UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
  WASHINGTON, D.C.
    20549
 FORM 10-K
   þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2008oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission File Number 1-10709
   PS BUSINESS PARKS,
    INC.
 (Exact name of registrant as
    specified in its charter)
  California

95-4300881(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer Identification
    No.)   701 Western Avenue,
    Glendale, California 91201-2397
 (Address of principal executive
    offices) (Zip Code)
  818-244-8080
  (Registrants telephone
    number, including area code)
  Securities registered pursuant
    to Section 12(b) of the Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $0.01 par value per share


New York Stock ExchangeDepositary Shares Each Representing 1/1,000 of a Share of
    7.000% Cumulative Preferred Stock, Series H, $0.01 par
    value per share


New York Stock ExchangeDepositary Shares Each Representing 1/1,000 of a Share of
    6.875% Cumulative Preferred Stock, Series I, $0.01 par
    value per share


New York Stock ExchangeDepositary Shares Each Representing 1/1,000 of a Share of
    7.950% Cumulative Preferred Stock, Series K, $0.01 par
    value per share


New York Stock ExchangeDepositary Shares Each Representing 1/1,000 of a Share of
    7.600% Cumulative Preferred Stock, Series L, $0.01 par
    value per share


New York Stock ExchangeDepositary Shares Each Representing 1/1,000 of a Share of
    7.200% Cumulative Preferred Stock, Series M, $0.01 par
    value per share


New York Stock ExchangeDepositary Shares Each Representing 1/1,000 of a Share of
    7.375% Cumulative Preferred Stock, Series O, $0.01 par
    value per share


New York Stock ExchangeDepositary Shares Each Representing 1/1,000 of a Share of
    6.700% Cumulative Preferred Stock, Series P, $0.01 par
    value per share


New York Stock Exchange   Securities registered pursuant
    to Section 12(g) of the Act:
 None
 (Title of class)
  þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated filer
    þ

Accelerated filer
    oNon-accelerated filer
    o

Smaller reporting company
    o(Do not check if a smaller reporting company)   Rule 12b-2 o þ
     DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




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##### 





PART I.
  ITEM 1.
    BUSINESS  The
    Company
      History of the Company:
             2




---



##### 



91201-2397. (818) 244-8080. Form 10-K. Form 10-K, Form 10-Q Form 8-K,
  Business of the Company:
  on-site
   3




---



##### 



Operating
    Partnership
        Summary
    of the Operating Partnership Agreement
    Issuance of Additional Partnership Interests:
  Capital Contributions:
 4




---



##### 



Distributions:
  Preferred Units:
    Redemption of Partnership Interests:
      Limited Partner Transfer Restrictions:
 5




---



##### 



Management:
      Extraordinary Transactions:
   6




---



##### 



Indemnification:
  Duties and Conflicts:
  Term:
  Other Provisions: winding-up
  Cost
    Allocation and Administrative Services
    Common
    Officers and Directors with PS
   7




---



##### 



Property
    Management
      Management
    REIT
    Structure
      Operating
    Strategy
    Maximize Net Cash Flow of Existing Properties:
 8




---



##### 



Focus on Targeted Markets:
  Reduce Capital Expenditures and Increase Occupancy Rates by
    Providing Flexible Properties and Attracting a Diversified
    Tenant Base:
  Provide Superior Property Management: on-site
  Financing
    Strategy
    Retain Operating Cash Flow:
  Perpetual Preferred Stock/Units:
 9




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##### 



Debt Financing:
  Access to Acquisition Capital: Form 10-K,
  Competition
      Investments
    in Real Estate Facilities
    Summary
    of Business Model
    Restrictions
    on Transactions with Affiliates
   10




---



##### 



Borrowings
          Employees
    Insurance
    Environmental
    Matters
     11




---



##### 



ITEM 1A.
    RISK
    FACTORS  Form 10-K,
  PS has
    significant influence over us.
    Provisions
    in our organizational documents may prevent changes in
    control.
  Our articles generally prohibit owning more than 7% of our
    shares:
  Our board can set the terms of certain securities without
    shareholder approval:
  The partnership agreement of our Operating Partnership
    restricts mergers:
  Our
    Operating Partnership poses additional risks to us.
   12




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##### 



We would
    incur adverse tax consequences if we fail to qualify as a
    REIT.
  Our cash flow would be reduced if we fail to qualify as a
    REIT:
  We may need to borrow funds to meet our REIT distribution
    requirements:
  The
    recent market disruptions may adversely affect our operating
    results and financial condition.
    Debt and Equity Markets:
  Valuations:
  Government Intervention:
 13




---



##### 



Since we
    buy and operate real estate, we are subject to general real
    estate investment and operating risks.
  Summary of real estate risks:
  
    the national, state and local economic climate and real estate
    conditions, such as oversupply of or reduced demand for space
    and changes in market rental rates;
    how prospective tenants perceive the attractiveness, convenience
    and safety of our properties;
    difficulties in consummating and financing acquisitions and
    developments on advantageous terms and the failure of
    acquisitions and developments to perform as expected;
    our ability to provide adequate management, maintenance and
    insurance;
    our ability to collect rent from tenants on a timely basis;
    the expense of periodically renovating, repairing and reletting
    spaces;
    environmental issues;
    compliance with the Americans with Disabilities Act and other
    federal, state, and local laws and regulations;
    increasing operating costs, including real estate taxes,
    insurance and utilities, if these increased costs cannot be
    passed through to tenants;
    changes in tax, real estate and zoning laws;
    increase in new commercial properties in our market;
    tenant defaults and bankruptcies;
    tenants right to sublease space; and
    concentration of properties leased to non-rated private
    companies.      We may be unable to consummate acquisitions and developments
    on advantageous terms or new acquisitions and developments may
    fail to perform as expected:
 14




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##### 



We may encounter significant delays and expense in reletting
    vacant space, or we may not be able to relet space at existing
    rates, in each case resulting in losses of income:
  Tenant defaults and bankruptcies may reduce our cash flow and
    distributions:
  We may be adversely affected by significant competition among
    commercial properties:
  We may be adversely affected if casualties to our properties
    are not covered by insurance:
  The illiquidity of our real estate investments may prevent us
    from adjusting our portfolio to respond to market changes:
  We may be adversely affected by changes in
    laws:
  We may incur significant environmental remediation costs:
 15




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##### 



We depend
    on external sources of capital to grow our company.
    Our
    ability to control our properties may be adversely affected by
    ownership through partnerships and joint ventures.
    We can
    change our business policies and increase our level of debt
    without shareholder approval.
    We can
    issue additional securities without shareholder
    approval.
    Increases
    in interest rates may adversely affect the market price of our
    common stock.
    Shares
    that become available for future sale may adversely affect the
    market price of our common stock.
   16




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##### 



We depend
    on key personnel.
    Change in
    taxation of corporate dividends may adversely affect the value
    of our shares.
    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS   17




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##### 



ITEM 2.
    PROPERTIES    (in thousands)
  WeightedRentable Square Footage


AverageLocation

Flex


Industrial


Office


Total


Occupancy RateArizonaMesa


78











78



77.3
%Phoenix


310











310



83.7
%Tempe


291











291



92.7
%679











679



86.9
%Northern CaliforniaHayward






407







407



97.5
%Monterey










12



12



97.8
%Sacramento










367



367



91.6
%San Jose


708











708



85.8
%San Ramon










52



52



96.5
%Santa Clara


178











178



100.0
%So. San Francisco


94











94



97.4
%980



407



431



1,818



92.0
%Southern CaliforniaBuena Park






317







317



99.0
%Carson


77











77



86.1
%Cerritos






395



31



426



99.0
%Culver City


149











149



90.3
%Irvine










160



160



92.9
%Laguna Hills


614











614



93.1
%Lake Forest


297











297



93.5
%Monterey Park


199











199



92.0
%Orange










108



108



87.3
%San Diego (1)


768











768



94.1
%Santa Ana










437



437



92.1
%Signal Hill


267











267



92.5
%Studio City


22











22



79.1
%Torrance


147











147



95.1
%2,540



712



736



3,988



93.8
%MarylandBeltsville


309











309



96.5
%Gaithersburg










29



29



95.6
%Rockville


212







688



900



91.8
%Silver Spring (1)


366







166



532



89.0
%887







883



1,770



91.8
%OregonBeaverton


1,024







188



1,212



84.0
%Milwaukee


102











102



83.5
%1,126







188



1,314



84.0
% 18




---



##### 



WeightedRentable Square Footage


AverageLocation

Flex


Industrial


Office


Total


Occupancy RateNorthern TexasDallas


237











237



90.1
%Farmers Branch


112











112



86.1
%Garland


36











36



85.3
%Irving (2)


715



231







946



97.7
%Mesquite


57











57



88.1
%Plano


184











184



88.3
%Richardson


117











117



83.3
%1,458



231







1,689



93.3
%Southern TexasAustin


787











787



93.4
%Houston


177







131



308



96.7
%Missouri City


66











66



99.5
%1,030







131



1,161



94.6
%South FloridaBoca Raton (1)


135











135



94.3
%Miami


631



2,556



12



3,199



96.9
%Wellington (1)


262











262



91.2
%1,028



2,556



12



3,596



96.4
%VirginiaAlexandria


155







54



209



96.6
%Chantilly (1)


563







38



601



92.0
%Fairfax










292



292



92.4
%Herndon










244



244



95.3
%Lorton


246











246



99.6
%Merrifield


303







355



658



99.9
%Springfield


270







90



360



98.9
%Sterling


296











296



98.6
%Woodbridge


114











114



96.1
%1,947







1,073



3,020



96.6
%WashingtonRedmond


465







28



493



94.5
%Renton


28











28



87.8
%493







28



521



94.2
%Total


12,168



3,906



3,482



19,556



93.5
%     (1)
    
    Six commercial properties, one in San Diego, California,
    one in Chantilly, Virginia, one in Silver Spring, Maryland, one
    in Boca Raton, Florida, and two in Wellington, Florida, serve as
    collateral to mortgage notes payable. For more information, see
    Note 6 to the consolidated financial statements.(2)
    
    The Company owns one property that is subject to a ground lease
    in Las Colinas, Texas.     19




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##### 



(in thousands)
  For the Year Ended December 31, 2008


For the Year Ended December 31, 2007


For the Year Ended December 31, 2006Flex


Office


Industrial


Total


Flex


Office


Industrial


Total


Flex


Office


Industrial


TotalRental Income:Southern California

$
43,894


$
15,619


$
5,804


$
65,317


$
43,049


$
16,099


$
5,326


$
64,474


$
41,077


$
15,020


$
5,130


$
61,227Northern California


13,859



7,190



2,890



23,939



12,559



6,977



2,676



22,212



9,743



6,805



2,475



19,023Southern Texas


10,228



2,388







12,616



9,648



2,201







11,849



8,271



2,201







10,472Northern Texas


15,686







1,278



16,964



14,062







1,100



15,162



13,643







1,093



14,736South Florida


12,336



214



20,005



32,555



11,777



230



19,508



31,515



6,256



198



18,219



24,673Virginia


34,508



24,684







59,192



32,666



21,536







54,202



30,361



20,442







50,803Maryland


16,288



21,689







37,977



17,341



21,532







38,873



15,763



19,656







35,419Oregon


14,985



3,481







18,466



15,015



3,266







18,281



15,531



3,065







18,596Arizona


7,006











7,006



6,976











6,976



7,001











7,001Washington


8,850



621







9,471



6,676



555







7,231



264











264Total


177,640



75,886



29,977



283,503



169,769



72,396



28,610



270,775



147,910



67,387



26,917



242,214Cost of Operations:Southern California


10,951



5,873



1,042



17,866



10,580



5,875



1,038



17,493



10,416



6,163



1,012



17,591Northern California


3,816



2,322



724



6,862



3,426



2,279



750



6,455



2,236



2,150



657



5,043Southern Texas


4,235



1,260







5,495



4,041



1,115







5,156



3,649



1,019







4,668Northern Texas


5,712







299



6,011



5,477







288



5,765



5,550







261



5,811South Florida


4,118



104



6,094



10,316



4,157



110



5,807



10,074



2,070



94



6,008



8,172Virginia


8,692



8,558







17,250



8,263



7,332







15,595



7,310



6,976







14,286Maryland


4,680



7,312







11,992



4,719



7,055







11,774



4,129



5,824







9,953Oregon


5,610



1,409







7,019



5,288



1,375







6,663



4,988



1,300







6,288Arizona


3,013











3,013



2,907











2,907



2,746











2,746Washington


2,410



208







2,618



2,289



189







2,478



113











113Total


53,237



27,046



8,159



88,442



51,147



25,330



7,883



84,360



43,207



23,526



7,938



74,671NOI:Southern California


32,943



9,746



4,762



47,451



32,469



10,224



4,288



46,981



30,661



8,857



4,118



43,636Northern California


10,043



4,868



2,166



17,077



9,133



4,698



1,926



15,757



7,507



4,655



1,818



13,980Southern Texas


5,993



1,128







7,121



5,607



1,086







6,693



4,622



1,182







5,804Northern Texas


9,974







979



10,953



8,585







812



9,397



8,093







832



8,925South Florida


8,218



110



13,911



22,239



7,620



120



13,701



21,441



4,186



104



12,211



16,501Virginia


25,816



16,126







41,942



24,403



14,204







38,607



23,051



13,466







36,517Maryland


11,608



14,377







25,985



12,622



14,477







27,099



11,634



13,832







25,466Oregon


9,375



2,072







11,447



9,727



1,891







11,618



10,543



1,765







12,308Arizona


3,993











3,993



4,069











4,069



4,255











4,255Washington


6,440



413







6,853



4,387



366







4,753



151











151Total

$
124,403


$
48,840


$
21,818


$
195,061


$
118,622


$
47,066


$
20,727


$
186,415


$
104,703


$
43,861


$
18,979


$
167,543  21




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##### 



(in thousands)
  For The Years Ended December 31,2008


2007


2006Property net operating income

$
195,061


$
186,415


$
167,543Facility management fees


728



724



625Interest and other income


1,457



5,104



6,874Depreciation and amortization


(99,848
)


(98,521
)


(86,216
)General and administrative


(8,099
)


(7,917
)


(7,046
)Interest expense


(3,952
)


(4,130
)


(2,575
)Income from continuing operations before minority interests

$
85,347


$
81,675


$
79,205   Significant
    Properties
        2004


2005


2006


2007


2008Weighted average occupancy rate


83.8%



91.8%



96.4%



98.2%



96.9%Realized rent per square foot

$
7.75


$
7.47


$
7.88


$
8.24


$
8.76     (in thousands, except number of leases
    expiring)
  Percentage of TotalRentable Square


Annualized Rental


Annualized RentalNumber of Leases


Footage Subject to


Income Under


Income RepresentedYear of Lease Expiration

Expiring


Expiring Leases


Expiring Leases


by Expiring Leases2009


86



660


$
6,311



21.5
%2010


72



758



6,593



22.5
%2011


65



691



6,725



22.9
%2012


34



491



4,745



16.2
%2013


24



391



3,613



12.3
%Thereafter


6



138



1,350



4.6
%Total


287



3,129


$
29,337



100.0
%  22




---



##### 



(in thousands, except year data)
  Rate of





Life in


AccumulatedTax Basis


Depreciation


Method


Years


DepreciationLand Improvements

$
45,588



6.5
%


MACRS, 150
%


15


$
18,884Improvements


24,582



9.6
%


VARIOUS



5



24,429Tenant Buildings


91,797



2.8
%


MACRS, SL



VAR



11,424Total

$
161,967














$
54,737     Portfolio
    Information
  (in thousands)
  Lease
    Expirations (Entire Portfolio) as of December 31,
    2008
  Percentage of TotalRentable Square


Annualized Rental


Annualized RentalFootage Subject to


Income Under


Income RepresentedYear of Lease Expiration

Expiring Leases


Expiring Leases


by Expiring Leases2009


4,330


$
63,629



21.7
%2010


4,157



64,164



21.9
%2011


3,305



54,254



18.5
%2012


2,391



41,573



14.2
%2013


1,966



30,632



10.4
%Thereafter


1,804



38,852



13.3
%Total


17,953


$
293,104



100.0
%  23




---



##### 



Lease
    Expirations (Small Tenant Portfolio) as of December 31,
    2008
    Percentage of SmallTenant AnnualizedRentable Square


Annualized Rental


Rental IncomeFootage Subject to


Income Under


Represented byYear of Lease Expiration

Expiring Leases


Expiring Leases


Expiring Leases2009


2,258


$
36,169



12.3
%2010


1,904



32,556



11.1
%2011


1,121



20,479



7.0
%2012


782



14,795



5.1
%2013


461



9,945



3.4
%Thereafter


326



7,909



2.7
%Total


6,852


$
121,853



41.6
%   Lease
    Expirations (Large Tenant Portfolio) as of December 31,
    2008
    Percentage of LargeTenant AnnualizedRentable Square


Annualized Rental


Rental IncomeFootage Subject to


Income Under


Represented byYear of Lease Expiration

Expiring Leases


Expiring Leases


Expiring Leases2009


2,072


$
27,460



9.4
%2010


2,253



31,608



10.8
%2011


2,184



33,775



11.5
%2012


1,609



26,778



9.1
%2013


1,505



20,687



7.0
%Thereafter


1,478



30,943



10.6
%Total


11,101


$
171,251



58.4
%   ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   24




---



##### 



ITEM 4A.
    EXECUTIVE
    OFFICERS OF THE REGISTRANT            ,
 25




---



##### 



PART II
  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES      RangeThree Months Ended

High


LowMarch 31, 2007

$
77.60


$
66.75June 30, 2007

$
72.25


$
60.22September 30, 2007

$
66.67


$
49.35December 31, 2007

$
63.95


$
50.45March 31, 2008

$
55.20


$
40.33June 30, 2008

$
59.90


$
51.60September 30, 2008

$
60.25


$
50.00December 31, 2008

$
57.18


$
32.99            26




---



##### 



Total Number of


Maximum NumberTotal Number





Shares Repurchased as


of Shares that Mayof Shares


Average Price


Part of Publicly


Yet Be RepurchasedPeriod Covered

Repurchased


Paid per Share


Announced Program


Under the ProgramOctober 1 through October 31, 2008





$








November 1 through November 30, 2008





$








December 1 through December 31, 2008


400,000
(1)

$
13.70







Total


400,000


$
13.70







     (1)
    
    On December 1, 2008, the Company paid $5.5 million to
    repurchase 400,000 depositary shares in a private transaction,
    each representing 1/1,000 of a share of the 6.700% Cumulative
    Preferred Stock, Series P, for a cost of $13.70 per
    depositary share.         27




---



##### 



ITEM 6.
    SELECTED
    FINANCIAL DATA  Form 10-K. Form 10-K
  For The Years Ended December 31,2008


2007


2006


2005


2004(In thousands, except per share data)Revenues:Rental income

$
283,503


$
270,775


$
242,214


$
219,604


$
210,937Facility management fees


728



724



625



579



624Total operating revenues


284,231



271,499



242,839



220,183



211,561Expenses:Cost of operations


88,442



84,360



74,671



65,712



62,994Depreciation and amortization


99,848



98,521



86,216



76,178



69,942General and administrative


8,099



7,917



7,046



5,843



4,628Total operating expenses


196,389



190,798



167,933



147,733



137,564Other income and expenses:Interest and other income


1,457



5,104



6,874



4,888



406Interest expense


(3,952
)


(4,130
)


(2,575
)


(1,330
)


(3,054
)Total other income and expenses


(2,495
)


974



4,299



3,558



(2,648
)Asset impairment due to casualty loss














72



Income from continuing operations before minority interests


85,347



81,675



79,205



75,936



71,349Minority interests in continuing operations:Minority interest in income  preferred units:Distributions to preferred unit holders


(7,007
)


(6,854
)


(9,789
)


(10,350
)


(17,106
)Redemption of preferred operating partnership units










(1,366
)


(301
)


(3,139
)Minority interest in income  common units


(8,296
)


(6,155
)


(5,113
)


(5,611
)


(4,540
)Total minority interests in continuing operations


(15,303
)


(13,009
)


(16,268
)


(16,262
)


(24,785
)Income from continuing operations


70,044



68,666



62,937



59,674



46,564Discontinued operations:Income (loss) from discontinued operations










(125
)


2,769



5,337Gain on disposition of real estate










2,328



18,109



15,462Minority interest in income attributable to discontinued
    operations  common units










(560
)


(5,258
)


(5,220
)Income from discontinued operations










1,643



15,620



15,579Net income


70,044



68,666



64,580



75,294



62,143Net income allocable to preferred shareholders:Preferred stock distributions


50,858



50,937



44,553



43,011



31,154Gain on repurchase of preferred stock, net


(4,228
)














Redemptions of preferred stock










3,380







1,866Total net income allocable to preferred shareholders


46,630



50,937



47,933



43,011



33,020Net income allocable to common shareholders

$
23,414


$
17,729


$
16,647


$
32,283


$
29,123  28




---



##### 



For The Years Ended December 31,2008


2007


2006


2005


2004(In thousands, except per share data)Per Common Share:Cash Distribution

$
1.76


$
1.61


$
1.16


$
1.16


$
1.16Net income  basic

$
1.15


$
0.83


$
0.78


$
1.48


$
1.34Net income  diluted

$
1.13


$
0.82


$
0.77


$
1.47


$
1.33Weighted average common shares  basic


20,443



21,313



21,335



21,826



21,767Weighted average common shares  diluted


20,664



21,634



21,646



22,018



21,960Balance Sheet Data:Total assets

$
1,469,323


$
1,516,583


$
1,463,599


$
1,463,794


$
1,366,768Total debt

$
59,308


$
60,725


$
67,048


$
25,893


$
11,367Preferred stock called for redemption

$



$



$
50,000


$



$
Minority interest  preferred units

$
94,750


$
94,750


$
82,750


$
135,750


$
127,750Minority interest  common units

$
148,023


$
154,470


$
165,469


$
169,451


$
169,295Preferred stock

$
706,250


$
716,250


$
572,500


$
593,350


$
510,850Common shareholders equity

$
414,564


$
439,330


$
482,703


$
500,108


$
506,114Other Data:Net cash provided by operating activities

$
189,337


$
184,094


$
166,134


$
148,828


$
152,166Net cash (used in) provided by investing activities

$
(35,192
)

$
(180,188
)

$
(169,986
)

$
24,389


$
(26,108
)Net cash used in financing activities

$
(134,171
)

$
(35,882
)

$
(129,694
)

$
(13,058
)

$
(91,971
)Funds from operations(1)

$
131,558


$
122,405


$
106,235


$
102,463


$
97,214Square footage owned at end of period


19,556



19,556



18,687



17,555



17,988     (1)
    
    Funds from operations (FFO) is computed in
    accordance with the White Paper on FFO approved by the Board of
    Governors of NAREIT. The White Paper defines FFO as net income,
    computed in accordance with GAAP, before depreciation,
    amortization, minority interest in income, gains or losses on
    asset dispositions and extraordinary items. FFO should be
    analyzed in conjunction with net income. However, FFO should not
    be viewed as a substitute for net income as a measure of
    operating performance or liquidity as it does not reflect
    depreciation and amortization costs or the level of capital
    expenditure and leasing costs necessary to maintain the
    operating performance of the Companys properties, which
    are significant economic costs and could materially impact the
    Companys results of operations. Other REITs may use
    different methods for calculating FFO and, accordingly, the
    Companys FFO may not be comparable to that of other real
    estate companies. See Item 7, Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Liquidity and Capital
    Resources  Funds from Operations, for a
    reconciliation of FFO and net income allocable to common
    shareholders and for information on why the Company presents FFO. 29




---



##### 



ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Form 10-K.
  Forward-Looking Statements: Form 10-K.
  Overview
        Critical
    Accounting Policies and Estimates:
  Form 10-K.
  Revenue Recognition:
  Property Acquisitions:
 30




---



##### 



Allowance for Doubtful Accounts:
      Impairment of Long-Lived Assets:
 31




---



##### 



Depreciation:
  Accruals of Operating Expenses:
  Accruals for Contingencies:
  Effect of Economic Conditions on the Companys
    Operations:
    Company Performance and Effect of Economic Conditions on
    Primary Markets:
   32




---



##### 



33




---



##### 



Growth of the Companys Operations and Acquisitions
    and Dispositions of Properties:
   34




---



##### 



Scheduled Lease Expirations:
  Impact of Inflation:
  Concentration of Portfolio by Region:
 35




---



##### 



(in thousands)
  WeightedSquare


Percent of


Rental


Percent of


Cost of


Percent of





Percent ofRegion

Footage


Total


Income


Total


Operations


Total


NOI


TotalSouthern California


3,988



20.4
%

$
65,317



23.0
%

$
17,866



20.2
%

$
47,451



24.3
%Northern California


1,818



9.3
%


23,939



8.4
%


6,862



7.8
%


17,077



8.8
%Southern Texas


1,161



5.9
%


12,616



4.5
%


5,495



6.2
%


7,121



3.7
%Northern Texas


1,689



8.6
%


16,964



6.0
%


6,011



6.8
%


10,953



5.6
%South Florida


3,596



18.4
%


32,555



11.5
%


10,316



11.7
%


22,239



11.4
%Virginia


3,020



15.4
%


59,192



20.9
%


17,250



19.5
%


41,942



21.5
%Maryland


1,770



9.1
%


37,977



13.4
%


11,992



13.6
%


25,985



13.3
%Oregon


1,314



6.7
%


18,466



6.5
%


7,019



7.9
%


11,447



5.9
%Arizona


679



3.5
%


7,006



2.5
%


3,013



3.4
%


3,993



2.0
%Washington


521



2.7
%


9,471



3.3
%


2,618



2.9
%


6,853



3.5
%Total before depreciation and amortization


19,556



100.0
%


283,503



100.0
%


88,442



100.0
%


195,061



100.0
%Depreciation and amortization


















99,848







(99,848
)Total based on GAAP









$
283,503






$
188,290






$
95,213   Concentration of Credit Risk by Industry:
  % of TotalAnnualizedIndustry

Rental IncomeBusiness services


13.2
%Health services


10.3
%Computer hardware, software and related service


9.3
%Warehouse, distribution, transportation and logistics


8.7
%Government


8.4
%Insurance and financial services


7.8
%Engineering and construction


7.7
%Retail, food and automotive


6.3
%Communications


5.7
%Home furnishing


3.8
%Electronics


3.5
%Educational services


3.0
%Aerospace/defense products and services


2.3
%Total


90.0
%  36




---



##### 



in thousands
  % of TotalAnnualized


AnnualizedTenants

Square Footage


Rental Income (1)


Rental IncomeU.S. Government


486


$
12,684



4.4
%Kaiser Permanente


186



4,302



1.5
%Wells Fargo Bank


102



1,749



0.6
%AARP


102



1,676



0.6
%Northrop Grumman


57



1,649



0.6
%Raytheon


82



1,495



0.5
%American Intercontinental University


75



1,405



0.5
%Verizon


72



1,350



0.5
%Intel Corporation


94



1,348



0.5
%Montgomery County Public School


47



1,329



0.5
%Total


1,303


$
28,987



10.2
%     (1)
    
    For leases expiring prior to December 31, 2009, annualized
    rental income represents income to be received under existing
    leases from December 31, 2008 through the date of
    expiration.  Comparison
    of 2008 to 2007
  Results of Operations:
 37




---



##### 



(in thousands, except per square foot
    data)
  For The Years Ended December 31,2008


2007


ChangeRental income:Same Park (18.7 million rentable square feet) (1)

$
268,248


$
260,632



2.9
%Non-Same Park (870,000 rentable square feet) (2)


15,255



10,143



50.4
%Total rental income


283,503



270,775



4.7
%Cost of operations:Same Park


83,721



80,779



3.6
%Non-Same Park


4,721



3,581



31.8
%Total cost of operations


88,442



84,360



4.8
%Net operating income (3):Same Park


184,527



179,853



2.6
%Non-Same Park


10,534



6,562



60.5
%Total net operating income


195,061



186,415



4.6
%Other income and expenses:Facility management fees


728



724



0.6
%Interest and other income


1,457



5,104



(71.5
%)Interest expense


(3,952
)


(4,130
)


(4.3
%)Depreciation and amortization


(99,848
)


(98,521
)


1.3
%General and administrative


(8,099
)


(7,917
)


2.3
%Income from continuing operations before minority interests

$
85,347


$
81,675



4.5
%Same Park gross margin (4)


68.8
%


69.0
%


(0.3
%)Same Park weighted average for the period:Occupancy


93.7
%


93.7
%


Realized rent per square foot (5)

$
15.32


$
14.89



2.9
%     (1)
    
    See below for a definition of Same Park.(2)
    
    See below for a definition of Non-Same Park.(3)
    
    Net operating income (NOI) is an important
    measurement in the commercial real estate industry for
    determining the value of the real estate generating the NOI. See
    Concentration of Portfolio by Region above for more
    information on NOI. The Companys calculation of NOI may
    not be comparable to those of other companies and should not be
    used as an alternative to measures of performance in accordance
    with GAAP.(4)
    
    Same Park gross margin is computed by dividing Same Park NOI by
    Same Park rental income.(5)
    
    Same Park realized rent per square foot represents the Same Park
    rental income earned per occupied square foot.  Supplemental Property Data and Trends:
 38




---



##### 



(in thousands)
  Cost of


Cost ofRental Income


Rental Income





Operations


Operations





NOI


NOIDecember 31,


December 31,


Increase


December 31,


December 31,


Increase


December 31,


December 31,


IncreaseRegion

2008


2007


(Decrease)


2008


2007


(Decrease)


2008


2007


(Decrease)Southern California

$
65,317


$
64,474



1.3
%

$
17,866


$
17,483



2.2
%

$
47,451


$
46,991



1.0
%Northern California


20,890



20,221



3.3
%


5,728



5,673



1.0
%


15,162



14,548



4.2
%Southern Texas


12,616



11,848



6.5
%


5,495



5,153



6.6
%


7,121



6,695



6.4
%Northern Texas


16,964



15,162



11.9
%


6,011



5,764



4.3
%


10,953



9,398



16.5
%South Florida


32,555



31,514



3.3
%


10,316



10,060



2.5
%


22,239



21,454



3.7
%Virginia


56,108



52,957



6.0
%


16,169



15,226



6.2
%


39,939



37,731



5.9
%Maryland


37,977



38,873



(2.3
%)


11,992



11,746



2.1
%


25,985



27,127



(4.2
%)Oregon


18,466



18,278



1.0
%


7,019



6,659



5.4
%


11,447



11,619



(1.5
%)Arizona


7,006



6,976



0.4
%


3,013



2,904



3.8
%


3,993



4,072



(1.9
%)Washington


349



329



6.1
%


112



111



0.9
%


237



218



8.7
%Total Same Park


268,248



260,632



2.9
%


83,721



80,779



3.6
%


184,527



179,853



2.6
%Non-Same Park


15,255



10,143



50.4
%


4,721



3,581



31.8
%


10,534



6,562



60.5
%Total before depreciation and amortization


283,503



270,775



4.7
%


88,442



84,360



4.8
%


195,061



186,415



4.6
%Depreciation and amortization














99,848



98,521



1.3
%


(99,848
)


(98,521
)


1.3
%Total based on GAAP

$
283,503


$
270,775



4.7
%

$
188,290


$
182,881



3.0
%

$
95,213


$
87,894



8.3
%   Revenues:
  Facility Management Operations:
  Cost of Operations:
  Depreciation and Amortization
    Expense:
 39




---



##### 



General and Administrative Expense:
  Interest and Other Income:
  Interest Expense:
  Minority Interest in Income:
  Comparison
    of 2007 to 2006
  Results of Operations:
 40




---



##### 



(in thousands, except per square foot
    data)
  For The Years Ended December 31,2007


2006


ChangeRental income:Same Park (17.5 million rentable square feet) (1)

$
238,783


$
230,965



3.4
%Non-Same Park (2.1 million rentable square feet) (2)


31,992



11,249



184.4
%Total rental income


270,775



242,214



11.8
%Cost of operations:Same Park


72,995



70,707



3.2
%Non-Same Park


11,365



3,964



186.7
%Total cost of operations


84,360



74,671



13.0
%Net operating income (3):Same Park


165,788



160,258



3.5
%Non-Same Park


20,627



7,285



183.1
%Total net operating income


186,415



167,543



11.3
%Other income and expenses:Facility management fees


724



625



15.8
%Interest and other income


5,104



6,874



(25.7
%)Interest expense


(4,130
)


(2,575
)


60.4
%Depreciation and amortization


(98,521
)


(86,216
)


14.3
%General and administrative


(7,917
)


(7,046
)


12.4
%Income from continuing operations before minority interests

$
81,675


$
79,205



3.1
%Same Park gross margin (4)


69.4
%


69.4
%


Same Park weighted average for the period:Occupancy


93.8
%


93.4
%


0.4
%Realized rent per square foot (5)

$
14.55


$
14.14



2.9
%     (1)
    
    See below for a definition of Same Park.(2)
    
    See below for a definition of Non-Same Park.(3)
    
    Net operating income (NOI) is an important
    measurement in the commercial real estate industry for
    determining the value of the real estate generating the NOI. See
    Concentration of Portfolio by Region above for more
    information on NOI. The Companys calculation of NOI may
    not be comparable to those of other companies and should not be
    used as an alternative to measures of performance in accordance
    with GAAP.(4)
    
    Same Park gross margin is computed by dividing Same Park NOI by
    Same Park rental income.(5)
    
    Same Park realized rent per square foot represents the Same Park
    rental income earned per occupied square foot.  Supplemental Property Data and Trends:
 41




---



##### 



(in thousands)
  Cost of


Cost ofRental Income


Rental Income





Operations


Operations





NOI


NOIDecember 31,


December 31,


Increase


December 31,


December 31,


Increase


December 31,


December 31,


IncreaseRegion

2007


2006


(Decrease)


2007


2006


(Decrease)


2007


2006


(Decrease)Southern California

$
63,570


$
60,803



4.6
%

$
17,115


$
17,362



(1.4
%)

$
46,455


$
43,441



6.9
%Northern California


19,589



18,854



3.9
%


5,380



5,006



7.5
%


14,209



13,848



2.6
%Southern Texas


11,849



10,472



13.1
%


5,156



4,668



10.5
%


6,693



5,804



15.3
%Northern Texas


15,162



14,736



2.9
%


5,765



5,811



(0.8
%)


9,397



8,925



5.3
%South Florida


25,899



24,316



6.5
%


7,869



8,041



(2.1
%)


18,030



16,275



10.8
%Virginia


51,219



50,055



2.3
%


14,779



14,056



5.1
%


36,440



35,999



1.2
%Maryland


25,909



25,868



0.2
%


7,251



6,616



9.6
%


18,658



19,252



(3.1
%)Oregon


18,281



18,596



(1.7
%)


6,663



6,288



6.0
%


11,618



12,308



(5.6
%)Arizona


6,976



7,001



(0.4
%)


2,907



2,746



5.9
%


4,069



4,255



(4.4
%)Washington


329



264



24.6
%


110



113



(2.7
%)


219



151



45.0
%Total Same Park


238,783



230,965



3.4
%


72,995



70,707



3.2
%


165,788



160,258



3.5
%Non-Same Park


31,992



11,249



184.4
%


11,365



3,964



186.7
%


20,627



7,285



183.1
%Total before depreciation and amortization


270,775



242,214



11.8
%


84,360



74,671



13.0
%


186,415



167,543



11.3
%Depreciation and amortization














98,521



86,216



14.3
%


(98,521
)


(86,216
)


14.3
%Total based on GAAP

$
270,775


$
242,214



11.8
%

$
182,881


$
160,887



13.7
%

$
87,894


$
81,327



8.1
%   Revenues:
  Facility Management Operations:
  Cost of Operations:
  Depreciation and Amortization
    Expense:
  General and Administrative Expense:
 42




---



##### 



Interest and Other Income:
  Interest Expense:
  Gain on Disposition of Real Estate:
  Minority Interest in Income:
  Liquidity
    and Capital Resources
           43




---



##### 



Non-GAAP Supplemental Disclosure Measure: Funds
    from Operations:
 44




---



##### 



in thousands
  For The Years Ended December 31,2008


2007


2006


2005


2004Net income allocable to common shareholders

$
23,414


$
17,729


$
16,647


$
32,283


$
29,123Gain on disposition of real estate










(2,328
)


(18,109
)


(15,462
)Depreciation and amortization


99,848



98,521



86,243



77,420



73,793Minority interest in income  common units


8,296



6,155



5,673



10,869



9,760Consolidated FFO allocable to common shareholders and minority
    interests


131,558



122,405



106,235



102,463



97,214FFO allocated to minority interests  common units


(34,468
)


(31,580
)


(27,005
)


(25,810
)


(24,401
)FFO allocated to common shareholders

$
97,090


$
90,825


$
79,230


$
76,653


$
72,813     Capital Expenditures: in thousands
  For The Years Ended December 31,2008


2007


2006Recurring capital expenditures

$
33,262


$
37,362


$
34,096Property renovations and other capital expenditures


1,930



5,239



5,131Total capital expenditures

$
35,192


$
42,601


$
39,227   Stock Repurchase:
  Preferred Stock Repurchase:
 45




---



##### 



Redemption of Preferred Equity:
  Distributions:
  Related Party Transactions:
    Off-Balance Sheet Arrangements:
  Contractual Obligations: (in thousands)
  Payments Due by PeriodContractual Obligations

Total


Less than 1 year


1 - 3 years


3 - 5 years


More than 5 yearsMortgage notes payable (principal and interest)

$
70,386


$
9,469


$
26,478


$
34,439


$
Total

$
70,386


$
9,469


$
26,478


$
34,439


$
    46




---



##### 



ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK      ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA    ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Conclusion
    Regarding the Effectiveness of Disclosure Controls and
    Procedures
  Rules 13a-15(e) 15d-15(e)
  Rules 13a-15(e) 15d-15(e)
  Managements
    Report on Internal Control over Financial Reporting
  Rules 13a-15(f) 15d-15(f) Internal
    Control-Integrated Framework Internal
    Control-Integrated Framework
 47




---



##### 



Changes
    in Internal Control Over Financial Reporting
  Rules 13a-15(f) 15d-15(f)
 48




---



##### 



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  To the Board
    of Directors and Shareholders of
    PS Business Parks, Inc.
  Internal Control 
    Integrated Framework
              
 49




---



##### 



ITEM 9B.
    OTHER
    INFORMATION    PART III
  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE        Form 10-K.
    ITEM 11.
    EXECUTIVE
    COMPENSATION   50




---



##### 



ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS      (a)


(b)


(c)Number of Securities


Weighted


Number of Securitiesto be Issued Upon


Average


Remaining Available forExercise of


Exercise Price of


Future Issuance underOutstanding


Outstanding


Equity CompensationOptions, Warrants,


Options,


Plans (Excludingand


Warrants, and


Securities Reflected inPlan Category

Rights


Rights


Column (a))Equity compensation plans approved by security holders


786,041


$
43.62



1,198,301Equity compensation plans not approved by security holders





$




Total


786,041
*

$
43.62
*


1,198,301
*     *
    
    Amounts include restricted stock units  ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES  Audit Fees: Form 10-Q
  Audit-Related Fees:
  Tax Fees:
  All Other Fees:
   51




---



##### 



PART IV
  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES                     52




---



##### 



PS
    BUSINESS PARKS, INC.
  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
    (Item 15(a)(1) and Item 15(a)(2))
  PageReport of Independent Registered Public Accounting Firm


54Consolidated balance sheets as of December 31, 2008 and 2007


55Consolidated statements of income for the years ended
    December 31, 2008, 2007 and 2006


56Consolidated statements of shareholders equity for the
    years ended December 31, 2008, 2007 and 2006


57Consolidated statements of cash flows for the years ended
    December 31, 2008, 2007 and 2006


58Notes to consolidated financial statements


60Schedule:III  Real estate and accumulated depreciation


76    53




---



##### 



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  To the Board
    of Directors and Shareholders of
    PS Business Parks, Inc.
        Internal Control  Integrated
    Framework
       54




---



##### 



PS
    BUSINESS PARKS, INC.
  CONSOLIDATED
    BALANCE SHEETS
  December 31,2008


2007(In thousands, exceptshare data)ASSETSCash and cash equivalents

$
55,015


$
35,041Real estate facilities, at cost:Land


494,849



494,849Buildings and equipment


1,517,484



1,484,0492,012,333



1,978,898Accumulated depreciation


(637,948
)


(539,857
)1,374,385



1,439,041Land held for development


7,869



7,8691,382,254



1,446,910Rent receivable


2,055



2,240Deferred rent receivable


21,633



21,927Other assets


8,366



10,465Total assets

$
1,469,323


$
1,516,583LIABILITIES AND SHAREHOLDERS EQUITYAccrued and other liabilities

$
46,428


$
51,058Mortgage notes payable


59,308



60,725Total liabilities


105,736



111,783Minority interests:Preferred units


94,750



94,750Common units


148,023



154,470Commitments and contingenciesShareholders equity:Preferred stock, $0.01 par value, 50,000,000 shares
    authorized, 28,250 and 28,650 shares issued and outstanding
    at December 31, 2008 and 2007, respectively


706,250



716,250Common stock, $0.01 par value, 100,000,000 shares
    authorized, 20,459,916 and 20,777,219 shares issued and
    outstanding at December 31, 2008 and 2007, respectively


204



207Paid-in capital


363,587



371,267Cumulative net income


622,113



552,069Cumulative distributions


(571,340
)


(484,213
)Total shareholders equity


1,120,814



1,155,580Total liabilities and shareholders equity

$
1,469,323


$
1,516,583    55




---



##### 



PS
    BUSINESS PARKS, INC.
  CONSOLIDATED
    STATEMENTS OF INCOME
  For The Years Ended December 31,2008


2007


2006(In thousands, exceptper share data)Revenues:Rental income

$
283,503


$
270,775


$
242,214Facility management fees


728



724



625Total operating revenues


284,231



271,499



242,839Expenses:Cost of operations


88,442



84,360



74,671Depreciation and amortization


99,848



98,521



86,216General and administrative


8,099



7,917



7,046Total operating expenses


196,389



190,798



167,933Other income and expenses:Interest and other income


1,457



5,104



6,874Interest expense


(3,952
)


(4,130
)


(2,575
)Total other income and expenses


(2,495
)


974



4,299Income from continuing operations before minority interests


85,347



81,675



79,205Minority interests in continuing operations:Minority interest in income  preferred units:Distributions to preferred unit holders


(7,007
)


(6,854
)


(9,789
)Redemption of preferred operating partnership units










(1,366
)Minority interest in income  common units


(8,296
)


(6,155
)


(5,113
)Total minority interests in continuing operations


(15,303
)


(13,009
)


(16,268
)Income from continuing operations


70,044



68,666



62,937Discontinued operations:Loss from discontinued operations










(125
)Gain on disposition of real estate










2,328Minority interest in income attributable to discontinued
    operations  common units










(560
)Income from discontinued operations










1,643Net income


70,044



68,666



64,580Net income allocable to preferred shareholders:Preferred stock distributions


50,858



50,937



44,553Gain on repurchase of preferred stock, net


(4,228
)






Redemptions of preferred stock










3,380Total net income allocable to preferred shareholders


46,630



50,937



47,933Net income allocable to common shareholders

$
23,414


$
17,729


$
16,647Net income per common share  basic:Continuing operations

$
1.15


$
0.83


$
0.70Discontinued operations

$



$



$
0.08Net income

$
1.15


$
0.83


$
0.78Net income per common share  diluted:Continuing operations

$
1.13


$
0.82


$
0.69Discontinued operations

$



$



$
0.08Net income

$
1.13


$
0.82


$
0.77Weighted average common shares outstanding:Basic


20,443



21,313



21,335Diluted


20,664



21,634



21,646    56




---



##### 



PS
    BUSINESS PARKS, INC.
  CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY
  CumulativePreferred Stock


Common Stock


Paid-in


Net


Cumulative


ShareholdersShares


Amount


Shares


Amount


Capital


Income


Distributions


Equity(In thousands, except share data)Balances at December 31, 2005


23,734


$
593,350



21,560,593


$
215


$
407,380


$
418,823


$
(326,310
)

$
1,093,458Issuance of preferred stock, net of costs


3,800



95,000











(2,798
)










92,202Redemption of preferred stock


(2,634
)


(65,850
)










1,658







(1,658
)


(65,850
)Preferred stock called for redemption


(2,000
)


(50,000
)










1,722







(1,722
)


(50,000
)Repurchase of common stock










(309,100
)


(3
)


(16,114
)










(16,117
)Exercise of stock options










37,900



1



1,366











1,367Stock compensation










21,612







2,286











2,286Net income






















64,580







64,580Distributions:Preferred stock


























(44,553
)


(44,553
)Common stock


























(24,718
)


(24,718
)Adjustment to minority interests underlying ownership


















2,548











2,548Balances at December 31, 2006


22,900



572,500



21,311,005



213



398,048



483,403



(398,961
)


1,055,203Issuance of preferred stock, net of costs


5,750



143,750











(4,183
)










139,567Repurchase of common stock










(601,042
)


(6
)


(31,847
)










(31,853
)Exercise of stock options










43,384







1,468











1,468Stock compensation










23,872







2,813











2,813Shelf registration


















(88
)










(88
)Net income






















68,666







68,666Distributions:Preferred stock


























(50,937
)


(50,937
)Common stock


























(34,315
)


(34,315
)Adjustment to minority interests underlying ownership


















5,056











5,056Balances at December 31, 2007


28,650



716,250



20,777,219



207



371,267



552,069



(484,213
)


1,155,580Repurchase of preferred stock, net of costs


(400
)


(10,000
)










4,810







(291
)


(5,481
)Repurchase of common stock










(370,042
)


(3
)


(18,321
)










(18,324
)Exercise of stock options










30,234







792











792Stock compensation










22,505







3,151











3,151Net income






















70,044







70,044Distributions:Preferred stock


























(50,858
)


(50,858
)Common stock


























(35,978
)


(35,978
)Adjustment to minority interests underlying ownership


















1,888











1,888Balances at December 31, 2008


28,250


$
706,250



20,459,916


$
204


$
363,587


$
622,113


$
(571,340
)

$
1,120,814    57




---



##### 



PS
    BUSINESS PARKS, INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  For The Years Ended December 31,2008


2007


2006(In thousands)Cash flows from operating activities:Net income

$
70,044


$
68,666


$
64,580Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization expense


99,848



98,521



86,243In-place lease adjustment


(194
)


(102
)


232Lease incentives net of tenant improvement reimbursements


(379
)


(33
)


440Amortization of mortgage premium


(260
)


(247
)


(76
)Minority interest in income


15,303



13,009



16,828Gain on disposition of properties










(2,328
)Stock compensation expense


3,151



2,813



2,845Decrease (increase) in receivables and other assets


1,759



(1,015
)


(3,741
)Increase in accrued and other liabilities


65



2,482



1,111Total adjustments


119,293



115,428



101,554Net cash provided by operating activities


189,337



184,094



166,134Cash flows from investing activities:Capital improvements to real estate facilities


(35,192
)


(42,601
)


(39,227
)Acquisition of real estate facilities






(138,936
)


(138,973
)Insurance proceeds from casualty loss






1,349



500Proceeds from disposition of real estate










7,714Net cash used in investing activities


(35,192
)


(180,188
)


(169,986
)Cash flows from financing activities:Principal payments on mortgage notes payable


(1,157
)


(1,126
)


(762
)Repayment of mortgage note payable






(4,950
)


Net proceeds from the issuance of preferred stock






139,567



92,448Net proceeds from the issuance of preferred units






11,665



Exercise of stock options


792



1,468



1,367Shelf registration costs






(88
)


Repurchase of common stock


(21,626
)


(28,551
)


(16,117
)Repurchase of preferred stock


(5,481
)






Redemption of preferred units










(53,000
)Redemption of preferred stock






(50,000
)


(65,850
)Distributions paid to preferred shareholders


(50,858
)


(50,937
)


(44,799
)Distributions paid to minority interests  preferred
    units


(7,007
)


(6,854
)


(9,789
)Distributions paid to common shareholders


(35,978
)


(34,315
)


(24,718
)Distributions paid to minority interests  common units


(12,856
)


(11,761
)


(8,474
)Net cash used in financing activities


(134,171
)


(35,882
)


(129,694
)Net increase (decrease) in cash and cash equivalents


19,974



(31,976
)


(133,546
)Cash and cash equivalents at the beginning of the period


35,041



67,017



200,563Cash and cash equivalents at the end of the period

$
55,015


$
35,041


$
67,017Supplemental disclosures:Interest paid

$
4,050


$
4,145


$
2,575    58




---



##### 



PS
    BUSINESS PARKS, INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  For The Years Ended December 31,2008


2007


2006(In thousands)Supplemental schedule of non-cash investing and financing
    activities:Adjustment to minority interest to underlying ownership:Minority interest  common units

$
(1,888
)

$
(5,391
)

$
(1,182
)Paid-in capital

$
1,888


$
5,391


$
1,182Gain on repurchase of preferred stock:Preferred stock

$
(4,519
)

$



$
Paid-in capital

$
4,519


$



$
Effect of Emerging Issues Task Force (EITF) Topic
    D-42 Cumulative distributions

$
(291
)

$



$
(3,380
)Minority interest  common units

$



$



$
(1,366
)Paid-in capital

$
291


$



$
4,746Mortgage note payable assumed in property acquisition:Real estate facilities

$



$



$
(41,993
)Mortgage notes payable

$



$



$
41,993Accrued stock repurchase:Paid-in capital

$



$
(3,302
)

$
Accrued and other liabilities

$



$
3,302


$
Preferred stock called for redemption:Preferred stock

$



$



$
(50,000
)Preferred stock called for redemption

$



$



$
50,000    59




---



##### 



PS
    BUSINESS PARKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  DECEMBER
    31, 2008
  1.
    Organization
    and description of business  Organization
    Description
    of business
      2.
    Summary
    of significant accounting policies  Basis of
    presentation
    Use of
    estimates
    Allowance
    for doubtful accounts
    Financial
    instruments
   60




---



##### 



Real
    estate facilities
    Properties
    held for disposition
    Intangible
    assets/liabilities
    Evaluation
    of asset impairment
   61




---



##### 



Asset
    impairment due to casualty loss
        Stock-based
    compensation
    Revenue
    and expense recognition
      Gains
    from sales of real estate
   62




---



##### 



General
    and administrative expense
    Income
    taxes
      Accounting
    for preferred equity issuance costs
    Net
    income per common share
  (in thousands, except per share data)
  2008


2007


2006Net income allocable to common shareholders

$
23,414


$
17,729


$
16,647Weighted average common shares outstanding:Basic weighted average common shares outstanding


20,443



21,313



21,335Net effect of dilutive stock compensation  based on
    treasury stock method using average market price


221



321



311Diluted weighted average common shares outstanding


20,664



21,634



21,646Net income per common share  Basic

$
1.15


$
0.83


$
0.78Net income per common share  Diluted

$
1.13


$
0.82


$
0.77  63




---



##### 



Segment
    reporting
    3.
    Real
    estate facilities  (in
    thousands)
  Buildings and


AccumulatedLand


Equipment


Depreciation


TotalBalances at December 31, 2005

$
383,308


$
1,189,815


$
(355,228
)

$
1,217,895Acquisition of real estate


56,469



124,774







181,243Disposition of real estate










27



27Asset impairment due to casualty loss






(374
)


108



(266
)Capital improvements, net






39,227







39,227Depreciation expense










(86,243
)


(86,243
)Balances at December 31, 2006


439,777



1,353,442



(441,336
)


1,351,883Acquisition of real estate


53,930



88,006







141,936Capital improvements, net






42,601







42,601Depreciation expense










(98,521
)


(98,521
)Transfer from land held for development


1,142











1,142Balances at December 31, 2007


494,849



1,484,049



(539,857
)


1,439,041Capital improvements, net






35,192







35,192Disposals






(1,757
)


1,757



Depreciation expense










(99,848
)


(99,848
)Balances at December 31, 2008

$
494,849


$
1,517,484


$
(637,948
)

$
1,374,385        64




---



##### 



(in thousands)
  2007


2006Land

$
53,930


$
56,469Buildings


88,006



124,774In-place leases


(1,357
)


433Total purchase price


140,579



181,676Mortgages assumed






(41,993
)Net operating assets and liabilities acquired


(1,643
)


(710
)Total cash paid

$
138,936


$
138,973       lease-up
     65




---



##### 



4.
    Leasing
    activity  (in thousands)
  2009

$
204,3382010


158,8772011


113,1542012


76,8452013


45,725Thereafter


72,336Total

$
671,275       5.
    Bank
    loans     66




---



##### 



6.
    Mortgage
    notes payable  (in thousands)
  December 31,


20072008


December 31,7.29% mortgage note, secured by one commercial property with a
    net book value of $6.2 million, principal and interest
    payable monthly, repaid February, 2009

$
5,144


$
5,3235.73% mortgage note, secured by one commercial property with a
    net book value of $29.7 million, principal and interest
    payable monthly, due March, 2013


14,247



14,5106.15% mortgage note, secured by one commercial property with a
    net book value of $29.8 million, principal and interest
    payable monthly, due November, 2031 (1)


16,912



17,3485.52% mortgage note, secured by one commercial property with a
    net book value of $16.1 million, principal and interest
    payable monthly, due May, 2013


10,053



10,2745.68% mortgage note, secured by one commercial property with a
    net book value of $17.9 million, principal and interest
    payable monthly, due May, 2013


10,065



10,2815.61% mortgage note, secured by one commercial property with a
    net book value of $5.8 million, principal and interest
    payable monthly, due January, 2011 (2)


2,887



2,989Total

$
59,308


$
60,725     (1)
    
    The mortgage note has a stated principal balance of
    $16.3 million and a stated interest rate of 7.20%. Based on
    the fair market value at the time of assumption, a mortgage
    premium was computed based on an effective interest rate of
    6.15%. The unamortized premiums were $635,000 and $834,000 as of
    December 31, 2008 and 2007, respectively. This mortgage is
    repayable without penalty beginning November, 2011.(2)
    
    The mortgage note has a stated principal balance of
    $2.8 million and a stated interest rate of 7.61%. Based on
    the fair market value at the time of assumption, a mortgage
    premium was computed based on an effective interest rate of
    5.61%. The unamortized premiums were $136,000 and $198,000 as of
    December 31, 2008 and 2007, respectively.  (in thousands)
  2009

$
6,4222010


1,3762011


19,4262012


8562013


31,228Total

$
59,308  67




---



##### 



7.
    Minority
    interests  Common
    partnership units
          Preferred
    partnership units
  (in thousands)
  December 31, 2008


December 31, 2007Earliest Potential

Dividend


Units





UnitsSeries

Issuance Date

Redemption Date

Rate


Outstanding


Amount


Outstanding


AmountSeries G

October, 2002

October, 2007


7.950%



800


$
20,000



800


$
20,000Series J

May & June, 2004

May, 2009


7.500%



1,710



42,750



1,710



42,750Series N

December, 2005

December, 2010


7.125%



800



20,000



800



20,000Series Q

March, 2007

March, 2012


6.550%



480



12,000



480



12,000Total










3,790


$
94,750



3,790


$
94,750      68




---



##### 



8.
    Related
    party transactions            on-site
     69




---



##### 



9.
    Shareholders
    equity  Preferred
    stock
  (in thousands, except share data)
  December 31, 2008


December 31, 2007Earliest Potential

Dividend


Shares





SharesSeries

Issuance Date

Redemption Date

Rate


Outstanding


Amount


Outstanding


AmountSeries H

January & October,
    2004

January, 2009


7.000%



8,200


$
205,000



8,200


$
205,000Series I

April, 2004

April, 2009


6.875%



3,000



75,000



3,000



75,000Series K

June, 2004

June, 2009


7.950%



2,300



57,500



2,300



57,500Series L

August, 2004

August, 2009


7.600%



2,300



57,500



2,300



57,500Series M

May, 2005

May, 2010


7.200%



3,300



82,500



3,300



82,500Series O

June & August, 2006

June, 2011


7.375%



3,800



95,000



3,800



95,000Series P

January, 2007

January, 2012


6.700%



5,350



133,750



5,750



143,750Total










28,250


$
706,250



28,650


$
716,250               Common
    stock
   70




---



##### 



Equity
    Stock
    10.
    Stock-based
    compensation         71




---



##### 



Weighted


AggregateWeighted


Average


IntrinsicNumber of


Average


Remaining


ValueOptions:

Options


Exercise Price


Contract Life


(In thousands)Outstanding at December 31, 2005


599,871


$
36.25Granted


32,000


$
56.73Exercised


(37,900
)

$
36.07Forfeited


(5,000
)

$
44.20Outstanding at December 31, 2006


588,971


$
35.89Granted


32,000


$
68.90Exercised


(43,384
)

$
33.84Forfeited


(5,000
)

$
39.18Outstanding at December 31, 2007


572,587


$
37.86Granted


14,000


$
57.79Exercised


(30,234
)

$
26.19Forfeited





$
Outstanding at December 31, 2008


556,353


$
39.00



4.66 Years


$
4,525Exercisable at December 31, 2008


451,153


$
35.56



4.03 Years


$
4,445   WeightedNumber of


Average GrantRestricted Stock Units:

Units


Date Fair ValueNonvested at December 31, 2005


128,000


$
39.27Granted


133,950


$
55.12Vested


(24,000
)

$
36.06Forfeited


(10,750
)

$
40.91Nonvested at December 31, 2006


227,200


$
48.88Granted


47,300


$
67.88Vested


(29,723
)

$
40.62Forfeited


(16,550
)

$
48.69Nonvested at December 31, 2007


228,227


$
53.91Granted


40,700


$
52.66Vested


(35,499
)

$
46.57Forfeited


(3,740
)

$
54.14Nonvested at December 31, 2008


229,688


$
54.81      72




---



##### 



11.
    Supplementary
    quarterly financial data (unaudited)  Three Months EndedMarch 31,


June 30,


September 30,


December 31,2007


2007


2007


2007(In thousands, except per share data)Revenues

$
65,307


$
67,457


$
68,707


$
70,028Cost of operations

$
20,439


$
21,022


$
21,204


$
21,695Net income allocable to common shareholders

$
5,923


$
3,781


$
4,267


$
3,758Net income per share:Basic

$
0.28


$
0.18


$
0.20


$
0.18Diluted

$
0.27


$
0.17


$
0.20


$
0.17   73




---



##### 



Three Months EndedMarch 31,


June 30,


September 30,


December 31,2008


2008


2008


2008(In thousands, except per share data)Revenues

$
70,306


$
70,623


$
71,642


$
71,660Cost of operations

$
22,490


$
21,939


$
22,591


$
21,422Net income allocable to common shareholders

$
3,802


$
4,623


$
5,396


$
9,593Net income per share:Basic

$
0.19


$
0.23


$
0.26


$
0.47Diluted

$
0.18


$
0.22


$
0.26


$
0.47   12.
    Commitments
    and contingencies      13.
    401(K)
    Plan    14.
    Recent
    accounting pronouncements  No. 03-6-1, EITF 03-6-1) EITF 03-6-1 EITF 03-6-1 EITF 03-6-1,
  SFAS 157-1, FAS 157-1) SFAS 157-2, FAS 157-2). FAS 157-1 FAS 157-2
 74




---



##### 



®
   75




---



##### 



PS
    BUSINESS PARKS, INC.
  SCHEDULE III 
    REAL ESTATE AND ACCUMULATED DEPRECIATION
    DECEMBER 31, 2008
    (DOLLARS IN THOUSANDS)
  CostCapitalizedSubsequentto


Gross Amount at Which Carried atInitial Cost to Company


Acquisition


December 31, 2008Buildings


Buildings





Buildings










Depreciableand


and





and





Accumulated


Year(s)

LivesDescription

Location

Encumbrances


Land


Improvements


Improvements


Land


Improvements


Total


Depreciation


Acquired

(Years)Corporate/Metro Park Phoenix

Phoenix, AZ

$



$
5,130


$
17,514


$
2,192


$
5,130


$
19,706


$
24,836


$
7,892


1999/2003


5-30Mesa

Mesa, AZ






675



1,692



2,758



675



4,450



5,125



1,915


1997


5-30Tempe/McKellips

Tempe, AZ






195



522



640



195



1,162



1,357



599


1997


5-30University

Tempe, AZ






2,805



7,107



5,625



2,805



12,732



15,537



6,958


1997


5-30Parkway Commerce

Hayward, CA






4,398



10,433



3,837



4,398



14,270



18,668



5,846


1997


5-30Monterey/Calle

Monterey, CA






288



706



258



288



964



1,252



456


1997


5-30Northpointe Business Center

Sacramento, CA






3,031



13,826



4,871



3,031



18,697



21,728



9,155


1999


5-30Sacramento/Northgate

Sacramento, CA






1,710



4,567



2,760



1,710



7,327



9,037



3,680


1997


5-30Las Plumas

San Jose, CA






4,379



12,889



4,580



4,379



17,469



21,848



9,586


1998


5-30Oakland Road

San Jose, CA






3,458



8,765



2,602



3,458



11,367



14,825



4,974


1997


5-30Rogers Ave

San Jose, CA






3,540



4,896



421



3,540



5,317



8,857



831


2006


5-30San Ramon/Norris Canyon

San Ramon, CA






1,486



3,642



936



1,486



4,578



6,064



1,989


1998


5-30Commerce Park

Santa Clara, CA






17,218



21,914



3,036



17,218



24,950



42,168



8,199


2007


5-30Santa Clara Tech Park

Santa Clara, CA






7,673



15,645



735



7,673



16,380



24,053



6,753


2000


5-30Airport Blvd.

So. San Francisco, CA






899



2,387



520



899



2,907



3,806



1,182


1997


5-30So. San Francisco/Produce

So. San Francisco, CA






776



1,886



363



776



2,249



3,025



859


1997


5-30Buena Park Industrial Center

Buena Park, CA






3,245



7,703



1,684



3,245



9,387



12,632



4,061


1997


5-30Carson

Carson, CA






990



2,496



1,080



990



3,576



4,566



1,719


1997


5-30Cerritos Business Center

Cerritos, CA






4,218



10,273



3,009



4,218



13,282



17,500



5,818


1997


5-30Cerritos/Edwards

Cerritos, CA






450



1,217



841



450



2,058



2,508



857


1997


5-30Culver City

Culver City, CA






3,252



8,157



5,838



3,252



13,995



17,247



6,221


1997


5-30Corporate Pointe

Irvine, CA






6,876



18,519



5,167



6,876



23,686



30,562



10,241


2000


5-30Laguna Hills Commerce Center

Laguna Hills, CA






16,261



39,559



3,348



16,261



42,907



59,168



16,932


1997


5-30Plaza Del Lago

Laguna Hills, CA






2,037



5,051



3,416



2,037



8,467



10,504



4,500


1997


5-30Canada

Lake Forest, CA






5,508



13,785



4,058



5,508



17,843



23,351



7,754


1997


5-30Monterey Park

Monterey Park, CA






3,078



7,862



1,054



3,078



8,916



11,994



3,875


1997


5-30Orange County Business Center

Orange County, CA






9,405



35,746



15,111



9,405



50,857



60,262



31,938


2003


5-30Orangewood

Orange County, CA






2,637



12,291



2,694



2,637



14,985



17,622



5,293


2003


5-30Kearney Mesa

San Diego, CA






2,894



7,089



2,160



2,894



9,249



12,143



3,885


1997


5-30Lusk

San Diego, CA






5,711



14,049



4,664



5,711



18,713



24,424



8,251


1997


5-30Rose Canyon Business Park

San Diego, CA


14,247



15,129



20,054



1,147



15,129



21,201



36,330



6,679


2005


5-30Signal Hill

Signal Hill, CA






6,693



12,699



1,716



6,693



14,415



21,108



4,997


1997/2006


5-30Studio City/Ventura

Studio City, CA






621



1,530



298



621



1,828



2,449



798


1997


5-30Torrance

Torrance, CA






2,318



6,069



1,809



2,318



7,878



10,196



3,649


1997


5-30Boca Commerce

Boca Raton, FL


10,053



7,795



9,258



363



7,795



9,621



17,416



1,360


2006


5-30MICC

Miami, FL






88,134



97,804



26,379



88,134



124,183



212,317



49,466


2003


5-30Wellington

Wellington, FL


12,952



10,845



18,560



684



10,845



19,244



30,089



2,797


2006


5-30Ammendale

Beltsville, MD






4,278



18,380



7,048



4,278



25,428



29,706



13,814


1998


5-30  76




---



##### 



CostCapitalizedSubsequentto


Gross Amount at Which Carried atInitial Cost to Company


Acquisition


December 31, 2008Buildings


Buildings





Buildings










Depreciableand


and





and





Accumulated


Year(s)

LivesDescription

Location

Encumbrances


Land


Improvements


Improvements


Land


Improvements


Total


Depreciation


Acquired

(Years)Gaithersburg/Christopher

Gaithersburg, MD






475



1,203



421



475



1,624



2,099



744


1997


5-30Metro Park

Rockville, MD






33,995



94,463



24,879



33,995



119,342



153,337



50,603


2001


5-30Westech Business Park

Silver Spring, MD


16,912



25,261



74,572



5,965



25,261



80,537



105,798



16,699


2006


5-30Cornell Oaks

Beaverton, OR






20,616



63,235



10,943



20,616



74,178



94,794



31,747


2001


5-30Creekside

Beaverton, OR






15,007



47,125



16,313



15,007



63,438



78,445



33,042


1998/2000


5-30Milwaukie

Milwaukie, OR






1,125



2,857



1,409



1,125



4,266



5,391



1,880


1997


5-30Empire Commerce

Dallas, TX






304



1,545



674



304



2,219



2,523



1,060


1998


5-30Northgate

Dallas, TX






1,274



5,505



2,253



1,274



7,758



9,032



3,775


1998


5-30Westwood Business Park

Farmers Branch, TX






941



6,884



1,395



941



8,279



9,220



2,947


2003


5-30Eastgate

Garland, TX






480



1,203



516



480



1,719



2,199



765


1997


5-30NFTZ

Irving, TX






1,517



6,499



1,698



1,517



8,197



9,714



4,333


1998


5-30Royal Tech

Irving, TX






13,707



51,560



17,548



13,707



69,108



82,815



30,218


1998/1999/2000


5-30La Prada

Mesquite, TX






495



1,235



541



495



1,776



2,271



781


1997


5-30The Summit

Plano, TX






1,536



6,654



3,612



1,536



10,266



11,802



4,820


1998


5-30Richardson/Business Parkway

Richardson, TX






799



3,568



2,096



799



5,664



6,463



2,873


1998


5-30Ben White

Austin, TX






1,550



7,015



789



1,550



7,804



9,354



3,640


1998


5-30Lamar Business Park

Austin, TX






2,528



6,596



3,690



2,528



10,286



12,814



5,991


1997


5-30McKalla

Austin, TX






1,411



6,384



1,444



1,411



7,828



9,239



4,000


1998


5-30McNeil

Austin, TX






437



2,013



957



437



2,970



3,407



1,709


1999


5-30Rutland

Austin, TX






2,022



9,397



2,859



2,022



12,256



14,278



5,046


1998/1999


5-30Waterford

Austin, TX






2,108



9,649



2,282



2,108



11,931



14,039



5,555


1999


5-30Houston/Timberway

Houston, TX






1,140



3,003



4,469



1,140



7,472



8,612



3,977


1997


5-30Westchase Corporate Park

Houston, TX






2,173



7,338



1,514



2,173



8,852



11,025



3,654


1999


5-30Quail Valley

Missouri City, TX






360



918



719



360



1,637



1,997



823


1997


5-30Alban Road

Springfield, VA






1,935



4,736



3,845



1,935



8,581



10,516



4,256


1997


5-30Beaumont

Chantilly, VA






4,736



11,051



1,520



4,736



12,571



17,307



3,212


2006


5-30Bren Mar

Alexandria, VA






2,197



5,380



2,677



2,197



8,057



10,254



3,779


1997


5-30Dulles South/Sullyfield

Chantilly, VA






1,373



6,810



1,727



1,373



8,537



9,910



3,975


1999


5-30Eisenhower

Alexandria, VA






1,440



3,635



2,011



1,440



5,646



7,086



2,813


1997


5-30Fair Oaks Business Park

Fairfax, VA






13,598



36,232



4,296



13,598



40,528



54,126



10,457


2004/2007


5-30Gunston

Lorton, VA






4,146



17,872



3,347



4,146



21,219



25,365



9,789


1998


5-30I-95

Springfield, VA






3,535



15,672



8,897



3,535



24,569



28,104



14,950


2007


5-30Lafayette

Chantilly, VA






1,680



13,398



2,886



1,680



16,284



17,964



8,429


1999/2000


5-30Monroe

Herndon, VA






6,737



18,911



7,938



6,737



26,849



33,586



13,007


1997/1999


5-30Northpointe

Sterling, VA






2,767



8,778



3,569



2,767



12,347



15,114



6,891


1997/1998


5-30Park East

Chantilly, VA


5,144



3,851



18,029



3,987



3,851



22,016



25,867



9,581


1999


5-30Prosperity Business Campus

Fairfax, VA






23,147



67,575



15,441



23,147



83,016



106,163



35,653


2001


5-30Shaw Road

Sterling, VA






2,969



10,008



3,495



2,969



13,503



16,472



7,520


1998


5-30Woodbridge

Woodbridge, VA






1,350



3,398



1,249



1,350



4,647



5,997



2,248


1997


5-30Overlake

Redmond, WA






27,761



49,353



2,758



27,761



52,111



79,872



14,328


2007


5-30Renton

Renton, WA






330



889



463



330



1,352



1,682



599


1997


5-30$
59,308


$
494,849


$
1,208,690


$
308,794


$
494,849


$
1,517,484


$
2,012,333


$
637,948  77




---



##### 



SIGNATURES
      PS Business Parks, Inc.
  By:
    /s/  Joseph
    D. Russell, Jr.       Signature

Title

Date/s/  Ronald
    L. Havner, Jr.Ronald
    L. Havner, Jr.

Chairman of the Board

February 25, 2009/s/  Joseph
    D. Russell, Jr.Joseph
    D. Russell, Jr.

President, Director and Chief
    Executive Officer (principal
    executive officer)

February 25, 2009/s/  Edward
    A. StokxEdward
    A. Stokx

Chief Financial Officer (principal financial officer and
    principal 
    accounting officer)

February 25, 2009/s/  R.
    Wesley BurnsR.
    Wesley Burns

Director

February 25, 2009/s/  Arthur
    M. FriedmanArthur
    M. Friedman

Director

February 25, 2009/s/  James
    H. KroppJames
    H. Kropp

Director

February 25, 2009/s/  Harvey
    LenkinHarvey
    Lenkin

Director

February 25, 2009/s/  Michael
    V. McGeeMichael
    V. McGee

Director

February 25, 2009/s/  Alan
    K. PribbleAlan
    K. Pribble

Director

February 25, 2009  78




---



##### 



PS
    BUSINESS PARKS, INC.
  EXHIBIT INDEX
    (Items 15(a)(3) and 15(b))
  3.1

Restated Articles of Incorporation. Filed with Registrants
    Registration Statement on Form S-3 (No. 333-78627) and
    incorporated herein by reference.3.2

Certificate of Determination of Preferences of 8.75% Series C
    Cumulative Redeemable Preferred Stock of PS Business Parks, Inc.
    Filed with Registrants Quarterly Report on Form 10-Q for
    the quarter ended September 30, 1999 (SEC File No. 001-10709)
    and incorporated herein by reference.3.3

Certificate of Determination of Preferences of 8.875% Series X
    Cumulative Redeemable Preferred Stock of PS Business Parks, Inc.
    Filed with Registrants Quarterly Report on Form 10-Q for
    the quarter ended September 30, 1999 (SEC File No. 001-10709)
    and incorporated herein by reference.3.4

Amendment to Certificate of Determination of Preferences of
    8.875% Series X Cumulative Redeemable Preferred Stock of PS
    Business Parks, Inc. Filed with Registrants Quarterly
    Report on Form 10-Q for the quarter ended September 30, 1999
    (SEC File No. 001-10709) and incorporated herein by reference.3.5

Certificate of Determination of Preferences of 8.875% Series Y
    Cumulative Redeemable Preferred Stock of PS Business Parks, Inc.
    Filed with Registrants Quarterly Report on Form 10-Q for
    the quarter ended June 30, 2000 (SEC File No. 001-10709) and
    incorporated herein by reference.3.6

Certificate of Determination of Preferences of 9.50% Series D
    Cumulative Redeemable Preferred Stock of PS Business Parks, Inc.
    Filed with Registrants Current Report on Form 8-K dated
    May 7, 2001 (SEC File No. 001-10709) and incorporated herein by
    reference.3.7

Amendment to Certificate of Determination of Preferences of
    9.50% Series D Cumulative Redeemable Preferred Stock of PS
    Business Parks, Inc. Filed with Registrants Quarterly
    Report on Form 10-Q for the quarter ended September 30, 2001
    (SEC File No. 001-10709) and incorporated herein by reference.3.8

Certificate of Determination of Preferences of
    91/4%
    Series E Cumulative Redeemable Preferred Stock of PS Business
    Parks, Inc. Filed with Registrants Quarterly Report on
    Form 10-Q for the quarter ended September 30, 2001 (SEC File No.
    001-10709) and incorporated herein by reference.3.9

Certificate of Determination of Preferences of 8.75% Series F
    Cumulative Redeemable Preferred Stock of PS Business Parks, Inc.
    Filed with Registrants Current Report on Form 8-K dated
    January 18, 2002 (SEC File No. 001-10709) and incorporated
    herein by reference.3.10

Certificate of Determination of Preferences of 7.95% Series G
    Cumulative Redeemable Preferred Stock of PS Business Parks, Inc.
    Filed with Registrants Annual Report on Form 10-K for the
    year ended December 31, 2003 and incorporated herein by
    reference.3.11

Certificate of Determination of Preferences of 7.00% Series H
    Cumulative Redeemable Preferred Stock of PS Business Parks, Inc.
    filed with Registrants Current Report on Form 8-K dated
    January 16, 2004 and incorporated herein by reference.3.12

Certificate of Determination of Preferences of 6.875% Series I
    Cumulative Redeemable Preferred Stock of PS Business Parks, Inc.
    Filed with Registrants Current Report on Form 8-K dated
    March 31, 2004 and incorporated herein by reference.3.13

Certificate of Determination of Preferences of 7.50% Series J
    Cumulative Redeemable Preferred Stock of PS Business Parks, Inc.
    Filed with Registrants Quarterly Report on Form 10-Q for
    the quarter ended June 30, 2004 and incorporated herein by
    reference.3.14

Certificate of Determination of Preferences of 7.950% Series K
    Cumulative Redeemable Preferred Stock of PS Business Parks, Inc.
    Filed with Registrants Current Report on Form 8-K dated
    June 24, 2004 and incorporated herein by reference.3.15

Certificate of Determination of Preferences of 7.60% Series L
    Cumulative Redeemable Preferred Stock of PS Business Parks, Inc.
    Filed with Registrants Current Report on Form 8-K dated
    August 23, 2004 and incorporated herein by reference.3.16

Certificate of Correction of Certificate of Determination of
    Preferences for the 7.00% Cumulative Preferred Stock, Series H
    of PS Business Parks, Inc. Filed with Registrants Current
    Report on Form 8-K dated October 18, 2004 and incorporated
    herein by reference. 79




---



##### 



3.17

Amendment to Certificate of Determination of Preferences for the
    7.00% Cumulative Preferred Stock, Series H of PS Business Parks,
    Inc. Filed with Registrants Current Report on Form 8-K
    dated October 18, 2004 and incorporated herein by reference.3.18

Certificate of Determination of Preferences of 7.20% Cumulative
    Preferred Stock, Series M of PS Business Parks, Inc. Filed with
    Registrants Current Report on Form 8-K dated April 29,
    2005 and incorporated herein by reference.3.19

Certificate of Determination of Preferences of
    71/8%
    Series N Cumulative Redeemable Preferred Stock of PS Business
    Parks, Inc. Filed with Registrants Current Report on Form
    8-K dated December 16, 2005 and incorporated herein by reference.3.20

Certificate of Determination of Preferences of 7.375% Series O
    Cumulative Redeemable Preferred Stock of PS Business Parks,
    Inc.  Filed with Registrants Current Report on Form 8-K
    dated May 18, 2006 and incorporated herein by reference.3.21

Certificate of Correction of Certificate of Determination of
    Preferences of 7.375% Cumulative Preferred Stock, Series O of PS
    Business Parks, Inc. Filed with Registrants Current Report
    on Form 8-K dated August 10, 2006 and incorporated herein by
    reference.3.22

Amendment to Certificate of Determination of Preferences of
    7.375% Series O Cumulative Redeemable Preferred Stock of PS
    Business Parks, Inc. Filed with Registrants Current Report
    on Form 8-K dated August 10, 2006 and incorporated herein by
    reference.3.23

Certificate of Determination of Preferences of 6.70% Series P
    Cumulative Redeemable Preferred Stock of PS Business Parks, Inc.
    Filed with Registrants Current Report on Form 8-K dated
    January 9, 2007 and incorporated herein by reference.3.24

Certificate of Determination of Preferences of 6.55% Series Q
    Cumulative Redeemable Preferred Stock of PS Business Parks, Inc.
    Filed with Registrants Current Report on Form 8-K dated
    March 16, 2007 and incorporated herein by reference.3.25

Restated Bylaws. Filed with Registrants Quarterly Report
    on Form 10-Q for the quarter ended June 30, 2008 and
    incorporated herein by reference4.1

Deposit Agreement Relating to 7.00% Cumulative Preferred Stock,
    Series H of PS Business Parks, Inc., dated as of January 15,
    2004. Filed with Registrants Current Report on Form 8-K
    dated January 15, 2004 and incorporated herein by reference.4.2

Specimen Stock Certificate for Registrants 7.00%
    Cumulative Preferred Stock, Series H. Filed with
    Registrants Current Report on Form 8-K dated January 15,
    2004 and incorporated herein by reference.4.3

Deposit Agreement Relating to 6.875% Cumulative Preferred Stock,
    Series I of PS Business Parks, Inc., dated as of March 31, 2004.
    Filed with Registrants Current Report on Form 8-K dated
    March 31, 2004 and incorporated herein by reference.4.4

Specimen Stock Certificate for Registrants 6.875%
    Cumulative Preferred Stock, Series I. Filed with
    Registrants Current Report on Form 8-K dated March 31,
    2004 and incorporated herein by reference.4.5

Deposit Agreement Relating to 7.95% Cumulative Preferred Stock,
    Series K of PS Business Parks, Inc., dated as of June 24, 2004.
    Filed with Registrants Current Report on Form 8-K dated
    June 24, 2004 and incorporated herein by reference.4.6

Specimen Stock Certificate for Registrants 7.95%
    Cumulative Preferred Stock, Series K. Filed with
    Registrants Current Report on Form 8-K dated June 24, 2004
    and incorporated herein by reference.4.7

Deposit Agreement Relating to 7.60% Cumulative Preferred Stock,
    Series L of PS Business Parks, Inc., dated as of August 23,
    2004. Filed with Registrants Current Report on Form 8-K
    dated August 23, 2004 and incorporated herein by reference.4.8

Specimen Stock Certificate for Registrants 7.60%
    Cumulative Preferred Stock, Series L. Filed with
    Registrants Current Report on Form 8-K dated August 23,
    2004 and incorporated herein by reference.4.9

Deposit Agreement Relating to 7.20% Cumulative Preferred Stock,
    Series M of PS Business Parks, Inc., dated as of April 27, 2005.
    Filed with Registrants Current Report on Form 8-K dated
    April 27, 2005 and incorporated herein by reference. 80




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##### 



4.10

Specimen Stock Certificate for Registrants 7.20%
    Cumulative Preferred Stock, Series M. Filed with
    Registrants Current Report on Form 8-K dated April 27,
    2005 and incorporated herein by reference.4.11

Deposit Agreement Relating to 7.375% Cumulative Preferred Stock,
    Series O of PS Business Parks, Inc., dated as of May 18, 2006.
    Filed with Registrants Current Report on Form 8-K dated
    May 18, 2006 and incorporated herein by reference.4.12

Specimen Stock Certificate for Registrants 7.375%
    Cumulative Preferred Stock, Series O. Filed with
    Registrants Current Report on Form 8-K dated May 18, 2006
    and incorporated herein by reference.4.13

Deposit Agreement Relating to 6.70% Cumulative Preferred Stock,
    Series P of PS Business Parks, Inc., dated as of January 9,
    2007. Filed with Registrants Current Report on Form 8-K
    dated January 9, 2007 and incorporated herein by reference.4.14

Specimen Stock Certificate for Registrants 6.70%
    Cumulative Preferred Stock, Series P. Filed with
    Registrants Current Report on Form 8-K dated January 9,
    2007 and incorporated herein by reference.10.1

Amended Management Agreement between Storage Equities, Inc. and
    Public Storage Commercial Properties Group, Inc. dated as of
    February 21, 1995. Filed with PSs Annual Report on Form
    10-K for the year ended December 31, 1994 (SEC File No.
    001-08389) and incorporated herein by reference.10.2

Agreement of Limited Partnership of PS Business Parks, L.P.
    Filed with Registrants Quarterly Report on Form 10-Q for
    the quarter ended June 30, 1998 (SEC File No. 001-10709) and
    incorporated herein by reference.10.3*

Offer Letter/ Employment Agreement between Registrant and Joseph
    D. Russell, Jr., dated as of September 6, 2002. Filed with
    Registrants Quarterly Report on Form 10-Q for the quarter
    ended March 31, 2003 and incorporated herein by reference.10.4

Form of Indemnity Agreement. Filed with Registrants
    Quarterly Report on Form 10-Q for the quarter ended March 31,
    1998 (SEC File No. 001-10709) and incorporated herein by
    reference.10.5*

Form of Indemnification Agreement for Executive Officers. Filed
    with Registrants Annual Report on Form 10-K for the year
    ended December 31, 2004 and incorporated herein by reference.10.6

Cost Sharing and Administrative Services Agreement dated as of
    November 16, 1995 by and among PSCC, Inc. and the owners listed
    therein. Filed with Registrants Quarterly Report on Form
    10-Q for the quarter ended March 31, 1998 (SEC File No.
    001-10709) and incorporated herein by reference.10.7

Amendment to Cost Sharing and Administrative Services Agreement
    dated as of January 2, 1997 by and among PSCC, Inc. and the
    owners listed therein. Filed with Registrants Quarterly
    Report on Form 10-Q for the quarter ended March 31, 1998 (SEC
    File No. 001-10709) and incorporated herein by reference.10.8

Accounts Payable and Payroll Disbursement Services Agreement
    dated as of January 2, 1997 by and between PSCC, Inc. and AOPP
    LP. Filed with Registrants Quarterly Report on Form 10-Q
    for the quarter ended March 31, 1998 (SEC File No. 001-10709)
    and incorporated herein by reference.10.9

Amendment to Agreement of Limited Partnership of PS Business
    Parks, L.P. Relating to 8.875% Series B Cumulative Redeemable
    Preferred Units, dated as of April 23, 1999. Filed with
    Registrants Quarterly Report on Form 10-Q for the quarter
    ended March 31, 1999 (SEC File No. 001-10709) and incorporated
    herein by reference.10.10

Amendment to Agreement of Limited Partnership of PS Business
    Parks, L.P. Relating to 9.25% Series A Cumulative Redeemable
    Preferred Units, dated as of April 30, 1999. Filed with
    Registrants Quarterly Report on Form 10-Q for the quarter
    ended March 31, 1999 (SEC File No. 001-10709) and incorporated
    herein by reference.10.11

Amendment to Agreement of Limited Partnership of PS Business
    Parks, L.P. Relating to 8.75% Series C Cumulative Redeemable
    Preferred Units, dated as of September 3, 1999. Filed with
    Registrants Quarterly Report on Form 10-Q for the quarter
    ended September 30, 1999 (SEC File No. 001-10709) and
    incorporated herein by reference. 81




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##### 



10.12

Amendment to Agreement of Limited Partnership of PS Business
    Parks, L.P. Relating to 8.875% Series X Cumulative Redeemable
    Preferred Units, dated as of September 7, 1999. Filed with
    Registrants Quarterly Report on Form 10-Q for the quarter
    ended September 30, 1999 (SEC File No. 001-10709) and
    incorporated herein by reference.10.13

Amendment to Agreement of Limited Partnership of PS Business
    Parks, L.P. Relating to Additional 8.875% Series X Cumulative
    Redeemable Preferred Units, dated as of September 23, 1999.
    Filed with Registrants Quarterly Report on Form 10-Q for
    the quarter ended September 30, 1999 (SEC File No. 001-10709)
    and incorporated herein by reference.10.14

Amendment to Agreement of Limited Partnership of PS Business
    Parks, L.P. Relating to 8.875% Series Y Cumulative Redeemable
    Preferred Units, dated as of July 12, 2000. Filed with
    Registrants Quarterly Report on Form 10-Q for the quarter
    ended June 30, 2000 (SEC File No. 001-10709) and incorporated
    herein by reference.10.15

Amendment to Agreement of Limited Partnership of PS Business
    Parks, L.P. Relating to 9.50% Series D Cumulative Redeemable
    Preferred Units, dated as of May 10, 2001. Filed with
    Registrants Quarterly Report on Form 10-Q for the quarter
    ended March 31, 2001 (SEC File No. 001-10709) and incorporated
    herein by reference.10.16

Amendment No. 1 to Amendment to Agreement of Limited Partnership
    of PS Business Parks, L.P. Relating to 9.50% Series D Cumulative
    Redeemable Preferred Units, dated as of June 18, 2001. Filed
    with Registrants Quarterly Report on Form 10-Q for the
    quarter ended September 30, 2001 (SEC File No. 001-10709) and
    incorporated herein by reference.10.17

Amendment to Agreement of Limited Partnership of PS Business
    Parks, L.P. Relating to
    91/4%
    Series E Cumulative Redeemable Preferred Units, dated as of
    September 21, 2001. Filed with Registrants Quarterly
    Report on Form 10-Q for the quarter ended September 30, 2001
    (SEC File No. 001-10709) and incorporated herein by reference.10.18

Amendment to Agreement of Limited Partnership of PS Business
    Parks, L.P. Relating to 8.75% Series F Cumulative Redeemable
    Preferred Units, dated as of January 18, 2002. Filed with
    Registrants Annual Report on Form 10-K for the year ended
    December 31, 2001 (SEC File No. 001-10709) and incorporated
    herein by reference.10.19

Amendment to Agreement of Limited Partnership of PS Business
    Parks, L.P. Relating to 7.95% Series G Cumulative Redeemable
    Preferred Units, dated as of October 30, 2002. Filed with
    Registrants Annual Report on Form 10-K for the year ended
    December 31, 2003 and incorporated herein by reference.10.20

Amendment to Agreement of Limited Partnership of PS Business
    Parks, L.P. Relating to 7.00% Series H Cumulative Redeemable
    Preferred Units, dated as of January 16, 2004. Filed with
    Registrants Annual Report on Form 10-K for the year ended
    December 31, 2003 and incorporated herein by reference.10.21

Amendment to Agreement of Limited Partnership of PS Business
    Parks, L.P. Relating to 6.875% Series I Cumulative Redeemable
    Preferred Units, dated as of April 21, 2004. Filed with
    Registrants Quarterly Report on Form 10-Q for the quarter
    ended September 30, 2004 and incorporated herein by reference.10.22

Amendment to Agreement of Limited Partnership of PS Business
    Parks, L.P. Relating to 7.50% Series J Cumulative Redeemable
    Preferred Units, dated as of May 27, 2004. Filed with
    Registrants Quarterly Report on Form 10-Q for the quarter
    ended June 30, 2004 and incorporated herein by reference.10.23

Amendment No. 1 to Amendment to Agreement of Limited Partnership
    of PS Business Parks, L.P. Relating to 7.50% Series J Cumulative
    Redeemable Preferred Units, dated as of June 17, 2004. Filed
    with Registrants Quarterly Report on Form 10-Q for the
    quarter ended June 30, 2004 and incorporated herein by reference.10.24

Amendment to Agreement of Limited Partnership of PS Business
    Parks, L.P. Relating to 7.95% Series K Cumulative Redeemable
    Preferred Units, dated as of June 30, 2004, filed with
    Registrants Annual Report on Form 10-K for the year ended
    December 31, 2004 and incorporated herein by reference. 82




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##### 



10.25

Amendment to Agreement of Limited Partnership of PS Business
    Parks, L.P. Relating to 7.60% Series L Cumulative Redeemable
    Preferred Units, dated as of August 31, 2004. Filed with
    Registrants Quarterly Report on Form 10-Q for the quarter
    ended September 30, 2004 and incorporated herein by reference.10.26

Amendment No. 1 to Amendment to Agreement of Limited Partnership
    of PS Business Parks, L.P. Relating to 7.00% Series H Cumulative
    Redeemable Preferred Units, dated as of October 25, 2004. Filed
    with Registrants Quarterly Report on Form 10-Q for the
    quarter ended September 30, 2004 and incorporated herein by
    reference.10.27

Amendment to Agreement of Limited Partnership of PS Business
    Parks, L.P. Relating to 7.20% Series M Cumulative Redeemable
    Preferred Units, dated as of May 2, 2005. Filed with
    Registrants Quarterly Report on Form 10-Q for the quarter
    ended March 31, 2005 and incorporated herein by reference.10.28

Amendment No. 1 to Amendment to Agreement of Limited Partnership
    Relating to 7.20% Series M Cumulative Redeemable Preferred
    Units, dated as of May 9, 2005. Filed with Registrants
    Quarterly Report on Form 10-Q for the quarter ended June 30,
    2005 and incorporated herein by reference.10.29

Amendment to Agreement of Limited Partnership of PS Business
    Parks, L.P. Relating to
    71/8%
    Series N Cumulative Redeemable Preferred Units, dated as of
    December 12, 2005. Filed with Registrants Current Report
    on Form 8-K dated December 16, 2005 and incorporated herein by
    reference.10.30

Amendment to Agreement of Limited Partnership of PS Business
    Parks, L.P. Relating to 7.375% Series O Cumulative Redeemable
    Preferred Units, dated as of June 16, 2006. Filed with
    Registrants Quarterly Report on Form 10-Q for the quarter
    ended June 30, 2006 and incorporated herein by reference.10.31

Amendment No. 1 to Amendment to Agreement of Limited Partnership
    of PS Business Parks, L.P. Relating to 7.375% Series O
    Cumulative Redeemable Preferred Units, dated as of August 16,
    2006. Filed with Registrants Annual Report on Form 10-K
    for the year ended December 31, 2006 and incorporated herein by
    reference.10.32

Amendment to Agreement of Limited Partnership of PS Business
    Parks, L.P. Relating to 6.70% Series P Cumulative Redeemable
    Preferred Units, dated as of January 9, 2007. Filed with
    Registrants Annual Report on Form 10-K for the year ended
    December 31, 2006 and incorporated herein by reference.10.33

Amendment to Agreement of Limited Partnership of PS Business
    Parks, L.P. Relating to 6.55% Series Q Cumulative Redeemable
    Preferred Units, dated as of March 12, 2007. Filed with
    Registrants Current Report on Form 8-K dated March 16,
    2007 and incorporated herein by reference.10.34

Registration Rights Agreement by and between PS Business Parks,
    Inc. and GSEP 2002 Realty Corp., dated as of October 30, 2002,
    relating to 7.95% Series G Cumulative Redeemable Preferred
    Units. Filed with Registrants Annual Report on Form 10-K
    for the year ended December 31, 2005 and incorporated herein by
    reference.10.35

Amended and Restated Registration Rights Agreement by and
    between PS Business Parks, Inc. and GSEP 2004 Realty Corp.,
    dated as of June 17, 2004, relating to 7.50% Series J Cumulative
    Redeemable Preferred Units. Filed with Registrants Annual
    Report on Form 10-K for the year ended December 31, 2005 and
    incorporated herein by reference.10.36

Registration Rights Agreement by and between PS Business Parks,
    Inc. and GSEP 2005 Realty Corp., dated as of December 12, 2005.
    Filed with Registrants Current Report on Form 8-K dated
    December 16, 2005 and incorporated herein by reference.10.37

Registration Rights Agreement by and between PS Business Parks,
    Inc. and GSEP 2006 Realty Corp., dated as of March 12, 2007.
    Filed with Registrants Current Report on Form 8-K dated
    March 16, 2007 and incorporated herein by reference.10.38

Amended and Restated Revolving Credit Agreement dated as of
    October 29, 2002 among PS Business Parks, L.P., Wells Fargo
    Bank, National Association, as Agent, and the Lenders named
    therein. Filed with Registrants Annual Report on Form 10-K
    for the year ended December 31, 2002 (SEC File No. 001-10709)
    and incorporated herein by reference. 83




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##### 



10.39

Modification Agreement, dated as of December 29, 2003. Filed
    with the Registrants Annual Report on Form 10-K for the
    year ended December 31, 2003 and incorporated herein by
    reference. This exhibit modifies the Amended and Restated
    Revolving Credit Agreement dated as of October 29, 2002 and
    filed with the Registrants Annual Report on Form 10-K for
    the year ended December 31, 2002 (SEC File No. 001-10709) and
    incorporated herein by reference.10.40

Modification Agreement, dated as of January 23, 2004. Filed with
    the Registrants Annual Report on Form 10-K for the year
    ended December 31, 2003 and incorporated herein by reference.
    This exhibit modifies the Modification Agreement dated as of
    December 29, 2003 and filed with the Registrants Annual
    Report on Form 10-K for the year ended December 31, 2003 and
    incorporated herein by reference.10.41

Third Modification Agreement, dated as of August 5, 2005. Filed
    with the Registrants Current Report on Form 8-K dated
    August 5, 2005 and incorporated herein by reference. This
    exhibit modifies the Modification Agreement dated as of January
    23, 2004 and filed with the Registrants Annual Report on
    Form 10-K for the year ended December 31, 2003 and incorporated
    herein by reference.10.42

Fourth Modification Agreement dated as of July 30, 2008 to
    Amended and Restated Revolving Credit Agreement dated October
    29, 2002. Filed with Registrants Current Report of Form
    8-K dated August 5, 2008 and incorporated herein by reference.10.43

Letter Agreement, dated as of December 29, 2003, between Public
    Storage, Inc. and PS Business Parks, L.P. Filed with the
    Registrants Current Report on Form 8- K dated January 14,
    2004 and incorporated herein by reference.10.44*

Registrants 1997 Stock Option and Incentive Plan. Filed
    with Registrants Registration Statement on Form S-8 (No.
    333-48313) and incorporated herein by reference.10.45*

Registrants 2003 Stock Option and Incentive Plan. Filed
    with Registrants Registration Statement on Form S-8 (No.
    333-104604) and incorporated herein by reference.10.46*

Retirement Plan for Non-Employee Directors. Filed with
    Registrants Registration Statement on Form S-8 (No.
    333-129463) and incorporated herein by reference.10.47*

Form of PS Business Parks, Inc. Restricted Stock Unit Agreement.
    Filed with Registrants Quarterly Report on Form 10-Q for
    the quarter ended September 30, 2004 and incorporated herein by
    reference.10.48*

Form of PS Business Parks, Inc. 2003 Stock Option and Incentive
    Plan Non-Qualified Stock Option Agreement. Filed with
    Registrants Quarterly Report on Form 10-Q for the quarter
    ended September 30, 2004 and incorporated herein by reference.10.49*

Form of PS Business Parks, Inc. 2003 Stock Option and Incentive
    Plan Stock Option Agreement. Filed with Registrants
    Quarterly Report on Form 10-Q for the quarter ended September
    30, 2004 and incorporated herein by reference.12

Statement re: Computation of Ratio of Earnings to Fixed Charges.
    Filed herewith.21

List of Subsidiaries. Filed herewith.23

Consent of Independent Registered Public Accounting Firm. Filed
    herewith.31.1

Certification of Chief Executive Officer pursuant to Section 302
    of the Sarbanes-Oxley Act of 2002. Filed herewith.31.2

Certification of Chief Financial Officer pursuant to Section 302
    of the Sarbanes-Oxley Act of 2002. Filed herewith.32.1

Certification of Chief Executive Officer and Chief Financial
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002. Filed herewith.     *
    
    Management contract or compensatory plan or arrangement 84