##### 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 September 30, 2009
 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 o
  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 Statements
    
    
    2Condensed
Consolidated Balance Sheets as of September 30, 2009
(Unaudited) and December 31, 2008
    
    
    2Condensed Consolidated Statements of Operations and Comprehensive Loss for the Threeand Nine Months Ended September 30, 2009 and 2008 (Unaudited)
    
    
    3Condensed Consolidated Statement of (Deficit) Equity for the Nine Months EndedSeptember 30, 2009 (Unaudited)
    
    
    4Condensed Consolidated Statements  of Cash Flows for the Nine Months EndedSeptember 30,
2009 and 2008 (Unaudited)
    
    
    5Notes to Condensed
Consolidated  Financial Statements (Unaudited)
    
    
    6Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    22Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    32Item 4.
    
    Controls and Procedures
    
    
    33Item 4T.
    
    Controls and Procedures
    
    
    33PART II  OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    34Item 1A.
    
    Risk Factors
    
    
    34Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    35Item 3.
    
    Defaults Upon Senior Securities
    
    
    35Item 4.
    
    Submission of Matters to a Vote of  Security Holders
    
    
    36Item 5.
    
    Other Information
    
    
    36Item 6.
    
    Exhibits
    
    
    36SignaturesExhibit 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
 September 30, 2009
    
    
    December 31, 2008(Unaudited)ASSETSReal estate investments:Operating properties, net
    
    $
    19,531,000
    
    
    $
    20,435,000Property held for non-sale disposition, net
    
    
    2,603,000
    
    
    
    5,259,000Properties held for sale, net
    
    
    19,492,000
    
    
    
    29,288,000Investments in unconsolidated real estate
    
    
    1,274,000
    
    
    
    4,034,00042,900,000
    
    
    
    59,016,000Cash and cash equivalents
    
    
    2,608,000
    
    
    
    1,459,000Accounts receivable, net
    
    
    133,000
    
    
    
    369,000Accounts and loans receivable due from related parties
    
    
    795,000
    
    
    
    764,000Restricted cash
    
    
    1,761,000
    
    
    
    1,788,000Identified intangible assets, net
    
    
    1,805,000
    
    
    
    2,290,000Other assets related to property held for non-sale disposition
    
    
    541,000
    
    
    
    1,126,000Other assets related to properties held for sale
    
    
    2,598,000
    
    
    
    3,582,000Other assets, net
    
    
    1,622,000
    
    
    
    1,821,000Total assets
    
    $
    54,763,000
    
    
    $
    72,215,000LIABILITIES AND (DEFICIT) EQUITYMortgage loans payable
    
    $
    34,192,000
    
    
    $
    34,192,000Mortgage loans payable secured by property held for non-sale disposition
    
    
    4,590,000
    
    
    
    4,590,000Mortgage loans payable secured by properties held for sale
    
    
    21,382,000
    
    
    
    30,133,000Accounts payable and accrued liabilities
    
    
    1,872,000
    
    
    
    2,098,000Accounts and loans payable due to related parties
    
    
    130,000
    
    
    
    227,000Acquired lease liabilities, net
    
    
    86,000
    
    
    
    129,000Other liabilities related to property held for non-sale disposition, net
    
    
    130,000
    
    
    
    133,000Other liabilities related to properties held for sale, net
    
    
    208,000
    
    
    
    319,000Security deposits, prepaid rent and other liabilities
    
    
    441,000
    
    
    
    379,000Total liabilities
    
    
    63,031,000
    
    
    
    72,200,000Commitments and contingencies (Note 15)(Deficit) equity:NNN 2003 Value Fund, LLC unit holders deficit
    
    
    (8,364,000
    )
    
    
    (279,000
    )Noncontrolling interest equity
    
    
    96,000
    
    
    
    294,000Total (deficit) equity
    
    
    (8,268,000
    )
    
    
    15,000Total liabilities and (deficit) equity
    
    $
    54,763,000
    
    
    $
    72,215,000
   2




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
(Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Revenue:Rental revenue
    
    $
    1,001,000
    
    
    $
    697,000
    
    
    $
    2,766,000
    
    
    $
    3,075,000Rental revenue of operations held for non-sale disposition
    
    
    192,000
    
    
    
    183,000
    
    
    
    622,000
    
    
    
    670,000Total revenues
    
    
    1,193,000
    
    
    
    880,000
    
    
    
    3,388,000
    
    
    
    3,745,000Expense:Rental expense
    
    
    465,000
    
    
    
    386,000
    
    
    
    1,293,000
    
    
    
    1,343,000General and administrative
    
    
    162,000
    
    
    
    67,000
    
    
    
    548,000
    
    
    
    607,000Depreciation and amortization
    
    
    297,000
    
    
    
    595,000
    
    
    
    844,000
    
    
    
    1,783,000Operating expenses of operations held for non-sale disposition
    
    
    202,000
    
    
    
    382,000
    
    
    
    748,000
    
    
    
    1,123,000Real estate related impairments
    
    
    400,000
    
    
    
    2,600,000
    
    
    
    400,000
    
    
    
    2,600,000Real estate related impairments of operations held for
non-sale disposition
    
    
    300,000
    
    
    
    
    
    
    
    3,000,000
    
    
    
    Total expenses
    
    
    1,826,000
    
    
    
    4,030,000
    
    
    
    6,833,000
    
    
    
    7,456,000Loss before other income (expense) and discontinued operations
    
    
    (633,000
    )
    
    
    (3,150,000
    )
    
    
    (3,445,000
    )
    
    
    (3,711,000
    )Other income (expense):Interest expense
    
    
    (690,000
    )
    
    
    (733,000
    )
    
    
    (2,062,000
    )
    
    
    (2,208,000
    )Interest expense of operations held for non-sale disposition
    
    
    (186,000
    )
    
    
    (132,000
    )
    
    
    (551,000
    )
    
    
    (393,000
    )Interest and dividend income
    
    
    1,000
    
    
    
    49,000
    
    
    
    25,000
    
    
    
    232,000Other-than-temporary impairment of marketable equity
securities
    
    
    
    
    
    
    (51,000
    )
    
    
    
    
    
    
    (844,000
    )Equity in losses of unconsolidated real estate
    
    
    (194,000
    )
    
    
    (146,000
    )
    
    
    (2,759,000
    )
    
    
    (777,000
    )Other expense
    
    
    (8,000
    )
    
    
    (1,000
    )
    
    
    (48,000
    )
    
    
    (15,000
    )Loss from continuing operations
    
    
    (1,710,000
    )
    
    
    (4,164,000
    )
    
    
    (8,840,000
    )
    
    
    (7,716,000
    )Income (loss) from discontinued operations
    
    
    815,000
    
    
    
    (644,000
    )
    
    
    557,000
    
    
    
    (2,099,000
    )Consolidated net loss
    
    
    (895,000
    )
    
    
    (4,808,000
    )
    
    
    (8,283,000
    )
    
    
    (9,815,000
    )Net income (loss) attributable to noncontrolling interest
    
    
    54,000
    
    
    
    (7,000
    )
    
    
    (198,000
    )
    
    
    (40,000
    )Net loss attributable to NNN 2003 Value Fund, LLC
    
    $
    (949,000
    )
    
    $
    (4,801,000
    )
    
    $
    (8,085,000
    )
    
    $
    (9,775,000
    )Comprehensive loss:Consolidated net loss
    
    $
    (895,000
    )
    
    $
    (4,808,000
    )
    
    $
    (8,283,000
    )
    
    $
    (9,815,000
    )Recognition of previously unrealized loss on marketable
equity securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    646,000Unrealized gain (loss) on marketable equity securities
arising during the period
    
    
    
    
    
    
    (2,000
    )
    
    
    
    
    
    
    37,000Comprehensive (income) loss attributable to noncontrolling
interests
    
    
    (54,000
    )
    
    
    7,000
    
    
    
    198,000
    
    
    
    40,000Comprehensive loss attributable to NNN 2003 Value Fund, LLC
    
    $
    (949,000
    )
    
    $
    (4,803,000
    )
    
    $
    (8,085,000
    )
    
    $
    (9,092,000
    )
   3




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NNN 2003 VALUE FUND, LLC
 
 CONDENSED CONSOLIDATED STATEMENT OF (DEFICIT) EQUITY
For the Nine Months Ended September 30, 2009
(Unaudited)
 NNN 2003 ValueNumber
    
    
    Total Equity
    
    
    Fund, LLC
    
    
    Noncontrollingof Units
    
    
    (Deficit)
    
    
    Deficit
    
    
    InterestBALANCE  December 31, 2008
    
    
    9,970
    
    
    $
    15,000
    
    
    $
    (279,000
    )
    
    $
    294,000Net loss
    
    
    
    
    
    
    (8,283,000
    )
    
    
    (8,085,000
    )
    
    
    (198,000
    )BALANCE  September 30, 2009
    
    
    9,970
    
    
    $
    (8,268,000
    )
    
    $
    (8,364,000
    )
    
    $
    96,000
   4




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Nine Months EndedSeptember 30,2009
    
    
    2008CASH FLOWS FROM OPERATING ACTIVITIES:Consolidated net loss
    
    $
    (8,283,000
    )
    
    $
    (9,815,000
    )Adjustments to reconcile net loss to net cash used in operating activities:Real estate related impairments on consolidated properties
    
    
    4,000,000
    
    
    
    3,200,000Gain on sale of real estate
    
    
    (704,000
    )
    
    
    Other than temporary impairment of marketable equity securities
    
    
    
    
    
    
    844,000Depreciation and amortization (including deferred financing costs,
deferred rent and above/below market leases)
    
    
    1,620,000
    
    
    
    4,129,000Equity in losses of unconsolidated real estate
    
    
    2,759,000
    
    
    
    777,000Allowance for doubtful accounts
    
    
    29,000
    
    
    
    (44,000
    )Change in operating assets and liabilities:Accounts receivable
    
    
    207,000
    
    
    
    (69,000
    )Accounts receivable from related parties
    
    
    (31,000
    )
    
    
    (73,000
    )Other assets
    
    
    (105,000
    )
    
    
    292,000Restricted cash
    
    
    (77,000
    )
    
    
    (563,000
    )Accounts payable and accrued liabilities
    
    
    (56,000
    )
    
    
    (738,000
    )Security deposits, prepaid rent and other liabilities
    
    
    (64,000
    )
    
    
    (12,000
    )Net cash used in operating activities
    
    
    (705,000
    )
    
    
    (2,072,000
    )CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from sale of real estate
    
    
    10,983,000
    
    
    
    Restricted cash
    
    
    
    
    
    
    728,000Capital expenditures
    
    
    (479,000
    )
    
    
    (1,372,000
    )Distribution from (investment in) unconsolidated real estate
    
    
    1,000
    
    
    
    (111,000
    )Net cash provided by (used in) investing activities
    
    
    10,505,000
    
    
    
    (755,000
    )CASH FLOWS FROM FINANCING ACTIVITIES:Restricted cash
    
    
    104,000
    
    
    
    1,385,000Principal repayments on mortgage loans payable and other debt
    
    
    (8,943,000
    )
    
    
    (3,245,000
    )Borrowings on mortgage loans payable and other debt
    
    
    192,000
    
    
    
    687,000Borrowings from related parties
    
    
    
    
    
    
    111,000Payment of deferred financing costs
    
    
    (4,000
    )
    
    
    (230,000
    )Distributions to noncontrolling interest
    
    
    
    
    
    
    (2,000
    )Distributions to unit holders
    
    
    
    
    
    
    (2,617,000
    )Net cash used in financing activities
    
    
    (8,651,000
    )
    
    
    (3,911,000
    )NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    1,149,000
    
    
    
    (6,738,000
    )CASH AND CASH EQUIVALENTS  beginning of period
    
    
    1,459,000
    
    
    
    8,208,000CASH AND CASH EQUIVALENTS  end of period
    
    $
    2,608,000
    
    
    $
    1,470,000SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid for interest
    
    $
    3,729,000
    
    
    $
    3,989,000Cash paid for income taxes
    
    $
    19,000
    
    
    $
    81,000NONCASH INVESTING ACTIVITIES:Accrual for tenant improvements and capital expenditures
    
    $
    14,000
    
    
    $
    714,000
   5




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
For the Three and Nine Months Ended September 30, 2009 and 2008
 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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NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  (Continued)
 Interim Unaudited Financial Data
  Principles of Consolidation and Basis of Presentation
 Consolidation
   Use of Estimates
  Investments in Marketable Equity Securities
  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.
  7




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NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  (Continued)
  Property, Plant and Equipment
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Line Item in Statement of Operations:Real estate related impairments
(investments in operating properties)
    
    $
    400,000
    
    
    $
    2,600,000
    
    
    $
    400,000
    
    
    $
    2,600,000Real estate related impairments of
operations held for non-sale disposition
    
    
    300,000
    
    
    
    
    
    
    
    3,000,000
    
    
    
    Equity in losses of unconsolidated real
estate (investments in unconsolidated
real estate)
    
    
    349,000
    
    
    
    
    
    
    
    2,996,000
    
    
    
    Income (loss) from discontinued
operations (investments in properties
held for sale)
    
    
    
    
    
    
    600,000
    
    
    
    600,000
    
    
    
    600,000Total real estate related impairments
    
    $
    1,049,000
    
    
    $
    3,200,000
    
    
    $
    6,996,000
    
    
    $
    3,200,000
  Operating Properties
  Property, Plant and Equipment Property Plant and Equipment
  8




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NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  (Continued)
  Property Plant and Equipment
 Property Held for Non-Sale Disposition
  Properties Held for Sale
 Property, Plant and Equipment
 
    
    management, having the authority to approve the action, commits to a plan to sell the
asset;
    
    the asset is available for immediate sale in its present condition subject only to terms
that are usual and customary for sales of such assets;
    
    an active program to locate a buyer and other actions required to complete the plan to
sell the asset have been initiated;
    
    the sale of the asset is probable and the transfer of the asset is expected to qualify
for recognition as a completed sale within one year;
    
    the asset is being actively marketed for sale at a price that is reasonable in relation
to its current fair value; and
    
    given the actions required to complete the plan, it is unlikely that significant changes
to the plan will be made or that the plan will be withdrawn.
 Property, Plant and Equipment
   9




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  (Continued)
  Fair Value Measurements
 Fair Value Measurements
 Fair Value
Measurements Fair Value
Measurements
  Quoted Prices inActive Markets
    
    
    Significant Other
    
    
    Significantfor Identical
    
    
    Observable
    
    
    Unobservable
    
    
    TotalAssets
    
    
    Inputs
    
    
    Inputs
    
    
    ImpairmentAssets
    
    September 30, 2009
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    LossesOperating properties
    
    $
    19,531,000
    
    
    $
    
    
    
    $
    
    
    
    $
    19,531,000
    
    
    $
    (400,000
    )Property held for non-sale disposition
    
    $
    2,603,000
    
    
    $
    
    
    
    $
    
    
    
    $
    2,603,000
    
    
    $
    (3,000,000
    )Properties held for sale
    
    $
    19,492,000
    
    
    $
    
    
    
    $
    
    
    
    $
    19,492,000
    
    
    $
    (600,000
    )Investments in unconsolidated real estate
    
    $
    1,274,000
    
    
    $
    
    
    
    $
    
    
    
    $
    1,274,000
    
    
    $
    (2,996,000
    )
   Fair Value of Financial Instruments
 Financial Instruments
  10




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  (Continued)
  Income Taxes
  Segments
 Segment Reporting
 Noncontrolling Interests
 Consolidation
 As PreviouslyAs of December 31, 2008
    
    Reported
    
    
    Adjustment
    
    
    As AdjustedMinority interests
    
    $
    294,000
    
    
    $
    (294,000
    )
    
    $
    Noncontrolling interests equity
    
    $
    
    
    
    $
    294,000
    
    
    $
    294,000Total (deficit) equity
    
    $
    (279,000
    )
    
    $
    294,000
    
    
    $
    15,000
 As PreviouslyThree Months Ended September 30, 2008
    
    Reported
    
    
    Adjustment
    
    
    As AdjustedMinority interest in losses
    
    $
    (7,000
    )
    
    $
    (7,000
    )
    
    $
    Net loss / consolidated net loss
    
    $
    (4,801,000
    )
    
    $
    (7,000
    )
    
    $
    (4,808,000
    )Loss attributable to noncontrolling interests
    
    $
    
    
    
    $
    (7,000
    )
    
    $
    (7,000
    )
 As PreviouslyNine Months Ended September 30, 2008
    
    Reported
    
    
    Adjustment
    
    
    As AdjustedMinority interest in losses
    
    $
    (40,000
    )
    
    $
    (40,000
    )
    
    $
    Net loss / consolidated net loss
    
    $
    (9,775,000
    )
    
    $
    (40,000
    )
    
    $
    (9,815,000
    )Loss attributable to noncontrolling interests
    
    $
    
    
    
    $
    (40,000
    )
    
    $
    (40,000
    )
  11




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  (Continued)
 Recently Issued Accounting Pronouncements
 Amendments to FASB Interpretation No. 46(R)
 3. Real Estate Investments  Operating Properties
  September 30, 2009
    
    
    December 31, 2008Buildings and tenant improvements
    
    $
    19,977,000
    
    
    $
    20,813,000Land
    
    
    2,203,000
    
    
    
    2,049,00022,180,000
    
    
    
    22,862,000Less: accumulated depreciation
    
    
    (2,649,000
    )
    
    
    (2,427,000
    )$
    19,531,000
    
    
    $
    20,435,000
   4. Real Estate Investments  Property Held for Non-Sale Disposition
  September 30, 2009
    
    
    December 31, 2008Buildings and tenant improvements
    
    $
    2,714,000
    
    
    $
    4,358,000Land
    
    
    1,011,000
    
    
    
    1,986,0003,725,000
    
    
    
    6,344,000Less: accumulated depreciation
    
    
    (1,122,000
    )
    
    
    (1,085,000
    )$
    2,603,000
    
    
    $
    5,259,000
    12




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  (Continued)
 5. Real Estate Investments  Properties Held for Sale
  September 30, 2009
    
    
    December 31, 2008Buildings, tenant improvements, and other tenant related assets
    
    $
    16,264,000
    
    
    $
    25,430,000Land
    
    
    3,909,000
    
    
    
    5,371,00020,173,000
    
    
    
    30,801,000Less: accumulated depreciation
    
    
    (681,000
    )
    
    
    (1,513,000
    )$
    19,492,000
    
    
    $
    29,288,000
  901 Civic Center Disposition
  6. Real Estate Investments  Unconsolidated Real Estate
  September 30,
    
    
    December 31,Description
    
    Location
    
    
    2009
    
    
    2008Enterprise Technology Center
    
    Scotts Valley, CA
    
    $
    359,000
    
    
    $
    1,312,000Chase Tower
    
    Austin, TX
    
    
    915,000
    
    
    
    861,000Executive Center II and III
    
    Dallas, TX
    
    
    
    
    
    
    1,861,000$
    1,274,000
    
    
    $
    4,034,000
  September 30,
    
    
    December 31,2009
    
    
    2008Balance Sheet Data:Assets (primarily real estate)
    
    $
    140,996,000
    
    
    $
    162,436,000Mortgage loans and other debt payable
    
    $
    117,872,000
    
    
    $
    118,719,000Other liabilities
    
    
    15,664,000
    
    
    
    16,102,000Equity
    
    
    7,460,000
    
    
    
    27,615,000Total liabilities and equity
    
    $
    140,996,000
    
    
    $
    162,436,000Our share of equity
    
    $
    1,274,000
    
    
    $
    4,034,000
  13




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  (Continued)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Statement of Operations Data:Revenues
    
    $
    5,855,000
    
    
    $
    5,935,000
    
    
    $
    17,982,000
    
    
    $
    17,905,000Rental and other expenses (including real estate
related impairment charges of $2,470,000 and
$21,270,000 during the three and nine months
ended September 30, 2009, respectively)
    
    
    7,085,000
    
    
    
    7,137,000
    
    
    
    37,460,000
    
    
    
    21,570,000Net loss
    
    $
    (1,230,000
    )
    
    $
    (1,202,000
    )
    
    $
    (19,478,000
    )
    
    $
    (3,665,000
    )Our equity in losses of unconsolidated real estate
    
    $
    (194,000
    )
    
    $
    (146,000
    )
    
    $
    (2,759,000
    )
    
    $
    (777,000
    )
   September 30,
    
    
    December 31,2009
    
    
    2008Enterprise Technology Center
    
    $
    32,970,000
    
    
    $
    33,544,000Chase Tower
    
    
    67,781,000
    
    
    
    68,031,000Executive Center II and III
    
    
    17,121,000
    
    
    
    17,144,000$
    117,872,000
    
    
    $
    118,719,000
 Chase Tower
    Executive Center II and III
   14




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  (Continued)
 Loan Covenants
  Unconsolidated Debt Due to Related Parties
  Amount ofNote Issue Dates
    
    LoanJune 8, 2005
    
    $
    1,000,000September 12, 2005
    
    
    200,000October 18, 2005
    
    
    240,000November 14, 2005
    
    
    5,000$
    1,445,000
  7. Marketable Equity Securities
  8. Identified Intangible Assets
  September 30, 2009
    
    
    December 31, 2008In-place leases
and tenant
relationships, net
of accumulated
amortization of
$1,358,000 and
$1,506,000 as of
September 30, 2009
and December 31,
2008, respectively
(with a weighted
average life of 62 months and 86
months for in-place
leases and tenant
relationships,
respectively, as of
September 30, 2009
and a
weighted-average
life of 48 months
and 94 months for
in-place leases and
tenant
relationships,
respectively, as of
December 31, 2008)
    
    $
    1,805,000
    
    
    $
    2,290,000
  15




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  (Continued)
   9. Other Assets
  September 30, 2009
    
    
    December 31, 2008Deferred rent receivable
    
    $
    567,000
    
    
    $
    295,000Deferred financing costs, net of
accumulated amortization of
$338,000 and $549,000 as of
September 30, 2009 and December 31,
2008, respectively
    
    
    55,000
    
    
    
    166,000Leasing commissions, net of
accumulated amortization of
$386,000 and $324,000 as of
September 30, 2009 and December 31,
2008, respectively
    
    
    514,000
    
    
    
    824,000Lease inducements, net of
accumulated amortization of
$369,000 and $94,000 as of
September 30, 2009 and December 31,
2008, respectively
    
    
    473,000
    
    
    
    536,000Prepaid expenses, deposits and other
    
    
    13,000
    
    
    
    $
    1,622,000
    
    
    $
    1,821,000
 10. Mortgage Loans Payable and Other Debt
   Total Mortgage
    
    
    Weighted AverageLoans Payable
    
    
    Interest RateSeptember 30, 2009
    
    
    December 31, 2008
    
    
    September 30, 2009
    
    
    December 31, 2008Variable rate
    
    $
    34,574,000
    
    
    $
    43,325,000
    
    
    
    7.47
    %
    
    
    6.02
    %Fixed rate
    
    
    25,590,000
    
    
    
    25,590,000
    
    
    
    7.04
    %
    
    
    7.04
    %Total
    
    $
    60,164,000
    
    
    $
    68,915,000
    
    
    
    7.28
    %
    
    
    6.39
    %
   Year
    
    Amount2009
    
    $
    4,590,0002010
    
    
    55,574,000Total
    
    $
    60,164,000
  16




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  (Continued)
 901 Civic Center Loan Repayment
  Tiffany Square Loan Extension
  Executive Center I Loan Default
    11. Derivative Financial Instruments
 Derivatives and Hedging
    17




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  (Continued)
  Notional Amount
    
    Index
    
    
    Rate
    
    
    Fair Value
    
    
    Instrument
    
    
    Maturity$9,837,000
    
    LIBOR
    
    
    3.33
    %
    
    $
    (112,000
    )
    
    Swap
    
    
    05/12/2009
  12. Noncontrolling Interests
  Entity
    
    Date Acquired
    
    
    Noncontrolling InterestsNNN Enterprise Way, LLC
    
    
    05/07/2004
    
    
    
    26.7
    %NNN 901 Civic Center, LLC
    
    
    04/24/2006
    
    
    
    3.1
    %
 13. 2003 Value Fund, LLC Unit Holders Deficit
       18




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  (Continued)
 14. Related Party Transactions
 The Management Agreement
   Property Management Fees
  Real Estate Acquisition Fees
  Real Estate Disposition Fees
  Leasing Commissions
  Accounting Fees
  Construction Management Fees
  Loan Fees
   19




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  (Continued)
 Related Party Accounts Payable
  Related Party Note Receivable
   15. Commitments and Contingencies
 Litigation
  Environmental Matters
  16. Concentration of Credit Risk
    20




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##### Table of Contents



NNN 2003 VALUE FUND, LLC
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)  (Continued)
  Square
    
    
    LeaseFootage
    
    
    ExpirationTenant
    
    Property
    
    (Approximate)
    
    
    DateMcKesson Information Solutions, Inc.
    
    Four Resource Square
    
    
    59,000
    
    
    
    06/30/2012PRC
    
    Tiffany Square
    
    
    96,000
    
    
    
    05/31/2012Westwood College of Technology
    
    Executive Center I
    
    
    44,000
    
    
    
    01/31/2013
 17. Discontinued Operations  Properties Held for Sale
 Property, Plant and Equipment
 Date DesignatedProperty
    
    Date Acquired
    
    
    for Sale
    
    
    Date Sold901 Civic Center
    
    
    04/24/2006
    
    
    
    09/26/2008
    
    
    
    07/17/2009The Sevens Building
    
    
    10/25/2007
    
    
    
    10/10/2008
    
    
    
    N/A
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Rental revenue
    
    $
    1,075,000
    
    
    $
    1,536,000
    
    
    $
    4,397,000
    
    
    $
    4,630,000Rental expense (including general, administrative, depreciation and amortization expense)
    
    
    574,000
    
    
    
    1,098,000
    
    
    
    2,447,000
    
    
    
    4,464,000Real estate related impairments
    
    
    
    
    
    
    600,000
    
    
    
    600,000
    
    
    
    600,000Income (loss) before other expense
    
    
    501,000
    
    
    
    (162,000
    )
    
    
    1,350,000
    
    
    
    (434,000
    )Interest expense
    
    
    (390,000
    )
    
    
    (482,000
    )
    
    
    (1,495,000
    )
    
    
    (1,655,000
    )Other expense
    
    
    
    
    
    
    
    
    
    
    (2,000
    )
    
    
    (10,000
    )Gain on disposal of discontinued operations
    
    
    704,000
    
    
    
    
    
    
    
    704,000
    
    
    
    Income (loss) from discontinued operations
    
    
    815,000
    
    
    
    (644,000
    )
    
    
    557,000
    
    
    
    (2,099,000
    )Income (loss) from discontinued operations attributable to noncontrolling interests
    
    
    51,000
    
    
    
    6,000
    
    
    
    57,000
    
    
    
    (15,000
    )Income (loss) from discontinued operations attributable to NNN 2003 Value Fund, LLC
    
    $
    764,000
    
    
    $
    (650,000
    )
    
    $
    500,000
    
    
    $
    (2,084,000
    )
  21




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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
    22




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##### Table of Contents



Business Strategy
  Acquisitions and Dispositions
   Critical Accounting Policies
  Factors Which May Influence Results of Operations
  Rental Revenue
   23




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##### Table of Contents



Scheduled Lease Expirations
  Sarbanes-Oxley Act
   Results of Operations
  Comparison of the Three and Nine Months Ended September 30, 2009 and 2008
 Three Months Ended
    
    
    
    
    
    
    
    
    
    
    Nine Months EndedSeptember 30,
    
    
    Change
    
    
    September 30,
    
    
    Change2009
    
    
    2008
    
    
    $
    
    
    %
    
    
    2009
    
    
    2008
    
    
    $
    
    
    %Revenue:Rental revenue
    
    $
    1,001,000
    
    
    $
    697,000
    
    
    $
    304,000
    
    
    
    43.6
    %
    
    $
    2,766,000
    
    
    $
    3,075,000
    
    
    $
    (309,000
    )
    
    
    (10.0
    %)Rental revenue of operations
held for non-sale disposition
    
    
    192,000
    
    
    
    183,000
    
    
    
    9,000
    
    
    
    4.9
    %
    
    
    622,000
    
    
    
    670,000
    
    
    
    (48,000
    )
    
    
    (7.2
    %)1,193,000
    
    
    
    880,000
    
    
    
    313,000
    
    
    
    35.6
    %
    
    
    3,388,000
    
    
    
    3,745,000
    
    
    
    (357,000
    )
    
    
    (9.5
    %)Expense:Rental expense
    
    
    465,000
    
    
    
    386,000
    
    
    
    79,000
    
    
    
    20.5
    %
    
    
    1,293,000
    
    
    
    1,343,000
    
    
    
    (50,000
    )
    
    
    (3.7
    %)General and administrative
    
    
    162,000
    
    
    
    67,000
    
    
    
    95,000
    
    
    
    141.8
    %
    
    
    548,000
    
    
    
    607,000
    
    
    
    (59,000
    )
    
    
    (9.7
    %)Depreciation and amortization
    
    
    297,000
    
    
    
    595,000
    
    
    
    (298,000
    )
    
    
    (50.1
    %)
    
    
    844,000
    
    
    
    1,783,000
    
    
    
    (939,000
    )
    
    
    (52.7
    %)Operating expenses of
operations held for non-sale
disposition
    
    
    202,000
    
    
    
    382,000
    
    
    
    (180,000
    )
    
    
    (47.1
    %)
    
    
    748,000
    
    
    
    1,123,000
    
    
    
    (375,000
    )
    
    
    (33.4
    %)Real estate related impairments
    
    
    400,000
    
    
    
    2,600,000
    
    
    
    (2,200,000
    )
    
    
    (84.6
    %)
    
    
    400,000
    
    
    
    2,600,000
    
    
    
    (2,200,000
    )
    
    
    (84.6
    %)Real estate related
impairments of operations held
for non-sale disposition
    
    
    300,000
    
    
    
    
    
    
    
    300,000
    
    
    
    
    %
    
    
    3,000,000
    
    
    
    
    
    
    
    3,000,000
    
    
    
    
    %1,826,000
    
    
    
    4,030,000
    
    
    
    (2,204,000
    )
    
    
    (54.7
    %)
    
    
    6,833,000
    
    
    
    7,456,000
    
    
    
    (623,000
    )
    
    
    (8.4
    %)Loss before other income
(expense) and discontinued
operations
    
    
    (633,000
    )
    
    
    (3,150,000
    )
    
    
    2,517,000
    
    
    
    (79.9
    %)
    
    
    (3,445,000
    )
    
    
    (3,711,000
    )
    
    
    266,000
    
    
    
    (7.2
    %)Other income (expense):Interest expense
    
    
    (690,000
    )
    
    
    (733,000
    )
    
    
    43,000
    
    
    
    (5.9
    %)
    
    
    (2,062,000
    )
    
    
    (2,208,000
    )
    
    
    146,000
    
    
    
    (6.6
    %)Interest expense of operations
held for non-sale disposition
    
    
    (186,000
    )
    
    
    (132,000
    )
    
    
    (54,000
    )
    
    
    40.9
    %
    
    
    (551,000
    )
    
    
    (393,000
    )
    
    
    (158,000
    )
    
    
    40.2
    %Interest and dividend income
    
    
    1,000
    
    
    
    49,000
    
    
    
    (48,000
    )
    
    
    (98.0
    %)
    
    
    25,000
    
    
    
    232,000
    
    
    
    (207,000
    )
    
    
    (89.2
    %)Other-than-temporary
impairment of marketable
equity securities
    
    
    
    
    
    
    (51,000
    )
    
    
    51,000
    
    
    
    (100.0
    %)
    
    
    
    
    
    
    (844,000
    )
    
    
    844,000
    
    
    
    (100.0
    %)Equity in losses of
unconsolidated real estate
    
    
    (194,000
    )
    
    
    (146,000
    )
    
    
    (48,000
    )
    
    
    32.9
    %
    
    
    (2,759,000
    )
    
    
    (777,000
    )
    
    
    (1,982,000
    )
    
    
    255.1
    %Other expense
    
    
    (8,000
    )
    
    
    (1,000
    )
    
    
    (7,000
    )
    
    
    700.0
    %
    
    
    (48,000
    )
    
    
    (15,000
    )
    
    
    (33,000
    )
    
    
    220.0
    %Loss from continuing operations
    
    
    (1,710,000
    )
    
    
    (4,164,000
    )
    
    
    2,454,000
    
    
    
    (58.9
    %)
    
    
    (8,840,000
    )
    
    
    (7,716,000
    )
    
    
    (1,124,000
    )
    
    
    14.6
    %Income (loss) from
discontinued operations
    
    
    815,000
    
    
    
    (644,000
    )
    
    
    1,459,000
    
    
    
    226.6
    %
    
    
    557,000
    
    
    
    (2,099,000
    )
    
    
    2,656,000
    
    
    
    126.5
    %Consolidated net loss
    
    $
    (895,000
    )
    
    $
    (4,808,000
    )
    
    $
    3,913,000
    
    
    
    (81.4
    %)
    
    $
    (8,283,000
    )
    
    $
    (9,815,000
    )
    
    $
    1,532,000
    
    
    
    (15.6
    %)
  24




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##### Table of Contents



Rental Revenue
   Rental Revenue of Operations Held for Non-Sale Disposition
   Rental Expense
   General and Administrative Expense
    25




---



##### Table of Contents



Depreciation and Amortization Expense
   Operating Expenses of Operations Held for Non-Sale Disposition
   Real Estate Related Impairments
 Property, Plant and
Equipment
 Property, Plant and
Equipment
 Real Estate Related Impairments of Operations Held for Non-Sale Disposition
 Property, Plant and
Equipment
  26




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##### Table of Contents



Interest Expense
   Interest Expense of Operations Held for Non-Sale Disposition
   Interest and Dividend Income
   Other-than-temporary Impairment of Marketable Equity Securities
  Equity in Losses of Unconsolidated Real Estate
   27




---



##### Table of Contents



Other Expense
   Income (Loss) from Discontinued Operations
   Consolidated Net Loss
   Liquidity and Capital Resources
    28




---



##### Table of Contents



Current Sources of Capital and Liquidity
   Planned Sales and Valuations of Real Estate Investments
  Property, Plant and Equipment Property, Plant and Equipment
 Cash Flows
     29




---



##### Table of Contents



Factors which may Influence Future Sources of Capital and Liquidity
 Debt Financing
   Mortgage
    
    
    Weighted AverageLoans Payable
    
    
    Interest RateSeptember 30, 2009
    
    
    December 31, 2008
    
    
    September 30, 2009
    
    
    December 31, 2008Variable rate
    
    $
    34,574,000
    
    
    $
    43,325,000
    
    
    
    7.47
    %
    
    
    6.02
    %Fixed rate
    
    
    25,590,000
    
    
    
    25,590,000
    
    
    
    7.04
    %
    
    
    7.04
    %Total
    
    $
    60,164,000
    
    
    $
    68,915,000
    
    
    
    7.28
    %
    
    
    6.39
    %
  Weighted-Average
    
    
    VariablePrincipal
    
    
    
    
    
    
    Interest
    
    
    or FixedProperty
    
    Outstanding
    
    
    Maturity Date
    
    
    Rate
    
    
    Interest RateConsolidated Properties:Executive Center I
    
    $
    4,590,000
    
    
    
    10/01/2009
    
    
    
    12.00
    %
    
    FixedTiffany Square
    
    
    12,395,000
    
    
    
    02/15/2010
    
    
    
    8.00
    %
    
    VariableFour Resource Square
    
    
    21,797,000
    
    
    
    03/07/2010
    
    
    
    7.25
    %
    
    VariableThe Sevens Building (1)
    
    
    21,382,000
    
    
    
    10/31/2010
    
    
    
    5.89
    %
    
    Fixed & VariableTotal consolidated mortgage loans payable
    
    $
    60,164,000Unconsolidated Properties:Executive Center II and III (2)
    
    $
    14,471,000
    
    
    
    12/28/2009
    
    
    
    3.12
    %
    
    VariableEnterprise Technology Center
    
    
    32,970,000
    
    
    
    05/11/2011
    
    
    
    6.44
    %
    
    FixedChase Tower
    
    
    67,781,000
    
    
    
    06/30/2010
    
    
    
    3.76
    %
    
    VariableTotal unconsolidated mortgage loans payable
    
    $
    115,222,000
 
 (1)
    
    Mortgage loans payable include $21,000,000 with a fixed interest rate of 5.95% and $382,000
with a variable interest rate of 2.50% as of September 30, 2009.(2)
    
    Excludes other unsecured notes payable of $2,650,000 as of September 30, 2009, which is
comprised of $1,205,000 due to TIC ownership, with a maturity date of December 28, 2009, and
$1,445,000 due to a related party, with a maturity date of January 1, 2010. These notes bear
interest at 8.00% per annum.   30




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##### Table of Contents



Payments Due by PeriodLess than
    
    
    
    
    
    
    
    
    
    
    More than1 Year
    
    
    1-3 Years
    
    
    4-5 Years
    
    
    5 Years(2009)
    
    
    (2010-2011)
    
    
    (2012-2013)
    
    
    (After 2013)
    
    
    TotalPrincipal payments  variable rate debt
    
    $
    
    
    
    $
    34,574,000
    
    
    $
    
    
    
    $
    
    
    
    $
    34,574,000Principal payments  fixed rate debt
    
    
    4,590,000
    
    
    
    21,000,000
    
    
    
    
    
    
    
    
    
    
    
    25,590,000Interest payments  variable rate debt (based on
rate in effect as of September 30, 2009)
    
    
    645,000
    
    
    
    425,000
    
    
    
    
    
    
    
    
    
    
    
    1,070,000Interest payments  fixed rate debt
    
    
    314,000
    
    
    
    1,041,000
    
    
    
    
    
    
    
    
    
    
    
    1,355,000Tenant improvement and lease commission obligations
    
    
    14,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,000$
    5,563,000
    
    
    $
    57,040,000
    
    
    $
    
    
    
    $
    
    
    
    $
    62,603,000
  Other Liquidity Needs
   Capital Resources
 General
    31




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##### Table of Contents



Off-Balance Sheet Arrangements
  Inflation
  Recently Issued Accounting Pronouncements
 Amendments to FASB Interpretation No. 46(R)
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
     32




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##### Table of Contents



Expected Maturity Date2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    Thereafter
    
    
    Total
    
    
    Fair ValueVariable rate mortgage loans payable
    
    $
    
    
    
    $
    34,574,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    34,574,000
    
    
    $
    22,832,000Weighted average interest rate on
maturing variable rate debt (based
on rates in effect as of September
30, 2009)
    
    
    
    %
    
    
    7.47
    %
    
    
    
    %
    
    
    
    %
    
    
    
    %
    
    
    
    %
    
    
    7.47
    %Fixed rate mortgage loans payable
    
    $
    4,590,000
    
    
    $
    21,000,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    25,590,000
    
    
    $
    24,100,000Weighted average interest rate on
maturing fixed rate debt
    
    
    12.00
    %
    
    
    5.95
    %
    
    
    
    %
    
    
    
    %
    
    
    
    %
    
    
    
    %
    
    
    7.04
    %
    
 Item 4. Controls and Procedures.
  
 Item 4T. Controls and Procedures.
 Evaluation of disclosure controls and procedures.
  Changes in internal control over financial reporting.
  33




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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.
   The uncertainty regarding our ability to generate the necessary cash flow to meet our
financial obligations, and the effect of other unknown adverse factors could threaten our existence
as a going concern.
   We will rely on the disposition of a number of our properties to generate cash and fund our
operations.
   34




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##### Table of Contents



Our mortgage loan payable on our Executive Center I property matured on October 1, 2009, and
we were unable to pay the outstanding principal balance and interest due under the loan which
triggered an event of default. If we are unable to enter into a forbearance agreement with the
lender, the lender may exercise their remedies under the loan agreements, including foreclosure on
the property which would have a material adverse effect on our operations and liquidity.
   If we are unable to pay the outstanding balances and all accrued interest on our mortgage
loans that mature within the next 12 months, the respective lenders may declare us in default of
the loans and exercise their remedies under the loan agreements, including foreclosure on the
properties, which could have a material adverse effect on our operating activities and cash flow.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
 Item 3. Defaults Upon Senior Securities.
   35




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##### Table of Contents



Item 4. Submission of Matters to a Vote of Security Holders.
  
 Item 5. Other Information.
  
 Item 6. Exhibits.
   36




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##### Table of Contents



SIGNATURES
  NNN 2003 Value Fund, LLC
(Registrant)November 16, 2009
    /s/ Kent W. PetersDate
    Kent W. PetersChief Executive Officer
(principal executive officer)November 16, 2009
    /s/ Michael J. RispoliDate
    Michael J. RispoliChief Financial Officer
Grubb & Ellis Realty Investors, LLC,

the Manager of NNN 2003 Value Fund, LLC

(principal financial officer)  37




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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).10.1
    
    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).10.6
    
    Temporary Extension Agreement by and among NNN VF Chase Tower, LLC et al. (Senior Borrowers)
and PSP/MRC DEBT PORTFOLIO S-1, L.P., successor-in-interest to MMA Realty Capital, LLC the
(Senior Lender) and also NNN VF Chase Tower, LLC et al. (Mezzanine Borrowers) and
Transwestern Mezzanine Realty Partners II, LLC, (Mezzanine Lender) dated June 30, 2009,
(included as Exhibit 10.1 to our Current Report on Form 8-K filed on July 6, 2009 and
incorporated herein by reference).10.7
    
    Letter Amendment to the Temporary Extension Agreement by and among NNN Chase Tower REO, LP,
NNN OF 8 Chase Tower REO, LP, ERG Chase Tower, LP and NNN VF Chase Tower RE, LP and PSP/MRC
Debt Portfolio S-1, LP, by and among NNN Chase Tower, LLC, NNN Chase Tower Member, LLC, NNN
OF 8 Chase Tower, LLC, NNN Of 8 Chase Tower Member, LLC, NNN-ERG Chase Tower GP I, LLC, ERG
Chase Tower Limited I, LP, NNN VF Chase Tower, LLC NNN VF Chase Tower Member, LLC, Grubb &
Ellis Realty Investors, LLC, NNN Opportunity Fund VIII, LLC, NNN 2003 Value Fund, LLC and
Transwestern Mezzanine Realty Partners II, LLC, dated July 10, 2009 (included as Exhibit 10.1
to our Current Report on Form 8-K filed July 14, 2009 and incorporated herein by reference)10.8
    
    Seventh Amendment to Agreement for Purchase and Sale by and among NNN VF 901 Civic, LLC, NNN
901 Civic, LLC and Robert Ko, effective July 15, 2009 (included as Exhibit 10.1 to our
Current Report on Form 8-K filed July 21, 2009 and incorporated herein by reference)10.9
    
    Loan Modification Agreement by and among NNN Chase Tower REO, LP, NNN OF 8 Chase Tower REO,
LP, ERG Chase Tower, LP and NNN VF Chase Tower RE, LP and PSP/MRC Debt Portfolio S-1, LP,
dated July 17, 2009 (included as Exhibit 10.1 to our Current Report on Form 8-K filed July
23, 2009 and incorporated herein by reference)10.10
    
    Forbearance and Modification Agreement by and among NNN Chase Tower, LLC, NNN Chase Tower
Member, LLC, NNN OF 8 Chase Tower, LLC, NNN Of 8 Chase Tower Member, LLC, NNN-ERG Chase Tower
GP I, LLC, ERG Chase Tower Limited I, LP, NNN VF Chase Tower, LLC NNN VF Chase Tower Member,
LLC, Grubb & Ellis Realty Investors, LLC, NNN Opportunity Fund VIII, LLC, Andrew Pastor,
Jeffrey S. Newberg, Kirk A. Rudy, Christopher T. Ellis, David L. Roche, and Arnold B. Miller,
NNN 2003 Value Fund, LLC and Transwestern Mezzanine Realty Partners II, LLC, dated July 17,
2009 (included as Exhibit 10.2 to our Current Report on Form 8-K filed July 23, 2009 and
incorporated herein by reference)
  38




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##### Table of Contents



ExhibitNumber
    
    Description31.1*
    
    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.**
    
    Furnished herewith.  39