##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 001-32649
 COGDELL SPENCER INC.
  Maryland
(State or other jurisdiction of 
incorporation or organization)
    
    20-3126457
(I.R.S. Employer
Identification No.)4401 Barclay Downs Drive, Suite 300Charlotte, North Carolina
(Address of principal executive offices)
    
    28209
(Zip code)
 (704) 940-2900
 
 þ o
  o þ o
 o þ




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##### 



TABLE OF CONTENTS
 PagePART I FINANCIAL INFORMATIONItem 1 Condensed Consolidated Financial Statements (Unaudited)
    
    1Item 2 Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    11Item 3 Quantitative and Qualitative Disclosures about Market Risk
    
    19Item 4 Controls and Procedures
    
    20PART II Other Information
    
    20Item 1 Legal Proceedings
    
    20Item 1A Risk Factors
    
    20Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
    
    20Item 3 Defaults Upon Senior Securities
    
    21Item 4 Submission of Matters to a Vote of Security Holders
    
    21Item 5 Other Information
    
    21Item 6 Exhibits
    
    22Exhibit 31.1Exhibit 31.2Exhibit 32.1




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 COGDELL SPENCER INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 As of
    
    
    As ofJune 30, 2007
    
    
    December 31, 2006AssetsReal estate properties:Land
    
    $
    24,971
    
    
    $
    22,768Buildings and improvements
    
    
    396,876
    
    
    
    339,214Less: Accumulated depreciation
    
    
    (33,504
    )
    
    
    (23,664
    )Total operating real estate properties, net
    
    
    388,343
    
    
    
    338,318Construction in progress
    
    
    13,857
    
    
    
    12,854Total real estate properties, net
    
    
    402,200
    
    
    
    351,172Cash and cash equivalents
    
    
    4,177
    
    
    
    1,029Restricted cash
    
    
    1,113
    
    
    
    982Investment in capital lease
    
    
    6,040
    
    
    
    6,193Acquired above market leases, net of
accumulated amortization of $401 in 2007 and
$290 in 2006
    
    
    886
    
    
    
    966Acquired in place lease value and deferred
leasing costs, net of accumulated amortization
of $14,575 in 2007 and $11,184 in 2006
    
    
    17,313
    
    
    
    18,205Acquired ground leases, net of accumulated
amortization of $166 in 2007 and $146 in 2006
    
    
    3,072
    
    
    
    3,092Deferred financing costs, net of accumulated
amortization of $470 in 2007 and $342 in 2006
    
    
    1,176
    
    
    
    1,018Goodwill
    
    
    5,335
    
    
    
    5,326Other assets
    
    
    6,888
    
    
    
    5,075Total assets
    
    $
    448,200
    
    
    $
    393,058Liabilities and stockholders equityNotes payable under line of credit
    
    $
    34,000
    
    
    $
    77,487Mortgage loans
    
    
    210,855
    
    
    
    184,544Accounts payable and other liabilities
    
    
    16,079
    
    
    
    9,851Accrued dividends and distributions
    
    
    5,728
    
    
    
    4,404Acquired below market leases, net of
accumulated amortization of $1,834 in 2007 and
$1,384 in 2006
    
    
    3,698
    
    
    
    3,096Total liabilities
    
    
    270,360
    
    
    
    279,382Commitments and contingenciesMinority interests
    
    
    50,055
    
    
    
    54,001Stockholders equity:Preferred stock, $0.01 par value; 50,000 shares
authorized, none issued or outstanding
    
    
    
    
    
    
    Common Stock; $0.01 par value; 200,000 shares
authorized, 11,950 and 8,000 shares issued and
outstanding in 2007 and 2006, respectively
    
    
    119
    
    
    
    80Additional paid-in capital
    
    
    166,848
    
    
    
    87,224Accumulated other comprehensive income
    
    
    288
    
    
    
    73Accumulated deficit
    
    
    (39,470
    )
    
    
    (27,702
    )Total stockholders equity
    
    
    127,785
    
    
    
    59,675Total liabilities and stockholders equity
    
    $
    448,200
    
    
    $
    393,058
  1




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COGDELL SPENCER INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenues:Rental
    
    $
    14,610
    
    
    $
    13,381
    
    
    $
    28,925
    
    
    $
    25,098Management fee revenue
    
    
    498
    
    
    
    218
    
    
    
    1,095
    
    
    
    560Expense reimbursements
    
    
    329
    
    
    
    135
    
    
    
    675
    
    
    
    310Development fee revenue
    
    
    21
    
    
    
    2
    
    
    
    251
    
    
    
    89Interest and other income
    
    
    192
    
    
    
    242
    
    
    
    601
    
    
    
    533Total revenues
    
    
    15,650
    
    
    
    13,978
    
    
    
    31,547
    
    
    
    26,590Expenses:Property operating and management
    
    
    6,065
    
    
    
    4,855
    
    
    
    11,970
    
    
    
    9,089General and administrative
    
    
    1,683
    
    
    
    1,580
    
    
    
    3,934
    
    
    
    3,435Depreciation
    
    
    5,023
    
    
    
    4,855
    
    
    
    9,874
    
    
    
    9,158Amortization
    
    
    1,726
    
    
    
    2,611
    
    
    
    3,517
    
    
    
    4,768Interest
    
    
    3,188
    
    
    
    3,393
    
    
    
    7,223
    
    
    
    5,784Total expenses
    
    
    17,685
    
    
    
    17,294
    
    
    
    36,518
    
    
    
    32,234Loss from continuing operations before equity in
earnings (loss) of unconsolidated real estate
partnerships, minority interests in real estate
partnership, minority interests in operating
partnership and discontinued operations
    
    
    (2,035
    )
    
    
    (3,316
    )
    
    
    (4,971
    )
    
    
    (5,644
    )Equity in earnings (loss) of unconsolidated real
estate partnerships
    
    
    4
    
    
    
    
    
    
    
    (5
    )
    
    
    5Minority interests in real estate partnership
    
    
    (22
    )
    
    
    (22
    )
    
    
    (39
    )
    
    
    (53
    )Minority
interests in Operating Partnership
    
    
    562
    
    
    
    1,177
    
    
    
    1,611
    
    
    
    2,008Loss from continuing operations
    
    
    (1,491
    )
    
    
    (2,161
    )
    
    
    (3,404
    )
    
    
    (3,684
    )Discontinued operations:Loss from discontinued operations
    
    
    
    
    
    
    (7
    )
    
    
    
    
    
    
    (11
    )Minority interests in Operating Partnership
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    4Total discontinued operations
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    (7
    )Net loss
    
    $
    (1,491
    )
    
    $
    (2,166
    )
    
    $
    (3,404
    )
    
    $
    (3,691
    )Per share data  basic and dilutedLoss from continuing operations
    
    $
    (0.12
    )
    
    $
    (0.27
    )
    
    $
    (0.34
    )
    
    $
    (0.46
    )Loss from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (0.12
    )
    
    $
    (0.27
    )
    
    $
    (0.34
    )
    
    $
    (0.46
    )Weighted average common shares  basic and diluted
    
    
    11,931
    
    
    
    7,975
    
    
    
    10,153
    
    
    
    7,974
  2




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COGDELL SPENCER INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
 AccumulatedNumber of
    
    
    
    
    
    
    Additional
    
    
    OtherCommon
    
    
    Common
    
    
    Paid-in
    
    
    Comprehensive
    
    
    AccumulatedShares
    
    
    Stock
    
    
    Capital
    
    
    Income
    
    
    Deficit
    
    
    TotalBalance at December 31, 2006
    
    
    8,000
    
    
    $
    80
    
    
    $
    87,224
    
    
    $
    73
    
    
    $
    (27,702
    )
    
    $
    59,675Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,404
    )
    
    
    (3,404
    )Unrealized gain
on
interest
rate
swaps
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    215
    
    
    
    
    
    
    
    215Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,189
    )Issuance of common
stock, net of
costs
    
    
    3,950
    
    
    
    39
    
    
    
    78,404
    
    
    
    
    
    
    
    
    
    
    
    78,443Conversion of
Operating
Partnership units
to common stock
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    6Amortization of
restricted stock
grants
    
    
    
    
    
    
    
    
    
    
    57
    
    
    
    
    
    
    
    
    
    
    
    57Dividends to
common
stockholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,364
    )
    
    
    (8,364
    )Adjustment to
record change of
interest in the
Operating
Partnership due to
the issuance of
Operating
Partnership units
in excess of book
value
    
    
    
    
    
    
    
    
    
    
    1,157
    
    
    
    
    
    
    
    
    
    
    
    1,157Balance at June 30, 2007
    
    
    11,950
    
    
    $
    119
    
    
    $
    166,848
    
    
    $
    288
    
    
    $
    (39,470
    )
    
    $
    127,785
  3




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##### Table of Contents



COGDELL SPENCER INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Six Months Ended
    
    
    Six Months EndedJune 30, 2007
    
    
    June 30, 2006Operating activities:Net loss
    
    $
    (3,404
    )
    
    $
    (3,691
    )Adjustments to reconcile net loss to cash
provided by operating activities:Minority interests
    
    
    (1,572
    )
    
    
    (1,959
    )Depreciation and amortization (including amounts in
discontinued operations)
    
    
    13,391
    
    
    
    13,974Amortization of acquired above market leases and
acquired below market leases, net (including amounts
in discontinued operations)
    
    
    (341
    )
    
    
    (448
    )Straight line rental revenue
    
    
    (153
    )
    
    
    (80
    )Amortization of deferred finance costs and debt
premium
    
    
    127
    
    
    
    8Equity-based compensation
    
    
    132
    
    
    
    55Equity in loss (earnings) of unconsolidated real
estate partnerships
    
    
    5
    
    
    
    (5
    )Change in fair value of interest rate swap agreements
    
    
    
    
    
    
    (472
    )Changes in operating assets and liabilities:Other assets
    
    
    (603
    )
    
    
    (474
    )Accounts payable and other liabilities
    
    
    4,029
    
    
    
    1,981Net cash provided by operating activities
    
    
    11,611
    
    
    
    8,889Investing activities:Investment in real estate properties
    
    
    (55,139
    )
    
    
    (73,966
    )Purchase of minority interests in Operating Partnership
    
    
    (3,653
    )
    
    
    Proceeds from capital lease
    
    
    153
    
    
    
    153Purchase of corporate equipment
    
    
    (333
    )
    
    
    Distributions received from real estate partnerships
    
    
    
    
    
    
    2Increase in restricted cash
    
    
    (131
    )
    
    
    (120
    )Net cash used in investing activities
    
    
    (59,103
    )
    
    
    (73,931
    )Financing activities:Proceeds from mortgage notes payable
    
    
    42,250
    
    
    
    Repayments of mortgage notes payable
    
    
    (15,840
    )
    
    
    (5,685
    )Proceeds from line of credit
    
    
    35,200
    
    
    
    70,750Repayments to line of credit
    
    
    (78,687
    )
    
    
    (4,500
    )Net proceeds from sale of common stock
    
    
    78,404
    
    
    
    Dividends and distributions
    
    
    (10,191
    )
    
    
    (4,328
    )Distributions to minority interests in real estate partnership
    
    
    (68
    )
    
    
    (85
    )Payment of deferred financing costs
    
    
    (428
    )
    
    
    (24
    )Net cash provided by financing activities
    
    
    50,640
    
    
    
    56,128Increase (decrease) in cash and cash equivalents
    
    
    3,148
    
    
    
    (8,914
    )Balance at beginning of period
    
    
    1,029
    
    
    
    9,571Cumulative effect adjustment associated with the
implementation of EITF 04-5
    
    
    
    
    
    
    213Balance at end of period
    
    $
    4,177
    
    
    $
    870Supplemental disclosure of cash flow information:Cash paid for interest, net of capitalized interest
    
    $
    7,172
    
    
    $
    6,017Cash paid for income taxes
    
    $
    229
    
    
    $
    Supplemental cash flow information  noncash
investing and financing activities:Issuance of Operating Partnership units as consideration for
investment in real estate property
    
    
    3,583
    
    
    
    Investment in real estate costs contributed by partner in a
consolidated real estate partnership
    
    
    460
    
    
    
    Debt assumed with purchase of property
    
    
    
    
    
    
    5,178Accrued dividends and distributions
    
    
    5,728
    
    
    
    4,326
  4




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COGDELL SPENCER INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 1. Business Description
  2. Summary of Significant Accounting Policies
 Basis of Presentation
   Interim Financial Information
  Use of Estimates in Financial Statements
  Reclassifications
  5




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Recent Accounting Pronouncements
     3. Property Acquisition
  Land and improvements
    
    $
    2,180Building and improvements
    
    
    32,606Acquired in place lease value and deferred leasing costs
    
    
    2,429Acquired above market leases
    
    
    28Acquired below market leases
    
    
    (1,043
    )Total purchase price allocated
    
    $
    36,200
  6




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Six Months EndedJune 30, 2007
    
    June 30, 2006Total revenues
    
    $
    33,845
    
    
    $
    28,888Net loss
    
    
    (1,828
    )
    
    
    (2,115
    )Per share information:Basic and diluted loss per share
    
    $
    (0.18
    )
    
    $
    (0.27
    )
 4. Investments in Real Estate Partnerships
  
    
    McLeod Medical Partners, LLC, a South Carolina limited liability company, founded in
1982, 1.1% owned by the Company, and owns three medical office buildings;
    
    Shannon Health/MOB Limited Partnership No. 1, a Delaware limited partnership, founded in
2001, 2.0% owned by the Company, and owns ten medical office buildings;
    
    BSB Health/MOB Limited Partnership No. 2, a Delaware limited partnership, founded in
2002, 2.0% owned by the Company, and owns nine medical office buildings;
    
    Rocky Mount MOB, LLC, a North Carolina limited liability company, founded in 2002, 34.5%
owned by the Company, and owns one medical office building; and
    
    Mebane Medical Investors, LLC, a North Carolina limited liability company, founded in
2006, 49.0% owned by the Company, currently has one medical office building under
construction.
    As of
    
    As ofJune 30, 2007
    
    December 31, 2006Financial position:Total assets
    
    $
    58,723
    
    
    $
    58,267Total liabilities
    
    
    52,603
    
    
    
    51,441Members equity
    
    
    6,120
    
    
    
    6,826
 Three Months Ended June 30,
    
    Six Months Ended June 30,2007
    
    2006
    
    2007
    
    2006Results of operations:Revenues
    
    $
    3,009
    
    
    $
    1,354
    
    
    $
    5,888
    
    
    $
    2,713Operating and
general and
administrative
expenses
    
    
    1,402
    
    
    
    701
    
    
    
    2,575
    
    
    
    1,376Net income
    
    
    170
    
    
    
    114
    
    
    
    447
    
    
    
    257
  7




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5. Mortgages, Notes Payable and Guarantees
     6. Minority Interests
   7. Commitments
  8. Dividends and Distributions
  9. Loss per Share
  8




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Three Months Ended
    
    
    Six Months EndedJune 30, 2007
    
    
    June 30, 2006
    
    
    June 30, 2007
    
    
    June 30, 2006Loss from continuing operations
    
    $
    (1,491
    )
    
    $
    (2,161
    )
    
    $
    (3,404
    )
    
    $
    (3,684
    )Loss from discontinued operations
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    (7
    )Net loss
    
    $
    (1,491
    )
    
    $
    (2,166
    )
    
    $
    (3,404
    )
    
    $
    (3,691
    )Per share data  basic and diluted:Loss from continuing operations
    
    $
    (0.12
    )
    
    $
    (0.27
    )
    
    $
    (0.34
    )
    
    $
    (0.46
    )Income (loss) from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (0.12
    )
    
    $
    (0.27
    )
    
    $
    (0.34
    )
    
    $
    (0.46
    )Weighted average shares outstanding -
basic and diluted
    
    
    11,931
    
    
    
    7,975
    
    
    
    10,153
    
    
    
    7,974
  Three Months Ended
    
    Six Months EndedJune 30, 2007
    
    June 30, 2006
    
    June 30, 2007
    
    June 30, 2006Operating Partnership units
    
    
    4,506
    
    
    
    4,365
    
    
    
    4,545
    
    
    
    4,365Unvested restricted stock
    
    
    18
    
    
    
    22
    
    
    
    19
    
    
    
    254,524
    
    
    
    4,387
    
    
    
    4,564
    
    
    
    4,390
 10. Related Party Transactions
  11. Segment Reporting
  9




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Three Months Ended
    
    
    Six Months EndedJune 30, 2007
    
    
    June 30, 2006
    
    
    June 30, 2007
    
    
    June 30, 2006Property operations:Rental revenues
    
    $
    14,610
    
    
    $
    13,381
    
    
    $
    28,925
    
    
    $
    25,098Interest and other income
    
    
    187
    
    
    
    235
    
    
    
    382
    
    
    
    441Property operating expenses
    
    
    (4,297
    )
    
    
    (3,768
    )
    
    
    (8,542
    )
    
    
    (6,958
    )Intersegment expenses
    
    
    (1,087
    )
    
    
    (871
    )
    
    
    (2,084
    )
    
    
    (1,713
    )Net operating income
    
    $
    9,413
    
    
    $
    8,977
    
    
    $
    18,681
    
    
    $
    16,868Total segment assets, end of period
    
    $
    437,876
    
    
    $
    362,441
    
    
    $
    437,876
    
    
    $
    362,441Real estate services:Fee revenue
    
    $
    519
    
    
    $
    220
    
    
    $
    1,346
    
    
    $
    649Expense reimbursements
    
    
    330
    
    
    
    135
    
    
    
    677
    
    
    
    310Interest and other income
    
    
    4
    
    
    
    7
    
    
    
    217
    
    
    
    92Intersegment revenues
    
    
    1,087
    
    
    
    871
    
    
    
    2,084
    
    
    
    1,713Real estate operating expenses
    
    
    (2,007
    )
    
    
    (1,196
    )
    
    
    (3,961
    )
    
    
    (2,359
    )Net operating income (loss)
    
    $
    (67
    )
    
    $
    37
    
    
    $
    363
    
    
    $
    405Total segment assets, end of period
    
    $
    10,324
    
    
    $
    6,322
    
    
    $
    10,324
    
    
    $
    6,322Reconciliations:Total segment revenues
    
    $
    16,737
    
    
    $
    14,849
    
    
    $
    33,631
    
    
    $
    28,303Elimination of intersegment revenues
    
    
    (1,087
    )
    
    
    (871
    )
    
    
    (2,084
    )
    
    
    (1,713
    )Total revenues
    
    $
    15,650
    
    
    $
    13,978
    
    
    $
    31,547
    
    
    $
    26,590Total segment net operating income
    
    $
    9,346
    
    
    $
    9,014
    
    
    $
    19,044
    
    
    $
    17,273Corporate general and administrative expenses
    
    
    (1,444
    )
    
    
    (1,471
    )
    
    
    (3,401
    )
    
    
    (3,207
    )Depreciation and amortization expense
    
    
    (6,749
    )
    
    
    (7,466
    )
    
    
    (13,391
    )
    
    
    (13,926
    )Interest expense
    
    
    (3,188
    )
    
    
    (3,393
    )
    
    
    (7,223
    )
    
    
    (5,784
    )Equity in earnings (loss) of unconsolidated
real estate partnerships
    
    
    4
    
    
    
    
    
    
    
    (5
    )
    
    
    5Minority interests
    
    
    540
    
    
    
    1,155
    
    
    
    1,572
    
    
    
    1,955Total discontinued operations
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    (7
    )Net loss
    
    $
    (1,491
    )
    
    $
    (2,166
    )
    
    $
    (3,404
    )
    
    $
    (3,691
    )Total segment assets
    
    $
    448,200
    
    
    $
    368,763
    
    
    $
    448,200
    
    
    $
    368,763Total discontinued operations
    
    
    
    
    
    
    1,479
    
    
    
    
    
    
    
    1,479Total assets, end of period
    
    $
    448,200
    
    
    $
    370,242
    
    
    $
    448,200
    
    
    $
    370,242
 10




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 When used in this discussion and elsewhere in this Quarterly Report on Form 10-Q , the words
believes, anticipates, projects, should, estimates, expects, and similar expressions
are intended to identify forward-looking statements with the meaning of that term in Section 27A of
the Securities Act of 1933, as amended (the Securities Act), and in Section 21F of the Securities
and Exchange Act of 1934, as amended. Actual results may differ materially due to uncertainties
including:
 
    
    the Companys business strategy;
    
    the Companys ability to obtain future financing arrangements;
    
    estimates relating to the Companys future distributions;
    
    the Companys understanding of the Companys competition;
    
    the Companys ability to renew the Companys ground leases;
    
    changes in the reimbursement available to the Companys tenants by government or private payors;
    
    the Companys tenants ability to make rent payments;
    
    defaults by tenants;
    
    market trends; and
    
    projected capital expenditures.
  Overview
    
    
    53 wholly owned properties;
    
    four joint venture properties; and
 11




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##### Table of Contents




    
    58 properties owned by third parties.
  Factors Which May Influence Future Results of Operations
   Critical Accounting Policies
   Investments in Real Estate
 Acquisition of real estate.
 12




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##### Table of Contents



Useful lives of assets.
 Asset impairment valuation.
 Revenue Recognition
   13




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##### Table of Contents



REIT Qualification Requirements
  Changes in Financial Condition
  Results of Operations
  Property Summary
  Three Months Ended
    
    Six Months EndedJune 30, 2007
    
    
    June 30, 2006
    
    
    June 30, 2007
    
    
    June 30, 2006Properties at
beginning of the
period
    
    
    50
    
    
    
    49
    
    
    
    50
    
    
    
    44Consolidation of
Rocky Mount MOB LLC
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Acquisitions
    
    
    1
    
    
    
    
    
    
    
    1
    
    
    
    4In-service
development
    
    
    1
    
    
    
    
    
    
    
    1
    
    
    
    Dispositions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Properties at end
of the period
    
    
    52
    
    
    
    49
    
    
    
    52
    
    
    
    49Lease-up
development
property
    
    
    1
    
    
    
    
    
    
    
    1
    
    
    
    
 Year EndedDecember 31, 2006Properties at January 1
    
    
    44Consolidation of Rocky Mount MOB LLC
    
    
    1Acquisitions
    
    
    6Dispositions
    
    
    (1
    )Properties at December 31
    
    
    50
   Comparison of the three months ended June 30, 2007 and June 30, 2006
 14




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##### Table of Contents



Revenue.
 Property operating and management expenses.
 General and administrative expenses.
 Interest expense.
  Comparison of the six months ended June 30, 2007 and June 30, 2006
 Revenue.
 Property operating and management expenses.
 General and administrative expenses.
 Interest expense.
  Cash Flows
 Comparison of the six months ended June 30, 2007 and June 30, 2006
 15




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##### Table of Contents



Construction in Progress
    EstimatedEstimated
    
    
    Net Rentable
    
    
    Investment
    
    
    Estimated TotalProperty
    
    Location
    
    Completion Date
    
    
    Square Feet
    
    
    to Date
    
    
    InvestmentLancaster General Health Campus MOB
    
    Lancaster, PA
    
    
    4Q 2007
    
    
    
    64,070
    
    
    $
    9,527
    
    
    $
    13,700Mebane Medical Office Building
    
    Mebane, NC
    
    
    2Q 2008
    
    
    
    60,000
    
    
    
    3,209
    
    
    
    16,200Land and pre-construction developments
    
    
    
    
    
    
    
    
    
    
    
    
    1,121
    
    
    
    124,070
    
    
    $
    13,857
    
    
    $
    29,900
    16




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##### Table of Contents



Liquidity and Capital Resources
        Long-Term Liquidity Needs
  17




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##### Table of Contents



Contractual Obligations
  ThroughRemainderof 2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    Thereafter
    
    
    TotalObligation:Long-term debt principal payments and
maturities (1)
    
    $
    37,050
    
    
    $
    70,785
    
    
    $
    46,605
    
    
    $
    1,626
    
    
    $
    3,710
    
    
    $
    84,674
    
    
    $
    244,450Standby letters of credit (2)
    
    
    1,422
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,422Interest payments (3)
    
    
    7,207
    
    
    
    10,826
    
    
    
    6,996
    
    
    
    5,486
    
    
    
    5,299
    
    
    
    17,825
    
    
    
    53,639Ground leases (4)
    
    
    107
    
    
    
    215
    
    
    
    215
    
    
    
    215
    
    
    
    215
    
    
    
    7,757
    
    
    
    8,724Operating leases (5)
    
    
    170
    
    
    
    409
    
    
    
    412
    
    
    
    356
    
    
    
    360
    
    
    
    31
    
    
    
    1,738Total
    
    $
    45,956
    
    
    $
    82,235
    
    
    $
    54,228
    
    
    $
    7,683
    
    
    $
    10,584
    
    
    $
    110,287
    
    
    $
    310,973
 
 (1)
    
    Includes notes payable under the Credit Facility(2)
    
    As collateral for performance on a mortgage note payable, the Company is
contingently liable under a standby letter of credit, which also reduces the availability
under the Credit Facility(3)
    
    Assumes one-month LIBOR 5.32% and Prime Rate of 8.25%(4)
    
    Substantially all of the ground leases effectively limit our control over various
aspects of the operation of the applicable property, restrict our ability to transfer the
property and allow the lessor the right of first refusal to purchase the building and
improvements. All of the ground leases provide for the property to revert to the lessor for no
consideration upon the expiration or earlier termination of the ground lease.(5)
    
    Payments under operating lease agreements relate to various of our properties
equipment and office space leases. The future minimum lease commitments under these leases are
as indicated. Off-Balance Sheet Arrangements
  18




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##### Table of Contents



Real Estate Taxes
  Inflation
  Seasonality
  Recent Accounting Pronouncements
     
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  19




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
    
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  20




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##### Table of Contents



Issuer Purchases of Equity Securities
  Total Number ofEquity Securities
    
    
    Approximate DollarAverage
    
    
    Purchased as Part
    
    
    Value of EquityTotal Number of
    
    
    Price Paid
    
    
    of Publicly
    
    
    Securities that MayEquity Securities
    
    
    Per Equity
    
    
    Announced Plans
    
    
    Yet Be PurchasedFor the Period
    
    Purchased
    
    
    Security
    
    
    or Programs
    
    
    Under the PlanApril 1 - April 30, 2007
    
    
    26,218
    
    
    $
    21.66
    
    
    
    N/A
    
    
    
    N/AMay 1 - May 31, 2007
    
    
    115,548
    
    
    $
    21.01
    
    
    
    N/A
    
    
    
    N/AJune 1 - June 30, 2007
    
    
    27,753
    
    
    $
    20.70
    
    
    
    N/A
    
    
    
    N/ATotal
    
    
    169,519
    
    
    $
    21.06
    
    
    
    N/A
    
    
    
    N/A
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
    Nominee
    
    Votes For
    
    Votes WithheldJames W. Cogdell
    
    
    10,619,046
    
    
    
    59,399John R. Georgius
    
    
    10,659,477
    
    
    
    18,968Richard B. Jennings
    
    
    10,122,331
    
    
    
    556,114Christopher E. Lee
    
    
    10,659,477
    
    
    
    18,968Richard C. Neugent
    
    
    10,660,477
    
    
    
    17,968Randolph D. Smoak, M.D.
    
    
    10,658,570
    
    
    
    19,875Frank C. Spencer
    
    
    10,619,046
    
    
    
    59,399
   Votes For
    
    Votes Against
    
    AbstentionsDeloitte & Touche LLP
    
    
    10,668,683
    
    
    
    7,504
    
    
    
    2,258
 
 ITEM 5. OTHER INFORMATION
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ITEM 6. EXHIBITS
 3.1
    
    Articles of Amendment and Restatement of Cogdell Spencer Inc., incorporated by reference to
Exhibit 3.1 of the Companys Registration Statement on Form S-11 (File No. 333-127396).3.2
    
    Bylaws of Cogdell Spencer Inc., incorporated by reference to Exhibit 3.2 of the Companys
Registration Statement on Form S-11 (File No. 333-127396).3.3
    
    Amended and Restated Agreement of Limited Partnership of Cogdell Spencer LP, incorporated by
reference to Exhibit 3.3 of the Companys Registration Statement on Form S-11 (File No.
333-127396).3.4
    
    Declaration of Trust of CS Business Trust I., incorporated by reference to Exhibit 3.4 of the
Companys Registration Statement on Form S-11 (File No. 333-127396).3.5
    
    Declaration of Trust of CS Business Trust II, incorporated by reference to Exhibit 3.5 of the
Companys Registration Statement on Form S-11 (File No. 333-127396).4.1
    
    Form of stock certificate, incorporated by reference to Exhibit 4.0 of the Companys
Registration Statement on Form S-11 (File No. 333-127396).31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of
2002.31.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of
2002.32.1
    
    Certification of Chief Executive and Chief Financial Officer pursuant to 18 U.S.C. Section
1350 as adapted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 22




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##### Table of Contents



SIGNATURES
  COGDELL SPENCER INC.RegistrantDate: August 8, 2007
    /s/Frank C. SpencerFrank C. SpencerPresident and Chief Executive OfficerDate: August 8, 2007
    /s/Charles M. HandyCharles M. HandySenior Vice President and Chief Financial Officer 23