##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, DC
    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, 2005oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          
    to   Commission file number
    001-32649
  COGDELL SPENCER INC.
 (Exact name of registrant as
    specified in its charter)
  Maryland(State or other
    jurisdiction of
    incorporation or organization)

20-3126457(I.R.S. Employer
    Identification No.)4401 Barclay Downs Drive,
    Suite 300
    Charlotte, North Carolina(Address of principal
    executive offices)

28209(Zip
    code)   Registrants telephone number, including area code:
 (704) 940-2900
  Securities
    Registered Pursuant to Section 12(b) of the Act:
  Title of Each Class

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

New York Stock Exchange,
    Inc.   Securities
    Registered Pursuant to Section 12(g) of the Act:
 None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K.  Yes þ o
  Rule 12b-2
 o o þ
  rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




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##### 



COGDELL
    SPENCER INC.
   TABLE OF CONTENTS
  PagePART IItem 1

Business


1Item 1A

Risk Factors


7Item 1B

Unresolved Staff
    Comments


26Item 2

Properties


26Item 3

Legal
    Proceedings


30Item 4

Submission of
    Matters to a Vote of Securities Holders


30PART IIItem 5

Market for
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities


30Item 6

Selected Financial
    Data


32Item 7

Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


34Item 7A

Quantitative and
    Qualitative Disclosures about Market Risk


44Item 8

Financial
    Statements and Supplementary Data


45Item 9

Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


77Item 9A

Controls and
    Procedures


77Item 9B

Other
    Information


77PART IIIItem 10

Directors and
    Executive Officers of the Registrant


77Item 11

Executive
    Compensation


77Item 12

Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


77Item 13

Certain
    Relationships and Related Transactions


77Item 14

Principal
    Accounting Fees and Services


77PART IVItem 15

Exhibits and
    Financial Statement Schedules


77SIGNATURES


79EX-14.1EX-23.1EX-31.1EX-31.2EX-32.1




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Explanatory
    Note
  Note that the financial statements covered in this report for
    the period from January 1, 2005 to October 31, 2005
    and for the years ended December 31, 2004 and 2003, contain
    the results of operations and financial condition of Cogdell
    Spencer Inc. Predecessor, which is not a legal entity, but
    represents a combination of certain real estate entities based
    on common management by Cogdell Spencer Advisors, Inc. In
    addition, the financial statements covered in this report
    contain the results of operations and financial condition of
    Cogdell Spencer Inc. for the period from November 1, 2005
    to December 31, 2005. Due to the timing of the initial
    public offering and the formation transactions, Cogdell Spencer
    Inc. (the Company) does not believe that the results
    of operations set forth in this document are necessarily
    indicative of the Companys future operating results as a
    publicly-held company.
  Statements
    Regarding Forward-Looking Information
  When used in this discussion and elsewhere in this Annual
    Report on
    Form 10-K,
    the words believes, anticipates,
    projects, should, estimates,
    expects, and similar expressions are intended to
    identify forward-looking statements with the meaning of that
    term in Section 27A of the Securities Act of 1933, as
    amended, and in Section 21F of the Securities and Exchange
    Act of 1934, as amended. Actual results may differ materially
    due to uncertainties including:
  
    the Companys business strategy;
    the Companys ability to obtain future financing
    arrangements;
    estimates relating to the Companys future distributions;
    the Companys understanding of the Companys
    competition;
    the Companys ability to renew the Companys ground
    leases;
    changes in the reimbursement available to the Companys
    tenants by government or private payors;
    the Companys tenants ability to make rent payments;
    defaults by tenants;
    market trends; and
    projected capital expenditures.   i




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PART I  Item 1.
    Business  The
    Company
      and/or
  
    45 wholly owned properties;
    eight joint venture properties; and
    19 properties owned by third parties (17 of which are for
    clients with whom the Company has an existing investment
    relationship).    Initial
    Public Offering and Formation Transactions
     1




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and/or
    
    repay approximately $71.2 million existing indebtedness,
    including accrued interest;
    pay $36.5 million to acquire interests in the predecessor
    entities from those investors who elected to receive cash in the
    Formation Transactions;
    pay $1.1 million to acquire a fee simple interest in the
    Companys Baptist Northwest property; and
    pay unsecured credit facility fees of $0.5 million.  The
    Companys Management Company
    Management
    Business
    and Growth Strategies
    Operating
    Strategy
    
    Strong Relationships with Physicians and Hospitals.   2




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
    Active Management of the Companys Properties.    
    Key On-Campus Locations.  state-of-the-art
  
    Loyal and Diverse Tenant Base.    
    Unique Focus.   3




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Acquisition
    and Development Strategy
    
    Development Expertise.    
    Selective Development and Acquisitions.    
    Develop and Maintain Strategic Relationships.  not-for-profit
  
    Investment Criteria and Funding.       4




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Regulation
             5




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Environmental
    Matters
  and/or and/or
  and/or
  Insurance
    Competition
    not-for-profit
 6




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##### Table of Contents



Code of
    Business Ethics and Corporate Governance Guidelines
    (704) 940-2900.
  Employees
    Offices
  28209-4670.
  Available
    Information
  Form 10-K, Form 10-Q, Form 8-K, 1-800-SEC-0330 Forms 10-K, 10-Q, 8-K,
  Item 1A.
    Risk
    Factors  Risks
    Related to the Companys Properties and
    Operations
  The
    Companys real estate investments are concentrated in
    medical office buildings and healthcare related facilities,
    making the Company more vulnerable economically than if the
    Companys investments were diversified.
   7




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The
    Company depends on significant tenants.
    The
    bankruptcy or insolvency of the Companys tenants under the
    Companys leases could seriously harm the Companys
    operating results and financial condition.
         8




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The
    long-term effects of Hurricane Katrina may adversely affect the
    ability of the Companys tenants at two of the
    Companys properties to meet future rent
    obligations.
      Adverse
    economic or other conditions in the markets in which the Company
    do business could negatively affect the Companys occupancy
    levels and rental rates and therefore the Companys
    operating results.
    
    the national economic climate and the local or regional economic
    climate in the markets in which the Company operates, which may
    be adversely impacted by, among other factors, industry
    slowdowns, relocation of businesses and changing demographics;
    periods of economic slowdown or recession, rising interest rates
    or declining demand for medical office buildings and healthcare
    related facilities, or the public perception that any of these
    events may occur, could result in a general decline in rental
    rates or an increase in tenant defaults;
    local or regional real estate market conditions such as the
    oversupply of medical office buildings and healthcare related
    facilities or a reduction in demand for medical office buildings
    and healthcare related facilities in a particular area;
    negative perceptions by prospective tenants of the safety,
    convenience and attractiveness of the Companys properties
    and the neighborhoods in which they are located;
    lack of continued success of the hospitals on whose campuses the
    Companys medical office buildings and healthcare related
    facilities are located;
    increased operating costs, including expenditures for capital
    improvements, insurance premiums, real estate taxes and
    utilities;
    changes in supply of or demand for similar or competing
    properties in an area;
    the impact of environmental protection laws;
    earthquakes and other natural disasters, terrorist acts, civil
    disturbances or acts of war which may result in uninsured or
    underinsured losses; and
    changes in the tax, real estate and zoning laws. 9




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All of
    the Companys wholly owned properties are located in South
    Carolina, North Carolina, Georgia, Louisiana and Kentucky, and
    changes in these markets may materially adversely affect the
    Company.
    The
    Company may not be successful in identifying and consummating
    suitable acquisitions or investment opportunities, which may
    impede the Companys growth and negatively affect the
    Companys results of operations.
      
    competition from other real estate investors with significant
    capital, including other publicly-traded REITs and institutional
    investment funds;
    competition from other potential acquirers may significantly
    increase the purchase price for an acquisition property, which
    could reduce the Companys profitability;
    unsatisfactory results of the Companys due diligence
    investigations or failure to meet other customary closing
    conditions;
    failure to finance an acquisition on favorable terms or at all;
    the Company may spend more than the time and amounts budgeted to
    make necessary improvements or renovations to acquired
    properties; and
    the Company may acquire properties subject to liabilities and
    without any recourse, or with only limited recourse, with
    respect to unknown liabilities such as liabilities for
    clean-up of
    undisclosed environmental contamination, claims by persons in
    respect of events transpiring or conditions existing before the
    Company acquired the properties and claims for indemnification
    by general partners, directors, officers and others indemnified
    by the former owners of the properties.   10




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If the
    Company is unable to promptly re-let its properties, if the
    rates upon such re-letting are significantly lower than expected
    or if the Company is required to undertake significant capital
    expenditures to attract new tenants, then the Companys
    business and results of operations would be adversely
    affected.
    Certain
    of the Companys properties may not have efficient
    alternative uses.
  and/or
  The
    Company faces increasing competition for the acquisition of
    medical office buildings and healthcare related facilities,
    which may impede the Companys ability to make future
    acquisitions or may increase the cost of these
    acquisitions.
   11




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The
    Company may not be successful in integrating and operating
    acquired properties.
  day-to-day
  The
    Companys medical office buildings and healthcare related
    facilities, their associated hospitals and the Companys
    tenants may be unable to compete successfully.
        The
    Companys investments in development and redevelopment
    projects may not yield anticipated returns, which would harm the
    Companys operating results and reduce the amount of funds
    available for distributions.
    
    the Company may be unable to obtain financing for these projects
    on favorable terms or at all;
    the Company may not complete development projects on schedule or
    within budgeted amounts;
    the Company may encounter delays or refusals in obtaining all
    necessary zoning, land use, building, occupancy and other
    required governmental permits and authorizations;
    occupancy rates and rents at newly developed or redeveloped
    properties may fluctuate depending on a number of factors,
    including market and economic conditions, and may result in the
    Companys investment not being profitable; and
    start-up
    costs may be higher than anticipated.   12




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Uninsured
    losses or losses in excess of the Company insurance coverage
    could adversely affect the Companys financial condition
    and the Companys cash flow.
    The
    Companys mortgage agreements and ground leases contain
    certain provisions that may limit the Companys ability to
    sell certain of the Companys medical office buildings and
    healthcare related facilities.
    
    obtain the consent of the lender;
    pay a fee equal to a fixed percentage of the outstanding loan
    balance; and
    pay any costs incurred by the lender in connection with any such
    assignment or transfer.   13




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19 of
    the Companys wholly owned properties are subject to ground
    leases that expose the Company to the loss of such properties
    upon breach or termination of the ground leases.
    Environmental
    compliance costs and liabilities associated with operating the
    Companys properties may affect the Companys results
    of operations.
            Costs
    associated with complying with the Americans with Disabilities
    Act of 1990 may result in unanticipated expenses.
   14




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and/or
  Risks
    Related to the Healthcare Industry
  Adverse
    trends in healthcare provider operations may negatively affect
    the Companys lease revenues and the Companys ability
    to make distributions to the Companys
    stockholders.
    
    changes in the demand for and methods of delivering healthcare
    services;
    changes in third party reimbursement policies;
    substantial competition for patients among healthcare providers;
    continued pressure by private and governmental payors to reduce
    payments to providers of services; and
    increased scrutiny of billing, referral and other practices by
    U.S. federal and state authorities.    Reductions
    in reimbursement from third party payors, including Medicare and
    Medicaid, could adversely affect the profitability of the
    Companys tenants and hinder their ability to make rent
    payments to the Company.
    The
    healthcare industry is heavily regulated, and new laws or
    regulations, changes to existing laws or regulations, loss of
    licensure or failure to obtain licensure could result in the
    inability of the Companys tenants to make rent payments to
    the Company.
     15




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The
    Companys tenants are subject to fraud and abuse laws, the
    violation of which by a tenant may jeopardize the tenants
    ability to make rent payments to the Company.
      
    the Federal Anti-Kickback Statute, which prohibits, among other
    things, the offer, payment, solicitation or receipt of any form
    of remuneration in return for, or to induce, the referral of
    Medicare and Medicaid patients;
    the Federal Physician Self-Referral Prohibition, which, subject
    to specific exceptions, restricts physicians who have financial
    relationships with healthcare providers from making referrals
    for specifically designated health services for which payment
    may be made under Medicare or Medicaid programs to an entity
    with which the physician, or an immediate family member, has a
    financial relationship;
    the False Claims Act, which prohibits any person from knowingly
    presenting false or fraudulent claims for payment to the federal
    government, including under the Medicare and Medicaid
    programs; and
    the Civil Monetary Penalties Law, which authorizes the
    Department of Health and Human Services to impose monetary
    penalties for certain fraudulent acts.  and/or and/or
  Risks
    Related to the Real Estate Industry
  Illiquidity
    of real estate investments could significantly impede the
    Companys ability to respond to adverse changes in the
    performance of the Companys properties.
   16




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Any
    investments in unimproved real property may take significantly
    longer to yield income-producing returns, if at all, and may
    result in additional costs to the Company to comply with
    re-zoning restrictions or environmental
    regulations.
  and/or
  Risks
    Related to the Companys Debt Financings
  Required
    payments of principal and interest on borrowings may leave the
    Company with insufficient cash to operate the Companys
    properties or to pay the distributions currently contemplated or
    necessary to qualify as a REIT and may expose the Company to the
    risk of default under the Companys debt
    obligations.
  and/or
    
    the Companys cash flow may be insufficient to meet the
    Companys required principal and interest payments;
    the Company may be unable to borrow additional funds as needed
    or on favorable terms, including to make acquisitions; 17




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
    the Company may be unable to refinance the Companys
    indebtedness at maturity or the refinancing terms may be less
    favorable than the terms of the Companys original
    indebtedness;
    because a portion of the Companys debt bears interest at
    variable rates, an increase in interest rates could materially
    increase the Companys interest expense;
    the Company may be forced to dispose of one or more of the
    Companys properties, possibly on disadvantageous terms;
    after debt service, the amount available for distributions to
    the Companys stockholders is reduced;
    the Companys debt level could place the Company at a
    competitive disadvantage compared to the Companys
    competitors with less debt;
    the Company may experience increased vulnerability to economic
    and industry downturns, reducing the Companys ability to
    respond to changing business and economic conditions;
    the Company may default on the Companys obligations and
    the lenders or mortgagees may foreclose on the Companys
    properties that secure their loans and receive an assignment of
    rents and leases;
    the Company may violate financial covenants which would cause a
    default on the Companys obligations;
    the Company may inadvertently violate non-financial restrictive
    covenants in the Companys loan documents, such as
    covenants that require the Company to maintain the existence of
    entities, maintain insurance policies and provide financial
    statements, which would entitle the lenders to accelerate the
    Companys debt obligations; and
    the Company defaults under any one of the Companys
    mortgage loans with cross-default or cross-collateralization
    provisions could result in default on other indebtedness or
    result in the foreclosures of other properties.    The
    Companys ability to pay distributions following the
    Companys initial annual period is dependent on a number of
    factors and is not assured.
    The
    Company could become highly leveraged in the future because the
    Companys organizational documents contain no limitations
    on the amount of debt the Company may incur.
  and/or
 18




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Increases
    in interest rates may increase the Companys interest
    expense and adversely affect the Companys cash flow and
    the Companys ability to service the Companys
    indebtedness and make distributions to the Companys
    stockholders.
    Failure
    to hedge effectively against interest rate changes may adversely
    affect the Companys results of operations.
    The
    Companys Credit Facility contains financial covenants that
    could limit the Companys operations and the Companys
    ability to make distributions to the Companys
    stockholders.
     19




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Risks
    Related to the Companys Organization and
    Structure
  The
    Companys management has no prior experience operating a
    REIT or a public Company and therefore may have difficulty in
    successfully and profitably operating the Companys
    business, or complying with regulatory requirements, including
    the Sarbanes-Oxley Act of 2002.
    The
    Companys two largest stockholders, Mr. Cogdell, the
    Companys Chairman, and Mr. Spencer, the
    Companys Chief Executive Officer, President and a member
    of the Companys board of directors, and their respective
    affiliates owned 17.4% and 3.7%, respectively, as of
    December 31, 2005 of the Companys outstanding common
    stock and units of limited partnership interest in the Operating
    Partnership (OP units) on a fully-diluted basis and
    therefore have the ability to exercise significant influence
    over the Company and any matter presented to the Companys
    stockholders.
  day-to-day
  The
    Companys business could be harmed if key personnel
    terminate their employment with the Company.
    Tax
    indemnification obligations could limit the Companys
    operating flexibility by limiting the Companys ability to
    sell specified properties.
   20




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majority-in-interest majority-in-interest
        Tax
    indemnification obligations may require the operating
    partnership to maintain certain debt levels.
    The
    Company may pursue less vigorous enforcement of terms of
    contribution and other agreements because of conflicts of
    interest with certain of the Companys
    officers.
   21




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Conflicts
    of interest could arise as a result of the Company UPREIT
    structure.
          Certain
    provisions of the Companys organizational documents,
    including the stock ownership limit imposed by the
    Companys charter, could prevent or delay a change in
    control transaction.
   22




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Certain
    provisions of Maryland law may limit the ability of a third
    party to acquire control of the Company.
    
    business combination provisions that, subject to
    certain limitations, prohibit certain business combinations
    between the Company and an interested stockholder
    (defined generally as any person who beneficially owns 10% or
    more of the voting power of the Companys shares or an
    affiliate thereof) for five years after the most recent date on
    which the stockholder becomes an interested stockholder, and
    thereafter impose special minimum price provisions and special
    stockholder voting requirements on these combinations; and
    control share provisions that provide that
    control shares of the Company (defined as shares
    which, when aggregated with other shares controlled by the
    stockholder, entitle the stockholder to exercise one of three
    increasing ranges of voting power in electing directors)
    acquired in a control share acquisition (defined as
    the direct or indirect acquisition of ownership or control of
    control shares) have no voting rights except to the
    extent approved by the Companys stockholders by the
    affirmative vote of at least two-thirds of all the votes
    entitled to be cast on the matter, excluding all interested
    shares.      The
    Companys board of directors has the power to cause the
    Company to issue additional shares of the Companys stock
    and the general partner has the power to issue additional OP
    units without stockholder approval.
   23




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The
    Companys rights and the rights of the Companys
    stockholders to take action to recover money damages from the
    Companys directors and officers are limited.
    You
    will have limited ability as a stockholder to prevent the
    Company from making any changes to the Company policies that you
    believe could harm the Companys business, prospects,
    operating results or share price.
    To the
    extent the Companys distributions represent a return of
    capital for tax purposes you could recognize an increased
    capital gain upon a subsequent sale by you of the Companys
    common stock.
    Risks
    Related to Qualification and Operation as a REIT
  The
    Companys failure to qualify or remain qualified as a REIT
    would have significant adverse consequences to the Company and
    the value of the Companys common stock.
   24




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
    the Company would not be allowed a deduction for distributions
    to stockholders in computing the Companys taxable income
    and the Company would be subject to U.S. federal income tax
    at regular corporate rates;
    the Company also could be subject to the U.S. federal
    alternative minimum tax and possibly increased state and local
    taxes; and
    unless the Company is entitled to relief under applicable
    statutory provisions, the Company could not elect to be taxed as
    a REIT for four taxable years following a year during which the
    Company was disqualified.        To
    maintain the Company REIT qualification, the Company may be
    forced to borrow funds during unfavorable market
    conditions.
    Dividends
    payable by REITs generally do not qualify for reduced tax
    rates.
   25




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Possible
    legislative or other actions affecting REITs could adversely
    affect the Company and the Companys
    stockholders.
    Complying
    with REIT requirements may cause the Company to forego otherwise
    attractive opportunities.
    The
    Company will pay some taxes.
    The
    ability of the Companys board of directors to revoke the
    Company REIT election without stockholder approval may cause
    adverse consequences to the Companys
    stockholders.
    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties  and/or
 26




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AnnualizedNet








Rent perRentable








Leased


AssociatedYear


Square


Occupancy


Annualized


Square


Health CareWholly Owned Property

City

Built(1)


Feet(2)


Rate


Rent


Foot(4)(5)


SystemGeorgia:Augusta POB I(6)(7)

Augusta


1978



99,493



97.9
%

$
1,128,986


$
11.59


University Health ServicesAugusta POB II(6)(7)

Augusta


1987



125,634



98.3



2,598,858



21.04


University Health ServicesAugusta POB III(6)(7)

Augusta


1994



47,034



90.7



711,772



16.68


University Health ServicesAugusta POB IV(6)(7)

Augusta


1995



55,134



89.6



750,157



15.19


University Health ServicesTotal Georgia








327,295



95.6



5,189,773



16.59Kentucky:Our Lady of Bellefonte(6)(8)(9)

Ashland


1997



46,908



90.0



927,626



21.97


Our Lady of Bellefonte HospitalAdjacent Parking Deck




1997











756,174Total Kentucky








46,908



90.0



1,683,800



21.97
(10)Louisiana:East Jefferson Medical Office
    Building(6)(8)(9)

Metairie


1985



119,921



100.0



2,303,877



19.21


East Jefferson General HospitalEast Jefferson Medical Specialty
    Building(6)(8)(9)(11)

Metairie


1985



10,809



100.0



958,896



88.71


East Jefferson General HospitalTotal Louisiana








130,730



100.0



3,262,773



24.96North Carolina:Barclay Downs

Charlotte


1987



38,395



97.1



758,211



20.34


Birkdale Medical Village(9)(12)

Huntersville


1997



64,669



100.0



1,363,212



21.08


NorthEast Medical CenterBirkdale Retail(9)

Huntersville


2001



8,269



100.0



186,980



22.61


Cabarrus POB(6)(8)(9)

Concord


1997



84,972



98.4



1,704,399



20.38


NorthEast Medical CenterCabarrus Pediatrics(9)(12)

Concord


1997



9,423



100.0



240,852



25.56


NorthEast Medical CenterCopperfield Medical Mall(12)

Concord


1989



26,000



100.0



559,520



21.52


NorthEast Medical CenterCopperfield MOB(6)(8)(9)

Concord


2005



63,907



82.8



1,064,055



20.11


NorthEast Medical CenterEast Rocky Mount Kidney
    Center(9)(13)

Rocky Mount


2000



8,043



100.0



161,023



20.02


Gaston Professional Center(6)(8)(9)

Gastonia


1997



114,956



100.0



2,636,937



22.94


Caramont Health SystemAdjacent Parking Deck




1997











608,162Harrisburg Family Physicians
    Building(12)

Harrisburg


1996



8,202



100.0



202,671



24.71


Carolinas HealthCare SystemHarrisburg Medical Mall(9)(12)

Harrisburg


1997



18,360



100.0



438,620



23.89


NorthEast Medical CenterLincoln/ Lakemont Family Practice
    Center(12)

Lincolnton


1998



16,500



100.0



359,115



21.76


Carolinas HealthCare SystemMallard Crossing Medical Park(9)

Charlotte


1997



52,540



92.8



1,162,789



23.85


Midland Medical Mall(9)(12)

Midland


1998



14,610



100.0



377,680



25.85


NorthEast Medical CenterMulberry Medical
    Park (6) (8)(9)

Lenoir


1982



24,992



100.0



471,085



18.85


Caldwell Memorial Hospital, Inc.Northcross Family Medical Practice
    Building(12)

Charlotte


1993



8,018



100.0



211,916



26.43


Carolinas HealthCare System 27




---



##### Table of Contents



AnnualizedNet








Rent perRentable








Leased


AssociatedYear


Square


Occupancy


Annualized


Square


Health CareWholly Owned Property

City

Built(1)


Feet(2)


Rate


Rent


Foot(4)(5)


SystemRandolph Medical Park(9)

Charlotte


1973



84,131



89.9



1,524,590



20.16


Rocky Mount Kidney Center(9)

Rocky Mount


1990



10,364



100.0



193,005



18.62


Rocky Mount Medical Park(9)

Rocky Mount


1991



96,993



95.8



1,760,371



18.95


Rowan Outpatient Surgery
    Center(6)(7)(13)

Salisbury


2003



19,464



100.0



404,073



20.76


Rowan Regional Medical CenterWeddington Internal &
    Pediatric Medicine(12)

Concord


2000



7,750



100.0



166,703



21.51


NorthEast Medical CenterTotal North Carolina








780,558



96.2



16,555,969



21.24
(14)South Carolina:190 Andrews(6)(8)

Greenville


1994



22,898



100.0



414,982



18.12


Bon Secours St. Francis Health SystemBaptist Northwest(9)

Columbia


1986



38,703



96.2



678,616



18.23


Beaufort Medical Plaza(6)(8)(9)

Beaufort


1999



59,340



100.0



1,192,193



20.09


Beaufort Memorial HospitalMt. Pleasant MOB(3)(6)(9)

Mt. Pleasant


2001



38,735



77.4



702,153



23.42


Roper St. Francis HealthcareMedical Arts Center of
    Orangeburg(7)(9)

Orangeburg


1984



49,024



97.3



877,628



18.40


The Regional Medical
    Center of Orangeburg
    and Calhoun CountiesOne Medical
    Park  HMOB(6)(8)(9)

Columbia


1984



69,840



100.0



1,536,132



22.00


Palmetto Health Alliance
    Sisters of CharityProvidence MOB I(6)(8)(9)

Columbia


1979



48,500



100.0



964,186



19.88


Providence Hospitals
    Sisters of CharityProvidence MOB II(6)(8)(9)

Columbia


1985



23,280



100.0



453,976



19.50


Providence Hospitals
    Sisters of CharityProvidence MOB III(6)(7)(9)

Columbia


1991



54,417



100.0



1,095,657



20.13


Providence HospitalsRiver Hills Medical Plaza(9)(12)

Little River


1999



27,566



100.0



802,099



29.10


Grand Strand RegionalRoper MOB(6) (8)(9)

Charleston


1990



121,723



88.9



2,100,341



19.41


Roper St. Francis HealthcareSt. Francis Community Medical
    Office Building(6)(8)(9)

Greenville


2001



45,140



100.0



1,028,805



22.79


Bon Secours St. Francis
    Health SystemSt. Francis Medical Plaza(6)(8)(9)

Greenville


1998



62,724



94.0



1,183,107



20.07


Bon Secours St. Francis
    Health SystemSt. Francis MOB(6)(8)(9)

Greenville


1984



49,767



95.6



855,540



17.98


Bon Secours St. Francis
    Health SystemSt. Francis Womens
    Center(6)(8)(9)

Greenville


1991



57,593



76.2



863,535



19.68


Bon Secours St. Francis
    Health SystemThree Medical Park(6)(8)(9)

Columbia


1988



88,755



100.0



1,912,941



21.55


Palmetto Health AllianceWest Medical I(6)(8)(9)

Charleston


2003



29,721



100.0



681,823



22.94


Roper St. Francis HealthcareTotal South Carolina








887,726



95.0



17,343,714



20.57Total








2,173,217



95.7
%

$
44,036,029


$
20.52
(15)     (1)
    
    Represents the year in which the property was placed in service.(2)
    
    Net rentable square feet represents the current square feet at a
    building under lease as specified in the lease agreements plus
    managements estimate of space available for lease. Net
    rentable square feet includes tenants proportional share
    of common areas.(3)
    
    Annualized rent represents the annualized monthly contracted
    rent under existing leases as of December 31, 2005.(4)
    
    Annualized rent per leased square foot represents annualized
    rent, excluding revenues attributable to parking, divided by the
    net rentable square feet divided by occupancy rate.(5)
    
    Unless otherwise indicated, annualized rent per leased square
    foot includes reimbursement to the Company for the payment for
    property operating expenses, real estate taxes and insurance
    with respect to such property.(6)
    
    On-campus facility. 28




---



##### Table of Contents



(7)
    
    Subject to a restrictive deed on the property.(8)
    
    Property is a tenant under a long-term ground lease on the
    property with an unrelated third party.(9)
    
    The Company developed this property.(10)
    
    Excludes annualized rent of adjacent parking deck to The
    Companys Lady of Bellefonte from calculation.(11)
    
    East Jefferson Medical Specialty Building is recorded as a
    sales-type capital lease in the Companys consolidated
    financial statements. As such, the annualized rent related to
    the minimum lease payments is not reflected as rental revenue in
    the statement of operations. However amortization of unearned
    income is recorded in interest income.(12)
    
    Off-campus facility    hospital
    anchored.(13)
    
    The annualized rent per leased square foot does not include any
    payments to us for payment of property operating expenses, real
    estate taxes and insurance with respect to such property. The
    tenant is responsible for payment of these expenses.(14)
    
    Excludes annualized rent of adjacent parking deck to Gaston
    Professional Center from calculation.(15)
    
    Excludes annualized rent of adjacent parking decks to The
    Companys Lady of Bellefonte and Gaston Professional Center
    from calculation.  Joint
    Venture Properties
      AnnualizedNet








Rent perRentable








Leased








AssociatedYear


Square


Occupancy


Annualized


Square


Ownership


Debt


HealthcareProperty

City, State

Built


Feet


Rate


Rent


Foot


Percentage


Balance(1)


SystemKannapolis Medical Mall

Kannapolis, NC


1987



28,033



100.0
%

$
641,752


$
22.89



5.0
%

$



NorthEast Medical
    CenterMary Black MOB(2)

Spartanburg, SC


1988



45,047



98.5



772,511



17.41



9.6



2,120,234


TriadMary Black MOB II(3)

Spartanburg, SC


1993



15,143



100.0



273,156



18.04



1.0



976,272


TriadMary Black Westside(4)

Spartanburg, SC


1991



37,455



100.0



758,998



20.26



5.0



2,712,166


TriadMcLeod MOB East(5)

Florence, SC


1993



127,458



95.6



1,871,433



15.36



1.1



13,327,371


McLeod Regional
    Medical CenterMcLeod Pee Dee Medical Park(5)

Florence, SC


1982



33,756



99.5



499,375



14.87



1.1



13,327,371


McLeod Regional
    Medical CenterMcLeod MOB West(5)

Florence, SC


1986



52,574



96.7



679,584



13.37



1.1



13,327,371


McLeod Regional
    Medical CenterRocky Mount MOB

Rocky Mt., NC


2002



35,393



95.7



786,676



23.23



34.5



4,339,675


Total








374,859






$
6,283,485










$
23,475,718     (1)
    
    Amounts are for the entity, not just the Companys interest
    in the real estate joint venture.(2)
    
    The Company expects to sell its 9.6% interest in this property
    to the associated healthcare system for $0.3 million in
    cash during the second quarter in 2006. The Company expects to
    continue to manage this property following this sale.(3)
    
    The Company expects to sell its 1.0% interest in this property
    to the associated healthcare system for approximately five
    thousand dollars in cash during the second quarter in 2006. The
    Company expects to continue to manage this property following
    this sale.(4)
    
    The Company expects to purchase the 95.0% interest in this
    property held by the associated healthcare system for
    $2.3 million in cash during the second quarter in 2006. The
    Company expects to fund this acquisition initially by drawing on
    its Credit Facility.(5)
    
    Total debt of $13.3 million is secured by all three
    properties listed. 29




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##### Table of Contents



Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders   PART II  Item 5.
    Market
    for Registrants Common Equity and Related Stockholder
    Matters and Issuer Purchases of Equity Securities  Market
    Information
    DividendsPeriod

High


Low


DeclaredOctober 27, 2005 to
    December 31, 2005

$
17.29


$
15.98


$
0.2333(1
)     (1)
    
    Pro-rata quarterly dividend is for the period November 1,
    2005 through December 31, 2005 and is based on a dividend
    of $0.35 per share for a full quarter.        Unregistered
    Sales of Equity Securities and Use of Proceeds
    
    Pursuant to separate merger, contribution and related
    agreements, the holders of ownership interests in the
    Predecessor (other than Cogdell Spencer Advisors, Inc.)
    contributed their interests in the properties and assets owned
    by the existing entities to the Company and interests in eight
    existing joint ventures with third parties in exchange for
    approximately 378,153 shares of the Companys common
    stock and 3,838,587 OP units having an aggregate value of
    approximately $71.7 million;
    The stockholders of Cogdell Spencer Advisors, Inc. exchanged all
    of their stock in Cogdell Spencer Advisors, Inc. for
    approximately 1,464,121 shares of the Companys common
    stock; and
    The Company acquired one property, 190 Andrews, located in
    Greenville, South Carolina. This property was acquired from its
    tenant-owners in exchange for 188,236 OP units, equal to
    $3.2 million, based upon the initial public offering price
    of $17.00 per share. 30




---



##### Table of Contents



Form S-11
      
    repay approximately $71.2 million existing indebtedness,
    including accrued interest;
    pay $36.5 million to acquire interests in the predecessor
    entities from those investors who elected to receive cash in the
    Formation Transactions;
    pay $1.1 million to acquire a fee simple interest in the
    Companys Baptist Northwest property; and
    pay Credit Facility fees of $0.5 million.   31




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##### Table of Contents



Item 6.
    Selected
    Financial Data    Form 10-K.
  Company


PredecessorNovember 1, 2005 -


January 1, 2005 -


For the Year Ended
    December 31,December 31, 2005


October 31, 2005


2004


2003


2002


2001(In thousands, except per share
    amounts)Statements of Operations
    Data:Revenues:Rental

$
7,044


$
35,986


$
40,657


$
38,993


$
37,676


$
34,912Fee revenue


221



1,450



2,364



1,361



1,871



2,302Expense reimbursements


94



565



840



806



875



775Interest and other income


127



879



843



849



843



989Total revenues


7,486



38,880



44,704



42,009



41,265



38,978Expenses:Property operating


2,596



13,124



14,837



14,116



13,335



12,290General and administrative


7,791



5,130



3,076



2,929



2,847



2,960Interest


1,512



8,275



9,067



11,422



15,707



14,508Depreciation and amortization


4,142



8,480



9,620



9,797



9,561



8,938Loss from early extinguishment of
    debt


103



















Total expenses


16,144



35,009



36,600



38,264



41,450



38,696Income (loss) from continuing
    operations before gain on sale of real estate properties, equity
    earnings (loss) on unconsolidated real estate partnerships and
    minority interests


(8,658
)


3,871



8,104



3,745



(185
)


282Gain on sale or (impairment) of
    real estate properties


















27



(225
)Equity earnings (loss) on
    unconsolidated real estate partnerships


3



(47
)


(60
)


(74
)


(136
)


(36
)Minority interests


3,055



















Income (loss) from continuing
    operations


(5,600
)


3,824



8,044



3,671



(294
)


21Discontinued
    operations:Operating income


















80



507Gain on sale of real estate
    properties


















613



Total discontinued operations


















693



507Net income (loss)

$
(5,600
)

$
3,824


$
8,044


$
3,671


$
399


$
528 32




---



##### Table of Contents



Company


PredecessorNovember 1, 2005 -


January 1, 2005 -


For the Year Ended
    December 31,December 31, 2005


October 31, 2005


2004


2003


2002


2001(In thousands, except per share
    amounts)Per Share:Distribution

$
0.2333Net loss  basic and
    diluted

$
(0.70
)Weighted average
    shares  basic and diluted


7,972Weighted average shares and
    units  basic and diluted


12,337Selected Balance Sheet
    Data:Assets:Real estate properties, net

$
258,523






$
156,509


$
149,584


$
148,720


$
150,871Other assets, net


49,959







21,916



16,415



17,950



14,622Assets held for sale






















1,142Total assets

$
308,482






$
178,425


$
165,999


$
166,670


$
166,635Liabilities and owners
    equity (deficit):Mortgages and line of credit

$
160,234






$
214,818


$
202,522


$
198,550


$
187,892Other liabilities, net


7,762







10,034



10,564



11,809



9,256Liabilities related to assets held
    of sale






















1,276Minority interests


62,018



















Owners equity (deficit)


78,468







(46,427
)


(47,087
)


(43,689
)


(31,789
)Total liabilities and owners
    equity (deficit)

$
308,482






$
178,425


$
165,999


$
166,670


$
166,635Cash Flow Data:Net cash provided by operating
    activities

$
1,635


$
10,312


$
16,089


$
12,738


$
13,326


$
13,230Net cash used in investing
    activities


(27,462
)


(5,939
)


(13,767
)


(7,523
)


(8,584
)


(18,903
)Net cash provided by (used in)
    financing activities


35,398



(5,863
)


1,880



(6,339
)


(3,644
)


5,190Other Data:Funds from operations(1)

$
(4,518
)

$
12,303


$
17,656


$
13,462


$
9,276


$
9,384     (1)
    
    As defined by the National
    Association of Real Estate Investment Trusts, or NAREIT, funds
    from operations, or FFO, represents net income (computed in
    accordance with generally accepted accounting principles, or
    GAAP), excluding gains from sales of property, plus real estate
    depreciation and amortization (excluding amortization of
    deferred financing costs) and after adjustments for
    unconsolidated partnerships and joint ventures. The Company
    present FFO because the Company consider it an important
    supplemental measure of the Companys operational
    performance and believes it is frequently used by securities
    analysts, investors and other interested parties in the
    evaluation of REITs, many of which present FFO when reporting
    their results. FFO is intended to exclude GAAP historical cost
    depreciation and amortization of real estate and related assets,
    which assumes that the value of real estate assets diminishes
    ratably over time. Historically, however, real estate values
    have risen or fallen with market conditions. Because FFO
    excludes depreciation and amortization unique to real estate,
    gains and losses from property dispositions and extraordinary
    items, it provides a performance measure that, when compared
    year over year, reflects the impact to operations from trends in
    occupancy rates, rental rates, operating costs, development
    activities and interest costs, providing perspective not
    immediately apparent from net income. The Company computes FFO
    in accordance with standards established by the Board of
    Governors of NAREIT in its March 1995 White Paper (as amended in
    November 1999 and April 2002), which may differ from the
    methodology for calculating FFO utilized by other equity REITs
    and, accordingly, may not be comparable to such other REITs.
    Further, FFO does not represent amounts available for
    managements discretionary use because of needed capital
    replacement or expansion, debt service obligations, or other
    commitments and uncertainties. FFO should not be considered as
    an alternative to net income (loss) 33




---



##### Table of Contents



(computed in accordance with GAAP)
    as an indicator of the Companys performance, nor is it
    indicative of funds available to fund the Companys cash
    needs, including the Companys ability to pay dividends or
    make distributions.    Company


PredecessorNovember 1, 2005 -


January 1, 2005 -December 31, 2005


October 31, 2005


2004


2003


2002


2001Funds from
    operations:Net income (loss)

$
(5,600
)

$
3,824


$
8,044


$
3,671


$
399


$
528Minority interests


(3,055
)


















Real estate depreciation and
    amortization


4,128



8,384



9,533



9,702



9,466



8,856Unconsolidated entities real
    estate depreciation and amortization


9



95



79



89



51



Gain on sale of real estate
    properties


















(640
)


Total funds from
    operations

$
(4,518
)

$
12,303


$
17,656


$
13,462


$
9,276


$
9,384   Item 7.
    Management
    Discussion and Analysis of Financial Condition and Results of
    Operations  The following discussion should be read in conjunction with
    the financial statements and notes thereto appearing elsewhere
    in this report. Where appropriate, the following discussion
    includes analysis of the effects of the Companys Offering,
    the Formation Transactions and related refinancing transactions
    and certain other transactions. The Company makes statements in
    this section that are forward-looking statements within the
    meaning of the federal securities laws. For a complete
    discussion of forward-looking statements, see the section in
    this
    Form 10-K
    entitled Statements Regarding Forward-Looking
    Information. Certain risk factors may cause actual
    results, performance or achievements to differ materially from
    those expressed or implied by the following discussion. For a
    discussion of such risk factors, see the section in this
    Form 10-K
    entitled Statements Regarding Forward-Looking
    Information.
  Overview
     34




---



##### Table of Contents



and/or
  
    45 wholly owned properties;
    eight joint venture properties; and
    19 properties owned by third parties (17 of which are for
    clients with whom the Company has an existing investment
    relationship).      and/or
  Factors
    Which May Influence Future Results of Operations
    Critical
    Accounting Policies
    Form 10-K.
 35




---



##### Table of Contents



Investments
    in Real Estate
  Acquisition of real estate. Form 10-K.
  Useful lives of assets.
  Asset impairment valuation.
 36




---



##### Table of Contents



Revenue
    Recognition
      REIT
    Qualification Requirements
    Results
    of Operations
    Year
    ended December 31, 2005 compared to year ended
    December 31, 2004
  Overview.
  Total Revenue.
 37




---



##### Table of Contents



Property Operating Expenses.
  Interest Expense.
  Depreciation and Amortization
    Expenses.
  General and Administrative Expenses.
  Minority Interests.
    Year
    ended December 31, 2004 compared to year ended
    December 31, 2003
  Overview.
 38




---



##### Table of Contents







Total Revenue.
























Property Operating Expenses.




Interest Expense.




Depreciation and Amortization
    Expenses.




General and Administrative Expenses.








Cash
    Flows




Year
    Ended December 31, 2005 compared to the Year Ended
    December 31, 2004










39



---



##### Table of Contents











Year
    Ended December 31, 2004 compared to the Year Ended
    December 31, 2003
















Construction
    in Progress








Recent
    Developments












Liquidity
    and Capital Resources










40



---



##### Table of Contents



Long-Term
    Liquidity Needs
   41




---



##### Table of Contents



Contractual
    Obligations
    2006


2007


2008


2009


2010


Thereafter


TotalObligation:Long-term debt principal payments
    and maturities(1)

$
14,809


$
36,821


$
47,022


$
11,597


$
1,456


$
47,825


$
159,530Standby letters of credit(2)


500























500Interest payments(3)


9,165



7,734



5,275



3,405



2,945



7,397



35,921Ground leases(4)


95



95



95



95



95



1,997



2,472Operating leases(5)


21



5



3















29Total

$
24,590


$
44,655


$
52,395


$
15,097


$
4,496


$
57,219


$
198,452     (1)
    
    Includes notes payable under the Companys Credit Facility(2)
    
    As collateral for performance on a mortgage note payable, the
    Company is contingently liable under a standby letter of credit,
    which also reduces the availability under the Credit Facility(3)
    
    Assumes one-month LIBOR of 4.39% and Prime Rate of 7.25%(4)
    
    Substantially all of the ground leases effectively limit our
    control over various aspects of the operation of the applicable
    property, restrict our ability to transfer the property and
    allow the lessor the right of first refusal to purchase the
    building and improvements. All of the ground leases provide for
    the property to revert to the lessor for no consideration upon
    the expiration or earlier termination of the ground lease.(5)
    
    Payments under operating lease agreements relate to various of
    our properties equipment leases. The future minimum lease
    commitments under these leases are as indicated above. 42




---



##### Table of Contents



Off-Balance
    Sheet Arrangements
      Real
    Estate Taxes
    Inflation
    Seasonality
    Recent
    Accounting Pronouncements
  No. 04-5 (EITF 04-5). EITF 04-5.
  and/or
 43




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosure About Market Risk       44




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
   INDEX TO THE CONSOLIDATED AND COMBINED FINANCIAL
    STATEMENTS
  PageReport of
    Independent Registered Public Accounting Firm


46Consolidated and
    Combined Balance Sheets as of December 31, 2005 and 2004


47Consolidated and
    Combined Statements of Operations for Cogdell Spencer Inc. for
    the period November 1, 2005 through December 31, 2005,
    and for Cogdell Spencer Inc. Predecessor for the period
    January 1, 2005 through October 31, 2005, and the
    years ended December 31, 2004 and 2003


48Consolidated and
    Combined Statements of Stockholders and Owners
    Equity (Deficit) for Cogdell Spencer Inc. for the period
    November 1, 2005 through December 31, 2005, and for
    Cogdell Spencer Inc. Predecessor for the period January 1,
    2005 through October 31, 2005, and the years ended
    December 31, 2004 and 2003


49Consolidated and
    Combined Statements of Cash Flows for Cogdell Spencer Inc. for
    the period November 1, 2005 through December 31, 2005,
    and for Cogdell Spencer Inc. Predecessor for the period
    January 1, 2005 through October 31, 2005, and the
    years ended December 31, 2004 and 2003


50Notes to
    Consolidated and Combined Financial Statements


51Supplemental
    Schedule  Schedule III  Real
    Estate and Accumulated Depreciation


74Notes to
    Schedule III  Real Estate and Accumulated
    Depreciation


76  45




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM            DELOITTE &
    TOUCHE LLP
    46




---



##### Table of Contents



COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
  CONSOLIDATED AND COMBINED BALANCE SHEETS
  Company


PredecessorDecember 31,


December 31,2005


2004(In thousands, exceptper share amounts)ASSETSReal estate properties:Land

$
17,047


$
10,947Buildings and improvements


243,090



234,516Construction in progress


1,099



6,049Less: Accumulated depreciation


(2,713
)


(95,003
)Total real estate properties, net


258,523



156,509Cash and cash equivalents


9,571



13,459Restricted cash


779



3,162Investment in capital lease


6,499



1,623Acquired above market leases, net
    of accumulated amortization of $25 in 2005


852



Acquired in place lease value and
    deferred leasing costs, net of accumulated amortization of
    $1,399 in 2005 and $7 in 2004


21,220



280Acquired ground leases, net of
    accumulated amortization of $15 in 2005


2,919



Deferred financing costs, net of
    accumulated amortization of $31 in 2005 and $1,941 in 2004


913



1,418Goodwill


2,875



Other assets


4,331



1,974Total assets

$
308,482


$
178,425LIABILITIES AND
    STOCKHOLDERS AND OWNERS EQUITYNotes payable under line of credit


19,600



1,513Mortgage loans


140,634



213,305Accounts payable and accrued
    liabilities


4,699



7,712Acquired below market leases, net
    of accumulated amortization of $164 in 2005


2,893



Interest rate swap agreements


170



2,322Total liabilities


167,996



224,852Commitments and contingenciesMinority interests in operating
    partnership


62,018



Stockholders and
    owners equity (deficit):Preferred stock, $0.01 par
    value; 50,000 shares authorized, none issued or outstanding






Common Stock; $0.01 par
    value; 200,000 shares authorized, 8,000 shares issued
    and outstanding


80



Additional paid-in capital


86,154



Unamortized restricted stock
    compensation


(299
)


Accumulated deficit


(7,467
)


Predecessors owners
    deficit






(46,427
)Total stockholders and
    owners equity (deficit)


78,468



(46,427
)Total liabilities and
    stockholders and owners equity

$
308,482


$
178,425    47




---



##### Table of Contents



COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
  CONSOLIDATED AND COMBINED STATEMENTS OF
    OPERATIONS
  Company


PredecessorNovember 1, 2005 -


January 1, 2005 -


For the Year Ended
    December 31,December 31, 2005


October 31, 2005


2004


2003(In thousands, except per share
    amounts)Revenues:Rental

$
7,044


$
14,270


$
15,699


$
16,070Rental  related
    party






21,716



24,958



22,923Fee revenue


221



1,450



2,364



1,361Expense reimbursements


94



565



840



806Interest and other income


127



879



843



849Total revenues


7,486



38,880



44,704



42,009Expenses:Property operating


2,596



13,124



14,837



14,116General and administrative


7,791



5,130



3,076



2,929Depreciation


2,727



8,421



9,550



9,710Amortization


1,415



59



70



87Interest


1,512



8,275



9,067



11,422Loss from early extinguishment of
    debt


103











Total expenses


16,144



35,009



36,600



38,264Income (loss) from operations
    before equity in earnings (loss) on unconsolidated real estate
    partnerships and minority interests in operating
    partnership


(8,658
)


3,871



8,104



3,745Equity in earnings (loss) on
    unconsolidated real estate partnerships


3



(47
)


(60
)


(74
)Minority interests in operating
    partnership


3,055











Net income (loss)

$
(5,600
)

$
3,824


$
8,044


$
3,671Basic and diluted loss per share

$
(0.70
)Weighted average common
    shares  basic and diluted


7,972    48




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##### Table of Contents



COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
 CONSOLIDATED
    AND COMBINED STATEMENTS OF STOCKHOLDERS AND 
    OWNERS EQUITY (DEFICIT)  UnamortizedNumber of





Additional


Restricted





PredecessorsCommon


Common


Paid-in


Stock


Accumulated


OwnersShares


Stock


Capital


Compensation


Deficit


Deficit


Total(In thousands)Balance at December 31,
    2002





$



$



$



$



$
(43,689
)

$
(43,689
)Contributions






















592



592Distributions






















(7,661
)


(7,661
)Net income






















3,671



3,671Balance at December 31,
    2003






















(47,087
)


(47,087
)Contributions






















6,744



6,744Distributions






















(14,128
)


(14,128
)Net income






















8,044



8,044Balance at December 31,
    2004






















(46,427
)


(46,427
)Contributions






















320



320Distributions






















(9,250
)


(9,250
)Net income






















3,824



3,824Balance at October 31,
    2005





$



$



$



$



$
(51,533
)

$
(51,533
)The CompanyIssuance of common stock, net of
    costs and adjusted for
    EITF 94-2
    historical cost basis


7,942


$
79


$
85,516


$



$



$



$
85,595Issuance of restricted stock
    grants, net of minority interests


58



1



638



(639
)










Restricted stock vested at
    Offering, net of minority interests














327











327Amortization of restricted stock
    compensation, net of minority interests














13











13Dividends


















(1,867
)






(1,867
)Net loss


















(5,600
)






(5,600
)Balance at December 31,
    2005


8,000


$
80


$
86,154


$
(299
)

$
(7,467
)

$



$
78,468    49




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##### Table of Contents



COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
  CONSOLIDATED AND COMBINED STATEMENTS OF CASH
    FLOWS
  Company


PredecessorNovember 1, 2005 -


January 1, 2005 -


For the Year Ended
    December 31,December 31, 2005


October 31, 2005


2004


2003(In thousands)Operating activities:Net income (loss)

$
(5,600
)

$
3,824


$
8,044


$
3,671Adjustments to reconcile net income
    (loss) to cash provided by operating activities:Minority interests in operating
    partnership


(3,055
)










Depreciation of real estate
    properties


2,713



8,325



9,463



9,615Depreciation of corporate
    furniture, fixtures and equipment


14



96



87



95Amortization of acquired ground
    leases, acquired in place lease value and deferred leasing costs


1,415



59



70



87Amortization of acquired above
    market leases and acquired below market leases, net


(134
)










Amortization of debt premium


(49
)


(40
)


Amortization of deferred finance
    costs


31



411



485



618Amortization of restricted stock
    compensation


13











Loss (gain) on unconsolidated real
    estate partnerships


(3
)


47



60



74Change in fair value of interest
    rate swap agreements


(14
)


(2,436
)


(2,874
)


(652
)Compensation expense for fully
    vested equity grants


6,384











Write-off of debt premium upon
    extinguishment of debt


(70
)










Changes in operating assets and
    liabilities:Other assets


137



(2,112
)


(469
)


(181
)Accounts payable and accrued
    expenses


(147
)


2,138



1,223



(589
)Net cash provided by operating
    activities


1,635



10,312



16,089



12,738Investing activities:Cash paid in Formation
    Transactions, net of cash assumed


(27,032
)










Acquisition and development of real
    estate properties


(2,715
)


(6,067
)


(13,182
)


(7,581
)Proceeds from sale of real estate
    properties and capital lease


51



61



73



556Advances to unconsolidated real
    estate partnerships






(82
)


(209
)


(170
)Distributions received from
    unconsolidated real estate partnerships










54



Decrease (increase) in restricted
    cash


2,234



149



(503
)


(328
)Net cash used in investing
    activities


(27,462
)


(5,939
)


(13,767
)


(7,523
)Financing activities:Proceeds from mortgage notes payable


4,550



1,987



32,084



11,600Repayments of mortgage notes payable


(71,357
)


(4,154
)


(19,264
)


(11,012
)Proceeds from line of credit


19,600



3,198







498Repayments to line of credit


(4,711
)






(525
)


Equity contributions to Predecessor
    entities






142



3,349



592Net proceeds from sale of common
    stock


91,368Dividends and distributions


(2,886
)


(7,026
)


(13,143
)


(7,661
)Termination of interest rate swap
    agreement


(222
)Payment of deferred financing costs


(944
)


(10
)


(621
)


(356
)Net cash provided by (used in)
    financing activities


35,398



(5,863
)


1,880



(6,339
)Increase (decrease) in cash and
    cash equivalents


9,571



(1,490
)


4,202



(1,124
)Balance at beginning of period






13,459



9,257



10,381Balance at end of period

$
9,571


$
11,969


$
13,459


$
9,257Supplemental disclosure of cash
    flow information:Cash paid for interest, net of
    capitalized interest

$
1,672


$
10,464


$
12,045


$
12,616Supplemental cash flow
    information  noncash investing and financing
    activities:Acquisitions (See Note 4 for
    purchase price allocation):Common stock and limited
    partnership units issued in connection with the acquisition of
    real estate properties, net of
    EITF 94-2
    historical cost basis adjustment

$
55,773


$



$



$
Debt assumed with purchase of
    properties


212,393











2,886Assumption of accounts payable and
    accrued expenses and interest rate swap agreements


5,194











Assumption of construction in
    progress, restricted cash, and other assets


5,016











Contributions receivable






178







Accrued distributions






2,348







Negative carrying amount in
    unconsolidated real estate partnership distributed to owners






124







Property contribution from member










3,395



Property distribution to member










985



    50




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##### Table of Contents



COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
 (Dollars in thousands, except per share amounts)
  1.
    Organization
    and Ownership  day-to-day
    and/or
   51




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##### Table of Contents



COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL
    STATEMENTS  (Continued)
     Number ofEntity

Property Location

Property Type

PropertiesAugusta Medical Partners, LLC

Augusta, GA

Medical Office


4Baptist Northwest Limited
    Partnership

Columbia, SC

Medical Office


1Barclay Downs Associates,
    LLC/Matthews
    Land Group, LLC

Charlotte, NC

Corporate Offices


1Beaufort Medical Plaza, LLC

Beaufort, SC

Medical Office


1Cabarrus Medical Partners, LLC

Greater Concord, NC

Medical Office


5Cabarrus POB, LLC

Concord, NC

Medical Office
    Wellness, Medical


1Cogdell Investors (Birkdale), LLC

Huntersville,  NC

Office


1Cogdell Investors (Mallard), LLC

Charlotte, NC

Medical Office


1Cogdell Investors
    (Birkdale II), LLC

Huntersville, NC

Retail Center


1Copperfield MOB, LLC

Concord, NC

Medical Office


1East Jefferson Medical Office
    Building
    Limited Partnership

Metairie, LA

Medical Office


1East Jefferson Medical Specialty
    Building
    Limited Partnership

Metairie, LA

Medical Office
    Medical Office,


1East Rocky Mount Kidney Center, LLC

Rocky Mount, NC

Kidney Dialysis
    Medical Office,


1Franciscan Development Company, LLC

Ashland, KY

Surgery


1Gaston MOB, LLC

Gastonia, NC

Medical Office


1HMOB Associates Limited Partnership

Columbia, SC

Medical Office


1Medical Arts Center of
    Orangeburg
    General Partnership

Orangeburg, SC

Medical Office


1Medical Investors, LLC, Medical
    Investors

Charlotte, NC andI, LLC, Medical
    Investors III, LLC

Charleston, SC

Medical Office


5Medical Park Three Limited
    Partnership

Columbia, SC

Medical Office


1Mulberry Medical Park Limited
    Partnership

Lenoir, NC

Medical Office


1Providence Medical Office
    Building, LLC

Columbia, SC

Medical Office


3River Hills Medical Associates, LLC

Little River, SC

Medical Office


1Rocky Mount Kidney Center
    Limited
    Partnership

Rocky Mount, NC

Medical Office,
    Kidney Dialysis


1Rocky Mount MOB, LLC

Rocky Mount, NC

Medical Office


1Rocky Mount Medical Park
    Limited
    Partnership

Rocky Mount, NC

Medical Office


1Roper MOB, LLC

Charleston, SC

Medical Office


1Rowan OSC Investors, LLC

Salisbury, NC

Surgery Center


1St. Francis Community MOB, LLC

Greenville, SC

Medical Office


2St. Francis Medical Plaza, LLC

Greenville, SC

Medical Office


2West Medical Office I, LLC

Charleston, SC

Medical Office


1  52




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##### Table of Contents



COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL
    STATEMENTS  (Continued)
   2.
    Summary
    of Significant Accounting Policies  Basis
    of Presentation
    Use of
    Estimates in Financial Statements
    Revenue
    Recognition
         53




---



##### Table of Contents



COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL
    STATEMENTS  (Continued)
    No. 01-14,
    Income
    Taxes
          Comprehensive
    Income or Loss
    Cash
    and Cash Equivalents
     54




---



##### Table of Contents



COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL
    STATEMENTS  (Continued)
   Restricted
    Cash
    Real
    Estate Properties
          lease-up lease-up
   55




---



##### Table of Contents



COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL
    STATEMENTS  (Continued)
      Repairs,
    Maintenance and Major Improvements
    Capitalization
    of Interest
    Tenant
    Receivables
    Investment
    in Capital Lease
    Deferred
    Financing Costs
    Unconsolidated
    Real Estate Partnerships
   56




---



##### Table of Contents



COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL
    STATEMENTS  (Continued)
    Guarantees
    Fair
    Value of Financial Instruments
    Offering
    Costs
    Stock
    Based Compensation
     57




---



##### Table of Contents



COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL
    STATEMENTS  (Continued)
   Reclassifications
    Recent
    Accounting Pronouncements
  No. 04-5 (EITF 04-5). EITF 04-5.
  and/or
    3.
    Minimum
    Future Rental Revenues   58




---



##### Table of Contents





COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR




NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL
    STATEMENTS  (Continued)










|                     |  |   |         | 
|-------------------- |  | - | ------- | 
|For the year ending: |  |   |         | 
|2006                 |  | $ | 37,565  | 
|2007                 |  |   | 29,794  | 
|2008                 |  |   | 24,795  | 
|2009                 |  |   | 18,921  | 
|2010                 |  |   | 14,009  | 
|Thereafter           |  |   | 32,522  | 
|                     |  |   |         | 
|                     |  | $ | 157,606 | 
|                     |  |   |         | 









|                             |  |              |        |   |              |   |         |  
|---------------------------- |  | ------------ | ------ | - | ------------ | - | ------- | -
|                             |  | December 31, |        |   | December 31, |  
|                             |  | 2005         |        |   | 2004         |  
|                            
|Total minimum lease payments |  | $            | 14,948 |   |              | $ | 15,702  |  
|Less: Unearned income        |  |              | (8,449 | ) |              |   | (14,079 | )
|                             |  |              |        |   |              |   |         |  
|Investment in capital lease  |  | $            | 6,499  |   |              | $ | 1,623   |  
|                             |  |              |        |   |              |   |         |  









|                     |  |   |        | 
|-------------------- |  | - | ------ | 
|For the year ending: |  |   |        | 
|2006                 |  | $ | 760    | 
|2007                 |  |   | 766    | 
|2008                 |  |   | 772    | 
|2009                 |  |   | 778    | 
|2010                 |  |   | 784    | 
|Thereafter           |  |   | 11,088 | 
|                     |  |   |        | 
|                     |  | $ | 14,948 | 
|                     |  |   |        | 



59



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##### Table of Contents





COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR




NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL
    STATEMENTS  (Continued)






|   |             
|-- | ------------
|4. | Acquisitions







|                                               |  |   |         |  
|---------------------------------------------- |  | - | ------- | -
|Operating Partnership units issued             |  | $ | 65,132  |  
|Common shares issued                           |  |   | 31,319  |  
|Cash                                           |  |   | 36,454  |  
|Assumption of liabilities                      |  |   | 216,764 |  
|Assumption of assets, including
    cash       |  |   | (17,916 | )
|EITF 94-2
    historical cost basis adjustment |  |   | (43,878 | )
|                                               |  |   |         |  
|Purchase price to be allocated                 |  | $ | 287,875 |  
|                                               |  |   |         |  





No. 94-2, (EITF 94-2)








|                                                             |  |   |         |  
|------------------------------------------------------------ |  | - | ------- | -
|Land                                                         |  | $ | 15,868  |  
|Buildings and improvements                                   |  |   | 238,798 |  
|Investment in capital lease                                  |  |   | 6,550   |  
|Acquired above market leases                                 |  |   | 877     |  
|Acquired in place lease value and
    deferred leasing costs |  |   | 22,399  |  
|Acquired ground leases                                       |  |   | 2,661   |  
|Goodwill                                                     |  |   | 2,875   |  
|Other assets                                                 |  |   | 1,712   |  
|Premium, net on assumed debt                                 |  |   | (823    | )
|Acquired below market leases                                 |  |   | (3,042  | )
|                                                             |  |   |         |  
|Total purchase price allocated                               |  | $ | 287,875 |  
|                                                             |  |   |         |  









|                                                             |  |   |       |  
|------------------------------------------------------------ |  | - | ----- | -
|Building and improvements                                    |  | $ | 2,663 |  
|Acquired in place lease value and
    deferred leasing costs |  |   | 221   |  
|Acquired ground lease                                        |  |   | 274   |  
|Acquired below market leases                                 |  |   | (11   | )
|                                                             |  |   |       |  
|Total purchase price allocated                               |  | $ | 3,147 |  
|                                                             |  |   |       |  



60



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##### Table of Contents





COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR




NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL
    STATEMENTS  (Continued)










|                                                             |  |           |       |  |               |   |       |  
|------------------------------------------------------------ |  | --------- | ----- |  | ------------- | - | ----- | -
|                                                             |  | Rowan OSC |       |  |               |  
|                                                             |  | Investors |       |  | Barclay Downs |  
|                                                            
|Land                                                         |  | $         | 607   |  |               | $ | 2,396 |  
|Building and improvements                                    |  |           | 3,305 |  |               |   | 2,827 |  
|Acquired in place lease value and
    deferred leasing costs |  |           | 290   |  |               |   |      |  
|Debt premium                                                 |  |           |      |  |               |   | (228  | )
|                                                             |  |           |       |  |               |   |       |  
|Total purchase price                                         |  | $         | 4,202 |  |               | $ | 4,995 |  
|                                                             |  |           |       |  |               |   |       |  







61



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##### Table of Contents



COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL
    STATEMENTS  (Continued)
   5.
    Mortgages,
    Notes Payable and Guarantees    InterestOutstanding at


Outstanding at


Stated


Rate atDecember 31,


December 31,


Interest


December 31,


MaturityEntity

2005


2004


Rate


2005


Date


AmortizationAugusta Medical Partners, LLC

$



$
25,238















Baptist Northwest Medical Park LP


2,344



2,388



8.25
%


8.25
%


2/1/2011



25 yearsBeaufort Medical Plaza, LLC


5,270



5,379



LIBOR + .95



5.34



8/18/2008



25 yearsCabarrus Medical Partners, LLC


10,378



10,560



LIBOR + 1.50
(1)


5.89



12/15/2014



25 yearsCabarrus POB, LLC






8,359















Cogdell Investors (Birkdale), LLC


7,758



7,884



6.75



6.75



10/1/2008



25 yearsCogdell Investors (Mallard), LLC






6,008















Cogdell Investors
    (Birkdale II), LLC






944















Copperfield MOB, LLC






3,950















East Jefferson Medical Office
    Building LP


9,773



9,945



6.01



6.01



8/10/2014



25 yearsEast Rocky Mount Kidney Center, LLC






1,053















Franciscan Development Company, LLC






10,679















Gaston MOB, LLC


17,358



18,150



LIBOR + 1.25



5.64



11/22/2007



25 yearsGaston MOB, LLC






14















HMOB Associates Limited Partnership


5,935



6,116



5.93



5.93



11/1/2013



20 yearsBarclay Downs Associates, LLC






2,721















Barclay Downs Associates, LLC


4,550







6.50



6.50



11/15/2012



25 years (6
)Matthews Land Group, LLC/Barclay
    Downs Associates, LLC






1,538















Medical Arts Center of Orangeburg GP


2,723



2,812



5.95



5.95



12/18/2007



20 yearsMedical Investors I, LLC


8,962



9,109



LIBOR + 1.85



6.24



12/10/2007



25 yearsMedical Investors III, LLC






4,737















Medical Park Three Limited
    Partnership


8,418



8,583



5.55



5.55



3/25/2014



25 yearsMulberry Medical Park LP


1,152



1,207



5.95



5.95



10/15/2006



20 yearsProvidence Medical Office Building,
    LLC


9,206



9,398



6.12



6.12



1/12/2013



25 yearsRiver Hills Medical Associates, LLC


3,161



3,247



LIBOR + 2.00



6.39



11/30/2008



22 yearsRiver Hills Medical Associates, LLC






300















River Hills Medical Associates, LLC






401















Rocky Mount Kidney Center LP


1,141



1,173



6.25



6.25



1/21/2009



20 yearsRocky Mount MOB, LLC






4,355















Rocky Mount MOB, LLC






73















Rocky Mount Medical Park LP


7,953



8,122



Prime



7.25



8/15/2008



25 yearsRocky Mount Medical Park LP






362















Roper MOB, LLC


10,164



10,280



LIBOR + 1.50



5.89



7/10/2009



18 years(2
)Rowan OSC Investors, LLC


3,547



3,614



6.00



6.00



7/6/2014



25 yearsSt. Francis Community MOB, LLC


9,448



9,603



LIBOR + 1.40



5.79



8/18/2007



25 yearsSt. Francis Community MOB, LLC






95















St. Francis Community MOB, LLC






114















St. Francis Medical Plaza, LLC


10,689



10,964



LIBOR + 1.325



5.72



2/15/2006



25 yearsSt. Francis Medical Plaza, LLC






44















West Medical Office I, LLC






3,413















West Medical Office I, LLC






257















Cogdell Spencer Advisors, Inc.(3)






975















Cogdell Spencer Advisors, Inc






490















Cogdell Spencer Advisors, Inc






48















Cogdell Spencer LP (4)(5)


19,600











5.50



10/31/2008



Total


159,530



214,702Premium, net


704



116Total debt

$
160,234


$
214,818     (1)
    
    Maximum interest of 8.25%; Minimum interest rate of 3.25%. 62




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##### Table of Contents



COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL
    STATEMENTS  (Continued)
   (2)
    
    Interest only through July 2005.(3)
    
    Revolving line of credit, repaid November 2005.(4)
    
    Unsecured revolving credit facility.(5)
    
    The interest rate is, at the Companys election, either
    (1) LIBOR plus a margin of between 100 to 130 basis
    points based on the Companys leverage ratio or
    (2) the higher of the federal funds rate plus 50 basis
    points or Bank of America, N.A.s prime rate.(6)
    
    Interest only through January 2008.             63




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##### Table of Contents



COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL
    STATEMENTS  (Continued)
     For the year ending:2006

$
14,8092007


36,8212008


47,0222009


11,5972010


1,456Thereafter


47,825Total mortgages and notes payable

$
159,530     Guarantees
    6.
    Derivative
    Financial Instruments  Interest Rate Swap
    Agreements   64




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##### Table of Contents



COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL
    STATEMENTS  (Continued)
     NotionalAmount asof December 31,








Effective


Expiration


December 31, 2005


December 31, 2004Entity

2005


Receive Rate


Pay Rate


Date


Date


Asset


Liability


Asset


LiabilityAugusta Medical Partners, LLC(1)

$
25,211



1 Month LIBOR



5.75
%


5/25/2001



6/26/2006


$



$



$



$
941Beaufort Medical Plaza, LLC


5,165



1 Month LIBOR



5.81



10/25/1999



7/25/2008







133







371Gaston MOB, LLC


17,358



1 Month LIBOR



3.25



1/23/2003



11/22/2007



467







121



Medical Investors I, LLC


8,962



1 Month LIBOR



4.82



2/10/2003



12/10/2007







37







377River Hills Medical Associates, LLC


3,161



1 Month LIBOR



3.63



3/10/2003



12/15/2008



94







10



Roper MOB, LLC


10,280



1 Month LIBOR



4.45



7/26/2004



7/10/2009



90











186St. Francis CMOB, LLC(2)


9,265



1 Month LIBOR



5.58



4/3/2001



8/18/2005















171St. Francis Medical Plaza, LLC(2)


10,956



1 Month LIBOR



5.52



1/8/1999



12/15/2005















276$
651


$
170


$
131


$
2,322     (1)
    
    Notional amount as of December 31, 2004, swap terminated in
    2005.(2)
    
    Notional amount as of December 31, 2004, expired in 2005.  7.
    Commitments
    and Contingencies  Construction
    in Progress
   65




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##### Table of Contents



COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL
    STATEMENTS  (Continued)
   Operating
    Leases
    For the year ending:2006

$
1162007


1002008


982009


952010


95Thereafter


1,997$
2,501     Tax
    Protection Agreements
      majority-in-interest majority-in-interest
      Litigation
   66




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##### Table of Contents



COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL
    STATEMENTS  (Continued)
   Indemnities
  and/or
  8.
    Investments
    in Real Estate Partnerships  Company    
    Cabarrus Land Company, LLC, a North Carolina limited liability
    company, founded in 1987, 5.0% owned by the Company, and owns
    one medical office building,
    Mary Black MOB Limited Partnership, a South Carolina limited
    partnership, founded in 1988, 9.6% owned by the Company, and
    owns one medical office building,
    Mary Black MOB II Limited Partnership, a South Carolina
    limited partnership, founded in 1993, 1.0% owned by the Company,
    and owns one medical office building,
    Mary Black Westside Medical Park I Limited Partnership, a South
    Carolina limited partnership, founded in 1991, 5.0% owned by the
    Company, and owns one medical office building,
    McLeod Medical Partners, LLC, a South Carolina limited liability
    company, founded in 1982, 1.1% owned by the Company, and owns
    three medical office buildings, and
    Rocky Mount MOB, LLC, a North Carolina limited liability
    company, founded in 2002, 34.5% owned by the Company, and owns
    one medical office building.    December 31, 2005Financial position:Total assets

$
32,606Total liabilities


23,752Members equity


8,854   67




---



##### Table of Contents



COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL
    STATEMENTS  (Continued)
  November 1, 2005 -December 31, 2005Results of
    operations:Revenues

$
1,070Operating and general and
    administrative expenses


375Net income


44   9.
    Investments
    in Real Estate
    Partnerships  Predecessor         68




---



##### Table of Contents



COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2004Financial position:Total assets

$
34,320Total liabilities


26,630Members equity


7,690   Ten MonthsEnded October 31,


Years Ended
    December 31,2005


2004


2003Results of
    operations:Revenues

$
5,126


$
5,604


$
3,949Operating and general and
    administrative expenses


2,527



2,302



1,630Net income


466



663



655   10.
    Stockholders
    Equity  Shares
    and Units
  one-for-one
  Dividends
    Distributions
   69




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##### Table of Contents



COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL
    STATEMENTS  (Continued)
   11.
    Loss per
    Share    November 1, 2005throughDecember 31, 2005Net loss

$
(5,600
)Weighted average shares
    outstanding  basic and diluted(1)


7,972Net loss per
    share  basic and diluted

$
(0.70
)     (1)
    
    28 shares of unvested restricted common stock are
    anti-dilutive due to the net loss.  12.
    Minority
    Interests      13.
    Incentive
    Plan        14.
    401(k)
    Savings Plan   70




---



##### Table of Contents



COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL
    STATEMENTS  (Continued)
   15.
    Related
    Party Transactions            16.
    Segment
    Reporting   71




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##### Table of Contents



COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL
    STATEMENTS  (Continued)
    Company


PredecessorNovember 1, 2005 -


January 1, 2005 -


For the Year Ended
    December 31,December 31, 2005


October 31, 2005


2004


2003Property operations:Rental revenues

$
7,044


$
35,986


$
40,657


$
38,993Interest and other income


116



878



831



840Operating and general and
    administrative expenses


(2,596
)


(11,188
)


(11,644
)


(11,346
)Intersegment expenses


(507
)


(2,778
)


(3,228
)


(3,083
)Net operating income

$
4,057


$
22,898


$
26,616


$
25,404Total segment assets, end of period

$
303,322






$
176,929


$
165,018Real estate services:Fee revenue

$
221


$
1,450


$
2,364


$
1,360Expense reimbursements


94



565



840



807Interest and other income


11



1



12



9Intersegment revenues


507



2,778



3,228



3,083Operating and general and
    administrative expenses


(652
)


(3,893
)


(4,900
)


(4,405
)Net operating income

$
181


$
901


$
1,544


$
854Total segment assets, end of period

$
5,160






$
1,496


$
981Reconciliations:Total segment revenues

$
7,993


$
41,658


$
47,932


$
45,092Elimination of intersegment revenues


(507
)


(2,778
)


(3,228
)


(3,083
)Total combined revenues

$
7,486


$
38,880


$
44,704


$
42,009Segment net operating income

$
4,238


$
23,799


$
28,160


$
26,258Corporate general and
    administrative expenses


(7,139
)


(3,173
)


(1,369
)


(1,294
)Depreciation and amortization
    expense


(4,142
)


(8,480
)


(9,620
)


(9,797
)Interest expense


(1,512
)


(8,275
)


(9,067
)


(11,422
)Loss from early extinguishment of
    debt


(103
)










Gain (loss) on unconsolidated real
    estate partnerships


3



(47
)


(60
)


(74
)Minority interests in operating
    partnership


3,055











Net income (loss)

$
(5,600
)

$
3,824


$
8,044


$
3,671Total assets, end of period

$
308,482






$
178,425


$
165,999  72




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##### Table of Contents



COGDELL
    SPENCER INC. AND COGDELL SPENCER INC. PREDECESSOR
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL
    STATEMENTS  (Continued)
   17.
    Quarterly
    Financial Information (unaudited)    Three Months EndedDecember 31,
    2005(1)


September 30,
    2005


June 30, 2005


March 31, 2005Total revenue

$
11,702


$
11,557


$
11,528


$
11,579Income (loss) before minority
    interests


(8,094
)


842



(54
)


2,475Net income (loss)


(5,039
)


842



(54
)


2,475Net loss per
    share  basic and diluted(2)

$
(0.70
)

$



$



$
Weighted-average
    shares  basic and diluted(2)


7,972   Three Months EndedDecember 31, 2004


September 30,
    2004


June 30, 2004


March 31, 2004Total revenue

$
11,322


$
10,946


$
11,446


$
10,990Net income


2,332



564



4,378



770     (1)
    
    Represents consolidated operating results for the Company for
    the period from November 1, 2005 to December 31, 2005
    and combined operating results for the Predecessor for the
    period October 1, 2005 to October 31, 2005. The
    operating results for the quarter ended December 31, 2005
    may not be comparable to future expected operating results of
    the Company since they include various Offering-related charges.(2)
    
    The net loss per share-basic and diluted is for the period from
    November  1, 2005 to December 31, 2005. This may
    not be comparable to future net income (loss) per share since it
    includes the effect of various Offering-related charges.  18.
    Subsequent
    Events (unaudited)     73




---



##### Table of Contents



COGDELL
    SPENCER INC.
  SCHEDULE III
    REAL ESTATE AND ACCUMULATED DEPRECIATION
    DECEMBER 31, 2005
  Cost Capitalized


Gross Amount at Which Carried
    atInitial Costs


Subsequent to


December 31, 2005Building and


Acquisition or





Building and





Accumulated


Date


DateProperty Name

Location

Encumbrances


Land


Improvements(A)


Development


Land


Improvements(A)


Total(B)


Depreciation


Constructed(C)


Acquired(In thousands)Augusta POB I

Georgia

$



$
259


$
8,431


$



$
259


$
8,431


$
8,690


$
104



1978



2005Augusta POB II

Georgia






602



10,646



33



602



10,679



11,281



132



1987



2005Augusta POB III

Georgia






339



3,986







339



3,986



4,325



49



1994



2005Augusta POB IV

Georgia






551



4,672







551



4,672



5,223



59



1995



2005Our Lady of Bellefonte

Kentucky










13,938











13,938



13,938



120



1997



2005East Jefferson Medical Office
    Building

Louisiana


9,773







12,239



8







12,247



12,247



131



1985



2005Barclay Downs

North Carolina


4,550



2,084



3,363



87



2,084



3,450



5,534



56



1987



2005Birkdale Medical Village

North Carolina


7,758



1,087



5,829







1,087



5,829



6,916



61



1997



2005Birkdale Retail

North Carolina






142



992



6



142



998



1,140



10



2001



2005Cabarrus POB

North Carolina










7,446



27







7,473



7,473



73



1997



2005Cabarrus Pediatrics

North Carolina


(D
)


249



1,140



4



249



1,144



1,393



14



1997



2005Copperfield Medical Mall

North Carolina


(D
)


1,380



3,147



26



1,380



3,173



4,553



39



1989



2005Copperfield MOB

North Carolina










9,281











9,281



9,281



63



2005



2005East Rocky Mount Kidney Center

North Carolina






260



1,194







260



1,194



1,454



13



2000



2005Gaston Professional Center

North Carolina


17,358







21,358



446







21,804



21,804



244



1997



2005Harrisburg Family Physicians
    Building

North Carolina


(E
)


270



509







270



509



779



8



1996



2005Harrisburg Medical Mall

North Carolina


(D
)


441



2,222







441



2,222



2,663



28



1997



2005Lincoln/Lakemont Family Practice
    Center

North Carolina


(E
)


270



1,025







270



1,025



1,295



17



1998



2005Mallard Crossing Medical Park

North Carolina






1,256



4,626







1,256



4,626



5,882



70



1997



2005Midland Medical Mall

North Carolina


(D
)


288



1,434







288



1,434



1,722



18



1998



2005Mulberry Medical Park

North Carolina


1,152







2,283











2,283



2,283



40



1982



2005Northcross Family Medical Practice
    Building

North Carolina


(E
)


270



498







270



498



768



8



1993



2005Randolph Medical Park

North Carolina


(E
)


1,621



5,386







1,621



5,386



7,007



90



1973



2005Rocky Mount Kidney Center

North Carolina


1,141



198



1,366







198



1,366



1,564



14



1990



2005Rocky Mount Medical Park

North Carolina


7,953



982



9,854



41



982



9,895



10,877



168



1991



2005Rowan Outpatient Surgery Center

North Carolina


3,547



399



4,666







399



4,666



5,065



37



2003



2005Weddington Internal &
    Pediatric Medicine

North Carolina


(D
)


489



938







489



938



1,427



12



2000



2005190 Andrews

South Carolina










2,663











2,663



2,663



31



1994



2005Baptist Northwest

South Carolina


2,344



398



2,534



1,179



1,577



2,534



4,111



35



1986



2005Beaufort Medical Plaza

South Carolina


5,270







7,399











7,399



7,399



66



1999



2005Mt. Pleasant MOB

South Carolina










3,605











3,605



3,605



46



2001



2005Medical Arts Center of Orangeburg

South Carolina


2,723



605



4,172



2



605



4,174



4,779



41



1984



2005One Medical
    Park  HMOB

South Carolina


5,935







8,767



4







8,771



8,771



79



1984



2005Providence MOB I

South Carolina


(F
)






5,002











5,002



5,002



64



1979



2005Providence MOB II

South Carolina


(F
)






2,441











2,441



2,441



31



1985



2005Providence MOB III

South Carolina


(F
)






5,609











5,609



5,609



72



1990



2005River Hills Medical Plaza

South Carolina


3,161



1,428



4,202







1,428



4,202



5,630



35



1999



2005Roper MOB

South Carolina


10,164







11,586



33







11,619



11,619



158



1990



2005St. Francis Community Medical
    Office Building

South Carolina


(G
)






5,449



329







5,778



5,778



61



2001



2005St. Francis Medical Plaza

South Carolina


10,689







8,007











8,007



8,007



55



1998



2005St. Francis MOB

South Carolina


(G
)






6,007











6,007



6,007



67



1984



2005St. Francis Womens Center

South Carolina


(G
)






7,352



95







7,447



7,447



51



1991



2005Three Medical Park

South Carolina


8,418







10,405











10,405



10,405



108



1988



2005West Medical I

South Carolina










3,792



488







4,280



4,280



35



2003



2005Total







$
15,868


$
241,461


$
2,808


$
17,047


$
243,090


$
260,137


$
2,713  74




---



##### Table of Contents



(A)
    
    - Includes building and improvements, site improvements,
    furniture, fixtures, and equipment and construction in progress.(B)
    
    - The aggregate cost for federal income tax purposes was
    $295,103 as of December 31, 2005. Depreciable lives range
    from 3-50 years.(C)
    
    - Represents the year in which the property was placed in
    service.(D)
    
    - Collateral for variable rate mortgage which had a balance of
    $10,378 at December 31, 2005(E)
    
    - Collateral for variable rate mortgage which had a balance of
    $8,962 at December 31, 2005(F)
    
    - Collateral for fixed rate mortgage which had a balance of
    $9,206 at December 31, 2005(G)
    
    - Collateral for variable rate mortgage which had a balance of
    $9,448 at December 31, 2005 75




---



##### Table of Contents



COGDELL
    SPENCER INC.NOTES TO SCHEDULE III
    REAL ESTATE AND ACCUMULATED DEPRECIATION
    DECEMBER 31, 2005
  A summary
    of activity for real estate properties and accumulated
    depreciation is as follows:
  2005(In thousands)Real estate
    properties:Balance, November 1, 2005

$
Formation Transactions


254,666Property acquisition


2,663Improvements


2,808Balance, December 31, 2005

$
260,137Accumulated
    depreciation:Balance, November 1, 2005

$
Depreciation


2,713Balance, December 31, 2005

$
2,713  76




---



##### Table of Contents



|        |                                                                                             
|------- | --------------------------------------------------------------------------------------------
|Item 9. | Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure







|         |                            
|-------- | ---------------------------
|Item 9A. | Controls
    and Procedures



Rules 13a-15(e) 15d-15(e) Rule 13a-15 Rule 15d-15,








Item 9B.
    Other Information








PART III




|         |                                                       
|-------- | ------------------------------------------------------
|Item 10. | Directors
    and Executive Officers of the Registrant







|         |                           
|-------- | --------------------------
|Item 11. | Executive
    Compensation







|         |                                                                                                       
|-------- | ------------------------------------------------------------------------------------------------------
|Item 12. | Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters







|         |                                                   
|-------- | --------------------------------------------------
|Item 13. | Certain
    Relationships and Related Transactions







|         |                                           
|-------- | ------------------------------------------
|Item 14. | Principal
    Accountant Fees and Services







|         |                                               
|-------- | ----------------------------------------------
|Item 15. | Exhibits
    and Financial Statement Schedules



| |   |       |  |                                                                                 
| | - | ----- |  | --------------------------------------------------------------------------------
| | 3 | .1(1) |  | Articles of Amendment and
    Restatement of Cogdell Spencer Inc.               
| | 3 | .2(1) |  | Bylaws of Cogdell Spencer Inc.                                                  
| | 3 | .3(1) |  | Amended and Restated Agreement of
    Limited Partnership of Cogdell Spencer LP.
| | 3 | .4(1) |  | Declaration of Trust of CS
    Business Trust I.                                
| | 3 | .5(1) |  | Declaration of Trust of CS
    Business Trust II.                               
| | 4 | .0(1) |  | Form of stock certificate.                                                      

77



---



##### Table of Contents



| |    |        |  |                                                                                                                                                                                                                                                                         
| | -- | ------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10 | .1(2)  |  | Form of Registration Rights
    Agreement, by and among Cogdell Spencer Inc. and the parties
    listed on Schedule I thereto.                                                                                                                                          
| | 10 | .3(1)  |  | Form of 2005 Long-Term Stock
    Incentive Plan.                                                                                                                                                                                                                        
| | 10 | .4(1)  |  | Form of Long-Term Stock Incentive
    Plan Award for employees without employment agreements.                                                                                                                                                                           
| | 10 | .5(1)  |  | Form of Cogdell Spencer Inc.
    Performance Bonus Plan.                                                                                                                                                                                                                
| | 10 | .6(1)  |  | Merger Agreement for Cogdell
    Spencer Inc., CS Merger Sub LLC and Cogdell Spencer Advisors,
    Inc. dated August 9, 2005.                                                                                                                                           
| | 10 | .7(1)  |  | Form of Indemnification Agreement.                                                                                                                                                                                                                                      
| | 10 | .8(1)  |  | Employment Agreement, dated
    October 21, 2005, by and between Cogdell Spencer Inc. and
    James W. Cogdell.                                                                                                                                                         
| | 10 | .9(1)  |  | Employment Agreement, dated
    October 21, 2005, by and between Cogdell Spencer Inc. and
    Frank C. Spencer.                                                                                                                                                         
| | 10 | .10(1) |  | Employment Agreement, dated
    October 21, 2005, by and between Cogdell Spencer Inc. and
    Charles M. Handy.                                                                                                                                                         
| | 10 | .11(1) |  | Engagement Letter from the Company
    to Realty Capital International Inc.                                                                                                                                                                                             
| | 10 | .12(1) |  | Irrevocable Exchange and
    Subscription Agreement by and among James W. Cogdell, Cogdell
    Spencer Advisors, Inc., Cogdell Spencer LP and Cogdell Spencer
    Inc.                                                                                                  
| | 10 | .13(1) |  | Irrevocable Exchange and
    Subscription Agreement by and among Frank C. Spencer, Cogdell
    Spencer Advisors, Inc., Cogdell Spencer LP and Cogdell Spencer
    Inc.                                                                                                  
| | 10 | .14(1) |  | Form of Irrevocable Exchange and
    Subscription Agreement for all holders of interests in the
    Existing Entities, with the exclusion of James W. Cogdell and
    Frank C. Spencer.                                                                                 
| | 10 | .15(1) |  | Form of Tax Protection Agreement
    for Existing Entities, except for Cabarrus POB, LLC, Medical
    Investors I, LLC and Medical Investors III, LLC.                                                                                                                  
| | 10 | .16(1) |  | Form of Tax Protection Agreement
    for Cabarrus POB, LLC, Medical Investors I, LLC and Medical
    Investors III, LLC.                                                                                                                                                
| | 10 | .17(1) |  | Form of Transaction Agreement by
    and among Cogdell Spencer Inc., Cogdell Spencer LP, the
    applicable Existing Entity and CS Merger Sub LLC.                                                                                                                      
| | 10 | .18(1) |  | Commitment letter dated
    October 4, 2005, for $100,000,000 senior unsecured
    revolving credit facility among Cogdell Spencer Inc., Bank of
    America, N.A., Bank of America Securities LLC, Citigroup Global
    Markets Inc., and Citigroup North America, Inc.
| | 10 | .19(1) |  | Form of Cogdell Spencer Inc. 2005
    Equity Incentive Plan Restricted Stock Award Agreement.                                                                                                                                                                           
| | 10 | .20(1) |  | Put Assignment Agreement dated
    August 11, 2005.                                                                                                                                                                                                                     
| | 10 | .21(1) |  | Form of Consent and Election Form.                                                                                                                                                                                                                                      
| | 10 | .22(1) |  | Form of Long-Term Stock Incentive
    Plan Award for employees with employment agreements.                                                                                                                                                                              
| | 10 | .23(1) |  | Schedule to Exhibit 10.14
    reflecting consideration to be received by Randolph D. Smoak,
    M.D. and Charles M. Handy.                                                                                                                                              
| | 14 | .1(3)  |  | Code of Ethics.                                                                                                                                                                                                                                                         
| | 21 | .1(1)  |  | List of Subsidiaries of Cogdell
    Spencer Inc.                                                                                                                                                                                                                        
| | 23 | .1(3)  |  | Consent of Deloitte &
    Touche LLP.                                                                                                                                                                                                                                   
| | 31 | .1(3)  |  | Certifications pursuant to
    Rule 13a-14(a)
    and
    15d-14(a).                                                                                                                                                                                                    
| | 32 | .1(3)  |  | Certifications pursuant to
    Section 1350.                                                                                                                                                                                                                            









|    |  |                                                                                                                              
|--- |  | -----------------------------------------------------------------------------------------------------------------------------
|(1) |  | Incorporated by reference to the Companys Registration
    Statement on Form
    S-11 (File
    No. 333-127396).            
|   
|(2) |  | Incorporated by reference to the Companys quarterly report
    on
    Form 10-Q
    for the period ended September 30, 2005.
|   
|(3) |  | Filed herewith.                                                                                                              

78



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##### Table of Contents



SIGNATURES    COGDELL SPENCER INC.RegistrantDate: March 31, 2006

/s/  Frank C. SpencerFrank C. SpencerPresident and Chief Executive Officer
    (Principal Executive Officer)Date: March 31, 2006

/s/  Charles M. HandyCharles M. HandySenior Vice President and Chief Financial Officer
    (Principal Financial and Accounting Officer)     Date: March 31, 2006

/s/  James W. CogdellJames W. CogdellChairman of the Board of DirectorsDate: March 31, 2006

/s/  Frank C. SpencerFrank C. SpencerPresident, Chief Executive Officer and DirectorDate: March 31, 2006

/s/  John R. GeorgiusJohn R. GeorgiusDirectorDate: March 31, 2006

/s/  Christopher E.
    LeeChristopher E. LeeDirectorDate: March 31, 2006

/s/  Randolph D. Smoak,
    M.D.Randolph D. Smoak, M.D.DirectorDate: March 31, 2006

/s/  Richard C.
    NeugentRichard C. NeugentDirectorDate: March 31, 2006

/s/  Richard B.
    JenningsRichard B. JenningsDirector  79