatedjoint ventures, of which we have a less than 100% interest, totaled $91.9million.  In 2005, proceeds from thedisposition of non-strategic properties totaled $1.1 billion for wholly ownedheld for rental properties, as the result of the Industrial Portfolio Sale, and$31.8 million for our share of property sales from unconsolidated jointventures.  Dispositions of wholly ownedproperties developed for sale rather than rental resulted in $188.6 million inproceeds in 2006 compared to $121.4 million in 2005.

In 2006, we acquired $948.4 million of incomeproducing properties and $436.7 million of undeveloped land compared to $295.6million of income producing properties and $137.7 million of undeveloped landin 2005.  We contributed 23 in serviceproperties from the Mark Winkler portfolio, with a book value of $381.6million, to two newly formed unconsolidated joint ventures in December 2006.

**Results of Operations**

A summary of our operating results and property statistics for each ofthe years in the three-year period ended December 31, 2006, is as follows (inthousands, except number of properties and per unit data):
|                                                                          |       | **2006**   |        | 2005   |   | 2004    |   |
|--------------------------------------------------------------------------|------------|------------|-------------|--------|--------|---------|--------|
|                                                                     |       |       |        |   |   |    |   |
| Rental Operations  revenues from Continuing Operations                   | ** ** | **$**      | **818,670** |   | $      | 668,607 |   | $ | 603,817 |   |
| Service Operations  revenues from Continuing Operations                  | ** ** | ** ** | **90,125**  |   |   | 81,941  |   |   | 70,803 |   |
| Earnings from Continuing  Rental Operations                              | ** ** | ** ** | **127,987** |   |   | 113,746 |   |   | 135,248 |   |
| Earnings from Continuing  Service Operations                             | ** ** | ** ** | **53,196**  |   |   | 44,278  |   |   | 27,652 |   |
| Operating income                                                         | ** ** | ** ** | **145,349** |   |   | 127,021 |   |   | 133,421 |   |
| Net income available for  common unitholders                             | ** ** | ** ** | **159,799** |   |   | 339,239 |   |   | 167,212 |   |
| Weighted average common  units outstanding                               | ** ** | ** ** | **148,069** |   |   | 155,059 |   |   | 155,281 |   |
| Weighted average common  units and potential dilutive common equivalents | ** ** | ** ** | **149,393** |   |   | 155,877 |   |   | 157,062 |   |
| Basic income per common  unit:                                           |       |       |        |   |   |    |   |   |   |   |
| Continuing  operations                                                   |       | **$**      | **.70**     |   | $      | .63     |   | $ | .71 |   |
| Discontinued  operations                                                 |       | **$**      | **.38**     |   | $      | 1.56    |   | $ | .37 |   |
| Diluted income per  common unit:                                         |       |       |        |   |   |    |   |   |   |   |
| Continuing  operation                                                    |       | **$**      | **.70**     |   | $      | .63     |   | $ | .70 |   |
| Discontinued  operations                                                 |       | $          | **.37**     |   | $      | 1.55    |   | $ | .37 |   |
| Number of in-service  properties at end of year                          |       | ** ** | **693**     |   |   | 660     |   |   | 874 |   |
| In-service square  footage at end of year                                |       | ** ** | **109,293** |   |   | 97,835  |   |   | 109,635 |   |

 

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

Rental Income from Continuing Operations

Overall, rental incomefrom continuing operations increased from $639.1 million in 2005 to $780.7million in 2006. The following table reconciles rental income from continuingoperations by reportable segment to total reported rental income fromcontinuing operations for the years ended December 31  (in thousands):

|             | ** ** | **2006**    |       | **2005**    |   |
|-------------|------------|-------------|------------|-------------|--------|
| Office      | ** ** | ** **  | **$**      | **562,903** |   |   | $ | 462,939 |   |
| Industrial  | ** ** | **203,259** |       |        |   | 166,343 |   |
| Non-segment | ** ** | ** **  | **14,504** |        |   |   | 9,776 |   |
| Total       | ** ** | ** **  | **$**      | **780,666** |   |   | $ | 639,058 |   |

 

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

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

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

·                  Our in-service occupancy increased from 92.7% atDecember 31, 2005, to 92.9% at December 31, 2006.

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

Equity in Earnings of Unconsolidated Companies

Equity in earningsrepresents our ownership share of net income from investments in unconsolidatedcompanies. These joint ventures generally own and operate rental properties andhold land for development.  Theseearnings increased from $29.5 million in 2005 to $38.0 million in 2006. During2006, our joint ventures sold 22 non-strategic buildings, with our share of thenet gain recorded through equity in earnings totaling $18.8 million.  During the second quarter of 2005, one of ourventures sold three buildings, with our share of the net gain recorded throughequity in earnings totaling $11.1 million.

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Rental Expenses and Real Estate Taxes

The following table reconciles rental expenses and real estate taxes byreportable segment to our total reported amounts in the statement of operationsfor the years ended December 31, 2006 and 2005, respectively (in thousands):
|                     | ** ** | **2006**   |        | **2005** |   |
|---------------------|------------|------------|-------------|----------|--------|
| Rental Expenses:    |       |       |        |     |   |
| Office              | ** ** | **$**      | **151,368** |     | $      | 125,093 |   |
| Industrial          | ** ** | **23,745** |        | 21,622   |   |
| Non-segment         | ** ** | ** ** | **3,519**   |     |   | 1,557 |   |
| Total               | ** ** | **$**      | **178,632** |     | $      | 148,272 |   |
|                |       |       |        |     |   |
| Real Estate  Taxes: |       |       |        |     |   |
| Office              | ** ** | **$**      | **59,717**  |     | $      | 53,039 |   |
| Industrial          | ** ** | **23,186** |        | 19,979   |   |
| Non-segment         | ** ** | ** ** | **6,012**   |     |   | 5,104 |   |
| Total               | ** ** | **$**      | **88,915**  |     | $      | 78,122 |   |

 

Rental expenses and real estatetaxes for 2006 have increased from 2005 by $30.4 million and $10.8 million,respectively, as the result of acquisition and development activity in 2005 and2006 as well as from our increase in occupancy over the past two years.

Interest Expense

Interest expense increased from $113.1 million in 2005 to $179.0million in 2006, as a result of the following:

·                  Interest expenseon the unsecured line of credit increased by $29.2 million from 2005 as theresult of increased borrowings throughout the year, as well as increasedinterest rates.

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

·                  Interest expenseon secured debt increased by $27.8 million as the result of the increase inborrowings in 2006.

·                  Amortization ofdeferred financing fees increased by $2.4 million as the result of additionalborrowings in 2006.

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

Depreciation andAmortization Expense

Depreciationand amortization increased from $215.4 million in 2005 to $244.1 million in2006 as the result of increases in our held-for-rental asset base fromacquisitions and developments during 2005 and 2006.

Service Operations

ServiceOperations primarily consist of sales of properties developed or acquired withthe intent to sell within a short period of time and the leasing, management,construction and development services for joint venture properties andproperties owned by third parties.  Theseoperations are heavily influenced by the current state of the economy, asleasing and management fees are dependent upon occupancy while construction anddevelopment services rely on the expansion of business operations. ServiceOperations earnings increased from $44.3 million in 2005 to $53.2 million in2006.  The following are the factorsrelated to the increase in Service Operations earnings in 2006.

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·                  OurService Operations building development and sales program, whereby a buildingis developed or repositioned by us and then sold, is a significant component ofearnings from service operations. During 2006, we generated pre-tax gains of$44.6 million from the sale of nine properties compared to $29.9 million fromthe sale of ten properties in 2005. Profit margins on these types of buildingsales fluctuate by sale depending on the type of property being sold, thestrength of the underlying tenant and nature of the sale, such as apre-contracted purchase price for a primary tenant versus a sale on the openmarket.

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

General andAdministrative Expense

General andadministrative expense increased from $31.0 million in 2005 to $35.8 million in2006. General and administrative expenses consist of two components. The firstcomponent is direct expenses that are not attributable to specific assets suchas legal fees, external audit fees, marketing costs, investor relationsexpenses and other corporate overhead. The second component is the unallocatedoverhead costs associated with the operation of our owned properties andService Operations, including construction, leasing and maintenance operations.Overhead costs not allocated to these operations are charged to general andadministrative expenses. The increase in general and administrative expensesfrom 2005 was largely attributable to an increase in our overall pool ofoverhead costs to support our current and anticipated future growth.

DiscontinuedOperations

Theresults of operations for properties sold during the year or designated asheld-for-sale at the end of the period are required to be classified asdiscontinued operations. The property specific components of net earnings thatare classified as discontinued operations include rental revenues, rentalexpenses, real estate taxes, allocated interest expense, depreciation expenseand minority interest, as well as the net gain or loss on the disposition ofproperties.

Weclassified the operations of 308 buildings as discontinued operations as ofDecember 31, 2006. These 308 buildings consist of 273 industrial, 32 office andthree retail properties. As a result, we classified net income from operationsof $9.3 million, $17.4 million and $31.4 million as net income fromdiscontinued operations for the years ended December 31, 2006, 2005 and 2004,respectively.

Ofthese properties, 21 were sold during 2006, 234 properties were sold during2005, 41 properties were sold during 2004, and 12 operating properties areclassified as held-for-sale at December 31, 2006. The gains on disposal ofthese properties, net of impairment adjustment, of $46.3 million, $223.9million and $26.2 million for the years ended December 31, 2006, 2005 and 2004,respectively, are also reported in discontinued operations.

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**Comparison of Year Ended December 31, 2005 to Year Ended December 31,2004**

Rental Income from Continuing Operations

Overall, rentalincome from continuing operations increased from $582.2 million in 2004 to$639.1 million in 2005. The following table reconciles rental income fromcontinuing operations by reportable segment to total reported rental incomefrom continuing operations for the years ended December 31, 2005 and 2004,respectively (in thousands):

|             | ** ** | **2005**    |        | **2004** |   |
|-------------|------------|-------------|-------------|----------|--------|
| Office      | ** ** | **$**       | **462,939** |     |   | $ | 419,068 |   |
| Industrial  | ** ** | **166,343** |        | 152,989  |   |
| Non-segment | ** ** | ** **  | **9,776**   |     |   | 10,174 |   |
| Total       | ** ** | **$**       | **639,058** |     |   | $ | 582,231 |   |

 

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

·                  In 2005, we acquired nine new properties and placed17 development projects in-service. These acquisitions and developments are theprimary factor in the $56.8 million overall increase in rental revenue for theyear ended 2005, compared to 2004.

·                  The nine property acquisitions provided revenues of$21.0 million. These acquisitions totaled $307.5 million on 2.2 million squarefeet and were 86.5% leased at December 31, 2005. Revenues from acquisitionsthat occurred in 2004 totaled $31.8 million in 2005 compared to $13.4 millionin 2004.

·                  Developments placed in service in 2005 providedrevenues of $5.8 million. Revenues from developments placed in service in 2004increased $9.9 million to $17.4 million in 2005.

·                  Our in-service occupancy increased from 90.9% atDecember 31, 2004, to 92.7% at December 31, 2005.

·                  Rental income includes lease termination fees.  Lease termination fees relate to specifictenants who pay a fee to terminate their lease obligations before the end ofthe contractual lease term. Lease termination fees in 2005 continued tosteadily decrease as a result of improving market conditions. Lease terminationfees decreased from $14.7 million in 2004 to $7.3 million in 2005.

Equity in Earnings of Unconsolidated Companies

Equity in earningsrepresents our ownership share of net income from investments in unconsolidatedcompanies. These joint ventures generally own and operate rental properties andhold land for development.  Theseearnings increased from $21.6 million in 2004 to $29.5 million in 2005. Duringthe second quarter of 2005, one of our ventures sold three buildings with ourshare of the net gain recorded through equity in earnings totaling $11.1million.

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Rental Expenses and Real Estate Taxes

The following table reconciles rental expenses and real estate taxes byreportable segment to our total reported amounts in the statement of operationsfor the years ended December 31, 2005 and 2004, respectively (in thousands):
|                     | ** ** | **2005**    |   | **2004** |   |
|---------------------|------------|-------------|--------|----------|--------|
| Rental Expenses:    |       |        |   |     |   |
| Office              | **$**      | **125,093** | $      | 106,303  |   |
| Industrial          | ** ** | **21,622**  |   | 19,467   |   |
| Non-segment         | ** ** | **1,557**   |   | 1,213    |   |
| Total               | **$**      | **148,272** | $      | 126,983  |   |
|                |       |        |   |     |   |
| Real Estate  Taxes: |       |        |   |     |   |
| Office              | **$**      | **53,039**  | $      | 44,245   |   |
| Industrial          | ** ** | **19,979**  |   | 16,922   |   |
| Non-segment         | ** ** | **5,104**   |   | 4,679    |   |
| Total               | **$**      | **78,122**  | $      | 65,846   |   |

 

Rental and real estate tax expensesfor 2005, as compared to 2004, have increased as a result of our 2004 and 2005acquisitions as well as our increase in occupancy. This increase in rental andreal estate taxes was in line with our expectations.

InterestExpense

Interestexpense increased from $104.0 million in 2004 to $113.1 million in 2005 largelyas the result of increased interest expense from additional unsecuredborrowings.

Depreciation and Amortization Expense

Depreciationand amortization expense increased from $171.8 million in 2004 to $215.4million in 2005 as the result of increases in our held-for-rental base fromacquisitions and developments during 2004 and 2005.

Service Operations

Service Operationsprimarily consist of building sales and the leasing, management, constructionand development services for joint venture properties and properties owned bythird parties.  These operations areheavily influenced by the current state of the economy as leasing andmanagement fees are dependent upon occupancy while construction and developmentservices rely on the expansion of business operations. Service Operationsearnings increased from $27.7 million in 2004 to $44.3 million in 2005.  The increase reflects higher constructionvolumes partially offset by increased staffing costs in 2005. Other factorsimpacting service operations are discussed below.

·                  Our Service Operationsdevelopment and sales program, whereby a building is developed or repositionedby us and then sold, is a significant component of construction and developmentincome. During 2005, we generated pre-tax gains of $29.9 million from the saleof 10 properties compared to $24.2 million from the sale of six properties in2004. Profit margins on these types of building sales fluctuate by saledepending on the type of property being sold, the strength of the underlyingtenant and nature of the sale, such as a pre-contracted purchase price for aprimary tenant versus a sale on the open market.

·                  In 2005, weexperienced an increase in our third-party construction business as evidencedby the increase in general contractor revenues in 2005 over 2004. We achieved aslight increase in our profit margins during 2005, which reflected improvedpricing in certain markets and our ability to select more profitable projectsas resources are re-positioned to our increasing held-for-investmentdevelopment pipeline.

·                  Inthe first quarter of 2005, we recognized $2.7 million of a non-recurringdeferred gain associated with the sale of our landscaping operations in 2001.The gain was deferred as a result of future performance provisions contained inthe original sales agreement. As a result of contract renegotiations effectivein the first quarter of 2005, all future performance provisions were removedand the deferred gain was recognized.

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General and Administrative Expense

General andadministrative expense increased from $29.5 million in 2004 to $31.0 million in2005. General and administrative expenses consist of two components. The firstcomponent is direct expenses not attributable to specific assets such as legalfees, external audit fees, marketing costs, investor relations expenses andother corporate overhead. The second component is the unallocated overheadcosts associated with the operation of our owned properties and ServiceOperations, including construction, leasing and maintenance operations.Overhead costs not allocated to these operations are charged to general andadministrative expenses. The increase in general and administrative expenses isprimarily the result of an increase in payroll expenses associated withlong-term compensation plans and an increase in the number of employees tosupport our overall growth.

**CriticalAccounting Policies**

The preparation ofour consolidated financial statements in conformity with GAAP requires us tomake estimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported amounts of revenues and expensesduring the reported period. Our estimates, judgments and assumptions areinherently subjective and based on the existing business and market conditions,and are therefore continually evaluated based upon available information andexperience. Note 2 to the Consolidated Financial Statements includes furtherdiscussion of our significant accounting policies.

Our management hasassessed the accounting policies used in the preparation of our financialstatements and discussed them with the General Partner’s Audit Committee and independent auditors.The following accounting policies are considered critical based uponmateriality to the financial statements, degree of judgment involved inestimating reported amounts and sensitivity to changes in industry and economicconditions:

*Accountingfor Joint Ventures:*We analyze our investments in jointventures under Financial Accounting Standards Board (“FASB”) Interpretation No.46(R), *Consolidation of Variable InterestEntities,* to determine if the joint venture is considered a variableinterest entity and would require consolidation. To the extent that our jointventures do not qualify as variable interest entities, we further assess underthe guidelines of Emerging Issues Task Force (“EITF”) Issue No. 04-5, *Determining Whether a General Partner, or the GeneralPartners as a Group, Controls a Limited Partnership or Similar Entity When theLimited Partners Have Certain Rights*(“EITF 04-5”), Statement ofPosition 78-9, *Accounting for Investments inReal Estate Ventures;*Accounting Research Bulletin No. 51, *Consolidated Financial Statements*and FASBNo. 94, * Consolidation of All Majority-OwnedSubsidiaries,*to determine if the venture should be consolidated. Wehave equity interests ranging from 10%-67% in joint ventures that own andoperate rental properties and hold land for development. We consolidate thosejoint ventures that we control through majority ownership interests orsubstantial participating rights. Control is further demonstrated by theability of the general partner to manage day-to-day operations, refinance debtand sell the assets of the joint venture without the consent of the limitedpartner and inability of the limited partner to replace the general partner. Weuse the equity method of accounting for those joint ventures where we do nothave control over operating and financial polices. Under the equity method ofaccounting, our investment in each joint venture is included on our balancesheet; however, the assets and liabilities of the joint ventures for which weuse the equity method are not included on our balance sheet.

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

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

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

In assessing theamount of indirect costs to be capitalized, we first allocate payroll costs, ona department-by-department basis, among activities for which capitalization iswarranted (i.e., construction, development and leasing) and those for whichcapitalization is not warranted  (i.e.,property management, maintenance, acquisitions and dispositions and generalcorporate functions). To the extent the employees of a department split theirtime between capitalizable and non-capitalizable activities, the allocations aremade based on estimates of the actual amount of time spent in each activity.Once the payroll costs are allocated, the non-payroll costs of each departmentare allocated among the capitalizable and non-capitalizable activities in thesame proportion as payroll costs.

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

*Impairmentof Real Estate Investments:* We evaluate our real estateinvestments upon occurrence of significant changes in the operations, but notless than annually, to assess whether any impairment indications are presentthat affect the recovery of the recorded value. If any real estate investmentis considered to be impaired, a loss is provided to reduce the carrying valueof the asset to its estimated fair value. We utilize the guidelines establishedunder SFAS No. 144, *Accounting for theImpairment or Disposal of Long Lived Assets*(“SFAS 144”), todetermine if impairment conditions exist. Under SFAS 144, we review theexpected undiscounted cash flows of each property in our held for rentalportfolio to determine if there are any indications of impairment of aproperty. The review of anticipated cash flows involves subjective assumptionsof estimated occupancy and rental rates and ultimate residual value. Inaddition to reviewing anticipated cash flows, we assess other factors such aschanges in business climate and legal factors that may affect the ultimatevalue of the property. These assumptions are subjective and the anticipatedcash flows may not ultimately be achieved.

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

*Acquisitionof Real Estate Property:*In accordance with SFAS 141, *Business Combinations*, we allocate thepurchase price of acquired properties to net tangible and identified intangibleassets based on their respective fair values.

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

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·                  The valueallocable to the above or below market component of an acquired in-place leaseis determined based upon the present value (using an interest rate whichreflects the risks associated with the lease) of the difference between (i) thecontractual amounts to be paid pursuant to the lease over its remaining termand (ii) management’s estimate of the amounts that would be paid using currentfair market rates over the remaining term of the lease. The amounts allocatedto above market leases are included in deferred leasing and other costs in thebalance sheet and below market leases are included in other liabilities in thebalance sheet; both are amortized to rental income over the remaining terms ofthe respective leases.

·                  Thetotal amount of intangible assets is further allocated to in-place lease valuesand to customer relationship values, based upon management’s assessment oftheir respective values. These intangible assets are included in deferredleasing and other costs in the balance sheet and are depreciated over theremaining term of the existing lease, or the anticipated life of the customerrelationship, as applicable.

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

·                  We maintain atenant “watch list” containing a list of significant tenants for which thepayment of receivables and future rent may be at risk. Various factors such aslate rent payments, lease or debt instrument defaults, and indications of adeteriorating financial position are considered when determining whether toinclude a tenant on the watch list.

·                  As a matter ofpolicy, we reserve the entire receivable balance, including straight-line rent,of any tenant with an amount outstanding over 90 days.

·                  Straight-linerent receivables for any tenant on the watch list or any other tenantidentified as a potential long-term risk, regardless of the status of rentreceivables, are reviewed and reserved as necessary.

*RevenueRecognition on Construction Contracts:* We recognize income onconstruction contracts where we serve as a general contractor on the percentageof completion method. Using this method, profits are recorded on the basis ofour estimates of the overall profit and percentage of completion of individualcontracts. A portion of the estimated profits is accrued based upon ourestimates of the percentage of completion of the construction contract.Cumulative revenues recognized may be less or greater than cumulative costs andprofits billed at any point in time during a contract’s term. This revenuerecognition method involves inherent risks relating to profit and costestimates with those risks reduced through approval and monitoring processes.

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

·                  Criteria foridentifying and selecting;

·                  Methodology inapplying; and

·                  Impacton the financial statements.

The AuditCommittee of the GeneralPartner has reviewed the critical accounting policies we identified.

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

#### **Sources of Liquidity**

We expect to meetour short-term liquidity requirements over the next twelve months, includingpayments of dividends and distributions, as well as recurring capitalexpenditures relating to maintaining our current real estate assets, primarilythrough the following:

·                  working capital;

·                  net cashprovided by operating activities; and

·                  proceedsreceived from real estate dispositions

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Although we historically have not used any other sources of funds topay for recurring capital expenditures on our current real estate investments,we may rely on the temporary use of borrowings or property disposition proceedsneeded to fund such expenditures during periods of high leasing volume.

We expect to meet long-term liquidity requirements, such as scheduledmortgage debt maturities, refinancing of long-term debt, preferred equityredemptions, the retirement of unsecured notes and amounts outstanding underthe unsecured credit facility, property acquisitions, financing of developmentactivities and other non-recurring capital improvements, primarily from thefollowing sources:

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

·                                          issuanceof additional debt securities;

·                                          undistributedcash provided by operating activities, if any; and

·                                          proceedsreceived from real estate dispositions.

### *RentalOperations*

We believe our principal source of liquidity, cashflows from Rental Operations, provides a stable source of cash to fundoperational expenses. We believe this cash-based revenue stream issubstantially aligned with revenue recognition (except for periodicstraight-line rental income accruals and amortization of above or below marketrents) as cash receipts from the leasing of rental properties are generallyreceived in advance of or in a short time following the actual revenuerecognition.

We are subject to risks of decreased occupancy throughmarket conditions, as well as tenant defaults and bankruptcies, and potentialreduction in rental rates upon renewal or re-letting of properties, which wouldresult in reduced cash flow from operations. However, we believe that theserisks are mitigated by our relatively strong market presence in most of ourlocations and the fact that we perform in-house credit review and analysis onmajor tenants and all significant leases before they are executed.

*Credit Facility*

We had one unsecured lineof credit available at December 31, 2006, summarized as follows (in thousands):
|                           | ** ** | Borrowing        | ** ** | **Maturity**  | ** ** | **Interest** | ** ** | **Outstanding**                              | ** ** |
|---------------------------|------------|------------------|------------|---------------|------------|--------------|------------|----------------------------------------------|------------|
| **Description**           | ** ** | **Capacit**y     | ** ** | **Dat**e      | ** ** | **Rate**     | ** ** | **at December 31, 2006**      | ** ** |
| Unsecured Line of  Credit |       | $ 1,000,000 |       | January  2010 |       | LIBOR + .525 | %          | $      317,000 |       |

 

We use this line of credit to fund developmentactivities, acquire additional rental properties and provide working capital.The line of credit provides us with an option to obtain borrowings fromfinancial institutions that participate in the line, at rates lower than thestated interest rate, subject to certain restrictions.  Interest rates on the amounts outstanding onthe unsecured line of credit as of December 31, 2006, ranged from LIBOR +.17%to LIBOR +.525% (equal to 5.52% and 5.875% as of December 31, 2006.) The lineof credit also contains financial covenants that require us to meet financialratios and defined levels of performance, including those related to variableinterest indebtedness, consolidated net worth and debt-to-marketcapitalization. As of December 31, 2006, we were in compliance with allfinancial covenants under our line of credit.

*Debtand Equity Securities*

On July 31, 2006, wefiled with the SEC an automatic shelf registration statement on Form S-3relating to the offer and sale, from time to time, of an indeterminate amountof debt securities. From time to time, we and the General Partner expect toissue additional securities under this new automatic shelf registrationstatement to fund the development and acquisition of additional rentalproperties and to fund the repayment of the credit facility and other long-termdebt upon maturity.

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On February 18, 2007, theGeneral Partner filed a resale shelf registration statement on Form S-3 withrespect to 11,747,135 shares of its common stock issuable upon the exchange orredemption of the Exchangeable Notes. Recipients of such common stock, whom we refer to as the “sellingshareholders,” may use the prospectus filed as part of the resale shelfregistration statement to resell, from time to time, the shares of the GeneralPartner’s common stock that it may issue to them upon the exchange orredemption of the Exchangeable Notes. Additional selling shareholders may be named by future prospectussupplements.

The General Partnerregistered the offering and resale of such shares to allow the sellingshareholders to sell any or all of their shares of common stock on the New YorkStock Exchange or in private transactions as described in the prospectus. Theregistration of the shares does not necessarily mean that the sellingshareholders will exchange their Exchangeable Notes for the General Partner’scommon stock, that upon any exchange or redemption of the Exchangeable Notes wewill elect, in our sole and absolute discretion, to exchange or redeem some orall of the Exchangeable Notes for shares of the General Partner’s common stockrather than cash, or that any shares of the General Partner’s common stockreceived upon exchange or redemption of the Exchangeable Notes will be sold bythe selling shareholders under the prospectus or otherwise.

The indenture governingour unsecured notes also requires us to comply with financial ratios and othercovenants regarding our operations. We were in compliance with all suchcovenants as of December 31, 2006.

*Saleof Real Estate Assets*

We utilize sales of realestate assets as an additional source of liquidity. We pursue opportunities tosell real estate assets at favorable prices to capture value created by us aswell as to improve the overall quality of our portfolio by recycling saleproceeds into new properties with greater value creation opportunities.

**Uses ofLiquidity**

Our principal uses ofliquidity include the following:

·                  Property investments;

·                  Recurring leasing/capital costs;

·                  Distributions to unitholders;

·                  Long-term debt maturities; and

·                  Othercontractual obligations

*PropertyInvestments*

We evaluate developmentand acquisition opportunities based upon market outlook, supply and long-termgrowth potential.

*Recurring Expenditures*

One of ourprincipal uses of our liquidity is to fund the development, acquisition andrecurring leasing/capital expenditures of our real estate investments. Thefollowing is a summary of our recurring capital expenditures for the year endedDecember 31  (in thousands):
|                       | ** ** | 2006       | ** ** | **2005** | ** ** | **2004** | ** ** |
|-----------------------|------------|------------|------------|----------|------------|----------|------------|
|                  | ** ** | ** ** |       |     |       |     |       |
| Tenant  improvements  | ** ** | **$**      | **41,895** | $        | 60,633     | $        | 58,847     |   |
| Leasing costs         | ** ** | ** ** | **17,106** |     | 33,175     |     | 27,777     |   |
| Building improvements | ** ** | ** ** | **8,122**  |     | 15,232     |     | 21,029     |   |
| Totals                | ** ** | **$**      | **67,123** | $        | 109,040    | $        | 107,653    |   |

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##### *Distributions*

In order to qualify as aREIT for federal income tax purposes, theGeneral Partner must currently distribute at least 90% of its taxableincome to its shareholders. We paid distributions per unit of $1.89, $1.87 and$1.85 for the years ended December 31, 2006, 2005 and 2004, respectively. Wealso paid a one-time special distribution of $1.05 per unit in 2005 as a resultof the significant gain realized from the Industrial Portfolio Sale. We expectto continue to distribute taxable earnings to meet the requirements of the General Partner to maintain its REITstatus. However, distributions are declared at the discretion of the General Partner’s board of directorsand are subject to actual cash available for distribution, our financialcondition, capital requirements and such other factors, as the General Partner’s board of directorsdeems relevant.

*DebtMaturities*

Debt outstanding atDecember 31, 2006, totaled $4.1 billion with a weighted average interest rateof 5.77% maturing at various dates through 2028. We had $3.1 billion ofunsecured debt, $317.0 million outstanding on our unsecured line of credit, and$662.5 million of secured debt outstanding at December 31, 2006. Scheduledprincipal amortization and maturities of such debt totaled $1.1 billion for theyear ended December 31, 2006.

The following is asummary of the scheduled future amortization and maturities of our indebtednessat December 31, 2006 (in thousands, except percentage data):
|            | ** ** | **Future  Repayments** | ** ** | **Weighted**Average | ** ** |
|------------|------------|------------------------|------------|---------------------|------------|
| ** ** | ** ** | **Scheduled**          | ** ** | ** **          | ** ** | ** ** | ** ** | **Interest  Rate of** | ** ** |
| **Year**   | ** ** | **Amortization**       | ** ** | **Maturities**      | ** ** | **Total** | ** ** | **Future  Repayments** | ** ** |
| 2007       |       | 13,045                 |       | 214,615             |       | 227,660 |   | 5.75% |   |
| 2008       |       | 12,478                 |       | 273,464             |       | 285,942 |   | 5.07% |   |
| 2009       |       | 12,185                 |       | 275,000             |       | 287,185 |   | 7.36% |   |
| 2010       |       | 11,952                 |       | 492,000             |       | 503,952 |   | 5.68% |   |
| 2011       |       | 11,985                 |       | 1,012,139           |       | 1,024,124 |   | 5.10% |   |
| 2012       |       | 9,914                  |       | 201,216             |       | 211,130 |   | 5.90% |   |
| 2013       |       | 9,905                  |       | 150,000             |       | 159,905 |   | 4.74% |   |
| 2014       |       | 9,826                  |       | 294,534             |       | 304,360 |   | 6.44% |   |
| 2015       |       | 7,593                  |       | 5,807               |       | 13,400 |   | 7.13% |   |
| 2016       |       | 6,671                  |       | 506,449             |       | 513,120 |   | 6.17% |   |
| 2017       |       | 4,976                  |       | 450,000             |       | 454,976 |   | 5.95% |   |
| Thereafter |       |                   | 31,676     |                |       | 91,724 |   |   | 123,400 |   | 6.49% |   |
|       |       | $                      | 142,206    |                | $          | 3,966,948 |   | $ | 4,109,154 |   | 5.77% |   |

 

**HistoricalCash Flows**

Cash and cash equivalentswere $68.2 million and $26.9 million at December 31, 2006 and 2005,respectively. The following highlights significant changes in net cashassociated with our operating, investing and financing activities (inmillions):
|                                                        | ** ** | **Years Ended December 31,** | ** ** |
|--------------------------------------------------------|------------|---------------------------------------------|------------|
| ** **                                             | ** ** | **2006**                                    | ** ** | **2005** | ** ** | **2004** | ** ** |
|                                                   |       |                                        |       |   |   |   |   |
| Net Cash Provided  by  Operating Activities            | $          | **275.3**                                   | $          | 405.4 | $ | 376.1 |   |
| Net Cash Provided  by (Used  for) Investing Activities | ** ** | **(1,236.8)**                               |       | 326.9 |   | (427.6) |   |
| Net Cash Provided by  (Used  for) Financing Activities | ** ** | **1,002.9**                                 |       | (711.2) |   | 44.6 |   |

 

*OperatingActivities*

Cash flows fromoperating activities provide the cash necessary to meet normal operationalrequirements of our rental operations and Service Operations activities. The receiptof rental income from rental operations continues to provide the primary sourceof our revenues and operating cash flows. In addition, we develop buildingswith the intent to sell them at or soon after completion, which providesanother significant source of operating cash flow activity.

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·                                          Duringthe year ended December 31, 2006, we incurred Service Operations buildingdevelopment costs of $273.5 million, compared to $83.4 million and $43.1million for the years ended December 31, 2005 and 2004, respectively. Thedifference is reflective of the increased activity in our held-for-salepipeline. The pipeline of held-for-sale projects under construction as ofDecember 31, 2006, has anticipated costs of $667.4 million.

·                                          Wesold nine Service Operations buildings in 2006 compared to ten in 2005 and sixin 2004, receiving net proceeds of $181.8 million, $113.0 million and $72.7million, respectively and recognized pre-tax gains of $49.0 million, $29.9million and $24.2 million, respectively.

*InvestingActivities*

Investing activities are one of the primary uses of our liquidity.Development and acquisition activities typically generate additional rentalrevenues and provide cash flows for operational requirements. Highlights ofsignificant cash uses are as follows:

·                  Sales of landand depreciated property provided $180.8 million in net proceeds in 2006,compared to $1.1 billion in 2005 and $178.3 million in 2004.  In addition, during 2006 we receiveddistributions of $21.2 million for our share of proceeds on the sales of landand depreciable property within three of our joint ventures.  The Industrial Portfolio Sale provided $955million of the $1.1 billion of proceeds received in 2005. We continue todispose of non-strategic and older properties as part of our capital recyclingprogram to fund acquisitions and new developments while improving the overallquality of our investment portfolio.

·                  Developmentcosts for our held for rental portfolio increased to $385.5 million for theyear ended December 31, 2006, from $210.0 million and $145.6 million for theyears ended December 31, 2005 and 2004, respectively. Management anticipatedthis continued increase, as a commitment to development activity was part ofour strategic plan for 2006 and continues to be for 2007.

·                  During 2006, wepaid cash of $735.3 million for real estate acquisitions, compared to $285.3million in 2005 and $204.4 million in 2004. The most significant activity in2006 consisted of the purchase of the Mark Winkler Portfolio of suburban officeand light industrial properties and undeveloped land in the Washington, D.C.area for $867.6 million ($713.5 million paid in cash) and a portfolio ofindustrial properties in Savannah, Georgia for $196.2 million ($125.9 millionpaid in cash at closing).

·                  In2006, we paid cash of $435.9 million for undeveloped land, compared to $136.3million in 2005 and $113.4 million in 2004. These acquisitions provide usgreater opportunities to use our development and construction expertise in theimproving economic cycle.

*FinancingActivities*

The following significant items highlight fluctuations in net cashprovided by financing activities:

·                  In January 2006,we received approximately $177.7 million in net proceeds from the GeneralPartner’s issuance of its Series M Cumulative Redeemable Preferred Shares. Thispreferred stock bears a dividend yield of 6.95%. We applied a portion of thenet proceeds from the Series M preferred equity issuance to redeem $75.0million of the General Partner’s Series I preferred shares in February, whichhad an 8.45% dividend rate.

·                  In February2006, we obtained a $700.0 million secured term loan, which was priced at LIBOR+.525%. The proceeds were used to finance the acquisition of the Mark WinklerPortfolio in the Washington, D.C. metropolitan area, and the loan was securedby these properties.  This term loan waspaid in full in August 2006 with proceeds from the issuance of senior unsecureddebt as described below.

·                  InFebruary and March 2006, we issued $150.0 million of 5.50% senior unsecurednotes due in 2016. A portion of the proceeds were used to retire our $100.0million 6.72% puttable option reset securities. The remaining cash proceedswere used to fund costs associated with the issuance of debt and to repayamounts outstanding under our line of credit.

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·                  In June 2006, wereceived approximately $106.3 million in net proceeds from the General Partner’sissuance of its Series N Cumulative Redeemable Preferred Shares.  This preferred stock bears a dividend yieldof 7.25%.

·                  In August 2006,we issued $450.0 million of 5.95% senior unsecured notes due in 2017 and $250.0million of 5.625% senior unsecured notes due in 2011.  The proceeds from these issuances were usedto pay off the $700.0 million secured term loan as described above.

·                  In November2006, we issued $319.0 million of 5.91% debt due in 2016 secured by certain ofour in-service real estate properties.

·                  In November2006, we issued $575.0 million of Exchangeable Notes, which will pay interestsemiannually at a rate of 3.75% per annum and mature in December 2011.

·                  InDecember 2006, we repaid our $250 million LIBOR +.26% Senior Unsecured Notes.

Credit Ratings

The General Partner andwe are currently assigned investment grade corporate credit ratings on oursenior unsecured notes from Fitch Ratings, Moody’s Investor Service andStandard and Poor’s Ratings Group. Currently, Fitch and Standard and Poor’shave assigned a rating of BBB+ and Moody’s Investors has assigned a rating ofBaa1 to our senior notes.

The General Partner andwe also received investment grade credit ratings from the same rating agencieson the General Partner’s preferred stock. Fitch and Standard and Poor’s have assigned a preferred stock rating ofBBB and Moody’s Investors has assigned a preferred stock rating of Baa2 to the General Partner’s preferred stock.

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

Financial Instruments

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

In August 2005, weentered into $300.0 million of cash flow hedges through forward-startinginterest rate swaps to hedge interest rates on $300.0 million of anticipateddebt offerings in 2007. The swaps qualify for hedge accounting, with anychanges in fair value recorded in accumulated Other Comprehensive Income (“OCI”).At December 31, 2006, the fair value of these swaps was approximately $9.9million in an asset position as the effective rates of the swaps were lowerthan current interest rates at December 31, 2006.

In March 2005, weentered into $300.0 million of cash flow hedges through forward-startinginterest rate swaps to hedge interest rates on $300.0 million of anticipateddebt offerings in 2006. The swaps qualified for hedge accounting, with any changesin fair value recorded in OCI.  In March2006, we issued $150.0 million of 5.50% senior unsecured notes due 2016 andterminated a corresponding amount of the cash flow hedges designated for thistransaction. The settlement amount paid of approximately $800,000 will berecognized to earnings through interest expense ratably over the life of thesenior unsecured notes and the ineffective portion of the hedge wasinsignificant.  In August 2006, we issued$450.0 million of 5.95% senior unsecured notes due 2017 and $250.0 million of5.63% senior unsecured notes due 2011 and terminated the remaining $150.0million of cash flow hedges.  Thesettlement amount received of approximately $1.6 million will be recognized toearnings through a reduction of interest expense ratably over the lives of thesenior unsecured notes. The ineffective portion of the hedge was insignificant.

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In June 2004, wesimultaneously entered into three forward-starting interest rate swapsaggregating $144.3 million, which effectively fixed the rate on financingexpected in 2004 at 5.346%, plus our credit spread over the swap rate. Theswaps qualified for hedge accounting; therefore, changes in the fair value wererecorded in OCI. In August 2004, we settled these three swaps when we issued$250.0 million of senior unsecured notes with an effective interest rate of6.33%, due in 2014. We paid $6.9 million to unwind the swaps, which isamortized from OCI into interest expense over the life of the new 6.33% seniorunsecured notes.

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

# **Off Balance Sheet Arrangements**

# *Investmentsin Unconsolidated Companies*

We have equity interests ranging from 10% — 67% inunconsolidated companies that own and operate rental properties and hold landfor development. The equity method of accounting (see Critical Accounting Policies) is used for these investments inwhich we have the ability to exercise significant influence, but not control,over operating and financial policies. As a result, the assets and liabilitiesof these joint ventures are not included on our balance sheet.

Our investments in and advances to unconsolidatedcompanies represents approximately 9% of our total assets as of December 31,2006. These investments provide several benefits to us, including increasedmarket share, tenant and property diversification and an additional source ofcapital to fund real estate projects.

Thefollowing table presents summarized financial information for unconsolidatedcompanies for the years ended December 31, 2006 and 2005, respectively  (in thousands, except percentage data):
|                                              | ** ** | **Dugan**        | ** **  | **Dugan**       | ** ** | **Eaton  Vance**    | ** ** | **Other**           | ** **  | ** ** | ** ** |
|----------------------------------------------|------------|------------------|-------------|-----------------|------------|---------------------|------------|---------------------|-------------|------------|------------|
| ** **                                   | ** ** | **Realty,  LLC** | ** **  | **Texas,  LLC** | ** ** | **Joint  Ventures** | ** ** | **Joint  Ventures** | ** **  | **Total**  | ** ** |
| ** **                                   | ** ** | **2006**         | ** **  | **2005**        | ** ** | **2006**            | ** ** | **2005**            | ** **  | **2006**   | ** ** | **2005** | ** ** | **2006** | ** ** | **2005** | ** ** | **2006** | ** ** | **2005** | ** ** |
|                                         |       |             |        |            |       |                |       |                |        |       |       |   |   |   |   |   |   |   |   |   |   |
| Land, buildings and tenant improvements, net | ** ** | **$**            | **641,562** |            | $          | 677,377             | ** ** | **$**               | **217,694** |       | $          | 211,818 | ** ** | **$** | **382,232** |   | $ | - | ** ** | **$** | **269,482** |   | $ | 232,059 | ** ** | **$** | **1,510,970** |   | $ | 1,121,254 |   |
| Land held for development                    | ** ** | ** **       | **9,669**   |            |       | 11,628              | ** ** | ** **          | **5,312**   |       |       | 9,222 |   | — |   | - | ** ** | ** ** | **76,299** |   |   | 27,086 | ** ** | ** ** | **91,280** |   |   | 47,936 |   |
| Other assets                                 | ** ** | ** **       | **37,060**  |            |       | 35,959              | ** ** | ** **          | **21,656**  |       |       | 17,347 | ** ** | ** ** | **5,189** |   |   | - | ** ** | ** ** | **84,675** |   |   | 19,778 | ** ** | ** ** | **148,580** |   |   | 73,084 |   |
| ** **                                   |       | **$**            | **688,291** |            | $          | 724,964             | ** ** | **$**               | **244,662** |       | $          | 238,387 | ** ** | **$** | **387,421** | ** ** | **$** | **-** | ** ** | **$** | **430,456** |   | $ | 278,923 | ** ** | **$** | **1,750,830** |   | $ | 1,242,274 |   |
|                                         | ** ** | ** **       | ** **  |            |       |                | ** ** | ** **          | ** **  |       |       |   | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |   |   |   | ** ** | ** ** | ** ** |   |   |   |   |
| Property indebtedness                        | ** ** | **$**            | **307,439** |            | $          | 360,290             | ** ** | **$**               | **17,998**  |       | $          | 17,999 | ** ** | **$** | **—** | ** ** | **$** | **-** | ** ** | **$** | **92,533** |   | $ | 136,903 | ** ** | **$** | **417,970** |   | $ | 515,192 |   |
| Other liabilities                            | ** ** | ** **       | **22,391**  |            |       | 23,903              | ** ** | ** **          | **9,803**   |       |       | 10,436 | ** ** | ** ** | **5,285** |   |   | - | ** ** | ** ** | **132,689** |   |   | 23,886 | ** ** | ** ** | **170,168** |   |   | 58,225 |   |
| ** **                                   |       | ** **       | **329,830** |            |       | 384,193             | ** ** | ** **          | **27,801**  |       |       | 28,435 | ** ** | ** ** | **5,285** |   | - | ** ** | ** ** | **225,222** |   |   | 160,789 | ** ** | ** ** | **588,138** |   |   | 573,417 |   |
| Owners’ equity                          | ** ** | ** **       | **358,461** |            |       | 340,771             | ** ** | ** **          | **216,861** |       |       | 209,952 | ** ** | ** ** | **382,136** |   |   | - | ** ** | ** ** | **205,234** |   |   | 118,134 | ** ** | ** ** | **1,162,692** |   |   | 668,857 |   |
| ** **                                   |       | **$**            | **688,291** |            | $          | 724,964             | ** ** | **$**               | **244,662** |       | $          | 238,387 | ** ** | **$** | **387,421** | ** ** | **$** | **-** | ** ** | **$** | **430,456** |   | $ | 278,923 | ** ** | **$** | **1,750,830** |   | $ | 1,242,274 |   |
|                                         | ** ** | ** **       | ** **  |            |       |                | ** ** | ** **          | ** **  | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |   |   |   |   |
| Rental income                                | ** ** | **$**            | **94,312**  |            | $          | 94,045              | ** ** | **$**               | **32,123**  | ** ** | **$**      | **30,481** | ** ** | **$** | **2,644** | ** ** | **$** | **-** | ** ** | **$** | **28,107** | ** ** | **$** | **38,921** | ** ** | **$** | **157,186** |   | $ | 163,447 |   |
| Net income (loss)                            | ** ** | **$**            | **34,483**  |            | $          | 41,678              | ** ** | **$**               | **12,822**  | ** ** | **$**      | **12,351** | ** ** | **$** | **1,069** | ** ** | **$** | **-** | ** ** | **$** | **17,611** | ** ** | **$** | **3,532** | ** ** | **$** | **65,985** |   | $ | 57,561 |   |
|                                         |       |             |        |            |       |                |       |                |        |       |       |   |   |   |   |   |   |   |   |   |   |
| Total square feet                            |       | **20,770**       |        | 21,436          |       | **6,840**           |       | 6,255               |        | **1,778**  |       | - |   | **6,307** |   | 5,225 |   | **35,695** |   | 32,916 |   |
| Percent leased                               | ** ** | **93.06**%       |        | 95.9**%**       | ** ** | **89.24%**          |       | 90.7**%**           | ** **  | **96.43%** |       | -**%** | ** ** | **71.50**% |   | 90.0% | ** ** | **88.69**% |   | 94.2% |   |
| Company                                      | ** ** | ** **       |        |            |       |                |       |                |        |       |       |   |   | **10%-** |   | 10.0 %- |   |   |   |   |   |
|  ownership  percentage                  | ** ** | **50.0**%        |        | 50.0**%**       | ** ** | **50.0**%           |       | 50.0**%**           | ** **  | **30.0%**  |       | -**%** | ** ** | **67**% |   | 64.0% |   |   |   |   |   |

 

*Off Balance Sheet Arrangements*

We do not have any relationships with unconsolidated entities orfinancial partnerships (“special purpose entities”) that have been establishedsolely for the purpose of facilitating off-balance sheet arrangements.

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**ContractualObligations**

At December 31, 2006, we are subject tocertain contractual payment obligations as described in the table below:
|                                                              | ** ** | **Payments due by Period** | ** **    |
|--------------------------------------------------------------|------------|-------------------------------------------|---------------|
| **Contractual Obligations**                             | ** ** | **Total**                                 | ** **    | **2007** | ** ** | **2008** | ** ** | **2009** | ** ** | **2010** | ** ** | **2011** | ** ** | **Thereafter** | ** ** |
| Long-term debt  (1)                                          |       | $                                         | 5,126,157     |   | $ | 432,672 |   | $ | 474,791 |   | $ | 464,387 |   | $ | 342,921 |   | $ | 1,168,423 |   | $ | 2,242,963 |   |
| Line of credit  (2)                                          |       | 373,531                                   |          | 18,434 |   | 18,434 |   | 18,434 |   | 318,229 |   | — |   | — |   |
| Share of mortgage  debt of unconsolidated joint ventures (3) |       | 251,815                                   |          | 51,493 |   | 13,197 |   | 61,929 |   | 120,615 |   | 4,581 |   | — |   |
| Ground leases                                                |       | 27,298                                    |          | 1,186 |   | 1,048 |   | 1,240 |   | 1,362 |   | 1,395 |   | 21,067 |   |
| Operating leases                                             |       | 725                                       |          | 399 |   | 169 |   | 145 |   | 10 |   | 2 |   | — |   |
| Development and  construction backlog costs (4)              |       | 590,807                                   |          | 549,169 |   | 41,638 |   | — |   | — |   | — |   | — |   |
| Future land  acquisitions (5)                                |       | 36,146                                    |          | 28,767 |   | 2,782 |   | — |   | 4,597 |   | — |   | — |   |
| Service contracts  (6)                                       |       | 6,531                                     |          | 2,437 |   | 2,591 |   | 1,161 |   | 171 |   | 171 |   | — |   |
| Other (7)                                                    |       |                                      | 3,549         |   |   | 353 |   |   | 355 |   |   | 356 |   |   | 358 |   |   | 359 |   |   | 1,768 |   |
| **Total Contractual Obligations**                            | ** ** | **$**                                     | **6,416,559** | ** ** | **$** | **1,084,910** | ** ** | **$** | **555,005** | ** ** | **$** | **547,652** | ** ** | **$** | **788,263** | ** ** | **$** | **1,174,931** | ** ** | **$** | **2,265,798** | ** ** |

 

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(1)          Our long-term debtconsists of both secured and unsecured debt and includes both principal andinterest. Interest expense for variable rate debt was calculated using theinterest rate at December 31, 2006.

(2)          Our unsecured line ofcredit matures in January 2010.

(3)          Our share ofunconsolidated mortgage debt includes both principal and interest. Interestexpense for variable rate debt was calculated using the interest rate atDecember 31, 2006.

(4)          Represents estimatedremaining costs on the completion of held-for-rental, held-for-sale andthird-party construction projects.

(5)          These land acquisitionsare subject to the completion of due diligence requirements, resolution ofcertain contingencies and completion of customary closing conditions.

(6)          Service contractsdefined as those, which cover periods greater than one year and are notcancelable without cause by either party.

(7)          Represents othercontractual obligations.

**Related Party Transactions**

We provide property management, leasing, construction and other tenantrelated services to unconsolidated companies in which we have equity interests.For the years ended December 31, 2006, 2005 and 2004, respectively, we receivedfrom these unconsolidated companies management fees of $4.4 million, $4.8million and $4.9 million, leasing fees of $2.9 million, $4.3 million and $2.6million and construction and development fees of $19.1 million, $2.0 millionand $1.5 million. We recorded these fees at market rates and eliminated ourownership percentages of these fees in the consolidated financial statements.

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

Wehave guaranteed the repayment of $79.6 million of economic development bondsissued by various municipalities in connection with certain commercialdevelopments. We will be required to make payments under our guarantees to theextent that incremental taxes from specified developments are not sufficient topay the bond debt service. Management does not believe that it is probable thatwe will be required to make any significant payments in satisfaction of theseguarantees.

We also haveguaranteed the repayment of secured and unsecured loans of four of ourunconsolidated subsidiaries. At December 31, 2006, the outstanding balance onthese loans was approximately $129.0 million. Management believes that thevalue of the real estate exceeds the loan balance and that we will not berequired to satisfy these guarantees.

We have enteredinto agreements, subject to the completion of due diligence requirements,resolution of certain contingencies and completion of customary closingconditions, for the future acquisition of land totaling $36.1 million.

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

Werenewed all of our major insurance policies in 2006. These policies includecoverage for acts of terrorism for our properties. We believe that thisinsurance provides adequate coverage against normal insurance risks and thatany loss experienced would not have a significant impact on our liquidity,financial position, or results of operations.

We are subject tovarious legal proceedings and claims that arise in the ordinary course ofbusiness.  In the opinion of management,the amount of any ultimate liability with respect to these actions will notmaterially affect our consolidated financial statements or results ofoperations.

# **Recent Accounting Pronouncements**

In June 2006, theFASB issued Interpretation No. 48, *Accountingfor Uncertainty in Income Taxes*, *anInterpretation of FASB Statement No. 109*(“FIN 48”).  FIN 48 clarifies the accounting foruncertainty in income taxes recognized in a company’s financial statements andprescribes a recognition threshold and measurement attribute for the financialstatement recognition and measurement of a tax position taken or expected to betaken in a tax return.  TheInterpretation also provides guidance on description, classification, interestand penalties, accounting in interim periods, disclosure and transition.  FIN 48 becomes effective on January 1, 2007and is not anticipated to have a material effect on our 2007 financialposition, results of operations, or liquidity.

In September 2006,the SEC issued Staff Accounting Bulletin No. 108, *Considering the Effects of Prior Year Misstatements when QuantifyingMisstatements in Current Year Financial Statements* (“SAB 108”). SAB108 provides guidance regarding the process of quantifying the materiality offinancial statement misstatements. We adopted SAB 108 in the fourth quarter of2006 with no effect to our financial statements.

**Item7A.  Quantitative and QualitativeDisclosure About Market Risks**

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

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Our interest rate risk is monitored using a variety of techniques. Thetable 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. 
|                                 | ** ** | ** **                                                                             | ** ** | ** **                                                                             | ** ** | ** **                                                                             | ** ** | ** **                                                                             | ** ** | ** **                                                                             | ** ** | ** **                                                                             | ** ** | ** **                                       | ** ** | **Fair**                                         | ** ** |
|---------------------------------|------------|----------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------|------------|--------------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                      | ** ** | **2007**                                                                               | ** ** | **2008**                                                                               | ** ** | **2009**                                                                               | ** ** | **2010**                                                                               | ** ** | **2011**                                                                               | ** ** | **Thereafter**                                                                         | ** ** | **Total**                                        | ** ** | **Value**                                        | ** ** |
| ** **                      | ** ** | ** **                                                                             | ** ** | ** **                                                                             | ** ** | ** **                                                                             | ** ** | ** **                                                                             | ** ** | ** **                                                                             | ** ** | ** **                                                                             | ** ** | ** **                                       | ** ** | ** **                                       | ** ** |
| Fixed  rate secured debt        |       | $     26,859                                                  |       | $     55,766                                                  |       | $     11,475                                                  |       | $     11,202                                                  |       | $     23,339                                                  |       | $   524,245                                                             |       | $   652,886                       |       | $   655,809                       |       |
| Weighted  average interest rate |       | 7.31%                                                                                  |       | 5.80%                                                                                  |       | 6.91%                                                                                  |       | 6.86%                                                                                  |       | 7.14%                                                                                  |       | 6.12%                                                                                  |       |                                             |       |                                             |       |
|                            |       |                                                                                   |       |                                                                                   |       |                                                                                   |       |                                                                                   |       |                                                                                   |       |                                                                                   |       |                                             |       |                                             |       |
| Variable  rate secured debt     |       | $          645                       |       | $          680                       |       | $          710                       |       | $          750                       |       | $          785                       |       | $       6,045                                       |       | $       9,615 |       | $       9,615 |       |
| Weighted  average interest rate |       | 3.79%                                                                                  |       | 3.79%                                                                                  |       | 3.79%                                                                                  |       | 3.79%                                                                                  |       | 3.79%                                                                                  |       | 3.79%                                                                                  |       |                                             |       |                                             |       |
|                            |       |                                                                                   |       |                                                                                   |       |                                                                                   |       |                                                                                   |       |                                                                                   |       |                                                                                   |       |                                             |       |                                             |       |
| Fixed  rate unsecured notes     |       | $   200,156                                                             |       | $   225,000                                                             |       | $   275,000                                                             |       | $   175,000                                                             |       | $ 1,000,000                                                                       |       | $ 1,250,000                                                                       |       | $ 3,125,156                                 |       | $ 3,167,834                                 |       |
| Weighted  average interest rate |       | 5.55%                                                                                  |       | 4.77%                                                                                  |       | 7.39%                                                                                  |       | 5.37%                                                                                  |       | 5.05%                                                                                  |       | 6.00%                                                                                  |       |                                             |       |                                             |       |
|                            |       |                                                                                   |       |                                                                                   |       |                                                                                   |       |                                                                                   |       |                                                                                   |       |                                                                                   |       |                                             |       |                                             |       |
| Variable  rate unsecured notes  |       | $              - |       | $       4,497                                       |       | $              - |       | $              - |       | $              - |       | $              - |       | $       4,497 |       | $       4,497 |       |
| Weighted  average interest rate |       | N/A                                                                                    |       | 6.20%                                                                                  |       | N/A                                                                                    |       | N/A                                                                                    |       | N/A                                                                                    |       | N/A                                                                                    |       |                                             |       |                                             |       |
|                            |       |                                                                                   |       |                                                                                   |       |                                                                                   |       |                                                                                   |       |                                                                                   |       |                                                                                   |       |                                             |       |                                             |       |
| Unsecured  line of credit       |       | $              - |       | $              - |       | $              - |       | $   317,000                                                             |       | $              - |       | $              - |       | $   317,000                       |       | $   317,000                       |       |
| Rate at December 31, 2006       |       | N/A                                                                                    |       | N/A                                                                                    |       | N/A                                                                                    |       | 5.82%                                                                                  |       | N/A                                                                                    |       | N/A                                                                                    |       |                                             |       |                                             |       |

 

As the table incorporates only those exposures that exist as of December31, 2006, it does not consider those exposures or positions that could ariseafter that date. As a result, our ultimate realized gain or loss with respectto interest rate fluctuations will depend on the exposures that arise duringthe period, our hedging strategies at that time, and interest rates.

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

The financial statements and supplementary dataare included under Item 15 of this Report.

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

There was no change or disagreement with ouraccountants related to our accounting and financial disclosures.

**Item 9A. Controls and Procedures**

We conducted anevaluation of the effectiveness of the design and operation of our “disclosurecontrols and procedures” as of the end of the period covered by this AnnualReport. The controls evaluation was done under the supervision and with theparticipation of management, including theGeneral Partner’s Chief Executive Officer and Chief Financial Officer.

Attached asexhibits to this Annual Report are certifications of the General Partner’s Chief Executive Officerand Chief Financial Officer, which are required in accordance with Rule 13a-14of the Securities Exchange Act of 1934. This Controls and Procedures sectionincludes the information concerning the controls evaluation referred to in thecertifications and it should be read in conjunction with the certifications fora more complete understanding of the topics presented.

Disclosurecontrols and procedures (as defined in Rule 13a-15 and 15d-15f under theSecurities Exchange Act of 1934 (the “Exchange Act”) are controls and otherprocedures that are designed to ensure that information required to bedisclosed in our reports filed under the Exchange Act, such as this AnnualReport, is recorded, processed, summarized and reported within the time periodsspecified in the SEC’s rules and forms. Disclosure controls and procedures arealso designed to ensure that such information is accumulated and communicatedto our management, including the GeneralPartner’s principal executive and principal financial officers, asappropriate, to allow timely decisions regarding required disclosure.

38

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Based on thedisclosure controls and procedures evaluation referenced above, the General Partner’s Chief ExecutiveOfficer and Chief Financial Officer have concluded that as of the end of theperiod covered by this Annual Report, our disclosure controls and procedureswere effective.

Management’sannual report on internal control over financial reporting and the attestationreport of our registered public accounting firm are included in Item 15 of PartIV under the headings “Management’s Report on Internal Control” and “Report ofIndependent Registered Public Accounting Firm,” respectively, and areincorporated herein by reference.

There were nochanges in our internal controls over financial reporting during the quarterended December 31, 2006, that have materially affected, or are reasonablylikely to materially affect, our internal controls over financial reporting.

**Item 9B. Other Information**

There was noinformation required to be disclosed in a report on Form 8-K during the fourthquarter of 2006 for which no Form 8-K was filed.

**PART III**

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

The Partnership does not have any directors orofficers. The information required by Item 10 for Directors and CertainExecutive Officers is contained in the General Partner’s Proxy Statement and isherein incorporated by this reference.

**Item 11.  Executive Compensation**

The information required by Item11 is contained in the Proxy Statement and is incorporated herein by this reference.

**Item 12. Security Ownership of Certain BeneficialOwners and Management and Related Stockholder Matters**

**The following is a summary of theexecutive officers of the General Partner as of January 1, 2007:**

***Dennis D. Oklak, age 53***.  Mr. Oklak was named Chairman and ChiefExecutive Officer of the General Partnerin April 2005. He served as President and Chief Executive Officer from April2004 to April 2005. He was Co-Chief Operating Officer from April 2002 throughJanuary 2003, at which time he was named President and Chief Operating Officer.Mr. Oklak assumed the position of Executive Vice President and ChiefAdministrative Officer in 1997. From 1986 through 1997, Mr. Oklak served invarious financial positions of the GeneralPartner.

***Matthew A. Cohoat, age 47***. Mr. Cohoatwas named Executive Vice President and Chief Financial Officer of the General Partner on January 1, 2004.From 1990 through 2003, Mr. Cohoat held various positions in financial areas ofthe General Partner.

***Robert M. Chapman, age 53***.  Mr. Chapman has served as the General Partner’s Senior ExecutiveVice President, Real Estate Operations, since November 2003. From 1999 throughNovember 2003, Mr. Chapman served in various real estate investment andoperating positions of the General Partner.

***Howard L. Feinsand, age 59***.** Mr. Feinsand has served as the General Partner’s Executive VicePresident and General Counsel since 1999 and, since 2003, also has served asthe General Partner’s Corporate Secretary. Mr. Feinsand served on the General Partner’s board of directorsfrom 1988 to January 2003.

39

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***Steven R. Kennedy, age*****50**. Mr. Kennedy was named as the General Partner’s Executive VicePresident, Construction on January 1, 2004. From 1986 until 2004, he served invarious capacities in the construction group, most recently as Senior VicePresident.

All other information required by Item 12 is containedin the Proxy Statement and is incorporated herein by this reference.

**Item 13.  Certain Relationships and RelatedTransactions**

The information required by Item13 is contained in the Proxy Statement and is incorporated herein by reference.

**Item 14.  Principal Accountant Fees and Services**

The information required by Item14 is contained the Proxy Statement and is incorporated herein by reference.

**PART IV**

**Item 15.  Exhibits and FinancialStatement Schedules**

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

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

The following Consolidated Financial Statements, together with theManagement’s Report on Internal Control, the Report of Independent RegisteredPublic Accounting Firm-Financial Statements and Financial Statement ScheduleIII and Report of Independent Registered Public Accounting Firm-Management’sAssessment of the Effectiveness of Internal Control over Financial Reportingand the Effectiveness of Internal Control over Financial Reporting, are listedbelow:

Management’s Report on Internal Control

Report of Independent Registered Public Accounting Firm-Management’s

  Assessment of the Effectivenessof Internal Control over Financial

  Reporting and the Effectivenessof Internal Control over Financial Reporting

Report of Independent Registered Public Accounting

  Firm-Financial Statements andFinancial Statement Schedule III

Consolidated Balance Sheets, December 31, 2006 and 2005

Consolidated Statements of Operations, Years Ended December 31,

  2006, 2005 and 2004

Consolidated Statements of Cash Flows, Years Ended December 31, 2006,2005

  and 2004

Consolidated Statements of Partners’ Equity, Years Ended December 31,

  2006, 2005 and 2004

Notesto Consolidated Financial Statements

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

Schedule III — Real Estate and Accumulated Depreciation

40

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**3.     Exhibits**

The following exhibits are filed with this Form 10-K or incorporatedherein by reference to the listed document previously filed with the SEC.Previously unfiled documents are noted with an asterisk (*).
| **Number** |   | **Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 3.1(i)     |   | Certificate of Limited Partnership of Duke Realty  Limited Partnership, dated September 17, 1993.*                                                                                                                                                                                                                                                                                                                                                                                                                              |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 3.2(i)     |   | Second Amended and Restated Agreement of Limited  Partnership of Duke Realty Limited Partnership.*                                                                                                                                                                                                                                                                                                                                                                                                                              |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 3.2(ii)    |   | Second Amendment to Second Amended and Restated  Agreement of Limited Partnership of Duke Realty Limited Partnership (filed as  Exhibit 10.3 to the General Partner’s Annual Report on Form 10-K405 for the  year ended December 31, 2001, as filed with the SEC on March 15, 2002, File  No. 001-09044, and incorporated herein by this reference).                                                                                                                                                                       |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 3.2(iii)   |   | Third Amendment to Second Amended and Restated  Agreement of Limited Partnership of Duke Realty Limited Partnership (filed as  Exhibit 10.4 to the General Partner’s Annual Report on Form 10-K405 for the  year ended December 31, 2001, as filed with the SEC on March 15, 2002, File  No. 001-09044, and incorporated herein by this reference).                                                                                                                                                                        |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 3.2(iv)    |   | Fourth Amendment to Second Amended and Restated  Agreement of Limited Partnership of Duke Realty Limited Partnership (filed as  Exhibit 10.5 to the General Partner’s Annual Report on Form 10-K405 for the  year ended December 31, 2001, as filed with the SEC on March 15, 2002, File  No. 001-09044, and incorporated herein by this reference).                                                                                                                                                                       |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 3.2(v)     |   | Fifth Amendment to Second Amended and Restated  Agreement of Limited Partnership of Duke Realty Limited Partnership, dated  August 25, 2003, establishing the amount, terms and rights of Duke Realty  Limited Partnership’s 6.625% Series J Cumulative Redeemable Preferred  Units (filed as Exhibit 10.6 to the General Partner’s Annual Report on Form  10-K for the year ended December 31, 2005, as filed with the SEC on March 7,  2006, File No. 001-09044, and incorporated herein by this reference).   |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 3.2(vi)    |   | Sixth Amendment to Second Amended and Restated  Agreement of Limited Partnership of Duke Realty Limited Partnership, dated  February 13, 2004, establishing the amount, terms and rights of Duke Realty  Limited Partnership’s 6.5% Series K Cumulative Redeemable Preferred  Units (filed as Exhibit 10.7 to the General Partner’s Annual Report on Form  10-K for the year ended December 31, 2005, as filed with the SEC on March 7,  2006, File No. 001-09044, and incorporated herein by this reference).   |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 3.2(vii)   |   | Seventh Amendment to Second Amended and Restated  Agreement of Limited Partnership of Duke Realty Limited Partnership, dated  November 30, 2004, establishing the amount, terms and rights of Duke Realty  Limited Partnership’s 6.6% Series L Cumulative Redeemable Preferred  Units (filed as Exhibit 10.8 to the General Partner’s Annual Report on Form  10-K for the year ended December 31, 2005, as filed with the SEC on March 7,  2006, File No. 001-09044, and incorporated herein by this reference). |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 3.2(viii)  |   | Eighth Amendment to Second Amended and Restated  Agreement of Limited Partnership of Duke Realty Limited Partnership, dated  January 31, 2006, establishing the amount, terms and rights of Duke Realty  Limited Partnership’s 6.95% Series M Cumulative Redeemable Preferred  Units (filed as Exhibit 3.1 to the Current Report on Form 8-K, as filed with  the SEC on February 6, 2006, File No. 000-20625, and incorporated herein by  this reference).                                                            |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 3.2(ix)    |   | Ninth Amendment to the Second Amended and Restated  Agreement of Limited Partnership of Duke Realty Limited Partnership, dated  June 30, 2006, establishing the amount, terms and rights of Duke Realty  Limited Partnership’s 7.25% Series N Cumulative Redeemable Preferred Units  (filed as Exhibit 3.1 to the Partnership’s Current Report on Form 8-K, as  filed with the SEC on July 5, 2006, File  No. 000-20625, and incorporated herein by this reference).                                                  |

 

41

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| 4.1(i)   |   | Third Restated Articles of Incorporation of Duke Realty  Corporation (filed as Exhibit 3.1 to the General Partner’s Quarterly Report  on Form 10-Q for the quarter ended March 31, 2003, as filed with the SEC on  May 13, 2003, File No. 001-09044, and incorporated herein by this reference).                                                                                                                                                                                                       |
|----------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 4.1(ii)  |   | Amendment to the Third Restated Articles of  Incorporation of Duke Realty Corporation, establishing the amount, terms and  rights of the General Partner’s 6.625% Series J Cumulative Redeemable  Preferred Shares (filed as Exhibit 3 to the General Partner’s Current Report  on Form 8-K, as filed with the SEC on August 27, 2003, File No. 001-09044,  and incorporated herein by this reference).                                                                                           |
|     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 4.1(iii) |   | Amendment to the Third Restated Articles of  Incorporation of Duke Realty Corporation, establishing the amount, terms and  rights of the General Partner’s 6.5% Series K Cumulative Redeemable Preferred  Shares (filed as Exhibit 3 to the General Partner’s Current Report on Form  8-K, as filed with the SEC on February 26, 2004, File No. 001-09044, and  incorporated herein by this reference).                                                                                           |
|     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 4.1(iv)  |   | Amendment to the Third Restated Articles of  Incorporation of Duke Realty Corporation, establishing the amount, terms and  rights of the General Partner’s 6.6% Series L Cumulative Redeemable Preferred  Shares (filed as Exhibit 3.1 of the General Partner’s Current Report on Form  8-K, as filed with the SEC on November 29, 2004, File No. 001-09044, and  incorporated herein by reference).                                                                                              |
|     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 4.1(v)   |   | Amendment to the Third  Restated Articles of Incorporation of Duke Realty Corporation, establishing  the amount, terms and rights of the General Partner’s 7.99% Series B  Cumulative Step-Up Premium Rate Preferred Shares (filed as Exhibit 3.6 to the General Partner’s Annual Report on Form  10-K for the year ended December 31, 2005, as filed with the SEC on March 7,  2006, File No. 001-09044, and incorporated herein by this reference).                                        |
|     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 4.1(vi)  |   | Amendment to the Third Restated Articles of  Incorporation of Duke Realty Corporation, establishing the amount, terms and  rights of the General Partner’s 7.25% Series N Cumulative Redeemable  Preferred Shares (filed as Exhibit 3.1 to the General Partner’s Current  Report on Form 8-K, as filed with the SEC on July 6, 2006, and incorporated  herein by this reference).                                                                                                                 |
|     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 4.1(vii) |   | Amendment to the Third Restated Articles of  Incorporation of Duke Realty Corporation, amending the Designating Amendment  to the Third Restated Articles of Incorporation of Duke Realty Corporation,  establishing the amount, terms and rights of the General Partner’s 6.95%  Series M Cumulative Redeemable Preferred Shares (filed as Exhibit 3.2 to the  General Partner’s Current Report on Form 8-K, as filed with the SEC on July  6, 2006, and incorporated herein by this reference). |
|     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 4.2(i)   |   | Third Amended and Restated Bylaws of Duke Realty Corporation  (filed as Exhibit 3.2 to the General Partner’s Quarterly Report on Form 10-Q  for the quarter ended March 31, 2003, as filed with the SEC on May 13, 2003,  File No. 001-09044, and incorporated herein by this reference).                                                                                                                                                                                                              |
|     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 4.3(i)   |   | Indenture, dated September 19, 1995, between Duke  Realty Limited Partnership and The First National Bank of Chicago, Trustee  (filed as Exhibit 4.1 to the General Partner’s Current Report on Form 8-K, as  filed with the SEC on September 22, 1995, File No. 001-09044, and incorporated  herein by this reference).                                                                                                                                                                               |
|     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 4.3(ii)  |   | First Supplemental Indenture, dated September 19,  1995, between Duke Realty Limited Partnership and The First National Bank of  Chicago, Trustee (filed as Exhibit 4.2 to the General Partner’s Current Report  on Form 8-K, as filed with the SEC on September 22, 1995, File No. 001-09044,  and incorporated herein by this reference).                                                                                                                                                            |

 

42

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| 4.3(iii)  |   | Second Supplemental Indenture, dated April 29, 1996,  between Duke Realty Limited Partnership and The First National Bank of  Chicago, Trustee (filed as Exhibit 4 to the Partnership’s Current Report on  Form 8-K, as filed with the SEC on July 12, 1996, File No. 000-20625, and  incorporated herein by this reference).              |
|-----------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |   |                                                                                                                                                                                                                                                                                                                                            |
| 4.3(iv)   |   | Third Supplemental Indenture, dated May 13, 1997,  between Duke Realty Limited Partnership and The First National Bank of  Chicago, Trustee (filed as Exhibit 4 to the Partnership’s Current Report on  Form 8-K, as filed with the SEC on May 20, 1997, File No. 000-20625, and  incorporated herein by this reference).                  |
|      |   |                                                                                                                                                                                                                                                                                                                                            |
| 4.3(v)    |   | Fourth Supplemental Indenture, dated August 21,  1997, between Duke Realty Limited Partnership and The First National Bank of  Chicago, Trustee (filed as Exhibit 4.8 to the General Partner’s Registration  Statement on Form S-4, as filed with the SEC on May 4, 1999, File No.  333-77645, and incorporated herein by this reference). |
|      |   |                                                                                                                                                                                                                                                                                                                                            |
| 4.3(vi)   |   | Fifth Supplemental Indenture, dated May 27, 1998,  between Duke Realty Limited Partnership and The First National Bank of  Chicago, Trustee (filed as Exhibit 4 to the Partnership’s Current Report on  Form 8-K, as filed with the SEC on June 1, 1998, File No. 000-20625, and  incorporated herein by this reference).                  |
|      |   |                                                                                                                                                                                                                                                                                                                                            |
| 4.3(vii)  |   | Sixth Supplemental Indenture, dated February 12,  1999, between Duke Realty Limited Partnership and The First National Bank of  Chicago, Trustee (filed as Exhibit 4 to the Partnership’s Current Report on  Form 8-K, as filed with the SEC on February 12, 1999, File No. 000-20625, and  incorporated herein by this reference).        |
|      |   |                                                                                                                                                                                                                                                                                                                                            |
| 4.3(viii) |   | Seventh Supplemental Indenture, dated June 18, 1999,  between Duke Realty Limited Partnership and The First National Bank of  Chicago, Trustee (filed as Exhibit 4 to the Partnership’s Current Report on  Form 8-K, as filed with the SEC on June 29, 1999, File No. 000-20625, and  incorporated herein by this reference).              |
|      |   |                                                                                                                                                                                                                                                                                                                                            |
| 4.3(ix)   |   | Eighth Supplemental Indenture, dated November 16,  1999, between Duke Realty Limited Partnership and Bank One Trust Company,  N.A., Trustee (filed as Exhibit 4 to the Partnership’s Current Report on Form  8-K, as filed with the SEC on November 15, 1999, File No. 000-20625, and  incorporated herein by this reference).             |
|      |   |                                                                                                                                                                                                                                                                                                                                            |
| 4.3(x)    |   | Ninth Supplemental Indenture, dated March 5, 2001,  between Duke Realty Limited Partnership and Bank One Trust Company, N.A.,  Trustee (filed as Exhibit 4 to the Partnership’s Current Report on Form 8-K,  as filed with the SEC on March 2, 2001, File No. 000-20625, and incorporated  herein by this reference).                      |
|      |   |                                                                                                                                                                                                                                                                                                                                            |
| 4.3(xi)   |   | Tenth Supplemental Indenture, dated June 8, 2001,  between Duke Realty Limited Partnership and Bank One Trust Company, N.A.,  Trustee (filed as Exhibit 4 to the Partnership’s Current Report on Form 8-K,  as filed with the SEC on August 13, 2001, File No. 000-20625, and  incorporated herein by this reference).                     |
|      |   |                                                                                                                                                                                                                                                                                                                                            |
| 4.3(xii)  |   | Eleventh Supplemental Indenture, dated August 26,  2002, between Duke Realty Limited Partnership and Bank One Trust Company,  N.A., Trustee (filed as Exhibit 4 to the Partnership’s Current Report on Form  8-K, as filed with the SEC on August 26, 2002, File No. 000-20625, and  incorporated herein by this reference).               |
|      |   |                                                                                                                                                                                                                                                                                                                                            |
| 4.3(xiii) |   | Twelfth Supplemental Indenture, dated January 16,  2003, between Duke Realty Limited Partnership and Bank One Trust Company,  N.A., Trustee (filed as Exhibit 4 to the Partnership’s Current Report on Form  8-K, as filed with the SEC on January 16, 2003, File No. 000-20625, and  incorporated herein by this reference).              |
|      |   |                                                                                                                                                                                                                                                                                                                                            |
| 4.3(xiv)  |   | Thirteenth Supplemental Indenture, dated May 22,  2003, between Duke Realty Limited Partnership and Bank One Trust Company,  N.A., Trustee (filed as Exhibit 4 to the Partnership’s Current Report on Form  8-K, as filed with the SEC on May 22, 2003, File No. 000-20625, and  incorporated herein by this reference).                   |

 

43

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| 4.3(xv)    |   | Fourteenth Supplemental Indenture, dated October 24,  2003, between Duke Realty Limited Partnership and Bank One Trust Company,  N.A., Trustee (filed as Exhibit 4 to the Partnership’s Current Report on Form  8-K, as filed with the SEC on October 24, 2003, File No. 000-20625, and  incorporated herein by this reference).                                                                                                                                                                                                                                                                             |
|------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.3(xvi)   |   | Fifteenth Supplemental Indenture, dated January 7,  2004, between Duke Realty Limited Partnership and J.P. Morgan Trust Company,  National Association, Trustee (filed as Exhibit 4 to the Partnership’s  Current Report on Form 8-K, as filed with the SEC on January 9, 2004, File  No. 000-20625, and incorporated herein by this reference).                                                                                                                                                                                                                                                             |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.3(xvii)  |   | Sixteenth Supplemental Indenture, dated January 16,  2004, between Duke Realty Limited Partnership and J.P. Morgan Trust Company,  National Association, Trustee (filed as Exhibit 4 to the Partnership’s  Current Report on Form 8-K, as filed with the SEC on January 23, 2004, File  No. 000-20625, and incorporated herein by this reference).                                                                                                                                                                                                                                                           |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.3(xviii) |   | Seventeenth Supplemental Indenture, dated August 16,  2004, between Duke Realty Limited Partnership and J.P. Morgan Trust Company,  National Association, Trustee (filed as Exhibit 4 to the Partnership’s  Current Report on Form 8-K, as filed with the SEC on August 18, 2004, File  No. 000-20625, and incorporated herein by this reference).                                                                                                                                                                                                                                                           |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.3(xix)   |   | Eighteenth Supplemental Indenture, dated December  22, 2004, between Duke Realty Limited Partnership and J.P. Morgan Trust  Company, National Association, Trustee (filed as Exhibit 4 to the  Partnership’s Current Report on Form 8-K, as filed with the SEC on December  23, 2004, File No. 000-20625, and incorporated herein by this reference).                                                                                                                                                                                                                                                        |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.3(xx)    |   | Nineteenth Supplemental Indenture, dated as of March  1, 2006, by and between Duke Realty Limited Partnership and J.P. Morgan Trust  Company, National Association (successor in interest to Bank One Trust  Company, N.A.), including the form of global note evidencing the 5.5% Senior  Notes Due 2016 (filed as Exhibit 4.1 to the Partnership’s Current Report on  Form 8-K, as filed with the SEC on March 3, 2006, File No. 000-20625, and  incorporated herein by this reference).                                                                                                                   |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.3(xxi)   |   | Twentieth Supplemental Indenture, dated as of July  24, 2006, by and between Duke Realty Limited Partnership and J.P. Morgan  Trust Company, National Association (successor in interest to The First  National Bank of Chicago), modifying certain financial covenants contained in  Sections 1004 and 1005 of the Indenture,  dated September 19, 1995, between Duke Realty Limited Partnership and The  First National Bank of Chicago, Trustee (filed as Exhibit 4.1 to the  Partnership’s Current Report on Form 8-K, filed with the SEC on July 28,  2006, and incorporated herein by this reference). |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.4(i)     |   | Indenture, dated as of July  28, 2006, by and between Duke Realty Limited Partnership and J.P.  Morgan Trust Company, National Association (filed as Exhibit 4.1 to the  General Partner’s automatic shelf registration statement on Form S-3, filed  with the SEC on July 31, 2006, and incorporated herein by this reference).                                                                                                                                                                                                                                                                             |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.4(ii)    |   | First Supplemental Indenture, dated as of August 24,  2006, by and between Duke Realty Limited Partnership and J.P. Morgan Trust  Company, National Association, including the form of global note evidencing  the 5.625% Senior Notes Due 2011 (filed as Exhibit 4.1 to the Partnership’s  Current Report on Form 8-K, as filed with the SEC on August 30, 2006, and  incorporated herein by this reference).                                                                                                                                                                                               |
|       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.4(iii)   |   | Second Supplemental Indenture, dated as of August  24, 2006, by and between Duke Realty Limited Partnership and J.P. Morgan  Trust Company, National Association, including the form of global note  evidencing the 5.95% Senior Notes Due 2017 (filed as Exhibit 4.2 to the  Partnership’s Current Report on Form 8-K, as filed with the SEC on August 30,  2006, and incorporated herein by this reference).                                                                                                                                                                                               |

 

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| 4.5       |   | Indenture, dated November 22, 2006, by and among  Duke Realty Limited Partnership, the General Partner and The Bank of New York  Trust Company, N.A., as trustee, including the form of 3.75% Exchangeable  Senior Note due 2011 (filed as Exhibit 4.1 to the Partnership’s Current Report  on Form 8-K, as filed with the Commission on November 29, 2006, File No.  000-20625, and incorporated herein by this reference).                                      |
|-----------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.6       |   | Deposit Agreement, dated as of January 31, 2006, by  and among the General Partner, American Stock Transfer & Trust Company,  as depositary, and the holders from time to time of the Depositary Receipts  (which includes as an exhibit the form of Depositary Receipts filed as  Exhibit 4.1 to the General Partner’s Current Report on Form 8-K, as filed  with the SEC January 31, 2006, File No. 001-09044, and incorporated herein by  this reference). |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1(i)   |   | Second Amended and Restated Agreement of Limited  Partnership of Duke Realty Services Limited Partnership (the “Services  Partnership”), dated as of September 30, 1994 (filed as Exhibit 10.3 to the  General Partner’s Annual Report on Form 10-K for the year ended December 31,  1994, as filed with the SEC on February 21, 1996, File No. 001-09044, and  incorporated herein by this reference).                                                 |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1(ii)  |   | First Amendment to Second Amended and Restated  Agreement of Limited Partnership of the Services Partnership, dated July 23,  1998 (filed as Exhibit 10.7 to the General Partner’s Annual Report on Form  10-K for the year ended December 31, 2001, as filed with the SEC on March 15,  2002, File No. 001-09044, and incorporated by this reference).                                                                                                           |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1(iii) |   | Second Amendment to Second Amended and Restated  Agreement of Limited Partnership of the Services Partnership, dated October  26, 1995 (filed as Exhibit 10.8 to the General Partner’s Annual Report on  Form 10-K for the year ended December 31, 2001, as filed with the SEC on  March 15, 2002, File No. 001-09044, and incorporated by this reference).                                                                                                       |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1(iv)  |   | Third Amendment to Second Amended and Restated  Agreement of Limited Partnership of the Services Partnership, effective as of  January 1, 2002 (filed as Exhibit 10.9 to the General Partner’s Annual Report  on Form 10-K for the year ended December 31, 2001, as filed with the SEC on  March 15, 2002, File No. 001-09044, and incorporated by this reference).                                                                                               |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.2      |   | Promissory Note of the Services Partnership (filed  as Exhibit 10.3 to the General Partner’s Registration Statement on Form S-2,  as filed with the SEC on June 8, 1993, File No. 33-64038, and incorporated  herein by this reference).                                                                                                                                                                                                                          |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.3(i)   |   | 1995 Key Employee Stock Option Plan of the General  Partner (filed as Exhibit 10.13 to the General Partner’s Annual Report on  Form 10-K for the year ended December 31, 1995, as filed with the SEC on  March 30, 1995, File No. 001-09044, and incorporated herein by this  reference).#                                                                                                                                                                        |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.3(ii)  |   | Amendment One to the 1995 Key Employees’ Stock  Option Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.19 to the  General Partner’s Annual Report on Form 10-K405 for the year ended December  31, 2001, as filed with the SEC on March 15, 2002, File No. 001-09044, and  incorporated herein by this reference).#                                                                                                                               |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.3(iii) |   | Amendment Two to the 1995 Key Employees’ Stock  Option Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.20 to the  General Partner’s Annual Report on Form 10-K405 for the year ended December  31, 2001, as filed with the SEC on March 15, 2002, File No. 001-09044, and  incorporated herein by this reference).#                                                                                                                               |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.3(iv)  |   | Amendment Three to the 1995 Key Employees’ Stock Option  Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.21 to the General  Partner’s Annual Report on Form 10-K405 for the year ended December 31, 2001,  as filed with the SEC on March 15, 2002, File No. 001-09044, and incorporated  herein by this reference).#                                                                                                                             |

 

45

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| 10.3(v)    |   | Amendment Four to the 1995 Key Employees’ Stock  Option Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.22 to the  General Partner’s Annual Report on Form 10-K405 for the year ended December  31, 2001, as filed with the SEC on March 15, 2002, File No. 001-09044, and  incorporated herein by this reference).# |
|------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |   |                                                                                                                                                                                                                                                                                                                                      |
| 10.3(vi)   |   | Amendment Five to the 1995 Key Employees’ Stock  Option Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.23 to the  General Partner’s Annual Report on Form 10-K405 for the year ended December  31, 2001, as filed with the SEC on March 15, 2002, File No. 001-09044, and  incorporated herein by this reference).# |
|       |   |                                                                                                                                                                                                                                                                                                                                      |
| 10.3(vii)  |   | Amendment Six to the 1995 Key Employees’ Stock  Option Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.24 to the  General Partner’s Annual Report on Form 10-K405 for the year ended December  31, 2001, as filed with the SEC on March 15, 2002, File No. 001-09044, and  incorporated herein by this reference).#  |
|       |   |                                                                                                                                                                                                                                                                                                                                      |
| 10.3(viii) |   | Amendment Seven to the 1995 Key Employees’ Stock  Option Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.1 to the  General Partner’s Quarterly Report on Form 10-Q, as filed with the SEC on  November 13, 2002, File No. 001-09044, and incorporated herein by this  reference).#                                   |
|       |   |                                                                                                                                                                                                                                                                                                                                      |
| 10.3(ix)   |   | Amendment Nine to the 1995 Key Employees’ Stock  Option Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.3 to the  General Partner’s Quarterly Report on Form 10-Q, as filed with the SEC on  October 9, 2005, File No. 001-09044, and incorporated herein by this  reference).#                                      |
|       |   |                                                                                                                                                                                                                                                                                                                                      |
| 10.3(x)    |   | Amendment Ten to the 1995 Key Employees’ Stock  Option Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.4 to the  General Partner’s Quarterly Report on Form 10-Q, as filed with the SEC on  November 8, 2006, File No. 001-09044, and incorporated herein by this  reference).#                                      |
|       |   |                                                                                                                                                                                                                                                                                                                                      |
| 10.4(i)    |   | 1995 Shareholder Value Plan of the Services  Partnership (filed as Exhibit 10.15 to the General Partner’s Annual Report on  Form 10-K for the year ended December 31, 1995, as filed with the SEC on  March 30, 1995, File No. 001-09044, and incorporated herein by this  reference).#                                              |
|       |   |                                                                                                                                                                                                                                                                                                                                      |
| 10.4(ii)   |   | Amendment One to the 1995 Shareholder Value Plan of  the Services Partnership (filed as Exhibit 10.29 to the General Partner’s  Annual Report on Form 10-K405 for the year ended December 31, 2001, as filed  with the SEC on March 15, 2002, File No. 001-09044, and incorporated herein  by this reference).#                      |
|       |   |                                                                                                                                                                                                                                                                                                                                      |
| 10.4(iii)  |   | Amendment Two to the 1995 Shareholder Value Plan of  the Services Partnership (filed as Exhibit 10.30 to the General Partner’s  Annual Report on Form 10-K405 for the year ended December 31, 2001, as filed  with the SEC on March 15, 2002, File No. 001-09044, and incorporated herein  by this reference).#                      |
|       |   |                                                                                                                                                                                                                                                                                                                                      |
| 10.4(iv)   |   | Amendment Three to the 1995 Shareholder Value Plan  of the Services Partnership (filed as Exhibit 10.31 to the General Partner’s  Annual Report on Form 10-K405 for the year ended December 31, 2001, as filed  with the SEC on March 15, 2002, File No. 001-09044, and incorporated herein  by this reference).#                    |
|       |   |                                                                                                                                                                                                                                                                                                                                      |
| 10.4(v)    |   | Amendment Four to the 1995 Shareholder Value Plan of  the Services Partnership (filed as Exhibit 10.2 to the General Partner’s  Quarterly Report on Form 10-Q, as filed with the SEC on November 13, 2002,  File No. 001-09044, and incorporated herein by this reference).#                                                         |
|       |   |                                                                                                                                                                                                                                                                                                                                      |
| 10.4(vi)   |   | Amendment Five to the 1995 Shareholder Value Plan of  the Services Partnership (filed as Exhibit 10.2 to the General Partner’s  Quarterly Report on Form 10-Q, as filed with the SEC on October 9, 2005, File  No. 001-09044, and incorporated herein by this reference).#                                                           |
|       |   |                                                                                                                                                                                                                                                                                                                                      |
| 10.5(i)    |   | 1999 Directors’ Stock Option and Dividend Increase  Unit Plan of Duke Realty Investments, Inc. (filed as Annex F to the  prospectus in the General Partner’s Registration Statement on Form S-4, as  filed with the SEC on May 4, 1999, File No. 333-77645, and incorporated  herein by this reference).#                       |

 

46

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| 10.5(ii)  |   | Amendment One to the 1999 Directors’ Stock Option  and Dividend Increase Unit Plan of Duke Realty Investments, Inc. (filed as  Appendix B of the Registrant’s Definitive Proxy Statement on Schedule 14A, as  filed with the SEC on March 15, 2005, File No. 001-09044, and incorporated  herein by this reference).# |
|-----------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |   |                                                                                                                                                                                                                                                                                                                            |
| 10.6(i)   |   | 1999 Salary Replacement Stock Option and Dividend  Increase Unit Plan (filed as Annex G to the prospectus in the General  Partner’s Registration Statement on Form S-4, as filed with the SEC on May 4,  1999, File No. 333-77645, and incorporated herein by this reference).#                                            |
|      |   |                                                                                                                                                                                                                                                                                                                            |
| 10.6(ii)  |   | Amendment One to the 1999 Salary Replacement Stock  Option and Dividend Increase Unit Plan of Duke Realty Investments, Inc.  (filed as Exhibit 10.3 to the General Partner’s Quarterly Report on Form  10-Q, as filed with the SEC on November 13, 2002, File No. 001-09044, and  incorporated herein by this reference).# |
|      |   |                                                                                                                                                                                                                                                                                                                            |
| 10.6(iii) |   | Amendment Two to the 1999 Salary Replacement Stock  Option and Dividend Increase Unit Plan of Duke Realty Investments, Inc.  (filed as Exhibit 10.4 to the General Partner’s Quarterly Report on Form  10-Q, as filed with the SEC on November 13, 2002, File No. 001-09044, and  incorporated herein by this reference).# |
|      |   |                                                                                                                                                                                                                                                                                                                            |
| 10.7(i)   |   | 2000 Performance Share Plan of Duke-Weeks Realty  Corporation (filed as Exhibit A of the Registrant’s Definitive Proxy  Statement on Schedule 14A, as filed with the SEC on March 15, 2001, File No.  001-09044, and incorporated herein by this reference).#                                                              |
|      |   |                                                                                                                                                                                                                                                                                                                            |
| 10.7(ii)  |   | Amendment One to the 2000 Performance Share Plan of  Duke-Weeks Realty Corporation (filed as Exhibit 10.6 to the General Partner’s  Quarterly Report on Form 10-Q, as filed with the SEC on November 13, 2002,  File No. 001-09044, and incorporated herein by this reference).#                                           |
|      |   |                                                                                                                                                                                                                                                                                                                            |
| 10.7(iii) |   | Amendment Two to the 2000 Performance Share Plan of  Duke-Weeks Realty Corporation (filed as Exhibit 10.42 to the General  Partner’s Annual Report on Form 10-K for the year ended December 31, 2003, as  filed with the SEC on March 5, 2004, File No. 001-09044, and incorporated  herein by this reference).#           |
|      |   |                                                                                                                                                                                                                                                                                                                            |
| 10.7(iv)  |   | Amendment Three to the 2000 Performance Share Plan  of Duke-Weeks Realty Corporation (filed as Exhibit 99.1 to the General  Partner’s Current Report on Form 8-K, as filed with the SEC on May 2, 2006,  File No. 001-09044, and incorporated herein by this reference).#                                                  |
|      |   |                                                                                                                                                                                                                                                                                                                            |
| 10.8(i)   |   | Dividend Increase Unit Plan of the Services  Partnership (filed as Exhibit 10.25 to the General Partner’s Annual Report on  Form 10-K405 for the year ended December 31, 2001, as filed with the SEC on  March 15, 2002, File No. 001-09044, and incorporated herein by this  reference).#                                 |
|      |   |                                                                                                                                                                                                                                                                                                                            |
| 10.8(ii)  |   | Amendment One to the Dividend Increase Unit Plan of  the Services Partnership (filed as Exhibit 10.26 to the General Partner’s  Annual Report on Form 10-K405 for the year ended December 31, 2001, as filed  with the SEC on March 15, 2002, File No. 001-09044, and incorporated herein  by this reference).#            |
|      |   |                                                                                                                                                                                                                                                                                                                            |
| 10.8(iii) |   | Amendment Two to the Dividend Increase Unit Plan of  the Services Partnership (filed as Exhibit 10.27 to the General Partner’s  Annual Report on Form 10-K405 for the year ended December 31, 2001, as filed  with the SEC on March 15, 2002, File No. 001-09044, and incorporated herein  by this reference).#            |
|      |   |                                                                                                                                                                                                                                                                                                                            |
| 10.8(iv)  |   | Amendment Three to the Dividend Increase Unit Plan  of the Services Partnership (filed as Exhibit 10.5 to the General Partner’s  Quarterly Report on Form 10-Q, as filed with the SEC on November 13, 2002,  File No. 001-09044, and incorporated herein by this reference).#                                              |
|      |   |                                                                                                                                                                                                                                                                                                                            |
| 10.8(v)   |   | Amendment Four to the Dividend Increase Unit Plan of  the Services Partnership (filed as Exhibit 10.30 to the General Partner’s  Annual Report on Form 10-K for the year ended December 31, 2004, as filed  with the SEC on March 4, 2005, File No. 001-09044, and incorporated herein by  this reference).#               |

 

47

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| 10.9(i)    |   | Directors’ Deferred Compensation Plan of Duke-Weeks  Realty Corporation (filed as Exhibit 10.5 to the General Partner’s Quarterly  Report on Form 10-Q, as filed with the SEC on November 8, 2006, File No.  001-09044, and incorporated herein by this reference).#                                   |
|------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |   |                                                                                                                                                                                                                                                                                                             |
| 10.9(ii)   |   | Amendment One to the Directors’ Deferred  Compensation Plan of Duke-Weeks Realty Corporation (filed as Exhibit  10.21(ii) to the General Partner’s Annual Report on Form 10-K, as filed with  the SEC on March 31, 2007, File No. 001-09044, and incorporated herein by  this reference).#             |
|       |   |                                                                                                                                                                                                                                                                                                             |
| 10.9(iii)  |   | Amendment Two to the Directors’ Deferred  Compensation Plan of Duke-Weeks Realty Corporation (filed as Exhibit 10.4 to  the General Partner’s Quarterly Report on Form 10-Q, as filed with the SEC on  October 9, 2005, File No. 001-09044, and incorporated herein by this  reference).#              |
|       |   |                                                                                                                                                                                                                                                                                                             |
| 10.9(iv)   |   | Amendment Three to the Directors’ Deferred  Compensation Plan of Duke-Weeks Realty Corporation (filed as Exhibit 99.2 to  the General Partner’s Registration Statement on Form S-8, as filed with the  SEC on March 24, 2004, File No. 333-113907, and incorporated herein by this  reference).#       |
|       |   |                                                                                                                                                                                                                                                                                                             |
| 10.10(i)   |   | Duke Realty Corporation 2005 Long-Term Incentive  Plan (filed as Appendix A to the General Partner’s Definitive Proxy Statement  on Schedule 14A, dated March 16, 2005, as filed with the SEC on March 16,  2005, File No. 001-09044, and incorporated herein by this reference).#                          |
|       |   |                                                                                                                                                                                                                                                                                                             |
| 10.10(ii)  |   | Form of 2005 Long-Term Incentive Plan Stock Option  Award Certificate (filed as Exhibit 99.4 to the General Partner’s Current  Report on Form 8-K, as filed with the SEC on May 3, 2005, File No. 001-09044,  and incorporated herein by this reference).#                                                  |
|       |   |                                                                                                                                                                                                                                                                                                             |
| 10.10(iii) |   | Form of 2005 Long-Term Incentive Plan Award  Certificate for Restricted Stock Units and Shareholder Value Plan Awards  (filed as Exhibit 99.5 to the General Partner’s Current Report on Form 8-K,  as filed with the SEC on May 3, 2005, File No. 001-09044, and incorporated  herein by this reference).# |
|       |   |                                                                                                                                                                                                                                                                                                             |
| 10.10(iv)  |   | Form of 2005 Long-Term Incentive Plan Restricted  Stock Unit Award Certificate for Non-Employee Directors (filed as Exhibit  99.6 to the General Partner’s Current Report on Form 8-K, as filed with the  SEC on May 3, 2005, File No. 001-09044, and incorporated herein by this  reference).#             |
|       |   |                                                                                                                                                                                                                                                                                                             |
| 10.10(v)   |   | Duke Realty Corporation 2005 Shareholder Value Plan,  a sub-plan of the 2005 Long-Term Incentive Plan (filed as Exhibit 99.2 to the  General Partner’s Current Report on Form 8-K, as filed with the SEC on May 3,  2005, File No. 001-09044, and incorporated herein by this reference).#                  |
|       |   |                                                                                                                                                                                                                                                                                                             |
| 10.11(i)   |   | Duke Realty Corporation Non-Employee Directors  Compensation Plan, a sub-plan of the 2005 Long-Term Incentive Plan (filed as  Exhibit 99.3 to the General Partner’s Current Report on Form 8-K as filed  with the SEC on May 3, 2005, File No. 001-09044, and incorporated herein by  this reference).#     |
|       |   |                                                                                                                                                                                                                                                                                                             |
| 10.11(ii)  |   | Amendment One to the Duke Realty Corporation 2005  Non-Employee Directors Compensation Plan (filed as Exhibit 99.1 to the  General Partner’s Current Report on Form 8-K, as filed with the SEC on  October 31, 2005, File No. 001-09044, and incorporated by this reference).#                              |
|       |   |                                                                                                                                                                                                                                                                                                             |
| 10.11(iii) |   | Amendment Two to the Duke Realty Corporation 2005  Non-Employee Directors Compensation Plan (filed as Exhibit 99.1 to the  General Partner’s Current Report on Form 8-K, as filed with the SEC on  February 7, 2006, File No. 001-09044, and incorporated by this reference).#                              |
|       |   |                                                                                                                                                                                                                                                                                                             |
| 10.11(iv)  |   | Amendment Three to the Duke Realty Corporation 2005  Non-Employee Directors Compensation Plan (filed as Exhibit 10.5 to the  General Partner’s Quarterly Report on Form 10-Q, as filed with the SEC on  November 8, 2006, File No. 001-09044, and incorporated by this reference).#                         |

 

48

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| 10.12  |   | Duke Realty Corporation 2005 Dividend Increase Unit  Replacement Plan (filed as Exhibit 99.1 to the General Partner’s Current  Report on Form 8-K, as filed with the SEC on December 9, 2005, File No.  001-09044, and incorporated herein by this reference).#                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.13  |   | Form of Forfeiture Agreement/Performance Unit Award  Agreement (filed as Exhibit 99.2 to the General Partner’s Current Report on  Form 8-K, as filed with the SEC on December 9, 2005, File No. 001-09044, and  incorporated herein by this reference).#                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.14  |   | Form of Letter Agreement Regarding Executive  Severance, dated December 13, 2005, between the General Partner, as the General  Partner of Duke Realty Limited Partnership, and the following executive  officers; Dennis D. Oklak, Robert M. Chapman, Matthew A. Cohoat, James B.  Connor, Denise K. Dank, Howard L. Feinsand, Robert D. Fessler, Donald Hunter,  Steven R. Kennedy, Paul R. Quinn, and Christopher Seger (filed as Exhibit  10.1 to the General Partner’s Current Report on Form 8-K, as filed with the  SEC on December 19, 2005, File No. 001-09044, and incorporated herein by this  reference).#                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.15  |   | Term Loan Agreement, Dated May 31, 2005, by and  between Duke Realty Limited Partnership, the General Partner, J.P. Morgan  Securities, Inc., JP Morgan Chase Bank, N.A. and the several banks, financial  institutions and other entities from time to time parties thereto as lenders  (filed as Exhibit 99.1 to the General Partner’s Current Report on Form 8-K,  as filed with the SEC on June 6, 2005, File No. 001-09044, and incorporated  herein by this reference).                                                                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.16  |   | Commercial Multi-Property Agreement of Purchase and  Sale, dated January 24, 2006, by and among Duke Realty Limited Partnership,  The Mark Winkler Company, and each of the other entities controlled by or  affiliated with The Mark Winkler Company named therein, as amended by the  First Amendment to Commercial Multi-Property Agreement of Purchase and Sale  dated February 28, 2006, the Second Amendment to Commercial  Multi-Property Agreement of Purchase and Sale dated March 10, 2006, and  the Third Amendment to Commercial Multi-Property Agreement of Purchase and  Sale dated April 21, 2006 (filed as  Exhibit 10.1 to the General Partner’s Quarterly Report on Form 10-Q, as filed  with the SEC on May 10, 2006, File No. 001-09044, and incorporated herein by  this reference). |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.17  |   | Fifth Amended and Restated Revolving Credit  Agreement dated January 25, 2006, among Duke Realty Limited Partnership, as  borrower, the General Partner, as Guarantor, and Bank One as Administrative  Agent and Lender (filed as Exhibit 10.56 to the General Partner’s Annual  Report on Form 10-K for the year ended December 31, 2005, as filed with the  SEC on March 7, 2006, File No. 001-09044, and incorporated herein by this  reference).                                                                                                                                                                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.18  |   | Term Loan Agreement, dated as of February 28, 2006,  by and among Duke Realty Limited Partnership, as borrower, the General  Partner, as Guarantor, certain of their respective subsidiaries, as  guarantors, Bank of America, N.A., individually and as Administrative Agent,  Banc of America Securities LLC, as Lead Arranger and Sole Book Runner, and  each of the other lenders named therein (filed as Exhibit 10.1 to the  Partnership’s Current Report on Form 8-K, as filed with the SEC on March 3,  2006, File No. 000-20625, and incorporated herein by this reference).                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.19  |   | Registration Rights Agreement, dated November 22,  2006, by and among Duke Realty Limited Partnership, the General Partner,  Morgan Stanley & Co. Incorporated, Citigroup Global Markets Inc. and UBS  Securities LLC, as representatives of the initial purchasers of the Notes  (incorporated by reference to Exhibit 10.1 to the Partnership’s Current  Report on Form 8-K, as filed with the Commission on November 29, 2006, File  No. 000-20625, and incorporated herein by this reference).                                                                                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.20  |   | Common Stock Delivery Agreement, dated November 22,  2006, by and between Duke Realty Limited Partnership and the General Partner  (filed as Exhibit 10.2 to the Partnership’s Current Report on Form 8-K, as  filed with the Commission on November 29, 2006, File No. 000-20625, and  incorporated herein by this reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |

 

49

----

 
| 10.21  |   | Contribution Agreement, dated December 5, 2006, by  and between Duke Realty Limited Partnership and Quantico and Belbrook Realty  Corporation, an affiliate of an investment fund managed by Eaton Vance (filed  as Exhibit 10.30 to the General Partner’s Annual Report on Form 10-K, as  filed with the SEC on March 31, 2007, File No. 001-09044, and incorporated  herein by this reference). |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.22  |   | Contribution Agreement, dated December 5, 2006, by  and between Duke Realty Limited Partnership and Lafayette and Belcrest Realty  Corporation, an affiliate of an investment fund managed by Eaton Vance (filed  as Exhibit 10.31 to the General Partner’s Annual Report on Form 10-K, as  filed with the SEC on March 31, 2007, File No. 001-09044, and incorporated  herein by this reference. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                   |
| 12.1   |   | Statement of Computation of Ratios of Earnings to  Fixed Charges.*                                                                                                                                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                   |
| 12.2   |   | Statement of Computation of Ratios of Earnings to  Debt Service.*                                                                                                                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                   |
| 21.1   |   | List of the Duke Realty Limited Partnership’s  Subsidiaries.*                                                                                                                                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                   |
| 23.1   |   | Consent of KPMG LLP.*                                                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                   |
| 24.1   |   | Executed Powers of Attorney of certain directors.*                                                                                                                                                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                   |
| 31.1   |   | Certification of the Chief Executive Officer  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                   |
| 31.2   |   | Certification of the Chief Financial Officer  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                   |
| 32.1   |   | Certification of the Chief Executive Officer  pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002.* **                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                   |
| 32.2   |   | Certification of the Chief Financial Officer  pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002.* **                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                   |
| 99.1   |   | Selected Quarterly Financial Information.*                                                                                                                                                                                                                                                                                                                                                             |

 

----

# Represents management contractor compensatory plan or arrangement.

* Filed herewith.

** The certifications attachedas Exhibits 32.1 and 32.2 accompany this Annual Report on Form 10-K and are “furnished”to the Securities and Exchange Commission pursuant to Section 906 of theSarbanes-Oxley Act of 2002 and shall not be deemed “filed” by us for purposesof Section 18 of the Securities Exchange Act of 1934, as amended.

We will furnish to any securityholder, upon written request, copies of any exhibit incorporated by reference,for a fee of 15 cents per page, to cover the costs of furnishing the exhibits.Written requests should include a representation that the person making therequest was the beneficial owner of securities entitled to vote at the AnnualMeeting of Shareholders.

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

The exhibits required to be filed with this Form 10-K pursuant to Item601 of Regulation S-K are listed under “Exhibits” in Part IV, Item 14(a)(3) ofForm 10-K and are incorporated herein by reference.

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

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

50

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**Management’s Report on InternalControl**

We, as management of DukeRealty Limited Partnership and its subsidiaries (the “Partnership”), areresponsible for establishing and maintaining adequate internal control overfinancial reporting (as defined in Rule 13a-15(f) under the Securities ExchangeAct of 1934, as amended). Pursuant to the rules and regulations of theSecurities and Exchange Commission, internal control over financial reportingis a process designed by, or under the supervision of, the company’s principalexecutive and principal financial officers, or persons performing similar functions,and effected by the General Partner’s board of directors, management and otherpersonnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles andincludes those policies and procedures that:

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

·                  Providereasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally acceptedaccounting principles, and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directorsof the Partnership; and

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

Management has evaluated the effectiveness of itsinternal control over financial reporting as of December 31, 2006 based on thecontrol criteria established in a report entitled Internal Control — IntegratedFramework, issued by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO). Based on such evaluation, we have concluded that, as ofDecember 31, 2006, our internal control over financial reporting is effectivebased on these criteria.

The independent registered public accounting firm ofKPMG LLP, as auditors of the Partnership’s consolidated financial statements,has issued an attestation report on management’s assessment of the Partnership’sinternal control over financial reporting.
| /s/ Dennis D. Oklak                   |   | /s/ Matthew A. Cohoat          |
|---------------------------------------|--------|--------------------------------|
| Dennis D. Oklak                       |   | Matthew A. Cohoat              |
| Chairman and  Chief Executive Officer |   | Executive Vice President and   |
| of the General Partner                |   | Chief Financial Officer of the |
| (Principal  Executive Officer)        |   | General Partner                |
|                                  |   | (Principal Financial Officer)  |

 

51

----

**Report ofIndependent Registered Public Accounting Firm**

The Partners of

Duke RealtyLimited Partnership:

We have audited the accompanying consolidated balancesheets of Duke Realty Limited Partnership and Subsidiaries (the “Partnership”)as of December 31, 2006 and 2005, and the related consolidated statements ofoperations, cash flows and partners’ equity for each of the years in thethree-year period ended December 31, 2006. In connection with our audits of theconsolidated financial statements, we also have audited the financial statementschedule III. These consolidated financial statements and financial statementschedule are the responsibility of the Partnership’s management. Our responsibilityis to express an opinion on these consolidated financial statements and thefinancial statement schedule based on our audits.

We conducted our audits in accordance with thestandards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statementsreferred to above present fairly, in all material respects, the financialposition of Duke Realty Limited Partnership and Subsidiaries as of December 31,2006 and 2005, and the results of their operations and their cash flows foreach of the years in the three-year period ended December 31, 2006, inconformity with U.S. generally accepted accounting principles. Also, in ouropinion, the related financial statement schedule III, when considered inrelation to the basic consolidated financial statements taken as a whole,presents fairly, in all material respects, the information set forth therein.

We also haveaudited, in accordance with the standards of the Public Company AccountingOversight Board (United States), the effectiveness of Duke Realty LimitedPartnership and Subsidiaries’ internal control over financial reporting as ofDecember 31, 2006, based on criteria established in Internal Control-IntegratedFramework issued by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO), and our report dated March 12, 2007, expressed anunqualified opinion on management’s assessment of, and the effective operationof, internal control over financial reporting.
| /s/ KPMG LLP          |   |
|-----------------------|--------|
|                  |
| Indianapolis, Indiana |
| March 12, 2007        |

 

52

----

**Report ofIndependent Registered Public Accounting Firm**

The Partners of

Duke RealtyLimited Partnership:

We have auditedmanagement’s assessment, included in the accompanying Management’s Report onInternal Control, that Duke Realty Limited Partnership and Subsidiaries (the “Partnership”)maintained effective internal control over financial reporting as of December31, 2006, based on criteria established in Internal Control-IntegratedFramework issued by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO). Duke Realty Limited Partnership and Subsidiaries’ managementis responsible for maintaining effective internal control over financialreporting and for its assessment of the effectiveness of internal control overfinancial reporting. Our responsibility is to express an opinion on management’sassessment and an opinion on the effectiveness of the Partnership’s internalcontrol over financial reporting based on our audit.

We conducted ouraudit in accordance with the standards of the Public Company AccountingOversight Board (United States). Those standards require that we plan andperform the audit to obtain reasonable assurance about whether effective internalcontrol over financial reporting was maintained in all material respects. Ouraudit included obtaining an understanding of internal control over financialreporting, evaluating management’s assessment, testing and evaluating thedesign and operating effectiveness of internal control, and performing suchother procedures as we considered necessary in the circumstances.  We believe that our audit provides areasonable basis for our opinion.

A company’sinternal control over financial reporting is a process designed to providereasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal control overfinancial reporting includes those policies and procedures that (1) pertain tothe maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2)provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generallyaccepted accounting principles, and that receipts and expenditures of thecompany are being made only in accordance with authorizations of management anddirectors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition, use, or dispositionof the company’s assets that could have a material effect on the financialstatements.

Because of itsinherent limitations, internal control over financial reporting may not preventor detect misstatements. Also, projections of any evaluation of effectivenessto future periods are subject to the risk that controls may become inadequatebecause of changes in conditions, or that the degree of compliance with thepolicies or procedures may deteriorate.

In our opinion,management’s assessment that Duke Realty Limited Partnership and Subsidiariesmaintained effective internal control over financial reporting as of December31, 2006, is fairly stated, in all material respects, based on criteriaestablished in Internal Control-Integrated Framework issued by COSO. Also, inour opinion, Duke Realty Limited Partnership and Subsidiaries maintained, in allmaterial respects, effective internal control over financial reporting as ofDecember 31, 2006, based on criteria established in Internal Control-IntegratedFramework issued by COSO.

We also haveaudited, in accordance with the standards of the Public Company AccountingOversight Board (United States), the consolidated balance sheets of Duke RealtyLimited Partnership and Subsidiaries as of December 31, 2006 and 2005, and therelated consolidated statements of operations, cash flows and partners’ equityfor each of the years in the three-year period ended December 31, 2006 andrelated financial statement schedule III, and our report dated March 12, 2007,expressed an unqualified opinion on those consolidated financial statements andrelated financial statement schedule III.
| /s/ KPMG LLP          |   |
|-----------------------|--------|
|                  |
|                  |
| Indianapolis, Indiana |
| March 12, 2007        |

 

53

----

**DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES**

**Consolidated Balance Sheets**

**As of December 31,**

**(inthousands)**
|                                                                                             | ** ** | **2006**      |   | 2005       |       |
|---------------------------------------------------------------------------------------------|------------|---------------|--------|------------|------------|
| **ASSETS**                                                                                  |       |          |   |       |       |
|                                                                                        |       |          |   |       |       |
| Real estate investments:                                                                    |       |          |   |       |       |
| Land and  improvements                                                                      | **$**      | **844,091**   | $      | 675,050    |       |
| Buildings and  tenant improvements                                                          | ** ** | **4,211,602** |   | 4,156,456  |       |
| Construction in  progress                                                                   | ** ** | **359,765**   |   | 227,066    |       |
| Investments in  and advances to unconsolidated companies                                    | ** ** | **628,323**   |   | 301,322    |       |
| Land held for  development                                                                  | ** ** | **737,752**   |   | 429,270    |       |
| ** **                                                                                  | ** ** | **6,781,533** |   | 5,789,164  |       |
| Accumulated depreciation                                                                    | ** ** | **(867,079)** |   | (754,742)  |       |
|                                                                                        | ** ** | ** **    |   |       |       |
| Net real estate  investments                                                                | ** ** | **5,914,454** |   | 5,034,422  |       |
|                                                                                        | ** ** | ** **    |   |       |       |
| Real estate investments  and other assets held-for-sale                                     | ** ** | **512,925**   |   | -          |       |
|                                                                                        | ** ** | ** **    |   |       |       |
| Cash and cash  equivalents                                                                  | ** ** | **68,154**    |   | 26,858     |       |
| Accounts receivable, net  of allowance of $1,088 and $1,093                                 | ** ** | **24,118**    |   | 31,342     |       |
| Straight-line rent  receivable, net of allowance of $1,915 and $1,538                       | ** ** | **105,319**   |   | 95,948     |       |
| Receivables on  construction contracts, including retentions                                | ** ** | **64,768**    |   | 50,035     |       |
| Deferred financing  costs, net of accumulated amortization of $19,492 and $14,113           | ** ** | **62,277**    |   | 27,118     |       |
| Deferred leasing and  other costs, net of accumulated amortization of $127,155 and $112,245 | ** ** | **311,553**   |   | 227,648    |       |
| Escrow deposits and  other assets                                                           | ** ** | **183,728**   |   | 153,316    |       |
| ** **                                                                                  | **$**      | **7,247,296** | $      | 5,646,687  |       |
| ** **                                                                                  | ** ** | ** **    |   | ** ** | ** ** |
| **LIABILITIES  AND PARTNERS’ EQUITY**                                                  | ** ** |          |   |       |       |
| Indebtedness:                                                                               | ** ** |          |   |       |       |
| Secured debt                                                                                | ** ** | **$515,192**  | $      | 167,255    |       |
| Unsecured notes                                                                             | ** ** | **3,129,653** |   | 2,050,396  |       |
| Unsecured line of  credit                                                                   | ** ** | **317,000**   |   | 383,000    |       |
| ** **                                                                                  | ** ** | **3,961,845** |   | 2,600,651  |       |
| ** **                                                                                  | ** ** | ** **    |   |       |       |
| Liabilities of  properties held for sale                                                    | ** ** | **155,185**   |   | -          |       |
|                                                                                        | ** ** | ** **    |   |       |       |
| Construction payables  and amounts due subcontractors, including retentions                 | ** ** | **136,508**   |   | 93,137     |       |
|                                                                                        | ** ** | ** **    |   |       |       |
| Accrued expenses:                                                                           | ** ** |          |   |       |       |
| Real estate taxes                                                                           | ** ** | **59,273**    |   | 60,883     |       |
| Interest                                                                                    | ** ** | **52,106**    |   | 33,022     |       |
| Other                                                                                       | ** ** | **62,078**    |   | 52,649     |       |
| Other liabilities                                                                           | ** ** | **128,857**   |   | 136,104    |       |
| Tenant security deposits  and prepaid rents                                                 | ** ** | **31,121**    |   | 34,924     |       |
| Total liabilities                                                                           | ** ** | **4,586,973** |   | 3,011,370  |       |
|                                                                                        | ** ** | ** **    |   |       |       |
| Minority interest                                                                           | ** ** | **1,080**     |   | 73         |       |
|                                                                                        | ** ** | ** **    |   |       |       |
| Partners’ equity:                                                                      | ** ** |          |   |       |       |
| General Partner                                                                             | ** ** |          |   |       |       |
|   Common equity                                                                        | ** ** | **1,671,104** |   | 1,841,932  |       |
|   Preferred equity (liquidation preferences  of $876,250 and $657,250)                 | ** ** | **825,774**   |   | 616,780    |       |
| ** **                                                                                  | ** ** | **2,496,878** |   | 2,458,712  |       |
| Limited  Partners’ common equity                                                       | ** ** | **156,930**   |   | 183,650    |       |
| Accumulated  other comprehensive income (loss)                                              | ** ** | **5,435**     |   | (7,118)    |       |
| Total partners’  equity                                                                | ** ** | **2,659,243** |   | 2,635,244  |       |
|                                                                                        | ** ** | ** **    |   |       |       |
| ** **                                                                                  | **$**      | **7,247,296** | $      | 5,646,687  |       |

 

See accompanying Notes toConsolidated Financial Statements.

 

54

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

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

**For theYears Ended December 31**

**(in thousands, except per unitamounts)**
|                                                                                    | ** ** | **2006**      |       | 2005      |   | 2004      |   |
|------------------------------------------------------------------------------------|------------|---------------|------------|-----------|--------|-----------|--------|
| **RENTAL  OPERATIONS**                                                             |       |          |       |      |   |      |   |
| Revenues:                                                                          |       |          |       |      |   |      |   |
| Rental income from continuing operations                                           | **$**      | **780,666**   | $          | 639,058   | $      | 582,231   |   |
| Equity in earnings of unconsolidated companies                                     | ** ** | **38,004**    |       | 29,549    |   | 21,586    |   |
| ** **                                                                         | ** ** | **818,670**   |       | 668,607   |   | 603,817   |   |
| Operating expenses:                                                                |       |          |       |      |   |      |   |
| Rental expenses                                                                    | ** ** | **178,632**   |       | 148,272   |   | 126,983   |   |
| Real estate taxes                                                                  | ** ** | **88,915**    |       | 78,122    |   | 65,846    |   |
| Interest expense                                                                   | ** ** | **179,007**   |       | 113,067   |   | 103,976   |   |
| Depreciation and amortization                                                      | ** ** | **244,129**   |       | 215,400   |   | 171,764   |   |
| ** **                                                                         | ** ** | **690,683**   |       | 554,861   |   | 468,569   |   |
| Earnings from continuing rental operations                                         | ** ** | **127,987**   |       | 113,746   |   | 135,248   |   |
|                                                                               | ** ** | ** **    |       |      |   |      |   |
| **SERVICE  OPERATIONS**                                                            |       |          |       |      |   |      |   |
| Revenues:                                                                          |       |          |       |      |   |      |   |
| General contractor gross revenue                                                   | ** ** | **308,562**   |       | 380,173   |   | 357,133   |   |
| General contractor costs                                                           | ** ** | **(284,633)** |       | (348,263) |   | (329,545) |   |
| Net general contractor revenue                                                     | ** ** | **23,929**    |       | 31,910    |   | 27,588    |   |
| Service fee revenue                                                                | ** ** | **21,633**    |       | 20,149    |   | 18,995    |   |
| Gain on sale of service operations properties                                      | ** ** | **44,563**    |       | 29,882    |   | 24,220    |   |
|                                                                               | ** ** | ** **    |       |      |   |      |   |
| Total revenue                                                                      | ** ** | **90,125**    |       | 81,941    |   | 70,803    |   |
|                                                                               | ** ** | ** **    |       |      |   |      |   |
| Operating expenses                                                                 | ** ** | **36,929**    |       | 37,663    |   | 43,151    |   |
|                                                                               | ** ** | ** **    |       |      |   |      |   |
| Earnings from service operations                                                   | ** ** | **53,196**    |       | 44,278    |   | 27,652    |   |
|                                                                               | ** ** | ** **    |       |      |   |      |   |
| General and  administrative expense                                                | ** ** | **(35,834)**  |       | (31,003)  |   | (29,479)  |   |
|                                                                               | ** ** | ** **    | ** ** |      |   |      |   |
|   Operating  income                                                           | ** ** | **145,349**   |       | 127,021   |   | 133,421   |   |
|                                                                               | ** ** | ** **    |       |      |   |      |   |
| **OTHER  INCOME (EXPENSE)**                                                        |       |          |       |      |   |      |   |
| Interest and other income, net                                                     | ** ** | **10,450**    |       | 4,637     |   | 4,646     |   |
| Earnings from sale of land, net of impairment  adjustments                         | ** ** | **7,791**     |       | 14,202    |   | 10,202    |   |
| Minority interest in earnings of subsidiaries                                      | ** ** | **(247)**     |       | (1,438)   |   | (1,253)   |   |
|                                                                               | ** ** | ** **    | ** ** |      |   |      |   |
| Income from continuing operations                                                  | ** ** | **163,343**   |       | 144,422   |   | 147,016   |   |
|                                                                               | ** ** | ** **    |       |      |   |      |   |
| Discontinued operations:                                                           |       |          |       |      |   |      |   |
|  Net income  from discontinued operations                                     | ** ** | **9,254**     |       | 17,438    |   | 31,371    |   |
|  Gain on sale  of property, net of impairment adjustments                     |       | **46,254**    |       | 223,858   |   | 26,247    |   |
|                                                                               |       | ** **    |       |      |   |      |   |
| Income from discontinued operations                                                | ** ** | **55,508**    |       | 241,296   |   | 57,618    |   |
|                                                                               | ** ** | ** **    |       |      |   |      |   |
| Net income                                                                         | ** ** | **218,851**   |       | 385,718   |   | 204,634   |   |
| Distributions on preferred units                                                   | ** ** | **(56,419)**  |       | (46,479)  |   | (33,777)  |   |
| Adjustments for redemption of preferred units                                      | ** ** | **(2,633)**   |       | -         |   | (3,645)   |   |
| Net income available for common unitholders                                        | **$**      | **159,799**   | $          | 339,239   | $      | 167,212   |   |
|                                                                               |       | ** **    | ** ** |      |   |      |   |
| Basic net income per common unit:                                                  |       |          |       |      |   |      |   |
| Continuing operations                                                              | **$**      | **.70**       | $          | .63       | $      | .71       |   |
| Discontinued operations                                                            | ** ** | **.38**       |       | 1.56      |   | .37       |   |
| Total                                                                              | **$**      | **1.08**      | $          | 2.19      | $      | 1.08      |   |
| Diluted net income per common unit:                                                |       |          |       |      |   |      |   |
| Continuing operations                                                              | **$**      | **.70**       | $          | .63       | $      | .70       |   |
| Discontinued operations                                                            | ** ** | **.37**       |       | 1.55      |   | .37       |   |
| Total                                                                              | **$**      | **1.07**      | $          | 2.18      | $      | 1.07      |   |
|                                                                               | ** ** | ** **    |       |      |   |      |   |
| Weighted average number of common units outstanding                                | ** ** | **148,069**   |       | 155,059   |   | 155,281   |   |
|                                                                               | ** ** | ** **    |       |      |   |      |   |
| Weighted average  number of common units and potential dilutive common equivalents |       | **149,393**   |       | 155,877   |   | 157,062   |   |

 

See accompanying Notes toConsolidated Financial Statements.

55

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**DUKE REALTYLIMITED PARTNERSHIP AND SUBSIDIARIES**

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

**For theYears Ended December 31**

**(inthousands)**
|                                                                                                |       | **2006**        |       | 2005      |    | 2004      |   |
|------------------------------------------------------------------------------------------------|------------|-----------------|------------|-----------|---------|-----------|--------|
| Cash flows from  operating activities:                                                         |       |            |       |      |    |      |   |
| Net income                                                                                     | **$**      | **218,851**     | $          | 385,718   | $       | 204,634   |   |
| Adjustments to  reconcile net income to net cash provided by operating activities:             |       |            |       |      |    |      |   |
| Depreciation of  buildings and tenant improvements                                             | ** ** | **206,999**     |       | 204,377   |    | 189,119   |   |
| Amortization of  deferred leasing and other costs                                              | ** ** | **47,269**      |       | 49,793    |    | 39,463    |   |
| Amortization of  deferred financing costs                                                      | ** ** | **8,617**       |       | 6,154     |    | 4,904     |   |
| Minority interest  in earnings                                                                 | ** ** | **247**         |       | 1,438     |    | 1,253     |   |
| Straight-line  rent adjustment                                                                 | ** ** | **(20,795)**    |       | (22,519)  |    | (22,436)  |   |
| Earnings from  land and depreciated property sales                                             | ** ** | **(49,614)**    |       | (238,060) |    | (36,449)  |   |
| Build-for-sale  operations, net                                                                | ** ** | **(140,692)**   |       | (6,295)   |    | (41)      |   |
| Construction  contracts, net                                                                   | ** ** | **1,749**       |       | 16,196    |    | (11,047)  |   |
| Other accrued  revenues and expenses, net                                                      | ** ** | **20,976**      |       | 11,680    |    | (3,787)   |   |
| Operating  distributions received in excess of (less than)                                     |       |            |       |      |    |      |   |
|  equity in earnings from unconsolidated  companies                                        | ** ** | **(18,339)**    |       | (3,055)   |    | 10,447    |   |
| ** Net cash provided by operating activities**                                            | ** ** | **275,268**     |       | 405,427   |    | 376,060   |   |
| ** **                                                                                     | ** ** | ** **      |       |      |    |      |   |
| Cash flows from  investing activities:                                                         |       |            |       |      |    |      |   |
| Development of  real estate investments                                                        | ** ** | **(385,516)**   |       | (209,990) |    | (145,629) |   |
| Acquisition of  in-service real estate investments                                             | ** ** | **(735,294)**   |       | (285,342) |    | (204,361) |   |
| Acquisition of  land held for development                                                      | ** ** | **(435,917)**   |       | (136,321) |    | (113,433) |   |
| Recurring tenant  improvements                                                                 | ** ** | **(41,895)**    |       | (60,633)  |    | (58,847)  |   |
| Recurring leasing  costs                                                                       | ** ** | **(17,106)**    |       | (33,175)  |    | (27,777)  |   |
| Recurring  building improvements                                                               | ** ** | **(8,122)**     |       | (15,232)  |    | (21,029)  |   |
| Other deferred  leasing costs                                                                  | ** ** | **(46,463)**    |       | (19,425)  |    | (16,386)  |   |
| Other deferred  costs and other assets                                                         | ** ** | **6,267**       |       | (16,070)  |    | (15,413)  |   |
| Proceeds from  land and depreciated property sales, net                                        | ** ** | **180,825**     |       | 1,134,667 |    | 178,301   |   |
| Distributions  received from unconsolidated companies for land and depreciated property  sales |       | **21,238**      |       | -         |    | -         |   |
| Capital  distributions from unconsolidated companies                                           | ** ** | **275,335**     |       | -         |    | -         |   |
|  Advances to unconsolidated companies, net                                                | ** ** | **(50,182)**    |       | (31,599)  |    | (3,033)   |   |
| ** Net cash provided by (used for) investing  activities**                                | ** ** | **(1,236,830)** |       | 326,880   |    | (427,607) |   |
| ** **                                                                                     | ** ** | ** **      | ** ** |      |    |      |   |
| Cash flows from  financing activities:                                                         |       |            |       |      |    |      |   |
| Payments for  repurchases of common units                                                      | ** ** | **(101,282)**   |       | (287,703) |    | -         |   |
| Proceeds from  exercise of the General Partner’s stock options                            | ** ** | **6,672**       |       | 3,945     |    | 12,259    |   |
| Proceeds from  issuance of preferred units, net                                                | ** ** | **283,994**     |       | -         |    | 338,360   |   |
| Payments for  redemption of preferred units                                                    | ** ** | **(75,000)**    |       | -         |    | (102,652) |   |
| Redemption of  warrants                                                                        |       | -               | ** ** | **-**     |    | (2,881)   |   |
| Redemption of  limited partner units                                                           |       | -               |       | (2,129)   |    | -         |   |
| Proceeds from  unsecured debt issuance                                                         | ** ** | **1,429,497**   |       | 400,000   |    | 690,000   |   |
| Payments on  unsecured debt                                                                    | ** ** | **(350,000)**   |       | (665,000) |    | (150,000) |   |
| Proceeds from  issuance of secured debt                                                        | ** ** | **1,029,426**   |       | -         |    | -         |   |
| Payments on  secured indebtedness including principal amortization                             | ** ** | **(750,354)**   |       | (46,675)  |    | (39,430)  |   |
| Borrowings  (payments) on lines of credit, net                                                 | ** ** | **(66,000)**    |       | 383,000   |    | (351,000) |   |
| Distributions to  common unitholders                                                           | ** ** | **(280,713)**   |       | (290,463) |    | (286,913) |   |
| Distributions to  common unitholders – special dividends                                  |       | -               |       | (157,904) |    | -         |   |
| Distributions to  preferred unitholders                                                        | ** ** | **(56,419)**    |       | (46,479)  |    | (31,828)  |   |
| Contributions  from (distributions to) minority interest                                       | ** ** | **930**         |       | (1,212)   |    | (1,134)   |   |
| Payment for  capped call option                                                                | ** ** | **(26,967)**    |       | -         |    | -         |   |
| Deferred  financing costs                                                                      | ** ** | **(40,926)**    |       | (599)     |    | (30,159)  |   |
| **Net cash  provided by (used for) financing activities**                                      | ** ** | **1,002,858**   |       | (711,219) |    | 44,622    |   |
| ** **                                                                                     | ** ** | ** **      |       |      |    |      |   |
| **Net  increase (decrease) in cash and cash equivalents**                                      | ** ** | **41,296**      |       | 21,088    |    | (6,925)   |   |
| ** **                                                                                     | ** ** | ** **      |       |      |    |      |   |
| Cash and cash  equivalents at beginning of year                                                | ** ** | **26,858**      |       | 5,770     |    | 12,695    |   |
| Cash and cash  equivalents at end of year                                                      | **$**      | **68,154**      | $          | 26,858    | $       | 5,770     |   |
| Other non-cash  items:                                                                         |       |            |       |      |    |      |   |
|  Assumption of debt for real estate  acquisitions                                         | **$**      | **217,520**     | $          | 11,743    | $       | 29,854    |   |
|  Contributions of property to unconsolidated  companies                                   | **$**      | **505,440**     | $          | -         | $       | -         |   |
|  Conversion of Limited Partner units to  common shares of General Partner                 | **$**      | **23,629**      | $          | 1,828     |  $ | 11,408    |   |
|  Conversion of Series D preferred units to  common shares of General Partner              | **$**      | **-**           | $          | -         |  $ | 130,665   |   |
|  Issuance of Limited Partner Units for real  estate acquisitions                          | **$**      | **-**           | $          | -         | $       | 7,575     |   |
|  Common shares of the General Partner  repurchased and retired, not settled               | **$**      | **-**           | $          | 9,357     | $       | -         |   |
|  Issuance of Limited Partner Units for  acquisition of minority interest                  | **$**      | **-**           | $          | 15,000    | $       | -         |   |

 

See accompanying Notes to Consolidated****FinancialStatements.

56

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**DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES**

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

**(inthousands, except per unit data)**
|                                                                | ** ** | ** **               | ** ** | ** **         | ** ** | **Limited** | ** ** | **Accumulated**   | ** ** | ** **    | ** ** |
|----------------------------------------------------------------|------------|--------------------------|------------|--------------------|------------|-------------|------------|-------------------|------------|---------------|------------|
| ** **                                                     | ** ** | **General Partner** | ** ** | **Partners’** | ** ** | **Other**   | ** ** | ** **        | ** ** |
| ** **                                                     | ** ** | **Common**               | ** ** | **Preferred**      | ** ** | **Common**  | ** ** | **Comprehensive** | ** ** | ** **    | ** ** |
| ** **                                                     | ** ** | **Equity**               | ** ** | **Equity**         | ** ** | **Equity**  | ** ** | **Income**        | ** ** | **Total**     | ** ** |
| **Balance at December 31, 2003**                               | **$**      | **2,153,844**            | **$**      | **511,785**        | **$**      | **212,691** | **$**      | **-**             | **$**      | **2,878,320** | ** ** |
| Comprehensive  income:                                         |       |                     |       |               |       |        |       |              |       |          |       |
| Net  income                                                    |       | 154,926                  |       | 33,777             |       | 15,931      |       | -                 |       | 204,634       |       |
| Losses  on derivative instruments                              |       | -                        |       | -                  |       | -           |       | (6,547)           |       | (6,547)       |       |
| Comprehensive  income                                          |       |                     |       |               |       |        |       |              |       | 198,087       |       |
| Capital  contribution from General Partner                     |       | 12,367                   |       | 338,312            |       | -           |       | -                 |       | 350,679       |       |
| Acquisition  of Partnership interest for common stock of       |       |                     |       |               |       |        |       |              |       |          |       |
|   General Partner                                    |       | 25,376                   |       | -                  |       | (13,968)    |       | -                 |       | 11,408        |       |
| Acquisition  of property in exchange for Limited Partner Units |       | -                        |       | -                  |       | 7,575       |       | -                 |       | 7,575         |       |
| Redemption  of Series E Preferred Units                        |       | -                        |       | (100,029)          |       | -           |       | -                 |       | (100,029)     |       |
| General  Partner’s redemption of Series D Preferred Units |       | -                        |       | (2,623)            |       | -           |       | -                 |       | (2,623)       |       |
| General  Partner’s conversion of Series D Preferred Units |       | 130,665                  |       | (130,665)          |       | -           |       | -                 |       | -             |       |
| Exercise  of General Partner warrants                          |       | (2,881)                  |       | -                  |       | -           |       | -                 |       | (2,881)       |       |
| Tax  benefits from employee stock plans                        |       | 770                      |       | -                  |       | -           |       | -                 |       | 770           |       |
| Stock  based compensation expense                              |       | 512                      |       | -                  |       | -           |       | -                 |       | 512           |       |
| Distributions  to preferred unitholders                        |       | -                        |       | (33,777)           |       | -           |       | -                 |       | (33,777)      |       |
| Distribution  to General Partner                               |       | (45)                     |       | -                  |       | -           |       | -                 |       | (45)          |       |
| Distributions  to partners ($1.85 per Common Unit)             |       | (261,061)                |       | -                  |       | (25,807)    |       | -                 |       | (286,868)     |       |
| **Balance at December 31, 2004**                               | **$**      | **2,214,473**            | **$**      | **616,780**        | **$**      | **196,422** | **$**      | **(6,547)**       | **$**      | **3,021,128** | ** ** |
| Comprehensive income:                                          |       |                     |       |               |       |        |       |              |       |          |       |
| Net  income                                                    |       | 309,184                  |       | 46,479             |       | 30,055      |       | -                 |       | 385,718       |       |
| Losses  on derivative instruments                              |       | -                        |       | -                  |       | -           |       | (571)             |       | (571)         |       |
| Comprehensive  income                                          |       |                     |       |               |       |        |       |              |       | 385,147       |       |
| Capital  contribution from General Partner                     |       | 4,143                    |       | -                  |       | -           |       | -                 |       | 4,143         |       |
| Acquisition  of Partnership interest for common stock of       |       |                     |       |               |       |        |       |              |       |          |       |
|   General Partner                                    |       | 18,085                   |       | -                  |       | (16,257)    |       | -                 |       | 1,828         |       |
| Acquisition  of property in exchange for Limited Partner Units |       | -                        |       | -                  |       | 15,000      |       | -                 |       | 15,000        |       |
| Redemption  of Limited Partner Units                           |       | -                        |       | -                  |       | (2,061)     |       | -                 |       | (2,061)       |       |
| Tax  benefits from employee stock plans                        |       | 245                      |       | -                  |       | -           |       | -                 |       | 245           |       |
| Stock  based compensation expense                              |       | 2,032                    |       | -                  |       | -           |       | -                 |       | 2,032         |       |
| Retirement  of common units                                    |       | (297,060)                |       | -                  |       | -           |       | -                 |       | (297,060)     |       |
| Distributions  to preferred unitholders                        |       | -                        |       | (46,479)           |       | -           |       | -                 |       | (46,479)      |       |
| Distribution  to General Partner                               |       | (42)                     |       | -                  |       | -           |       | -                 |       | (42)          |       |
| Distributions  to partners ($1.87 per Common Unit)             |       | (265,076)                |       | -                  |       | (25,441)    |       | -                 |       | (290,517)     |       |
| Distributins  to partners ($1.05 per Common Unit) - Special    |       | (144,052)                |       | -                  |       | (14,068)    |       | -                 |       | (158,120)     |       |
| **Balance at December 31, 2005**                               | **$**      | **1,841,932**            | **$**      | **616,780**        | **$**      | **183,650** | **$**      | **(7,118)**       | **$**      | **2,635,244** | ** ** |
| Comprehensive income:                                          |       |                     |       |               |       |        |       |              |       |          |       |
| Net  income                                                    |       | 147,726                  |       | 56,419             |       | 14,706      |       | -                 |       | 218,851       |       |
| Gains  on derivative instruments                               |       | -                        |       | -                  |       | -           |       | 12,553            |       | 12,553        |       |
| Comprehensive  income                                          |       |                     |       |               |       |        |       |              |       | 231,404       |       |
| Capital  contribution from General Partner                     |       | 6,186                    |       | 283,994            |       | -           |       | -                 |       | 290,180       |       |
| Acquisition  of partnership interest for common stock of       |       |                     |       |               |       |        |       |              |       |          |       |
|  General Partner                                          |       | 39,918                   |       | -                  |       | (16,289)    |       | -                 |       | 23,629        |       |
| Redemption  of Series I Preferred units                        |       | -                        |       | (75,000)           |       | -           |       | -                 |       | (75,000)      |       |
| Capped  call option                                            |       | (26,967)                 |       | -                  |       | -           |       | -                 |       | (26,967)      |       |
| Tax  benefits from Employee Stock Plans                        |       | 606                      |       | -                  |       | -           |       | -                 |       | 606           |       |
| Stock  based compensation expense                              |       | 8,892                    |       | -                  |       | -           |       | -                 |       | 8,892         |       |
| Retirement  of common units                                    |       | (91,925)                 |       | -                  |       | -           |       | -                 |       | (91,925)      |       |
| Distributions  to preferred unitholders                        |       | -                        |       | (56,419)           |       | -           |       | -                 |       | (56,419)      |       |
| Distribution  to General Partner                               |       | (74)                     |       | -                  |       | -           |       | -                 |       | (74)          |       |
| Distributions  to partners ($1.89 per Common Unit)             |       | (255,190)                |       | -                  |       | (25,137)    |       | -                 |       | (280,327)     |       |
| **Balance at December 31, 2006**                               | **$**      | **1,671,104**            | **$**      | **825,774**        | **$**      | **156,930** | **$**      | **5,435**         | **$**      | **2,659,243** | ** ** |
| ** **                                                     | ** ** | ** **               | ** ** | ** **         | ** ** | ** **  | ** ** | ** **        | ** ** | ** **    | ** ** |
| **Common Units outstanding at December 31, 2006**              | ** ** | **133,921**              | ** ** | ** **         | ** ** | **12,407**  |       |              |       | **146,328**   |       |
|                                                                |            |                          |            |                    |            |             |            |                   |            |               |            |  |

 

See accompanying Notes to Consolidated****FinancialStatements.

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

Notes to Consolidated FinancialStatements

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

Duke RealtyLimited Partnership (the “Partnership”) was formed on October 4, 1993, whenDuke Realty Corporation (the “General Partner”) contributed all of its propertiesand related assets and liabilities, along with the net proceeds from theissuance of additional shares of the General Partner, through an offering tothe Partnership. Simultaneously, the Partnership completed the acquisition ofDuke Associates, a full-service commercial real estate firm operating in theMidwest. The General Partner was formed in 1985 and qualifies as a Real EstateInvestment Trust (“REIT”) under provisions of the Internal Revenue Code. TheGeneral Partner is the sole general partner of the Partnership, owning 91.5% ofthe common partnership interests as of December 31, 2005 (“General PartnerUnits”). The remaining 8.5% of the Partnership’s common interest is owned bylimited partners (“Limited Partner Units” and, together with the GeneralPartner Units, the “Common Units”). The Limited Partner Units are exchangeablefor shares of the General Partner’s common stock on a one-for-one basis subjectgenerally to a one-year holding period, or under certain circumstances, theGeneral Partner may repurchase the Limited Partnership Units for cash. TheGeneral Partner also owns preferred partnership interests in the Partnership (“PreferredUnits”).

We own and operatea portfolio primarily consisting of industrial and office properties in theMidwest, Southeast, Mid-Atlantic and Southwest United States and provide realestate services to third-party owners. We conduct service operations throughDuke Realty Services, LLC, Duke Realty Services Limited Partnership and DukeConstruction Limited Partnership. The consolidated financial statements includeour accounts and our majority-owned or controlled subsidiaries, and the terms “we”,“us”, and “our” refer to Duke Realty Limited Partnership and subsidiaries (the “Partnership”)and those entities owned or controlled by the Partnership.

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

**Principles of Consolidation**

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

**Reclassifications**

Certain 2005 and 2004 balances have been reclassified to conform to the2006 presentation.

**Real Estate Investments**

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

Direct and certain indirect costs clearly associated with andincremental to the development, construction, leasing or expansion of realestate investments are capitalized as a cost of the property. In addition, allleasing commissions paid to third parties for new leases or lease renewals arecapitalized. We capitalize a portion of our indirect costs associated with ourconstruction, development and leasing efforts. In assessing the amount ofdirect and indirect costs to be capitalized, allocations are made based onestimates of the actual amount of time spent in each activity. We do notcapitalize any costs attributable to downtime or to unsuccessful projects.

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

Notes to Consolidated Financial Statements

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

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

Construction in process and land held for development are included inreal estate investments and are stated at cost. Real estate investments alsoinclude our equity interests in unconsolidated joint ventures that own andoperate rental properties and hold land for development.  We first analyze our investments injoint ventures under Financial Accounting Standards Board (“FASB”)Interpretation No. 46(R), *Consolidation ofVariable Interest Entities*(“FIN 46(R)”), to determine if the joint ventureis a variable interest entity and would require consolidation. To the extentthat our joint ventures do not qualify as variable interest entities, wefurther assess under the guidelines of Emerging Issues Task Force (“EITF”)Issue No. 04-5, *Determining Whether aGeneral Partner, or the General Partners as a Group, Controls a LimitedPartnership or Similar Entity When the Limited Partners Have Certain Rights*(“EITF04-5”), Statement of Position 78-9, *Accountingfor Investments in Real Estate Ventures*; Accounting ResearchBulletin No. 51, *Consolidated FinancialStatements,* and FASB No. 94, *Consolidationof All Majority-Owned Subsidiaries*, to determine if the ventureshould be consolidated. The equity methodof accounting is used for those investments in which we have the ability toexercise significant influence, but not control, over operating and financialpolicies. Any difference between the carrying amount of these investments andthe underlying equity in net assets is amortized to equity in earnings ofunconsolidated companies over the depreciable life of the property, generally40 years. Distributions received from unconsolidated joint ventures related tothe operations of the properties in the joint ventures are reflected as anoperating activity in our Consolidated Statement of Cash Flows. Distributionsreceived from unconsolidated joint ventures related to property sales or othercapital transactions are reflected as an investing activity in our ConsolidatedStatement of Cash Flows.

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

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

Notes to Consolidated Financial Statements

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

The valueallocable to the above or below market component of an acquired in-place leaseis determined based upon the present value (using a discount rate whichreflects the risks associated with the acquired leases) of the differencebetween (i) the contractual amounts to be paid pursuant to the lease over itsremaining term and (ii) management’s estimate of the amounts that would be paidusing fair market rates over the remaining term of the lease. The amountsallocated to above market leases are included in deferred leasing and othercosts in the balance sheet and below market leases are included in otherliabilities in the balance sheet; both are amortized to rental income over theremaining terms of the respective leases.

The total amountof intangible assets is further allocated to in-place lease values and tocustomer relationship values based upon management’s assessment of theirrespective values. These intangible assets are included in deferred leasing andother costs in the balance sheet and are depreciated over the remaining term ofthe existing lease, or the anticipated life of the customer relationship, asapplicable.

**Cash Equivalents**

Investments with a maturity of three months or less when purchased areclassified as cash equivalents.

**Valuation of Receivables**

We reserve the entire receivable balance,including straight-line rent, of any tenant with an amount outstanding over 90days. Straight-line rent receivables for any tenant with long-term risk,regardless of the status of rent receivables, are reviewed and reserved asnecessary.

**Deferred Costs**

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

**Revenues**

Rental Operations

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

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

Notes to Consolidated Financial Statements

Revenue is recognized on payments received from tenants for early leaseterminations after all necessary criteria have been met in accordance with SFASNo. 13, *Accounting for Leases*.

Service Operations

Management feesare based on a percentage of rental receipts of properties managed and arerecognized as the rental receipts are collected. Maintenance fees are basedupon established hourly rates and are recognized as the services are performed. Construction management and development feesrepresent fee based third-party contracts and are recognized as earnedbased on the terms of the contract, which approximates the percentage ofcompletion method.

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

Unbilled receivables on construction contracts totaled $32.4 millionand $10.7 million at December 31, 2006 and 2005, respectively.

Property Sales

Gains on sales of all properties are recognized in accordance with SFASNo. 66, *Accounting for Sales of Real Estate*.

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

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

**Net Income Per Common Unit**

Basic net income per common unit is computed by dividing net incomeavailable for common unitholders by the weighted average number of common unitsoutstanding for the period. Diluted net income per common unit is computed bydividing net income available for common unitholders by the weighted averagenumber of common units outstanding, including any potential dilutive commonequivalents for the period.

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

Notes to Consolidated Financial Statements

The following table reconciles the components of basic and diluted netincome per common unit (in thousands):
|                                                                 |       | **2006**    |   | 2005    |   | 2004    |   |
|-----------------------------------------------------------------|------------|-------------|--------|---------|--------|---------|--------|
| Basic and diluted net income available for common  unitholders  | **$**      | **159,799** | $      | 339,239 | $      | 167,212 |   |
|                                                            | ** ** | ** **  |   |    |   |    |   |
| Weighted average number of common units outstanding             | ** ** | **148,069** |   | 155,059 |   | 155,281 |   |
| Weighted average conversion of Series D preferred  units (1)    |       | -           |   | -       |   | 877     |   |
| Dilutive units for stock-based compensation plans (2)           | ** ** | **1,324**   |   | 818     |   | 904     |   |
| Weighted average number of common units and potential  dilutive |       |        |   |    |   |    |   |
| common equivalents                                              | ** ** | **149,393** |   | 155,877 |   | 157,062 |   |

 

(1)          We called for the redemption of the Series Dpreferred units as of March 16, 2004. Prior to the redemption date, nearly 5.3million Series D preferred units were converted to 4.9 million common units.These units represent the weighted effect, assuming the Series D preferredunits had been converted on January 1, 2004.

(2)          Excludes (in thousands of units) 719; 1,158; and456 of anti-dilutive units as of December 31, 2006, 2005 and 2004,respectively.

A joint venture partner in one of our unconsolidated companies has theoption to convert a portion of its ownership to the General Partner’s commonshares, which would require the issuance of additional Common units to theGeneral Partner. The effect of this option on earnings per unit wasanti-dilutive for the years ended December 31, 2006, 2005 and 2004.

We issuedExchangeable Senior Notes (“Exchangeable Notes”) in 2006. These ExchangeableNotes had no effect on diluted earnings per unit, as the conversion option wasnot in the money.

**Federal Income Taxes**

We recorded federal and state income taxes of $6.8 million, $5.6million and $5.2 million for 2006, 2005 and 2004, respectively, which wereprimarily attributable to the earnings of our taxable REIT subsidiaries. Wepaid federal and state income taxes of $4.3 million, $8.7 million and $6.2million for 2006, 2005 and 2004, respectively. The taxable REIT subsidiarieshave no significant deferred income tax items.

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

**Stock Based Compensation**

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

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

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

Effective January 1, 2002, we prospectively adopted the fair valuerecognition provisions of Statement of Financial Accounting Standards No. 123, *Accounting for Stock-Based Compensation* (“SFAS123”), and applied SFAS 123 to all awards granted after January 1, 2002.

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**DUKE REALTY LIMITED PARTNERSHIPAND SUBSIDIARIES**

Notes to Consolidated Financial Statements

The followingtable illustrates the effect on net income and earnings per unit if we hadapplied the fair value recognition provisions of SFAS 123 to all stock-basedemployee compensation for the years ended December 31, 2005 and 2004,respectively (in thousands, except per unit data):
|                                                                                                            |   | 2005    |   | 2004    |   |
|------------------------------------------------------------------------------------------------------------|--------|---------|--------|---------|--------|
| Net income  available for common unitholders, as reported                                                  | $      | 339,239 | $      | 167,212 |   |
|                                                                                                       |   |    |   |    |   |
| Add: Stock-based  employee compensation expense included in net income determined under fair  value method |   | 1,116   |   | 455     |   |
|                                                                                                       |   |    |   |    |   |
| Deduct: Total  stock-based compensation expense determined under fair value method for all  awards         |   | (1,285) |   | (923)   |   |
| Pro forma net  income available for common unitholders                                                     | $      | 339,070 | $      | 166,744 |   |
|                                                                                                       |   |    |   |    |   |
| Basic net income  per common unit                                                                          |   |    |   |    |   |
| As reported                                                                                                | $      | 2.19    | $      | 1.08    |   |
| Pro forma                                                                                                  | $      | 2.19    | $      | 1.07    |   |
|                                                                                                       |   |    |   |    |   |
| Diluted net  income per common unit                                                                        |   |    |   |    |   |
| As reported                                                                                                | $      | 2.18    | $      | 1.07    |   |
| Pro forma                                                                                                  | $      | 2.18    | $      | 1.06    |   |

 

Effective January 1, 2006, we adopted Statement of Financial AccountingStandards No. 123(R), *Share Based Payment*,(“SFAS 123(R)”), using the modified prospective application method. Under thismethod, as of  January 1, 2006, weapplied the provisions of SFAS 123(R) to new and modified awards, as well as tothe nonvested portion of awards granted before the required effective date andoutstanding at such time.

## **DerivativeFinancial Instruments**

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

If a derivativequalifies as a cash flow hedge, the change in fair value of the derivative isrecognized in other comprehensive income to the extent the hedge is effective,while the ineffective portion of the derivative’s change in fair value isrecognized in earnings. We estimate the fair value of derivative instrumentsusing standard market conventions and techniques such as discounted cash flowanalysis, option pricing models and termination cost at each balance sheetdate.  For all hedging relationships, weformally document the hedging relationship and its risk-management objectiveand strategy for undertaking the hedge, the hedging instrument, the hedgeditem, the nature of the risk being hedged, how the hedging instrument’seffectiveness in offsetting the hedged risk will be assessed prospectively andretrospectively, and a description of the method of measuring ineffectiveness.

**Use of Estimates**

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

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Notes to Consolidated Financial Statements

**(3)****                     Significant Acquisitions and Dispositions**

In February 2006, we acquired the majority of a Washington, D.C.metropolitan area portfolio of suburban office and light industrial properties(the “Mark Winkler Portfolio”). The assets acquired for a purchase price ofapproximately $867.6 million are comprised of 32 in-service properties withapproximately 2.9 million square feet for rental, 166 acres of undevelopedland, as well as certain related assets of the Mark Winkler Company, a realestate management company. The acquisition was financed primarily throughassumed mortgage loans and new borrowings.

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

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

 

 In December 2006, we contributed 23of these in-service properties acquired from the Mark Winkler Portfolio with abasis of $381.6 million representing real estate investments and acquired leaserelated intangible assets to two new unconsolidated subsidiaries. The remainingnine in-service properties are classified and accounted for as held-for-sale.The results of operations of the acquired properties since the date ofacquisition have been included in continuing operations, rather thandiscontinued operations, based on our intention to sell the majority of ourownership interest in the properties to entities in which we will retain aminority equity ownership interest.

In the third quarter of 2006, we finalized the purchase of a portfolio ofindustrial real estate properties in Savannah, Georgia. We completed a majorityof the purchase in January 2006. The assets acquired for a purchase price ofapproximately $196.2 million are comprised of 18 buildings with approximately5.1 million square feet for rental as well as over 60 acres of undevelopedland.  The acquisition was financed inpart through assumed mortgage loans. The results of operations for the acquiredproperties since the date of acquisition have been included in continuingrental operations in our consolidated financial statements.

We acquired total income producing real estate related assets of $948.4million, $295.6 million, and $246.2 million in 2006, 2005, and 2004,respectively.

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Notes to Consolidated Financial Statements

On September 29, 2005, we completed the sale of a portfolio of 212 realestate properties, consisting of approximately 14.1 million square feet ofprimarily light distribution and service center properties and approximately 50acres of undeveloped land (the “Industrial Portfolio Sale”). The purchase pricetotaled $983 million, of which we received net proceeds of $955.0 million afterthe settlement of certain liabilities and transaction costs. Portions of theproceeds were used to pay down $423.0 million of outstanding debt on our $500.0million unsecured line of credit and the entire outstanding balance on our$400.0 million term loan. The operations for 2005 and 2004 and the gain for2005 associated with the properties in the Industrial Portfolio Sale have beenreclassified to discontinued operations. As a result of the taxable incomegenerated by the sale, a one-time special cash dividend of $1.05 per share waspaid to our common shareholders in the fourth quarter of 2005.

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

We provide property management, leasing, constructionand other tenant related services to unconsolidated companies in which we haveequity interests. For the years ended December 31, 2006, 2005 and 2004, wereceived management fees of $4.4 million, $4.8 million and $4.9 million,leasing fees of $2.9 million, $4.3 million and $2.6 million and constructionand development fees of $19.1 million, $2.0 million and $1.5 million,respectively, from these companies. These fees approximate market rates and weeliminated our ownership percentages of these fees in the consolidatedfinancial statements.

**(5)****               Investmentsin Unconsolidated Companies**

We have equityinterests ranging from 10%–67% in unconsolidated joint ventures that own andoperate rental properties and hold land for development.

Combinedsummarized financial information for the unconsolidated companies as ofDecember 31, 2006 and 2005, and for the years ended December 31, 2006 and 2005,and 2004, are as follows (in thousands):
|                                               |       | **2006**      |   | 2005      |   | 2004    |   |
|-----------------------------------------------|------------|---------------|--------|-----------|--------|---------|--------|
| Rental revenue                                | **$**      | **157,186**   | $      | 163,447   | $      | 167,803 |   |
| Net income                                    | **$**      | **65,985**    | $      | 57,561    | $      | 40,138  |   |
| Cash distributions  received                  | **$**      | **36,096**    | $      | 25,446    | $      | 30,309  |   |
|                                          | ** ** | ** **    |   |      |   |    |   |
| Land, buildings and  tenant improvements, net | **$**      | **1,510,970** | $      | 1,121,254 |   |    |   |
| Land held for  development                    | ** ** | **91,280**    |   | 47,936    |   |    |   |
| Other assets                                  | ** ** | **148,580**   |   | 73,084    |   |    |   |
| ** **                                    | **$**      | **1,750,830** | $      | 1,242,274 |   |    |   |
| ** **                                    |       | ** **    |   |      |   |    |   |
| Property indebtedness                         | **$**      | **417,970**   | $      | 515,192   |   |    |   |
| Other liabilities                             | ** ** | **170,168**   |   | 58,225    |   |    |   |
| ** **                                    |       | **588,138**   |   | 573,417   |   |    |   |
| Owners’ equity                           | ** ** | **1,162,692** |   | 668,857   |   |    |   |
| ** **                                    | **$**      | **1,750,830** | $      | 1,242,274 |   |    |   |

 

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Notes to Consolidated Financial Statements

Our share of the scheduledpayments of long term debt for the unconsolidated joint ventures for each ofthe next five years and thereafter as of December 31, 2006, are as follows (in thousands):

| Year   |   | Future  Repayments |    |
|--------|--------|--------------------|---------|
| 2007   |   | $                  | 38,639  |   |   |
| 2008   |   |               | 1,765   |   |   |
| 2009   |   |               | 40,499  |   |   |
| 2010   |   |               | 113,439 |   |   |
| 2011   |   |               | 4,411   |   |   |
|   |   | $                  | 198,753 |   |   |

 

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

We classified the operations of 308 buildings asdiscontinued operations as of December 31, 2006. These 308 buildings consist of273 industrial, 32 office and three retail properties. Of these properties, 21were sold during 2006, 234 properties were sold during 2005, 41 properties weresold during 2004 and 12 operating properties are classified as held-for-sale atDecember 31, 2006.

The following table illustrates operations of thebuildings reflected in discontinuedoperationsfor the years ended December 31 (in thousands):

|                                                            |       | **2006**   |   | 2005    |   | 2004    |   |
|------------------------------------------------------------|------------|------------|--------|---------|--------|---------|--------|
| Revenues                                                   | **$**      | **40,852** | $      | 129,239 | $      | 173,746 |   |
| Expenses:                                                  |       |       |   |    |   |    |   |
| Operating                                                  | ** ** | **13,878** |   | 42,612  |   | 51,742  |   |
| Interest                                                   | ** ** | **7,499**  |   | 30,203  |   | 33,633  |   |
| Depreciation and  Amortization                             | ** ** | **10,139** |   | 38,770  |   | 56,818  |   |
| General and  Administrative                                | ** ** | **82**     |   | 216     |   | 182     |   |
| Income from discontinued operations, before gain on  sales |       | **9,254**  |   | 17,438  |   | 31,371  |   |
| Gain on sale of property, net of impairment  adjustments   |       | **46,254** |   | 223,858 |   | 26,247  |   |
| Income from discontinued operations                        | **$**      | **55,508** | $      | 241,296 | $      | 57,618  |   |

 

At December 31, 2006, we classified 12 properties as held-for-sale andincluded in discontinued operations. Additionally, we have classified nine ofthe remaining in-service properties from the Mark Winkler Portfolio, as well assix additional properties, as held-for-sale. However, the results of these 15 properties are included in continuingoperations, either based on our present intention to sell the majority of ourownership interest in the properties to entities in which we will retain aminority equity ownership interest or because the results of operations for theproperties are immaterial. The following table illustrates the aggregatebalance sheet of the aforementioned 12 properties included in discontinuedoperations, as well as the 15 held-for-sale properties whose results areincluded in continuing operations at December 31, 2006 (in thousands):
|                               | ** ** | **Held- for-Sale and Included inDiscontinued Operations** |    | **Held-for-Sale and Includedin Continuing Operations** |   | **Total** |    |
|-------------------------------|------------|-----------------------------------------------------------|---------|--------------------------------------------------------|--------|-----------|---------|
| Real estate  investments, net |       | $                                                         | 113,705 |                                                   |   | $         | 381,435 |   | $ | 495,140 |   |
| Other assets                  |       |                                                      | 10,818  |                                                   |   |      | 6,967   |   |   | 17,785 |   |
| Assets held-for-sale          |       | $                                                         | 124,523 |                                                   |   | $         | 388,402 |   | $ | 512,925 |   |
|                          |       |                                                      |    |                                                   |   |      |    |   |   |   |   |
| Accrued expenses              |       | $                                                         | 3,742   |                                                   |   | $         | 664     |   | $ | 4,406 |   |
| Other liabilities             |       |                                                      | 1,352   |                                                   |   |      | 2,118   |   |   | 3,470 |   |
| Secured debt                  |       |                                                      | —  |                                                   |   |      | 147,309 |   |   | 147,309 |   |
| Liabilities held-for-sale     |       | $                                                         | 5,094   |                                                   |   | $         | 150,091 |   | $ | 155,185 |   |

 

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Notes to Consolidated Financial Statements

We allocate interest expense to discontinuedoperations and have included such interest expense in computing net income fromdiscontinued operations. Interest expense allocable to discontinued operationsincludes interest on any debt on secured properties included in discontinuedoperations and an allocable share of our consolidated unsecured interestexpense for unencumbered properties. The allocation of unsecured interestexpense to discontinued operations was based upon the gross book value of thediscontinued operations unencumbered population as it related to our entireunencumbered population.

We recordedimpairment adjustments on depreciable properties of $266,000, $3.7 million and$180,000 in 2006, 2005 and 2004, respectively.

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

Indebtedness at December 31 consists of the following (in thousands):
|                                                                                                                                                                       |        | **2006**      |   | 2005      |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|---------------|--------|-----------|--------|
| ** **                                                                                                                                                            |        | ** **    |   |      |   |
| Fixed rate  secured debt, weighted average interest rate of 6.21% at December 31, 2006,  and 6.13% at December 31, 2005, maturity dates ranging from 2007 to 2026     | **$ ** | **652,886**   | $      | 131,732   |   |
|                                                                                                                                                                  |        | ** **    |   |      |   |
| Variable rate  secured debt, weighted average interest rate of 3.79% at December 31, 2006,  and 5.75% at December 31, 2005, maturity dates ranging from 2014 to 2025  |        | **9,615**     |   | 35,523    |   |
|                                                                                                                                                                  |        | ** **    |   |      |   |
| Fixed rate  unsecured notes, weighted average interest rate of 5.67% at December 31,  2006, and 6.02% at December 31, 2005, maturity dates ranging from 2007 to  2028 |        | **3,125,157** |   | 1,800,396 |   |
|                                                                                                                                                                  |        | ** **    |   |      |   |
| Unsecured line of  credit, interest rate of 5.82% at December 31, 2006, and 4.83% at December  31, 2005 maturity date of 2010                                         |        | **317,000**   |   | 383,000   |   |
|                                                                                                                                                                  |        | ** **    |   |      |   |
| Variable rate  unsecured debt, market rate of 6.2% at December 31, 2006, and 4.76% at  December 31, 2005, maturity date of 2008                                       |        | **4,496**     |   | 250,000   |   |
|                                                                                                                                                                  |        | ** **    |   |      |   |
| ** **                                                                                                                                                            | $           | **4,109,154** | $      | 2,600,651 |   |

 

The fair value of our indebtedness as of December 31, 2006, was $4.2billion. This fair value amount was calculated using current market rates andspreads available to us on debt instruments with similar terms and maturities.

As of December 31, 2006, the $662.5 million of secured debt wascollateralized by rental properties with a carrying value of $1.0 billion andby letters of credit in the amount of $9.8 million.

We had one unsecured line of credit available at December 31, 2006, describedas follows (dollars in thousands):
| Description              | ** ** | **Borrowing  Capacity** | ** ** | **Maturity  Date** | ** ** | **Interest  Rate** | ** ** | **Outstanding  at December 31, 2006** | ** ** |
|--------------------------|------------|-------------------------|------------|--------------------|------------|--------------------|------------|------------------------------------------------------|------------|
| Unsecured Line of Credit | $          | 1,000,000               |       | January 2010       |       | LIBOR + .525%      |       |                                                 | $317,000   |   |   |
|                          |            |                         |            |                    |            |                    |            |                                                      |            |  |  |

 

The line of credit provides us with an option to obtain borrowings fromfinancial institutions that participate in the line, at rates lower than thestated interest rate, subject to certain restrictions.  Interest rates on the amounts outstanding onthe unsecured line of credit as of December 31, 2006 ranged from LIBOR+.17% toLIBOR+.525% (equal to 5.52% and 5.875% as of December 31, 2006).

The line of credit also contains various financial covenants thatrequire us to meet financial ratios and defined levels of performance,including those related to variable rate indebtedness, consolidated net worthand debt-to-market capitalization. As of December 31, 2006, we were incompliance with all financial covenants under our line of credit.

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Notes to Consolidated Financial Statements

We took the following actions during the year ended December 31,2006, relevant to our indebtedness:

·                  InJanuary 2006, we renewed our unsecured line of credit. The new facilityprovides borrowing capacity up to $1.0 billion and, subject to certainconditions, may be increased to $1.3 billion. Under the new facility, whichreplaced the previous unsecured line of credit agreement, the interest rate wasreduced, the borrowing capacity was increased by $500.0 million and thematurity date was extended to January 25, 2010.

·                  To finance theacquisition of the Mark Winkler Portfolio, we obtained a $700.0 million termloan with an interest rate of LIBOR + .525%, secured by certain of the acquiredreal estate properties. This term loan was paid in full in August 2006 withproceeds from the issuance of senior unsecured debt as described below.

·                  Inconjunction with our real estate acquisitions, we assumed $221.6 million ofmortgage loans, of which we received $10.5 million of proceeds directly. Theassumed mortgage loans bear interest at rates ranging between 5.55% and 8.50%and have maturities ranging between 2011 and 2026.  An adjustment of $6.3 million was recorded toincrease the assumed loans to fair value.

·                  InFebruary and March 2006, we issued $150.0 million of 5.50% senior unsecurednotes due in 2016.  A portion of theproceeds were used to retire our $100.0 million of 6.72% unsecured notes.  The remaining cash proceeds were used to fundcosts associated with the issuance of the debt and to repay amounts outstandingunder our line of credit.

·                  InAugust 2006, we issued $450.0 million of 5.95% senior unsecured notes due in2017 and $250.0 million of 5.625% senior unsecured notes due in 2011.  The proceeds from these issuances were usedto pay off the $700.0 million secured term loan that was obtained to financethe purchase of the Mark Winkler Portfolio.

·                  InNovember 2006, we issued $319.0 million of 5.91% debt due in 2016 secured bycertain of our in-service real estate properties.

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

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

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**DUKE REALTYLIMITED PARTNERSHIP AND SUBSIDIARIES**

Notes to Consolidated Financial Statements

Concurrent withthe issuance of the Exchangeable Notes, we purchased a capped call option onthe General Partner’s common stock in a private transaction.  This capped call option allows us to buy theGeneral Partner’s common shares, up to a maximum of approximately 11.7 millionshares, from counter parties equal to the amounts of common stock and/or cashrelated to the excess conversion value we would pay to the holders of theExchangeable Notes upon conversion.  Thecapped call option will terminate upon the earlier of the maturity date of therelated Exchangeable Notes or the first day all of the related ExchangeableNotes are no longer outstanding due to conversion or otherwise.  The capped call option, which cost $27.0million, was recorded as a reduction of partners’ equity and effectively increased the conversionprice to 40% above the General Partner’s stock price on the issuance date.  The fair value of the capped call option was$27.9 million at December 31, 2006.

·                  In December 2006, we repaid $250.0 million ofLIBOR +.26% Senior Unsecured Notes upon their maturity.

At December 31, 2006, the scheduled amortization and maturities of allindebtedness for the next five years and thereafter were as follows  (in thousands):

| Year       |   | Amount    |   |
|------------|--------|-----------|--------|
| 2007       | $      | 227,660   |   |
| 2008       |   | 285,942   |   |
| 2009       |   | 287,185   |   |
| 2010       |   | 503,952   |   |
| 2011       |   | 1,024,124 |   |
| Thereafter |   | 1,780,291 |   |
|       | $      | 4,109,154 |   |

 

The amount of interest paid in 2006, 2005 and 2004 was $198.1 million,$151.3 million and $136.2 million, respectively. The amount of interestcapitalized in 2006, 2005 and 2004 was $36.3 million, $9.5 million and $6.0 million,respectively.

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

We are engaged inthree reportable operating segments, the first two of which consist of theownership and rental of office and industrial real estate investments. Thethird segment consists of our build-to-suit for sale operations and providingvarious real estate services such as property management, maintenance, leasing,development and construction management to third-party property owners andjoint ventures (“Service Operations”). Our reportable segments offer differentproducts or services and are managed separately because each segment requiresdifferent operating strategies and management expertise.

The assets of theService Operations business segment generally include properties underdevelopment.  During the period betweenthe completion of development, rehabilitation or repositioning of a ServiceOperations property and the date the property is contributed to a property fundor sold to a third party, the property and its associated rental income andrental expenses are included in the applicable property operations segmentbecause the primary activity associated with the Service Operations propertyduring that period is rental activities. Upon contribution or sale, the resulting gain or loss is part of theincome of the Service Operations business segment.

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Notes to Consolidated Financial Statements

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

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

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

Managementbelieves that the use of FFO, combined with the required primary GAAPpresentations, improves the understanding of operating results of REITs amongthe investing public and makes comparisons of REIT operating results moremeaningful.  Management considers FFO tobe a useful measure for reviewing comparative operating and financialperformance (although FFO should be reviewed in conjunction with net income whichremains the primary measure of performance) because by excluding gains orlosses related to sales of previously depreciated operating real estate assetsand excluding real estate asset depreciation and amortization, FFO provides auseful comparison of the operating performance of our real estate betweenperiods or as compared to different companies.

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Notes to Consolidated Financial Statements

The following table shows (i) the revenues and FFO for each of thereportable segments and (ii) a reconciliation of net income available forcommon unitholders to the calculation of FFO for the years ended December 31(in thousands):
|                                                                      | ** ** | **2006**      |   | 2005      |   | 2004      |   |
|----------------------------------------------------------------------|------------|---------------|--------|-----------|--------|-----------|--------|
| Revenues                                                             |       |          |   |      |   |      |   |
| Rental  Operations:                                                  |       |          |   |      |   |      |   |
| Office                                                               | **$**      | **562,903**   | $      | 462,939   | $      | 419,068   |   |
| Industrial                                                           | ** ** | **203,259**   |   | 166,343   |   | 152,989   |   |
| Service  Operations                                                  | ** ** | **90,125**    |   | 81,941    |   | 70,803    |   |
| Total Segment  Revenues                                              | ** ** | **856,287**   |   | 711,223   |   | 642,860   |   |
| Non-Segment  Revenue                                                 | ** ** | **52,508**    |   | 39,325    |   | 31,760    |   |
| Consolidated  Revenue from continuing operations                     | ** ** | **908,795**   |   | 750,548   |   | 674,620   |   |
| Discontinued  Operations                                             | ** ** | **40,852**    |   | 129,239   |   | 173,746   |   |
| Consolidated  Revenue                                                | **$**      | **949,647**   | $      | 879,787   | $      | 848,366   |   |
|                                                                 | ** ** | ** **    |   |      |   |      |   |
| Funds From Operations                                                |       |          |   |      |   |      |   |
| Rental  Operations:                                                  |       |          |   |      |   |      |   |
| Office                                                               | **$**      | **351,818**   | $      | 284,807   | $      | 268,520   |   |
| Industrial                                                           | ** ** | **156,328**   |   | 124,742   |   | 116,782   |   |
| Services  Operations                                                 | ** ** | **53,196**    |   | 44,278    |   | 27,652    |   |
| Total Segment FFO                                                    | ** ** | **561,342**   |   | 453,827   |   | 412,954   |   |
| Non-Segment FFO:                                                     |       |          |   |      |   |      |   |
| Interest expense                                                     | ** ** | **(179,007)** |   | (113,067) |   | (103,976) |   |
| Interest and  other income, net                                      | ** ** | **10,450**    |   | 4,637     |   | 4,646     |   |
| General and  administrative expense                                  | ** ** | **(35,834)**  |   | (31,003)  |   | (29,479)  |   |
| Gain on land sales, net of impairment                                | ** ** | **7,791**     |   | 14,201    |   | 10,119    |   |
| Other non-segment income (expense)                                   | ** ** | **4,529**     |   | (540)     |   | 3,919     |   |
| Minority interest                                                    | ** ** | **(247)**     |   | (1,438)   |   | (1,253)   |   |
| Joint venture FFO                                                    | ** ** | **37,774**    |   | 37,964    |   | 40,488    |   |
| Distributions on  preferred units                                    | ** ** | **(56,419)**  |   | (46,479)  |   | (33,777)  |   |
| Adjustment for  redemption of preferred units                        | ** ** | **(2,633)**   |   | —    |   | (3,645)   |   |
| Discontinued  operations                                             | ** ** | **23,824**    |   | 56,208    |   | 88,189    |   |
| Consolidated basic  FFO                                              | ** ** | **371,570**   |   | 374,310   |   | 388,185   |   |
|                                                                 | ** ** | ** **    |   |      |   |      |   |
| Depreciation and  amortization on continuing operations              | ** ** | **(244,129)** |   | (215,400) |   | (171,764) |   |
| Depreciation and  amortization on discontinued operations            | ** ** | **(10,139)**  |   | (38,770)  |   | (56,818)  |   |
| Partnership’s  share of joint venture adjustments               | ** ** | **(18,394)**  |   | (19,510)  |   | (18,901)  |   |
| Earnings from  depreciated property sales on discontinued operations | ** ** | **42,089**    |   | 227,513   |   | 26,510    |   |
| Earnings from  depreciated property sales - share of joint venture   | ** ** | **18,802**    |   | 11,096    |   | —    |   |
|                                                                 | ** ** | ** **    |   |      |   |      |   |
| Net income available for common unitholders                          | **$**      | **159,799**   | $      | 339,239   | $      | 167,212   |   |

 

The assets for each of the reportable segments as of December 31 are asfollows (in thousands):
|                      | ** ** | **December 31** | ** ** | **December 31,** | ** ** | ** ** | ** ** |
|----------------------|------------|-----------------|------------|-----------------------|------------|------------|------------|
| ** **           | ** ** | **2006**        | ** ** | **2005**              | ** ** | ** ** | ** ** |
|                 | ** ** |            |       |                  |       |       |       |   |   |
| Assets               | ** ** |            |       |                  |       |       |       |   |   |
| Rental Operations:   | ** ** |            |       |                  |       |       |       |   |   |
| Office               | **$**      | **4,081,917**   |       | $                     | 3,396,985  |       |       |   |   |
| Industrial           | ** ** | **1,951,916**   |       |                  | 1,577,631  |       |       |   |   |
| Service Operations   | ** ** | **270,652**     |       |                  | 177,463    |       |       |   |   |
| Total Segment Assets | ** ** | **6,304,485**   |       |                  | 5,152,079  |       |       |   |   |
| Non-Segment Assets   | ** ** | **942,811**     |       |                  | 494,608    |       |       |   |   |
| Consolidated Assets  | **$**      | **7,247,296**   |       | $                     | 5,646,687  |       |       |   |   |

 

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Notes to Consolidated Financial Statements

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

|                                 |       | **2006**   |   | 2005   |   | 2004    |   |
|---------------------------------|------------|------------|--------|--------|--------|---------|--------|
| Recurring Capital  Expenditures |       |       |   |   |   |    |   |   |   |   |   |   |
| Office                          | **$**      | **53,048** |   |   | $      | 66,890  |   |   | $ | 68,535 |   |   |
| Industrial                      | ** ** | **13,734** |   |   |   | 42,083  |   |   |   | 39,096 |   |   |
| Non-segment                     | ** ** | **341**    |   |   |   | 67      |   |   |   | 22 |   |   |
| Total                           | **$**      | **67,123** |   |   | $      | 109,040 |   |   | $ | 107,653 |   |   |

 

**(9)  Leasing Activity**

Future minimum rents due to us under non-cancelable operating leases atDecember 31, 2006, are as follows (in thousands):

| Year       |   | Amount    |   |
|------------|--------|-----------|--------|
| 2007       | $      | 622,631   |   |
| 2008       |   | 592,653   |   |
| 2009       |   | 529,424   |   |
| 2010       |   | 456,919   |   |
| 2011       |   | 365,683   |   |
| Thereafter |   | 1,097,812 |   |
|       | $      | 3,665,122 |   |

 

In addition to minimum rents, certain leases require reimbursements ofspecified operating expenses that amounted to $161.7 million, $151.4 million,and $137.9 million for the years ended December 31, 2006, 2005 and 2004,respectively.

**(10) Employee Benefit Plans**

We maintain a 401(k) plan for full-time employees.  We make matching contributions up to anamount equal to three percent of the employee’s salary and may also make annualdiscretionary contributions. The total expense recognized for this plan was$3.9 million, $3.3 million and $2.2 million for the years ended December 31,2006, 2005 and 2004, respectively.

We make contributions to a contributory health and welfare plan asnecessary to fund claims not covered by employee contributions. The totalexpense we recognized related to this plan was $9.4 million, $8.1 million and$7.2 million for 2006, 2005 and 2004, respectively. These expense amountsinclude estimates based upon the historical experience of claims incurred butnot reported as of year-end.

**(11) Partners’ Equity**

The General Partner periodically accesses the public equity markets tofund the development and acquisition of additional rental properties or to paydown debt. The proceeds of these offerings are contributed to us in exchangefor an additional interest in the Partnership. In January 2006, the General Partner issued $184.0 million of6.95% Series M Cumulative Redeemable Preferred Shares, from which a portion ofthe net proceeds were used to redeem its $75.0 million of outstanding 8.45%Series I Cumulative Redeemable Preferred Shares.  Offering costs of $2.6 million were chargedagainst net income available to common unitholders in conjunction with theredemption of the Series I Cumulative Redeemable Preferred Shares.  In June 2006, the General Partner issued$110.0 million of 7.25% Series N Cumulative Redeemable Preferred Shares.

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Notesto Consolidated Financial Statements

The following series of preferred units were outstanding as of December31, 2006 (in thousands, except percentage data):
| Description        |   | SharesOutstanding |   |   | DividendRate |   |   | RedemptionDate |   | LiquidationPreference |   |
|--------------------|--------|-------------------|--------|--------|--------------|--------|--------|----------------|--------|-----------------------|--------|
|               |   |              |   |   |         |   |   |           |   |                  |   |   |   |   |   |
| Series B Preferred |   |              | 265    |   |         |   | 7.990  | %              |   | September 30,  2007   |   |   | $132,250 |   |   |
| Series J Preferred |   |              | 400    |   |         |   | 6.625  | %              |   | August 29, 2008       |   |   | 100,000 |   |   |
| Series K Preferred |   |              | 600    |   |         |   | 6.500  | %              |   | February 13, 2009     |   |   | 150,000 |   |   |
| Series L Preferred |   |              | 800    |   |         |   | 6.600  | %              |   | November 30, 2009     |   |   | 200,000 |   |   |
| Series M Preferred |   |              | 736    |   |         |   | 6.950  | %              |   | January 31, 2011      |   |   | 184,000 |   |   |
| Series N Preferred |   |              | 440    |   |         |   | 7.250  | %              |   | June 30, 2011         |   |   | 110,000 |   |   |
|                    |        |                   |        |        |              |        |        |                |        |                       |        |  |  |  |  |  |  |

 

The dividend rate on the Series B preferred units increases to 9.99%after September 12, 2012.

All series ofpreferred equity require cumulative distributions and have no stated maturitydate (although the General Partnermay redeem all such preferred units on or following their optional redemptiondates at the General Partner’s option, in whole or in part).

Pursuant to theGeneral Partner’s $750 million share repurchase plan that was approved by itsboard of directors, we paid approximately $91.9 million and $297.1 million forthe redemption of 2,266,684 and 8,995,775 of the General Partner’s commonshares at an average price of $40.55 and $33.02 per share during the yearsended December 31, 2006 and 2005, respectively. From time to time, the GeneralPartner’s management may repurchase additional common shares of the GeneralPartner pursuant to its share repurchase plan.

**(12) StockBased Compensation**

The General Partner isauthorized to issue up to 10,462,147 shares of its common stock under our stockbased employee and non-employee compensation plans.

Some of the General Partner’s stock-based compensation awards, includingboth stock options and restricted stock units, have a retirement eligibleprovision, whereby awards granted to an employee who has reached certain ageand service criteria, automatically vest upon such employee’s retirement. Wehave previously accounted for this type of arrangement by recognizingcompensation cost (for both pro forma and expense recognition purposes) overthe full stated vesting period of the award and, if the employee retired beforethe end of the vesting period, recognizing any remaining unrecognizedcompensation cost at the date of retirement. Upon adoption of SFAS 123(R),expense on new awards is recognized over a period up until when the awards areno longer contingent upon future service. Had we applied this method of vestingto all existing unvested awards issued to retirement eligible employees priorto January 1, 2006, we would have recognized an additional $1.0 million instock-based employee compensation expense for the year ended December 31, 2006.

An additional requirement of SFAS 123(R) is that estimated forfeitures beconsidered in determining compensation expense. As previously permitted, werecorded forfeitures when they occurred. The effect of this accounting changeon existing nonvested stock compensation was insignificant.

The effect of adopting SFAS 123(R) was not significant to earnings orcash flows.

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

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Notesto Consolidated Financial Statements

Fixed Stock OptionPlans

The General Partner hadoptions outstanding under six fixed stock option plans as of December 31, 2006.Additional grants may be made under one of those plans. Stock option awardsgranted under the General Partner’s stock based employee and non-employeecompensation plans generally vest over five years at 20% per year and havecontractual lives of ten years.  Theexercise price for stock option grants is set at the fair value of the GeneralPartner’s common stock on the day of grant.

The following table summarizes transactions under the GeneralPartner’s stock option plans as of December 31, 2006:
|                                   | ** ** | ** **    | ** ** | **2006**     | ** ** | ** **    | ** ** |
|-----------------------------------|------------|---------------|------------|--------------|------------|---------------|------------|
| ** **                        | ** ** | ** **    |       | **Weighted** |       | **Weighted**  |       | Aggregate |   |
| ** **                        | ** ** | ** **    |       | **Average**  |       | **Average**   |       | Intrinsic |   |
| ** **                        | ** ** | ** **    |       | **Exercise** |       | **Remaining** |       | Value  (1) |   |
| ** **                        | ** ** | **Shares**    | ** ** | **Price**    |       | **Life**      |       | (in  Millions) |   |
| Outstanding,  beginning of year   | ** ** | **3,828,157** | ** ** | **$25.50**   |       |          |       |   |   |
| Granted                           | ** ** | **861,591**   | ** ** | **$34.19**   |       |          |       |   |   |
| Exercised                         | ** ** | **(714,524)** | ** ** | **$22.40**   |       |          |       |   |   |
| Forfeited                         | ** ** | **(126,299)** | ** ** | **$30.71**   |       |          |       |   |   |
| Outstanding, end  of year         | ** ** | **3,848,925** | ** ** | **$27.85**   |       | 6.3           |       |   | $50.2 |   |
| Options exercisable,  end of year |       | **1,985,742** |       | **$24.26**   |       | 4.6           |       |   | $33.0 |   |

 

----

(1)          The aggregate intrinsic value represents thetotal pre-tax intrinsic value, based on the closing stock price of $40.90 atDecember 31, 2006, which would have been received by the option holders had alloption holders exercised their options as of that date.  This amount changes continuously based on themarket prices of the General Partner’s stock.

Options granted inthe years ended December 31, 2006, 2005, and 2004, respectively, had a weightedaverage fair value per option of $3.60, $3.04, and $2.84. As of December 31,2006, there was $3.4 million of total unrecognized compensation expense relatedto stock options granted under the plans, which is expected to be recognizedover a weighted average remaining period of 2.97 years. The total intrinsicvalue of options exercised during the years ended December 31, 2006, 2005, and2004 respectively, was $11.3 million, $3.4 million, and $8.5 million.  Compensation expense recognized for fixedstock option plans was $1.7 million, $1.1 million, and $853,000 for the yearsended December 31, 2006, 2005, and 2004, respectively.  The fair value of options vested during theyears ended December 31, 2006, 2005, and 2004 was $1.6 million, $1.2 million,and $1.1 million, respectively.

The fair values of theoptions were determined using the Black-Scholes option-pricing model with thefollowing assumptions:
|                          |       | **2006**           |   | 2005    |   | 2004    |   |
|--------------------------|------------|--------------------|--------|---------|--------|-------------------|--------|
| Dividend yield           | ** ** | **6.25 %**         |   | 6.25 %  |   | 6.50 %            |   |
| Volatility               | ** ** | **20.0 %**         |   | 20.0 %  |   | 20.0 %            |   |
| Risk-free  interest rate | ** ** | **4.5 %**          |   | 3.8 %   |   | 3.6 %             |   |
| Expected life            | ** ** | **6 years  ** |   | 6 years |   | 6 years           |   |

 

The risk free interestrate assumption is based upon observed interest rates appropriate for the termof the General Partner’s employee stock options. The dividend yield assumptionis based on the history of and our present expectation of future dividendpayouts. Our computation of expected volatility for the valuation of stockoptions granted in the years ended December 31, 2006, 2005, and 2004 is basedon historic volatility over a period of time equal to the expected term. Theexpected life of employee stock options represents the weighted average periodthe stock options are expected to remain outstanding.

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**DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES**

Notes to Consolidated Financial Statements

Performance Share Plan

Performance shares were granted under the 2000 Performance Share Plan,with each performance share economically equivalent to one share of the General Partner’s common stock.

The performance sharesvest over a five-year period with the vesting percentage for a year dependentupon the General Partner’s attainment of certain predefined levels of earningsgrowth for such year.  The performanceshares have a contractual life of five years.

In April 2006, the 2000Performance Share Plan was amended to provide that awards would be settled inshares of the General Partner’s common stock rather than cash.  The fair value of existing awards was fixedat the date of the amendment and the fair value of subsequent awards will befixed at the fair value of the General Partner’s common stock at the date ofgrant.

The following tablesummarizes transactions for the General Partner’s performance shares for theyear ended December 31, 2006:
| **2000 Performance Share Plan**                                      | ** ** | **Vested** | ** ** | **Unvested** | ** ** | **Total** |
|----------------------------------------------------------------------|------------|------------|------------|--------------|------------|-----------|
|                                                                 |       |       |       |         |       |      |
| Performance Share Plan units at  December 31, 2005                   |       | 84,466     |       | 99,001       |       |      | 183,467 |
| Granted                                                              |       | -          |       | -            |       |      | - |
| Vested                                                               |       | 25,487     |       | (25,487)     |       |      | - |
| Forfeited                                                            |       | -          |       | (3,746)      |       |      | (3,746) |
| Dividend reinvestments                                               |       | 8,378      |       | -            |       |      | 8,378 |
| Disbursements                                                        |       | (15,076)   |       | -            |       |      | (15,076) |
| Total Performance Share Plan units  outstanding at December 31, 2006 |       | 103,255    |       | 69,768       |       |      | 173,023 |

 

## Compensationexpense recognized for Performance Share Plan units was $1.2 million, $1.3million, and $1.7 million for 2006, 2005, and 2004, respectively. The totalvest date fair value of shares vesting during the year ended December 31, 2006was $918,000.

Shareholder Value Plan Awards

The General Partner’s 2005 Shareholder Value Plan (“2005SVP Plan”), a sub-plan of its 2005 Long-Term Incentive Plan, was approved bythe General Partner’s shareholders in April 2005. Upon vesting, payout of the2005 Shareholder Value Plan awards will be made in shares of the GeneralPartner’s common stock. Under the 2005 SVP Plan, shareholder value awards fullyvest three years after the date of grant. The number of common shares to beissued may range from 0%-300% of the target shares awarded and will be basedupon the General Partner’s total shareholder return for such three-year periodas compared to the S&P 500 Index and the NAREIT Real Estate 50 Index. Eachindex is weighted at 50%.

Awards made under the 2005 SVP Plan are measured atfair value, which is determined using a Monte Carlo simulation model that wasdeveloped to accommodate the unique features of the 2005 SVP Plan. Compensationcost recognized under the 2005 SVP Plan was $879,000 and $438,000 for the yearsended December 31, 2006 and 2005, respectively.

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**DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES**

Notes to Consolidated Financial Statements

The following table summarizes transactions for theGeneral Partner’s awards under the 2005 SVP Plan for 2006:
|                                         | ** ** | ** **     |       | **Weighted**    |
|-----------------------------------------|------------|----------------|------------|-----------------|
| ** **                              | ** ** | **Number  of** | ** ** | **Average**     |
| ** **                              | ** ** | **SVP**        | ** ** | **Grant  Date** |
| **2005  Shareholder Value Plan Awards** | ** ** | **Units**      | ** ** | **Fair  Value** |
| SVP awards at  December 31, 2005        |       | 75,678         |       |            | $30.64 |
| Granted                                 |       | 90,844         |       |            | $34.13 |
| Forfeited                               |       | (5,169         | )          |            | $31.54 |
| SVP awards at  December 31, 2006        |       | 161,353        |       |            | $32.58 |

 

## As ofDecember 31, 2006, there was $1.7 million of total unrecognized compensationexpense related to nonvested SVP Plan awards granted under the 2005 SVP Plan,which will be recognized over a weighted average period of 1.75 years. All 2005SVP Plan awards have a contractual life of three years.

## RestrictedStock Units

Under the General Partner’s2005 Long-Term Incentive Plan and its 2005 Non-Employee Directors CompensationPlan approved by the General Partner’sshareholders in April 2005, restricted stock units (“RSUs”) may be granted tonon-employee directors, executive officers and selected management employees.An RSU is economically equivalent to one share of the General Partner’s common stock. RSUs granted prior to January1, 2006 vest 20% per year over five years, have contractual lives of five yearsand are payable in shares of the GeneralPartner’s common stock.  RSUsgranted to existing non-employee directors subsequent to January 1, 2006 vest100% over one year, and have contractual lives of one year. We recognize thevalue of the granted RSUs over this vesting period as expense.

The following table summarizes transactions for the General Partner’sRSUs, excluding dividend equivalents, for 2006:
|                             | ** ** | ** **     |       | **Weighted**    |
|-----------------------------|------------|----------------|------------|-----------------|
| ** **                  | ** ** | ** **     |       | **Average**     |
| ** **                  | ** ** | **Number  of** | ** ** | **Grant  Date** |
| **Restricted  Stock Units** | ** ** | ** **     | **RSUs**   | ** **      | **Fair  Value** |
| RSUs at December  31, 2005  |       | 172,095        |       |            | $32.19 |
| Granted                     |       | 108,452        |       |            | $34.18 |
| Vested                      |       | (33,084)       |       |            | $33.83 |
| Forfeited                   |       | (11,859)       |       |            | $32.51 |
| RSUs at December  31, 2006  |       | 235,604        |       |            | $33.98 |
|                             |            |                |            |                 |  |  |  |  |

                                                                                                

Compensation costrecognized for RSUs totaled $2.1 million and $478,000 for the years endedDecember 31, 2006 and 2005, respectively.

As of December 31, 2006, there was $5.5 million of total unrecognizedcompensation expense related to nonvested RSUs granted under the Plan, which isexpected to be recognized over a weighted average period of 4 years.

**(13)****  Financial Instruments**

We are exposed to capital market risk, such as changes in interestrates. In order to manage the volatility relating to interest rate risk, we mayenter into interest rate hedging arrangements from time to time. We do notutilize derivative financial instruments for trading or speculative purposes.

In August 2005, we entered into $300.0 million of cash flow hedgesthrough forward-starting interest rate swaps to hedge interest rates on $300.0million of anticipated debt offerings in 2007. The swaps qualify for hedge accounting,with any changes in fair value recorded in Accumulated Other ComprehensiveIncome (“OCI”). At December 31, 2006, the fair value of these swaps wasapproximately $9.9 million in an asset position as the effective rates of theswaps were lower than current interest rates at December 31, 2006.

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Notes to Consolidated Financial Statements

In March 2005, we enteredinto $300.0 million of cash flow hedges through forward-starting interest rateswaps to hedge interest rates on $300.0 million of anticipated debt offeringsin 2006. The swaps qualified for hedge accounting, with any changes in fairvalue recorded in OCI.  In March 2006, weissued $150.0 million of 5.5% senior unsecured notes due 2016 and terminated acorresponding amount of the cash flow hedges designated for this transaction.The settlement amount paid of approximately $800,000 will be recognized toearnings through interest expense ratably over the life of the senior unsecurednotes and the ineffective portion of the hedge was insignificant.  In August 2006, we issued $450.0 million of5.95% senior unsecured notes due 2017 and $250.0 million of 5.63% seniorunsecured notes due 2011 and terminated the remaining $150 million of cash flowhedges.  The settlement amount receivedof approximately $1.6 million will be recognized to earnings through areduction of interest expense ratably over the lives of the senior unsecurednotes. The ineffective portion of the hedge was insignificant.

In June 2004, wesimultaneously entered into three forward-starting interest rate swapsaggregating $144.3 million, which effectively fixed the rate on financingexpected in 2004 at 5.346%, plus our credit spread over the swap rate. Theswaps qualified for hedge accounting; therefore, changes in the fair value wererecorded in OCI. In August 2004, we settled these three swaps when we issued$250.0 million of senior unsecured notes with an effective interest rate of6.33%, due in 2014. We paid $6.9 million to unwind the swaps, which isamortized from OCI into interest expense over the life of the new 6.33% seniorunsecured notes.

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

**(14)****  Recent AccountingPronouncements**

In June 2006, theFASB issued Interpretation No. 48, *Accountingfor Uncertainty in Income Taxes*, *anInterpretation of FASB Statement No. 109*(“FIN 48”).  FIN 48 clarifies the accounting foruncertainty in income taxes recognized in a company’s financial statements andprescribes a recognition threshold and measurement attribute for the financial statementrecognition and measurement of a tax position taken or expected to be taken ina tax return.  The Interpretation alsoprovides guidance on description, classification, interest and penalties,accounting in interim periods, disclosure and transition.  FIN 48 becomes effective on January 1, 2007and is not anticipated to have a material effect on our 2007 financialposition, results of operations, or liquidity.

In September 2006,the Securities Exchange Commission (“SEC”) issued Staff Accounting Bulletin No.108, *Considering the Effects of Prior YearMisstatements when Quantifying Misstatements in Current Year FinancialStatements* (“SAB 108”). SAB 108 provides guidance regarding theprocess of quantifying the materiality of financial statement misstatements. Weadopted SAB 108 in the fourth quarter of 2006 with no effect to our financialstatements.

**(15)****  Commitments and Contingencies**

We have guaranteed the repayment of $79.6 million ofeconomic development bonds issued by various municipalities in connection withcertain commercial developments. We will be required to make payments under ourguarantees to the extent that incremental taxes from specified developments arenot sufficient to pay the bond debt service. Management does not believe thatit is probable that we will be required to make any significant payments insatisfaction of these guarantees.

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Notes to Consolidated Financial Statements

We also have guaranteed the repayment of secured and unsecured loans offour of our unconsolidated subsidiaries. At December 31, 2006, the outstandingbalance on these loans was approximately $129.0 million. Management believesthat the value of the real estate exceeds the loan balance and that we will notbe required to satisfy these guarantees.

We have entered into agreements, subject to the completion of duediligence requirements, resolution of certain contingencies and completion ofcustomary closing conditions, for the future acquisition of land totaling $36.1million.

In October 2000, we sold or contributed industrialproperties and undeveloped land with a fair value of $487 million to a jointventure (Dugan Realty LLC) in which we have a 50% interest and recognized a netgain of $35.2 million. In connection with this transaction, the joint venturepartners were given an option to put up to a $50 million interest in the jointventure to us in exchange for the GeneralPartner’s common stock or cash (at our option), subject to certaintiming and other restrictions. As a result of this put option, we deferred$10.2 million of gain on sale of depreciated property and recorded a $50million liability.

We renewed all of our major insurance policies in 2006. These policiesinclude coverage for acts of terrorism for our properties. We believe that thisinsurance provides adequate coverage against normal insurance risks and thatany loss experienced would not have a significant impact on our liquidity,financial position, or results of operations.

We are subject to various legal proceedings and claimsthat arise in the ordinary course of business. In the opinion of management, the amount of any ultimate liability withrespect to these actions will not materially affect our consolidated financialstatements or results of operations.

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

*Declarationof Distributions*

The General Partner’s board of directors declared the followingdistributions at its January 31, 2007, regularly scheduled Board meeting:

|                                  |       | **Quarterly  ** |            |       |              |       |
|----------------------------------|------------|---------------------------|-----------------|------------|-------------------|------------|
| **Class**                        | ** ** | ** **                | **Amount/Unit** | ** ** | **Record  Date**  | ** ** | **Payment  Date** |
| Common                           |       | $                         | 0.4750     |       | February 14, 2007 |       | February 28, 2007 |
| Preferred (per depositary unit): |       |                      |            |       |              |       |   |
| Series B                         |       | $                         | 0.998750   |       | March 16, 2007    |       | March 30, 2007 |
| Series J                         |       | $                         | 0.414063   |       | February 14, 2007 |       | February 28, 2007 |
| Series K                         |       | $                         | 0.406250   |       | February 14, 2007 |       | February 28, 2007 |
| Series L                         |       | $                         | 0.412500   |       | February 14, 2007 |       | February 28, 2007 |
| Series M                         |       | $                         | 0.434375   |       | March 16, 2007    |       | March 30, 2007 |
| Series N                         |       | $                         | 0.453125   |       | March 16, 2007    |       | March 30, 2007 |
|                                  |            |                           |                 |            |                   |            |  |  |

 

78

----

** **
| **DUKE REALTY LIMITED PARTNERSHIPREAL ESTATE AND ACCUMULATED  DEPRECIATION**

**DECEMBER  31, 2006**

**(in thousands)** | ** ** | **Schedule 3** |
|--------------------------------------------------------------------------------------------------------------------------|------------|----------------|

 
|                                 | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Cost Capitalized**                    | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
|---------------------------------|------------|---------------------------------|------------|--------------|------------|------------------|------------|-----------------------|------------|-----------------|------------|----------------------------------------------|------------|------------------------|------------|--------------|------------|------------|------------|---------------------------|------------|-----------------|------------|--------------|------------|
| ** **                      | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Subsequent to**                       | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| ** **                      | ** ** | ** **                      | ** ** | **Building** | ** ** | ** **       | ** ** | **Initial Cost** | ** ** | **Development** | ** ** | **Gross Book Value 12/31/06** | ** ** | **Accumulated**        | ** ** | **Year**     | ** ** | **Year**   | ** ** |
| **Development**                 | ** ** | **Name**                        | ** ** | **Type**     | ** ** | **Encumbrances** | ** ** | **Land**              | ** ** | **Buildings**   | ** ** | **or Acquisition**                      | ** ** | **Land/Land Imp** | ** ** | **Bldgs/TI** | ** ** | **Total**  | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
| ** **                      | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| **ALEXANDRIA, VIRGINIA**        | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Mark Center                     |       | 1801  N. Beauregard St.         |       | Office       |       | 9,054            |       | 3,812                 |       | 19,568          |       | -                                            |       | 3,812                  |       | 19,568       |       | 23,380     |       | -                         |       | 1982            |       | 2006         |       |
| Mark Center                     |       | 1901  N. Beauregard St.         |       | Office       |       | 8,000            |       | 2,661                 |       | 13,791          |       | -                                            |       | 2,661                  |       | 13,791       |       | 16,452     |       | -                         |       | 1982            |       | 2006         |       |
| Mark Center                     |       | 2001  N. Beauregard St.         |       | Office       |       | 38,542           |       | 11,062                |       | 60,242          |       | -                                            |       | 11,062                 |       | 60,242       |       | 71,305     |       | -                         |       | 1990            |       | 2006         |       |
| ** **                      | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| **ALPHARETTA, GEORGIA**         | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Brookside Office Park           |       | Radiant  I                      |       | Office       |       | -                |       | 1,269                 |       | 14,696          |       | 53                                           |       | 1,269                  |       | 14,749       |       | 16,018     |       | 2,769                     |       | 1998            |       | 1999         |       |
| Brookside Office Park           |       | Brookside  I                    |       | Office       |       | -                |       | 1,625                 |       | 8,741           |       | 3,763                                        |       | 1,492                  |       | 12,637       |       | 14,129     |       | 2,403                     |       | 1999            |       | 1999         |       |
| Brookside Office Park           |       | Radiant  II                     |       | Office       |       | -                |       | 831                   |       | 7,265           |       | 177                                          |       | 831                    |       | 7,442        |       | 8,273      |       | 1,095                     |       | 2000            |       | 2000         |       |
| Brookside Office Park           |       | Brookside  II                   |       | Office       |       | -                |       | 1,381                 |       | 11,666          |       | 1,539                                        |       | 1,248                  |       | 13,338       |       | 14,587     |       | 2,578                     |       | 2000            |       | 2001         |       |
| Hembree Crest                   |       | 11415  Old Roswell Road         |       | Industrial   |       | -                |       | 648                   |       | 2,454           |       | 1,055                                        |       | 648                    |       | 3,509        |       | 4,157      |       | 1,163                     |       | 1991            |       | 1999         |       |
| NorthWinds Center               |       | Northwinds  VII                 |       | Office       |       | -                |       | 2,271                 |       | 19,895          |       | 1,303                                        |       | 2,304                  |       | 21,165       |       | 23,469     |       | 4,202                     |       | 1998            |       | 1999         |       |
| NorthWinds Center               |       | Northwinds  I                   |       | Office       |       | -                |       | 1,879                 |       | 15,933          |       | 167                                          |       | 1,879                  |       | 16,100       |       | 17,979     |       | 2,247                     |       | 1997            |       | 2004         |       |
| NorthWinds Center               |       | Northwinds  II                  |       | Office       |       | -                |       | 1,796                 |       | 16,522          |       | 445                                          |       | 1,796                  |       | 16,966       |       | 18,762     |       | 2,741                     |       | 1997            |       | 2004         |       |
| NorthWinds Center               |       | Northwinds  III                 |       | Office       |       | 16,468           |       | 1,868                 |       | 16,114          |       | 439                                          |       | 1,868                  |       | 16,552       |       | 18,420     |       | 2,376                     |       | 1998            |       | 2004         |       |
| NorthWinds Center               |       | Northwinds  IV                  |       | Office       |       | 15,673           |       | 1,844                 |       | 16,089          |       | 1,287                                        |       | 1,844                  |       | 17,376       |       | 19,219     |       | 2,403                     |       | 1999            |       | 2004         |       |
| NorthWinds Center               |       | Northwinds  V                   |       | Office       |       | -                |       | 2,215                 |       | 15,522          |       | 317                                          |       | 2,215                  |       | 15,839       |       | 18,054     |       | 2,249                     |       | 1999            |       | 2004         |       |
| NorthWinds Center               |       | Northwinds  VI                  |       | Office       |       | -                |       | 2,662                 |       | 15,600          |       | 554                                          |       | 2,662                  |       | 16,153       |       | 18,816     |       | 2,384                     |       | 2000            |       | 2004         |       |
| NorthWinds Center               |       | Northwinds  Village             |       | Retail       |       | -                |       | 704                   |       | 4,453           |       | 146                                          |       | 710                    |       | 4,594        |       | 5,303      |       | 408                       |       | 2000            |       | 2004         |       |
| NorthWinds Center               |       | Northwinds  Restaurant          |       | Retail       |       | -                |       | 202                   |       | 329             |       | -                                            |       | 202                    |       | 329          |       | 531        |       | 36                        |       | 1998            |       | 2004         |       |
| 10745 Westside Parkway          |       | 10745  Westside Parkway         |       | Office       |       | -                |       | 925                   |       | 5,790           |       | 292                                          |       | 925                    |       | 6,082        |       | 7,007      |       | 1,303                     |       | 1995            |       | 1999         |       |
| Ridgeland                       |       | 1320  Ridgeland Parkway         |       | Industrial   |       | -                |       | 998                   |       | 5,874           |       | 52                                           |       | 998                    |       | 5,927        |       | 6,924      |       | 1,102                     |       | 1999            |       | 1999         |       |
| Ridgeland                       |       | 1345  Ridgeland Parkway         |       | Industrial   |       | -                |       | 488                   |       | 2,186           |       | 1,029                                        |       | 488                    |       | 3,214        |       | 3,702      |       | 548                       |       | 1999            |       | 1999         |       |
| Ridgeland                       |       | 1335  Ridgeland Pkwy            |       | Industrial   |       | -                |       | 579                   |       | 2,362           |       | 309                                          |       | 579                    |       | 2,671        |       | 3,250      |       | 735                       |       | 1999            |       | 2000         |       |
| Preston Ridge                   |       | Preston  Ridge IV               |       | Office       |       | -                |       | 2,777                 |       | 13,300          |       | 503                                          |       | 2,781                  |       | 13,799       |       | 16,580     |       | 2,506                     |       | 2000            |       | 2004         |       |
| Windward                        |       | 800  North Point Parkway        |       | Office       |       | -                |       | 1,250                 |       | 18,443          |       | -                                            |       | 1,250                  |       | 18,443       |       | 19,693     |       | 1,851                     |       | 1991            |       | 2003         |       |
| Windward                        |       | 900  North Point Parkway        |       | Office       |       | -                |       | 1,250                 |       | 13,945          |       | -                                            |       | 1,250                  |       | 13,945       |       | 15,195     |       | 1,412                     |       | 1991            |       | 2003         |       |
|                            |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **ARLINGTON HEIGHTS, ILLINOIS** | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Arlington Business Park         |       | Atrium  II                      |       | Office       |       | -                |       | 776                   |       | 6,921           |       | 2,027                                        |       | 776                    |       | 8,948        |       | 9,724      |       | 2,087                     |       | 1986            |       | 1998         |       |
|                            |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **ATLANTA, GEORGIA**            | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Druid Chase                     |       | 6  West Druid Hills Drive       |       | Office       |       | -                |       | 473                   |       | 6,731           |       | 2,492                                        |       | 473                    |       | 9,223        |       | 9,696      |       | 2,104                     |       | 1968            |       | 1999         |       |
| Druid Chase                     |       | 2801  Buford Highway            |       | Office       |       | -                |       | 794                   |       | 9,487           |       | 2,568                                        |       | 794                    |       | 12,055       |       | 12,849     |       | 2,477                     |       | 1977            |       | 1999         |       |
| Druid Chase                     |       | 1190  West Druid Hills Drive    |       | Office       |       | -                |       | 689                   |       | 6,625           |       | 1,225                                        |       | 689                    |       | 7,851        |       | 8,540      |       | 1,631                     |       | 1980            |       | 1999         |       |
|                            |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **AURORA, ILLINOIS**            | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Meridian Business Campus        |       | 535  Exchange                   |       | Industrial   |       | -                |       | 386                   |       | 920             |       | 264                                          |       | 386                    |       | 1,184        |       | 1,570      |       | 249                       |       | 1984            |       | 1999         |       |
| Meridian Business Campus        |       | 525  North Enterprise Street    |       | Industrial   |       | -                |       | 342                   |       | 1,678           |       | 110                                          |       | 342                    |       | 1,788        |       | 2,131      |       | 413                       |       | 1984            |       | 1999         |       |
| Meridian Business Campus        |       | 615  North Enterprise Street    |       | Industrial   |       | -                |       | 468                   |       | 2,824           |       | 649                                          |       | 468                    |       | 3,473        |       | 3,941      |       | 828                       |       | 1984            |       | 1999         |       |
| Meridian Business Campus        |       | 3615  Exchange                  |       | Industrial   |       | -                |       | 410                   |       | 1,603           |       | 140                                          |       | 410                    |       | 1,743        |       | 2,153      |       | 418                       |       | 1986            |       | 1999         |       |
| Meridian Business Campus        |       | 4000  Sussex Avenue             |       | Industrial   |       | -                |       | 417                   |       | 1,711           |       | 292                                          |       | 417                    |       | 2,003        |       | 2,421      |       | 467                       |       | 1990            |       | 1999         |       |
| Meridian Business Campus        |       | 3737  East Exchange             |       | Industrial   |       | -                |       | 598                   |       | 2,543           |       | 166                                          |       | 598                    |       | 2,709        |       | 3,307      |       | 626                       |       | 1985            |       | 1999         |       |
| Meridian Business Campus        |       | 444  North Commerce Street      |       | Industrial   |       | -                |       | 722                   |       | 5,411           |       | 596                                          |       | 722                    |       | 6,007        |       | 6,730      |       | 1,445                     |       | 1985            |       | 1999         |       |
| Meridian Business Campus        |       | 880  North Enterprise Street    |       | Industrial   |       | -                |       | 1,150                 |       | 5,760           |       | 530                                          |       | 1,150                  |       | 6,290        |       | 7,439      |       | 1,281                     |       | 1999            |       | 2000         |       |
| Meridian Business Campus        |       | Meridian  Office Service Center |       | Industrial   |       | -                |       | 567                   |       | 1,283           |       | 1,701                                        |       | 567                    |       | 2,984        |       | 3,551      |       | 451                       |       | 2001            |       | 2001         |       |
| Meridian Business Campus        |       | Genera  Corporation             |       | Industrial   |       | -                |       | 1,957                 |       | 3,827           |       | -                                            |       | 1,957                  |       | 3,827        |       | 5,784      |       | 410                       |       | 2004            |       | 2004         |       |
|                            |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **BALTIMORE, MARYLAND**         | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Port of Baltimore               |       | Baltimore  Ground Lease         |       | Grounds      |       | -                |       | 2,547                 |       | -               |       | -                                            |       | 2,547                  |       | -            |       | 2,547      |       | -                         |       | N/A             |       | 2006         |       |
|                            |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **BEACHWOOD, OHIO**             | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| One Corporate Exchange          |       | One  Corporate Exchange         |       | Office       |       | -                |       | 1,287                 |       | 8,548           |       | 1,400                                        |       | 1,287                  |       | 9,947        |       | 11,234     |       | 2,886                     |       | 1989            |       | 1996         |       |
| Corporate Place                 |       | Corporate  Place                |       | Office       |       | -                |       | 1,161                 |       | 7,352           |       | 903                                          |       | 1,163                  |       | 8,253        |       | 9,416      |       | 2,169                     |       | 1988            |       | 1996         |       |
|                            |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **BERRY HILL, TN**              | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Four-Forty Business  Center     |       | Four-Forty  Business Center I   |       | Industrial   |       | -                |       | 938                   |       | 6,462           |       | 46                                           |       | 938                    |       | 6,508        |       | 7,446      |       | 1,215                     |       | 1997            |       | 1999         |       |
| Four-Forty Business  Center     |       | Four-Forty  Business Center III |       | Industrial   |       | -                |       | 1,812                 |       | 7,579           |       | 238                                          |       | 1,812                  |       | 7,817        |       | 9,629      |       | 1,568                     |       | 1998            |       | 1999         |       |
| Four-Forty Business  Center     |       | Four-Forty  Business Center IV  |       | Industrial   |       | -                |       | 1,522                 |       | 5,750           |       | 303                                          |       | 1,522                  |       | 6,053        |       | 7,575      |       | 1,324                     |       | 1997            |       | 1999         |       |
| Four-Forty Business Center      |       | Four-Forty Business  Center V   |       | Industrial   |       | -                |       | 471                   |       | 3,321           |       | 527                                          |       | 471                    |       | 3,847        |       | 4,319      |       | 1,240                     |       | 1999            |       | 1999         |       |

** **

79

----

 
| **DUKE REALTY LIMITED PARTNERSHIPREAL ESTATE AND ACCUMULATED  DEPRECIATION**

**DECEMBER  31, 2006**

**(in thousands)** | ** ** | **Schedule 3** |
|--------------------------------------------------------------------------------------------------------------------------|------------|----------------|

 
|                               | ** ** | ** **                     | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Cost Capitalized**                    | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
|-------------------------------|------------|--------------------------------|------------|--------------|------------|------------------|------------|-----------------------|------------|-----------------|------------|----------------------------------------------|------------|------------------------|------------|--------------|------------|------------|------------|---------------------------|------------|-----------------|------------|--------------|------------|
| ** **                    | ** ** | ** **                     | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Subsequent to**                       | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| ** **                    | ** ** | ** **                     | ** ** | **Building** | ** ** | ** **       | ** ** | **Initial Cost** | ** ** | **Development** | ** ** | **Gross Book Value 12/31/06** | ** ** | **Accumulated**        | ** ** | **Year**     | ** ** | **Year**   | ** ** |
| **Development**               | ** ** | **Name**                       | ** ** | **Type**     | ** ** | **Encumbrances** | ** ** | **Land**              | ** ** | **Buildings**   | ** ** | **or Acquisition**                      | ** ** | **Land/Land Imp** | ** ** | **Bldgs/TI** | ** ** | **Total**  | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
| ** **                    | ** ** | ** **                     | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| **BLOOMINGTON,  MINNESOTA**   |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Alpha Business Center         |       | Alpha Business Ctr I&II    |       | Office       |       | -                |       | 280                   |       | 1,513           |       | 367                                          |       | 280                    |       | 1,879        |       | 2,160      |       | 451                       |       | 1980            |       | 1999         |       |
| Alpha Business Center         |       | Alpha Business Ctr III&IV  |       | Industrial   |       | -                |       | 341                   |       | 1,835           |       | 366                                          |       | 341                    |       | 2,201        |       | 2,542      |       | 490                       |       | 1980            |       | 1999         |       |
| Alpha Business Center         | ** ** | Alpha Business Ctr V           | ** ** | Industrial   | ** ** | -                | ** ** | 537                   | ** ** | 2,977           | ** ** | 361                                          | ** ** | 538                    | ** ** | 3,338        | ** ** | 3,875      | ** ** | 690                       | ** ** | 1980            | ** ** | 1999         | ** ** |
| Hampshire Dist. Center        | ** ** | Hampshire Dist Center North    | ** ** | Industrial   | ** ** | 1,473            | ** ** | 779                   | ** ** | 4,500           | ** ** | 279                                          | ** ** | 779                    | ** ** | 4,779        | ** ** | 5,558      | ** ** | 1,107                     | ** ** | 1979            | ** ** | 1997         | ** ** |
| Hampshire Dist. Center        |       | Hampshire Dist Center South    |       | Industrial   |       | 1,670            |       | 901                   |       | 5,068           |       | 314                                          |       | 901                    |       | 5,382        |       | 6,283      |       | 1,256                     |       | 1979            |       | 1997         |       |
| Norman Pointe Office  Park    |       | Norman Pointe I                |       | Office       |       | -                |       | 3,650                 |       | 27,994          |       | 2,145                                        |       | 3,650                  |       | 30,139       |       | 33,789     |       | 5,799                     |       | 2000            |       | 2000         |       |
|                          |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **BLUE ASH, OHIO**            |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| McAuley Place                 |       | McAuley Place                  |       | Office       |       | -                |       | 2,331                 |       | 18,596          |       | 1,724                                        |       | 2,331                  |       | 20,320       |       | 22,650     |       | 3,792                     |       | 2000            |       | 2001         |       |
| Huntington Bank Building      |       | Huntington Bank Building       |       | Office       |       | -                |       | 175                   |       | 241             |       | -                                            |       | 175                    |       | 241          |       | 416        |       | 64                        |       | 1986            |       | 1996         |       |
| Lake Forest/Westlake          |       | Lake Forest Place              |       | Office       |       | -                |       | 1,953                 |       | 19,055          |       | 2,814                                        |       | 1,953                  |       | 21,870       |       | 23,823     |       | 5,912                     |       | 1985            |       | 1996         |       |
| Northmark Office Park         |       | Northmark Building 1           |       | Office       |       | -                |       | 1,452                 |       | 5,272           |       | 254                                          |       | 1,452                  |       | 5,526        |       | 6,978      |       | 1,395                     |       | 1987            |       | 2004         |       |
| Northmark Office Park         |       | Northmark Building 2           |       | Office       |       | -                |       | 1,386                 |       | 5,136           |       | 47                                           |       | 1,386                  |       | 5,183        |       | 6,568      |       | 916                       |       | 1984            |       | 2004         |       |
| Lake Forest/Westlake          |       | Westlake Center                |       | Office       |       | -                |       | 2,459                 |       | 16,091          |       | 3,207                                        |       | 2,459                  |       | 19,299       |       | 21,758     |       | 5,336                     |       | 1981            |       | 1996         |       |
| Landings                      |       | Landings Building I            |       | Office       |       | -                |       | 4,302                 |       | 17,512          |       | -                                            |       | 4,302                  |       | 17,512       |       | 21,814     |       | 305                       |       | 2006            |       | 2006         |       |
|                          |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **BOLINGBROOK,  ILLINOIS**    |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Joliet Road Business Park     |       | 555 Joliet Road, Bolingbrook   |       | Industrial   |       | -                |       | 2,184                 |       | 9,284           |       | 378                                          |       | 2,332                  |       | 9,514        |       | 11,846     |       | 1,221                     |       | 1967            |       | 2002         |       |
| Joliet Road Business  Park    |       | Dawes Transportation           |       | Industrial   |       | -                |       | 3,050                 |       | 4,453           |       | -                                            |       | 3,050                  |       | 4,453        |       | 7,502      |       | 378                       |       | 2005            |       | 2005         |       |
|                          |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **BRASELTON,  GEORGIA**       |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Braselton Business Park       |       | Braselton II                   |       | Industrial   |       | -                |       | 1,365                 |       | 9,505           |       | 1,622                                        |       | 1,884                  |       | 10,608       |       | 12,493     |       | 1,707                     |       | 2001            |       | 2001         |       |
| Park 85 at Braselton          |       | Park 85 @ Braselton Bldg 625   |       | Industrial   |       | -                |       | 9,855                 |       | 25,690          |       | -                                            |       | 9,855                  |       | 25,690       |       | 35,545     |       | 665                       |       | 2004            |       | 2005         |       |
|                          |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **BRENTOOD,  TENNESSEE**      |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Brentwood South Bus. Center   |       | Brentwood South Bus Ctr I      |       | Industrial   |       | -                |       | 1,065                 |       | 5,775           |       | 758                                          |       | 1,065                  |       | 6,533        |       | 7,599      |       | 1,342                     |       | 1987            |       | 1999         |       |
| Brentwood South Bus. Center   | ** ** | Brentwood South Bus Ctr II     | ** ** | Industrial   | ** ** | -                | ** ** | 1,065                 | ** ** | 2,786           | ** ** | 1,105                                        | ** ** | 1,065                  | ** ** | 3,891        | ** ** | 4,956      | ** ** | 735                       | ** ** | 1987            | ** ** | 1999         | ** ** |
| Brentwood South Bus. Center   |       | Brentwood South Bus Ctr III    |       | Industrial   |       | -                |       | 848                   |       | 4,130           |       | 583                                          |       | 848                    |       | 4,712        |       | 5,561      |       | 1,094                     |       | 1989            |       | 1999         |       |
| Creekside Crossing            |       | Creekside Crossing I           |       | Office       |       | -                |       | 1,900                 |       | 7,993           |       | 302                                          |       | 1,901                  |       | 8,295        |       | 10,195     |       | 2,279                     |       | 1997            |       | 1998         |       |
| Creekside Crossing            | ** ** | Creekside Crossing II          | ** ** | Office       | ** ** | -                | ** ** | 2,087                 | ** ** | 8,224           | ** ** | 1,129                                        | ** ** | 2,087                  | ** ** | 9,353        | ** ** | 11,440     | ** ** | 2,466                     | ** ** | 1999            | ** ** | 2000         | ** ** |
| Creekside Crossing            |       | Creekside Crossing III         |       | Office       |       | -                |       | 2,969                 |       | 9,899           |       | -                                            |       | 2,969                  |       | 9,899        |       | 12,868     |       | 153                       |       | 2006            |       | 2006         |       |
|                          |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **BROOKLYN  PARK, MINNESOTA** |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| 7300 Northland Drive          |       | 7300 Northland Drive           |       | Industrial   |       | -                |       | 700                   |       | 6,607           |       | 197                                          |       | 703                    |       | 6,801        |       | 7,504      |       | 1,536                     |       | 1980            |       | 1998         |       |
| Crosstown North Bus.  Ctr.    |       | Crosstown North Bus. Ctr. 1    |       | Industrial   |       | -                |       | 835                   |       | 5,459           |       | 1,113                                        |       | 1,286                  |       | 6,121        |       | 7,407      |       | 1,628                     |       | 1998            |       | 1999         |       |
| Crosstown North Bus.  Ctr.    |       | Crosstown North Bus. Ctr. 2    |       | Industrial   |       | -                |       | 449                   |       | 2,837           |       | 670                                          |       | 599                    |       | 3,357        |       | 3,956      |       | 731                       |       | 1998            |       | 1999         |       |
| Crosstown North Bus.  Ctr.    |       | Crosstown North Bus. Ctr. 3    |       | Industrial   |       | -                |       | 758                   |       | 2,032           |       | 234                                          |       | 837                    |       | 2,186        |       | 3,024      |       | 544                       |       | 1999            |       | 1999         |       |
| Crosstown North Bus.  Ctr.    |       | Crosstown North Bus. Ctr. 4    |       | Industrial   |       | -                |       | 2,079                 |       | 7,622           |       | 1,184                                        |       | 2,397                  |       | 8,487        |       | 10,884     |       | 2,464                     |       | 1999            |       | 1999         |       |
| Crosstown North Bus.  Ctr.    |       | Crosstown North Bus. Ctr. 5    |       | Industrial   |       | -                |       | 1,079                 |       | 5,335           |       | 420                                          |       | 1,354                  |       | 5,479        |       | 6,833      |       | 1,669                     |       | 1999            |       | 2000         |       |
| Crosstown North Bus.  Ctr.    |       | Crosstown North Bus. Ctr. 6    |       | Industrial   |       | -                |       | 788                   |       | 3,100           |       | 1,882                                        |       | 1,031                  |       | 4,738        |       | 5,769      |       | 1,228                     |       | 2000            |       | 2000         |       |
| Crosstown North Bus.  Ctr.    |       | Crosstown North Bus. Ctr. 10   |       | Industrial   |       | -                |       | 2,757                 |       | 4,642           |       | 548                                          |       | 2,723                  |       | 5,225        |       | 7,948      |       | 442                       |       | 2004            |       | 2004         |       |
| Crosstown North Bus.  Ctr.    |       | Crosstown North Bus. Ctr. 12   |       | Industrial   |       | -                |       | 4,564                 |       | 9,014           |       | -                                            |       | 4,564                  |       | 9,014        |       | 13,578     |       | 493                       |       | 2005            |       | 2005         |       |
|                          |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **CARMEL,  INDIANA**          |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Hamilton Crossing             |       | Hamilton Crossing I            |       | Industrial   |       | -                |       | 835                   |       | 4,550           |       | 2,469                                        |       | 847                    |       | 7,007        |       | 7,855      |       | 2,588                     |       | 1989            |       | 1993         |       |
| Hamilton Crossing             |       | Hamilton Crossing II           |       | Office       |       | -                |       | 313                   |       | 1,410           |       | 1,173                                        |       | 384                    |       | 2,512        |       | 2,896      |       | 1,030                     |       | 1997            |       | 1997         |       |
| Hamilton Crossing             |       | Hamilton Crossing III          |       | Office       |       | -                |       | 890                   |       | 9,581           |       | 1,531                                        |       | 890                    |       | 11,112       |       | 12,001     |       | 2,714                     |       | 2000            |       | 2000         |       |
| Hamilton Crossing             |       | Hamilton Crossing IV           |       | Office       |       | -                |       | 515                   |       | 5,377           |       | 98                                           |       | 598                    |       | 5,392        |       | 5,990      |       | 1,277                     |       | 1999            |       | 1999         |       |
| Hamilton Crossing             |       | Hamilton Crossing VI           |       | Office       |       | -                |       | 1,044                 |       | 13,743          |       | 840                                          |       | 1,068                  |       | 14,559       |       | 15,627     |       | 1,720                     |       | 2003            |       | 2003         |       |
| Meridian Technology  Center   |       | Meridian Tech Center           |       | Office       |       | -                |       | 376                   |       | 2,695           |       | 1,035                                        |       | 376                    |       | 3,730        |       | 4,106      |       | 627                       |       | 1986            |       | 2002         |       |
| West Carmel Marketplace       |       | West Carmel Mktplc (Marshalls) |       | Retail       |       | -                |       | 1,427                 |       | 2,383           |       | -                                            |       | 1,427                  |       | 2,383        |       | 3,811      |       | -                         |       | 2005            |       | 2005         |       |
| West Carmel Marketplace       |       | West Carmel (Best Buy, Petco)  |       | Retail       |       | -                |       | 2,578                 |       | 4,088           |       | -                                            |       | 2,578                  |       | 4,088        |       | 6,666      |       | -                         |       | 2006            |       | 2006         |       |
| West Carmel Marketplace       |       | West Carmel Mktplc B-Shops     |       | Retail       |       | -                |       | 4,687                 |       | 2,688           |       | -                                            |       | 4,687                  |       | 2,689        |       | 7,375      |       | -                         |       | 2006            |       | 2006         |       |
| West Carmel Marketplace       |       | West Carmel Mktplc-OfficeMax   |       | Retail       |       | -                |       | 1,274                 |       | 1,757           |       | -                                            |       | 1,274                  |       | 1,757        |       | 3,031      |       | -                         |       | 2006            |       | 2006         |       |

 

80

----

 
| **DUKE REALTY LIMITED PARTNERSHIPREAL ESTATE AND ACCUMULATED  DEPRECIATION**

**DECEMBER  31, 2006**

**(in thousands)** | ** ** | **Schedule 3** |
|--------------------------------------------------------------------------------------------------------------------------|------------|----------------|

 
|                               | ** ** | ** **                     | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Cost Capitalized**                    | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
|-------------------------------|------------|--------------------------------|------------|--------------|------------|------------------|------------|-----------------------|------------|-----------------|------------|----------------------------------------------|------------|------------------------|------------|--------------|------------|------------|------------|---------------------------|------------|-----------------|------------|--------------|------------|
| ** **                    | ** ** | ** **                     | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Subsequent to**                       | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| ** **                    | ** ** | ** **                     | ** ** | **Building** | ** ** | ** **       | ** ** | **Initial Cost** | ** ** | **Development** | ** ** | **Gross Book Value 12/31/06** | ** ** | **Accumulated**        | ** ** | **Year**     | ** ** | **Year**   | ** ** |
| **Development**               | ** ** | **Name**                       | ** ** | **Type**     | ** ** | **Encumbrances** | ** ** | **Land**              | ** ** | **Buildings**   | ** ** | **or Acquisition**                      | ** ** | **Land/Land Imp** | ** ** | **Bldgs/TI** | ** ** | **Total**  | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
| **CAROL  STREAM, ILLINOIS**   | ** ** | ** **                     | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Carol Stream Business  Park   |       | Carol Stream IV                |       | Industrial   |       | -                |       | 3,204                 |       | 14,986          |       | 471                                          |       | 3,204                  |       | 15,457       |       | 18,661     |       | 1,610                     |       | 1994            |       | 2003         |       |
| Carol Stream Business  Park   |       | Carol Stream V                 |       | Industrial   |       | -                |       | 4,553                 |       | 7,605           |       | 195                                          |       | 4,553                  |       | 7,800        |       | 12,353     |       | 707                       |       | 1986            |       | 2003         |       |
|                          |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **CARY,  NORTH CAROLINA**     | ** ** |                           | ** ** |         | ** ** |             | ** ** |                  | ** ** |            | ** ** |                                         | ** ** |                   | ** ** |         | ** ** |       | ** ** |                      | ** ** |            | ** ** |         | ** ** |
| Regency Forest                | ** ** | 200 Regency Forest Dr.         | ** ** | Office       | ** ** | -                | ** ** | 1,230                 | ** ** | 13,398          | ** ** | 1,833                                        | ** ** | 1,230                  | ** ** | 15,231       | ** ** | 16,461     | ** ** | 3,035                     | ** ** | 1999            | ** ** | 1999         | ** ** |
| Regency Forest                |       | 100 Regency Forest Dr.         |       | Office       |       | -                |       | 1,538                 |       | 9,852           |       | 1,732                                        |       | 1,618                  |       | 11,503       |       | 13,122     |       | 2,359                     |       | 1997            |       | 1999         |       |
| Weston Parkway                |       | 6501 Weston Parkway            |       | Office       |       | -                |       | 1,775                 |       | 10,668          |       | 992                                          |       | 1,775                  |       | 11,660       |       | 13,435     |       | 2,392                     |       | 1996            |       | 1999         |       |
|                          |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **CELEBRATION,  FLORIDA**     |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Celebration Business  Center  |       | Celebration Business Center I  |       | Office       |       | -                |       | 1,102                 |       | 4,791           |       | 423                                          |       | 1,308                  |       | 5,008        |       | 6,316      |       | 996                       |       | 1997            |       | 1999         |       |
| Celebration Business  Center  |       | Celebration Business Center II |       | Office       |       | -                |       | 771                   |       | 3,587           |       | 187                                          |       | 961                    |       | 3,585        |       | 4,545      |       | 735                       |       | 1997            |       | 1999         |       |
| Celebration Office  Center    |       | Celebration Office Center I    |       | Office       |       | -                |       | 1,382                 |       | 6,462           |       | 303                                          |       | 1,382                  |       | 6,765        |       | 8,147      |       | 1,237                     |       | 2000            |       | 2000         |       |
| Celebration Office  Center    |       | Celebration Office Center II   |       | Office       |       | -                |       | 1,382                 |       | 6,254           |       | 2,412                                        |       | 1,382                  |       | 8,666        |       | 10,048     |       | 1,948                     |       | 2001            |       | 2001         |       |
|                          |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **CHANTILLY,  VIRGINIA**      |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Liberty Center                |       | Liberty Center III             |       | Office       |       | 31,120           |       | 11,302                |       | 27,065          |       | -                                            |       | 11,302                 |       | 27,065       |       | 38,367     |       | -                         |       | 2006            |       | 2006         |       |
| Liberty Center                |       | Liberty Center I               |       | Office       |       | 10,621           |       | 6,692                 |       | 17,656          |       | -                                            |       | 6,692                  |       | 17,656       |       | 24,348     |       | -                         |       | 1998            |       | 2006         |       |
| Liberty Center                |       | Liberty Center II              |       | Office       |       | 26,038           |       | 13,424                |       | 33,601          |       | -                                            |       | 13,424                 |       | 33,601       |       | 47,025     |       | -                         |       | 2002            |       | 2006         |       |
| TASC Campus                   |       | 4803 Stonecroft                |       | Office       |       | 14,474           |       | 6,532                 |       | 15,986          |       | -                                            |       | 6,532                  |       | 15,986       |       | 22,518     |       | -                         |       | 2005            |       | 2006         |       |
| TASC Campus                   |       | 4805 Stonecroft                |       | Office       |       | 9,460            |       | 5,496                 |       | 14,604          |       | -                                            |       | 5,496                  |       | 14,604       |       | 20,100     |       | -                         |       | 2000            |       | 2006         |       |
|                          |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **CINCINNATI,  OHIO**         |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| 311 Elm                       |       | 311 Elm                        |       | Office       |       | -                |       | 339                   |       | 5,749           |       | 1,303                                        |       | 346                    |       | 7,045        |       | 7,391      |       | 3,618                     |       | 1986            |       | 1993         |       |
| 312 Elm                       |       | 312 Elm                        |       | Office       |       | 35,226           |       | 4,750                 |       | 46,921          |       | 4,969                                        |       | 5,428                  |       | 51,211       |       | 56,639     |       | 17,207                    |       | 1992            |       | 1993         |       |
| 312 Plum                      |       | 312 Plum                       |       | Office       |       | -                |       | 2,539                 |       | 24,348          |       | 3,037                                        |       | 2,590                  |       | 27,334       |       | 29,924     |       | 9,346                     |       | 1987            |       | 1993         |       |
| One Ashview Place             |       | One Ashview Place              |       | Office       |       | -                |       | 1,204                 |       | 12,612          |       | 2,827                                        |       | 1,204                  |       | 15,439       |       | 16,643     |       | 4,423                     |       | 1989            |       | 1997         |       |
| Blue Ash Office Center        |       | Blue Ash Office Center VI      |       | Office       |       | -                |       | 518                   |       | 2,783           |       | 608                                          |       | 518                    |       | 3,392        |       | 3,910      |       | 850                       |       | 1989            |       | 1997         |       |
| Towers of Kenwood             | ** ** | Towers of Kenwood              | ** ** | Office       | ** ** | -                | ** ** | 4,891                 | ** ** | 42,412          | ** ** | 1,305                                        | ** ** | 4,891                  | ** ** | 43,717       | ** ** | 48,609     | ** ** | 4,347                     | ** ** | 1989            | ** ** | 2003         | ** ** |
| Governors Hill                |       | 8790 Governor's Hill           |       | Office       |       | -                |       | 400                   |       | 4,564           |       | 992                                          |       | 408                    |       | 5,549        |       | 5,957      |       | 1,824                     |       | 1985            |       | 1993         |       |
| Governors Hill                |       | 8800 Governor's Hill           |       | Office       |       | -                |       | 225                   |       | 2,293           |       | 587                                          |       | 231                    |       | 2,874        |       | 3,105      |       | 1,271                     |       | 1985            |       | 1986         |       |
| Governors Hill                | ** ** | 8600/8650 Governor's Hill Dr.  | ** ** | Office       | ** ** | -                | ** ** | 1,220                 | ** ** | 18,338          | ** ** | 5,640                                        | ** ** | 1,245                  | ** ** | 23,953       | ** ** | 25,198     | ** ** | 7,550                     | ** ** | 1986            | ** ** | 1993         | ** ** |
| Kenwood Executive Center      |       | Kenwood Executive Center       |       | Office       |       | -                |       | 606                   |       | 4,021           |       | 931                                          |       | 664                    |       | 4,895        |       | 5,559      |       | 1,224                     |       | 1981            |       | 1997         |       |
| Kenwood Commons               |       | 8230 Kenwood Commons           |       | Office       |       | 3,554            |       | 638                   |       | 2,970           |       | 861                                          |       | 638                    |       | 3,831        |       | 4,468      |       | 2,243                     |       | 1986            |       | 1986         |       |
| Kenwood Commons               |       | 8280 Kenwood Commons           |       | Office       |       | 2,246            |       | 638                   |       | 1,773           |       | 477                                          |       | 638                    |       | 2,250        |       | 2,888      |       | 1,169                     |       | 1986            |       | 1986         |       |
| Kenwood Medical Office  Bldg. |       | Kenwood Medical Office Bldg.   |       | Office       |       | -                |       | -                     |       | 7,798           |       | 100                                          |       | -                      |       | 7,899        |       | 7,899      |       | 1,609                     |       | 1994            |       | 1999         |       |
| Pfeiffer Place                |       | Pfeiffer Place                 |       | Office       |       | -                |       | 3,608                 |       | 14,290          |       | 1,353                                        |       | 3,608                  |       | 15,643       |       | 19,252     |       | 3,355                     |       | 2001            |       | 2001         |       |
| Pfeiffer Woods                |       | Pfeiffer Woods                 |       | Office       |       | -                |       | 1,450                 |       | 12,322          |       | 1,640                                        |       | 2,128                  |       | 13,284       |       | 15,412     |       | 2,548                     |       | 1998            |       | 1999         |       |
| Remington Office Park         |       | Remington Park Building A      |       | Office       |       | -                |       | 560                   |       | 1,469           |       | 587                                          |       | 560                    |       | 2,056        |       | 2,616      |       | 491                       |       | 1982            |       | 1997         |       |
| Remington Office Park         |       | Remington Park Building B      |       | Office       |       | -                |       | 560                   |       | 1,473           |       | 508                                          |       | 560                    |       | 1,981        |       | 2,541      |       | 664                       |       | 1982            |       | 1997         |       |
| Triangle Office Park          |       | Triangle Office Park           |       | Office       |       | 3,815            |       | 1,018                 |       | 11,059          |       | 1,166                                        |       | 1,018                  |       | 12,226       |       | 13,244     |       | 5,976                     |       | 1965            |       | 1986         |       |
|                          |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **CLAYTON,  MISSOURI**        |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Interco Corporate Tower       |       | Interco Corporate Tower        |       | Office       |       | -                |       | 6,150                 |       | 43,275          |       | 1,751                                        |       | 6,150                  |       | 45,026       |       | 51,176     |       | 6,060                     |       | 1986            |       | 2002         |       |
|                          |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **COLUMBUS,  OHIO**           |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Easton                        |       | One Easton Oval                |       | Office       |       | -                |       | 2,789                 |       | 10,577          |       | 444                                          |       | 2,789                  |       | 11,022       |       | 13,810     |       | 2,642                     |       | 1998            |       | 1999         |       |
| Easton                        |       | Two Easton Oval                |       | Office       |       | -                |       | 2,489                 |       | 16,683          |       | 1,541                                        |       | 2,489                  |       | 18,224       |       | 20,713     |       | 4,170                     |       | 1996            |       | 1998         |       |
| Easton                        |       | Easton Way One                 |       | Office       |       | -                |       | 1,874                 |       | 9,994           |       | 577                                          |       | 1,874                  |       | 10,571       |       | 12,445     |       | 3,024                     |       | 2000            |       | 2000         |       |
| Easton                        |       | Easton Way Two                 |       | Office       |       | -                |       | 2,005                 |       | 10,287          |       | 792                                          |       | 2,005                  |       | 11,078       |       | 13,083     |       | 3,122                     |       | 2001            |       | 2001         |       |
| Easton                        |       | Easton Way Three               |       | Office       |       | -                |       | 2,768                 |       | 11,530          |       | 68                                           |       | 2,768                  |       | 11,598       |       | 14,366     |       | 2,138                     |       | 2002            |       | 2003         |       |
| Easton                        |       | Lane Bryant                    |       | Office       |       | -                |       | 4,346                 |       | 11,395          |       | -                                            |       | 4,346                  |       | 11,396       |       | 15,742     |       | 668                       |       | 2006            |       | 2006         |       |
| Easton                        |       | 4400 Easton Commons            |       | Office       |       | -                |       | 1,886                 |       | 7,779           |       | -                                            |       | 1,886                  |       | 7,779        |       | 9,665      |       | 126                       |       | 2006            |       | 2006         |       |
| Polaris                       |       | 1000 Polaris Parkway           |       | Office       |       | -                |       | 1,200                 |       | 6,636           |       | 1,502                                        |       | 1,293                  |       | 8,045        |       | 9,338      |       | 2,291                     |       | 1992            |       | 1999         |       |
|                          |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **COPPELL,  TEXAS**           |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Freeport North                |       | Freeport X                     |       | Industrial   |       | -                |       | 8,198                 |       | 18,852          |       | 3,033                                        |       | 8,198                  |       | 21,885       |       | 30,083     |       | 3,750                     |       | 2003            |       | 2003         |       |
|                          |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **DAVENPORT,  FLORIDA**       |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Park 27 Distribution  Center  |       | Park 27 Distribution Center I  |       | Industrial   |       | -                |       | 2,449                 |       | 6,107           |       | 8                                            |       | 2,449                  |       | 6,116        |       | 8,564      |       | 1,084                     |       | 2002            |       | 2002         |       |

** **

81

----

 
| **DUKE REALTY LIMITED PARTNERSHIPREAL ESTATE AND ACCUMULATED  DEPRECIATION**

**DECEMBER  31, 2006**

**(in thousands)** | ** ** | **Schedule 3** |
|--------------------------------------------------------------------------------------------------------------------------|------------|----------------|

 
|                              | ** ** | ** **                    | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Cost Capitalized**                    | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
|------------------------------|------------|-------------------------------|------------|--------------|------------|------------------|------------|-----------------------|------------|-----------------|------------|----------------------------------------------|------------|------------------------|------------|--------------|------------|------------|------------|---------------------------|------------|-----------------|------------|--------------|------------|
| ** **                   | ** ** | ** **                    | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Subsequent to**                       | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| ** **                   | ** ** | ** **                    | ** ** | **Building** | ** ** | ** **       | ** ** | **Initial Cost** | ** ** | **Development** | ** ** | **Gross Book Value 12/31/06** | ** ** | **Accumulated**        | ** ** | **Year**     | ** ** | **Year**   | ** ** |
| **Development**              | ** ** | **Name**                      | ** ** | **Type**     | ** ** | **Encumbrances** | ** ** | **Land**              | ** ** | **Buildings**   | ** ** | **or Acquisition**                      | ** ** | **Land/Land Imp** | ** ** | **Bldgs/TI** | ** ** | **Total**  | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
| ** **                   | ** ** | ** **                    | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| **DES  PLAINES, ILLINOIS**   |       |                          |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| 2180 South Wolf Road         |       | 2180 South Wolf Road          |       | Industrial   |       | -                |       | 179                   |       | 1,632           |       | 476                                          |       | 179                    |       | 2,108        |       | 2,288      |       | 515                       |       | 1966            |       | 1998         |       |
|                         |       |                          |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **DOWNERS  GROVE, ILLINOIS** | ** ** |                          | ** ** |         | ** ** |             | ** ** |                  | ** ** |            | ** ** |                                         | ** ** |                   | ** ** |         | ** ** |       | ** ** |                      | ** ** |            | ** ** |         | ** ** |
| Executive Towers             | ** ** | Executive Towers I            | ** ** | Office       | ** ** | -                | ** ** | 2,652                 | ** ** | 23,964          | ** ** | 6,016                                        | ** ** | 2,652                  | ** ** | 29,980       | ** ** | 32,632     | ** ** | 7,365                     | ** ** | 1983            | ** ** | 1997         | ** ** |
| Executive Towers             |       | Executive Towers II           |       | Office       |       | -                |       | 3,386                 |       | 31,815          |       | 8,361                                        |       | 3,386                  |       | 40,176       |       | 43,562     |       | 12,399                    |       | 1984            |       | 1997         |       |
| Executive Towers             |       | Executive Towers III          |       | Office       |       | -                |       | 3,512                 |       | 32,513          |       | 6,815                                        |       | 3,512                  |       | 39,328       |       | 42,840     |       | 9,962                     |       | 1987            |       | 1997         |       |
|                         |       |                          |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **DUBLIN,  OHIO**            |       |                          |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Scioto Corporate Center      |       | Scioto Corporate Center       |       | Office       |       | -                |       | 1,100                 |       | 3,227           |       | 1,310                                        |       | 1,100                  |       | 4,537        |       | 5,637      |       | 1,433                     |       | 1987            |       | 1996         |       |
| Tuttle Crossing              |       | Qwest                         |       | Office       |       | -                |       | 2,618                 |       | 18,730          |       | 1,800                                        |       | 2,670                  |       | 20,478       |       | 23,148     |       | 6,772                     |       | 1990            |       | 1993         |       |
| Tuttle Crossing              |       | 4600 Lakehurst                |       | Office       |       | -                |       | 1,494                 |       | 12,858          |       | 552                                          |       | 1,524                  |       | 13,380       |       | 14,904     |       | 4,497                     |       | 1990            |       | 1993         |       |
| Tuttle Crossing              |       | 4700 Lakehurst Court          |       | Office       |       | -                |       | 717                   |       | 2,439           |       | 465                                          |       | 717                    |       | 2,904        |       | 3,621      |       | 913                       |       | 1994            |       | 1994         |       |
| Tuttle Crossing              |       | 4675 Lakehurst                |       | Office       |       | -                |       | 605                   |       | 5,873           |       | 176                                          |       | 605                    |       | 6,049        |       | 6,654      |       | 1,819                     |       | 1995            |       | 1995         |       |
| Tuttle Crossing              |       | 5500 Glendon Court            |       | Office       |       | -                |       | 1,066                 |       | 7,613           |       | 1,097                                        |       | 1,066                  |       | 8,710        |       | 9,775      |       | 2,719                     |       | 1995            |       | 1995         |       |
| Tuttle Crossing              |       | 5555 Glendon Court            |       | Office       |       | -                |       | 1,600                 |       | 7,196           |       | 1,275                                        |       | 1,767                  |       | 8,305        |       | 10,071     |       | 2,611                     |       | 1995            |       | 1995         |       |
| Britton Central              |       | 6060 Britton Parkway          |       | Office       |       | -                |       | 1,601                 |       | 8,725           |       | 182                                          |       | 1,601                  |       | 8,907        |       | 10,508     |       | 3,779                     |       | 1996            |       | 1996         |       |
| Tuttle Crossing              |       | Compmanagement                |       | Office       |       | -                |       | 867                   |       | 4,408           |       | 646                                          |       | 867                    |       | 5,054        |       | 5,921      |       | 1,569                     |       | 1997            |       | 1997         |       |
| Tuttle Crossing              |       | 4725 Lakehurst                |       | Office       |       | -                |       | 483                   |       | 9,349           |       | 998                                          |       | 483                    |       | 10,348       |       | 10,831     |       | 3,158                     |       | 1998            |       | 1998         |       |
| Tuttle Crossing              |       | 5515 Parkcenter Circle        |       | Office       |       | -                |       | 1,283                 |       | 6,739           |       | 376                                          |       | 1,283                  |       | 7,114        |       | 8,397      |       | -                         |       | 1996            |       | 2005         |       |
| Tuttle Crossing              |       | 5555 Parkcenter Circle        |       | Office       |       | -                |       | 1,580                 |       | 9,096           |       | 901                                          |       | 1,580                  |       | 9,997        |       | 11,577     |       | 3,224                     |       | 1992            |       | 1994         |       |
| Tuttle Crossing              |       | Parkwood Place                |       | Office       |       | -                |       | 1,690                 |       | 11,563          |       | 1,037                                        |       | 1,690                  |       | 12,600       |       | 14,290     |       | 4,290                     |       | 1997            |       | 1997         |       |
| Tuttle Crossing              |       | Nationwide                    |       | Office       |       | -                |       | 4,815                 |       | 15,444          |       | 823                                          |       | 4,815                  |       | 16,268       |       | 21,083     |       | 4,344                     |       | 1996            |       | 1996         |       |
| Tuttle Crossing              |       | Emerald II                    |       | Office       |       | -                |       | 495                   |       | 2,836           |       | 31                                           |       | 495                    |       | 2,868        |       | 3,363      |       | 645                       |       | 1998            |       | 1998         |       |
| Tuttle Crossing              |       | Atrium II, Phase I            |       | Office       |       | -                |       | 1,649                 |       | 9,885           |       | 516                                          |       | 1,649                  |       | 10,401       |       | 12,050     |       | 2,919                     |       | 1997            |       | 1998         |       |
| Tuttle Crossing              |       | Atrium II, Phase II           |       | Office       |       | -                |       | 1,597                 |       | 7,993           |       | 1,109                                        |       | 1,597                  |       | 9,102        |       | 10,699     |       | 2,072                     |       | 1998            |       | 1999         |       |
| Tuttle Crossing              |       | Blazer I                      |       | Office       |       | -                |       | 904                   |       | 4,517           |       | 583                                          |       | 904                    |       | 5,100        |       | 6,004      |       | 1,262                     |       | 1999            |       | 1999         |       |
| Tuttle Crossing              | ** ** | Parkwood II                   | ** ** | Office       | ** ** | -                | ** ** | 1,848                 | ** ** | 14,030          | ** ** | 256                                          | ** ** | 1,848                  | ** ** | 14,286       | ** ** | 16,134     | ** ** | 4,220                     | ** ** | 2000            | ** ** | 2000         | ** ** |
| Tuttle Crossing              |       | Blazer II                     |       | Office       |       | -                |       | 1,016                 |       | 6,658           |       | 508                                          |       | 1,016                  |       | 7,167        |       | 8,183      |       | 1,938                     |       | 2000            |       | 2000         |       |
| Tuttle Crossing              |       | Emerald III                   |       | Office       |       | -                |       | 1,685                 |       | 9,862           |       | 1,292                                        |       | 1,694                  |       | 11,146       |       | 12,839     |       | 2,663                     |       | 2001            |       | 2001         |       |
|                         | ** ** |                          | ** ** |         | ** ** |             | ** ** |                  | ** ** |            | ** ** |                                         | ** ** |                   | ** ** |         | ** ** |       | ** ** |                      | ** ** |            | ** ** |         | ** ** |
| **DULUTH,  GEORGIA**         |       |                          |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Crestwood Pointe             |       | 3805 Crestwood Parkway        |       | Office       |       | -                |       | 877                   |       | 15,107          |       | 1,385                                        |       | 877                    |       | 16,492       |       | 17,369     |       | 3,571                     |       | 1997            |       | 1999         |       |
| Crestwood Pointe             |       | 3885 Crestwood Parkway        |       | Office       |       | -                |       | 878                   |       | 14,057          |       | 804                                          |       | 878                    |       | 14,861       |       | 15,739     |       | 2,955                     |       | 1998            |       | 1999         |       |
| Hampton Green                |       | Hampton Green Office I        |       | Office       |       | -                |       | 1,388                 |       | 12,188          |       | 691                                          |       | 1,388                  |       | 12,879       |       | 14,266     |       | 2,767                     |       | 2000            |       | 2000         |       |
| River Green                  |       | 3450 River Green Court        |       | Industrial   |       | -                |       | 194                   |       | 2,001           |       | 274                                          |       | 194                    |       | 2,274        |       | 2,468      |       | 421                       |       | 1989            |       | 1999         |       |
| Business Park At  Sugarloaf  |       | 2775 Premiere Parkway         |       | Industrial   |       | 6,857            |       | 560                   |       | 4,672           |       | 276                                          |       | 565                    |       | 4,943        |       | 5,508      |       | 898                       |       | 1997            |       | 1999         |       |
| Business Park At  Sugarloaf  |       | 3079 Premiere Parkway         |       | Industrial   |       | 11,454           |       | 776                   |       | 6,403           |       | 1,822                                        |       | 783                    |       | 8,219        |       | 9,001      |       | 1,854                     |       | 1998            |       | 1999         |       |
| Business Park At  Sugarloaf  |       | Sugarloaf Office I            |       | Office       |       | -                |       | 1,042                 |       | 8,681           |       | 709                                          |       | 1,042                  |       | 9,389        |       | 10,432     |       | 1,975                     |       | 1998            |       | 1999         |       |
| Business Park At  Sugarloaf  |       | 2850 Premiere Parkway         |       | Office       |       | 6,827            |       | 621                   |       | 4,631           |       | 6                                            |       | 627                    |       | 4,631        |       | 5,258      |       | 491                       |       | 1997            |       | 2002         |       |
| Business Park At  Sugarloaf  |       | Sugarloaf Office II (3039)    |       | Office       |       | -                |       | 972                   |       | 3,791           |       | 420                                          |       | 1,006                  |       | 4,178        |       | 5,184      |       | 450                       |       | 1999            |       | 2002         |       |
| Business Park At  Sugarloaf  |       | Sugarloaf Office III (2810)   |       | Office       |       | -                |       | 696                   |       | 3,896           |       | 413                                          |       | 696                    |       | 4,308        |       | 5,004      |       | 565                       |       | 1999            |       | 2002         |       |
| Business Park At  Sugarloaf  |       | 2855 Premiere Parkway         |       | Industrial   |       | 6,155            |       | 765                   |       | 3,633           |       | 443                                          |       | 770                    |       | 4,070        |       | 4,841      |       | 926                       |       | 1999            |       | 1999         |       |
| Business Park At  Sugarloaf  |       | 6655 Sugarloaf                |       | Industrial   |       | 9,958            |       | 1,651                 |       | 6,449           |       | 75                                           |       | 1,659                  |       | 6,516        |       | 8,175      |       | 832                       |       | 1998            |       | 2001         |       |
| Business Park At  Sugarloaf  |       | Sugarloaf Office IV           |       | Office       |       | -                |       | 623                   |       | 2,988           |       | 304                                          |       | 623                    |       | 3,292        |       | 3,915      |       | 528                       |       | 2000            |       | 2000         |       |
| Business Park At  Sugarloaf  |       | Sugarloaf Office V            |       | Office       |       | -                |       | 744                   |       | 3,816           |       | 463                                          |       | 744                    |       | 4,278        |       | 5,022      |       | 1,652                     |       | 2001            |       | 2001         |       |
| Business Park At  Sugarloaf  |       | Sugarloaf VI                  |       | Office       |       | -                |       | 1,659                 |       | 6,027           |       | 818                                          |       | 1,659                  |       | 6,846        |       | 8,504      |       | 579                       |       | 2004            |       | 2004         |       |
| Business Park At  Sugarloaf  |       | Sugarloaf VII                 |       | Office       |       | -                |       | 1,796                 |       | 5,163           |       | -                                            |       | 1,796                  |       | 5,163        |       | 6,959      |       | 65                        |       | 2006            |       | 2006         |       |
|                         |       |                          |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **EAGAN,  MINNESOTA**        |       |                          |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Apollo Industrial Center     |       | Apollo Industrial Ctr I       |       | Industrial   |       | -                |       | 866                   |       | 4,976           |       | 1,472                                        |       | 882                    |       | 6,432        |       | 7,314      |       | 1,815                     |       | 1997            |       | 1997         |       |
| Apollo Industrial Center     |       | Apollo Industrial Ctr II      |       | Industrial   |       | -                |       | 474                   |       | 2,581           |       | 145                                          |       | 474                    |       | 2,727        |       | 3,200      |       | 560                       |       | 2000            |       | 2000         |       |
| Apollo Industrial Center     |       | Apollo Industrial Ctr III     |       | Industrial   |       | -                |       | 1,432                 |       | 6,688           |       | 50                                           |       | 1,432                  |       | 6,739        |       | 8,170      |       | 1,197                     |       | 2000            |       | 2000         |       |
| Silverbell Commons           |       | Silverbell Commons            |       | Industrial   |       | -                |       | 1,807                 |       | 6,657           |       | 1,692                                        |       | 1,908                  |       | 8,248        |       | 10,156     |       | 2,068                     |       | 1999            |       | 1999         |       |
| Trapp Road Commerce  Center  |       | Trapp Road Commerce Center I  |       | Industrial   |       | -                |       | 671                   |       | 3,886           |       | 446                                          |       | 700                    |       | 4,303        |       | 5,003      |       | 949                       |       | 1996            |       | 1998         |       |
| Trapp Road Commerce  Center  |       | Trapp Road Commerce Center II |       | Industrial   |       | -                |       | 1,250                 |       | 6,738           |       | 1,094                                        |       | 1,266                  |       | 7,816        |       | 9,082      |       | 1,687                     |       | 1998            |       | 1998         |       |

 

82

----

 
| **DUKE REALTY LIMITED PARTNERSHIPREAL ESTATE AND ACCUMULATED  DEPRECIATION**

**DECEMBER  31, 2006**

**(in thousands)** | ** ** | **Schedule 3** |
|--------------------------------------------------------------------------------------------------------------------------|------------|----------------|

 
|                              | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Cost Capitalized**                    | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
|------------------------------|------------|---------------------------------|------------|--------------|------------|------------------|------------|-----------------------|------------|-----------------|------------|----------------------------------------------|------------|------------------------|------------|--------------|------------|------------|------------|---------------------------|------------|-----------------|------------|--------------|------------|
| ** **                   | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Subsequent to**                       | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| ** **                   | ** ** | ** **                      | ** ** | **Building** | ** ** | ** **       | ** ** | **Initial Cost** | ** ** | **Development** | ** ** | **Gross Book Value 12/31/06** | ** ** | **Accumulated**        | ** ** | **Year**     | ** ** | **Year**   | ** ** |
| **Development**              | ** ** | **Name**                        | ** ** | **Type**     | ** ** | **Encumbrances** | ** ** | **Land**              | ** ** | **Buildings**   | ** ** | **or Acquisition**                      | ** ** | **Land/Land Imp** | ** ** | **Bldgs/TI** | ** ** | **Total**  | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
| ** **                   | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| **EARTH  CITY, MISSOURI**    |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Earth City                   |       | Rider Trail                     |       | Office       |       | 5,464            |       | 2,615                 |       | 10,877          |       | 2,149                                        |       | 2,615                  |       | 13,026       |       | 15,642     |       | 3,025                     |       | 1987            |       | 1997         |       |
| Earth City                   |       | 3300 Pointe 70                  |       | Office       |       | 3,907            |       | 1,186                 |       | 7,515           |       | 2,489                                        |       | 1,186                  |       | 10,003       |       | 11,189     |       | 2,920                     |       | 1989            |       | 1997         |       |
| Earth City                   | ** ** | Corporate Center, Earth City    | ** ** | Industrial   | ** ** | -                | ** ** | 783                   | ** ** | 3,838           | ** ** | 1,501                                        | ** ** | 783                    | ** ** | 5,339        | ** ** | 6,122      | ** ** | 1,606                     | ** ** | 2000            | ** ** | 2000         | ** ** |
| Earth City                   | ** ** | Corporate Trail Distribution    | ** ** | Industrial   | ** ** | -                | ** ** | 2,850                 | ** ** | 6,163           | ** ** | -                                            | ** ** | 2,850                  | ** ** | 6,163        | ** ** | 9,012      | ** ** | 220                       | ** ** | 2006            | ** ** | 2006         | ** ** |
|                         |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **EAST  POINTE, GEORGIA**    |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Camp Creek                   |       | Camp Creek Bldg 1400            |       | Office       |       | 5,560            |       | 561                   |       | 3,042           |       | 821                                          |       | 563                    |       | 3,861        |       | 4,424      |       | 785                       |       | 1988            |       | 2001         |       |
| Camp Creek                   |       | Camp Creek Bldg 1800            |       | Office       |       | 4,111            |       | 462                   |       | 2,657           |       | 168                                          |       | 464                    |       | 2,823        |       | 3,287      |       | 462                       |       | 1989            |       | 2001         |       |
| Camp Creek                   |       | Camp Creek Bldg 2000            |       | Office       |       | 3,319            |       | 395                   |       | 2,292           |       | 37                                           |       | 397                    |       | 2,328        |       | 2,725      |       | 360                       |       | 1989            |       | 2001         |       |
| Camp Creek                   |       | Camp Creek Bldg 2400            |       | Industrial   |       | 2,906            |       | 296                   |       | 1,675           |       | 324                                          |       | 298                    |       | 1,997        |       | 2,294      |       | 329                       |       | 1988            |       | 2001         |       |
| Camp Creek                   |       | Camp Creek Bldg 2600            |       | Industrial   |       | 3,691            |       | 364                   |       | 2,346           |       | 136                                          |       | 366                    |       | 2,481        |       | 2,846      |       | 585                       |       | 1990            |       | 2001         |       |
| Camp Creek                   |       | Clorox Company                  |       | Industrial   |       | 19,369           |       | 4,406                 |       | 9,512           |       | 602                                          |       | 4,841                  |       | 9,678        |       | 14,520     |       | 1,061                     |       | 2003            |       | 2003         |       |
| Camp Creek                   |       | Camp Creek Building 1200        |       | Office       |       | -                |       | 1,334                 |       | 2,673           |       | 928                                          |       | 1,334                  |       | 3,600        |       | 4,934      |       | 545                       |       | 2004            |       | 2004         |       |
| Camp Creek                   |       | 3900 North Commerce             |       | Industrial   |       | 5,342            |       | 1,059                 |       | 2,974           |       | -                                            |       | 1,059                  |       | 2,973        |       | 4,032      |       | 204                       |       | 2005            |       | 2005         |       |
| Camp Creek                   |       | Camp Creek Building M           |       | Industrial   |       | -                |       | 5,687                 |       | 10,192          |       | -                                            |       | 5,687                  |       | 10,192       |       | 15,879     |       | 351                       |       | 2006            |       | 2006         |       |
| Camp Creek                   |       | Hartsfield Warehouse BTS        |       | Industrial   |       | 11,881           |       | 2,065                 |       | 7,076           |       | -                                            |       | 2,065                  |       | 7,076        |       | 9,141      |       | 193                       |       | 2006            |       | 2006         |       |
| Camp Creek                   |       | Camp Creek Building 1000        |       | Office       |       | -                |       | 1,537                 |       | 2,459           |       | -                                            |       | 1,537                  |       | 2,459        |       | 3,996      |       | 71                        |       | 2006            |       | 2006         |       |
|                         |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **FAIRFIELD,  OHIO**         |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Thunderbird Building 1       |       | Thunderbird Building 1          |       | Industrial   |       | -                |       | 248                   |       | 1,740           |       | 156                                          |       | 248                    |       | 1,896        |       | 2,144      |       | 635                       |       | 1991            |       | 1995         |       |
|                         |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **FENTON,  MISSOURI**        |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Fenton Interstate  Buildings |       | Fenton Interstate Building C    |       | Industrial   |       | -                |       | 519                   |       | 1,978           |       | 322                                          |       | 519                    |       | 2,300        |       | 2,819      |       | 593                       |       | 1986            |       | 1999         |       |
| Fenton Interstate  Buildings |       | Fenton Interstate Building D    |       | Industrial   |       | -                |       | 1,286                 |       | 5,050           |       | 700                                          |       | 1,286                  |       | 5,750        |       | 7,036      |       | 1,234                     |       | 1987            |       | 1999         |       |
| Fenton Interstate  Buildings |       | Fenton Interstate Building A    |       | Industrial   |       | -                |       | 603                   |       | 2,593           |       | 40                                           |       | 603                    |       | 2,633        |       | 3,236      |       | 544                       |       | 1987            |       | 2000         |       |
| Fenton Interstate  Buildings |       | Fenton Interstate Building B    |       | Industrial   |       | -                |       | 702                   |       | 2,299           |       | 134                                          |       | 702                    |       | 2,433        |       | 3,135      |       | 449                       |       | 1986            |       | 2000         |       |
|                         | ** ** |                            | ** ** |         | ** ** |             | ** ** |                  | ** ** |            | ** ** |                                         | ** ** |                   | ** ** |         | ** ** |       | ** ** |                      | ** ** |            | ** ** |         | ** ** |
| **FISHERS,  INDIANA**        |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Exit 5                       |       | Exit 5 Building 1               |       | Industrial   |       | -                |       | 822                   |       | 2,695           |       | 153                                          |       | 822                    |       | 2,848        |       | 3,669      |       | 697                       |       | 1999            |       | 1999         |       |
| Exit 5                       | ** ** | Exit 5 Building 2               | ** ** | Industrial   | ** ** | -                | ** ** | 749                   | ** ** | 4,361           | ** ** | 264                                          | ** ** | 749                    | ** ** | 4,625        | ** ** | 5,373      | ** ** | 1,580                     | ** ** | 1999            | ** ** | 2000         | ** ** |
|                         |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **FRANKLIN,  TENNESSEE**     |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Aspen Grove Business  Center |       | Aspen Grove Business Ctr I      |       | Industrial   |       | -                |       | 936                   |       | 6,446           |       | 2,633                                        |       | 936                    |       | 9,079        |       | 10,015     |       | 1,969                     |       | 1996            |       | 1999         |       |
| Aspen Grove Business  Center |       | Aspen Grove Business Ctr II     |       | Industrial   |       | -                |       | 1,151                 |       | 6,482           |       | 540                                          |       | 1,151                  |       | 7,022        |       | 8,173      |       | 1,346                     |       | 1996            |       | 1999         |       |
| Aspen Grove Business  Center |       | Aspen Grove Business Ctr III    |       | Industrial   |       | -                |       | 970                   |       | 6,163           |       | 66                                           |       | 970                    |       | 6,230        |       | 7,199      |       | 1,655                     |       | 1998            |       | 1999         |       |
| Aspen Grove Business  Center |       | Aspen Grove Business Center IV  |       | Industrial   |       | -                |       | 492                   |       | 2,416           |       | 23                                           |       | 492                    |       | 2,439        |       | 2,931      |       | 360                       |       | 2002            |       | 2002         |       |
| Aspen Grove Business  Center |       | Aspen Grove Business Ctr V      |       | Industrial   |       | -                |       | 943                   |       | 5,171           |       | 1,188                                        |       | 943                    |       | 6,360        |       | 7,303      |       | 1,343                     |       | 1996            |       | 1999         |       |
| Aspen Grove Business  Center |       | Aspen Grove Flex Center II      |       | Industrial   |       | -                |       | 240                   |       | 1,289           |       | 368                                          |       | 240                    |       | 1,657        |       | 1,897      |       | 96                        |       | 1999            |       | 1999         |       |
| Aspen Grove Business  Center |       | Aspen Grove Office Center I     |       | Office       |       | -                |       | 950                   |       | 6,323           |       | 2,137                                        |       | 950                    |       | 8,461        |       | 9,410      |       | 1,717                     |       | 1999            |       | 1999         |       |
| Aspen Grove Business  Center |       | Aspen Grove Flex Center I       |       | Industrial   |       | -                |       | 301                   |       | 1,233           |       | 631                                          |       | 301                    |       | 1,863        |       | 2,165      |       | 366                       |       | 1999            |       | 1999         |       |
| Aspen Grove Business  Center |       | Aspen Grove Flex Center III     |       | Industrial   |       | -                |       | 327                   |       | 1,888           |       | 847                                          |       | 327                    |       | 2,734        |       | 3,062      |       | 624                       |       | 2001            |       | 2001         |       |
| Aspen Grove Business  Center |       | Aspen Grove Flex Center IV      |       | Industrial   |       | -                |       | 205                   |       | 973             |       | 204                                          |       | 205                    |       | 1,177        |       | 1,382      |       | 140                       |       | 2001            |       | 2001         |       |
| Aspen Grove Business  Center |       | Aspen Corporate Center 100      |       | Office       |       | -                |       | 723                   |       | 3,451           |       | 84                                           |       | 723                    |       | 3,535        |       | 4,258      |       | 455                       |       | 2004            |       | 2004         |       |
| Aspen Grove Business  Center |       | Aspen Corporate Center 200      |       | Office       |       | -                |       | 1,306                 |       | 1,866           |       | 944                                          |       | 1,306                  |       | 2,810        |       | 4,116      |       | 113                       |       | 2006            |       | 2006         |       |
| Brentwood South Bus.  Center |       | Brentwood South Bus Ctr IV      |       | Industrial   |       | -                |       | 569                   |       | 2,435           |       | 603                                          |       | 569                    |       | 3,038        |       | 3,607      |       | 533                       |       | 1990            |       | 1999         |       |
| Brentwood South Bus.  Center |       | Brentwood South Bus  Ctr V |       | Industrial   |       | -                |       | 445                   |       | 1,932           |       | 72                                           |       | 445                    |       | 2,003        |       | 2,449      |       | 378                       |       | 1990            |       | 1999         |       |
| Brentwood South Bus.  Center |       | Brentwood South Bus Ctr VI      |       | Industrial   |       | -                |       | 489                   |       | 1,243           |       | 573                                          |       | 489                    |       | 1,816        |       | 2,305      |       | 339                       |       | 1990            |       | 1999         |       |
|                         |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **GARDEN  CITY, GEORGIA**    |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Aviation Court               |       | Aviation Court Land             |       | Grounds      |       | -                |       | 1,509                 |       | -               |       | -                                            |       | 1,509                  |       | -            |       | 1,509      |       | 18                        |       | N/A             |       | 2006         |       |
|                         |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **GRAND  PRAIRIE, TEXAS**    |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Grand Lakes                  |       | Grand Lakes I                   |       | Industrial   |       | -                |       | 8,106                 |       | 13,069          |       | -                                            |       | 8,106                  |       | 13,069       |       | 21,175     |       | 121                       |       | 2006            |       | 2006         |       |
|                         |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **GREENWOOD,  INDIANA**      |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| South Park-Indiana           |       | Brylane Parking Lot             |       | Grounds      |       | -                |       | 54                    |       | -               |       | 3                                            |       | 57                     |       | -            |       | 57         |       | 40                        |       | N/A             |       | 1994         |       |

 

83

----

 
| **DUKE REALTY LIMITED PARTNERSHIPREAL ESTATE AND ACCUMULATED  DEPRECIATION**

**DECEMBER  31, 2006**

**(in thousands)** | ** ** | **Schedule 3** |
|--------------------------------------------------------------------------------------------------------------------------|------------|----------------|

 
|                               | ** ** | ** **                     | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Cost Capitalized**                    | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
|-------------------------------|------------|--------------------------------|------------|--------------|------------|------------------|------------|-----------------------|------------|-----------------|------------|----------------------------------------------|------------|------------------------|------------|--------------|------------|------------|------------|---------------------------|------------|-----------------|------------|--------------|------------|
| ** **                    | ** ** | ** **                     | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Subsequent to**                       | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| ** **                    | ** ** | ** **                     | ** ** | **Building** | ** ** | ** **       | ** ** | **Initial Cost** | ** ** | **Development** | ** ** | **Gross Book Value 12/31/06** | ** ** | **Accumulated**        | ** ** | **Year**     | ** ** | **Year**   | ** ** |
| **Development**               | ** ** | **Name**                       | ** ** | **Type**     | ** ** | **Encumbrances** | ** ** | **Land**              | ** ** | **Buildings**   | ** ** | **or Acquisition**                      | ** ** | **Land/Land Imp** | ** ** | **Bldgs/TI** | ** ** | **Total**  | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
| ** **                    | ** ** | ** **                     | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| **GROVEPORT,  OHIO**          |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| 6600 Port Road                |       | 6600 Port Road                 |       | Industrial   |       | -                |       | 2,725                 |       | 23,287          |       | 1,389                                        |       | 2,850                  |       | 24,551       |       | 27,401     |       | 6,028                     |       | 1995            |       | 1997         |       |
| Groveport Commerce Center     |       | Groveport Commerce Center #437 |       | Industrial   |       | -                |       | 1,049                 |       | 7,609           |       | 1,244                                        |       | 1,065                  |       | 8,837        |       | 9,902      |       | 2,295                     |       | 1999            |       | 1999         |       |
| Groveport Commerce  Center    | ** ** | Groveport Commerce Center #168 | ** ** | Industrial   | ** ** | -                |       | 510                   |       | 3,759           | ** ** | 1,059                                        | ** ** | 510                    | ** ** | 4,818        | ** ** | 5,328      | ** ** | 1,127                     | ** ** | 1999            | ** ** | 2000         | ** ** |
| Groveport Commerce  Center    | ** ** | Groveport Commerce Center #345 | ** ** | Industrial   | ** ** | -                | ** ** | 1,045                 | ** ** | 7,349           | ** ** | 938                                          | ** ** | 1,045                  | ** ** | 8,287        | ** ** | 9,332      | ** ** | 1,958                     | ** ** | 2000            | ** ** | 2000         | ** ** |
| Groveport Commerce  Center    |       | Groveport Commerce Center #667 |       | Industrial   |       | -                | ** ** | 4,420                 | ** ** | 14,439          |       | -                                            |       | 4,420                  |       | 14,440       |       | 18,859     |       | 1,419                     |       | 2005            |       | 2005         |       |
|                          |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **HANAHAN,  SOUTH CAROLINA**  |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Charleston                    |       | 916 Commerce Circle            |       | Industrial   |       | 1,186            |       | 286                   |       | 1,781           |       | -                                            |       | 286                    |       | 1,782        |       | 2,068      |       | -                         |       | 1999            |       | 2006         |       |
|                          |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **HEBRON,  KENTUCKY**         |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Southpark, KY                 |       | Southpark Building 4           |       | Industrial   |       | -                |       | 779                   |       | 3,353           |       | 123                                          |       | 779                    |       | 3,476        |       | 4,255      |       | 1,104                     |       | 1994            |       | 1994         |       |
| Southpark, KY                 |       | CR Services                    |       | Industrial   |       | -                |       | 1,085                 |       | 4,214           |       | 1,410                                        |       | 1,085                  |       | 5,624        |       | 6,709      |       | 1,739                     |       | 1994            |       | 1994         |       |
| Hebron Industrial Park        |       | Hebron Building 1              |       | Industrial   |       | -                |       | 8,855                 |       | 11,527          |       | -                                            |       | 8,855                  |       | 11,527       |       | 20,382     |       | 456                       |       | 2006            |       | 2006         |       |
|                          |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **HIGHLAND  HILLS, OHIO**     |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Harvard Crossing Bus.  Campus |       | One Harvard Crossing           |       | Office       |       | -                |       | 660                   |       | 7,685           |       | 139                                          |       | 660                    |       | 7,824        |       | 8,484      |       | 629                       |       | 1999            |       | 2004         |       |
| Metropolitan Plaza            |       | Metropolitan Plaza             |       | Office       |       | -                |       | 2,310                 |       | 13,847          |       | 263                                          |       | 2,310                  |       | 14,110       |       | 16,420     |       | 1,458                     |       | 2000            |       | 2003         |       |
|                          |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **HOPKINS,  MINNESOTA**       |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Cornerstone Business  Center  |       | Cornerstone Business Center    |       | Industrial   |       | 4,887            |       | 1,469                 |       | 8,437           |       | 491                                          |       | 1,543                  |       | 8,855        |       | 10,398     |       | 2,139                     |       | 1996            |       | 1997         |       |
|                          |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **HUTCHINS,  TEXAS**          |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Duke Intermodal Park          |       | Duke Intermodal I              |       | Industrial   |       | -                |       | 5,290                 |       | 9,641           |       | -                                            |       | 5,290                  |       | 9,641        |       | 14,931     |       | 73                        |       | 2006            |       | 2006         |       |
|                          |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **INDEPENDENCE,  OHIO**       |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Corporate Plaza               |       | Corporate Plaza I              |       | Office       |       | -                |       | 2,116                 |       | 14,072          |       | 1,707                                        |       | 2,116                  |       | 15,779       |       | 17,894     |       | 4,272                     |       | 1989            |       | 1996         |       |
| Corporate Plaza               | ** ** | Corporate Plaza II             | ** ** | Office       | ** ** | -                |       | 1,841                 |       | 11,996          | ** ** | 1,731                                        | ** ** | 1,841                  | ** ** | 13,727       | ** ** | 15,568     | ** ** | 3,764                     | ** ** | 1991            | ** ** | 1996         | ** ** |
| Freedom Square                |       | Freedom Square I               |       | Office       |       | -                | ** ** | 595                   | ** ** | 3,961           |       | 754                                          |       | 600                    |       | 4,711        |       | 5,310      |       | 1,296                     |       | 1980            |       | 1996         |       |
| Freedom Square                |       | Freedom Square II              |       | Office       |       | -                |       | 1,746                 |       | 11,584          |       | 1,150                                        |       | 1,746                  |       | 12,735       |       | 14,481     |       | 3,518                     |       | 1987            |       | 1996         |       |
| Freedom Square                | ** ** | Freedom Square III             | ** ** | Office       | ** ** | -                |       | 701                   |       | 6,290           | ** ** | 39                                           | ** ** | 701                    | ** ** | 6,328        | ** ** | 7,029      | ** ** | 1,917                     | ** ** | 1997            | ** ** | 1997         | ** ** |
| Oak Tree Place                |       | Oak Tree Place                 |       | Office       |       | -                | ** ** | 703                   | ** ** | 4,632           |       | 843                                          |       | 703                    |       | 5,475        |       | 6,178      |       | 1,297                     |       | 1979            |       | 1997         |       |
| Park Center Plaza             |       | Park Center Plaza I            |       | Office       |       | -                |       | 2,193                 |       | 13,155          |       | 399                                          |       | 2,193                  |       | 13,554       |       | 15,747     |       | 4,058                     |       | 1998            |       | 1998         |       |
| Park Center Plaza             |       | Park Center Plaza II           |       | Office       |       | -                |       | 2,190                 |       | 13,353          |       | 24                                           |       | 2,190                  |       | 13,376       |       | 15,566     |       | 3,878                     |       | 1999            |       | 1999         |       |
| Park Center Plaza             |       | Park Center Plaza III          |       | Office       |       | -                |       | 2,190                 |       | 11,975          |       | 2,545                                        |       | 2,190                  |       | 14,519       |       | 16,710     |       | 3,411                     |       | 2000            |       | 2000         |       |
|                          |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **INDIANAPOLIS,  INDIANA**    |       |                           |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| Park 100                      |       | Park 465                       |       | Industrial   |       | -                |       | 124                   |       | 759             |       | -                                            |       | 124                    |       | 759          |       | 883        |       | 34                        |       | 1983            |       | 2005         |       |
| Franklin Road Business  Park  |       | Franklin Road Business Center  |       | Industrial   |       | -                |       | 594                   |       | 10,384          |       | 1,328                                        |       | 594                    |       | 11,712       |       | 12,306     |       | 4,023                     |       | 1962            |       | 1995         |       |
| 6061 Guion Road               |       | 6061 Guion Rd                  |       | Industrial   |       | -                |       | 274                   |       | 1,798           |       | 194                                          |       | 274                    |       | 1,992        |       | 2,266      |       | 593                       |       | 1974            |       | 1995         |       |
| Hillsdale                     |       | Hillsdale Technecenter 4       |       | Industrial   |       | -                |       | 366                   |       | 5,049           |       | 860                                          |       | 366                    |       | 5,910        |       | 6,276      |       | 2,003                     |       | 1987            |       | 1993         |       |
| Hillsdale                     |       | Hillsdale Technecenter 5       |       | Industrial   |       | -                |       | 251                   |       | 2,927           |       | 769                                          |       | 251                    |       | 3,696        |       | 3,947      |       | 1,207                     |       | 1987            |       | 1993         |       |
| Hillsdale                     |       | Hillsdale Technecenter 6       |       | Industrial   |       | -                |       | 315                   |       | 4,334           |       | 1,743                                        |       | 315                    |       | 6,078        |       | 6,393      |       | 2,444                     |       | 1987            |       | 1993         |       |
| Keystone Crossing             |       | 8555 N. River Road             |       | Office       |       | -                |       | -                     |       | 5,998           |       | 1,199                                        |       | -                      |       | 7,197        |       | 7,197      |       | 1,775                     |       | 1985            |       | 1997         |       |
| One North Capitol             |       | One North Capitol              |       | Office       |       | -                |       | 1,439                 |       | 9,313           |       | 776                                          |       | 1,439                  |       | 10,088       |       | 11,528     |       | 2,235                     |       | 1980            |       | 1998         |       |
| Park 100                      |       | Park 100 Bldg 31               |       | Industrial   |       | -                |       | 64                    |       | 384             |       | -                                            |       | 64                     |       | 383          |       | 447        |       | 18                        |       | 1978            |       | 2005         |       |
| Park 100                      |       | Park 100 Building 96           |       | Industrial   |       | -                |       | 1,414                 |       | 13,804          |       | 113                                          |       | 1,667                  |       | 13,664       |       | 15,331     |       | 4,077                     |       | 1994            |       | 1995         |       |
| Park 100                      |       | Park 100 Building 98           |       | Industrial   |       | -                |       | 273                   |       | 8,217           |       | 2,059                                        |       | 273                    |       | 10,275       |       | 10,549     |       | 3,338                     |       | 1968            |       | 1994         |       |
| Park 100                      |       | Park 100 Building 100          |       | Industrial   |       | -                |       | 103                   |       | 2,072           |       | 629                                          |       | 103                    |       | 2,701        |       | 2,804      |       | 797                       |       | 1995            |       | 1995         |       |
| Park 100                      |       | Park 100 Building 102          |       | Office       |       | -                |       | 182                   |       | 1,118           |       | -                                            |       | 182                    |       | 1,118        |       | 1,300      |       | 51                        |       | 1982            |       | 2005         |       |
| Park 100                      |       | Park 100 Building 107          |       | Industrial   |       | -                |       | 99                    |       | 1,698           |       | 321                                          |       | 99                     |       | 2,019        |       | 2,118      |       | 572                       |       | 1984            |       | 1995         |       |
| Park 100                      |       | Park 100 Building 109          |       | Industrial   |       | -                |       | 240                   |       | 1,802           |       | 350                                          |       | 246                    |       | 2,146        |       | 2,392      |       | 993                       |       | 1985            |       | 1986         |       |
| Park 100                      |       | Park 100 Building 116          |       | Office       |       | -                |       | 341                   |       | 3,207           |       | 333                                          |       | 348                    |       | 3,533        |       | 3,881      |       | 1,597                     |       | 1988            |       | 1988         |       |
| Park 100                      |       | Park 100 Building 118          |       | Office       |       | -                |       | 226                   |       | 2,252           |       | 750                                          |       | 230                    |       | 2,998        |       | 3,228      |       | 959                       |       | 1988            |       | 1993         |       |
| Park 100                      |       | Park 100 Building 119          |       | Office       |       | -                |       | 388                   |       | 3,719           |       | 1,393                                        |       | 500                    |       | 5,000        |       | 5,500      |       | 2,012                     |       | 1989            |       | 1993         |       |
| Park 100                      |       | Park 100 Building 122          |       | Industrial   |       | -                |       | 284                   |       | 3,695           |       | 956                                          |       | 290                    |       | 4,645        |       | 4,935      |       | 1,498                     |       | 1990            |       | 1993         |       |
| Park 100                      |       | Park 100 Building 124          |       | Office       |       | -                |       | 227                   |       | 2,771           |       | 8                                            |       | 227                    |       | 2,779        |       | 3,006      |       | 521                       |       | 1992            |       | 2002         |       |
| Park 100                      |       | Park 100 Building 127          |       | Industrial   |       | -                |       | 96                    |       | 1,654           |       | 453                                          |       | 96                     |       | 2,106        |       | 2,203      |       | 594                       |       | 1995            |       | 1995         |       |
| Park 100                      |       | Park 100 Building 141          |       | Industrial   |       | -                |       | 1,120                 |       | 3,305           |       | -                                            |       | 1,120                  |       | 3,305        |       | 4,425      |       | 228                       |       | 2005            |       | 2005         |       |

** **

84

----

** **
| **DUKE REALTY LIMITED PARTNERSHIP** | **Schedule  3** |
|-------------------------------------|-----------------|

**REALESTATE AND ACCUMULATED DEPRECIATION**

**DECEMBER31, 2006**

**(inthousands)**
|                                | ** ** | ** **                    | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Cost Capitalized**                    | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
|--------------------------------|------------|-------------------------------|------------|--------------|------------|------------------|------------|-----------------------|------------|-----------------|------------|----------------------------------------------|------------|------------------------|------------|--------------|------------|------------|------------|---------------------------|------------|-----------------|------------|--------------|------------|
| ** **                     | ** ** | ** **                    | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Subsequent to**                       | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| ** **                     | ** ** | ** **                    | ** ** | **Building** | ** ** | ** **       | ** ** | **Initial Cost** | ** ** | **Development** | ** ** | **Gross Book Value 12/31/06** | ** ** | **Accumulated**        | ** ** | **Year**     | ** ** | **Year**   | ** ** |
| **Development**                | ** ** | **Name**                      | ** ** | **Type**     | ** ** | **Encumbrances** | ** ** | **Land**              | ** ** | **Buildings**   | ** ** | **or Acquisition**                      | ** ** | **Land/Land Imp** | ** ** | **Bldgs/TI** | ** ** | **Total**  | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
| Park 100                       |       | UPS Parking                   |       | Grounds      |       | -                |       | 270                   |       | -               |       | -                                            |       | 270                    |       | -            |       | 270        |       | 82                        |       | N/A             |       | 1997         | ** ** |
| Park 100                       |       | Norgate Ground Lease          |       | Grounds      |       | -                |       | 51                    |       | -               |       | -                                            |       | 51                     |       | -            |       | 51         |       | -                         |       | N/A             |       | 1995         |       |
| Park 100                       |       | Zollman Ground Lease          |       | Grounds      |       | -                |       | 115                   |       | -               |       | -                                            |       | 115                    |       | -            |       | 115        |       | -                         |       | N/A             |       | 1994         |       |
| Park 100                       |       | Bldg 111 Parking Lot          |       | Grounds      |       | -                |       | 196                   |       | -               |       | -                                            |       | 196                    |       | -            |       | 196        |       | 42                        |       | N/A             |       | 1994         |       |
| Park 100                       |       | Becton Dickinson Lot          |       | Grounds      |       | -                |       | -                     |       | -               |       | 13                                           |       | 13                     |       | -            |       | 13         |       | 10                        |       | N/A             |       | 1993         |       |
| Park 100                       |       | 3.58 acres on Allison  Avenue |       | Grounds      |       | -                |       | 242                   |       | -               |       | -                                            |       | 242                    |       | -            |       | 242        |       | 21                        |       | N/A             |       | 2000         |       |
| Park 100                       |       | Hewlett-Packard Land  Lease   |       | Grounds      |       | -                |       | 252                   |       | -               |       | -                                            |       | 252                    |       | -            |       | 252        |       | 17                        |       | N/A             |       | 2003         |       |
| Park 100                       |       | Park 100 Bldg 121 Land  Lease |       | Grounds      |       | -                |       | 5                     |       | -               |       | -                                            |       | 5                      |       | -            |       | 5          |       | -                         |       | N/A             |       | 2003         |       |
| Park 100                       |       | Hewlett Packard Land  Lse-62  |       | Grounds      |       | -                |       | 45                    |       | -               |       | -                                            |       | 45                     |       | -            |       | 45         |       | 3                         |       | N/A             |       | 2003         |       |
| Park 100                       |       | West 79th St. Parking  Lot LL |       | Grounds      |       | -                |       | 350                   |       | -               |       | -                                            |       | 350                    |       | -            |       | 350        |       | 3                         |       | N/A             |       | 2006         |       |
| Park Fletcher                  |       | Park Fletcher Building  33    |       | Industrial   |       | -                |       | 1,237                 |       | 5,264           |       | -                                            |       | 1,237                  |       | 5,264        |       | 6,501      |       | 75                        |       | 1997            |       | 2006         |       |
| Park Fletcher                  |       | Park Fletcher Building  34    |       | Industrial   |       | -                |       | 1,331                 |       | 5,640           |       | -                                            |       | 1,331                  |       | 5,640        |       | 6,971      |       | 82                        |       | 1997            |       | 2006         |       |
| Park Fletcher                  |       | Park Fletcher Building  35    |       | Industrial   |       | -                |       | 380                   |       | 1,503           |       | -                                            |       | 380                    |       | 1,503        |       | 1,883      |       | 25                        |       | 1997            |       | 2006         |       |
| Park Fletcher                  |       | Park Fletcher Building  36    |       | Industrial   |       | -                |       | 476                   |       | 2,355           |       | -                                            |       | 476                    |       | 2,355        |       | 2,831      |       | 30                        |       | 1997            |       | 2006         |       |
| Park Fletcher                  |       | Park Fletcher Building  37    |       | Industrial   |       | -                |       | 286                   |       | 653             |       | -                                            |       | 286                    |       | 653          |       | 939        |       | 17                        |       | 1998            |       | 2006         |       |
| Park Fletcher                  |       | Park Fletcher Building  38    |       | Industrial   |       | -                |       | 1,428                 |       | 5,957           |       | -                                            |       | 1,428                  |       | 5,957        |       | 7,385      |       | 80                        |       | 1999            |       | 2006         |       |
| Park Fletcher                  |       | Park Fletcher Building  39    |       | Industrial   |       | -                |       | 570                   |       | 2,160           |       | -                                            |       | 570                    |       | 2,160        |       | 2,730      |       | 32                        |       | 1999            |       | 2006         |       |
| Park Fletcher                  |       | Park Fletcher Building  40    |       | Industrial   |       | -                |       | 761                   |       | 3,363           |       | -                                            |       | 761                    |       | 3,362        |       | 4,124      |       | 43                        |       | 1999            |       | 2006         |       |
| Park Fletcher                  |       | Park Fletcher Building  41    |       | Industrial   |       | -                |       | 952                   |       | 4,310           |       | -                                            |       | 952                    |       | 4,310        |       | 5,262      |       | 40                        |       | 2001            |       | 2006         |       |
| Park Fletcher                  |       | Park Fletcher Building  42    |       | Industrial   |       | -                |       | 2,095                 |       | 8,301           |       | -                                            |       | 2,095                  |       | 8,301        |       | 10,396     |       | -                         |       | 2001            |       | 2006         |       |
| Parkwood Crossing              |       | One Parkwood Crossing         |       | Office       |       | -                |       | 1,018                 |       | 10,089          |       | 948                                          |       | 1,028                  |       | 11,027       |       | 12,055     |       | 3,241                     |       | 1989            |       | 1995         |       |
| Parkwood Crossing              |       | Two Parkwood Crossing         |       | Office       |       | -                |       | 861                   |       | 6,421           |       | 1,024                                        |       | 871                    |       | 7,435        |       | 8,306      |       | 1,955                     |       | 1996            |       | 1996         |       |
| Parkwood Crossing              |       | Three Parkwood Crossing       |       | Office       |       | -                |       | 1,377                 |       | 9,462           |       | 707                                          |       | 1,387                  |       | 10,159       |       | 11,546     |       | 3,298                     |       | 1997            |       | 1997         |       |
| Parkwood Crossing              |       | Four Parkwood Crossing        |       | Office       |       | -                |       | 1,489                 |       | 11,714          |       | 560                                          |       | 1,537                  |       | 12,225       |       | 13,762     |       | 2,959                     |       | 1998            |       | 1998         |       |
| Parkwood Crossing              |       | Five Parkwood Crossing        |       | Office       |       | -                |       | 1,485                 |       | 12,229          |       | 689                                          |       | 1,528                  |       | 12,875       |       | 14,403     |       | 2,970                     |       | 1999            |       | 1999         |       |
| Parkwood Crossing              |       | Six Parkwood Crossing         |       | Office       |       | -                |       | 1,960                 |       | 15,410          |       | 792                                          |       | 1,960                  |       | 16,201       |       | 18,162     |       | 3,946                     |       | 2000            |       | 2000         |       |
| Parkwood Crossing              |       | Eight Parkwood Crossing       |       | Office       |       | -                |       | 6,435                 |       | 16,419          |       | 137                                          |       | 6,435                  |       | 16,555       |       | 22,990     |       | 2,665                     |       | 2002            |       | 2002         |       |
| Parkwood Crossing              |       | Nine Parkwood Crossing        |       | Office       |       | -                |       | 6,046                 |       | 15,991          |       | -                                            |       | 6,047                  |       | 15,991       |       | 22,038     |       | 813                       |       | 2005            |       | 2005         |       |
| River Road - Indianapolis      |       | River Road Building I         |       | Office       |       | -                |       | 856                   |       | 7,725           |       | 1,735                                        |       | 856                    |       | 9,460        |       | 10,315     |       | 3,024                     |       | 1997            |       | 1998         |       |
| Woodfield                      |       | Two Woodfield Crossing        |       | Office       |       | -                |       | 719                   |       | 9,345           |       | 2,216                                        |       | 733                    |       | 11,548       |       | 12,281     |       | 3,995                     |       | 1987            |       | 1993         |       |
| Woodfield                      |       | Three Woodfield Crossing      |       | Office       |       | -                |       | 3,767                 |       | 19,999          |       | 5,067                                        |       | 3,843                  |       | 24,990       |       | 28,833     |       | 8,243                     |       | 1989            |       | 1993         |       |
| Woodland Corporate Park        |       | Woodland Corporate Park  I    |       | Office       |       | -                |       | 290                   |       | 4,597           |       | 700                                          |       | 320                    |       | 5,267        |       | 5,587      |       | 1,973                     |       | 1998            |       | 1998         |       |
| Woodland Corporate Park        |       | Woodland Corporate Park  II   |       | Office       |       | -                |       | 271                   |       | 3,583           |       | 840                                          |       | 297                    |       | 4,398        |       | 4,695      |       | 1,186                     |       | 1999            |       | 1999         |       |
| Woodland Corporate Park        |       | Woodland Corporate Park  III  |       | Office       |       | -                |       | 1,227                 |       | 4,135           |       | 198                                          |       | 1,227                  |       | 4,333        |       | 5,559      |       | 1,018                     |       | 1999            |       | 2000         |       |
| Woodland Corporate Park        |       | Woodland Corporate Park  IV   |       | Office       |       | -                |       | 715                   |       | 7,245           |       | 528                                          |       | 715                    |       | 7,773        |       | 8,488      |       | 2,041                     |       | 2000            |       | 2000         |       |
| Woodland Corporate Park        |       | Woodland Corporate Park  V    |       | Office       |       | -                |       | 768                   |       | 10,015          |       | 5                                            |       | 768                    |       | 10,021       |       | 10,788     |       | 1,420                     |       | 2002            |       | 2002         |       |
|                           |       |                          |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **LAKE FOREST, ILLINOIS**      | ** ** | ** **                    | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Bradley Business Center        |       | 28188 N. Ballard Drive        |       | Industrial   |       | -                |       | 186                   |       | 1,751           |       | 346                                          |       | 186                    |       | 2,098        |       | 2,284      |       | 507                       |       | 1985            |       | 1998         |       |
| Bradley Business Center        |       | 13777 West Laurel Drive       |       | Industrial   |       | -                |       | 98                    |       | 913             |       | 53                                           |       | 98                     |       | 965          |       | 1,064      |       | 219                       |       | 1981            |       | 1998         |       |
| Bradley Business Center        |       | 13825 West Laurel Drive       |       | Industrial   |       | -                |       | 750                   |       | 1,874           |       | 906                                          |       | 750                    |       | 2,780        |       | 3,530      |       | 946                       |       | 1978            |       | 1999         |       |
| Conway Park                    |       | One Conway Park               |       | Office       |       | -                |       | 1,901                 |       | 17,617          |       | 2,591                                        |       | 1,901                  |       | 20,208       |       | 22,109     |       | 4,526                     |       | 1989            |       | 1998         |       |
|                           |       |                          |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **LAKE MARY, FLORIDA**         | ** ** | ** **                    | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   |       |
| Northpoint                     |       | Northpoint Center I           |       | Office       |       | -                |       | 1,087                 |       | 11,520          |       | 1,426                                        |       | 1,087                  |       | 12,946       |       | 14,033     |       | 2,141                     |       | 1998            |       | 1999         |       |
| Northpoint                     |       | Northpoint Center II          |       | Office       |       | -                |       | 1,202                 |       | 9,632           |       | 537                                          |       | 1,202                  |       | 10,168       |       | 11,370     |       | 1,688                     |       | 1999            |       | 2000         |       |
| Northpoint                     |       | Northpoint III                |       | Office       |       | -                |       | 1,552                 |       | 10,987          |       | 183                                          |       | 1,552                  |       | 11,170       |       | 12,722     |       | 2,401                     |       | 2001            |       | 2001         |       |
| Northpoint                     |       | Northpoint IV                 |       | Office       |       | -                |       | 1,605                 |       | 8,583           |       | 4,294                                        |       | 1,605                  |       | 12,876       |       | 14,481     |       | 1,366                     |       | 2002            |       | 2002         |       |
|                           |       |                          |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **LAWRENCEVILLE, GEORGIA**     | ** ** | ** **                    | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   |       |
| Hillside at Huntcrest          |       | Huntcrest I                   |       | Office       |       | -                |       | 1,193                 |       | 11,061          |       | 28                                           |       | 1,193                  |       | 11,088       |       | 12,281     |       | 2,216                     |       | 2000            |       | 2001         |       |
| Hillside at Huntcrest          |       | Huntcrest II                  |       | Office       |       | -                |       | 927                   |       | 10,599          |       | 43                                           |       | 927                    |       | 10,642       |       | 11,569     |       | 1,860                     |       | 2000            |       | 2001         |       |
| Hillside at Huntcrest          |       | Huntcrest III                 |       | Office       |       | -                |       | 1,358                 |       | 12,937          |       | 241                                          |       | 1,358                  |       | 13,178       |       | 14,536     |       | 2,252                     |       | 2001            |       | 2002         |       |
| Hillside at Huntcrest          |       | Huntcrest IV                  |       | Office       |       | -                |       | 1,295                 |       | 5,742           |       | 331                                          |       | 1,306                  |       | 6,062        |       | 7,368      |       | 551                       |       | 2003            |       | 2003         |       |
| Other Northeast I85 Properties |       | Weyerhaeuser BTS              |       | Industrial   |       | 9,312            |       | 3,974                 |       | 3,101           |       | 21                                           |       | 3,982                  |       | 3,114        |       | 7,096      |       | 529                       |       | 2004            |       | 2004         |       |
|                           |       |                          |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **LEBANON, INDIANA**           | ** ** | ** **                    | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   |       |
| Lebanon Business Park          |       | Lebanon Building 4            |       | Industrial   |       | 13,206           |       | 305                   |       | 9,672           |       | 184                                          |       | 305                    |       | 9,856        |       | 10,162     |       | 2,599                     |       | 1997            |       | 1997         |       |
| Lebanon Business Park          |       | Lebanon Building 9            |       | Industrial   |       | 10,640           |       | 554                   |       | 6,872           |       | 769                                          |       | 554                    |       | 7,641        |       | 8,195      |       | 1,573                     |       | 1999            |       | 1999         |       |
| Lebanon Business Park          |       | Lebanon Building 12           |       | Industrial   |       | 24,670           |       | 5,163                 |       | 13,207          |       | 394                                          |       | 5,163                  |       | 13,601       |       | 18,764     |       | 2,042                     |       | 2002            |       | 2002         |       |
| Lebanon Business Park          |       | Lebanon Building 13           |       | Industrial   |       | 9,388            |       | 561                   |       | 6,579           |       | 83                                           |       | 1,901                  |       | 5,322        |       | 7,223      |       | 950                       |       | 2003            |       | 2003         |       |
| Lebanon Business Park          |       | Lebanon Building 14           |       | Industrial   |       | 19,693           |       | 2,813                 |       | 12,196          |       | 597                                          |       | 2,813                  |       | 12,793       |       | 15,605     |       | 1,033                     |       | 2004            |       | 2004         |       |

 

85

----

 
| **DUKE REALTY LIMITED PARTNERSHIP** | **Schedule  3** |
|-------------------------------------|-----------------|

**REALESTATE AND ACCUMULATED DEPRECIATION**

**DECEMBER31, 2006**

**(inthousands)**

 
|                                 | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Cost Capitalized**                    | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
|---------------------------------|------------|---------------------------------|------------|--------------|------------|------------------|------------|-----------------------|------------|-----------------|------------|----------------------------------------------|------------|------------------------|------------|--------------|------------|------------|------------|---------------------------|------------|-----------------|------------|--------------|------------|
| ** **                      | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Subsequent to**                       | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| ** **                      | ** ** | ** **                      | ** ** | **Building** | ** ** | ** **       | ** ** | **Initial Cost** | ** ** | **Development** | ** ** | **Gross Book Value 12/31/06** | ** ** | **Accumulated**        | ** ** | **Year**     | ** ** | **Year**   | ** ** |
| **Development**                 | ** ** | **Name**                        | ** ** | **Type**     | ** ** | **Encumbrances** | ** ** | **Land**              | ** ** | **Buildings**   | ** ** | **or Acquisition**                      | ** ** | **Land/Land Imp** | ** ** | **Bldgs/TI** | ** ** | **Total**  | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
| **LEBANON, TENNESSEE**          | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Park 840 Logistics Center       |       | Pk 840 Logistics Cnt.  Bldg 653 |       | Industrial   |       | -                |       | 6,776                 |       | 11,125          |       | -                                            |       | 6,776                  |       | 11,125       |       | 17,901     |       | 142                       |       | 2006            |       | 2006         | ** ** |
|                            |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **LISLE, ILLINOIS**             | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   |       |
| Corporate Lakes Business Park   |       | 2275 Cabot Drive                |       | Office       |       | -                |       | 3,355                 |       | 7,008           |       | 6                                            |       | 3,355                  |       | 7,014        |       | 10,369     |       | 632                       |       | 1996            |       | 2004         |       |
|                            |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **MARYLAND HEIGHTS, MISSOURI**  | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   |       |
| Riverport Business Park         |       | Riverport Tower                 |       | Office       |       | -                |       | 3,549                 |       | 30,135          |       | 8,186                                        |       | 3,954                  |       | 37,915       |       | 41,869     |       | 10,017                    |       | 1991            |       | 1997         |       |
| Riverport Business Park         |       | Riverport Distribution          |       | Industrial   |       | -                |       | 242                   |       | 2,238           |       | 680                                          |       | 242                    |       | 2,918        |       | 3,159      |       | 622                       |       | 1990            |       | 1997         |       |
| Riverport Business Park         |       | Express Scripts Service  Center |       | Industrial   |       | -                |       | 1,197                 |       | 8,755           |       | 427                                          |       | 1,197                  |       | 9,182        |       | 10,379     |       | 2,269                     |       | 1992            |       | 1997         |       |
| Riverport Business Park         |       | Express Scripts HQ              |       | Office       |       | -                |       | 2,285                 |       | 8,988           |       | 295                                          |       | 2,285                  |       | 9,283        |       | 11,568     |       | 1,785                     |       | 1999            |       | 1999         |       |
| Riverport Business Park         |       | Riverport 1                     |       | Industrial   |       | -                |       | 900                   |       | 3,463           |       | 256                                          |       | 900                    |       | 3,719        |       | 4,619      |       | 1,387                     |       | 1999            |       | 1999         |       |
| Riverport Business Park         |       | Riverport 2                     |       | Industrial   |       | -                |       | 1,238                 |       | 4,644           |       | 79                                           |       | 1,238                  |       | 4,724        |       | 5,962      |       | 989                       |       | 2000            |       | 2000         |       |
| Riverport Business Park         |       | Riverport 3                     |       | Industrial   |       | -                |       | 1,269                 |       | 4,514           |       | 2,168                                        |       | 1,269                  |       | 6,682        |       | 7,951      |       | 2,115                     |       | 2001            |       | 2001         |       |
|                            |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **MASON, OHIO**                 | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   |       |
| Deerfield Crossing              |       | Deerfield Crossing  Building 1  |       | Office       |       | -                |       | 1,493                 |       | 12,285          |       | 687                                          |       | 1,493                  |       | 12,972       |       | 14,465     |       | 2,992                     |       | 1999            |       | 1999         |       |
| Deerfield Crossing              |       | Deerfield Crossing Building  2  |       | Office       |       | -                |       | 1,069                 |       | 13,987          |       | 478                                          |       | 1,069                  |       | 14,465       |       | 15,534     |       | 4,084                     |       | 2001            |       | 2001         |       |
| Governor's Pointe               |       | Governor's Pointe 4770          |       | Office       |       | -                |       | 586                   |       | 7,896           |       | 496                                          |       | 596                    |       | 8,382        |       | 8,978      |       | 3,669                     |       | 1986            |       | 1988         |       |
| Governor's Pointe               |       | Governor's Pointe 4705          |       | Office       |       | -                |       | 719                   |       | 6,540           |       | 3,594                                        |       | 987                    |       | 9,866        |       | 10,852     |       | 3,274                     |       | 1988            |       | 1993         |       |
| Governor's Pointe               |       | Governor's Pointe 4605          |       | Office       |       | -                |       | 630                   |       | 17,668          |       | 2,765                                        |       | 909                    |       | 20,153       |       | 21,062     |       | 6,358                     |       | 1990            |       | 1993         |       |
| Governor's Pointe               |       | Governor's Pointe 4660          |       | Office       |       | -                |       | 385                   |       | 4,726           |       | 164                                          |       | 529                    |       | 4,746        |       | 5,275      |       | 1,576                     |       | 1997            |       | 1997         |       |
| Governor's Pointe               |       | Governor's Pointe 4680          |       | Office       |       | -                |       | 1,115                 |       | 7,368           |       | 827                                          |       | 1,115                  |       | 8,195        |       | 9,310      |       | 2,086                     |       | 1998            |       | 1998         |       |
| Governors Pointe Retail         |       | Bigg's Supercenter              |       | Retail       |       | -                |       | 2,107                 |       | 9,927           |       | 137                                          |       | 4,227                  |       | 7,943        |       | 12,170     |       | 3,076                     |       | 1996            |       | 1996         |       |
| Governors Pointe Retail         |       | Lowes                           |       | Retail       |       | -                |       | 3,750                 |       | 6,507           |       | 304                                          |       | 3,750                  |       | 6,811        |       | 10,561     |       | 2,832                     |       | 1997            |       | 1997         |       |
|                            |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **MAYFIELD HEIGHTS, OHIO**      | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   |       |
| Landerbrook Corporate Center    |       | Landerbrook Corp. Center  One   |       | Office       |       | -                |       | 1,807                 |       | 10,680          |       | 72                                           |       | 1,808                  |       | 10,750       |       | 12,558     |       | 3,200                     |       | 1997            |       | 1997         |       |
| Landerbrook Corporate Center    |       | Landerbrook Corp. Center  Two   |       | Office       |       | -                |       | 1,382                 |       | 9,793           |       | 2,279                                        |       | 1,382                  |       | 12,071       |       | 13,453     |       | 3,749                     |       | 1998            |       | 1998         |       |
| Landerbrook Corporate Center    |       | Landerbrook Corp. Center  Three |       | Office       |       | -                |       | 1,528                 |       | 8,505           |       | 4,717                                        |       | 1,684                  |       | 13,066       |       | 14,750     |       | 2,659                     |       | 2000            |       | 2001         |       |
|                            |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **MCDONOUGH, GEORGIA**          | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   |       |
| Liberty Distribution Center     |       | 120 Declaration Drive           |       | Industrial   |       | -                |       | 615                   |       | 8,550           |       | 137                                          |       | 615                    |       | 8,687        |       | 9,302      |       | 1,647                     |       | 1997            |       | 1999         |       |
| Liberty Distribution Center     |       | 250 Declaration Drive           |       | Industrial   |       | 22,268           |       | 2,273                 |       | 13,225          |       | 2,191                                        |       | 2,312                  |       | 15,377       |       | 17,689     |       | 2,074                     |       | 2001            |       | 2001         |       |
|                            |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **MENDOTA HEIGHTS, MINNESOTA**  | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   |       |
| Enterprise Industrial Center    |       | Enterprise Industrial  Center   |       | Industrial   |       | 1,367            |       | 864                   |       | 5,039           |       | 550                                          |       | 864                    |       | 5,589        |       | 6,453      |       | 1,320                     |       | 1979            |       | 1997         |       |
|                            |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **MINNETONKA, MINNESOTA**       | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   |       |
| 10801 Red Circle Drive          |       | 10801 Red Circle Dr.            |       | Office       |       | -                |       | 527                   |       | 2,459           |       | 701                                          |       | 527                    |       | 3,160        |       | 3,687      |       | 739                       |       | 1977            |       | 1997         |       |
|                            |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **MONROE, OHIO**                | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   |       |
| Monroe Business Center          |       | Monroe Business Center  Bldg. 1 |       | Industrial   |       | -                |       | 660                   |       | 5,435           |       | 354                                          |       | 660                    |       | 5,789        |       | 6,449      |       | 1,361                     |       | 1992            |       | 1999         |       |
|                            |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **MORRISVILLE, NORTH CAROLINA** | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   |       |
| Perimeter Park                  |       | 507 Airport Blvd                |       | Industrial   |       | -                |       | 1,327                 |       | 8,373           |       | 1,165                                        |       | 1,351                  |       | 9,515        |       | 10,866     |       | 2,063                     |       | 1993            |       | 1999         |       |
| Perimeter Park                  |       | 5151 McCrimmon Pkwy             |       | Office       |       | -                |       | 1,318                 |       | 7,832           |       | 983                                          |       | 1,342                  |       | 8,791        |       | 10,133     |       | 1,604                     |       | 1995            |       | 1999         |       |
| Perimeter Park                  |       | 2600 Perimeter Park Dr          |       | Industrial   |       | -                |       | 975                   |       | 5,392           |       | 384                                          |       | 991                    |       | 5,760        |       | 6,751      |       | 1,213                     |       | 1997            |       | 1999         |       |
| Perimeter Park                  |       | 5150 McCrimmon Pkwy             |       | Industrial   |       | -                |       | 1,739                 |       | 12,249          |       | 647                                          |       | 1,773                  |       | 12,862       |       | 14,635     |       | 2,413                     |       | 1998            |       | 1999         |       |
| Perimeter Park                  |       | 2400 Perimeter Park Dr.         |       | Office       |       | -                |       | 760                   |       | 5,775           |       | 1,160                                        |       | 778                    |       | 6,917        |       | 7,695      |       | 1,439                     |       | 1999            |       | 1999         |       |
| Perimeter Park                  |       | 3000 Perimeter Park Dr  (Met 1) |       | Industrial   |       | 638              |       | 482                   |       | 2,891           |       | 1,136                                        |       | 491                    |       | 4,018        |       | 4,509      |       | 835                       |       | 1989            |       | 1999         |       |
| Perimeter Park                  |       | 2900 Perimeter Park Dr  (Met 2) |       | Industrial   |       | 502              |       | 235                   |       | 1,991           |       | 1,128                                        |       | 264                    |       | 3,090        |       | 3,354      |       | 581                       |       | 1990            |       | 1999         |       |
| Perimeter Park                  |       | 2800 Perimeter Park Dr  (Met 3) |       | Industrial   |       | 881              |       | 777                   |       | 4,825           |       | 593                                          |       | 811                    |       | 5,385        |       | 6,196      |       | 1,035                     |       | 1992            |       | 1999         |       |
| Perimeter Park                  |       | 1100 Perimeter Park  Drive      |       | Industrial   |       | -                |       | 777                   |       | 5,948           |       | 799                                          |       | 794                    |       | 6,730        |       | 7,525      |       | 1,374                     |       | 1990            |       | 1999         |       |
| Perimeter Park                  |       | 1400 Perimeter Park  Drive      |       | Office       |       | -                |       | 666                   |       | 4,561           |       | 1,214                                        |       | 900                    |       | 5,541        |       | 6,441      |       | 1,242                     |       | 1991            |       | 1999         |       |
| Perimeter Park                  |       | 1500 Perimeter Park  Drive      |       | Office       |       | -                |       | 1,148                 |       | 10,302          |       | 395                                          |       | 1,177                  |       | 10,669       |       | 11,846     |       | 2,058                     |       | 1996            |       | 1999         |       |
| Perimeter Park                  |       | 1600 Perimeter Park  Drive      |       | Office       |       | -                |       | 1,463                 |       | 10,021          |       | 2,021                                        |       | 1,513                  |       | 11,992       |       | 13,505     |       | 2,392                     |       | 1994            |       | 1999         |       |
| Perimeter Park                  |       | 1800 Perimeter Park  Drive      |       | Office       |       | -                |       | 907                   |       | 5,678           |       | 901                                          |       | 993                    |       | 6,493        |       | 7,486      |       | 1,316                     |       | 1994            |       | 1999         |       |
| Perimeter Park                  |       | 2000 Perimeter Park  Drive      |       | Office       |       | -                |       | 788                   |       | 5,807           |       | 891                                          |       | 842                    |       | 6,644        |       | 7,485      |       | 1,701                     |       | 1997            |       | 1999         |       |

 

86

----

 
| **DUKE REALTY LIMITED PARTNERSHIP** | **Schedule  3** |
|-------------------------------------|-----------------|

**REALESTATE AND ACCUMULATED DEPRECIATION**

**DECEMBER31, 2006**

**(inthousands)**

 
|                               | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Cost Capitalized**                    | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
|-------------------------------|------------|---------------------------------|------------|--------------|------------|------------------|------------|-----------------------|------------|-----------------|------------|----------------------------------------------|------------|------------------------|------------|--------------|------------|------------|------------|---------------------------|------------|-----------------|------------|--------------|------------|
| ** **                    | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Subsequent to**                       | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| ** **                    | ** ** | ** **                      | ** ** | **Building** | ** ** | ** **       | ** ** | **Initial Cost** | ** ** | **Development** | ** ** | **Gross Book Value 12/31/06** | ** ** | **Accumulated**        | ** ** | **Year**     | ** ** | **Year**   | ** ** |
| **Development**               | ** ** | **Name**                        | ** ** | **Type**     | ** ** | **Encumbrances** | ** ** | **Land**              | ** ** | **Buildings**   | ** ** | **or Acquisition**                      | ** ** | **Land/Land Imp** | ** ** | **Bldgs/TI** | ** ** | **Total**  | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
| Perimeter Park                |       | 1700 Perimeter Center  West     |       | Office       |       | -                |       | 1,230                 |       | 10,765          |       | 2,779                                        |       | 1,260                  |       | 13,514       |       | 14,774     |       | 2,473                     |       | 1997            |       | 1999         | ** ** |
| Perimeter Park                |       | 3900 N. Paramount Parkway       |       | Office       |       | -                |       | 540                   |       | 13,269          |       | 256                                          |       | 574                    |       | 13,491       |       | 14,065     |       | 2,549                     |       | 1998            |       | 1999         | ** ** |
| Perimeter Park                |       | 3900 S.Paramount Pkwy           |       | Office       |       | -                |       | 1,575                 |       | 12,212          |       | 1,486                                        |       | 1,612                  |       | 13,661       |       | 15,273     |       | 3,409                     |       | 2000            |       | 1999         |       |
| Perimeter Park                |       | 5200 East Paramount             |       | Office       |       | -                |       | 1,748                 |       | 17,388          |       | 1,011                                        |       | 1,797                  |       | 18,349       |       | 20,146     |       | 4,943                     |       | 1999            |       | 1999         |       |
| Perimeter Park                |       | 3500 Paramount Pkwy             |       | Office       |       | -                |       | 755                   |       | 12,948          |       | 137                                          |       | 755                    |       | 13,085       |       | 13,840     |       | 3,704                     |       | 1999            |       | 2000         |       |
| Perimeter Park                |       | 2700 Perimeter Park             |       | Industrial   |       | -                |       | 662                   |       | 3,209           |       | 1,685                                        |       | 662                    |       | 4,894        |       | 5,556      |       | 1,184                     |       | 2001            |       | 2001         |       |
| Perimeter Park                |       | 5200 West Paramount             |       | Office       |       | -                |       | 1,831                 |       | 13,288          |       | 1,007                                        |       | 1,831                  |       | 14,295       |       | 16,126     |       | 2,421                     |       | 2000            |       | 2001         |       |
| Perimeter Park                |       | 2450 Perimeter Park             |       | Office       |       | -                |       | 669                   |       | 4,003           |       | 25                                           |       | 669                    |       | 4,028        |       | 4,697      |       | 1,479                     |       | 2001            |       | 2001         |       |
| Perimeter Park                |       | 3800 Paramount Parkway          |       | Office       |       | -                |       | 2,657                 |       | 7,329           |       | -                                            |       | 2,657                  |       | 7,328        |       | 9,985      |       | 52                        |       | 2006            |       | 2006         |       |
| Perimeter Park                |       | Lenovo BTS I                    |       | Office       |       | -                |       | 1,439                 |       | 16,961          |       | -                                            |       | 1,439                  |       | 16,961       |       | 18,400     |       | -                         |       | 2006            |       | 2006         |       |
| Woodlake Center               |       | 100 Innovation Avenue  (Woodlk) |       | Industrial   |       | -                |       | 633                   |       | 4,003           |       | 282                                          |       | 633                    |       | 4,285        |       | 4,918      |       | 999                       |       | 1994            |       | 1999         |       |
| Woodlake Center               |       | 101 Innovation  Ave(Woodlk III) |       | Industrial   |       | -                |       | 615                   |       | 4,095           |       | 135                                          |       | 615                    |       | 4,230        |       | 4,845      |       | 837                       |       | 1997            |       | 1999         |       |
| Woodlake Center               |       | 200 Innovation Drive            |       | Industrial   |       | -                |       | 357                   |       | 4,494           |       | 28                                           |       | 357                    |       | 4,522        |       | 4,879      |       | 1,074                     |       | 1999            |       | 1999         |       |
| Woodlake Center               |       | 501 Innovation Ave.             |       | Industrial   |       | -                |       | 640                   |       | 5,632           |       | 158                                          |       | 640                    |       | 5,790        |       | 6,430      |       | 985                       |       | 1999            |       | 1999         |       |
| Woodlake Center               |       | 1000 Innovation (Woodlk  6)     |       | Industrial   |       | -                |       | 514                   |       | 2,927           |       | 59                                           |       | 514                    |       | 2,987        |       | 3,501      |       | 360                       |       | 1996            |       | 2002         |       |
| Woodlake Center               |       | 1200 Innovation (Woodlk  7)     |       | Industrial   |       | -                |       | 740                   |       | 5,936           |       | 59                                           |       | 740                    |       | 5,995        |       | 6,735      |       | 1,529                     |       | 1996            |       | 2002         |       |
| Woodlake Center               |       | Woodlake VIII                   |       | Industrial   |       | -                |       | 908                   |       | 1,517           |       | 339                                          |       | 908                    |       | 1,856        |       | 2,764      |       | 313                       |       | 2003            |       | 2003         |       |
|                          |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **NAPERVILLE, ILLINOIS**      | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   |       |
| Meridian Business Campus      |       | 1835 Jefferson                  |       | Industrial   |       | -                |       | 3,180                 |       | 7,959           |       | 1                                            |       | 3,180                  |       | 7,960        |       | 11,140     |       | 677                       |       | 2003            |       | 2003         |       |
|                          |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **NASHVILLE, TENNESSEE**      | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   |       |
| Airpark East                  |       | Airpark East-800  Commerce Dr.  |       | Industrial   |       | -                |       | 1,564                 |       | 3,341           |       | 699                                          |       | 1,564                  |       | 4,040        |       | 5,604      |       | 836                       |       | 2001            |       | 2002         |       |
| Haywood Oaks                  |       | Haywood Oaks Building 8         |       | Industrial   |       | -                |       | 617                   |       | 3,514           |       | 230                                          |       | 751                    |       | 3,610        |       | 4,360      |       | 1,467                     |       | 1997            |       | 1997         |       |
| Lakeview Place                |       | Three Lakeview                  |       | Office       |       | -                |       | 2,126                 |       | 13,055          |       | 2,121                                        |       | 2,126                  |       | 15,176       |       | 17,302     |       | 3,773                     |       | 1999            |       | 1999         |       |
| Lakeview Place                |       | One Lakeview Place              |       | Office       |       | -                |       | 2,046                 |       | 11,486          |       | 1,361                                        |       | 2,123                  |       | 12,770       |       | 14,893     |       | 2,995                     |       | 1986            |       | 1998         |       |
| Lakeview Place                |       | Two Lakeview Place              |       | Office       |       | -                |       | 2,046                 |       | 11,856          |       | 1,871                                        |       | 2,046                  |       | 13,727       |       | 15,773     |       | 2,893                     |       | 1988            |       | 1998         |       |
| Riverview Business Center     |       | Riverview Office  Building      |       | Office       |       | -                |       | 847                   |       | 6,133           |       | 1,254                                        |       | 847                    |       | 7,387        |       | 8,234      |       | 1,626                     |       | 1983            |       | 1999         |       |
| Nashville Business Center     |       | Nashville Business  Center I    |       | Industrial   |       | -                |       | 936                   |       | 6,033           |       | 110                                          |       | 936                    |       | 6,143        |       | 7,079      |       | 1,226                     |       | 1997            |       | 1999         |       |
| Nashville Business Center     |       | Nashville Business  Center II   |       | Industrial   |       | -                |       | 5,659                 |       | 10,206          |       | -                                            |       | 5,659                  |       | 10,206       |       | 15,866     |       | 510                       |       | 2005            |       | 2005         |       |
| Not Applicable                |       | Powertel Pk Lot at  Grassmere   |       | Grounds      |       | -                |       | 1,050                 |       | -               |       | 39                                           |       | 1,089                  |       | -            |       | 1,089      |       | 204                       |       | 2003            |       | 2003         |       |
|                          |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **NEW ALBANY, OHIO**          | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| New Albany                    |       | 6525 West Campus Oval           |       | Office       |       | -                |       | 842                   |       | 3,608           |       | 2,224                                        |       | 881                    |       | 5,793        |       | 6,674      |       | 812                       |       | 1993            |       | 1999         |       |
|                          |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **NILES, ILLINOIS**           | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Niles Distribution Center     |       | Niles Distribution  Center      |       | Industrial   |       | -                |       | 4,920                 |       | 3,669           |       | 8                                            |       | 4,920                  |       | 3,677        |       | 8,597      |       | 306                       |       | 1950            |       | 2004         |       |
|                          |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **NORCROSS, GEORGIA**         | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Gwinnett Park                 |       | 4436 Park Drive                 |       | Industrial   |       | -                |       | 18                    |       | 1,536           |       | 36                                           |       | 26                     |       | 1,563        |       | 1,590      |       | 377                       |       | 1968            |       | 1999         |       |
| Gwinnett Park                 |       | 1835 Shackleford Court          |       | Office       |       | -                |       | 29                    |       | 6,150           |       | 1,009                                        |       | 29                     |       | 7,159        |       | 7,188      |       | 1,532                     |       | 1990            |       | 1999         |       |
| Gwinnett Park                 |       | 1854 Shackelford Court          |       | Office       |       | -                |       | 52                    |       | 9,842           |       | 1,322                                        |       | 52                     |       | 11,165       |       | 11,216     |       | 2,216                     |       | 1985            |       | 1999         |       |
| Gwinnett Park                 |       | 4275 Shackleford Road           |       | Office       |       | -                |       | 8                     |       | 2,101           |       | 545                                          |       | 12                     |       | 2,643        |       | 2,655      |       | 642                       |       | 1985            |       | 1999         |       |
|                          |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **NORTHLAKE, ILLINOIS**       | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   |       |
| Northlake 1 Park              |       | Northlake I                     |       | Industrial   |       | -                |       | 5,721                 |       | 10,859          |       | -                                            |       | 5,721                  |       | 10,859       |       | 16,580     |       | 1,644                     |       | 2002            |       | 2002         |       |
| Northlake Distribution Park   |       | Northlake III - Grand  Whse.    |       | Industrial   |       | -                |       | 5,382                 |       | 5,708           |       | -                                            |       | 5,382                  |       | 5,708        |       | 11,090     |       | 51                        |       | 2006            |       | 2006         |       |
|                          |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **NORTH OLMSTED, OHIO**       | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   |       |
| Great Northern Corporate Ctr. |       | Great Northern Corp  Center I   |       | Office       |       | -                |       | 1,048                 |       | 6,913           |       | 1,465                                        |       | 1,040                  |       | 8,387        |       | 9,426      |       | 2,308                     |       | 1985            |       | 1996         |       |
| Great Northern Corporate Ctr. |       | Great Northern Corp  Center II  |       | Office       |       | -                |       | 1,048                 |       | 7,149           |       | 1,337                                        |       | 1,048                  |       | 8,486        |       | 9,534      |       | 2,416                     |       | 1987            |       | 1996         |       |
| Great Northern Corporate Ctr. |       | Great Northern Corp  Center III |       | Office       |       | -                |       | 604                   |       | 5,660           |       | 430                                          |       | 604                    |       | 6,091        |       | 6,694      |       | 1,804                     |       | 1999            |       | 1999         |       |
|                          |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         |       |
| **OAK BROOK, ILLINOIS**       | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   |       |
| 2000 York Road                |       | 2000 York Road                  |       | Office       |       | 10,959           |       | 2,625                 |       | 15,831          |       | -                                            |       | 2,625                  |       | 15,831       |       | 18,456     |       | 3,320                     |       | 1960            |       | 2005         |       |

 

87

----

 
| **DUKE REALTY LIMITED PARTNERSHIP** | **Schedule  3** |
|-------------------------------------|-----------------|

**REALESTATE AND ACCUMULATED DEPRECIATION**

**DECEMBER31, 2006**

**(inthousands)**

 
|                                  | ** ** | ** **                          | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Cost Capitalized**                    | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
|----------------------------------|------------|-------------------------------------|------------|--------------|------------|------------------|------------|-----------------------|------------|-----------------|------------|----------------------------------------------|------------|------------------------|------------|--------------|------------|------------|------------|---------------------------|------------|-----------------|------------|--------------|------------|
| ** **                       | ** ** | ** **                          | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Subsequent to**                       | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| ** **                       | ** ** | ** **                          | ** ** | **Building** | ** ** | ** **       | ** ** | **Initial Cost** | ** ** | **Development** | ** ** | **Gross Book Value 12/31/06** | ** ** | **Accumulated**        | ** ** | **Year**     | ** ** | **Year**   | ** ** |
| **Development**                  | ** ** | **Name**                            | ** ** | **Type**     | ** ** | **Encumbrances** | ** ** | **Land**              | ** ** | **Buildings**   | ** ** | **or Acquisition**                      | ** ** | **Land/Land Imp** | ** ** | **Bldgs/TI** | ** ** | **Total**  | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
| **OLIVETTE, MISSOURI**           |       |                                |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         | ** ** |
| Warson Commerce Center           |       | Warson Commerce Center              |       | Industrial   |       | -                |       | 749                   |       | 5,267           |       | 826                                          |       | 749                    |       | 6,093        |       | 6,842      |       | 1,401                     |       | 1987            |       | 1998         | ** ** |
|                             |       |                                |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         | ** ** |
| **ORLANDO, FLORIDA**             | ** ** | ** **                          | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Liberty Park at Southcenter      |       | outhcenter I–Brede/Allied  BTS | S          | Industrial   |       | -                |       | 3,094                 |       | 3,867           |       | -                                            |       | 3,094                  |       | 3,867        |       | 6,961      |       | 684                       |       | 2002            |       | 2002         | ** ** |
| Parksouth Distribution Center    |       | Parksouth Dist. Ctr–Bldg  B    |       | Industrial   |       | -                |       | 565                   |       | 4,893           |       | 431                                          |       | 570                    |       | 5,319        |       | 5,889      |       | 1,078                     |       | 1996            |       | 1999         | ** ** |
| Parksouth Distribution Center    |       | Parksouth Dist. Ctr–Bldg  A    |       | Industrial   |       | -                |       | 493                   |       | 4,545           |       | 222                                          |       | 498                    |       | 4,762        |       | 5,260      |       | 915                       |       | 1997            |       | 1999         | ** ** |
| Parksouth Distribution Center    |       | Parksouth Dist. Ctr–Bldg  D    |       | Industrial   |       | -                |       | 593                   |       | 4,131           |       | 72                                           |       | 597                    |       | 4,199        |       | 4,796      |       | 802                       |       | 1998            |       | 1999         | ** ** |
| Parksouth Distribution Center    |       | Parksouth Dist. Ctr–Bldg  E    |       | Industrial   |       | -                |       | 649                   |       | 4,549           |       | 344                                          |       | 653                    |       | 4,889        |       | 5,542      |       | 947                       |       | 1997            |       | 1999         | ** ** |
| Parksouth Distribution Center    |       | Parksouth Dist. Ctr–Bldg  F    |       | Industrial   |       | -                |       | 1,030                 |       | 5,232           |       | 1,089                                        |       | 1,035                  |       | 6,317        |       | 7,351      |       | 1,406                     |       | 1999            |       | 1999         | ** ** |
| Parksouth Distribution Center    |       | Parksouth Dist. Ctr–Bldg  H    |       | Industrial   |       | -                |       | 725                   |       | 3,833           |       | 37                                           |       | 730                    |       | 3,865        |       | 4,595      |       | 859                       |       | 2000            |       | 2000         | ** ** |
| Parksouth Distribution Center    |       | Chase BTS–Orlando              |       | Industrial   |       | -                |       | 598                   |       | 2,032           |       | 1,274                                        |       | 674                    |       | 3,229        |       | 3,904      |       | 421                       |       | 2000            |       | 2001         | ** ** |
| Parksouth Distribution Center    |       | Parksouth–Benjamin Moore  BTS  |       | Industrial   |       | -                |       | 708                   |       | 2,070           |       | 9                                            |       | 1,115                  |       | 1,673        |       | 2,787      |       | 271                       |       | 2003            |       | 2003         | ** ** |
| Crossroads Business Park         |       | Crossroads Business  Center VII     |       | Industrial   |       | -                |       | 2,803                 |       | 5,891           |       | -                                            |       | 2,803                  |       | 5,891        |       | 8,694      |       | 109                       |       | 2006            |       | 2006         | ** ** |
|                             |       |                                |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         | ** ** |
| **PARK RIDGE, ILLINOIS**         | ** ** | ** **                          | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| O'Hare Corporate Centre          |       | O'Hare Corporate Centre             |       | Office       |       | -                |       | 1,476                 |       | 8,819           |       | 632                                          |       | 1,476                  |       | 9,451        |       | 10,926     |       | 935                       |       | 1985            |       | 2003         | ** ** |
|                             |       |                                |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         | ** ** |
| **PEPPER PIKE, OHIO**            | ** ** | ** **                          | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Corporate Circle                 |       | Corporate Circle                    |       | Office       |       | -                |       | 1,696                 |       | 11,262          |       | 3,133                                        |       | 1,698                  |       | 14,393       |       | 16,090     |       | 3,948                     |       | 1983            |       | 1996         | ** ** |
|                             |       |                                |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         | ** ** |
| **PLAINFIELD, INDIANA**          | ** ** | ** **                          | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Plainfield Business Park         |       | Plainfield Building 1               |       | Industrial   |       | 16,372           |       | 1,104                 |       | 11,151          |       | 415                                          |       | 1,104                  |       | 11,567       |       | 12,671     |       | 2,012                     |       | 2000            |       | 2000         | ** ** |
| Plainfield Business Park         |       | Plainfield Building 2               |       | Industrial   |       | 17,230           |       | 1,387                 |       | 9,437           |       | 2,475                                        |       | 2,492                  |       | 10,807       |       | 13,299     |       | 2,073                     |       | 2000            |       | 2000         | ** ** |
| Plainfield Business Park         |       | Plainfield Building 3               |       | Industrial   |       | 17,368           |       | 2,016                 |       | 9,238           |       | 2,250                                        |       | 2,016                  |       | 11,488       |       | 13,504     |       | 998                       |       | 2002            |       | 2002         | ** ** |
| Plainfield Business Park         |       | Plainfield Building 5               |       | Industrial   |       | 13,077           |       | 2,726                 |       | 7,284           |       | 140                                          |       | 2,726                  |       | 7,424        |       | 10,150     |       | 710                       |       | 2004            |       | 2004         | ** ** |
| Plainfield Business Park         |       | Plainfield Building 8               |       | Industrial   |       | 20,556           |       | 4,527                 |       | 11,928          |       | -                                            |       | 4,527                  |       | 11,928       |       | 16,456     |       | 209                       |       | 2006            |       | 2006         | ** ** |
|                             |       |                                |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         | ** ** |
| **PLANO, TEXAS**                 | ** ** | ** **                          | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| 5556 & 5560 Tennyson Parkway |       | 5560 Tennyson Parkway               |       | Office       |       | -                |       | 1,527                 |       | 5,831           |       | 724                                          |       | 1,527                  |       | 6,555        |       | 8,082      |       | 1,419                     |       | 1997            |       | 1999         | ** ** |
| 5556 & 5560 Tennyson Parkway |       | 5556 Tennyson Parkway               |       | Office       |       | -                |       | 1,181                 |       | 11,154          |       | 206                                          |       | 1,181                  |       | 11,359       |       | 12,540     |       | 2,714                     |       | 1999            |       | 1999         | ** ** |
|                             |       |                                |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         | ** ** |
| **PLYMOUTH, MINNESOTA**          | ** ** | ** **                          | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Medicine Lake Indust Ctr         |       | Medicine Lake Indus.  Center        |       | Industrial   |       | 2,354            |       | 1,145                 |       | 6,512           |       | 861                                          |       | 1,145                  |       | 7,373        |       | 8,518      |       | 2,087                     |       | 1970            |       | 1997         | ** ** |
|                             |       |                                |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         | ** ** |
| **PORT WENTWORTH, GEORGIA**      | ** ** | ** **                          | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Grange Road                      |       | 318 Grange Road                     |       | Industrial   |       | 3,051            |       | 957                   |       | 4,816           |       | -                                            |       | 957                    |       | 4,817        |       | 5,774      |       | 183                       |       | 2001            |       | 2006         | ** ** |
| Grange Road                      |       | 246 Grange Road                     |       | Industrial   |       | 6,382            |       | 1,191                 |       | 8,294           |       | -                                            |       | 1,191                  |       | 8,293        |       | 9,485      |       | 246                       |       | 2006            |       | 2006         | ** ** |
| Crossroads (Savannah)            |       | 100 Ocean Link Way–Godley  Rd  |       | Industrial   |       | 11,423           |       | 2,306                 |       | 13,389          |       | -                                            |       | 2,306                  |       | 13,389       |       | 15,695     |       | 192                       |       | 2006            |       | 2006         | ** ** |
|                             |       |                                |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         | ** ** |
| **RALEIGH, NORTH CAROLINA**      | ** ** | ** **                          | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Brook Forest                     |       | Brook Forest I                      |       | Office       |       | -                |       | 1,242                 |       | 5,948           |       | 541                                          |       | 1,242                  |       | 6,489        |       | 7,731      |       | 1,798                     |       | 2000            |       | 2000         | ** ** |
| Centerview                       |       | Centerview 5540                     |       | Office       |       | -                |       | 773                   |       | 6,306           |       | 1,408                                        |       | 773                    |       | 7,714        |       | 8,487      |       | 882                       |       | 1986            |       | 2003         | ** ** |
| Centerview                       |       | Centerview 5565                     |       | Office       |       | -                |       | 513                   |       | 4,831           |       | 613                                          |       | 513                    |       | 5,444        |       | 5,957      |       | 533                       |       | 1999            |       | 2003         | ** ** |
| Centerview                       |       | Centerview 5580                     |       | Office       |       | -                |       | 768                   |       | 5,675           |       | 324                                          |       | 768                    |       | 6,000        |       | 6,767      |       | 538                       |       | 1987            |       | 2003         | ** ** |
| Crabtree Overlook                |       | Crabtree Overlook                   |       | Office       |       | -                |       | 2,164                 |       | 21,050          |       | 135                                          |       | 2,164                  |       | 21,185       |       | 23,349     |       | 5,012                     |       | 2000            |       | 2001         | ** ** |
| Interchange Plaza                |       | 801 Jones Franklin Rd               |       | Office       |       | -                |       | 1,351                 |       | 7,766           |       | 764                                          |       | 1,351                  |       | 8,530        |       | 9,881      |       | 1,712                     |       | 1995            |       | 1999         | ** ** |
| Interchange Plaza                |       | 5520 Capital Ctr Dr  (Intrch I)     |       | Office       |       | -                |       | 842                   |       | 4,395           |       | 530                                          |       | 842                    |       | 4,926        |       | 5,767      |       | 1,217                     |       | 1993            |       | 1999         | ** ** |
| Walnut Creek                     |       | Walnut Creek Business  Park #1      |       | Industrial   |       | -                |       | 419                   |       | 3,100           |       | 532                                          |       | 419                    |       | 3,631        |       | 4,050      |       | 1,122                     |       | 2001            |       | 2001         | ** ** |
| Walnut Creek                     |       | Walnut Creek Business  Park #2      |       | Industrial   |       | -                |       | 456                   |       | 3,774           |       | 256                                          |       | 456                    |       | 4,030        |       | 4,486      |       | 923                       |       | 2001            |       | 2001         | ** ** |
| Walnut Creek                     |       | Walnut Creek Business  Park #3      |       | Industrial   |       | -                |       | 679                   |       | 4,169           |       | 1,210                                        |       | 679                    |       | 5,380        |       | 6,059      |       | 932                       |       | 2001            |       | 2001         | ** ** |
| Walnut Creek                     |       | Walnut Creek IV                     |       | Industrial   |       | -                |       | 2,038                 |       | 2,977           |       | 418                                          |       | 2,038                  |       | 3,395        |       | 5,433      |       | 613                       |       | 2004            |       | 2004         | ** ** |
|                             |       |                                |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         | ** ** |
| **RINCON, GEORGIA**              | ** ** | ** **                          | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| RINCON                           |       | 400 Ft. Howard Road                 |       | Industrial   |       | -                |       | 5,299                 |       | 10,119          |       | -                                            |       | 5,299                  |       | 10,119       |       | 15,418     |       | -                         |       | 2002            |       | 2006         | ** ** |
|                             |       |                                |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         | ** ** |
| **ROMEOVILLE, ILLINOIS**         | ** ** | ** **                          | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Crossroads Business Park         |       | Chapco Carton Company               |       | Industrial   |       | -                |       | 917                   |       | 5,217           |       | 49                                           |       | 917                    |       | 5,266        |       | 6,183      |       | 660                       |       | 1999            |       | 2002         | ** ** |
| Park 55                          |       | Park 55 Bldg. 1                     |       | Industrial   |       | -                |       | 6,433                 |       | 8,997           |       | 917                                          |       | 6,433                  |       | 9,913        |       | 16,346     |       | 973                       |       | 2004            |       | 2004         | ** ** |

 

88

----

 
| **DUKE REALTY LIMITED PARTNERSHIP** | **Schedule  3** |
|-------------------------------------|-----------------|

**REALESTATE AND ACCUMULATED DEPRECIATION**

**DECEMBER31, 2006**

**(inthousands)**

 
|                               | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Cost Capitalized**                    | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
|-------------------------------|------------|---------------------------------|------------|--------------|------------|------------------|------------|-----------------------|------------|-----------------|------------|----------------------------------------------|------------|------------------------|------------|--------------|------------|------------|------------|---------------------------|------------|-----------------|------------|--------------|------------|
| ** **                    | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Subsequent to**                       | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| ** **                    | ** ** | ** **                      | ** ** | **Building** | ** ** | ** **       | ** ** | **Initial Cost** | ** ** | **Development** | ** ** | **Gross Book Value 12/31/06** | ** ** | **Accumulated**        | ** ** | **Year**     | ** ** | **Year**   | ** ** |
| **Development**               | ** ** | **Name**                        | ** ** | **Type**     | ** ** | **Encumbrances** | ** ** | **Land**              | ** ** | **Buildings**   | ** ** | **or Acquisition**                      | ** ** | **Land/Land Imp** | ** ** | **Bldgs/TI** | ** ** | **Total**  | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
| Office Development            |       | GSA BTS                         |       | Office       |       | -                |       | 5,625                 |       | 7,711           |       | -                                            |       | 5,625                  |       | 7,710        |       | 13,335     |       | -                         |       | 2006            |       | 2006         | ** ** |
| O'Hare International Ctr      |       | O'Hare International Ctr  I     |       | Office       |       | -                |       | 7,700                 |       | 33,354          |       | -                                            |       | 7,700                  |       | 33,353       |       | 41,054     |       | 3,765                     |       | 1984            |       | 2005         | ** ** |
| O'Hare International Ctr      |       | O'Hare International Ctr  II    |       | Office       |       | -                |       | 8,103                 |       | 31,999          |       | -                                            |       | 8,103                  |       | 31,999       |       | 40,102     |       | 3,188                     |       | 1987            |       | 2005         | ** ** |
| Riverway                      |       | Riverway East                   |       | Office       |       | -                |       | 13,664                |       | 34,570          |       | -                                            |       | 13,664                 |       | 34,569       |       | 48,233     |       | 4,238                     |       | 1987            |       | 2005         | ** ** |
| Riverway                      |       | Riverway West                   |       | Office       |       | -                |       | 3,294                 |       | 39,676          |       | -                                            |       | 3,294                  |       | 39,676       |       | 42,971     |       | 3,154                     |       | 1989            |       | 2005         | ** ** |
| Riverway                      |       | Riverway Central                |       | Office       |       | -                |       | 4,229                 |       | 68,293          |       | -                                            |       | 4,229                  |       | 68,293       |       | 72,522     |       | 5,125                     |       | 1989            |       | 2005         | ** ** |
| Riverway                      |       | Riverway Retail                 |       | Retail       |       | -                |       | 189                   |       | -               |       | -                                            |       | 189                    |       | -            |       | 189        |       | 45                        |       | 1987            |       | 2005         | ** ** |
|                          |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         | ** ** |
| **SAVANNAH, GEORGIA**         | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Gulfstream Road               |       | 198 Gulfstream                  |       | Industrial   |       | 6,296            |       | 549                   |       | 4,255           |       | -                                            |       | 549                    |       | 4,255        |       | 4,804      |       | 157                       |       | 1997            |       | 2006         | ** ** |
| Gulfstream Road               |       | 194 Gulfstream                  |       | Industrial   |       | 1,114            |       | 412                   |       | 2,816           |       | -                                            |       | 412                    |       | 2,817        |       | 3,229      |       | 105                       |       | 1998            |       | 2006         | ** ** |
| Gulfstream Road               |       | 190 Gulfstream                  |       | Industrial   |       | 2,415            |       | 689                   |       | 4,916           |       | -                                            |       | 689                    |       | 4,916        |       | 5,606      |       | 180                       |       | 1999            |       | 2006         | ** ** |
| Grange Road                   |       | 250 Grange Road                 |       | Industrial   |       | 4,975            |       | 928                   |       | 8,648           |       | -                                            |       | 928                    |       | 8,647        |       | 9,575      |       | 279                       |       | 2002            |       | 2006         | ** ** |
| Grange Road                   |       | 248 Grange Road                 |       | Industrial   |       | 2,119            |       | 664                   |       | 3,496           |       | -                                            |       | 664                    |       | 3,496        |       | 4,160      |       | 118                       |       | 2002            |       | 2006         | ** ** |
| SPA Park                      |       | 80 Coleman Blvd.                |       | Industrial   |       | 2,238            |       | 782                   |       | 3,349           |       | -                                            |       | 782                    |       | 3,349        |       | 4,131      |       | 114                       |       | 2002            |       | 2006         | ** ** |
| Crossroads (Savannah)         |       | 163 Portside Court              |       | Industrial   |       | 21,469           |       | 8,433                 |       | 8,366           |       | -                                            |       | 8,433                  |       | 8,367        |       | 16,800     |       | 468                       |       | 2004            |       | 2006         | ** ** |
| Crossroads (Savannah)         |       | 151 Portside Court              |       | Industrial   |       | 4,018            |       | 966                   |       | 7,155           |       | -                                            |       | 966                    |       | 7,155        |       | 8,121      |       | 150                       |       | 2003            |       | 2006         | ** ** |
| Crossroads (Savannah)         |       | 175 Portside Court              |       | Industrial   |       | 14,319           |       | 4,300                 |       | 15,696          |       | -                                            |       | 4,300                  |       | 15,695       |       | 19,995     |       | 609                       |       | 2005            |       | 2006         | ** ** |
| Crossroads (Savannah)         |       | 150 Portside Court              |       | Industrial   |       | 11,462           |       | 3,071                 |       | 23,914          |       | -                                            |       | 3,071                  |       | 23,914       |       | 26,986     |       | 739                       |       | 2001            |       | 2006         | ** ** |
| Crossroads (Savannah)         |       | 235 Jimmy Deloach  Parkway      |       | Industrial   |       | 4,144            |       | 1,074                 |       | 8,442           |       | -                                            |       | 1,074                  |       | 8,441        |       | 9,515      |       | 237                       |       | 2001            |       | 2006         | ** ** |
| Crossroads (Savannah)         |       | 239 Jimmy Deloach  Parkway      |       | Industrial   |       | 3,581            |       | 1,074                 |       | 7,141           |       | -                                            |       | 1,074                  |       | 7,141        |       | 8,214      |       | 202                       |       | 2001            |       | 2006         | ** ** |
| Crossroads (Savannah)         |       | 246 Jimmy Deloach  Parkway      |       | Industrial   |       | 3,878            |       | 992                   |       | 5,383           |       | -                                            |       | 992                    |       | 5,383        |       | 6,375      |       | 152                       |       | 2006            |       | 2006         | ** ** |
| Crossroads (Savannah)         |       | 276 Jimmy Deloach  Parkway      |       | Grounds      |       | -                |       | 2,266                 |       | -               |       | -                                            |       | 2,267                  |       | -            |       | 2,267      |       | 38                        |       | N/A             |       | 2006         | ** ** |
|                          |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         | ** ** |
| **SEVEN HILLS, OHIO**         | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Rock Run Business Campus      |       | Rock Run North                  |       | Office       |       | -                |       | 837                   |       | 5,462           |       | 665                                          |       | 960                    |       | 6,004        |       | 6,964      |       | 1,767                     |       | 1984            |       | 1996         | ** ** |
| Rock Run Business Campus      |       | Rock Run Center                 |       | Office       |       | -                |       | 1,046                 |       | 6,924           |       | 720                                          |       | 1,169                  |       | 7,521        |       | 8,690      |       | 2,289                     |       | 1985            |       | 1996         | ** ** |
|                          |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         | ** ** |
| **SHARONVILLE, OHIO**         | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Mosteller Distribution Center |       | Mosteller Distribution  Ctr. I  |       | Industrial   |       | -                |       | 1,275                 |       | 6,193           |       | 3,433                                        |       | 1,275                  |       | 9,626        |       | 10,901     |       | 2,953                     |       | 1957            |       | 1996         | ** ** |
| Mosteller Distribution Center |       | Mosteller Distribution  Ctr. II |       | Industrial   |       | -                |       | 828                   |       | 4,744           |       | 1,324                                        |       | 828                    |       | 6,068        |       | 6,896      |       | 2,118                     |       | 1997            |       | 1997         | ** ** |
|                          |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         | ** ** |
| **ST. LOUIS PARK, MINNESOTA** | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| The West End                  |       | 1600 Tower                      |       | Office       |       | -                |       | 2,321                 |       | 31,239          |       | 4,608                                        |       | 2,321                  |       | 35,848       |       | 38,168     |       | 8,850                     |       | 2000            |       | 2000         | ** ** |
| The West End                  |       | MoneyGram Tower                 |       | Office       |       | -                |       | 3,039                 |       | 35,636          |       | 3,613                                        |       | 3,091                  |       | 39,197       |       | 42,288     |       | 7,582                     |       | 1987            |       | 1999         | ** ** |
| The West End                  |       | Novartis Warehouse              |       | Industrial   |       | -                |       | 2,005                 |       | 10,948          |       | 459                                          |       | 2,005                  |       | 11,407       |       | 13,411     |       | 7,652                     |       | 1960            |       | 1998         | ** ** |
| Minneapolis-West              |       | 5219 Building  (Redeveloped)    |       | Office       |       | -                |       | 102                   |       | 19              |       | -                                            |       | 102                    |       | 19           |       | 121        |       | 19                        |       | 1965            |       | 1998         | ** ** |
| Minneapolis-West              |       | North Plaza  (Redeveloped)      |       | Office       |       | -                |       | 347                   |       | 24              |       | -                                            |       | 347                    |       | 24           |       | 371        |       | 67                        |       | 1966            |       | 1998         | ** ** |
| Minneapolis-West              |       | South Plaza  (Redeveloped)      |       | Office       |       | -                |       | 397                   |       | 76              |       | -                                            |       | 397                    |       | 76           |       | 473        |       | 76                        |       | 1966            |       | 1998         | ** ** |
| Minneapolis                   |       | Chilies Ground Lease            |       | Grounds      |       | -                |       | 921                   |       | -               |       | 69                                           |       | 990                    |       | -            |       | 990        |       | 4                         |       | N/A             |       | 1998         | ** ** |
| Minneapolis                   |       | Olive Garden Ground  Lease      |       | Grounds      |       | -                |       | 921                   |       | -               |       | -                                            |       | 921                    |       | -            |       | 921        |       | -                         |       | N/A             |       | 1998         | ** ** |
|                          |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         | ** ** |
| **ST. LOUIS, MISSOURI**       | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Craig Park Center             |       | Craig Park Center               |       | Industrial   |       | -                |       | 254                   |       | 2,260           |       | 467                                          |       | 254                    |       | 2,727        |       | 2,981      |       | 677                       |       | 1984            |       | 1998         | ** ** |
| Hawthorn Office               |       | Hawthorn Office#1  (Savvis)     |       | Office       |       | -                |       | 2,600                 |       | 15,239          |       | 241                                          |       | 2,600                  |       | 15,480       |       | 18,080     |       | 2,099                     |       | 1997            |       | 2002         | ** ** |
| Lakeside Crossing             |       | Lakeside Crossing  Buliding I   |       | Industrial   |       | -                |       | 574                   |       | 2,272           |       | 637                                          |       | 574                    |       | 2,909        |       | 3,483      |       | 592                       |       | 2001            |       | 2002         | ** ** |
| Lakeside Crossing             |       | Lakeside Crossing  Building II  |       | Industrial   |       | -                |       | 1,118                 |       | 2,227           |       | -                                            |       | 1,118                  |       | 2,228        |       | 3,345      |       | 772                       |       | 2002            |       | 2002         | ** ** |
| Lakeside Crossing             |       | Lakeside Crossing  Building III |       | Industrial   |       | -                |       | 1,851                 |       | 4,881           |       | 651                                          |       | 1,851                  |       | 5,532        |       | 7,383      |       | 1,092                     |       | 2001            |       | 2002         | ** ** |
| Lakeside Crossing             |       | Lakeside Crossing V             |       | Office       |       | -                |       | 883                   |       | 1,928           |       | -                                            |       | 883                    |       | 1,928        |       | 2,811      |       | 557                       |       | 2003            |       | 2003         | ** ** |
| Lakeside Crossing             |       | Lakeside Crossing  Building VI  |       | Industrial   |       | -                |       | 1,074                 |       | 2,125           |       | 2,348                                        |       | 1,507                  |       | 4,040        |       | 5,547      |       | 694                       |       | 2002            |       | 2002         | ** ** |
| Laumeier Office Park          |       | Laumeier I                      |       | Office       |       | -                |       | 1,384                 |       | 9,936           |       | 1,983                                        |       | 1,384                  |       | 11,920       |       | 13,303     |       | 4,417                     |       | 1987            |       | 1995         | ** ** |
| Laumeier Office Park          |       | Laumeier II                     |       | Office       |       | -                |       | 1,421                 |       | 9,990           |       | 1,486                                        |       | 1,421                  |       | 11,476       |       | 12,897     |       | 3,896                     |       | 1988            |       | 1995         | ** ** |
| Laumeier Office Park          |       | Laumeier IV                     |       | Office       |       | -                |       | 1,029                 |       | 6,963           |       | 1,089                                        |       | 1,029                  |       | 8,052        |       | 9,081      |       | 2,006                     |       | 1987            |       | 1998         | ** ** |
| Maryville Center              |       | 500–510 Maryville Centre   |       | Office       |       | -                |       | 3,402                 |       | 24,768          |       | 3,887                                        |       | 3,402                  |       | 28,655       |       | 32,057     |       | 6,704                     |       | 1984            |       | 1997         | ** ** |
| Maryville Center              |       | 530 Maryville Centre            |       | Office       |       | 5,631            |       | 2,219                 |       | 15,292          |       | 2,166                                        |       | 2,219                  |       | 17,458       |       | 19,677     |       | 4,372                     |       | 1990            |       | 1997         | ** ** |
| Maryville Center              |       | 550 Maryville Centre            |       | Office       |       | -                |       | 1,996                 |       | 12,532          |       | 2,074                                        |       | 1,996                  |       | 14,607       |       | 16,602     |       | 3,093                     |       | 1988            |       | 1997         | ** ** |
| Maryville Center              |       | 635–645 Maryville Centre   |       | Office       |       | -                |       | 3,048                 |       | 18,193          |       | 1,694                                        |       | 3,048                  |       | 19,887       |       | 22,935     |       | 4,725                     |       | 1987            |       | 1997         | ** ** |
| Maryville Center              |       | 655 Maryville Centre            |       | Office       |       | -                |       | 1,860                 |       | 13,258          |       | 1,925                                        |       | 1,860                  |       | 15,183       |       | 17,043     |       | 3,323                     |       | 1994            |       | 1997         | ** ** |
| Maryville Center              |       | 540 Maryville Centre            |       | Office       |       | -                |       | 2,219                 |       | 14,746          |       | 1,371                                        |       | 2,219                  |       | 16,117       |       | 18,336     |       | 4,177                     |       | 1990            |       | 1997         | ** ** |

 

89

----

 
| **DUKE REALTY LIMITED PARTNERSHIP** | **Schedule  3** |
|-------------------------------------|-----------------|

**REALESTATE AND ACCUMULATED DEPRECIATION**

**DECEMBER31, 2006**

**(inthousands)**

 
|                               | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Cost Capitalized**                    | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
|-------------------------------|------------|---------------------------------|------------|--------------|------------|------------------|------------|-----------------------|------------|-----------------|------------|----------------------------------------------|------------|------------------------|------------|--------------|------------|------------|------------|---------------------------|------------|-----------------|------------|--------------|------------|
| ** **                    | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Subsequent to**                       | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| ** **                    | ** ** | ** **                      | ** ** | **Building** | ** ** | ** **       | ** ** | **Initial Cost** | ** ** | **Development** | ** ** | **Gross Book Value 12/31/06** | ** ** | **Accumulated**        | ** ** | **Year**     | ** ** | **Year**   | ** ** |
| **Development**               | ** ** | **Name**                        | ** ** | **Type**     | ** ** | **Encumbrances** | ** ** | **Land**              | ** ** | **Buildings**   | ** ** | **or Acquisition**                      | ** ** | **Land/Land Imp** | ** ** | **Bldgs/TI** | ** ** | **Total**  | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
| Maryville Center              |       | 520 Maryville Centre            |       | Office       |       | -                |       | 2,404                 |       | 14,521          |       | 1,037                                        |       | 2,404                  |       | 15,557       |       | 17,962     |       | 3,197                     |       | 1998            |       | 1999         | ** ** |
| Maryville Center              |       | 700 Maryville Centre            |       | Office       |       | -                |       | 4,556                 |       | 28,599          |       | 360                                          |       | 4,556                  |       | 28,960       |       | 33,515     |       | 6,700                     |       | 1999            |       | 2000         | ** ** |
| Maryville Center              |       | 533 Maryville Centre            |       | Office       |       | -                |       | 3,230                 |       | 17,921          |       | 275                                          |       | 3,230                  |       | 18,196       |       | 21,426     |       | 3,821                     |       | 2000            |       | 2000         | ** ** |
| Maryville Center              |       | 555 Maryville Centre            |       | Office       |       | -                |       | 3,226                 |       | 15,799          |       | 1,648                                        |       | 3,226                  |       | 17,447       |       | 20,672     |       | 3,271                     |       | 2000            |       | 2001         | ** ** |
| Maryville Center              |       | 625 Maryville Centre            |       | Office       |       | 3,193            |       | 2,509                 |       | 11,229          |       | 262                                          |       | 2,509                  |       | 11,490       |       | 13,999     |       | 1,935                     |       | 1996            |       | 2002         | ** ** |
| St. Louis Business Center     |       | St. Louis Business  Center A    |       | Industrial   |       | -                |       | 194                   |       | 1,768           |       | 508                                          |       | 194                    |       | 2,276        |       | 2,470      |       | 654                       |       | 1987            |       | 1998         | ** ** |
| St. Louis Business Center     |       | St. Louis Business Center  B    |       | Industrial   |       | -                |       | 250                   |       | 2,114           |       | 1,151                                        |       | 250                    |       | 3,265        |       | 3,515      |       | 755                       |       | 1986            |       | 1998         | ** ** |
| St. Louis Business Center     |       | St. Louis Business  Center C    |       | Industrial   |       | -                |       | 166                   |       | 1,271           |       | 406                                          |       | 166                    |       | 1,677        |       | 1,842      |       | 348                       |       | 1986            |       | 1998         | ** ** |
| St. Louis Business Center     |       | St. Louis Business  Center D    |       | Industrial   |       | -                |       | 168                   |       | 1,454           |       | 314                                          |       | 168                    |       | 1,768        |       | 1,936      |       | 375                       |       | 1987            |       | 1998         | ** ** |
| Southridge                    |       | Southridge Business  Center     |       | Industrial   |       | -                |       | 1,158                 |       | 4,234           |       | 1,751                                        |       | 1,158                  |       | 5,984        |       | 7,142      |       | 907                       |       | 2002            |       | 2002         | ** ** |
| West Port Place               |       | Westport Center I               |       | Industrial   |       | -                |       | 1,707                 |       | 5,329           |       | 886                                          |       | 1,707                  |       | 6,216        |       | 7,923      |       | 1,625                     |       | 1998            |       | 1998         | ** ** |
| West Port Place               |       | Westport Center II              |       | Industrial   |       | -                |       | 914                   |       | 1,999           |       | 257                                          |       | 914                    |       | 2,257        |       | 3,170      |       | 654                       |       | 1998            |       | 1998         | ** ** |
| West Port Place               |       | Westport Center III             |       | Industrial   |       | -                |       | 1,206                 |       | 2,650           |       | 524                                          |       | 1,206                  |       | 3,174        |       | 4,381      |       | 795                       |       | 1998            |       | 1999         | ** ** |
| West Port Place               |       | Westport Center IV              |       | Industrial   |       | -                |       | 1,440                 |       | 4,860           |       | 58                                           |       | 1,440                  |       | 4,918        |       | 6,358      |       | 990                       |       | 2000            |       | 2000         | ** ** |
| West Port Place               |       | Westport Center V               |       | Industrial   |       | -                |       | 493                   |       | 1,591           |       | 23                                           |       | 493                    |       | 1,614        |       | 2,107      |       | 566                       |       | 1999            |       | 2000         | ** ** |
| West Port Place               |       | Westport Place                  |       | Office       |       | -                |       | 1,990                 |       | 6,340           |       | 2,068                                        |       | 1,990                  |       | 8,408        |       | 10,398     |       | 1,871                     |       | 1999            |       | 2000         | ** ** |
| Westmark                      |       | Westmark                        |       | Office       |       | -                |       | 1,497                 |       | 10,423          |       | 2,181                                        |       | 1,684                  |       | 12,417       |       | 14,101     |       | 4,171                     |       | 1987            |       | 1995         | ** ** |
| Westview Place                |       | Westview Place                  |       | Office       |       | -                |       | 669                   |       | 8,799           |       | 2,494                                        |       | 669                    |       | 11,292       |       | 11,961     |       | 3,675                     |       | 1988            |       | 1995         | ** ** |
| Woodsmill Commons             |       | Woodsmill Commons II  (400)     |       | Office       |       | -                |       | 1,718                 |       | 7,896           |       | 5                                            |       | 1,718                  |       | 7,902        |       | 9,620      |       | 855                       |       | 1985            |       | 2003         | ** ** |
| Woodsmill Commons             |       | Woodsmill Commons I  (424)      |       | Office       |       | -                |       | 1,836                 |       | 7,783           |       | 147                                          |       | 1,836                  |       | 7,930        |       | 9,767      |       | 902                       |       | 1985            |       | 2003         | ** ** |
|                          |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         | ** ** |
| **ST. PETERS, MISSOURI**      | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Horizon Business Ctr          |       | Horizon Business Center         |       | Industrial   |       | -                |       | 344                   |       | 2,475           |       | 276                                          |       | 344                    |       | 2,751        |       | 3,095      |       | 650                       |       | 1985            |       | 1998         | ** ** |
|                          |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         | ** ** |
| **STERLING, VIRGINIA**        | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| TransDulles Centre            |       | 22800 Davis Drive               |       | Office       |       | -                |       | 2,550                 |       | 7,755           |       | -                                            |       | 2,550                  |       | 7,755        |       | 10,305     |       | -                         |       | 1989            |       | 2006         | ** ** |
|                          |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         | ** ** |
| **SUNRISE, FLORIDA**          | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Sawgrass                      |       | Sawgrass – Building B      |       | Office       |       | -                |       | 1,211                 |       | 6,424           |       | 1,242                                        |       | 1,211                  |       | 7,666        |       | 8,877      |       | 1,973                     |       | 1999            |       | 2000         | ** ** |
| Sawgrass                      |       | Sawgrass – Building A      |       | Office       |       | -                |       | 1,147                 |       | 4,530           |       | 37                                           |       | 1,147                  |       | 4,568        |       | 5,715      |       | 963                       |       | 2000            |       | 2001         | ** ** |
| Sawgrass                      |       | Sawgrass Pointe                 |       | Office       |       | -                |       | 3,484                 |       | 21,827          |       | 5,043                                        |       | 3,484                  |       | 26,870       |       | 30,354     |       | 4,195                     |       | 2001            |       | 2002         | ** ** |
|                          |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         | ** ** |
| **TAMPA, FLORIDA**            | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Fairfield Distribution Center |       | Fairfield Distribution  Ctr I   |       | Industrial   |       | -                |       | 483                   |       | 2,658           |       | 94                                           |       | 487                    |       | 2,748        |       | 3,235      |       | 536                       |       | 1998            |       | 1999         | ** ** |
| Fairfield Distribution Center |       | Fairfield Distribution  Ctr II  |       | Industrial   |       | -                |       | 530                   |       | 4,901           |       | 69                                           |       | 534                    |       | 4,966        |       | 5,500      |       | 933                       |       | 1998            |       | 1999         | ** ** |
| Fairfield Distribution Center |       | Fairfield Distribution  Ctr III |       | Industrial   |       | -                |       | 334                   |       | 2,771           |       | 98                                           |       | 338                    |       | 2,865        |       | 3,203      |       | 533                       |       | 1999            |       | 1999         | ** ** |
| Fairfield Distribution Center |       | Fairfield Distribution  Ctr IV  |       | Industrial   |       | -                |       | 600                   |       | 1,958           |       | 1,007                                        |       | 604                    |       | 2,961        |       | 3,565      |       | 627                       |       | 1999            |       | 1999         | ** ** |
| Fairfield Distribution Center |       | Fairfield Distribution  Ctr V   |       | Industrial   |       | -                |       | 488                   |       | 3,538           |       | 108                                          |       | 488                    |       | 3,646        |       | 4,134      |       | 1,071                     |       | 2000            |       | 2000         | ** ** |
| Fairfield Distribution Center |       | Fairfield Distribution  Ctr VI  |       | Industrial   |       | -                |       | 555                   |       | 4,517           |       | 487                                          |       | 555                    |       | 5,004        |       | 5,559      |       | 1,017                     |       | 2001            |       | 2001         | ** ** |
| Fairfield Distribution Center |       | Fairfield Distribution  Ctr VII |       | Industrial   |       | -                |       | 394                   |       | 3,906           |       | 779                                          |       | 394                    |       | 4,685        |       | 5,079      |       | 1,749                     |       | 2001            |       | 2001         | ** ** |
| Fairfield Distribution Center |       | Fairfield VIII                  |       | Industrial   |       | -                |       | 1,082                 |       | 3,326           |       | 1                                            |       | 1,082                  |       | 3,327        |       | 4,409      |       | 653                       |       | 2004            |       | 2004         | ** ** |
| Eagle Creek Business Center   |       | Eagle Creek Business  Ctr. I    |       | Industrial   |       | -                |       | 3,705                 |       | 3,187           |       | 703                                          |       | 3,705                  |       | 3,889        |       | 7,594      |       | 77                        |       | 2006            |       | 2006         | ** ** |
| Highland Oaks                 |       | Highland Oaks I                 |       | Office       |       | -                |       | 1,525                 |       | 13,488          |       | 789                                          |       | 1,525                  |       | 14,277       |       | 15,802     |       | 3,338                     |       | 1999            |       | 1999         | ** ** |
| Highland Oaks                 |       | Highland Oaks II                |       | Office       |       | -                |       | 1,605                 |       | 11,354          |       | 2,936                                        |       | 1,605                  |       | 14,290       |       | 15,895     |       | 3,185                     |       | 1999            |       | 2000         | ** ** |
|                          |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         | ** ** |
| **WEST CHESTER, OHIO**        | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Centre Pointe Office Park     |       | Centre Pointe I                 |       | Office       |       | -                |       | 2,501                 |       | 9,574           |       | 300                                          |       | 2,501                  |       | 9,873        |       | 12,374     |       | 1,459                     |       | 2000            |       | 2004         | ** ** |
| Centre Pointe Office Park     |       | Centre Pointe II                |       | Office       |       | -                |       | 2,056                 |       | 10,063          |       | 52                                           |       | 2,056                  |       | 10,115       |       | 12,171     |       | 1,458                     |       | 2001            |       | 2004         | ** ** |
| Centre Pointe Office Park     |       | Centre Pointe III               |       | Office       |       | -                |       | 2,048                 |       | 10,309          |       | 432                                          |       | 2,048                  |       | 10,740       |       | 12,788     |       | 1,600                     |       | 2002            |       | 2004         | ** ** |
| Centre Pointe Office Park     |       | Centre Pointe IV                |       | Office       |       | -                |       | 2,013                 |       | 9,017           |       | -                                            |       | 2,932                  |       | 8,098        |       | 11,030     |       | 421                       |       | 2005            |       | 2005         | ** ** |
| World Park at Union Centre    |       | World Park at Union  Centre 10  |       | Industrial   |       | -                |       | 2,150                 |       | 7,885           |       | -                                            |       | 2,151                  |       | 7,884        |       | 10,034     |       | 217                       |       | 2006            |       | 2006         | ** ** |
| World Park at Union Centre    |       | World Park at Union  Centre 11  |       | Industrial   |       | -                |       | 2,592                 |       | 6,936           |       | 14                                           |       | 2,592                  |       | 6,949        |       | 9,541      |       | 871                       |       | 2004            |       | 2004         | ** ** |
|                          |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         | ** ** |
| **WESTERVILLE, OHIO**         | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Westerville                   |       | Liebert                         |       | Office       |       | -                |       | 755                   |       | 3,144           |       | 909                                          |       | 755                    |       | 4,053        |       | 4,808      |       | 752                       |       | 1999            |       | 1999         | ** ** |
|                          |       |                            |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         | ** ** |
| **WESTMONT, ILLINOIS**        | ** ** | ** **                      | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Oakmont Corporate Center      |       | Oakmont Tech Center             |       | Office       |       | -                |       | 1,501                 |       | 8,590           |       | 2,414                                        |       | 1,703                  |       | 10,801       |       | 12,505     |       | 2,208                     |       | 1989            |       | 1998         | ** ** |
| Oakmont Corporate Center      |       | Oakmont Circle Office           |       | Office       |       | -                |       | 3,177                 |       | 13,874          |       | 2,063                                        |       | 3,521                  |       | 15,593       |       | 19,114     |       | 3,497                     |       | 1990            |       | 1998         | ** ** |

 

 

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| **DUKE REALTY LIMITED PARTNERSHIP** | **Schedule  3** |
|-------------------------------------|-----------------|

**REALESTATE AND ACCUMULATED DEPRECIATION**

**DECEMBER31, 2006**

**(inthousands)**

 
|                     | ** ** | ** **         | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Cost Capitalized**                    | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
|---------------------|------------|--------------------|------------|--------------|------------|------------------|------------|-----------------------|------------|-----------------|------------|----------------------------------------------|------------|------------------------|------------|--------------|------------|------------|------------|---------------------------|------------|-----------------|------------|--------------|------------|
| ** **          | ** ** | ** **         | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | **Subsequent to**                       | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| ** **          | ** ** | ** **         | ** ** | **Building** | ** ** | ** **       | ** ** | **Initial Cost** | ** ** | **Development** | ** ** | **Gross Book Value 12/31/06** | ** ** | **Accumulated**        | ** ** | **Year**     | ** ** | **Year**   | ** ** |
| **Development**     | ** ** | **Name**           | ** ** | **Type**     | ** ** | **Encumbrances** | ** ** | **Land**              | ** ** | **Buildings**   | ** ** | **or Acquisition**                      | ** ** | **Land/Land Imp** | ** ** | **Bldgs/TI** | ** ** | **Total**  | ** ** | **Depreciation (1)** | ** ** | **Constructed** | ** ** | **Acquired** | ** ** |
| **WESTON, FLORIDA** | ** ** | ** **         | ** ** | ** **   | ** ** | ** **       | ** ** | ** **            | ** ** | ** **      | ** ** | ** **                                   | ** ** | ** **             | ** ** | ** **   | ** ** | ** ** | ** ** | ** **                | ** ** | ** **      | ** ** | ** **   | ** ** |
| Weston Pointe       |       | Weston  Pointe I   |       | Office       |       | -                |       | 2,580                 |       | 10,020          |       | 624                                          |       | 2,580                  |       | 10,644       |       | 13,224     |       | 1,117                     |       | 1999            |       | 2003         | ** ** |
| Weston Pointe       |       | Weston  Pointe II  |       | Office       |       | -                |       | 2,183                 |       | 10,791          |       | 13                                           |       | 2,183                  |       | 10,804       |       | 12,987     |       | 1,234                     |       | 2000            |       | 2003         | ** ** |
| Weston Pointe       |       | Weston  Pointe III |       | Office       |       | -                |       | 2,183                 |       | 11,531          |       | 698                                          |       | 2,183                  |       | 12,228       |       | 14,411     |       | 1,161                     |       | 2001            |       | 2003         | ** ** |
| Weston Pointe       |       | Weston  Pointe IV  |       | Office       |       | -                |       | 3,349                 |       | 10,695          |       | -                                            |       | 3,349                  |       | 10,695       |       | 14,044     |       | 398                       |       | 2006            |       | 2006         | ** ** |
|                |       |               |       |         |       |             |       |                  |       |            |       |                                         |       |                   |       |         |       |       |       |                      |       |            |       |         | ** ** |
|                |       | Eliminations       |       |         |       |             |       |                  |       |            |       | (18,866                                      | )          | (174                   | )          | (18,692      | )          | (18,866    | )          | (6,074                    | )          |            |       |         | ** ** |
|                |       |               |       |         |       | 662,501          |       | 860,656               |       | 4,331,817       |       | 390,715                                      |       | 876,462                |       | 4,706,726    |       | 5,583,188  |       | 900,898                   |       |            |       |         | ** ** |

 

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(1)       Depreciationof real estate is computed using the straight-line method over 40 years forbuildings, 15 years for land improvements and shorter periods based on leaseterms (generally 3 to 10 years) for tenant improvements.
|                                             | ** ** | **Real Estate Assets** | ** ** | **Accumulated Depreciation** | ** ** |
|---------------------------------------------|------------|----------------------------------|------------|-----------------------------------|------------|
| ** **                                  | ** ** | **2006**                         | ** ** | **2005**                          | ** ** | **2004** | ** ** | **2006** | ** ** | **2005** | ** ** | **2004** | ** ** |
| Balance at beginning of  year               | $          | 4,831,506                        |       | $                                 | 5,377,094  |   | $ | 5,094,168 |   | $ | 754,742 |   | $ | 788,900 |   | $ | 677,357 |   |   |
| Acquisitions                                |       | 836,146                          |       |                              | 272,141    |   |   | 213,500 |   |   | - |   |   | - |   |   | - |   |   |
| Construction  costs and tenant improvements |       | 540,442                          |       |                              | 321,786    |   |   | 291,850 |   |   | - |   |   | - |   |   | - |   |   |
| Depreciation  expense                       |       | -                                |       |                              | -          |   |   | - |   |   | 199,148 |   |   | 200,102 |   |   | 185,091 |   |   |
| Acquisition  of minority interest           |       | -                                |       |                              | -          |   |   | 11,408 |   |   | - |   |   | - |   |   | - |   |   |
|                                        |       | 6,208,094                        |       |                              | 5,971,021  |   |   | 5,610,926 |   |   | 953,890 |   |   | 989,002 |   |   | 862,448 |   |   |
|                                        |       |                             |       |                              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deductions  during year:                    |       |                             |       |                              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost  of real estate sold or contributed    |       | (590,308                         | )          |                              | (1,081,447 | ) |   | (180,982 | ) |   | (18,660 | ) |   | (179,848 | ) |   | (20,878 | ) |   |
| Impairment  Allowance                       |       | (266                             | )          |                              | (3,656     | ) |   | (180 | ) |   |   |   |   |   |   |   |   |   |   |
| Write-off  of fully amortized assets        |       | (34,332                          | )          |                              | (54,412    | ) |   | (52,670 | ) |   | (34,332 | ) |   | (54,412 | ) |   | (52,670 | ) |   |
| Balance at end of year                      | $          | 5,583,188                        |       | $                                 | 4,831,506  |   | $ | 5,377,094 |   | $ | 900,898 |   | $ | 754,742 |   | $ | 788,900 |   |   |

** **

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** **

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) ofthe Securities Exchange Act of 1934, the registrant has duly caused this reportto be signed on its behalf by the undersigned, thereunto duly authorized.
|           | DUKE REALTY LIMITED PARTNERSHIP |                                                         |
|----------------|---------------------------------|--------------------------------------------------------------|
|           |                            |                                                         |
|           |                            |                                                         |
| March 12, 2007 | By:                             | /s/ Dennis D. Oklak                                          |   |
|           |                            | Dennis D. Oklak                                              |
|           |                            |  Chairman and Chief Executive                           |
|           |                            |   Officer of the General Partner                   |
|           |                            |                                                         |
|           | By:                             | /s/ Matthew A. Cohoat                                        |   |
|           |                            | Matthew A. Cohoat                                            |
|           |                            | Executive Vice President and                                 |
|           |                            |   Chief Financial Officer of the General  Partner  |
|           |                            |      (Principal Financial  Officer) |
|                |                                 |                                                              |  |  |  |  |

 

Pursuant to the requirements ofthe Securities Exchange Act of 1934, this report has been signed below by thefollowing persons on behalf of the registrant and in the capacities and on thedates indicated.
| Signature                   | ** ** | **Date** | ** ** | **Title**                       |
|-----------------------------|------------|----------|------------|---------------------------------|
|                        |       |     |       |                            |
|                        |       |     |       |                            |
| /s/ Barrington H. Branch*   |       | 2/25/07  |       | Director of the General Partner |
| Barrington H. Branch        |       |     |       |                            |
|                        |       |     |       |                            |
| /s/ Geoffrey Button *       |       | 2/22/07  |       | Director of the General Partner |
| Geoffrey Button             |       |     |       |                            |
|                        |       |     |       |                            |
| /s/ William Cavanaugh, III* |       | 2/23/07  |       | Director of the General Partner |
| William Cavanaugh, III      |       |     |       |                            |
|                        |       |     |       |                            |
| /s/ Ngaire E. Cuneo *       |       | 2/22/07  |       | Director of the General Partner |
| Ngaire E. Cuneo             |       |     |       |                            |
|                        |       |     |       |                            |
| /s/ Charles R. Eitel*       |       | 2/23/07  |       | Director of the General Partner |
| Charles R. Eitel            |       |     |       |                            |
|                        |       |     |       |                            |
| /s/ Dr. R. Glenn Hubbard*   |       | 2/21/07  |       | Director of the General Partner |
| Dr. R. Glenn Hubbard        |       |     |       |                            |
|                        |       |     |       |                            |
| /s/ Dr. Martin C. Jischke*  |       | 2/22/07  |       | Director of the General Partner |
| Dr. Martin C. Jischke       |       |     |       |                            |
|                        |       |     |       |                            |
| /s/ L. Ben Lytle *          |       | 2/22/07  |       | Director of the General Partner |
| L. Ben Lytle                |       |     |       |                            |

 

92

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| /s/ William O. McCoy *   |   | 2/22/07 |   | Director of the General Partner |
|--------------------------|--------|---------|--------|---------------------------------|
| William O. McCoy         |   |    |   |                            |
|                     |   |    |   |                            |
| /s/ Jack R. Shaw *       |   | 2/22/07 |   | Director of the General Partner |
| Jack R. Shaw             |   |    |   |                            |
|                     |   |    |   |                            |
| /s/ Robert J. Woodward * |   | 2/22/07 |   | Director of the General Partner |
| Robert J. Woodward       |   |    |   |                            |

 

 

----

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

 

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