##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2011
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from to
 Commission File Number: 0-51295
 NNN 2003 Value Fund, LLC
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    20-0122092
(I.R.S. Employer
Identification No.)1551 N. Tustin Avenue, Suite 300, Santa Ana, California
(Address of principal executive offices)
    
    92705
(Zip Code)
 (714) 667-8252
 N/A
 þ o
 o þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



NNN 2003 VALUE FUND, LLC
(A Delaware limited liability company)
TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Balance Sheets as of June 30, 2011 (Unaudited) and
December 31, 2010
    
    
    2Unaudited Condensed Consolidated Statements of Operations and Comprehensive
Income (Loss) for the Three and Six Months Ended June 30, 2011 and 2010
    
    
    3Unaudited Condensed Consolidated Statement of Equity (Deficit) for the Six Months
Ended June 30, 2011
    
    
    4Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months
Ended June 30, 2011 and 2010
    
    
    5Notes to Unaudited Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    17Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    24Item 4. Controls and Procedures
    
    
    24PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    25Item 1A. Risk Factors
    
    
    25Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    27Item 3. Defaults Upon Senior Securities
    
    
    27Item 4. [Removed and Reserved.]
    
    
    27Item 5. Other Information
    
    
    27Item 6. Exhibits
    
    
    28Signatures
    
    
    29EX-31.1EX-31.2EX-32.1EX-32.2
   1




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements.
 NNN 2003 VALUE FUND, LLC
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 June 30, 2011
    
    
    December 31, 2010(Unaudited)ASSETSReal estate investments:Properties held for non-sale disposition, net
    
    $
    
    
    
    $
    27,218,000Investments in unconsolidated real estate
    
    
    12,000
    
    
    
    24,00012,000
    
    
    
    27,242,000Cash and cash equivalents
    
    
    663,000
    
    
    
    2,031,000Accounts receivable, net
    
    
    
    
    
    
    79,000Restricted cash
    
    
    217,000
    
    
    
    646,000Intangible assets related to properties held for non-sale disposition, net
    
    
    
    
    
    
    1,951,000Other assets related to properties held for non-sale disposition, net
    
    
    
    
    
    
    738,000Total assets
    
    $
    892,000
    
    
    $
    32,687,000LIABILITIES AND EQUITY (DEFICIT)Mortgage loans payable secured by properties held for non-sale disposition
    
    $
    
    
    
    $
    43,471,000Accounts payable and accrued liabilities
    
    
    104,000
    
    
    
    613,000Accounts payable due to related parties
    
    
    
    
    
    
    32,000Other liabilities related to properties held for non-sale disposition, net
    
    
    
    
    
    
    422,000Other liabilities
    
    
    217,000
    
    
    
    217,000Total liabilities
    
    
    321,000
    
    
    
    44,755,000Commitments and contingencies (Note 11)Equity (deficit):NNN 2003 Value Fund, LLC unit holders equity (deficit)
    
    
    571,000
    
    
    
    (12,068,000
    )Noncontrolling interest equity
    
    
    
    
    
    
    Total equity (deficit)
    
    
    571,000
    
    
    
    (12,068,000
    )Total liabilities and equity (deficit)
    
    $
    892,000
    
    
    $
    32,687,000
   2




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)


(Unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2011
    
    
    2010
    
    
    2011
    
    
    2010Interest and dividend income
    
    $
    
    
    
    $
    7,000
    
    
    $
    
    
    
    $
    20,000Other income
    
    
    
    
    
    
    11,000
    
    
    
    
    
    
    
    17,000General and administrative expense
    
    
    (119,000
    )
    
    
    (134,000
    )
    
    
    (175,000
    )
    
    
    (231,000
    )Equity in (losses) income of
unconsolidated real estate
    
    
    (6,000
    )
    
    
    1,016,000
    
    
    
    (12,000
    )
    
    
    609,000(Loss) income from continuing
operations
    
    
    (125,000
    )
    
    
    900,000
    
    
    
    (187,000
    )
    
    
    415,000Income from discontinued operations
    
    
    
    
    
    
    963,000
    
    
    
    13,326,000
    
    
    
    5,000Consolidated net (loss) income
    
    
    (125,000
    )
    
    
    1,863,000
    
    
    
    13,139,000
    
    
    
    420,000Loss attributable to noncontrolling
interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (98,000
    )Net (loss) income attributable to
NNN 2003 Value Fund, LLC
    
    $
    (125,000
    )
    
    $
    1,863,000
    
    
    $
    13,139,000
    
    
    $
    518,000Comprehensive (loss) income:Consolidated net (loss) income
    
    $
    (125,000
    )
    
    $
    1,863,000
    
    
    $
    13,139,000
    
    
    $
    420,000Other comprehensive (loss) income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive (loss) income
    
    
    (125,000
    )
    
    
    1,863,000
    
    
    
    13,139,000
    
    
    
    420,000Comprehensive (loss) income
attributable to noncontrolling
interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (98,000
    )Comprehensive (loss) income
attributable to NNN 2003 Value
Fund, LLC
    
    $
    (125,000
    )
    
    $
    1,863,000
    
    
    $
    13,139,000
    
    
    $
    518,000
   3




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 
 CONDENSED CONSOLIDATED STATEMENT OF EQUITY (DEFICIT)

(Unaudited)
 NNN 2003 ValueNumber
    
    
    Total Equity
    
    
    Fund, LLC
    
    
    Noncontrollingof Units
    
    
    (Deficit)
    
    
    Equity (Deficit)
    
    
    InterestsDeficit Balance  December 31, 2010
    
    
    9,970
    
    
    $
    (12,068,000
    )
    
    $
    (12,068,000
    )
    
    $
    Distributions
    
    
    
    
    
    
    (500,000
    )
    
    
    (500,000
    )
    
    
    Net income
    
    
    
    
    
    
    13,139,000
    
    
    
    13,139,000
    
    
    
    Equity Balance  June 30, 2011
    
    
    9,970
    
    
    $
    571,000
    
    
    $
    571,000
    
    
    $
    
   4




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NNN 2003 VALUE FUND, LLC
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)
 Six Months EndedJune 30,2011
    
    
    2010CASH FLOWS FROM OPERATING ACTIVITIES:Consolidated net income
    
    $
    13,139,000
    
    
    $
    420,000Adjustments to reconcile net income to net cash used in operating
activities:Real estate related impairments
    
    
    
    
    
    
    5,300,000Gain on extinguishment of debt
    
    
    (13,634,000
    )
    
    
    (6,667,000
    )Depreciation and amortization (including deferred financing
costs, deferred rent, lease inducements and above/below market
leases)
    
    
    157,000
    
    
    
    1,394,000Equity in losses (earnings) of unconsolidated real estate
    
    
    12,000
    
    
    
    (609,000
    )Allowance for doubtful accounts
    
    
    44,000
    
    
    
    118,000Change in operating assets and liabilities:Accounts receivable, including accounts and loans receivable
due from related parties
    
    
    (138,000
    )
    
    
    260,000Other assets
    
    
    38,000
    
    
    
    (317,000
    )Restricted cash
    
    
    (21,000
    )
    
    
    (389,000
    )Accounts payable and accrued liabilities, including accounts
payable to related parties
    
    
    (235,000
    )
    
    
    384,000Security deposits, prepaid rent and other liabilities
    
    
    (181,000
    )
    
    
    (19,000
    )Net cash used in operating activities
    
    
    (819,000
    )
    
    
    (125,000
    )CASH FLOWS FROM INVESTING ACTIVITIES:Capital expenditures
    
    
    
    
    
    
    (296,000
    )Distributions from unconsolidated real estate
    
    
    
    
    
    
    1,268,000Proceeds from repayment of loans receivable from related parties
    
    
    
    
    
    
    579,000Net cash provided by investing activities
    
    
    
    
    
    
    1,551,000CASH FLOWS FROM FINANCING ACTIVITIES:Restricted cash
    
    
    
    
    
    
    1,000Borrowings on mortgage loans payable
    
    
    
    
    
    
    180,000Distributions to unit holders
    
    
    (500,000
    )
    
    
    (2,000,000
    )Cash transferred to lender in connection with transfer of property
    
    
    (49,000
    )
    
    
    (213,000
    )Net cash used in financing activities
    
    
    (549,000
    )
    
    
    (2,032,000
    )NET DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (1,368,000
    )
    
    
    (606,000
    )CASH AND CASH EQUIVALENTS  beginning of period
    
    
    2,031,000
    
    
    
    2,724,000CASH AND CASH EQUIVALENTS  end of period
    
    $
    663,000
    
    
    $
    2,118,000SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid for interest
    
    $
    
    
    
    $
    1,850,000NONCASH INVESTING AND FINANCING ACTIVITIES:Accrual for tenant improvements and capital expenditures
    
    $
    
    
    
    $
    12,000Transfer of real estate and other assets and liabilities in
connection with debt extinguishment
    
    $
    29,788,000
    
    
    $
    10,749,000Cancellation of debt and accrued interest in connection with
transfer of real estate and other assets and liabilities
    
    $
    43,471,000
    
    
    $
    17,629,000
   5




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NNN 2003 VALUE FUND, LLC
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
 The use of the words we, us, or our refers to NNN 2003 Value Fund, LLC and its
subsidiaries, except where the context otherwise requires.
 1. Organization and Description of Business
      6




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  Continued
  2. Summary of Significant Accounting Policies
  Interim Financial Data
   Principles of Consolidation and Basis of Presentation
 Consolidation
  7




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  Continued
   Use of Estimates
  Real Estate Related Impairments
  
    
    a significant negative industry or economic trend;
    
    a significant underperformance relative to historical or projected future operating results;
and
    
    a significant change in the manner in which the asset is used.
  Property, Plant and Equipment
  8




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  Continued
 Properties Held for Non-Sale Disposition
   Fair Value of Financial Instruments
 Financial Instruments
  Income Taxes
  Income Taxes
  9




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  Continued
 Segments
 Segment Reporting
 3. Real Estate Investments  Properties Held for Non-Sale Disposition
  June 30, 2011
    
    
    December 31, 2010Buildings and tenant improvements
    
    $
    
    
    
    $
    26,813,000Land
    
    
    
    
    
    
    4,137,000
    
    
    
    30,950,000Less: accumulated depreciation
    
    
    
    
    
    
    (3,732,000
    )$
    
    
    
    $
    27,218,000
  4. Real Estate Investments  Unconsolidated Real Estate
  Property
    
    Location
    
    June 30, 2011
    
    
    December 31, 2010Chase Tower
    
    Austin, TX
    
    $
    8,000
    
    
    $
    6,000Enterprise Technology Center
    
    Scotts Valley, CA
    
    
    
    
    
    
    Executive Center II and III
    
    Dallas, TX
    
    
    4,000
    
    
    
    18,000$
    12,000
    
    
    $
    24,000
 Summarized Financial Information
  June 30, 2011
    
    
    December 31, 2010Assets (primarily real estate)
    
    $
    17,331,000
    
    
    $
    18,591,000Mortgage loans and other debt payable
    
    $
    32,562,000
    
    
    $
    32,562,000Other liabilities
    
    
    6,866,000
    
    
    
    5,258,000(Deficit) equity
    
    
    (22,097,000
    )
    
    
    (19,229,000
    )Total liabilities and (deficit) equity
    
    $
    17,331,000
    
    
    $
    18,591,000Our share of equity
    
    $
    12,000
    
    
    $
    24,000
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2011
    
    
    2010
    
    
    2011
    
    
    2010Revenues
    
    $
    240,000
    
    
    $
    539,000
    
    
    $
    496,000
    
    
    $
    2,218,000Rental and other expenses
    
    
    1,684,000
    
    
    
    1,997,000
    
    
    
    3,345,000
    
    
    
    21,699,000Loss from continuing operations
    
    
    (1,444,000
    )
    
    
    (1,458,000
    )
    
    
    (2,849,000
    )
    
    
    (19,481,000
    )(Loss) income from
discontinued operations
    
    
    (30,000
    )
    
    
    3,219,000
    
    
    
    (48,000
    )
    
    
    2,741,000Net (loss) income
    
    $
    (1,474,000
    )
    
    $
    1,761,000
    
    
    $
    (2,897,000
    )
    
    $
    (16,740,000
    )Our equity in (losses) income
of unconsolidated real estate
    
    $
    (6,000
    )
    
    $
    635,000
    
    
    $
    (12,000
    )
    
    $
    261,000
  10




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NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  Continued
    OwnershipProperty
    
    Percentage
    
    
    June 30, 2011
    
    
    December 31, 2010Enterprise Technology Center
    
    
    8.5
    %
    
    $
    32,562,000
    
    
    $
    32,562,000
  Enterprise Technology Center
    11




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  Continued
 Executive Center II and III
  Chase Tower
  5. Intangible Assets Related to Properties Held for Non-Sale Disposition
  June 30, 2011
    
    
    December 31, 2010In-place leases and
tenant relationships, net of
accumulated amortization of
$1,881,000 as of December
31, 2010
    
    $
    
    
    
    $
    1,951,000
  6. Other Assets Related to Properties Held for Non-Sale Disposition
  June 30, 2011
    
    
    December 31, 2010Deferred rent receivable
    
    $
    
    
    
    $
    277,000Lease commissions, net of
accumulated amortization of
$286,000 as of December 31, 2010
    
    
    
    
    
    
    321,000Prepaid expenses, deposits and other
    
    
    
    
    
    
    140,000$
    
    
    
    $
    738,000
  12




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  Continued
 7. Mortgage Loans Payable Secured by Properties Held for Non-Sale Disposition
   Total Mortgage
    
    
    Weighted AverageLoans Payable
    
    
    Interest RateVariable rate
    
    $
    22,471,000
    
    
    
    7.26
    %Fixed rate
    
    
    21,000,000
    
    
    
    10.95
    %$
    43,471,000
    
    
    
    9.04
    %
 Sevens Building Mortgage Loan
  Four Resource Square Mortgage Loan
   13




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  Continued
 8. Noncontrolling Interests
  Entity
    
    Date Acquired
    
    
    Noncontrolling InterestsNNN Enterprise Way, LLC
    
    
    05/07/2004
    
    
    
    26.7
    %
 9. NNN 2003 Value Fund, LLC Unit Holders Equity
      10. Related Party Transactions
 The Management Agreement
    14




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  Continued
 Property Management Fees
  Real Estate Acquisition Fees
  Real Estate Disposition Fees
  Leasing Commissions
  Accounting Fees
  Construction Management Fees
  Loan Fees
  Related Party Accounts Payable
   15




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  Continued
 11. Commitments and Contingencies
 Litigation
   Environmental Matters
  12. Discontinued Operations
 Property, Plant and Equipment
 Property
    
    Disposition DateTiffany Square
    
    May 7, 2010Executive Center I
    
    June 2, 2010Four Resource Square
    
    January 20, 2011Sevens Building
    
    March 25, 2011
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2011
    
    
    2010
    
    
    2011
    
    
    2010Rental revenue
    
    $
    
    
    
    $
    2,036,000
    
    
    $
    964,000
    
    
    $
    4,366,000Rental expense (including general,
administrative, depreciation and
amortization)
    
    
    
    
    
    
    (1,623,000
    )
    
    
    (727,000
    )
    
    
    (3,569,000
    )Real estate related impairments
    
    
    
    
    
    
    (5,300,000
    )
    
    
    
    
    
    
    (5,300,000
    )Interest expense
    
    
    
    
    
    
    (817,000
    )
    
    
    (545,000
    )
    
    
    (2,159,000
    )Gains on extinguishment of debt
    
    
    
    
    
    
    6,667,000
    
    
    
    13,634,000
    
    
    
    6,667,000Income (loss) from discontinued operations
    
    
    
    
    
    
    963,000
    
    
    
    13,326,000
    
    
    
    5,000Income (loss) from discontinued
operations attributable to noncontrolling
interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Income (loss) from discontinued
operations attributable to NNN 2003 Value
Fund, LLC
    
    $
    
    
    
    $
    963,000
    
    
    $
    13,326,000
    
    
    $
    5,000
  16




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##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis Financial Condition and Results of Operations.
 The use of the words we, us, or our refers to NNN 2003 Value Fund, LLC and its
subsidiaries, except where the context otherwise requires.
  Forward-Looking Statements
  Overview and Background
    17




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##### Table of Contents



Business Strategy
   18




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##### Table of Contents



Acquisitions and Dispositions
    Critical Accounting Policies
  Interim Financial Data
   Factors Which May Influence Results of Operations
    19




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##### Table of Contents



Sarbanes-Oxley Act
   Results of Operations
   Comparison of the Three Months Ended June 30, 2011 and 2010
 Three Months EndedJune 30,2011
    
    
    2010
    
    
    ChangeInterest and dividend income
    
    $
    
    
    
    $
    7,000
    
    
    $
    (7,000
    )Other income
    
    
    
    
    
    
    11,000
    
    
    
    (11,000
    )General and administrative expense
    
    
    (119,000
    )
    
    
    (134,000
    )
    
    
    15,000Equity in (losses) income of
unconsolidated real estate
    
    
    (6,000
    )
    
    
    1,016,000
    
    
    
    (1,022,000
    )(Loss) income from continuing operations
    
    
    (125,000
    )
    
    
    900,000
    
    
    
    (1,025,000
    )Income from discontinued operations
    
    
    
    
    
    
    963,000
    
    
    
    (963,000
    )Consolidated net (loss) income
    
    $
    (125,000
    )
    
    $
    1,863,000
    
    
    $
    (1,988,000
    )
 Interest and Dividend Income
  Other Income
   20




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##### Table of Contents



General and Administrative Expense
  Equity in (Losses) Income of Unconsolidated Real Estate
  Income from Discontinued Operations
  Consolidated Net (Loss) Income
  Comparison of the Six Months Ended June 30, 2011 and 2010
 Six Months EndedJune 30,2011
    
    
    2010
    
    
    ChangeInterest and dividend income
    
    $
    
    
    
    $
    20,000
    
    
    $
    (20,000
    )Other income
    
    
    
    
    
    
    17,000
    
    
    
    (17,000
    )General and administrative expense
    
    
    (175,000
    )
    
    
    (231,000
    )
    
    
    56,000Equity in (losses) income of
unconsolidated real estate
    
    
    (12,000
    )
    
    
    609,000
    
    
    
    (621,000
    )(Loss) income from continuing operations
    
    
    (187,000
    )
    
    
    415,000
    
    
    
    (602,000
    )Income from discontinued operations
    
    
    13,326,000
    
    
    
    5,000
    
    
    
    13,321,000Consolidated net income
    
    $
    13,139,000
    
    
    $
    420,000
    
    
    $
    12,719,000
 Interest and Dividend Income
  Other Income
   21




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##### Table of Contents



General and Administrative Expense
  Equity in (Losses) Income of Unconsolidated Real Estate
  Income from Discontinued Operations
  Consolidated Net Income
  Liquidity and Capital Resources
 Sources of Capital and Liquidity
    22




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##### Table of Contents



Debt Financing
  Weighted-Average
    
    
    VariablePrincipal
    
    
    
    
    
    
    Interest
    
    
    or FixedOutstanding
    
    
    Maturity Date
    
    
    Rate
    
    
    Interest RateEnterprise Technology Center
    
    $
    32,562,000
    
    
    
    05/11/2011
    
    
    
    11.44
    %
    
    Fixed
  Cash Flows
    Other Liquidity Needs
  Contractual Obligations
   23




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##### Table of Contents



Off-Balance Sheet Arrangements
  Inflation
  
 Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk.
  
 Item 4.
    
    Controls and Procedures.
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  24




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##### Table of Contents



PART II  OTHER INFORMATION
 The use of the words we, us, or our refers to NNN 2003 Value Fund, LLC and its
subsidiaries, except where the context otherwise requires.
 
 Item 1.
    
    Legal Proceedings.
   
 Item 1A.
    
    Risk Factors.
  Our sole remaining property interest is currently undergoing a judicial foreclosure process,
whereby a private sale of the property is expected to be pursued by the court-appointed receiver,
after which we intend to pay distributions to our unit holders from available funds, if any, and
wind up our operations, which we expect will be completed within the next six to twelve months.
As a result of the judicial foreclosure of our sole remaining property interest, there is
substantial doubt about our ability to continue as a going concern.
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We rely on the disposition of our properties to generate cash to fund our operations and pay
distributions to our unit holders, however, our remaining property interest consists of an 8.5%
interest in one unconsolidated property that is currently undergoing a judicial foreclosure
process, which greatly limits our ability to generate cash to fund our operations and/or pay
future distributions to our unit holders.
    Our success is dependent on the performance of our manager, which could be adversely impacted by the recent sale of its parent company, Daymark Realty Advisors, Inc., to an unrelated third party.
    26




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##### Table of Contents



Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds.
  
 Item 3.
    
    Defaults Upon Senior Securities.
  
 Item 4.
    
    [Removed and Reserved.]
 
 Item 5.
    
    Other Information.
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##### Table of Contents



Item 6.
    
    Exhibits.
   28




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##### Table of Contents



SIGNATURES
  NNN 2003 Value Fund, LLC(Registrant)August 12,
2011
    
    /s/ Steven M. ShippDate
    
    Steven M. ShippExecutive Vice President, Portfolio ManagementGrubb & Ellis Realty Investors, LLC,the Manager of NNN 2003 Value Fund, LLC(principal executive officer)August 12, 2011
    
    /s/ Paul E. HendersonDate
    
    Paul E. HendersonChief Accounting OfficerGrubb & Ellis Realty Investors, LLC,the Manager of NNN 2003 Value Fund, LLC(principal financial officer)
  29




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##### Table of Contents



EXHIBIT INDEX
   ExhibitNumber
    
    Description3.1
    
    
    Articles of Organization of NNN 2003 Value Fund, LLC, dated
March 19, 2003 (included in Exhibit 3.1 to our Form 10 filed
on May 2, 2005 and incorporated herein by reference).31.1
    *
    
    Certification of Principal Executive Officer, pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    *
    
    Certification of Principal Financial Officer, pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    **
    
    Certification of Principal Executive Officer, pursuant to 18
U.S.C. Section 1350, as created by Section 906 of the
Sarbanes-Oxley Act of 2002.32.2
    **
    
    Certification of Principal Financial Officer, pursuant to 18
U.S.C. Section 1350, as created by Section 906 of the
Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith.**
    
    Furnished herewith.  30