##### 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 1934For the quarterly period ended
    March 31, 2008oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period from
    to   0-51295
  NNN 2003 Value Fund,
    LLC
   Delaware

20-0122092(State or other jurisdiction of

(I.R.S. Employerincorporation or organization)

Identification No.)1551 N. Tustin Avenue,
    Suite 300, Santa Ana, California

92705(Address of principal executive offices)

(Zip Code)   (714) 667-8252
   N/A
    þ o
  non-accelerated Rule 12b-2
  Large accelerated filer

o



Accelerated filer

oNon-accelerated filer

þ

(Do not check if a smaller reporting company)

Smaller reporting company

o   Rule 12b-2
  o þ




---



##### 



NNN 2003
    VALUE FUND, LLC
    (A Delaware Corporation)
  TABLE OF
    CONTENTS
   
 PART I  FINANCIAL
    INFORMATIONItem 1.


Financial Statements


2Condensed Consolidated Balance Sheets as of
    March 31, 2008 (Unaudited) and December 31, 2007
    (Unaudited)


2Condensed Consolidated Statements of Operations
    and Comprehensive (Loss) Income for the Three Months Ended
    March 31, 2008 and 2007 (Unaudited)


3Condensed Consolidated Statement of Unit
    Holders Equity for the Three Months Ended March 31,
    2008 (Unaudited)


4Condensed Consolidated Statements of Cash Flows
    for the Three Months Ended March 31, 2008 and 2007
    (Unaudited)


5Notes to Condensed Consolidated Financial
    Statements (Unaudited)


6Item 2.


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


24Item 3.


Quantitative and Qualitative Disclosures About
    Market Risk


39Item 4.


Controls and Procedures


39Item 4T.


Controls and Procedures


39PART II  OTHER
    INFORMATIONItem 1.


Legal Proceedings


41Item 1A.


Risk Factors


41Item 2.


Unregistered Sales of Equity Securities and Use
    of Proceeds


41Item 3.


Defaults Upon Senior Securities


41Item 4.


Submission of Matters to a Vote of Security
    Holders


41Item 5.


Other Information


41Item 6.


Exhibits


41Signatures


42EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 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

As of March 31, 2008 and December 31, 2007

(Unaudited) March 31,

December 31,2008

2007ASSETSReal estate investments:Operating properties, net

$
74,037,000

$
74,597,000Investments in unconsolidated real estate


5,753,000


5,740,00079,790,000


80,337,000Cash and cash equivalents


6,606,000


8,208,000Investment in marketable equity securities


1,023,000


1,054,000Accounts receivable, net


741,000


434,000Accounts receivable from related parties


603,000


594,000Restricted cash


3,960,000


3,985,000Identified intangible assets, net


8,198,000


8,848,000Other assets, net


5,301,000


5,221,000Total assets

$
106,222,000

$
108,681,000LIABILITIES, MINORITY INTERESTS AND UNIT HOLDERS
    EQUITYMortgage loans payable

$
72,242,000

$
71,682,000Accounts payable and accrued liabilities


3,800,000


4,009,000Accounts payable due to related parties


254,000


240,000Identified intangible liabilities, net


178,000


195,000Security deposits, prepaid rent and other liabilities


981,000


1,008,000Total liabilities


77,455,000


77,134,000Commitments and contingencies (Note 13)Minority interests


672,000


682,000Unit holders equity


28,089,000


31,511,000Accumulated other comprehensive income (loss)


6,000


(646,000)Total unit holders equity


28,095,000


30,865,000Total liabilities, minority interests and unit holders
    equity

$
106,222,000

$
108,681,000    2




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##### Table of Contents



NNN 2003
    VALUE FUND, LLC



CONDENSED
    CONSOLIDATED STATEMENTS OF OPERATIONS

AND
    COMPREHENSIVE (LOSS) INCOME

For the Three Months Ended March 31, 2008 and
    2007

(Unaudited) Three Months EndedMarch 31,2008


2007Revenue:Rental income

$
2,932,000


$
1,316,000Expense:Rental expense


1,675,000



864,000General and administrative


452,000



499,000Depreciation and amortization


1,362,000



589,000Total expense


3,489,000



1,952,000Loss before other income (expense) and discontinued operations


(557,000)



(636,000)Other income (expense):Interest expense (including amortization of deferred financing
    costs)


(1,454,000)



(678,000)Interest and dividend income


113,000



97,000Other-than-temporary impairment of marketable equity securities


(683,000)



Equity in earnings (losses) of unconsolidated real estate


12,000



(290,000)Other income


10,000



32,000Loss before minority interests


(2,559,000)



(1,475,000)Minority interests


9,000



80,000Loss from continuing operations


(2,550,000)



(1,395,000)Discontinued operations:Gain on sale of real estate including minority interests related
    to sale of real estate






3,134,000Loss from discontinued operations






(473,000)Total income from discontinued operations






2,661,000Net (loss) income

$
(2,550,000)


$
1,266,000Comprehensive income:Net (loss) income

$
(2,550,000)


$
1,266,000Recognition of previously unrealized loss on marketable equity
    securities


646,000



Unrealized gain (loss) on marketable equity securities arising
    during the period


6,000



(43,000)Comprehensive (loss) income

$
(1,898,000)


$
1,223,000Net (loss) income per unit:Continuing operations  basic and diluted

$
(255.77)


$
(139.92)Discontinued operations  basic and diluted

$



$
266.90Total net (loss) income per unit  basic and diluted

$
(255.77)


$
126.98Weighted average number of units outstanding  basic
    and diluted


9,970



9,970    3




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##### Table of Contents



NNN 2003
    VALUE FUND, LLC



CONDENSED
    CONSOLIDATED STATEMENT OF UNIT HOLDERS EQUITY

For the Three Months Ended March 31, 2008

(Unaudited) Numberof Units


TotalBALANCE  December 31, 2007


9,970


$
30,865,000Distributions






(872,000)Net loss






(2,550,000)Change in unrealized losses on marketable equity securities






652,000BALANCE  March 31, 2008


9,970


$
28,095,000    4




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##### Table of Contents



NNN 2003
    VALUE FUND, LLC
  CONDENSED
    CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Three Months Ended March 31, 2008 and
    2007
 (Unaudited)
  Three Months EndedMarch 31,2008


2007CASH FLOWS FROM OPERATING ACTIVITIESNet (loss) income

$
(2,550,000)


$
1,266,000Adjustments to reconcile net (loss) income to net cash used in
    operating activities:Gain on sale of real estate






(3,134,000)Other-than-temporary impairment of marketable equity securities


683,000



Depreciation and amortization (including deferred financing
    costs, deferred rent and above market leases)


1,223,000



618,000Equity in (earnings) losses of unconsolidated real estate


(12,000)



290,000Minority interests


(9,000)



(80,000)Allowance for doubtful accounts


112,000



(1,000)Change in operating assets and liabilities:Accounts receivable


(419,000)



188,000Accounts receivable from related parties


(9,000)



4,000Other assets


21,000



142,000Accounts payable and accrued liabilities


5,000



(1,360,000)Security deposits, prepaid rent and other liabilities


(27,000)



17,000Net cash used in operating activities


(982,000)



(2,050,000)CASH FLOWS FROM INVESTING ACTIVITIESAcquisition of real estate properties






(23,862,000)Proceeds from sale of real estate operating properties






11,491,000Distributions received from unconsolidated real estate






37,000Capital expenditures


(319,000)



(129,000)Purchase of marketable equity securities






(1,970,000)Restricted cash


25,000



(3,262,000)Net cash used in investing activities


(294,000)



(17,695,000)CASH FLOWS FROM FINANCING ACTIVITIESBorrowings on mortgage loans payable and other debt


560,000



34,434,000Borrowings from related parties






1,250,000Principal repayments on mortgage loans payable and other debt






(5,500,000)Principal repayments on related party borrowings






(1,250,000)Minority interests distributions


(1,000)



(23,000)Payment of deferred financing costs


(13,000)



(698,000)Distributions


(872,000)



(872,000)Net cash (used in) provided by financing activities


(326,000)



27,341,000NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS


(1,602,000)



7,596,000CASH AND CASH EQUIVALENTS - beginning of period


8,208,000



644,000CASH AND CASH EQUIVALENTS - end of period

$
6,606,000


$
8,240,000SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid during the period for:Interest

$
1,346,000


$
990,000Income taxes

$
9,000


$
2,000NONCASH INVESTING AND FINANCING ACTIVITIES:Accrual for tenant improvements and capital expenditures

$
74,000


$
150,000Accrual for deferred financing costs

$



$
5,000The following represents certain assets acquired and liabilities
    assumed in connection with our acquisitions and dispositions of
    operating propertiesIncrease in investment operating properties:Security deposits and prepaid rent

$



$
8,000Other assets

$



$
403,000Accrued expenses

$



$
39,000    5




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##### Table of Contents



NNN 2003
    VALUE FUND, LLC
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)
  1.
    Organization
    and Description of Business  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.
          2.
    Summary
    of Significant Accounting Policies   6




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##### Table of Contents



NNN 2003
    VALUE FUND, LLC
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  Interim
    Financial Data
  Form 10-K,
  Principles
    of Consolidation
  Consolidation of Variable Interest Entities,
  Investment
    in Marketable Equity Securities
    Income
    Taxes
   7




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##### Table of Contents



NNN 2003
    VALUE FUND, LLC
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  Segments
  Disclosures about Segments of an Enterprise and
    Related Information
  Recently
    Issued Accounting Pronouncements
  Fair Value Measurement, SFAS No. 157-1, Application of FASB Statement No. 157 to FASB Statement
    No. 13 and Other Accounting Pronouncements That Address
    Fair Value Measurements for Purposes of Lease Classification or
    Measurement Under Statement 13, SFAS 157-1. SFAS 157-1 Accounting for Leases SFAS No. 157-2, Effective Date of FASB Statement No. 157, SFAS 157-2. SFAS 157-2 SFAS 157-1 SFAS 157-1 SFAS 157-2,
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities
  Business Combinations, Noncontrolling Interests in
    Consolidated Financial Statements  An Amendment of
    ARB No. 51,
 8




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##### Table of Contents



NNN 2003
    VALUE FUND, LLC
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    Disclosures about Derivative Instruments and Hedging
    Activities
  SFAS No. 142-3, Determination of the Useful Life of Intangible Assets, SFAS 142-3. SFAS 142-3 Goodwill and Other Intangible Assets, SFAS 142-3 SFAS 142-3 SFAS 142-3 SFAS 142-3
  3.
    Investments
    in Real Estate  Operating
    Properties
    March 31, 2008

December 31, 2007Buildings and tenant improvements

$
64,786,000

$
64,710,000Land


12,627,000


12,627,00077,413,000


77,337,000Less: accumulated depreciation


(3,376,000)


(2,740,000)$
74,037,000

$
74,597,000  9




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##### Table of Contents



NNN 2003
    VALUE FUND, LLC
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
     Acquisitions
    and Dispositions
    Acquisitions
    During the Three Months Ended March 31, 2008
    Dispositions
    During the Three Months Ended March 31, 2008
    Acquisitions
    During the Three Months Ended March 31, 2007
  Consolidated
    Properties
      Dispositions
    During the Three Months Ended March 31, 2007
  Consolidated
    Properties
         10




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##### Table of Contents



NNN 2003
    VALUE FUND, LLC
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  Investments
    in Unconsolidated Real Estate
    Ownership

March 31,


December 31,Description

Location

Percentage

2008


2007Enterprise Technology Center

Scotts Valley, CA

8.5%

$
2,241,000


$
2,232,000Chase Tower

Austin, TX

14.8%


1,323,000



1,328,000Executive Center II & III

Dallas, TX

41.1%


2,189,000



2,180,000$
5,753,000


$
5,740,000     March 31,


December 31,2008


2007Balance Sheet Data:Assets (primarily real estate)

$
164,957,000


$
165,434,000Mortgage loans payable and other debt

$
115,017,000


$
114,244,000Other liabilities


15,720,000



17,040,000Equity


34,220,000



34,150,000Total liabilities and equity

$
164,957,000


$
165,434,000Our share of equity

$
5,753,000


$
5,740,000   Three Months EndedMarch 31,2008


2007Revenues

$
6,363,000


$
6,109,000Rental and other expenses


6,307,000



7,772,000Net income (loss)

$
56,000


$
(1,663,000)Our equity in earnings (losses) of unconsolidated real estate

$
12,000


$
(290,000)   4.
    Marketable
    Equity Securities    Historical


Gross Unrealized


Gross Realized


EstimatedCost


Gains


Losses


Gains


Losses


Fair ValueMarch 31, 2008Marketable equity securities

$
1,700,000


$
6,000


$



$



$
(683,000)


$
1,023,000   other-than-temporary
 11




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##### Table of Contents



NNN 2003
    VALUE FUND, LLC
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  5.
    Identified
    Intangible Assets    March 31, 2008

December 31, 2007In-place leases, above market leases and tenant relationships,
    net of accumulated amortization of $2,953,000 and $2,450,000 as
    of March 31, 2008 and December 31, 2007, respectively
    (with a weighted average life of 45 months, 55 months,
    and 93 months for in-place leases, above market leases, and
    tenant relationships, respectively, as of March 31, 2008
    and a weighted-average life of 45 months, 58 months,
    and 96 months for in-place leases, above market leases, and
    tenant relationships, respectively, as of December 31, 2007)

$
8,198,000

$
8,848,000     6.
    Other
    Assets    March 31, 2008

December 31, 2007Deferred rent receivable

$
1,508,000

$
1,274,000Deferred financing costs, net of accumulated amortization of
    $687,000 and $542,000 as of March 31, 2008 and
    December 31, 2007, respectively


848,000


980,000Lease commissions, net of accumulated amortization of $241,000
    and $186,000 as of March 31, 2008 and December 31,
    2007, respectively


1,327,000


1,362,000Lease inducements, net of accumulated amortization of $395,000
    and $321,000 as of March 31, 2008 and December 31,
    2007, respectively


1,531,000


1,605,000Prepaid expenses, deposits and other


87,000


$
5,301,000

$
5,221,000   7.
    Mortgage
    Loans Payable and Other Debt      Total Mortgage


Weighted AverageLoans Payable


Interest RateMarch 31, 2008


December 31, 2007


March 31, 2008


December 31, 2007Mortgage loans payable

$
72,242,000


$
71,682,000



6.62
%


7.19
%Fixed rate and variable rate:Fixed rate

$
26,000,000


$
26,000,000



6.73
%


6.73
%Variable rate

$
46,242,000


$
45,682,000



6.56
%


7.45
%  12




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##### Table of Contents



NNN 2003
    VALUE FUND, LLC
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
      Other
    Debt
    8.
    Derivative
    Financial Instruments  Derivative Instruments and Hedging Activities,
    Notional Amount

Index

Rate

Fair Value

Instrument

Maturity$10,550,000

LIBOR

5.40%

$(52,000)

SWAP

05/12/2008     Notional Amount

Index

Rate

Fair Value

Instrument

Maturity$10,550,000

LIBOR

5.40%

$(33,000)

SWAP

05/12/2008  13




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##### Table of Contents



NNN 2003
    VALUE FUND, LLC
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    9.
    Minority
    Interests  tenant-in-common,
  Entity

Date Acquired

Minority InterestsNNN Enterprise Way, LLC


05/07/04



26.7
%901 Civic Center


04/24/06



3.1
%     10.
    Unit
    Holders Equity          per-unit
 14




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##### Table of Contents



NNN 2003
    VALUE FUND, LLC
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  11.
    Related
    Party Transactions  The
    Management Agreement
      Property
    Management Fees
    Real
    Estate Acquisition Fees
    Real
    Estate Disposition Fees
    Lease
    Commissions
    Accounting
    Fees
   15




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##### Table of Contents



NNN 2003
    VALUE FUND, LLC
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  Construction
    Fees
    Loan
    Fees
    Acquisition
    Fees
    Related
    Party Accounts Receivable/Payable
    Unconsolidated
    Debt Due to Related Parties
  and/or
    NNN 2003 ValueOwnership


Amount of

Fund, LLCsProperty/Issue Date

Percentage


Loan

Portion of DebtExecutive Center II & III:06/08/05


41.1%


$
1,000,000

$
411,00009/12/05


41.1%



200,000


82,00010/18/05


41.1%



240,000


99,00011/14/05


41.1%



5,000


2,000Total





$
1,445,000

$
594,000   12.
    Fair
    Value Measurement  SFAS No. 157-2,
 16




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##### Table of Contents



NNN 2003
    VALUE FUND, LLC
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
      OtherObservable

Observable

UnobservableInputs

Inputs

InputsLevel 1

Level 2

Level 3

TotalAssetsAvailable-for-sale marketable equity securities

$
1,023,000

$


$


$
1,023,000Total assets at fair value

$
1,023,000

$


$


$
1,023,000LiabilitiesInterest rate swaps

$


$
52,000

$


$
52,000Total liabilities at fair value

$


$
52,000

$


$
52,000       13.
    Commitments
    and Contingencies  Rental
    Income
       17




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##### Table of Contents



NNN 2003
    VALUE FUND, LLC
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  SEC
    Investigation
  In the matter of Triple Net Properties, LLC.
  and/or Accounting for Contingencies.
  Prior
    Performance Tables
    Litigation
    Environmental
    Matters
   18




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##### Table of Contents



NNN 2003
    VALUE FUND, LLC
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    Unconsolidated
    Debt
    As of March 31,

As of December 31,2008

2007Mortgage



MortgageLoans Payable

NNN 2003

Loans Payable

NNN 2003and

Value

and

ValueOwnership

Other Debt

Fund, LLCs

Other Debt

Fund, LLCsProperty

Percentage

Balance

Portion of Debt

Balance

Portion of DebtEnterprise Technology Center


8.5
%

$
34,085,000

$
2,897,000

$
34,263,000

$
2,912,000Chase Tower


14.8
%


64,568,000


9,556,000


63,633,000


9,418,000Executive Center II & III


41.1
%


16,364,000


6,726,000


16,348,000


6,719,000Total





$
115,017,000

$
19,179,000

$
114,244,000

$
19,049,000     14.
    Concentration
    of Credit Risk     19




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##### Table of Contents



NNN 2003
    VALUE FUND, LLC
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    Percentage of







Lease2008 Annual


2008 Annual




Square


ExpirationTenant

Base Rent*


Base Rent


Property

Footage


DateMcKesson Information Solutions, Inc.

$
1,101,000



11.8
%

Four Resource Square


59,000


06/30/12General Services Administration (GSA)  
    Federal Bureau of 
    Investigation (FBI)(1)

$
1,075,000



11.5
%

901 Civic Center


49,000


03/14/08 
    and
    05/03/08     *
    
    Annualized rental revenue based on contractual base rent from
    leases in effect as of March 31, 2008.  (1)
    
    We are currently in discussions with the GSA-FBI regarding the
    renewal of their leases that expired on March 14, 2008 and
    May 3, 2008. We anticipate that the GSA-FBI will renew
    their 49,000 square feet of space for four years with an
    annual base rent beginning at approximately $103,000 per month
    with 3.0% annual rent increases and a termination option after
    year three.    Percentage of







Lease2007 Annual

2007 Annual




Square


ExpirationTenant

Base Rent*

Base Rent


Property

Footage


DateGSA  FBI

$
1,043,000


16.3
%

901 Civic Center


49,000


03/14/08 
    and
    05/03/08Westwood College of Technology

$
763,000


11.9
%

Executive Center I


44,000


01/31/13McKesson Information Solutions, Inc.

$
757,000


11.9
%

Four Resource Square


41,000


10/31/08     *
    
    Annualized rental revenue based on contractual base rent from
    leases in effect as of March 31, 2007.  15.
    Discontinued
    Operations  Properties Held for Sale    Property

Date Purchased

Date Designated for Sale

Date SoldWoodside

September 30, 2005

October 19, 2007

December 13, 2007Daniels Road

October 14, 2005

December 12, 2006

March 30, 2007Interwood

January 26, 2005

December 22, 2006

March 14, 2007  20




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##### Table of Contents



NNN 2003
    VALUE FUND, LLC
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    Three Months EndedMarch 31,2008

2007Rental income

$


$
663,000Rental expense





(409,000)Depreciation and amortization





(285,000)Loss before other expense





(31,000)Interest expense (including amortization of deferred financing
    costs)





(442,000)Other expense





Loss from discontinued operations





(473,000)Gain on sale of real estate including minority interest on sale
    of real estate





3,134,000Total income from discontinued operations

$


$
2,661,000     16.
    Per Unit
    Data  Earnings Per Share.
    Three Months EndedMarch 31,2008

2007Loss from continuing operations

$
(2,550,000)

$
(1,395,000)Income from discontinued operations





2,661,000Net (loss) income

$
(2,550,000)

$
1,266,000Net (loss) income per unit:Continuing operations - basic and diluted

$
(255.77)

$
(139.92)Discontinued operations - basic and diluted





266.90Total net (loss) income per unit - basic and diluted

$
(255.77)

$
126.98Weighted average number of units outstanding - basic and
    diluted


9,970


9,970   17.
    Business
    Combinations  Business
    Combinations,
 21




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##### Table of Contents



NNN 2003
    VALUE FUND, LLC
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    Four Resource SquareLand

$
1,668,000Building and improvements


19,357,000In place leases


1,034,000Tenant relationships


1,592,000Net assets acquired

$
23,651,000Below market leases


(145,000
)Net liabilities incurred

$
(145,000
)       18.
    Subsequent
    Events  Resignation
    and Appointment of Chief Executive Officer
      Mortgage
    Loans Payable
   22




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##### Table of Contents



NNN 2003
    VALUE FUND, LLC
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
   23




---



##### 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.
  Form 10-Q.
  Forward-Looking
    Statements
    Overview
    and Background
     24




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##### Table of Contents



Business
    Strategy
    Acquisitions
    and Dispositions
    Acquisitions
    During the Three Months Ended March 31, 2008
    Dispositions
    During the Three Months Ended March 31, 2008
    Acquisitions
    During the Three Months Ended March 31, 2007
  Consolidated
    Properties
     25




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##### Table of Contents



Dispositions
    During the Three Months Ended March 31, 2007
  Consolidated
    Properties
          Critical
    Accounting Policies
  Form 10-K,
  Interim
    Financial Data
  Form 10-K,
  Principles
    of Consolidation
  Consolidation of
    Variable Interest Entities,
  Investment
    in Marketable Equity Securities
   26




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##### Table of Contents



Income
    Taxes
    Segments
  Disclosures about Segments of an Enterprise and
    Related Information
  Factors
    Which May Influence Results of Operations
  Rental
    Income
         27




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##### Table of Contents



Scheduled
    Lease Expirations
    Sarbanes-Oxley
    Act
     28




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##### Table of Contents



Results
    of Operations
    Comparison
    of the Three Months Ended March 31, 2008 and
    2007
  Three Months EndedMarch 31,


Change2008


2007


$


%Revenue:Rental income

$
2,932,000


$
1,316,000


$
1,616,000



122.8%Expense:Rental expense


1,675,000



864,000



811,000



93.9%General and administrative


452,000



499,000



(47,000)



(9.4)%Depreciation and amortization


1,362,000



589,000



773,000



131.2%3,489,000



1,952,000



1,537,000



78.7%Loss before other income (expense) and discontinued operations


(557,000)



(636,000)



79,000



12.4%Other income (expense):Interest expense (including amortization of deferred financing
    costs)


(1,454,000)



(678,000)



(776,000)



(114.5)%Interest and dividend income


113,000



97,000



16,000



16.5%Other-than-temporary impairment of marketable equity securities


(683,000)







(683,000)



Equity in earnings (losses) of unconsolidated real estate


12,000



(290,000)



302,000



104.1%Other income


10,000



32,000



(22,000)



(68.8)%Loss before minority interests


(2,559,000)



(1,475,000)



(1,084,000)



(73.5)%Minority interests


9,000



80,000



(71,000)



(88.8)%Loss from continuing operations


(2,550,000)



(1,395,000)



(1,155,000)



(82.8)%Discontinued operations:Gain on sale of real estate including minority interest related
    to sale of real estate






3,134,000



(3,134,000)



(100.0)%Loss from discontinued operations






(473,000)



473,000



100.0%Total income from discontinued operations






2,661,000



(2,661,000)



(100.0)%Net (loss) income

$
(2,550,000)


$
1,266,000


$
(3,816,000)



(301.4)%   Rental
    Income
    Rental
    Expense
   29




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##### Table of Contents



General
    and Administrative Expense
    Depreciation
    and Amortization Expense
    Interest
    Expense
    Interest
    and Dividend Income
    Other-than-temporary
    Impairment of Marketable Equity Securities
    Equity in
    Earnings (Losses) of Unconsolidated Real Estate
   30




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##### Table of Contents



Minority
    Interests
    Gain on
    Sale of Real Estate including Minority Interest Related to Sale
    of Real Estate
    Loss from
    Discontinued Operations
    Net
    (Loss) Income
    Liquidity
    and Capital Resources
  Current
    Sources of Capital and Liquidity
    Factors
    Which May Influence Future Sources of Capital and
    Liquidity
  SEC
    Investigation
  In the matter of Triple Net Properties, LLC.
  and/or
 31




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##### Table of Contents



Accounting for
    Contingencies.
  Investment
    in Marketable Equity Securities
    Debt
    Financing
        Total Mortgage


Weighted AverageLoans Payable


Interest RateMarch 31, 2008


December 31, 2007


March 31, 2008


December 31, 2007Mortgage loans payable

$
72,242,000


$
71,682,000



6.62
%


7.19
%Fixed rate and variable rate:Fixed rate

$
26,000,000


$
26,000,000



6.73
%


6.73
%Variable rate

$
46,242,000


$
45,682,000



6.56
%


7.45
%  32




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##### Table of Contents



30-day
    Notional Amount

Index

Rate

Fair Value

Instrument

Maturity$10,550,000


LIBOR



5.40%



$(52,000)



SWAP



05/12/2008       and/or
    Other
    Liquidity Needs
   33




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##### Table of Contents



Cash
    Flows
  Comparison
    of the Three Months Ended March 31, 2008 and 2007
          Capital
    Resources
  General
   34




---



##### Table of Contents



and/or
    Unconsolidated
    Debt
    As of March 31,


As of December 31,2008


2007Mortgage





MortgageLoans Payable





Loansand


NNN 2003 Value


Payable and


NNN 2003 ValueOwnership


Other Debt


Fund, LLCs


Other Debt


Fund, LLCsProperty

Percentage


Balance


Portion of Debt


Balance


Portion of DebtEnterprise Technology Center


8
.5
%

$
34,085,000


$
2,897,000


$
34,263,000


$
2,912,000Chase Tower


14
.8
%


64,568,000



9,556,000



63,633,000



9,418,000Executive Center II & III


41
.1
%


16,364,000



6,726,000



16,348,000



6,719,000Total






$
115,017,000


$
19,179,000


$
114,244,000


$
19,049,000    35




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##### Table of Contents



Unconsolidated
    Debt Due to Related Parties
    NNN 2003 ValueOwnership


Amount of

Fund, LLCsProperty/Issue
    Date

Percentage


Loan

Portion of DebtExecutive Center II & III:06/08/05


41.1%


$
1,000,000

$
411,00009/12/05


41.1%



200,000


82,00010/18/05


41.1%



240,000


99,00011/14/05


41.1%



5,000


2,000Total





$
1,445,000

$
594,000   Debt
    Service Requirements
    Contractual
    Obligations
    Payments Due by PeriodLess than








More than1 Year


1-3 Years


4-5 Years


5 Years(2008)


(2009-2010)


(2011-2012)


(After 2012)


TotalPrincipal payments  variable rate debt

$
11,156,000


$
35,086,000


$



$



$
46,242,000Principal payments  fixed rate debt


5,000,000



21,000,000











26,000,000Interest payments  variable rate debt (based on rate
    in effect at March 31, 2008)


1,843,000



1,974,000











3,817,000Interest payments  fixed rate debt


1,187,000



2,291,000











3,478,000Tenant improvement and lease commission obligations


2,026,000















2,026,000Total

$
21,212,000


$
60,351,000


$



$



$
81,563,000   Off-Balance
    Sheet Arrangements
   36




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##### Table of Contents



Inflation
    Subsequent
    Events
  Resignation
    and Appointment of Chief Executive Officer
      Mortgage
    Loans Payable
    Recently
    Issued Accounting Pronouncements
  Fair Value Measurement, SFAS No. 157-1, Application of FASB Statement No. 157 to FASB Statement
    No. 13 and Other Accounting Pronouncements That Address
    Fair Value Measurements for Purposes of Lease Classification or
    Measurement Under Statement 13, SFAS 157-1. SFAS 157-1
 37




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##### Table of Contents



Accounting for Leases SFAS No. 157-2, Effective Date of FASB Statement No. 157, SFAS 157-2. SFAS 157-2 SFAS 157-1 SFAS 157-1 SFAS 157-2,
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities
  Business Combinations, Noncontrolling Interests in
    Consolidated Financial Statements  An Amendment of
    ARB No. 51,
  Disclosures about Derivative Instruments and Hedging
    Activities
  SFAS No. 142-3, Determination of the Useful Life of Intangible Assets, SFAS 142-3. SFAS 142-3 Goodwill and Other Intangible Assets, SFAS 142-3
 38




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##### Table of Contents



SFAS 142-3 SFAS 142-3 SFAS 142-3
  Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk.          Expected Maturity Date2008


2009


2010


2011


2012


Thereafter


TotalFixed rate debt - principal payments

$
5,000,000


$



$
21,000,000


$



$



$



$
26,000,000Weighted average interest rate on maturing debt


10.00%







5.95%















6.73%Variable rate debt - principal payments

$
11,156,000


$
13,225,000


$
21,861,000


$



$



$



$
46,242,000Weighted average interest rate on maturing debt (based on rates
    in effect as of March 31, 2008)


6.12%



5.80%



7.24%















6.56%       Item 4.
    Controls
    and Procedures.    Item 4T.
    Controls
    and Procedures.  Evaluation of disclosure controls and
    procedures.
 39




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##### Table of Contents



Rules 13a-15(e) 15d-15(e)
  Changes in internal control over financial
    reporting.
 40




---



##### 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.  SEC
    Investigation
  In the matter of Triple Net Properties, LLC.
  and/or Accounting for Contingencies.
  Litigation
    Item 1A.
    Risk
    Factors.  Form 10-K,
  Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds.    Item 3.
    Defaults
    Upon Senior Securities.    Item 4.
    Submission
    of Matters to a Vote of Security Holders.    Item 5.
    Other
    Information.    Item 6.
    Exhibits.   41




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##### Table of Contents



SIGNATURES    NNN 2003 Value
    Fund, LLC(Registrant)May 15, 2008

/s/ Kent W. PetersDate

Kent W. Peters Chief Executive Officer
    (principal executive officer)May 15, 2008

/s/ Francene LapointDate

Francene LaPointChief Financial Officer 
    Grubb & Ellis Realty Investors, LLC, 
    the Manager of NNN 2003 Value Fund, LLC (principal financial
    officer)  42




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##### Table of Contents



EXHIBIT INDEX
  Regulation S-K,
  Form 10-Q Regulation S-K).
  ExhibitNumber

Description10.1

Operating Agreement of NNN 2003 Value Fund, LLC, by and between
    Triple Net Properties, LLC, as the Manager, and Anthony W.
    Thompson, as the Initial Member (included as Exhibit 10.1 to our
    Form 10 filed on May 2, 2005 and incorporated herein by
    reference).10.2

Management Agreement between NNN 2003 Value Fund, LLC and Triple
    Net Properties Realty, Inc. (included as Exhibit 10.2 to our
    Form 10 filed on May 2, 2005 and incorporated herein by
    reference).10.3

First Amendment to Operating Agreement of NNN 2003 Value Fund,
    LLC, by and between Triple Net Properties, LLC, as the Manager,
    dated January 20, 2005, (included as Exhibit 10.3 to our Form
    10-K filed on April 2, 2007 and incorporated herein by
    reference).10.4

First Amendment to Management Agreement between NNN 2003 Value
    Fund, LLC and Triple Net Properties Realty, Inc., dated May 1,
    2005, (included as Exhibit 10.4 to our Form 10-K filed on April
    2, 2007 and incorporated herein by reference).10.5

Second Amendment to Operating Agreement of NNN 2003 Value Fund,
    LLC, by and between Triple Net Properties, LLC, as the Manager,
    dated February 2, 2007, (included as Exhibit 10.7 to our Form
    10-K filed on April 2, 2007 and incorporated herein by
    reference).31.1*

Certification of Chief 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 Chief 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. 43