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,
    2009oro

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-T o 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:
 4




---



##### 



Capital Contributions:
  Distributions:
  Preferred Units:
    Redemption of Partnership Interests:
     5




---



##### 



Limited Partner Transfer Restrictions:
  Management:
      Extraordinary Transactions:
   6




---



##### 



Indemnification:
  Duties and Conflicts:
  Term:
  Other Provisions: winding-up
  Cost
    Allocation and Administrative Services
   7




---



##### 



Common
    Officers and Directors with PS
    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:
 9




---



##### 



Perpetual Preferred Stock/Units:
  Debt Financing:
  Access to Capital: Form 10-K,
  Competition
      Investments
    in Real Estate Facilities
    Summary
    of Business Model
   10




---



##### 



Restrictions
    on Transactions with Affiliates
    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 any person from 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




---



##### 



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




---



##### 



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:
 15




---



##### 



We may incur significant environmental remediation costs:
  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



81.2
%Phoenix


310











310



80.4
%Tempe


291











291



92.1
%679











679



85.5
%Northern CaliforniaHayward






407







407



96.1
%Monterey










12



12



86.9
%Sacramento










367



367



84.6
%San Jose


708











708



87.3
%San Ramon










52



52



84.8
%Santa Clara


178











178



52.0
%So. San Francisco


94











94



93.8
%980



407



431



1,818



85.5
%Southern CaliforniaBuena Park






317







317



98.7
%Carson


77











77



87.3
%Cerritos






395



31



426



98.7
%Culver City


149











149



94.8
%Irvine










160



160



95.9
%Laguna Hills


614











614



91.2
%Lake Forest


297











297



89.6
%Monterey Park


199











199



86.7
%Orange










108



108



85.3
%San Diego(1)


768











768



92.2
%Santa Ana










437



437



82.6
%Signal Hill


267











267



87.4
%Studio City


22











22



90.8
%Torrance


147











147



90.8
%2,540



712



736



3,988



91.3
%MarylandBeltsville


309











309



84.8
%Gaithersburg










29



29



97.8
%Rockville


212







688



900



95.6
%Silver Spring(1)


366







166



532



89.9
%887







883



1,770



92.1
%OregonBeaverton


1,024







188



1,212



79.4
%Milwaukee


102











102



86.5
%1,126







188



1,314



79.9
% 18




---



##### 



WeightedRentable Square Footage

AverageLocation

Flex

Industrial

Office

Total

Occupancy RateNorthern TexasDallas


237











237



86.0
%Farmers Branch


112











112



79.4
%Garland


36











36



84.1
%Irving(2)


715



231







946



94.3
%Mesquite


57











57



92.4
%Plano


184











184



92.7
%Richardson


117











117



86.3
%1,458



231







1,689



91.1
%Southern TexasAustin


787











787



83.8
%Houston


177











177



92.6
%Missouri City


66











66



97.5
%1,030











1,030



86.2
%South FloridaBoca Raton(1)


135











135



87.2
%Miami


631



2,556



12



3,199



95.4
%Wellington(1)


262











262



86.6
%1,028



2,556



12



3,596



94.5
%VirginiaAlexandria


155







54



209



94.2
%Chantilly


563







38



601



82.3
%Fairfax










292



292



90.9
%Herndon










244



244



95.0
%Lorton


246











246



98.0
%Merrifield


303







355



658



98.9
%Springfield


270







90



360



97.6
%Sterling


296











296



97.3
%Woodbridge


114











114



93.4
%1,947







1,073



3,020



93.6
%WashingtonRedmond


465







28



493



88.8
%Renton


28











28



77.0
%493







28



521



88.2
%Total


12,168



3,906



3,351



19,425



90.4
%     (1)
    
    Five commercial properties, one in San Diego, California,
    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 two properties that are subject to ground
    leases in Las Colinas, Texas, expiring in 2019 and 2020, each
    with one 10 year extension option.     19




---



##### 



(in thousands)
  For The Year Ended December 31, 2009


For The Year Ended December 31, 2008


For The Year Ended December 31, 2007Flex


Office


Industrial


Total


Flex


Office


Industrial


Total


Flex


Office


Industrial


TotalRental Income:Southern California

$
41,566


$
14,767


$
5,554


$
61,887


$
43,894


$
15,619


$
5,804


$
65,317


$
43,049


$
16,099


$
5,326


$
64,474Northern California


11,103



6,733



2,859



20,695



13,859



7,190



2,890



23,939



12,559



6,977



2,676



22,212Southern Texas


9,899











9,899



10,228











10,228



9,648











9,648Northern Texas


15,331







1,245



16,576



15,686







1,278



16,964



14,062







1,100



15,162South Florida


11,292



212



19,912



31,416



12,336



214



20,005



32,555



11,777



230



19,508



31,515Virginia


34,265



24,575







58,840



34,508



24,684







59,192



32,666



21,536







54,202Maryland


16,670



22,442







39,112



16,288



21,689







37,977



17,341



21,532







38,873Oregon


14,269



2,941







17,210



14,985



3,481







18,466



15,015



3,266







18,281Arizona


6,393











6,393



7,006











7,006



6,976











6,976Washington


8,291



638







8,929



8,850



621







9,471



6,676



555







7,231Total


169,079



72,308



29,570



270,957



177,640



73,498



29,977



281,115



169,769



70,195



28,610



268,574Cost of Operations:Southern California


10,872



5,647



1,097



17,616



10,951



5,873



1,042



17,866



10,580



5,875



1,038



17,493Northern California


3,771



2,336



681



6,788



3,816



2,322



724



6,862



3,426



2,279



750



6,455Southern Texas


4,124











4,124



4,235











4,235



4,041











4,041Northern Texas


5,441







336



5,777



5,712







299



6,011



5,477







288



5,765South Florida


3,985



130



5,952



10,067



4,118



104



6,094



10,316



4,157



110



5,807



10,074Virginia


8,890



8,635







17,525



8,692



8,558







17,250



8,263



7,332







15,595Maryland


4,820



7,293







12,113



4,680



7,312







11,992



4,719



7,055







11,774Oregon


5,403



1,352







6,755



5,610



1,409







7,019



5,288



1,375







6,663Arizona


2,735











2,735



3,013











3,013



2,907











2,907Washington


2,205



207







2,412



2,410



208







2,618



2,289



189







2,478Total


52,246



25,600



8,066



85,912



53,237



25,786



8,159



87,182



51,147



24,215



7,883



83,245NOI:Southern California


30,694



9,120



4,457



44,271



32,943



9,746



4,762



47,451



32,469



10,224



4,288



46,981Northern California


7,332



4,397



2,178



13,907



10,043



4,868



2,166



17,077



9,133



4,698



1,926



15,757Southern Texas


5,775











5,775



5,993











5,993



5,607











5,607Northern Texas


9,890







909



10,799



9,974







979



10,953



8,585







812



9,397South Florida


7,307



82



13,960



21,349



8,218



110



13,911



22,239



7,620



120



13,701



21,441Virginia


25,375



15,940







41,315



25,816



16,126







41,942



24,403



14,204







38,607Maryland


11,850



15,149







26,999



11,608



14,377







25,985



12,622



14,477







27,099Oregon


8,866



1,589







10,455



9,375



2,072







11,447



9,727



1,891







11,618Arizona


3,658











3,658



3,993











3,993



4,069











4,069Washington


6,086



431







6,517



6,440



413







6,853



4,387



366







4,753Total 120

$
116,833


$
46,708


$
21,504


$
185,045


$
124,403


$
47,712


$
21,818


$
193,933


$
118,622


$
45,980


$
20,727


$
185,329  20




---



##### 








(in
    thousands)
  For The Years Ended December 31,2009


2008


2007Property net operating income

$
185,045


$
193,933


$
185,329Facility management fees


698



728



724Interest and other income


536



1,457



5,104Depreciation and amortization


(84,504
)


(99,317
)


(97,998
)General and administrative


(6,202
)


(8,099
)


(7,917
)Interest expense


(3,552
)


(3,952
)


(4,130
)Income from continuing operations

$
92,021


$
84,750


$
81,112   Significant
    Properties
        2009

2008

2007

2006

2005Weighted average occupancy rate


95.4
%


96.9
%


98.2
%


96.4
%


91.8
%Realized rent per square foot

$
8.69


$
8.76


$
8.24


$
7.88


$
7.47     (in thousands, except number of leases
    expiring)
  Percent ofRentable Square


Annualized Rental


Annualized RentalNumber of


Footage Subject to


Income Under


Income RepresentedYear of Lease Expiration

Leases Expiring


Expiring Leases


Expiring Leases


by Expiring Leases2010


77



748


$
6,290



22.5
%2011


93



800



7,412



26.6
%2012


60



635



5,743



20.6
%2013


41



489



4,632



16.6
%2014


28



280



2,460



8.8
%2015


4



65



593



2.1
%2016


1



31



198



0.7
%2017














2018


1



75



588



2.1
%2019














Thereafter














Total


305



3,123


$
27,916



100.0
%  21




---



##### 



(in thousands, except year data)
  Rate of





Life in


AccumulatedTax Basis


Depreciation


Method


Years


DepreciationLand Improvements

$
45,588



5.9
%


MACRS, 150
%


15


$
21,560Improvements


24,582



0.0
%


VARIOUS



5



24,435Tenant Buildings


83,000



3.7
%


MACRS, SL



VAR



12,797Total

$
153,170














$
58,792     Portfolio
    Information
    2009

2008

2007

2006

2005Weighted average occupancy rate


90.5
%


93.5
%


93.4
%


93.4
%


91.5
%Realized rent per square foot

$
15.45


$
15.50


$
14.97


$
14.36


$
13.82   (in thousands)
  Lease
    Expirations (Entire Portfolio) as of December 31,
    2009
  Percent ofRentable Square


Annualized Rental


Annualized RentalFootage Subject to


Income Under


Income RepresentedYear of Lease Expiration

Expiring Leases


Expiring Leases


by Expiring Leases2010


4,115


$
60,828



21.8
%2011


4,575



71,672



25.6
%2012


3,437



53,821



19.3
%2013


2,416



35,871



12.8
%2014


1,775



26,972



9.6
%2015


578



10,125



3.6
%2016


499



10,497



3.8
%2017


67



2,127



0.8
%2018


190



3,613



1.3
%2019


78



2,329



0.8
%Thereafter


65



1,585



0.6
%Total


17,795


$
279,440



100.0
%  22




---



##### 



Lease
    Expirations (Small Tenant Portfolio) as of December 31,
    2009
    Percent ofRentable Square


Annualized Rental


Annualized RentalFootage Subject to


Income Under


Income RepresentedYear of Lease Expiration

Expiring Leases


Expiring Leases


by Expiring Leases2010


2,227


$
34,650



12.4
%2011


1,938



30,624



10.9
%2012


1,298



21,954



7.9
%2013


627



12,044



4.3
%2014


420



8,116



2.9
%2015


136



2,602



0.9
%2016


79



1,809



0.7
%2017


5



97



0.0
%2018


7



216



0.1
%2019


40



1,273



0.4
%Thereafter


3



62



0.0
%Total


6,780


$
113,447



40.5
%   Lease
    Expirations (Large Tenant Portfolio) as of December 31,
    2009
    Percent ofRentable Square


Annualized Rental


Annualized RentalFootage Subject to


Income Under


Income RepresentedYear of Lease Expiration

Expiring Leases


Expiring Leases


by Expiring Leases2010


1,888


$
26,178



9.4
%2011


2,637



41,048



14.7
%2012


2,139



31,867



11.4
%2013


1,789



23,827



8.5
%2014


1,355



18,856



6.7
%2015


442



7,523



2.7
%2016


420



8,688



3.1
%2017


62



2,030



0.8
%2018


183



3,397



1.2
%2019


38



1,056



0.4
%Thereafter


62



1,523



0.6
%Total


11,015


$
165,993



59.5
%   ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   23




---



##### 



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, 2008

$
55.20


$
40.33June 30, 2008

$
59.90


$
51.60September 30, 2008

$
60.25


$
50.00December 31, 2008

$
57.18


$
32.99March 31, 2009

$
46.37


$
28.29June 30, 2009

$
49.24


$
35.57September 30, 2009

$
56.44


$
42.36December 31, 2009

$
53.56


$
46.03                      24




---



##### 



ITEM 6.
    SELECTED
    FINANCIAL DATA  Form 10-K. Form 10-K
  For The Years Ended December 31,2009


2008


2007


2006


2005(In thousands, except per share data)Revenues:Rental income

$
270,957


$
281,115


$
268,574


$
240,013


$
217,895Facility management fees


698



728



724



625



579Total operating revenues


271,655



281,843



269,298



240,638



218,474Expenses:Cost of operations


85,912



87,182



83,245



73,652



64,779Depreciation and amortization


84,504



99,317



97,998



85,735



75,721General and administrative


6,202



8,099



7,917



7,046



5,843Total operating expenses


176,618



194,598



189,160



166,433



146,343Other income and expenses:Interest and other income


536



1,457



5,104



6,874



4,888Interest expense


(3,552
)


(3,952
)


(4,130
)


(2,575
)


(1,330
)Total other income and expenses


(3,016
)


(2,495
)


974



4,299



3,558Asset impairment due to casualty loss


















72Income from continuing operations


92,021



84,750



81,112



78,504



75,617Discontinued operations:Income from discontinued operations


830



597



563



576



3,088Gain on disposition of real estate














2,328



18,109Gain on sale of land


1,488















Total discontinued operations


2,318



597



563



2,904



21,197Net income

$
94,339


$
85,347


$
81,675


$
81,408


$
96,814Net income allocation:Net income allocable to noncontrolling interests:Noncontrolling interests  common units

$
19,730


$
8,296


$
6,155


$
5,673


$
10,869Noncontrolling interests  preferred units


(2,569
)


7,007



6,854



11,155



10,651Total net income allocable to noncontrolling interests


17,161



15,303



13,009



16,828



21,520Net income allocable to PS Business Parks, Inc.:Common shareholders


59,413



23,179



17,537



16,513



32,242Preferred shareholders


17,440



46,630



50,937



47,933



43,011Restricted stock unit holders


325



235



192



134



41Total net income allocable to PS Business Parks, Inc.


77,178



70,044



68,666



64,580



75,294$
94,339


$
85,347


$
81,675


$
81,408


$
96,814   25




---



##### 



For The Years Ended December 31,2009

2008

2007

2006

2005(In thousands, except per share data)Per Common Share:Cash Distribution

$
1.76


$
1.76


$
1.61


$
1.16


$
1.16Net income  basic

$
2.70


$
1.13


$
0.82


$
0.77


$
1.48Net income  diluted

$
2.68


$
1.12


$
0.81


$
0.77


$
1.47Weighted average common shares  basic


21,998



20,443



21,313



21,335



21,826Weighted average common shares  diluted


22,128



20,618



21,573



21,584



21,970Balance Sheet Data:Total assets

$
1,564,822


$
1,469,323


$
1,516,583


$
1,463,599


$
1,463,794Total debt

$
52,887


$
59,308


$
60,725


$
67,048


$
25,893Preferred stock called for redemption

$



$



$



$
50,000


$
Equity:PS Business Parks, Inc.s shareholders equity:Preferred stock

$
626,046


$
706,250


$
716,250


$
572,500


$
593,350Common stock

$
589,633


$
414,564


$
439,330


$
482,703


$
500,108Noncontrolling interests:Preferred units

$
73,418


$
94,750


$
94,750


$
82,750


$
135,750Common units

$
176,540


$
148,023


$
154,470


$
165,469


$
169,451Other Data:Net cash provided by operating activities

$
179,625


$
189,337


$
184,094


$
166,134


$
148,828Net cash (used in) provided by investing activities

$
(26,956
)

$
(35,192
)

$
(180,188
)

$
(169,986
)

$
24,389Net cash provided by (used in) financing activities

$
545


$
(134,171
)

$
(35,882
)

$
(129,694
)

$
(13,058
)Funds from operations (1)

$
163,074


$
131,558


$
122,405


$
106,235


$
102,608Square footage owned at end of period


19,556



19,556



19,556



18,687



17,555     (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, gains or losses on asset dispositions, net income
    allocable to noncontrolling interests  common units,
    net income allocable to restricted stock unit holders and
    nonrecurring 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. 26




---



##### 



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:
 27




---



##### 



Allowance for Doubtful Accounts:
      Impairment of Long-Lived Assets:
 28




---



##### 



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:
 29




---



##### 



30




---



##### 



Growth of the Companys Operations and Acquisitions
    and Dispositions of Properties:
   31




---



##### 



Scheduled Lease Expirations:
  Impact of Inflation:
  Concentration of Portfolio by Region:
 32




---



##### 



(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



20.5
%

$
61,887



22.8
%

$
17,616



20.5
%

$
44,271



23.9
%Northern California


1,818



9.4
%


20,695



7.6
%


6,788



7.9
%


13,907



7.5
%Southern Texas


1,030



5.3
%


9,899



3.7
%


4,124



4.8
%


5,775



3.3
%Northern Texas


1,689



8.7
%


16,576



6.1
%


5,777



6.7
%


10,799



5.8
%South Florida


3,596



18.5
%


31,416



11.6
%


10,067



11.7
%


21,349



11.5
%Virginia


3,020



15.5
%


58,840



21.7
%


17,525



20.4
%


41,315



22.3
%Maryland


1,770



9.1
%


39,112



14.4
%


12,113



14.1
%


26,999



14.6
%Oregon


1,314



6.8
%


17,210



6.4
%


6,755



7.9
%


10,455



5.6
%Arizona


679



3.5
%


6,393



2.4
%


2,735



3.2
%


3,658



2.0
%Washington


521



2.7
%


8,929



3.3
%


2,412



2.8
%


6,517



3.5
%Total NOI


19,425



100.0
%

$
270,957



100.0
%

$
85,912



100.0
%

$
185,045



100.0
%Reconciliation of NOI to incomefrom continuing operationsTotal NOI

$
185,045Other income and expenses:Facility management fees


698Interest and other income


536Interest expense


(3,552
)Depreciation and amortization


(84,504
)General and administrative


(6,202
)Income from continuing operations

$
92,021  33




---



##### 



Concentration of Credit Risk by Industry:
  Percent ofAnnualizedIndustry

Rental IncomeBusiness services


14.7
%Health services


11.4
%Computer hardware, software and related services


9.3
%Warehouse, distribution, transportation and logistics


8.7
%Government


8.5
%Engineering and construction


7.2
%Insurance and financial services


7.1
%Retail, food and automotive


6.9
%Communications


5.2
%Home furnishing


3.9
%Electronics


3.5
%Educational services


2.7
%Aerospace/defense products and services


2.5
%Other


8.4
%Total


100.0
%     (1)
    Excludes assets classified as properties held for disposition.  in thousands
  Percent ofAnnualized


AnnualizedTenants

Square Footage


Rental Income (2)


Rental IncomeU.S. Government


507


$
12,663



4.6
%Kaiser Permanente


186



4,615



1.7
%Wells Fargo Bank


101



1,767



0.6
%AARP


102



1,739



0.6
%American Intercontinental University


75



1,450



0.6
%Welch Allyn Protocol, Inc.


91



1,420



0.5
%Verizon


72



1,382



0.5
%Montgomery County Public School


47



1,366



0.5
%Intel Corporation


94



1,307



0.5
%Symantec Corporation


73



1,243



0.5
%Total


1,348


$
28,952



10.6
%     (1)
    Excludes assets classified as properties held for disposition.(2)
    For leases expiring prior to December 31, 2010, annualized
    rental income represents income to be received under existing
    leases from December 31, 2009 through the date of
    expiration.  Comparison
    of 2009 to 2008
  Results of Operations:
 34




---



##### 



(in thousands, except per square foot data)
 For The YearsEnded December 31,2009


2008


ChangeRental income:Same Park (1)

$
270,957


$
281,115



(3.6
%)Cost of operations:Same Park


85,912



87,182



(1.5
%)Net operating income (2):Same Park


185,045



193,933



(4.6
%)Other income and expenses:Facility management fees


698



728



(4.1
%)Interest and other income


536



1,457



(63.2
%)Interest expense


(3,552
)


(3,952
)


(10.1
%)Depreciation and amortization


(84,504
)


(99,317
)


(14.9
%)General and administrative


(6,202
)


(8,099
)


(23.4
%)Income from continuing operations

$
92,021


$
84,750



8.6
%Same Park gross margin (3)


68.3
%


69.0
%


(1.0
)%Same Park weighted average for the period:Occupancy


90.4
%


93.4
%


(3.2
%)Realized rent per square foot (4)

$
15.43


$
15.49



(0.4
%)    (1)
    
    See above for a definition of Same Park.(2)
    
    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.(3)
    
    Same Park gross margin is computed by dividing Same Park NOI by
    Same Park rental income.(4)
    
    Same Park realized rent per square foot represents the Same Park
    rental income earned per occupied square foot. 35




---



##### 



Supplemental Property Data and Trends:
  (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

2009


2008


(Decrease)


2009


2008


(Decrease)


2009


2008


(Decrease)Southern California

$
61,887


$
65,317



(5.3
%)

$
17,616


$
17,866



(1.4
%)

$
44,271


$
47,451



(6.7
%)Northern California


20,695



23,939



(13.6
%)


6,788



6,862



(1.1
%)


13,907



17,077



(18.6
%)Southern Texas


9,899



10,228



(3.2
%)


4,124



4,235



(2.6
%)


5,775



5,993



(3.6
%)Northern Texas


16,576



16,964



(2.3
%)


5,777



6,011



(3.9
%)


10,799



10,953



(1.4
%)South Florida


31,416



32,555



(3.5
%)


10,067



10,316



(2.4
%)


21,349



22,239



(4.0
%)Virginia


58,840



59,192



(0.6
%)


17,525



17,250



1.6
%


41,315



41,942



(1.5
%)Maryland


39,112



37,977



3.0
%


12,113



11,992



1.0
%


26,999



25,985



3.9
%Oregon


17,210



18,466



(6.8
%)


6,755



7,019



(3.8
%)


10,455



11,447



(8.7
%)Arizona


6,393



7,006



(8.7
%)


2,735



3,013



(9.2
%)


3,658



3,993



(8.4
%)Washington


8,929



9,471



(5.7
%)


2,412



2,618



(7.9
%)


6,517



6,853



(4.9
%)Total NOI

$
270,957


$
281,115



(3.6
%)

$
85,912


$
87,182



(1.5
%)

$
185,045


$
193,933



(4.6
%)Reconciliation of NOI to incomefrom continuing operationsTotal NOI

$
185,045


$
193,933



(4.6
%)Other income and expenses:Facility management fees


698



728



(4.1
%)Interest and other income


536



1,457



(63.2
%)Interest expense


(3,552
)


(3,952
)


(10.1
%)Depreciation and amortization


(84,504
)


(99,317
)


(14.9
%)General and administrative


(6,202
)


(8,099
)


(23.4
%)Income from continuing operations

$
92,021


$
84,750



8.6
%   Rental Income:
  Facility Management Operations:
  Cost of Operations:
  Depreciation and Amortization
    Expense:
  General and Administrative Expense:
 36




---



##### 



Interest and Other Income:
  Interest Expense:
  Gain on Sale of Land:
  Net Income Allocable to Noncontrolling
    Interests:
  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 (18.6 million rentable square feet) (1)

$
265,860


$
258,431



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


15,255



10,143



50.4
%Total rental income


281,115



268,574



4.7
%Cost of operations:Same Park


82,461



79,664



3.5
%Non-Same Park


4,721



3,581



31.8
%Total cost of operations


87,182



83,245



4.7
%Net operating income 3):Same Park


183,399



178,767



2.6
%Non-Same Park


10,534



6,562



60.5
%Total net operating income


193,933



185,329



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


(99,317
)


(97,998
)


1.3
%General and administrative


(8,099
)


(7,917
)


2.3
%Income from continuing operations

$
84,750


$
81,112



4.5
%Same Park gross margin (4)


69.0
%


69.2
%


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


93.6
%


93.7
%


(0.1
%)Realized rent per square foot (5)

$
15.31


$
14.87



3.0
%     (1)
    
    See above for a definition of Same Park.(2)
    
    See above 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


10,228



9,647



6.0
%


4,235



4,038



4.9
%


5,993



5,609



6.8
%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


265,860



258,431



2.9
%


82,461



79,664



3.5
%


183,399



178,767



2.6
%Non-Same Park


15,255



10,143



50.4
%


4,721



3,581



31.8
%


10,534



6,562



60.5
%Total NOI

$
281,115


$
268,574



4.7
%

$
87,182


$
83,245



4.7
%

$
193,933


$
185,329



4.6
%Reconciliation of NOI to incomefrom continuing operationsTotal NOI

$
193,933


$
185,329



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


(99,317
)


(97,998
)


1.3
%General and administrative


(8,099
)


(7,917
)


2.3
%Income from continuing operations

$
84,750


$
81,112



4.5
%   Rental Income:
  Facility Management Operations:
  Cost of Operations:
  Depreciation and Amortization
    Expense:
  General and Administrative Expense:
 39




---



##### 



Interest and Other Income:
  Interest Expense:
  Net Income Allocable to Noncontrolling
    Interests:
  Liquidity
    and Capital Resources
           40




---



##### 



Non-GAAP Supplemental Disclosure Measure: Funds from
    Operations:
     41




---



##### 



in thousands
  For The Years Ended December 31,2009


2008


2007


2006


2005Net income allocable to common shareholders

$
59,413


$
23,179


$
17,537


$
16,513


$
32,242Gain on disposition of real estate


(1,488
)










(2,328
)


(18,109
)Depreciation and amortization (1)


85,094



99,848



98,521



86,243



77,420Net income allocable to noncontrolling interests 
    common units


19,730



8,296



6,155



5,673



10,869Net income allocable to restricted stock unit holders


325



235



192



134



186Consolidated FFO allocable to common and dilutive shares


163,074



131,558



122,405



106,235



102,608FFO allocated to noncontrolling interests  common
    units


(40,472
)


(34,443
)


(31,094
)


(26,974
)


(25,620
)FFO allocated to restricted stock unit holders


(726
)


(730
)


(598
)


(486
)


(444
)FFO allocated to common shares

$
121,876


$
96,385


$
90,713


$
78,775


$
76,544     (1)
    Includes depreciation from discontinued operations.    Capital Expenditures: in thousands
  For The Years Ended December 31,2009


2008


2007Recurring capital expenditures

$
28,345


$
33,262


$
37,362Property renovations and other capital expenditures


1,168



1,930



5,239Total capital expenditures

$
29,513


$
35,192


$
42,601   Stock Repurchase:
  Preferred Equity Repurchase:
 42




---



##### 



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)

$
60,917


$
4,353


$
24,786


$
31,778


$
Total

$
60,917


$
4,353


$
24,786


$
31,778


$
    43




---



##### 



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
 44




---



##### 



Changes
    in Internal Control Over Financial Reporting
  Rules 13a-15(f) 15d-15(f)
 45




---



##### 



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  To the Board
    of Directors and Shareholders of
    PS Business Parks, Inc.
              
    46




---



##### 



ITEM 9B.
    OTHER
    INFORMATION    PART III
  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE            ,
   47




---



##### 



Form 10-K.
    ITEM 11.
    EXECUTIVE
    COMPENSATION   48




---



##### 



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,


Options,


Plans (ExcludingWarrants, and


Warrants, and


Securities Reflected inPlan Category

Rights


Rights


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


661,843


$
41.99



1,172,602Equity compensation plans not approved by security holders





$




Total


661,843
*

$
41.99
*


1,172,602
*    *
    
    Amounts include restricted stock units  ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES    PART IV
  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES                     49




---



##### 



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


51Consolidated balance sheets as of December 31, 2009 and 2008


52Consolidated statements of income for the years ended
    December 31, 2009, 2008 and 2007


53Consolidated statements of equity for the years ended
    December 31, 2009, 2008 and 2007


54Consolidated statements of cash flows for the years ended
    December 31, 2009, 2008 and 2007


55Notes to consolidated financial statements


57Schedule:III  Real estate and accumulated depreciation


74    50




---



##### 



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  The Board of
    Directors and Shareholders of
    PS Business Parks, Inc.
          Ernst &
    Young LLP
    51




---



##### 



PS
    BUSINESS PARKS, INC.
  CONSOLIDATED
    BALANCE SHEETS
  December 31,2009


2008(In thousands, exceptshare data)ASSETSCash and cash equivalents

$
208,229


$
55,015Real estate facilities, at cost:Land


493,709



493,709Buildings and equipment


1,528,044



1,510,0122,021,753



2,003,721Accumulated depreciation


(707,209
)


(633,971
)1,314,544



1,369,750Properties held for disposition, net


4,260



4,635Land held for development


6,829



7,8691,325,633



1,382,254Rent receivable


2,504



2,055Deferred rent receivable


21,596



21,633Other assets


6,860



8,366Total assets

$
1,564,822


$
1,469,323LIABILITIES AND EQUITYAccrued and other liabilities

$
46,298


$
46,428Mortgage notes payable


52,887



59,308Total liabilities


99,185



105,736Commitments and contingenciesEquity:PS Business Parks, Inc.s shareholders equity:Preferred stock, $0.01 par value, 50,000,000 shares
    authorized, 25,042 and 28,250 shares issued and outstanding
    at December 31, 2009 and 2008, respectively


626,046



706,250Common stock, $0.01 par value, 100,000,000 shares
    authorized, 24,399,509 and 20,459,916 shares issued and
    outstanding at December 31, 2009 and 2008, respectively


243



204Paid-in capital


548,393



363,587Cumulative net income


699,291



622,113Cumulative distributions


(658,294
)


(571,340
)Total PS Business Parks, Inc.s shareholders equity


1,215,679



1,120,814Noncontrolling interests:Preferred units


73,418



94,750Common units


176,540



148,023Total noncontrolling interests


249,958



242,773Total equity


1,465,637



1,363,587Total liabilities and equity

$
1,564,822


$
1,469,323    52




---



##### 



PS
    BUSINESS PARKS, INC.
  CONSOLIDATED
    STATEMENTS OF INCOME
  For The Years Ended December 31,2009


2008


2007(In thousands, except per share data)Revenues:Rental income

$
270,957


$
281,115


$
268,574Facility management fees


698



728



724Total operating revenues


271,655



281,843



269,298Expenses:Cost of operations


85,912



87,182



83,245Depreciation and amortization


84,504



99,317



97,998General and administrative


6,202



8,099



7,917Total operating expenses


176,618



194,598



189,160Other income and expenses:Interest and other income


536



1,457



5,104Interest expense


(3,552
)


(3,952
)


(4,130
)Total other income and expenses


(3,016
)


(2,495
)


974Income from continuing operations


92,021



84,750



81,112Discontinued operations:Income from discontinued operations


830



597



563Gain on sale of land


1,488







Total discontinued operations


2,318



597



563Net income

$
94,339


$
85,347


$
81,675Net income allocation:Net income allocable to noncontrolling interests:Noncontrolling interests  common units

$
19,730


$
8,296


$
6,155Noncontrolling interests  preferred units


(2,569
)


7,007



6,854Total net income allocable to noncontrolling interests


17,161



15,303



13,009Net income allocable to PS Business Parks, Inc.:Common shareholders


59,413



23,179



17,537Preferred shareholders


17,440



46,630



50,937Restricted stock unit holders


325



235



192Total net income allocable to PS Business Parks, Inc.


77,178



70,044



68,666$
94,339


$
85,347


$
81,675Net income per common share  basic:Continuing operations

$
2.62


$
1.11


$
0.80Discontinued operations

$
0.08


$
0.02


$
0.02Net income

$
2.70


$
1.13


$
0.82Net income per common share  diluted:Continuing operations

$
2.61


$
1.10


$
0.79Discontinued operations

$
0.08


$
0.02


$
0.02Net income

$
2.68


$
1.12


$
0.81Weighted average common shares outstanding:Basic


21,998



20,443



21,313Diluted


22,128



20,618



21,573    53




---



##### 



PS
    BUSINESS PARKS, INC.
  CONSOLIDATED
    STATEMENTS OF EQUITY
  Total PSBusiness Parks, Inc.sPreferred Stock


Common Stock


Paid-in


Cumulative


Cumulative


Shareholders


Noncontrolling


TotalShares


Amount


Shares


Amount


Capital


Net Income


Distributions


Equity


Interests


Equity(In thousands, except share data)Balances at December 31, 2006


22,900


$
572,500



21,311,005


$
213


$
398,048


$
483,403


$
(398,961
)

$
1,055,203


$
248,219


$
1,303,422Issuance of preferred stock, net of issuance costs


5,750



143,750











(4,183
)










139,567







139,567Issuance of preferred units, net of issuance costs


































11,665



11,665Repurchase of common stock










(601,042
)


(6
)


(31,847
)










(31,853
)






(31,853
)Exercise of stock options










43,384







1,468











1,468







1,468Stock compensation, net










23,872







2,811











2,811







2,811Shelf registration


















(88
)










(88
)






(88
)Net income






















68,666







68,666



13,009



81,675Distributions:Preferred stock


























(50,937
)


(50,937
)






(50,937
)Common stock


























(34,315
)


(34,315
)






(34,315
)Noncontrolling interests


































(18,615
)


(18,615
)Adjustment to noncontrolling interests in underlying operating
    partnership


















5,058











5,058



(5,058
)


Balances at December 31, 2007


28,650



716,250



20,777,219



207



371,267



552,069



(484,213
)


1,155,580



249,220



1,404,800Repurchase of preferred stock, net of issuance costs


(400
)


(10,000
)










4,810







(291
)


(5,481
)






(5,481
)Repurchase of common stock










(370,042
)


(3
)


(18,321
)










(18,324
)






(18,324
)Exercise of stock options










30,234







792











792







792Stock compensation, net










22,505







3,152











3,152







3,152Net income






















70,044







70,044



15,303



85,347Distributions:Preferred stock


























(50,858
)


(50,858
)






(50,858
)Common stock


























(35,978
)


(35,978
)






(35,978
)Noncontrolling interests


































(19,863
)


(19,863
)Adjustment to noncontrolling interests in underlying operating
    partnership


















1,887











1,887



(1,887
)


Balances at December 31, 2008


28,250



706,250



20,459,916



204



363,587



622,113



(571,340
)


1,120,814



242,773



1,363,587Issuance of common stock, net of issuance costs










3,833,333



38



171,194











171,232







171,232Repurchase of preferred stock, net of issuance costs


(3,208
)


(80,204
)










32,788







(2,783
)


(50,199
)






(50,199
)Repurchase of preferred units, net of issuance costs


















9,577











9,577



(21,912
)


(12,335
)Repurchase of common stock


















(230
)










(230
)






(230
)Exercise of stock options










35,100







1,177











1,177







1,177Stock compensation, net










71,160



1



1,015











1,016







1,016Shelf registration


















(75
)










(75
)






(75
)Net income






















77,178







77,178



17,161



94,339Distributions:Preferred stock


























(44,662
)


(44,662
)






(44,662
)Common stock


























(39,509
)


(39,509
)






(39,509
)Noncontrolling interests


































(18,704
)


(18,704
)Adjustment to noncontrolling interests in underlying operating
    partnership


















(30,640
)










(30,640
)


30,640



Balances at December 31, 2009


25,042


$
626,046



24,399,509


$
243


$
548,393


$
699,291


$
(658,294
)

$
1,215,679


$
249,958


$
1,465,637    54




---



##### 








PS
    BUSINESS PARKS, INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  For The Years Ended December 31,2009


2008


2007(In thousands)Cash flows from operating activities:Net income

$
94,339


$
85,347


$
81,675Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization expense


85,094



99,848



98,521In-place lease adjustment


(252
)


(194
)


(102
)Lease incentives net of tenant improvement reimbursements


(326
)


(379
)


(33
)Amortization of mortgage premium


(271
)


(260
)


(247
)Gain on disposition of properties


(1,488
)






Stock compensation


2,900



4,061



3,724Decrease (increase) in receivables and other assets


262



1,759



(1,015
)Increase (decrease) in accrued and other liabilities


(633
)


(845
)


1,571Total adjustments


85,286



103,990



102,419Net cash provided by operating activities


179,625



189,337



184,094Cash flows from investing activities:Capital improvements to real estate facilities


(29,513
)


(35,192
)


(42,601
)Acquisition of real estate facilities










(138,936
)Insurance proceeds from casualty loss










1,349Proceeds from disposition of real estate


2,557







Net cash used in investing activities


(26,956
)


(35,192
)


(180,188
)Cash flows from financing activities:Principal payments on mortgage notes payable


(1,022
)


(1,157
)


(1,126
)Repayment of mortgage note payable


(5,128
)






(4,950
)Net proceeds from the issuance of preferred stock










139,567Net proceeds from the issuance of preferred units










11,665Net proceeds from the issuance of common stock


171,232







Exercise of stock options


1,177



792



1,468Shelf registration costs


(75
)






(88
)Repurchase of preferred units


(12,335
)






Repurchase of common stock


(230
)


(21,626
)


(28,551
)Repurchase of preferred stock


(50,199
)


(5,481
)


Redemption of preferred stock










(50,000
)Distributions paid to common shareholders


(39,509
)


(35,978
)


(34,315
)Distributions paid to preferred shareholders


(44,662
)


(50,858
)


(50,937
)Distributions paid to noncontrolling interests 
    common units


(12,856
)


(12,856
)


(11,761
)Distributions paid to noncontrolling interests 
    preferred units


(5,848
)


(7,007
)


(6,854
)Net cash provided by (used in) financing activities


545



(134,171
)


(35,882
)Net increase (decrease) in cash and cash equivalents


153,214



19,974



(31,976
)Cash and cash equivalents at the beginning of the period


55,015



35,041



67,017Cash and cash equivalents at the end of the period

$
208,229


$
55,015


$
35,041Supplemental disclosures:Interest paid

$
3,523


$
4,050


$
4,145 55




---



##### 



PS
    BUSINESS PARKS, INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  For The Years Ended December 31,2009


2008


2007(In thousands)Supplemental schedule of non-cash investing and financing
    activities:Adjustment to noncontrolling interests in underlying operating
    partnership:Noncontrolling interests  common units

$
30,640


$
(1,887
)

$
(5,393
)Paid-in capital

$
(30,640
)

$
1,887


$
5,393Gain on repurchase of preferred equity:Preferred stock

$
(30,005
)

$
(4,519
)

$
Preferred units

$
(8,997
)

$



$
Paid-in capital

$
39,002


$
4,519


$
Effect of redemption/repurchase of preferred equity:Cumulative distributions

$
(2,783
)

$
(291
)

$
Noncontrolling interest  common units

$
(580
)

$



$
Paid-in capital

$
3,363


$
291


$
Accrued stock repurchase:Paid-in capital

$



$



$
(3,302
)Accrued and other liabilities

$



$



$
3,302    56




---



##### 



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  DECEMBER
    31, 2009
  1. Organization
    and description of business
  Organization
    Description
    of business
      2. Summary
    of significant accounting policies
  Basis of
    presentation
      Noncontrolling
    Interests
    Use of
    estimates
   57




---



##### 



Allowance
    for doubtful accounts
    Financial
    instruments
        Real
    estate facilities
    Properties
    held for disposition
    Intangible
    assets/liabilities
   58




---



##### 



Evaluation
    of asset impairment
    Asset
    impairment due to casualty loss
      Stock
    compensation
    Revenue
    and expense recognition
      Gains
    from sales of real estate
   59




---



##### 



General
    and administrative expense
    Income
    taxes
      Accounting
    for preferred equity issuance costs
   60




---



##### 



Net
    income allocation
  (in thousands)
  2009


2008


2007Net income allocable to noncontrolling interests:Noncontrolling interests  common units:Continuing operations

$
19,155


$
8,139


$
6,012Discontinued operations


575



157



143Total net income allocable to noncontrolling
    interests  common units


19,730



8,296



6,155Noncontrolling interests  preferred units:Distributions to preferred units holders


5,848



7,007



6,854Gain on repurchase of preferred units, net of issuance costs


(8,417
)






Total net income allocable to noncontrolling
    interests  preferred units


(2,569
)


7,007



6,854Total net income allocable to noncontrolling interests


17,161



15,303



13,009Net income allocable to PS Business Parks, Inc.:Common shareholders:Continuing operations


57,680



22,742



17,120Discontinued operations


1,733



437



417Total net income allocable to common shareholders


59,413



23,179



17,537Preferred shareholders:Distributions to preferred shareholders


44,662



50,858



50,937Gain on repurchase of preferred stock, net of issuance costs


(27,222
)


(4,228
)


Total net income allocable to preferred shareholders


17,440



46,630



50,937Restricted stock unit holders:Continuing operations


315



232



189Discontinued operations


10



3



3Total net income allocable to restricted stock unit holders


325



235



192Total net income allocable to PS Business Parks, Inc.


77,178



70,044



68,666$
94,339


$
85,347


$
81,675   Net
    income per common share
   61




---



##### 



(in thousands, except per share
    amounts)
  2009


2008


2007Net income allocable to common shareholders

$
59,413


$
23,179


$
17,537Weighted average common shares outstanding:Basic weighted average common shares outstanding


21,998



20,443



21,313Net effect of dilutive stock compensation  based on
    treasury stock method using average market price


130



175



260Diluted weighted average common shares outstanding


22,128



20,618



21,573Net income per common share  Basic

$
2.70


$
1.13


$
0.82Net income per common share  Diluted

$
2.68


$
1.12


$
0.81     Segment
    reporting
    Reclassifications
   62




---



##### 



3. Real
    estate facilities
  (in
    thousands)
  Buildings and


AccumulatedLand


Equipment


Depreciation


TotalBalances at December 31, 2006

$
438,637


$
1,346,641


$
(438,414
)

$
1,346,864Acquisition 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











1,142Transfer to properties held for dispositions






(485
)


523



38Balances at December 31, 2007


493,709



1,476,763



(536,412
)


1,434,060Capital improvements, net






35,192







35,192Disposals






(1,757
)


1,757



Depreciation expense










(99,848
)


(99,848
)Transfer to properties held for dispositions






(185
)


531



346Balances at December 31, 2008


493,709



1,510,013



(633,972
)


1,369,750Capital improvements, net






29,513







29,513Disposals






(11,267
)


11,267



Depreciation expense










(85,094
)


(85,094
)Transfer to properties held for dispositions






(215
)


590



375Balances at December 31, 2009

$
493,709


$
1,528,044


$
(707,209
)

$
1,314,544       (in thousands)
  2007Land

$
53,930Buildings


88,006In-place leases


(1,357
)Total purchase price


140,579Mortgages assumed


Net operating assets and liabilities acquired


(1,643
)Total cash paid

$
138,936  63




---



##### 



lease-up
      (in
    thousands)
  For The Years Ended December 31,2009


2008


2007Rental income

$
2,515


$
2,388


$
2,201Cost of operations


(1,095
)


(1,260
)


(1,115
)Depreciation


(590
)


(531
)


(523
)Income from discontinued operations

$
830


$
597


$
563      64




---



##### 



4.
    Leasing
    activity  (in thousands)
  2010

$
191,9142011


147,0292012


99,7192013


61,3032014


38,396Thereafter


52,461Total

$
590,822       5.
    Bank
    loans     65




---



##### 



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


December 31,2009


20085.73% mortgage note, secured by one commercial property with a
    net book value of $29.1 million, principal and interest
    payable monthly, due March, 2013

$
14,006


$
14,2476.15% mortgage note, secured by one commercial property with a
    net book value of $28.5 million, principal and interest
    payable monthly, due November, 2031(1)


16,446



16,9125.52% mortgage note, secured by one commercial property with a
    net book value of $15.5 million, principal and interest
    payable monthly, due May, 2013


9,819



10,0535.68% mortgage note, secured by one commercial property with a
    net book value of $17.4 million, principal and interest
    payable monthly, due May, 2013


9,836



10,0655.61% mortgage note, secured by one commercial property with a
    net book value of $5.7 million, principal and interest
    payable monthly, due January, 2011(2)


2,780



2,8877.29% mortgage note, repaid February, 2009






5,144Total

$
52,887


$
59,308     (1)
    The mortgage note has a stated principal balance of
    $16.0 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 $427,000 and $635,000 as of
    December 31, 2009 and 2008, respectively. This mortgage is
    repayable without penalty beginning November, 2011.(2)
    The mortgage note has a stated principal balance of
    $2.7 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 $73,000 and $136,000 as of
    December 31, 2009 and 2008, respectively.  (in
    thousands)
  2010

$
1,3762011


3,9842012


1,1742013


31,5732014


371Thereafter


14,409Total

$
52,887   7.
    Noncontrolling
    interests   66




---



##### 



Common
    partnership units
          Preferred
    partnership units
    December 31, 2009


December 31, 2008Earliest Potential

Dividend


Units


Amount


Units


AmountSeries

Issuance Date

Redemption Date

Rate


Outstanding


(In thousands)


Outstanding


(In thousands)Series G

October, 2002

October, 2007


7.950%



800,000


$
20,000



800,000


$
20,000Series J

May & June, 2004

May, 2009


7.500%



1,710,000



42,750



1,710,000



42,750Series N

December, 2005

December, 2010


7.125%



223,300



5,583



800,000



20,000Series Q

March, 2007

March, 2012


6.550%



203,400



5,085



480,000



12,000Total










2,936,700


$
73,418



3,790,000


$
94,750      67




---



##### 



8.
    Related
    party transactions              on-site
     68




---



##### 



9.
    Shareholders
    equity  Preferred
    stock
    December 31, 2009


December 31, 2008Earliest Potential

Dividend


Shares


Amount


Shares


AmountSeries

Issuance Date

Redemption Date

Rate


Outstanding


(In thousands)


Outstanding


(In thousands)Series H

January & October, 2004

January, 2009


7.000%



6,340,776


$
158,520



8,200,000


$
205,000Series I

April, 2004

April, 2009


6.875%



2,745,050



68,626



3,000,000



75,000Series K

June, 2004

June, 2009


7.950%



2,165,000



54,125



2,300,000



57,500Series L

August, 2004

August, 2009


7.600%



1,935,000



48,375



2,300,000



57,500Series M

May, 2005

May, 2010


7.200%



3,182,000



79,550



3,300,000



82,500Series O

June & August, 2006

June, 2011


7.375%



3,384,000



84,600



3,800,000



95,000Series P

January, 2007

January, 2012


6.700%



5,290,000



132,250



5,350,000



133,750Total










25,041,826


$
626,046



28,250,000


$
706,250                69




---



##### 



Common
    stock
        Equity
    Stock
    10.
    Stock
    compensation         70




---



##### 



WeightedWeighted


Average


AggregateNumber of


Average


Remaining


IntrinsicOptions:

Options


Exercise Price


Contract Life


Value(In thousands)Outstanding 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


$
39.00Granted


26,000


$
40.50Exercised


(35,100
)

$
33.53Forfeited


(4,501
)

$
38.16Outstanding at December 31, 2009


542,752


$
39.43



3.84 Years


$
6,687Exercisable at December 31, 2009


464,152


$
37.33



3.21 Years


$
6,332   WeightedNumber of


Average GrantRestricted Stock Units:

Units


Date Fair ValueNonvested 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


$
54.81Granted


11,700


$
35.00Vested


(114,797
)

$
53.94Forfeited


(7,500
)

$
55.96Nonvested at December 31, 2009


119,091


$
53.64      71




---



##### 



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


June 30,


September 30,


December 31,2008


2008


2008


2008(In thousands, except per share data)Revenues

$
69,540


$
69,864


$
70,875


$
70,836Cost of operations

$
22,195


$
21,558


$
22,325


$
21,104Net income allocable to common shareholders

$
3,749


$
4,561


$
5,336


$
9,533Net income per share:Basic

$
0.18


$
0.22


$
0.26


$
0.47Diluted

$
0.18


$
0.22


$
0.26


$
0.46   72




---



##### 



Three Months EndedMarch 31,


June 30,


September 30,


December 31,2009


2009


2009


2009(In thousands, except per share data)Revenues

$
69,132


$
67,375


$
66,885


$
67,565Cost of operations

$
22,436


$
21,251


$
21,320


$
20,905Net income allocable to common shareholders

$
32,588


$
8,152


$
8,327


$
9,855Net income per share:Basic

$
1.59


$
0.40


$
0.37


$
0.40Diluted

$
1.59


$
0.39


$
0.37


$
0.40     Three Months EndedSeptember 30, 2009


June 30, 2009


March 31, 2009Previously





Previously





PreviouslyAs Adjusted


Reported


As Adjusted


Reported


As Adjusted


Reported(In thousands, except per share data)Revenues

$
66,885


$
66,885


$
67,375


$
67,375


$
69,132


$
69,132Cost of operations

$
21,320


$
21,320


$
21,251


$
21,251


$
22,436


$
22,436Net income allocable to common shareholders

$
8,327


$
8,762


$
8,152


$
8,657


$
32,588


$
32,961Net income per share:Basic

$
0.37


$
0.39


$
0.40


$
0.42


$
1.59


$
1.61Diluted

$
0.37


$
0.39


$
0.39


$
0.42


$
1.59


$
1.60   12.
    Commitments
    and contingencies      13.
    401(K)
    Plan   73




---



##### 



PS
    BUSINESS PARKS, INC.
  SCHEDULE III 
    REAL ESTATE AND ACCUMULATED DEPRECIATION
    DECEMBER 31, 2009
    (DOLLARS IN THOUSANDS)
  CostCapitalizedSubsequentto


Gross Amount at Which Carried atInitial Cost to Company


Acquisition


December 31, 2009Buildings


Buildings





Buildings










Depreciableand


and





and





Accumulated


Year(s)

LivesDescription

Location

Encumbrances


Land


Improvements


Improvements


Land


Improvements


Total


Depreciation


Acquired

(Years)Mesa

Mesa, AZ

$



$
675


$
1,692


$
2,820


$
675


$
4,512


$
5,187


$
2,330


1997


5-30Corporate/Metro Park Phoenix

Phoenix, AZ






5,130



17,514



2,131



5,130



19,645



24,775



8,534


1999/2003


5-30Tempe/McKellips

Tempe, AZ






195



522



618



195



1,140



1,335



620


1997


5-30University

Tempe, AZ






2,805



7,107



5,886



2,805



12,993



15,798



7512


1997


5-30Parkway Commerce

Hayward, CA






4,398



10,433



3,777



4,398



14,210



18,608



6,293


1997


5-30Monterey/Calle

Monterey, CA






288



706



260



288



966



1,254



503


1997


5-30Northpointe Business Center

Sacramento, CA






3,031



13,826



5,109



3,031



18,935



21,966



9,922


1999


5-30Sacramento/Northgate

Sacramento, CA






1,710



4,567



2,821



1,710



7,388



9,098



3,990


1997


5-30Las Plumas

San Jose, CA






4,379



12,889



5,504



4,379



18,393



22,772



10,042


1998


5-30Oakland Road

San Jose, CA






3,458



8,765



2,615



3,458



11,380



14,838



5,469


1997


5-30Rogers Ave

San Jose, CA






3,540



4,896



368



3,540



5,264



8,804



1,200


2006


5-30San Ramon/Norris Canyon

San Ramon, CA






1,486



3,642



1,043



1,486



4,685



6,171



2,160


1997


5-30Commerce Park

Santa Clara, CA






17,218



21,914



3,242



17,218



25,156



42,374



11,039


2007


5-30Santa Clara Tech Park

Santa Clara, CA






7,673



15,645



1,151



7,673



16,796



24,469



7,252


2000


5-30Airport Blvd.

So. San Francisco, CA






899



2,387



584



899



2,971



3,870



1,311


1997


5-30So. San Francisco/Produce

So. San Francisco, CA






776



1,886



367



776



2,253



3,029



960


1997


5-30Buena Park Industrial Center

Buena Park, CA






3,245



7,703



1,828



3,245



9,531



12,776



4,429


1997


5-30Carson

Carson, CA






990



2,496



1,121



990



3,617



4,607



1,845


1997


5-30Cerritos Business Center

Cerritos, CA






4,218



10,273



3,060



4,218



13,333



17,551



6,450


1997


5-30Cerritos/Edwards

Cerritos, CA






450



1,217



942



450



2,159



2,609



978


1997


5-30Culver City

Culver City, CA






3,252



8,157



5,995



3,252



14,152



17,404



6,953


1997


5-30Corporate Pointe

Irvine, CA






6,876



18,519



5,239



6,876



23,758



30,634



11,343


2000


5-30Laguna Hills Commerce Center

Laguna Hills, CA






16,261



39,559



3,637



16,261



43,196



59,457



18,556


1997


5-30Plaza Del Lago

Laguna Hills, CA






2,037



5,051



3,434



2,037



8,485



10,522



4,748


1997


5-30Canada

Lake Forest, CA






5,508



13,785



4,159



5,508



17,944



23,452



8,461


1997


5-30Monterey Park

Monterey Park, CA






3,078



7,862



1,127



3,078



8,989



12,067



4,182


1997


5-30Orange County Business Center

Orange County, CA






9,405



35,746



15,833



9,405



51,579



60,984



33,959


2003


5-30Orangewood

Orange County, CA






2,637



12,291



2,932



2,637



15,223



17,860



5,984


2003


5-30Kearney Mesa

San Diego, CA






2,894



7,089



2,349



2,894



9,438



12,332



4,357


1997


5-30Lusk

San Diego, CA






5,711



14,049



4,693



5,711



18,742



24,453



9,013


1997


5-30Rose Canyon Business Park

San Diego, CA


14,006



15,129



20,054



1,309



15,129



21,363



36,492



7,413


2005


5-30Signal Hill

Signal Hill, CA






6,693



12,699



1,779



6,693



14,478



21,171



5,460


1997/2006


5-30Studio City/Ventura

Studio City, CA






621



1,530



323



621



1,853



2,474



875


1997


5-30Torrance

Torrance, CA






2,318



6,069



2,039



2,318



8,108



10,426



3,987


1997


5-30Boca Commerce

Boca Raton, FL


9,819



7,795



9,258



517



7,795



9,775



17,570



2,043


2006


5-30MICC

Miami, FL






88,134



97,804



28,143



88,134



125,947



214,081



54,398


2003


5-30Wellington

Wellington, FL


12,616



10,845



18,560



915



10,845



19,475



30,320



3,782


2006


5-30Ammendale

Beltsville, MD






4,278



18,380



7,384



4,278



25,764



30,042



14,900


1998


5-30Gaithersburg/Christopher

Gaithersburg, MD






475



1,203



465



475



1,668



2,143



831


1997


5-30Metro Park

Rockville, MD






33,995



94,463



27,462



33,995



121,925



155,920



56,343


2001


5-30Westech Business Park

Silver Spring, MD


16,446



25,261



74,572



7,038



25,261



81,610



106,871



23,183


2006


5-30Cornell Oaks

Beaverton, OR






20,616



63,235



11,682



20,616



74,917



95,533



34,725


2001


5-30 74




---



##### 



CostCapitalizedSubsequentto


Gross Amount at Which Carried atInitial Cost to Company


Acquisition


December 31, 2009Buildings


Buildings





Buildings










Depreciableand


and





and





Accumulated


Year(s)

LivesDescription

Location

Encumbrances


Land


Improvements


Improvements


Land


Improvements


Total


Depreciation


Acquired

(Years)Creekside

Beaverton, OR






15,007



47,125



16,989



15,007



64,114



79,121



35,297


1998/2000


5-30Milwaukie

Milwaukie, OR






1,125



2,857



1,433



1,125



4,290



5,415



2,045


1997


5-30Empire Commerce

Dallas, TX






304



1,545



739



304



2,284



2,588



1,189


1998


5-30Northgate

Dallas, TX






1,274



5,505



2,393



1,274



7,898



9,172



4,172


1998


5-30Westwood Business Park

Farmers Branch, TX






941



6,884



1,394



941



8,278



9,219



3,235


2003


5-30Eastgate

Garland, TX






480



1,203



495



480



1,698



2,178



855


1997


5-30NFTZ(1)

Irving, TX






1,517



6,499



1,793



1,517



8,292



9,809



4,619


1998


5-30Royal Tech

Irving, TX






13,707



51,560



17,866



13,707



69,426



83,133



33,362


1998/1999/2000


5-30La Prada

Mesquite, TX






495



1,235



524



495



1,759



2,254



887


1997


5-30The Summit

Plano, TX






1,536



6,654



3,485



1,536



10,139



11,675



5,302


1998


5-30Richardson/Business Parkway

Richardson, TX






799



3,568



2,124



799



5,692



6,491



3,145


1998


5-30Ben White

Austin, TX






1,550



7,015



886



1,550



7,901



9,451



3,895


1998


5-30Lamar Business Park

Austin, TX






2,528



6,596



3,776



2,528



10,372



12,900



6,600


1997


5-30McKalla

Austin, TX






1,411



6,384



1,558



1,411



7,942



9,353



4,210


1998


5-30McNeil

Austin, TX






437



2,013



957



437



2,970



3,407



1,880


1999


5-30Rutland

Austin, TX






2,022



9,397



3,139



2,022



12,536



14,558



5,334


1998/1999


5-30Waterford

Austin, TX






2,108



9,649



2,657



2,108



12,306



14,414



6,141


1999


5-30Houston/Timberway

Houston, TX






1,140



3,003



4,508



1,140



7,511



8,651



4,391


1997


5-30Westchase Corporate Park

Houston, TX






2,173



7,338



1,515



2,173



8,853



11,026



4,064


1999


5-30Quail Valley

Missouri City, TX






360



918



679



360



1,597



1,957



883


1997


5-30Bren Mar

Alexandria, VA






2,197



5,380



3,083



2,197



8,463



10,660



4,211


1997


5-30Eisenhower

Alexandria, VA






1,440



3,635



2,053



1,440



5,688



7,128



3,107


1997


5-30Beaumont

Chantilly, VA






4,736



11,051



1,643



4,736



12,694



17,430



4,356


2006


5-30Dulles South/Sullyfield

Chantilly, VA






1,373



6,810



1,865



1,373



8,675



10,048



4,329


1999


5-30Lafayette

Chantilly, VA






1,680



13,398



3,165



1,680



16,563



18,243



8,878


1999/2000


5-30Park East

Chantilly, VA






3,851



18,029



4,667



3,851



22,696



26,547



10,696


1999


5-30Fair Oaks Business Park

Fairfax, VA






13,598



36,232



4,302



13,598



40,534



54,132



13,450


2004/2007


5-30Prosperity Business Campus

Fairfax, VA






23,147



67,575



16,222



23,147



83,797



106,944



38,983


2001


5-30Monroe

Herndon, VA






6,737



18,911



7,677



6,737



26,588



33,325



14,015


1997/1999


5-30Gunston

Lorton, VA






4,146



17,872



3,436



4,146



21,308



25,454



10,722


1998


5-30Alban Road

Springfield, VA






1,935



4,736



4,081



1,935



8,817



10,752



4,798


1997


5-30I-95

Springfield, VA






3,535



15,672



9,537



3,535



25,209



28,744



15,465


2000


5-30Northpointe

Sterling, VA






2,767



8,778



3,758



2,767



12,536



15,303



7,315


1997/1998


5-30Shaw Road

Sterling, VA






2,969



10,008



3,717



2,969



13,725



16,694



7,963


1998


5-30Woodbridge

Woodbridge, VA






1,350



3,398



1,380



1,350



4,778



6,128



2,420


1997


5-30Overlake

Redmond, WA






27,761



49,353



3,198



27,761



52,551



80,312



20,403


2007


5-30Renton

Renton, WA






330



889



470



330



1,359



1,689



648


1997


5-30$
52,887


$
494,849


$
1,208,690


$
326,865


$
494,849


$
1,535,555


$
2,030,404


$
711,600     (1)
    
    The Company owns two properties
    that are subject to ground leases in Las Colinas, Texas,
    expiring in 2019 and 2020, each with one 10 year extension
    option. 75




---



##### 





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 26, 2010/s/  Joseph
    D. Russell, Jr.Joseph
    D. Russell, Jr.

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

February 26, 2010/s/  Edward
    A. StokxEdward
    A. Stokx

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

February 26, 2010/s/  R.
    Wesley BurnsR.
    Wesley Burns

Director

February 26, 2010/s/  Jennifer
    Holden DunbarJennifer
    Holden Dunbar

Director

February 26, 2010/s/  Arthur
    M. FriedmanArthur
    M. Friedman

Director

February 26, 2010/s/  James
    H. KroppJames
    H. Kropp

Director

February 26, 2010/s/  Harvey
    LenkinHarvey
    Lenkin

Director

February 26, 2010/s/  Michael
    V. McGeeMichael
    V. McGee

Director

February 26, 2010  76




---



##### 



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. 77




---



##### 



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, as amended. Filed with Registrants
    Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2009 and incorporated
    herein by reference.4
.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.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. 78




---



##### 



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.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. 79




---



##### 



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.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. 80




---



##### 



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.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. 81




---



##### 



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 82