----

----

| (Mark One) |                                                                                          |
|------------|-----------------------------------------------------------------------------------------------|
| R          | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  |
|       | For the quarterly period ended March 31, 2011                                                 |
| or         |
| £     | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|       | For the transition period from to                                                             |

| Maryland                                                       | 20-0138854                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
|                                                           |                                 |
| 2800 Post Oak Boulevard                                        |                                 |
| Suite 5000                                                |                                 |
| Houston, Texas                                                 | 77056-6118                           |
| (Address of principal executive offices)                       | (Zip code)                           |

|  Large accelerated filer   o |   | Accelerated Filer  o |   |
|---------------------------------------------|--------|--------------------------------|--------|

| Non-accelerated filer   x (Do not check if smaller reporting company) |   Smaller Reporting Company  o |
|---------------------------------------------------------------------------------|----------------------------------------------------|

----

----

| PART I – FINANCIAL INFORMATION               |                                                                                        |   |   |
|--------------------------------------------------------------|---------------------------------------------------------------------------------------------|--------|--------|
|                                                         |                                                                                        |   |   |
| Item 1.                                                 | Condensed Consolidated Financial Statements (Unaudited):                                    |   |   |   |
|                                                         | Condensed Consolidated Balance Sheets                                                       |   |   | 1 |   |
|                                                         | Condensed Consolidated Statements of Operations and Comprehensive Loss                      |   |   | 2 |   |
|                                                         | Condensed Consolidated Statements of Equity                                                 |   |   | 3 |   |
|                                                         | Condensed Consolidated Statements of Cash Flows                                             |   |   | 4 |   |
|                                                         | Notes to the Condensed Consolidated Financial Statements                                    |   |   | 5 |   |
| Item 2.                                                 | Management’s Discussion and Analysis of Financial Condition and Results of Operations |   |   | 22 |   |
| Item 3.                                                 | Quantitative and Qualitative Disclosures About Market Risk                                  |   |   | 31 |   |
| Item 4.                                                 | Controls and Procedures                                                                     |   |   | 31 |   |
|                                                         |                                                                                        |   |   |   |
| PART II – OTHER INFORMATION                  |                                                                                        |   |   |   |
|                                                         |                                                                                        |   |   |   |
| Item 1.                                                      | Legal Proceedings                                                                           |   |   | 32 |   |
| Item 1A.                                                     | Risk Factors                                                                                |   |   | 32 |   |
| Item 2.                                                      | Unregistered Sales of Equity Securities and Use of Proceeds                                 |   |   | 32 |   |
| Item 3.                                                      | Defaults Upon Senior Securities                                                             |   |   | 32 |   |
| Item 4.                                                      | Removed and Reserved                                                                        |   |   | 32 |   |
| Item 5.                                                      | Other Information                                                                           |   |   | 32 |   |
| Item 6.                                            | Exhibits                                                                                    |   |   | 32 |   |
|                                                         |                                                                                        |   |   |   |
| SIGNATURES                                                   |                                                                                        |   |   |   |
| Certification                                                |                                                                                        |   |   |   |
| Certification                                                |                                                                                        |   |   |   |
| Certification of CEO & CFO pursuant to Section 906  |                                                                                        |   |   |   |

----

| PART I - FINANCIAL INFORMATION                                                                                                                                                                                                   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Item 1. Condensed Consolidated Financial Statements.                                                                                                                                                                             |   |
|                                                                                                                                                                                                                             |   |
| HINES REAL ESTATE INVESTMENT TRUST, INC.                                                                                                                                                                                         |   |
| CONDENSED CONSOLIDATED BALANCE SHEETS                                                                                                                                                                                            |   |
| (UNAUDITED)                                                                                                                                                                                                                      |   |
|                                                                                                                                                                                                                             |   | March 31, |   |   | December 31, |   |
|                                                                                                                                                                                                                             |   | 2011 |   |   | 2010 |   |
|                                                                                                                                                                                                                             |   | (in thousands, except per share amounts) |   |
| ASSETS                                                                                                                                                                                                                           |   |
| Investment property, net                                                                                                                                                                                                         |   | $ | 2,208,416 |   |   | $ | 2,213,212 |   |
| Investments in unconsolidated entities                                                                                                                                                                                           |   |   | 369,456 |   |   |   | 373,798 |   |
| Cash and cash equivalents                                                                                                                                                                                                        |   |   | 58,673 |   |   |   | 64,592 |   |
| Restricted cash                                                                                                                                                                                                                  |   |   | 3,762 |   |   |   | 3,852 |   |
| Distributions receivable                                                                                                                                                                                                         |   |   | 2,470 |   |   |   | 2,236 |   |
| Tenant and other receivables                                                                                                                                                                                                     |   |   | 55,031 |   |   |   | 53,469 |   |
| Intangible lease assets, net                                                                                                                                                                                                     |   |   | 208,060 |   |   |   | 220,981 |   |
| Deferred leasing costs, net                                                                                                                                                                                                      |   |   | 110,440 |   |   |   | 101,467 |   |
| Deferred financing costs, net                                                                                                                                                                                                    |   |   | 6,912 |   |   |   | 7,401 |   |
| Other assets                                                                                                                                                                                                                     |   |   | 110,360 |   |   |   | 109,008 |   |
| TOTAL ASSETS                                                                                                                                                                                                                     |   | $ | 3,133,580 |   |   | $ | 3,150,016 |   |
|                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |
| Liabilities:                                                                                                                                                                                                                     |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |
| Accounts payable and accrued expenses                                                                                                                                                                                            |   | $ | 76,591 |   |   | $ | 81,971 |   |
| Due to affiliates                                                                                                                                                                                                                |   |   | 5,854 |   |   |   | 6,171 |   |
| Intangible lease liabilities, net                                                                                                                                                                                                |   |   | 68,293 |   |   |   | 72,465 |   |
| Other liabilities                                                                                                                                                                                                                |   |   | 16,761 |   |   |   | 17,661 |   |
| Interest rate swap contracts                                                                                                                                                                                                     |   |   | 80,105 |   |   |   | 85,301 |   |
| Participation interest liability                                                                                                                                                                                                 |   |   | 77,217 |   |   |   | 73,333 |   |
| Distributions payable                                                                                                                                                                                                            |   |   | 28,966 |   |   |   | 29,426 |   |
| Notes payable                                                                                                                                                                                                                    |   |   | 1,544,100 |   |   |   | 1,521,544 |   |
| Total liabilities                                                                                                                                                                                                                |   |   | 1,897,887 |   |   |   | 1,887,872 |   |
|                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |
| Commitments and contingencies (Note 12)                                                                                                                                                                                          |   |   |  - |   |   |   |  - |   |
|                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |
| Equity:                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |
| Preferred shares, $.001 par value; 500,000 preferred shares authorized, none issued or outstanding as of March 31, 2011 and December 31, 2010                                                                                    |   |   | - |   |   |   | - |   |
| Common shares, $.001 par value; 1,500,000 common shares authorized as of March 31, 2011 and December 31, 2010; 223,814 and 222,795 common shares issued and outstanding as of March 31, 2011 and December 31, 2010, respectively |   |   | 224 |   |   |   | 223 |   |
| Additional paid-in capital                                                                                                                                                                                                       |   |   | 1,572,406 |   |   |   | 1,590,488 |   |
| Retained deficit                                                                                                                                                                                                                 |   |   | (351,043 | ) |   |   | (340,610 | ) |
| Accumulated other comprehensive income                                                                                                                                                                                           |   |   | 14,106 |   |   |   | 12,043 |   |
| Shareholders' equity                                                                                                                                                                                                             |   |   | 1,235,693 |   |   |   | 1,262,144 |   |
| Noncontrolling interests                                                                                                                                                                                                         |   |   | - |   |   |   | - |   |
| Total equity                                                                                                                                                                                                                     |   |   | 1,235,693 |   |   |   | 1,262,144 |   |
| TOTAL LIABILITIES AND EQUITY                                                                                                                                                                                                     |   | $ | 3,133,580 |   |   | $ | 3,150,016 |   |
|                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |
| See notes to the condensed consolidated financial statements.                                                                                                                                                                    |   |

----

| HINES REAL ESTATE INVESTMENT TRUST, INC.                                                                                                                     |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS                                                                                       |   |
| For the Three Months Ended March 31, 2011 and 2010                                                                                                           |   |
| (UNAUDITED)                                                                                                                                                  |   |
|                                                                                                                                                         |   |   |   |   |   |   |
|                                                                                                                                                         |   | Three Months Ended March 31, |   |
|                                                                                                                                                         |   | 2011 |   |   | 2010 |   |
|                                                                                                                                                         |   | (In thousands, except per share amounts) |   |
| Revenues:                                                                                                                                                    |   |   |   |   |   |   |
| Rental revenue                                                                                                                                               |   | $ | 73,794 |   |   | $ | 78,004 |   |
| Other revenue                                                                                                                                                |   |   | 6,753 |   |   |   | 7,077 |   |
| Total revenues                                                                                                                                               |   |   | 80,547 |   |   |   | 85,081 |   |
| Expenses:                                                                                                                                                    |   |   |   |   |   |   |   |   |
| Property operating expenses                                                                                                                                  |   |   | 22,339 |   |   |   | 23,333 |   |
| Real property taxes                                                                                                                                          |   |   | 11,505 |   |   |   | 11,181 |   |
| Property management fees                                                                                                                                     |   |   | 1,834 |   |   |   | 1,890 |   |
| Depreciation and amortization                                                                                                                                |   |   | 25,680 |   |   |   | 27,753 |   |
| Asset management and acquisition fees                                                                                                                        |   |   | 7,643 |   |   |   | 7,655 |   |
| General and administrative                                                                                                                                   |   |   | 1,610 |   |   |   | 1,363 |   |
| Total expenses                                                                                                                                               |   |   | 70,611 |   |   |   | 73,175 |   |
| Income from continuing operations before other income (expenses), provision for income taxes and equity in losses  of unconsolidated entities, net |   |   | 9,936 |   |   |   | 11,906 |   |
| Other income (expenses):                                                                                                                                     |   |   |   |   |   |   |   |   |
| Gain (loss) on derivative instruments, net                                                                                                                   |   |   | 5,196 |   |   |   | (5,854 | ) |
| Interest expense                                                                                                                                             |   |   | (22,527 | ) |   |   | (22,732 | ) |
| Interest income                                                                                                                                              |   |   | 69 |   |   |   | 87 |   |
| Loss from continuing operations before provision for income taxes and equity in losses of unconsolidated entities, net                                       |   |   | (7,326 | ) |   |   | (16,593 | ) |
| Provision for income taxes                                                                                                                                   |   |   | (130 | ) |   |   | (114 | ) |
| Equity in losses of unconsolidated entities, net                                                                                                             |   |   | (1,826 | ) |   |   | (1,718 | ) |
| Loss from continuing operations                                                                                                                              |   |   | (9,282 | ) |   |   | (18,425 | ) |
| Income from discontinued operations, net of taxes                                                                                                            |   |   | - |   |   |   | 5,487 |   |
| Net loss                                                                                                                                                     |   |   | (9,282 | ) |   |   | (12,938 | ) |
| Less: Net income attributable to noncontrolling interests                                                                                                    |   |   | (1,151 | ) |   |   | (1,129 | ) |
| Net loss attributable to common shareholders                                                                                                                 |   | $ | (10,433 | ) |   | $ | (14,067 | ) |
| Basic and diluted loss per common share:                                                                                                                     |   |   |   |   |   |   |   |   |
| Loss per common share                                                                                                                                        |   | $ | (0.05 | ) |   | $ | (0.06 | ) |
| Weighted average number of common shares outstanding                                                                                                         |   |   | 223,814 |   |   |   | 218,666 |   |
|                                                                                                                                                         |   |   |   |   |   |   |   |   |
| Net comprehensive loss:                                                                                                                                      |   |   |   |   |   |   |   |   |
| Net loss                                                                                                                                                     |   | $ | (9,282 | ) |   | $ | (12,938 | ) |
| Other comprehensive income:                                                                                                                                  |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment                                                                                                                      |   |   | 2,063 |   |   |   | (12,864 | ) |
| Net comprehensive loss                                                                                                                                       |   |   | (7,219 | ) |   |   | (25,802 | ) |
| Net comprehensive income attributable to noncontrolling interests                                                                                            |   |   | (1,151 | ) |   |   | (1,129 | ) |
| Net comprehensive loss attributable to common shareholders                                                                                                   |   | $ | (8,370 | ) |   | $ | (26,931 | ) |
|                                                                                                                                                         |   |   |   |   |   |   |   |   |
| See notes to the condensed consolidated financial statements.                                                                                                |   |

----

| HINES REAL ESTATE INVESTMENT TRUST, INC.                      |   |
|---------------------------------------------------------------|--------|
| CONDENSED CONSOLIDATED STATEMENTS OF EQUITY                   |   |
| For the Three Months Ended March 31, 2011 and 2010            |   |
| (In thousands)                                                |   |
| (UNAUDITED)                                                   |   |
|                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                          |   | Hines Real Estate Investment Trust, Inc. |   |   |   |   |   |   |   |
|                                                          |   | Common Shares |   |   | Amount |   |   | Additional Paid-in Capital |   |   | Accumulated Deficit |   |   | Accumulated Other Comprehensive Income |   |   | Total |   |   | NoncontrollingInterests |   |
| BALANCE,January 1, 2011                                       |   |   | 222,795 |   |   | $ | 223 |   |   | $ | 1,590,488 |   |   | $ | (340,610 | ) |   | $ | 12,043 |   |   | $ | 1,262,144 |   |   | $ | - |   |
| Issuance ofcommon shares                                      |   |   | 1,339 |   |   |   | 1 |   |   |   | 12,829 |   |   |   | - |   |   |   | - |   |   |   | 12,830 |   |   |   | - |   |
| Redemption ofcommon shares                                    |   |   | (320 | ) |   |   | - |   |   |   | (3,086 | ) |   |   | - |   |   |   | - |   |   |   | (3,086 | ) |   |   | - |   |
| Distributions declared                                        |   |   | - |   |   |   | - |   |   |   | (27,815 | ) |   |   | - |   |   |   | - |   |   |   | (27,815 | ) |   |   | (1,151 | ) |
| Other offering costs, net                                     |   |   | - |   |   |   | - |   |   |   | (10 | ) |   |   | - |   |   |   | - |   |   |   | (10 | ) |   |   | - |   |
| Net income (loss)                                             |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (10,433 | ) |   |   | - |   |   |   | (10,433 | ) |   |   | 1,151 |   |
| Foreign currencytranslation adjustment                        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,063 |   |   |   | 2,063 |   |   |   | - |   |
| BALANCE                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| March 31, 2011                                                |   |   | 223,814 |   |   | $ | 224 |   |   | $ | 1,572,406 |   |   | $ | (351,043 | ) |   | $ | 14,106 |   |   | $ | 1,235,693 |   |   | $ | - |   |
|                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                          |   | Common Shares |   |   | Amount |   |   | Additional Paid-in Capital |   |   | Accumulated Deficit |   |   | Accumulated Other Comprehensive Income (Loss) |   |   | Total |   |   | NoncontrollingInterests |   |
| BALANCE,January 1, 2010                                       |   |   | 217,237 |   |   | $ | 217 |   |   | $ | 1,661,006 |   |   | $ | (300,703 | ) |   | $ | 48,408 |   |   | $ | 1,408,928 |   |   | $ | - |   |
| Issuance ofcommon shares                                      |   |   | 1,873 |   |   |   | 2 |   |   |   | 18,006 |   |   |   | - |   |   |   | - |   |   |   | 18,008 |   |   |   | - |   |
| Redemption ofcommon shares                                    |   |   | (142 | ) |   |   | - |   |   |   | (2,182 | ) |   |   | - |   |   |   | - |   |   |   | (2,182 | ) |   |   | - |   |
| Distributions declared                                        |   |   | - |   |   |   | - |   |   |   | (32,650 | ) |   |   | - |   |   |   | - |   |   |   | (32,650 | ) |   |   | (1,129 | ) |
| Selling commissionsand dealer manager fees                    |   |   | - |   |   |   | - |   |   |   | (118 | ) |   |   | - |   |   |   | - |   |   |   | (118 | ) |   |   | - |   |
| Net income (loss)                                             |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (14,067 | ) |   |   | - |   |   |   | (14,067 | ) |   |   | 1,129 |   |
| Foreign currencytranslation adjustment                        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (3,012 | ) |   |   | (3,012 | ) |   |   | - |   |
| Foreign currencytranslation adjustment included in income     |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (9,852 | ) |   |   | (9,852 | ) |   |   | - |   |
| BALANCE                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| March 31, 2010                                                |   |   | 218,968 |   |   | $ | 219 |   |   | $ | 1,644,062 |   |   | $ | (314,770 | ) |   | $ | 35,544 |   |   | $ | 1,365,055 |   |   | $ | - |   |
|                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See notes to the condensed consolidated financial statements. |   |

----

| HINES REAL ESTATE INVESTMENT TRUST, INC.                                            |   |
|-------------------------------------------------------------------------------------|--------|
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                                     |   |
| For the Three Months Ended March 31, 2011 and 2010                                  |   |
| (UNAUDITED)                                                                         |   |
|                                                                                |   |
|                                                                                |   |   |   |   |   |   |
|                                                                                |   | 2011 |   |   | 2010 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                               |   | (In thousands) |   |
| Net loss                                                                            |   | $ | (9,282 | ) |   | $ | (12,938 | ) |
| Adjustments to reconcile net loss to cash from operating activities:                |   |   |   |   |   |   |   |   |
| Depreciation and amortization                                                       |   |   | 26,973 |   |   |   | 28,488 |   |
| Gain on sale of investment property                                                 |   |   | - |   |   |   | (4,225 | ) |
| Equity in losses of unconsolidated entities                                         |   |   | 1,826 |   |   |   | 1,718 |   |
| Distributions received from unconsolidated entities                                 |   |   | 830 |   |   |   | - |   |
| (Gain) loss on derivative instruments, net                                          |   |   | (5,196 | ) |   |   | 5,854 |   |
| Net change in operating accounts                                                    |   |   | (19,193 | ) |   |   | (21,304 | ) |
| Net cash from operating activities                                                  |   |   | (4,042 | ) |   |   | (2,407 | ) |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                               |   |   |   |   |   |   |   |   |
| Distributions received from unconsolidated entities in excess of equity in earnings |   |   | 2,195 |   |   |   | 2,208 |   |
| Investments in property                                                             |   |   | (1,818 | ) |   |   | (1,361 | ) |
| Proceeds from sale of land and improvements                                         |   |   | - |   |   |   | 35,025 |   |
| Change in restricted cash                                                           |   |   | 89 |   |   |   | 2,550 |   |
| Net cash from investing activities                                                  |   |   | 466 |   |   |   | 38,422 |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                               |   |   |   |   |   |   |   |   |
| Change in other liabilities                                                         |   |   | 254 |   |   |   | 13 |   |
| Proceeds from issuance of common stock                                              |   |   | - |   |   |   | 1,554 |   |
| Redemption of common shares                                                         |   |   | (2,929 | ) |   |   | (1,301 | ) |
| Payments of selling commissions and dealer manager fees                             |   |   | - |   |   |   | (166 | ) |
| Payment of organizational and offering expenses                                     |   |   | (19 | ) |   |   | - |   |
| Distributions paid to shareholders and noncontrolling interests                     |   |   | (16,596 | ) |   |   | (17,199 | ) |
| Proceeds from notes payable                                                         |   |   | 17,500 |   |   |   | 94,000 |   |
| Payments on notes payable                                                           |   |   | (553 | ) |   |   | (94,281 | ) |
| Additions to deferred financing costs                                               |   |   | (186 | ) |   |   | (1,352 | ) |
| Net cash from financing activities                                                  |   |   | (2,529 | ) |   |   | (18,732 | ) |
| Effect of exchange rate changes on cash                                             |   |   | 186 |   |   |   | 13 |   |
| Net change in cash and cash equivalents                                             |   |   | (5,919 | ) |   |   | 17,296 |   |
| Cash and cash equivalents, beginning of period                                      |   |   | 64,592 |   |   |   | 41,577 |   |
| Cash and cash equivalents, end of period                                            |   | $ | 58,673 |   |   | $ | 58,873 |   |
|                                                                                |   |   |   |   |   |   |   |   |
| See notes to the condensed consolidated financial statements.                       |   |

----

----

----

|                                      |   |   | March 31, 2011      |   |   | December 31, 2010   |   |
|-------------------------------------------|--------|--------|---------------------|--------|--------|---------------------|--------|
| Prepaid insurance                         |   | $      |  273      |   | $      |  911      |   |
| Prepaid/deferred taxes                    |   |   | 3,009          | (1)    |   |  994      |   |
| Cash collateral for HSH mortgage facility |   |   | 106,291        | (2)    |   |  106,251  | (2)    |
| Other                                     |   |   | 787            |   |   |  852      |   |
| Total                                     |   | $      |  110,360  |   | $      |  109,008  |   |

| (1)   |  At March 31, 2011 prepaid/deferred taxes consist primarily of prepaid property taxes.                                                                                                                                                                                                                                                                                                              |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            |                                                                                                                                                                                                                                                                                                                                                                                                     |
| (2)   | During the fourth quarter of 2009, the Company made collateral payments totaling $106.1 million to HSH Nordbank in order to rebalance the collateral for the properties under the Company’s pooled mortgage facility. The increase in the cash collateral since that time is due to interest earned on these payments, which accrue to the Company and is reflected as an increase in the balance. |

----

----

| Property                            |   | City                       |   | Date Acquired          |   | Leasable Square Feet   |   | Percent Leased |   | Effective Ownership (1) |
|-------------------------------------|--------|----------------------------|--------|------------------------|--------|------------------------|--------|----------------|--------|-------------------------|
| Directly-owned Properties           |   |                       |   |                   |   |                   |   |           |
| 321 North Clark                     |   | Chicago, Illinois          |   | 04/2006                |   |  888,837     |   | 75%            |   | 100%                    |
| Citymark                            |   | Dallas, Texas              |   | 08/2005                |   |  219,117     |   | 84%            |   | 100%                    |
| 4050/4055 Corporate Drive           |   | Dallas, Texas              |   | 05/2008                |   |  643,429     |   | 100%           |   | 100%                    |
| JPMorgan Chase Tower                |   | Dallas, Texas              |   | 11/2007                |   |  1,252,019   |   | 88%            |   | 100%                    |
| 345 Inverness Drive                 |   | Denver, Colorado           |   | 12/2008                |   |  175,287     |   | 78%            |   | 100%                    |
| Arapahoe Business Park              |   | Denver, Colorado           |   | 12/2008                |   |  309,450     |   | 88%            |   | 100%                    |
| Raytheon/DIRECTV Buildings          |   | El Segundo, California     |   | 03/2008                |   |  550,579     |   | 100%           |   | 100%                    |
| 2100 Powell                         |   | Emeryville, California     |   | 12/2006                |   |  344,433     |   | 100%           |   | 100%                    |
| Williams Tower                      |   | Houston, Texas             |   | 05/2008                |   |  1,479,764   |   | 87%            |   | 100%                    |
| 2555 Grand                          |   | Kansas City, Missouri      |   | 02/2008                |   |  595,607     |   | 100%           |   | 100%                    |
| One Wilshire                        |   | Los Angeles, California    |   | 08/2007                |   |  661,553     |   | 95%            |   | 100%                    |
| 3 Huntington Quadrangle             |   | Melville, New York         |   | 07/2007                |   |  407,912     |   | 52%            |   | 100%                    |
| Airport Corporate Center            |   | Miami, Florida             |   | 01/2006                |   |  1,018,428   |   | 83%            |   | 100%                    |
| Minneapolis Office/Flex Portfolio   |   | Minneapolis, Minnesota     |   | 09/2007                |   |  767,859     |   | 86%            |   | 100%                    |
| 3400 Data Drive                     |   | Rancho Cordova, California |   | 11/2006                |   |  149,703     |   | 100%           |   | 100%                    |
| Daytona Buildings                   |   | Redmond, Washington        |   | 12/2006                |   |  251,313     |   | 100%           |   | 100%                    |
| Laguna Buildings                    |   | Redmond, Washington        |   | 01/2007                |   |  460,661     |   | 85%            |   | 100%                    |
| 1515 S Street                       |   | Sacramento, California     |   | 11/2005                |   |  349,740     |   | 99%            |   | 100%                    |
| 1900 and 2000 Alameda               |   | San Mateo, California      |   | 06/2005                |   |  254,145     |   | 91%            |   | 100%                    |
| Seattle Design Center               |   | Seattle, Washington        |   | 06/2007                |   |  390,684     |   | 74%            |   | 100%                    |
| 5th and Bell                        |   | Seattle, Washington        |   | 06/2007                |   |  197,135     |   | 91%            |   | 100%                    |
| Atrium on Bay                       |   | Toronto, Ontario           |   | 02/2007                |   |  1,077,496   |   | 98%            |   | 100%                    |
| Total for Directly-Owned Properties |   |                       |   |                   |   |  12,445,151  |   | 89%            |   |                    |
|                                |   |                       |   |                   |   |                   |   |           |   |                    |
| Indirectly-owned Properties         |   |                       |   |                   |   |                   |   |           |
|                                |   |                       |   |                   |   |                   |   |           |   |                    |
| Core Fund Properties                |   |                       |   |                   |   |                   |   |           |
| One Atlantic Center                 |   | Atlanta, Georgia           |   | 07/2006                |   |  1,100,312   |   | 90%            |   | 22%                     |
| The Carillon Building               |   | Charlotte, North Carolina  |   | 07/2007                |   |  472,222     |   | 85%            |   | 22%                     |
| Charlotte Plaza                     |   | Charlotte, North Carolina  |   | 06/2007                |   |  625,026     |   | 89%            |   | 22%                     |
| One North Wacker                    |   | Chicago, Illinois          |   | 03/2008                |   |  1,373,754   |   | 94%            |   | 22%                     |
| Three First National Plaza          |   | Chicago, Illinois          |   | 03/2005                |   |  1,423,515   |   | 92%            |   | 18%                     |
| 333 West Wacker                     |   | Chicago, Illinois          |   | 04/2006                |   |  855,056     |   | 75%            |   | 18%                     |
| One Shell Plaza                     |   | Houston, Texas             |   | 05/2004                |   |  1,230,395   |   | 99%            |   | 11%                     |
| Two Shell Plaza                     |   | Houston, Texas             |   | 05/2004                |   |  565,573     |   | 97%            |   | 11%                     |
| 425 Lexington Avenue                |   | New York, New York         |   | 08/2003                |   |  700,034     |   | 100%           |   | 11%                     |
| 499 Park Avenue                     |   | New York, New York         |   | 08/2003                |   |  291,515     |   | 94%            |   | 11%                     |
| Renaissance Square                  |   | Phoenix, Arizona           |   | 12/2007                |   |  965,508     |   | 83%            |   | 22%                     |
| Riverfront Plaza                    |   | Richmond, Virginia         |   | 11/2006                |   |  951,616     |   | 97%            |   | 22%                     |
| Johnson Ranch Corporate Centre      |   | Roseville, California      |   | 05/2007                |   |  179,990     |   | 42%            |   | 18%                     |
| Roseville Corporate Center          |   | Roseville, California      |   | 05/2007                |   |  111,418     |   | 51%            |   | 18%                     |
| Summit at Douglas Ridge             |   | Roseville, California      |   | 05/2007                |   |  185,128     |   | 74%            |   | 18%                     |
| Olympus Corporate Centre            |   | Roseville, California      |   | 05/2007                |   |  193,178     |   | 51%            |   | 18%                     |
| Douglas Corporate Center            |   | Roseville, California      |   | 05/2007                |   |  214,606     |   | 84%            |   | 18%                     |
| Wells Fargo Center                  |   | Sacramento, California     |   | 05/2007                |   |  502,365     |   | 96%            |   | 18%                     |
| 525 B Street                        |   | San Diego, California      |   | 08/2005                |   |  449,180     |   | 95%            |   | 22%                     |
| The KPMG Building                   |   | San Francisco, California  |   | 09/2004                |   |  379,328     |   | 88%            |   | 22%                     |
| 101 Second Street                   |   | San Francisco, California  |   | 09/2004                |   |  388,370     |   | 83%            |   | 22%                     |
| 720 Olive Way                       |   | Seattle, Washington        |   | 01/2006                |   |  300,710     |   | 84%            |   | 18%                     |
| 1200 19th Street                    |   | Washington, D.C.           |   | 08/2003                |   |  337,486     |   | 83%            |   | 11%                     |
| Warner Center                       |   | Woodland Hills, California |   | 10/2006                |   |  808,274     |   | 89%            |   | 18%                     |
| Total for Core Fund Properties      |   |                       |   |  14,604,559  |   | 89%                    |   |           |

----

| Property                             |   | City                        |   | Date Acquired          |   | Leasable Square Feet |   | Percent Leased |   | Effective Ownership (1) |
|--------------------------------------|--------|-----------------------------|--------|------------------------|--------|----------------------|--------|----------------|--------|-------------------------|
|                                 |   |                        |   |                   |   |                 |   |           |   |                    |
| Indirectly-owned Properties          |   |                        |   |                   |   |                 |   |           |
|                                 |   |                        |   |                   |   |                 |   |           |   |                    |
| Grocery-Anchored Portfolio           |   |                        |   |                   |   |                 |   |           |
| Cherokee Plaza                       |   | Atlanta, Georgia            |   | 11/2008                |   |  99,749    |   | 100%           |   | 70%                     |
| Bellaire Boulevard Center            |   | Bellaire, Texas             |   | 11/2008                |   |  35,081    |   | 100%           |   | 70%                     |
| Thompson Bridge Commons              |   | Gainesville, Georgia        |   | 03/2009                |   |  92,587    |   | 93%            |   | 70%                     |
| Champions Village                    |   | Houston, Texas              |   | 11/2008                |   |  384,581   |   | 87%            |   | 70%                     |
| King's Crossing                      |   | Kingwood, Texas             |   | 11/2008                |   |  126,397   |   | 100%           |   | 70%                     |
| Sandy Plains Exchange                |   | Marietta, Georgia           |   | 02/2009                |   |  72,784    |   | 95%            |   | 70%                     |
| Commons at Dexter Lakes              |   | Memphis, Tennessee          |   | 11/2008                |   |  228,496   |   | 91%            |   | 70%                     |
| Mendenhall Commons                   |   | Memphis, Tennessee          |   | 11/2008                |   |  79,871    |   | 98%            |   | 70%                     |
| University Palms Shopping Center     |   | Oviedo, Florida             |   | 11/2008                |   |  99,172    |   | 91%            |   | 70%                     |
| Shoppes at Parkland                  |   | Parkland, Florida           |   | 03/2009                |   |  145,652   |   | 96%            |   | 70%                     |
| Oak Park Village                     |   | San Antonio, Texas          |   | 11/2008                |   |  64,287    |   | 100%           |   | 70%                     |
| Heritage Station                     |   | Wake Forest, North Carolina |   | 01/2009                |   |  68,641    |   | 98%            |   | 70%                     |
| Total for Grocery-Anchored Portfolio |   |                        |   |  1,497,298   |   | 93%                  |   |           |
|                                 |   |                        |   |                   |   |                 |   |           |   |                    |
| Other                                |   |                        |   |                   |   |                 |   |           |
| Distribution Park Rio                |   | Rio de Janeiro, Brazil      |   | 07/2007                |   |  693,115   |   | 100%           |   | 50%                     |
| Total for All Properties             |   |                        |   |  29,240,123  |   | 89%                  | (2)    |           |

| (1)    | This percentage shows the effective ownership of the Operating Partnership in the properties listed. On March 31, 2011, Hines REIT owned a 95.9% interest in the Operating Partnership as its sole general partner. Affiliates of Hines owned the remaining 4.1% interest in the Operating Partnership. In addition, the Company owned an approximate 26.8% non-managing general partner interest in the Core Fund as of March 31, 2011. The Core Fund does not own 100% of these properties; its ownership interest in its properties ranges from 40.6% to 83.0%. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (2)    | This amount represents the percentage leased assuming the Company owns a 100% interest in each of these properties.  The percentage leased based on the Company’s effective ownership interest in each property is 89%.                                                                                                                                                                                                                                                                                                                            |

|                            |   | March 31, 2011 |      |   | December 31, 2010 |   |
|---------------------------------|--------|----------------|-----------|--------|-------------------|--------|
| Buildings and improvements      |   | $              | 1,960,516 |   |              | $      | 1,953,741 |   |
| Less: accumulated depreciation  |   |           | (189,325  | )      |              |   | (176,263 | ) |
| Buildings and improvements, net |   |           | 1,771,191 |   |              |   | 1,777,478 |   |
| Land                            |   |           | 437,225   |   |              |   | 435,734 |   |
| Investment property, net        |   | $              | 2,208,416 |   |              | $      | 2,213,212 |   |

----

|    Lease Intangibles                                                                                                                              |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                             |   |   |   |   |   |   |   |   |
|      As of March 31, 2011, the cost basis and accumulated amortization related to lease intangibles was as follows (in thousands): |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |

|                           | Lease Intangibles |   |
|--------------------------------|-------------------|--------|
|                           | In-Place Leases   |   | Out-of-Market Lease Assets |   | Out-of-Market Lease Liabilities |   |
| Cost                           | $            |   | 356,062 |   | $  |   | 57,558 |   | $  |   | 130,277 |   |
| Less: accumulated amortization |              |   | (179,919 | ) |   |   | (25,641 | ) |   |   | (61,984 | ) |
| Net                            | $            |   | 176,143 |   | $  |   | 31,917 |   | $  |   | 68,293 |   |

|                           | Lease Intangibles |     |
|--------------------------------|-------------------|----------|
|                           | In-Place Leases   |     | Out-of-Market Lease Assets |   | Out-of-Market Lease Liabilities |   |
| Cost                           | $                 | 361,367  |   | $ |  57,637 |   | $ |  130,892 |   |
| Less: accumulated amortization |              | (173,860 | ) |   | (24,163 | ) |   | (58,427 | ) |
| Net                            | $                 | 187,507  |   | $ | 33,474 |   | $ | 72,465 |   |

|                              |   | In-Place Leases |   |   | Out-of-Market Leases, Net |   |
|-----------------------------------|--------|-----------------|--------|--------|---------------------------|--------|
| April 1 through December 31, 2011 |   | $               | 30,760 |   |                      | $      | (6,935 | ) |
| 2012                         |   |            | 33,234 |   |                      |   | (8,737 | ) |
| 2013                         |   |            | 27,141 |   |                      |   | (8,408 | ) |
| 2014                         |   |            | 20,552 |   |                      |   | (5,258 | ) |
| 2015                         |   |            | 18,380 |   |                      |   | (4,166 | ) |

|                              |   | Fixed Future Minimum Rentals |      |
|-----------------------------------|--------|------------------------------|-----------|
| April 1 through December 31, 2011 |   | $                            | 162,701   |   |
| 2012                         |   |                         | 202,223   |   |
| 2013                         |   |                         | 169,857   |   |
| 2014                         |   |                         | 142,728   |   |
| 2015                         |   |                         | 132,717   |   |
| Thereafter                        |   |                         | 475,550   |   |
| Total                             |   | $                            | 1,285,776 |   |

----

|                                                                                                                                                                       | Three Months Ended March 31,             |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------|--------|
|                                                                                                                                                                       | 2011                                     |   | 2010 |   |
|                                                                                                                                                                       | (In thousands, except per share amounts) |   |
| Revenues:                                                                                                                                                                  |                                     |   |   |   |   |   |
| Rental revenue                                                                                                                                                             |                                     | $      | - |   |   | $ | 3,109 |   |
| Other revenue                                                                                                                                                              |                                     |   | - |   |   |   | - |   |
| Total revenues                                                                                                                                                             |                                     |   | - |   |   |   | 3,109 |   |
| Expenses:                                                                                                                                                                  |                                     |   |   |   |   |   |   |   |
| Property operating expenses                                                                                                                                                |                                     |   | - |   |   |   | 67 |   |
| Real property taxes                                                                                                                                                        |                                     |   | - |   |   |   | 265 |   |
| Property management fees                                                                                                                                                   |                                     |   | - |   |   |   | 36 |   |
| Depreciation and amortization                                                                                                                                              |                                     |   | - |   |   |   | 1,123 |   |
| Total expenses                                                                                                                                                             |                                     |   | - |   |   |   | 1,491 |   |
| Income from discontinued operations before interest income, taxes and gain on sale                                                                                    |                                     |   | - |   |   |   | 1,618 |   |
| Interest income                                                                                                                                                            |                                     |   | - |   |   |   | 67 |   |
| Income taxes                                                                                                                                                               |                                     |   | - |   |   |   | (423 | ) |
| Income from discontinued operations before gain on sale                                                                                                                    |                                     |   | - |   |   |   | 1,262 |   |
| Gain on sale of property                                                                                                                                                   |                                     |   | - |   |   |   | 4,225 |   |
| Income from discontinued operations                                                                                                                                        |                                     | $      | - |   |   | $ | 5,487 |   |
|                                                                                                                                                                       |                                     |   |   |   |   |   |   |   |
| The tables below show income (loss) and earnings (loss) per share attributable to common shareholders allocated between continuing operations and discontinued operations: |                                     |
|                                                                                                                                                                       |                                     |   |   |   |   |   |   |   |
| Loss from continuing operations attributable                                                                                                                               |                                     |   |   |   |   |   |   |   |
| to common shareholders                                                                                                                                                     |                                     | $      | (10,433 | ) |   | $ | (19,371 | ) |
| Income from discontinued operations attributable                                                                                                                      |                                     |   |   |   |   |   |   |   |
| to common shareholders                                                                                                                                                     |                                     |   | - |   |   |   | 5,304 |   |
| Net loss attributable to common shareholders                                                                                                                               |                                     | $      | (10,433 | ) |   | $ | (14,067 | ) |
|                                                                                                                                                                       |                                     |   |   |   |   |   |   |   |
| Basic and diluted earnings (loss) per share attributable                                                                                                                   |                                     |   |   |   |   |   |   |   |
| to common shareholders                                                                                                                                                     |                                     |   |   |   |   |   |   |   |
| Loss from continuing operations                                                                                                                                            |                                     | $      | (0.05 | ) |   | $ | (0.09 | ) |
| Income from discontinued operations                                                                                                                                        |                                     | $      | - |   |   | $ | 0.02 |   |

|                    |                         |   |    |   |   |   |
|-------------------------|------------------------------|--------|---------|--------|--------|--------|
|                    | Three Months Ended March 31, |   |
|                    | 2011                         |   | 2010    |   |
| Beginning balance       |                         | $      | 373,798 |   |   | $      | 379,057 |   |
| Distributions declared  |                         |   | (3,259  | )      |   |   | (3,342 | ) |
| Equity in losses        |                         |   | (1,826  | )      |   |   | (1,718 | ) |
| Effect of exchange rate |                         |   | 743     |   |   |   | (677 | ) |
| Ending balance          |                         | $      | 369,456 |   |   | $      | 373,320 |   |

----

| Period            |   | Investment in Grocery-Anchored Portfolio (1) |   |   | Maximum Risk of Loss |   |
|-------------------|--------|----------------------------------------------|--------|--------|----------------------|--------|
| March 31, 2011    |   | $                                            | 64,592 |   |                 | $      | 64,592 |   |
| December 31, 2010 |   | $                                            | 66,123 |   |                 | $      | 66,123 |   |

| (1)   | Represents the carrying amount of the investment in the Grocery-Anchored Portfolio, which includes the net effect of contributions made, distributions received and the Company’s share of equity in earnings. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                |   | March 31, 2011 |      |   | December 31, 2010 |
|-------------------------------------|--------|----------------|-----------|--------|-------------------|
|                                |   | (In thousands) |
| ASSETS                              |   |           |      |   |              |
| Cash                                |   | $              | 111,222   |   |              | $ | 131,353 |
| Investment property, net            |   |           | 3,250,998 |   |              |   | 3,265,193 |
| Other assets                        |   |           | 788,834   |   |              |   | 725,498 |
| Total Assets                        |   | $              | 4,151,054 |   |              | $ | 4,122,044 |
|                                |   |           |      |   |              |   |   |
| LIABILITIES AND EQUITY              |   |           |      |   |              |   |   |
| Debt                                |   | $              | 2,452,395 |   |              | $ | 2,463,920 |
| Other liabilities                   |   |           | 316,637   |   |              |   | 260,922 |
| Redeemable noncontrolling interests |   |           | 450,838   |   |              |   | 454,036 |
| Partners' equity                    |   |           | 931,184   |   |              |   | 943,166 |
| Total Liabilities and Equity        |   | $              | 4,151,054 |   |              | $ | 4,122,044 |

|                                                  |   | Three Months Ended March 31, |     |
|-------------------------------------------------------|--------|------------------------------|----------|
|                                                  |   | 2011                         |     | 2010 |
|                                                  |   | (In thousands)               |     |
| Revenues, other income and interest income            |   | $                            | 117,455  |   | $ | 122,268 |   |
| Property operating expenses                           |   |                         | (55,708) |   |   | (57,280) |   |
| Interest expense                                      |   |                         | (33,295) |   |   | (33,336) |   |
| Depreciation and amortization                         |   |                         | (37,735) |   |   | (41,778) |   |
| Income tax expense                                    |   |                         | (107)    |   |   | (90) |   |
| Income from discontinued operations                   |   |                         | —  |   |   | 993 |   |
| Loss allocated to redeemable noncontrolling interests |   |                         | 777      |   |   | 1,228 |   |
| Net loss                                              |   | $                            | (8,613)  |   | $ | (7,995) |   |

----

|                         |   | March 31, 2011 |   |   | December 31, 2010 |
|------------------------------|--------|----------------|--------|--------|-------------------|
|                         |   | (In thousands) |
| ASSETS                       |   |           |   |   |              |
| Cash                         |   | $              | 76     |   |              | $ | 55 |
| Investment property, net     |   |           | 64,730 |   |              |   | 62,476 |
| Other assets                 |   |           | 1,608  |   |              |   | 2,505 |
| Total Assets                 |   | $              | 66,414 |   |              | $ | 65,036 |
|                         |   |           |   |   |              |   |   |
| LIABILITIES AND EQUITY       |   |           |   |   |              |   |   |
| Total liabilities            |   | $         | 540    |   |              | $ | 378 |
| Partners' equity             |   |           | 65,874 |   |              |   | 64,658 |
| Total Liabilities and Equity |   | $              | 66,414 |   |              | $ | 65,036 |

|                               |   | Three Months Ended March 31, |
|------------------------------------|--------|------------------------------|
|                               |   | 2011                         |   | 2010 |
|                               |   | (In thousands)               |
| Total revenues and interest income |   | $                            | 2,253 |   | $ | 2,365 |
| Total expenses                     |   |                         | (1,107) |   |   | (962) |
| Net income                         |   | $                            | 1,146 |   | $ | 1,403 |

|                         |   | March 31, 2011 |    |   | December 31, 2010 |
|------------------------------|--------|----------------|---------|--------|-------------------|
|                         |   | (In thousands) |
| ASSETS                       |   |           |    |   |              |
| Cash                         |   | $              | 4,300   |   |              | $ | 2,454 |
| Investment property, net     |   |           | 167,193 |   |              |   | 167,909 |
| Other assets                 |   |           | 23,206  |   |              |   | 27,701 |
| Total Assets                 |   | $              | 194,699 |   |              | $ | 198,064 |
|                         |   |           |    |   |              |   |   |
| LIABILITIES AND EQUITY       |   |           |    |   |              |   |   |
| Debt                         |   | $              | 127,060 |   |              | $ | 127,334 |
| Other liabilities            |   |           | 5,921   |   |              |   | 7,335 |
| Members' equity              |   |           | 61,718  |   |              |   | 63,395 |
| Total Liabilities and Equity |   | $              | 194,699 |   |              | $ | 198,064 |

|                               |   | Three Months Ended March 31, |
|------------------------------------|--------|------------------------------|
|                               |   | 2011                         |   | 2010 |
|                               |   | (In thousands)               |
| Total revenues and interest income |   | $                            | 6,001 |   | $ | 6,200 |
| Total expenses                     |   |                         | (5,490) |   |   | (5,701) |
| Net income                         |   | $                            | 511 |   | $ | 499 |

----

| Description                                                                  |  Maturity Date |   | Interest Rate |           |    | Principal Outstanding at March 31,  2011 |   |               | Principal Outstanding at December 31, 2010 |
|------------------------------------------------------------------------------|---------------------|--------|---------------|----------------|---------|----------------------------------------------------|--------|--------------------|-------------------------------------------------|
| SECURED MORTGAGE DEBT                                                        |                |   |          |           |    |                                               |   |               |                                            |
| Wells Fargo Bank, N.A. — Airport Corporate Center                      | 3/11/2012           |   |          | Variable       |    |                                               | $      |   64,283 |                                            |   | $ | 64,454 |
| Metropolitan Life Insurance Company — 1515 S. Street    | 8/1/2011            |   |          | 5.680          | %       |                                               |   | 45,000             |                                            |   |   | 45,000 |
| Capmark Finance, Inc. — Atrium on Bay                             | 2/26/2017           |   |          | 5.330          | %       |                                               |   |  195,377      | (1)                                             |   |   | 190,019 |
| The Prudential Insurance Company of America — One Wilshire        | 11/1/2012           |   |          | 5.980          | %       |                                               |   | 159,500            |                                            |   |   | 159,500 |
| IXIS Real Estate Capital Inc. – Raytheon/ DIRECTV Buildings            | 12/5/2016           |   |          | 5.675          | %       |                                               |   |  51,851       |                                            |   |   | 52,069 |
| New York State Teachers’ Retirement System – 2555 Grand          | 5/1/2013            |   |          | 5.375          | %       |                                               |   | 86,000             |                                            |   |   | 86,000 |
| New York State Teachers’ Retirement System – Williams Tower      | 6/1/2013            |   |          | 5.500          | %       |                                               |   | 165,000            |                                            |   |   | 165,000 |
| Artesia Mortgage Capital Corporation –  345 Inverness Drive  | 12/11/2016          |   |          | 5.850          | %       |                                               |   |   15,267 |                                            |   |   | 15,317 |
| Artesia Mortgage Capital Corporation – Arapahoe Business Park I        | 6/11/2015           |   |          | 5.330          | %       |                                               |   |  9,654        |                                            |   |   | 9,687 |
| Artesia Mortgage Capital Corporation – Arapahoe Business Park II       | 11/11/2015          |   |          | 5.530          | %       |                                               |   |  10,176       |                                            |   |   | 10,215 |
| HSH POOLED MORTGAGE FACILITY                                            |                |   |          |           |    |                                               |   |               |                                            |   |   |   |
| HSH Nordbank — Citymark, 321 North Clark, 1900 and 2000 Alameda   | 8/1/2016            |   |          | 5.8575         | %  |                                               |   |  185,000      |                                            |   |   | 185,000 |
| HSH Nordbank — 3400 Data Drive, Watergate Tower IV                | 1/12/2017           |   |          |  5.2505   | %  |                                               |   |  98,000       |                                            |   |   |  98,000 |
| HSH Nordbank — Daytona and Laguna Buildings                       |  5/2/2017      |   |          |  5.3550   | %  |                                               |   |  119,000      |                                            |   |   |  119,000 |
| HSH Nordbank — 3 Huntington Quadrangle                            |  7/19/2017     |   |          |  5.9800   | %  |                                               |   |  48,000       |                                            |   |   |  48,000 |
| HSH Nordbank — Seattle Design Center/5th and Bell                 | 8/14/2017           |   |          |  6.0300   | %  |                                               |   |  70,000       |                                            |   |   |  70,000 |
| MET LIFE SECURED MORTGAGE FACILITY                                           |                |   |          |           |    |                                               |   |               |                                            |   |   |   |
| Met Life — JPMorgan Chase Tower/Minneapolis Office/Flex Portfolio | 1/1/2013            |   |          |  5.70     | %  |                                               |   |  205,000      |                                            |   |   |  205,000 |
| OTHER NOTES PAYABLE                                                     |                |   |          |           |    |                                               |   |               |                                            |   |   |   |
| KeyBank Revolving Credit Facility                                            | 8/3/2011            |   |          |  Variable |    |                                               |   |   17,500 | (2)                                        |   |   | — |
| Atrium Note Payable                                                          |  10/1/2011     |   |          |  7.390    | %  |                                               |   |   2,935  | (1)                                             |   |   |  2,896 |
| TOTAL PRINCIPAL OUTSTANDING                                                  |                |   |          |           |    |                                               |   | 1,547,543          |                                            |   |   | 1,525,157 |
| Unamortized Discount (3)                                                     |                |   |          |           |    |                                               |   |  (3,443)      |                                            |   |   | (3,613) |
| NOTES PAYABLE                                                                |                |   |          |           |    |                                               | $      |  1,544,100    |                                            |   | $ |  1,521,544 |

| (1)    | The Company entered into notes payable in connection with its acquisition of Atrium on Bay. The notes are denominated in Canadian dollars and translated into U.S. dollars based on the exchange rate at the end of each period.                                                                                                                                                                                                                                                                      |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| (2)    | The Company entered into a new $45.0 million revolving line of credit with KeyBank pursuant to a Credit Agreement dated February 3, 2011 and a Promissory Note dated February 3, 2011.  The facility matures August 3, 2011, subject to extension at the Company’s election for an additional six month period. Interest at the Company’s election, will be determined based on (i) the Prime Rate, (ii) the Federal Funds Rate or (iii) LIBOR plus a margin of at least 3.25%. |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| (3)    | The Company assumed notes payable in connection with various acquisitions, which were recorded at their estimated fair value as of the date of acquisition. The difference between the fair value at acquisition and the principal outstanding is amortized over the term of the related note.                                                                                                                                                                                                        |   |

----

|          | Principal Payments due by Period |   |
|---------------|----------------------------------|--------|
|          | 2011                             |   |   | 2012 |   |   | 2013 |   |   | 2014 |   |   | 2015 |   |   | Thereafter |   |
| Notes Payable | $                                | 66,945 |   |   | $ | 224,638 |   |   | $ | 457,480 |   |   | $ | 3,820 |   |   | $ | 22,833 |   |   | $ | 771,827 |   |

|                                                                             |   | Liability Derivatives Fair Value |     |
|----------------------------------------------------------------------------------|--------|----------------------------------|----------|
|  Derivatives not designated as hedging instruments for accounting purposes: |   | March 31, 2011                   |     |   | December 31, 2010 |
| Interest rate swap contracts                                                     |   | $                                | (80,105) |   |   | $ | (85,301) |   |
| Total derivatives                                                                |   | $                                | (80,105) |   |   | $ | (85,301) |   |

|                                  | Three Months Ended March 31, |    |
|---------------------------------------|------------------------------|---------|
|                                  | 2011                         |    | 2010 |   |
| Gain (loss) on interest rate swap (1) | $                            | 5,196   |   | $ | (5,854 | ) |
| Loss on foreign currency swap (2)     |                         | — |   |   | (110 | ) |
| Total                                 | $                            | 5,196   |   | $ | (5,964 | ) |

| (1)    | Amounts represent the gain (loss) on interest rate swaps due to changes in fair value and are recorded in gain (loss) on derivative instruments, net in the condensed consolidated statements of operations.                  |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                          |
| (2)    | Amount represents the loss on the Company’s foreign currency swap described above. This amount is recorded in income from discontinued operations, net of taxes in the condensed consolidated statements of operations. |

----

|                                     |   | Shareholders       |   | Noncontrolling Interests |
|------------------------------------------|--------|--------------------|--------|--------------------------|
| Distributions for the Three Months Ended |   | Cash Distributions |   | Distributions Reinvested |   | Total Declared |   |  Total Declared |
|                                     |   |               |   |                     |   |   |   |   |   |   |   |   |
| 2011                                     |   |               |   |                     |   |   |   |   |   |   |   |   |
| March 31, 2011                           |   | $                  | 15,491 |                     | $ | 12,324 |   | $ | 27,815 |   | $ | 1,151 |
|                                     |   |               |   |                     |   |   |   |   |   |   |   |   |
| 2010                                     |   |               |   |                     |   |   |   |   |   |   |   |   |
| December 31, 2010                        |   | $                  | 15,473 |                     | $ | 12,830 |   | $ | 28,303 |   | $ | 1,123 |
| September 30, 2010                       |   | $                  | 14,986 |                     | $ | 13,172 |   | $ | 28,158 |   | $ | 1,067 |
| June 30, 2010                            |   | $                  | 17,226 |                     | $ | 16,011 |   | $ | 33,237 |   | $ | 1,205 |
| March 31, 2010                           |   | $                  | 16,480 |                     | $ | 16,170 |   | $ | 32,650 |   | $ | 1,129 |
| Total                                    |   | $                  | 64,165 |                     | $ | 58,183 |   | $ | 122,348 |   | $ | 4,524 |

|                                                                                                                                                                                                                                                 |   |                         | Incurred    |       |      | Unpaid as of |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|-------------|------------|-----------|--------------|
|                                                                                                                                                                                                                                                 |   | Three Months Ended March 31, |        |       | March 31, |         | December 31, |
|  Type and Recipient                                                                                                                                                                                                                             |   | 2011                    |        | 2010  |      |         | 2011  |   | 2010  |
| Participation Interest in the Operating Partnership – HALP Associates Limited Partnership                                                                                                                                                      |   | $                            | 3,884  |       | $         | 3,877   |   |   | $ | 77,217  |   | $ | 73,333  |
|                                                                                                                                                                                                                                                 |   |                         |        |       |      |         |   |   |   |   |   |   |   |
| Due to Affiliates                                                                                                                                                                                                                                    |   |                         |        |       |      |         |   |   |   |   |   |   |   |
| Selling Commissions – the Dealer Manager                                                                                                                                                                                                       |   | $                            | -      |       | $         | 89      |   |   | $ | -  |   | $ | -  |
| Dealer Manager Fee – the Dealer Manager                                                                                                                                                                                                        |   |                         | -      |       |      | 29      |   |   |   | -  |   |   | -  |
| Issuer Costs -  the Advisor                                                                                                                                                                                                                |   |                         | 10     |       |      | -       |   |   |   | -  |   |   | 9  |
| Asset Management Fee – the Advisor                                                                                                                                                                                                             |   |                         | 3,759  |       |      | 3,778   |   |   |   | 3,759  |   |   | 3,759  |
| Disposition Fee – the Advisor                                                                                                                                                                                                                  |   |                         | -      |       |      | 384     |   |   |   | -  |   |   | -  |
| Debt Financing Fee – the Advisor                                                                                                                                                                                                               |   |                         | -      |       |      | 650     |   |   |   | -  |   |   | -  |
| Other - The Advisor (1)                                                                                                                                                                                                                              |   |                         | 802    |       |      | 579     |   |   |   | 445  |   |   | 785  |
| Property Management Fee – Hines                                                                                                                                                                                                                |   |                         | 1,834  |       |      | 1,871   |   |   |   | 164  |   |   | 12  |
| Leasing Fee – Hines                                                                                                                                                                                                                            |   |                         | 1,345  |       |      | 488     |   |   |   | 1,037  |   |   | 958  |
| Tenant Construction Management Fees – Hines                                                                                                                                                                                                    |   |                         | 9      |       |      | -       |   |   |   | 8  |   |   | 15  |
| Expense Reimbursements – Hines (with respect to management and operation of the Company’s properties)                                                                                                                                    |   |                         | 4,427  |       |      | 4,315   |   |   |   | 441  |   |   | 633  |
| Due to Affiliates                                                                                                                                                                                                                                    |   |                         |        |       |      |         |   |   | $ | 5,854  |   | $ | 6,171  |
|                                                                                                                                                                                                                                                 |   |                         |        |       |      |         |   |   |   |   |   |   |   |
| (1)   Includes amounts the Advisor paid on behalf of the Company such as general and administrative expenses. These amounts are generally reimbursed to the Advisor during the month following the period in which they are incurred. |

| 10. Changes in Assets and Liabilities                                                                                                                                                                            |   |   |   |   |   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                                                                                                                                                             |   |   |   |   |   |   |
|      The effect of the changes in asset and liability accounts on cash flows from operating activities for the three months ended March 31, 2011 and 2010 is as follows (in thousands): |

|                                            |   | 2011   |    |   | 2010   |   |
|-------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                            |   |   |    |   |   |   |
| Change in other assets                          |   | $      | (1,332  | )      |   | $      | (1,848 | ) |
| Change in tenant and other receivables          |   |   | (1,494  | )      |   |   | (1,501 | ) |
| Change in deferred leasing costs                |   |   | (13,542 | )      |   |   | (8,745 | ) |
| Change in accounts payable and accrued expenses |   |   | (5,199  | )      |   |   | (8,848 | ) |
| Change in participation interest liability      |   |   | 3,884   |   |   |   | 3,877 |   |
| Change in other liabilities                     |   |   | (1,197  | )      |   |   | 328 |   |
| Change in due to affiliates                     |   |   | (313    | )      |   |   | (4,567 | ) |
| Changes in assets and liabilities               |   | $      | (19,193 | )      |   | $      | (21,304 | ) |

----

| 11. Supplemental Cash Flow Disclosures                                                                                                             |   |   |   |   |   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                                                                                               |   |   |   |   |   |   |
|      Supplemental cash flow disclosures for the three months ended March 31, 2011 and 2010 are as follows (in thousands): |

|                                             |   | 2011   |   |   | 2010   |   |
|--------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Supplemental Disclosure of Cash Flow Information |   |   |   |   |   |   |
| Cash paid for interest                           |   | $      | 21,249 |   |   | $      | 22,647 |   |
| Cash paid for income taxes                       |   | $      | 216    |   |   | $      | 909 |   |
| Supplemental Schedule of Non-Cash Activities     |   |   |   |   |   |   |   |   |
| Distributions declared and unpaid                |   | $      | 28,966 |   |   | $      | 33,779 |   |
| Distributions reinvested                         |   | $      | 12,830 |   |   | $      | 16,692 |   |

----

|              |   |       |    |   | Basis of Fair Value Measurements |
|-------------------|--------|------------|---------|--------|----------------------------------|
| Description       |   | Fair Value |    |   |                             |   Quoted Prices InActive Markets forIdentical Items(Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   | SignificantUnobservable Inputs(Level 3) |
| March 31, 2011    |   | $          | (80,105 | )      |                             | $ | — |   |   | $ | (80,105 | ) |   | $ | — |
| December 31, 2010 |   | $          | (85,301 | )      |                             | $ | — |   |   | $ | (85,301 | ) |   | $ | — |

----

|                                                         |                                                                                                                                                                                                                                                  |   |           |   | Three Months Ended March 31, |
|--------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|------------------------------|
|                                                         |                                                                                                                                                                                                                                                  |   |           |   | 2011                    |   | 2010  |
|                                                         |   Office properties                                                                                                                                                                                                                         |   |           |   |                         | $ | 79,412  |   | $ | 83,983  |
|                                                         |   Domestic industrial property                                                                                                                                                                                                              |   |           |   |                         |   | 1,135  |   |   | 1,098  |
| Total revenue                                                |                                                                                                                                                                                                                                                  |   |           |   | $                            | 80,547  |   | $ | 85,081  |
|                                                         |                                                                                                                                                                                                                                                  |   |           |   |                         |   |   |   |   |   |
| Net operating income (1)                                     |                                                                                                                                                                                                                                                  |   |           |   |                         |   |   |   |
|                                                         |   Office properties (1)                                                                                                                                                                                                                     |   |           |   |                         | $ | 43,986  |   | $ | 47,814  |
|                                                         |   Domestic industrial property (1)                                                                                                                                                                                                          |   |           |   |                         |   | 883  |   |   | 863  |
| Total segment net operating income                           |                                                                                                                                                                                                                                                  |   |           | $      | 44,869                  |   | $ | 48,677  |
|                                                         |                                                                                                                                                                                                                                                  |   |           |   |                         |   |   |   |   |   |
| Equity in earnings (losses) of unconsolidated entities       |                                                                                                                                                                                                                                                  |   |           |   |                         |   |   |   |
|                                                         |    Equity in losses of domestic office properties                                                                                                                                                                                      |   |           |   |                         | $ | (2,414) |   | $ | (2,402) |
|                                                         |    Equity in earnings (losses) of domestic retail properties                                                                                                                                                                           |   |           |   |                         |   | 1  |   |   | (5) |
|                                                         |    Equity in earnings of international industrial property                                                                                                                                                                             |   |           |   |                         |   | 587  |   |   | 689  |
| Total equity in earnings (losses) of unconsolidated entities |                                                                                                                                                                                                                                                  |   |           |   | $                            | (1,826) |   | $ | (1,718) |
|                                                         |                                                                                                                                                                                                                                                  |   |           |   |                         |   |   |   |   |   |
| Total assets                                                 |                                                                                                                                                                                                                                                  |   | March 31, 2011 |   | December 31, 2010            |
|                                                         |   Office properties                                                                                                                                                                                                                         |   |           |   |                         | $ | 2,584,903  |   | $ | 2,592,579  |
|                                                         |   Domestic industrial property                                                                                                                                                                                                              |   |           |   |                         |   | 40,008  |   |   | 41,650  |
|                                                         |   Investment in unconsolidated entities -                                                                                                                                                                                                   |   |           |   |                         |   |   |   |   |   |
|                                                         |       Office properties                                                                                                                                                                                                 |   |           |   |                         |   | 272,020  |   |   | 275,372  |
|                                                         |       Domestic retail properties                                                                                                                                                                                        |   |           |   |                         |   | 64,592  |   |   | 66,123  |
|                                                         |       International industrial property                                                                                                                                                                                 |   |           |   |                         |   | 32,844  |   |   | 32,303  |
|                                                         |   Corporate-level accounts (2)                                                                                                                                                                                                              |   |           |   |                         |   | 139,213  |   |   | 141,989  |
| Total assets                                                 |                                                                                                                                                                                                                                                  |   |           |   | $                            | 3,133,580  |   | $ | 3,150,016  |
|                                                         |                                                                                                                                                                                                                                                  |   |           |   |                         |   |   |   |   |   |
|                                                         |                                                                                                                                                                                                                                                  |   |           |   | Three Months Ended March 31, |
|                                                         |                                                                                                                                                                                                                                                  |   |           |   | 2011                    |   | 2010  |
| Reconciliation to net loss                                   |                                                                                                                                                                                                                                                  |   |           |   |                         |   |   |   |   |
|                                                         | Total segment net operating income                                                                                                                                                                                                                    |   |           |   |                         | $ | 44,869  |   | $ | 48,677  |
|                                                         | Depreciation and amortization                                                                                                                                                                                                                         |   |           |   |                         |   | (25,680) |   |   | (27,753) |
|                                                         | Asset management and acquisition fees                                                                                                                                                                                                                 |   |           |   |                         |   | (7,643) |   |   | (7,655) |
|                                                         | General and administrative                                                                                                                                                                                                                            |   |           |   |                         |   | (1,610) |   |   | (1,363) |
|                                                         | Gain (loss) on derivative instruments, net                                                                                                                                                                                                            |   |           |   |                         |   | 5,196  |   |   | (5,854) |
|                                                         | Interest expense                                                                                                                                                                                                                                      |   |           |   |                         |   | (22,527) |   |   | (22,732) |
|                                                         | Interest income                                                                                                                                                                                                                                       |   |           |   |                         |   | 69  |   |   | 87  |
|                                                         | Provision for income taxes                                                                                                                                                                                                                            |   |           |   |                         |   | (130) |   |   | (114) |
|                                                         | Equity in losses of unconsolidated entities, net                                                                                                                                                                                                      |   |           |   |                         |   | (1,826) |   |   | (1,718) |
|                                                         | Income from discontinued operations, net of tax                                                                                                                                                                                                  |   |           |   |                         |   | -  |   |   | 5,487  |
| Net loss                                                     |                                                                                                                                                                                                                                                  |   |           |   | $                            | (9,282) |   | $ | (12,938) |
|                                                         |                                                                                                                                                                                                                                                  |   |           |   |                         |   |   |   |   |   |
| (1)                                                          |   Revenues less property operating expenses, real property taxes and property management fees.                                                                                                                                              |
|                                                         |                                                                                                                                                                                                                                                  |
| (2)                                                          |   This amount is primarily made of the Company's $106.3 million deposit to HSH Nordbank (see Note 2 - Summary of Significant Accounting Policies - Other Assets for additional information) and cash at the corporate level. |

----

----

|   | • | The potential need to fund tenant improvements, lease-up costs or other capital expenditures, as well as increases in property operating expenses and costs of compliance with environmental matters or discovery of previously undetected environmentally hazardous or other undetected adverse conditions at our properties; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                           |
|   | • | Risks associated with debt;                                                                                                                                                                                                                                                                                                    |

|   | • | Competition for tenants, including competition with affiliates of Hines Interests Limited Partnership (“Hines”); |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------|

|   | • | Risks associated with adverse changes in general economic or local market conditions, including terrorist attacks and other acts of violence, which may affect the markets in which we and our tenants operate; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Catastrophic events, such as hurricanes, earthquakes, tornadoes and terrorist attacks; and our ability to secure adequate insurance at reasonable and appropriate rates; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                     |
|   | • | Risks associated with the currency exchange rate related to our international investments;                                                                               |

|   | • | Risks associated with our international investments, including the burden of complying with a wide variety of foreign laws and the uncertainty of such laws, the tax treatment of transaction structures, political and economic instability, foreign currency fluctuations, and inflation and governmental measures to curb inflation may adversely affect our operations and our ability to make distributions; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | The failure of any bank in which we deposit our funds could reduce the amount of cash we have available to pay distributions and make additional investments; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Changes in governmental, tax, real estate and zoning laws and regulations and the related costs of compliance and increases in our administrative operating expenses, including expenses associated with operating as a public company; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Risks relating to our investment in Hines US Core Office Fund LP (the “Core Fund”), such as its reliance on Hines for its operations and investments, and our potential liability for Core Fund obligations; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                          |
|   | • | The lack of liquidity associated with our assets;                                                                                                                                                                             |

----

|   | • | Our reliance on our Advisor, Hines and affiliates of Hines for our day-to-day operations and our Advisor’s ability to attract and retain high-quality personnel who can provide service at a level acceptable to us;                                |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                      |
|   | • | Risks associated with conflicts of interests that result from our relationship with our Advisor and Hines, as well as conflicts of interests certain of our officers and directors face relating to the positions they hold with other entities; and |
|   |    |                                                                                                                                                                                                                                                      |
|   | • | Our ability to continue to qualify as a real estate investment trust (“REIT”) for federal income tax purposes.                                                                                                                                |

----

|   | • | proceeds from our dividend reinvestment plan;                      |
|--------|---------|--------------------------------------------------------------------|
|   | • | debt financings, including secured or unsecured facilities;        |
|   | • | proceeds from the sale of our properties; and                      |
|   | • | cash flow generated by our real estate investments and operations. |

----

|                                     |   | Shareholders       |   | Noncontrolling Interests |
|------------------------------------------|--------|--------------------|--------|--------------------------|
| Distributions for the Three Months Ended |   | Cash Distributions |   | Distributions Reinvested |   | Total Declared |   | Total Declared |
| 2011                                     |   |               |   |                     |   |   |   |   |   |   |   |   |
| March 31, 2011                           |   | $                  | 15,491 |                     | $ | 12,324 |   | $ | 27,815 |   | $ | 1,151 |
|                                     |   |               |   |                     |   |   |   |   |   |   |   |   |
| 2010                                     |   |               |   |                     |   |   |   |   |   |   |   |   |
| December 31, 2010                        |   | $                  | 15,473 |                     | $ | 12,830 |   | $ | 28,303 |   | $ | 1,123 |
| September 30, 2010                       |   | $                  | 14,986 |                     | $ | 13,172 |   | $ | 28,158 |   | $ | 1,067 |
| June 30, 2010                            |   | $                  | 17,226 |                     | $ | 16,011 |   | $ | 33,237 |   | $ | 1,205 |
| March 31, 2010                           |   | $                  | 16,480 |                     | $ | 16,170 |   | $ | 32,650 |   | $ | 1,129 |
| Total                                    |   | $                  | 64,165 |                     | $ | 58,183 |   | $ | 122,348 |   | $ | 4,524 |

----

|   | RESULTS OF OUR DIRECTLY-OWNED PROPERTIES |
|--------|------------------------------------------|

|                                          |   | Three Months Ended March 31, |         | Change     |   |
|-----------------------------------------------|--------|------------------------------|--------------|------------|--------|
|                                          |   | 2011                    |         | 2010  |   | $ |   | % |   |
| Total Revenue                                 |   |                         |         |       |   |   |   |   |   |   |
| Property revenues                             |   | $                            | 80,547  |       | $      | 85,081  |   | $ | (4,534) |   |   | (5.3) | % |
| Less: Property expenses (1)                   |   |                         | 35,808  |       |   | 36,518  |   |   | (710) |   |   | (1.9) | % |
| Total property revenues in excess of expenses |   | $                            | 44,739  |       | $      | 48,563  |   | $ | (3,824) |   |   | (7.9) | % |
|                                          |   |                         |         |       |   |   |   |   |   |   |   |   |   |
| Interest and Depreciation/Amortization        |   |                         |         |       |   |   |   |   |   |   |   |   |   |
| Depreciation and amortization                 |   | $                            | 25,680  |       | $      | 27,753  |   | $ | (2,073) |   |   | (7.5) | % |
| Interest expense                              |   | $                            | 22,527  |       | $      | 22,732  |   | $ | (205) |   |   | (0.9) | % |
| Interest income                               |   | $                            | 69      |       | $      | 87  |   | $ | (18) |   |   | (20.7) | % |

| (1)   | Property expenses include property operating expenses, real property taxes, property management fees and income taxes. |
|-----------------|------------------------------------------------------------------------------------------------------------------------|

|                                                                                    |           |   |    | Three Months Ended March 31, |
|-----------------------------------------------------------------------------------------|----------------|--------|---------|------------------------------|
|                                                                                    |           |   |    | 2011                    |   | 2010  |
|                                                                                    |           |   |    | (In thousands)               |
| Revenues:                                                                               |           |   |    |                         |   |   |
| Rental revenue                                                                          |           | $      | -  |                         | $ | 3,109  |
| Other revenue                                                                           |           |   | -  |                         |   | -  |
|                                                                                    | Total revenues |   |    | -                       |   |   | 3,109  |
| Expenses:                                                                               |           |   |    |                         |   |   |
| Property operating expenses                                                             |           |   | -  |                         |   | 67  |
| Real property taxes                                                                     |           |   | -  |                         |   | 265  |
| Property management fees                                                                |           |   | -  |                         |   | 36  |
| Depreciation and amortization                                                           |           |   | -  |                         |   | 1,123  |
|                                                                                    | Total expenses |   |    | -                       |   |   | 1,491  |
| Income from discontinued operations before interest income, taxes and gain on sale |           |   | -  |                         |   | 1,618  |
| Interest income                                                                         |           |   | -  |                         |   | 67  |
| Income taxes                                                                            |           |   | -  |                         |   | (423) |
| Income from discontinued operations before gain on sale                            |           |   | -  |                         |   | 1,262  |
| Gain on sale of properties                                                              |           |   | -  |                         |   | 4,225  |
| Income from discontinued operations                                                     |           | $      | -  |                         | $ | 5,487  |

----

|   | RESULTS FOR OUR INDIRECTLY-OWNED PROPERTIES |
|--------|---------------------------------------------|

| Other Corporate-level Activities                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                                                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      The tables below provide detail relating to our asset management and acquisition fees and general and administrative expenses.  All amounts in thousands, except percentages: |
|                                                                                                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                  |   | Three Months Ended March 31, |        | Change     |   |
|---------------------------------------|--------|------------------------------|-------------|------------|--------|
|                                  |   | 2011                    |        | 2010  |   | $ |   | % |   |
|                                  |   |                         |        |       |   |   |   |   |   |
| Asset management and acquisition fees |   | $                            | 7,643  |       | $      | 7,655  |   | $ | (12) |   |   | (0.2) | % |
| General and administrative expenses   |   | $                            | 1,610  |       | $      | 1,363  |   | $ | 247  |   |   | 18.1  | % |

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|   | •  | MFFO excludes gains (losses) related to changes in estimated values of derivative instruments related to our interest rate swaps. Although we expect to hold these instruments to maturity, if we were to settle these instruments currently, it would have an impact on our operations.                                                              |
|--------|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |          |                                                                                                                                                                                                                                                                                                                                                  |
|   | •  | Our FFO and MFFO as presented may not be comparable to amounts calculated by other REITs.                                                                                                                                                                                                                                                             |
|   |          |                                                                                                                                                                                                                                                                                                                                                  |
|   | •  | Our business is subject to volatility in the real estate markets and general economic conditions, and adverse changes in those conditions could have a material adverse impact on our business, results of operations and MFFO. Accordingly, the predictive nature of MFFO is uncertain and past performance may not be indicative of future results. |

|                                                                                                                                        |   | Three Months Ended March 31, |    |
|---------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|---------|
|                                                                                                                                        |   | 2011                         |    |   | 2010 |   |
| Net loss                                                                                                                                    |   | $                            | (9,282  | ) |   | $ | (12,938 | ) |
|      Depreciation and amortization (1)                                                                             |   |                         | 25,680  |   |   |   | 28,876 |   |
|      Gain on sale of investment property (2)                                                                       |   |                         | -       |   |   |   | (4,225 | ) |
|      Adjustments to equity in earnings from     unconsolidated entities, net (3)     |   |                         | 8,863   |   |   |   | 10,586 |   |
|      Adjustments for noncontrolling interests (4)                                                                  |   |                         | (1,003  | ) |   |   | (748 | ) |
| Funds from operations                                                                                                                       |   |                         | 24,258  |   |   |   | 21,551 |   |
|      (Gain) loss on derivative instruments (5)                                                                     |   |                         | (5,196  | ) |   |   | 5,854 |   |
|      Other components of revenues and expenses (6)                                                                 |   |                         | (2,173  | ) |   |   | (3,172 | ) |
|      Adjustments to equity in earnings (losses) from     unconsolidated entities, net (3) |   |                         | 87      |   |   |   | 171 |   |
|      Adjustments for noncontrolling interests (4)                                                                  |   |                         | 289     |   |   |   | (95 | ) |
| Modified Funds From Operations                                                                                                              |   |                         | 17,265  |   |   |   | 24,309 |   |
|                                                                                                                                        |   |                         |    |   |   |   |   |   |
| Basic and Diluted Loss Per Common Share                                                                                                     |   | $                            | (0.05   | ) |   | $ | (0.06 | ) |
| Funds From Operations Per Common Share                                                                                                      |   | $                            | 0.11    |   |   | $ | 0.10 |   |
| Modified Funds From Operations Per Common Share                                                                                             |   | $                            | 0.08    |   |   | $ | 0.11 |   |
| Weighted Average Shares Outstanding                                                                                                         |   |                         | 223,814 |   |   |   | 218,666 |   |

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| 1) |   | Represents the depreciation and amortization of various real estate assets.  Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, we believe that such depreciation and amortization may be of limited relevance in evaluating current operating performance and, as such, these items are excluded from our determination of FFO. This amount includes $1.1 million of depreciation and amortization related to discontinued operations for the three months ended March 31, 2010. |
|----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2) |   | Represents the gain on disposition of certain real estate investments. Although this gain is included in the calculation of net income (loss), we have excluded it from FFO because we believe doing so more appropriately presents the operating performance of our real estate investments on a comparative basis.                                                                                                                                                                                                                                                                                                                                         |
| 3) |   | Includes adjustments to equity in earnings (losses) of unconsolidated entities, net, similar to those described in Notes 1, 2 and 6 for our unconsolidated entities, which are necessary to convert our share of income (loss) from unconsolidated entities to FFO and MFFO.                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 4) |   | Includes income attributable to noncontrolling interests and all adjustments to eliminate the noncontrolling interests’ share of the adjustments to convert our net income (loss) to FFO and MFFO.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 5) |   | Represents components of net income (loss) related to the estimated changes in the values of our interest rate swap derivatives.  We have excluded these changes in value from our evaluation of our operating performance and MFFO because we expect to hold the underlying instruments to their maturity and accordingly the interim gains or losses will remain unrealized.                                                                                                                                                                                                                                                                                                        |
| 6) |   | Includes the following components of revenues and expenses that we do not consider in evaluating our operating performance and determining MFFO (in thousands):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

|                                     |   | Three Months Ended March 31, |
|------------------------------------------|--------|------------------------------|
| 2011                                |   | 2010                    |
| Straight-line rent adjustment (a)        |   | $                            | (2,350) |   | $ | (1,977) |
| Amortization of lease incentives (b)     |   |                         | 2,815  |   |   | 1,788  |
| Amortization of out-of-market leases (b) |   |                         | (2,849) |   |   | (3,196) |
| Other                                    |   |                         | 211  |   |   | 213  |
|                                     |   | $                            | (2,173) |   | $ | (3,172) |

|   |   | a | )  | Represents the adjustments to rental revenue as required by GAAP to recognize minimum lease payments on a straight-line basis over the respective lease terms.  We have excluded these adjustments from our evaluation of the operating performance of the Company and in determining MFFO because we believe that the rent that is billable during the current period is a more relevant measure of the Company’s operating performance for such period.                                                                               |
|--------|--------|---|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | b | )  | Represents the amortization of lease incentives and out-of-market leases.  As stated in Note 1 above, historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, we believe that such amortization may be of limited relevance in evaluating current operating performance and, as such, these items are excluded from our determination of MFFO. |

| ·   | Pursuant to the terms of the Grocery Anchored Portfolio joint venture agreement, for the three months ended March 31, 2011 and 2010, we received distributions of approximately $670,000 and $679,000 in excess of our pro-rata share of the joint venture’s MFFO, respectively. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On January 22, 2010, we sold Distribution Park Araucaria, an industrial property located in Curitiba, Brazil, which we acquired in December 2008 for $33.0 million. Net proceeds from the sale after deducting transaction costs, fees and taxes were $34.6 million. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Amortization of deferred financing costs was approximately $709,000 and $740,000 for the three months ended March 31, 2011 and 2010, respectively, and was deducted in determining MFFO. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A portion of our acquisition and asset management fees are paid in equity through the Participation Interest. For both the three months ended March 31, 2011 and 2010, this amount was $3.9 million. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |         |          |     |   |       |    |         |          |        |   |            |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------------|----------|--------|------------|---------|--------------|---------------|-------------|--------|-----------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |         |          |     |   |       |    | Total        |          |        |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |         |          |     |   |       |    | Number of    |          | Maximum     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |         |          |     |   |       |    | Shares       |          | Number of   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |         |          |     |   |       |    | Purchased as |          | Shares that |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |         |          |     |   |       | Part of |         | May Yet be    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | Total        |          | Average  |   | Publicly   |    | Purchased    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | Number of    |          | Price    |   | Announced  |    | Under the    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |  Shares |          | Paid per |   | Plans or   |    | Plans or     |
| Period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | Purchased    |          | Share    |   | Programs   |    | Programs (2) |
| January 1, 2011 to March 31, 2011 (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |         | 320,159  |     | $      |  9.15 |    |         | 320,159  |        |   | 1,339,263  |
|     Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |         | 320,159  |     |   |       |    |         | 320,159  |        |   |            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |         |          |     |   |       |    |         |          |        |   |            |
| (1) All shares were redeemed on January 3, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| (2) Our share redemption program is currently limited to requests made in connection with the death or disability of a stockholder. If we determine to redeem shares, we redeem shares on a quarterly basis and such redemptions will be limited to the lesser of the amount required to redeem 10% of the shares outstanding as of the same date in the prior calendar year or the amount of proceeds received from our dividend reinvestment plan in the quarter prior to the quarter in which the redemption request was received. This amount represents the number of shares available for redemption on April 1, 2011. For more information regarding our share redemption program, please see Item 5 of our 2010 Annual Report on Form 10-K. |

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|         |   | HINES REAL ESTATE INVESTMENT TRUST, INC. |
|--------------|--------|------------------------------------------|
|         |   |                                     |   |   |
| May 13, 2011 |   | By:                                      | /s/ CHARLES N. HAZEN |   |
|         |   |                                     | Charles N. Hazen |   |
|         |   |                                     | President and Chief Executive Officer |   |
|         |   |                                     |   |   |
|         |   |                                     |   |   |
| May 13, 2011 |   | By:                                      | s/ SHERRI W. SCHUGART |   |
|         |   |                                     | Sherri W. Schugart |   |
|         |   |                                     | Chief Financial Officer |   |
|         |   |                                     |   |   |
|         |   |                                     |   |   |

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| Exhibit No. |   |   |   |   | Description |
|-------------|--------|--------|--------|--------|-------------|
|        | 3.1    |   |   |   | —     |   | Second Amended and Restated Articles of Incorporation of Hines Real Estate Investment Trust, Inc. (filed as Exhibit 3.1 to the registrant’s Current Report on Form 8-K on July 13, 2007 and incorporated by reference herein). |
|        | 3.2    |   |   |   | —     |   | Second Amended and Restated Bylaws of Hines Real Estate Investment Trust, Inc. (filed as Exhibit 3.1 to the registrant’s Current Report on Form 8-K on August 3, 2006 and incorporated by reference herein). |
|        | 31.1   | *      |   |   | —     |   | Certification. |
|        | 31.2   | *      |   |   | —     |   | Certification. |
|        | 32.1   | *      |   |   | —     |   | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Pursuant to SEC Release 34-47551 this Exhibit is furnished to the SEC and shall not be deemed to be “filed.” |

| * | Filed herewith |
|---|----------------|

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