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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q







|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended March 31, 2010



| ̈ | 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: 000-53200





CB RICHARD ELLIS REALTY
TRUST

(Exact name of registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Maryland                                                       |  | 56-2466617                          
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)

47 Hulfish Street, Suite 210, Princeton, New Jersey 08542

(Address of principal executive offices) (Zip Code)

(609) 683-4900

(Registrants telephone number, including area code)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days.    Yes  x    No  
 ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    Yes   ̈    No  
 ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a
smaller reporting company. See the definitions of large accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):



|                            |  |                                               |  |                          |  |                              
|--------------------------- |  | --------------------------------------------- |  | ------------------------ |  | -----------------------------
|Large accelerated filer  
 ̈ |  | Accelerated Filer   ̈                          |  | Non-accelerated
filer  x |  | Smaller reporting company  
 ̈
|                            |  | (do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes   ̈    No  
x

The number of shares outstanding of the registrants common shares, $0.01 par value, was 127,733,818 as of May 7, 2010.











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##### Table of Contents

CB RICHARD ELLIS REALTY TRUST

INDEX



|                              |  |                                                                                                                                           |  |   
|----------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------- |  | --
|10-Q PART AND ITEM NO.        |  |                                                                                                                                          
|                              | 
|PART I. FINANCIAL INFORMATION |  |                                                                                                                                          
|1.                            |  | Condensed Consolidated Financial Statements (unaudited)                                                                                   |  | 1 
|                              |  | Condensed Consolidated Balance Sheets as of March 31, 2010 and December 31, 2009                                                          |  | 1 
|                              |  | Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2010 and 2009                                        |  | 2 
|                              |  | Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2010 and 2009                                        |  | 3 
|                              |  | Condensed Consolidated Statements of Shareholders Equity and Non-Controlling Interest for the Three Months Ended March 31,
2010 and 2009 |  | 4 
|                              |  | Notes to the Condensed Consolidated Financial Statements for the Three Months Ended March 31, 2010 and
2009                               |  | 5 
|2.                            |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                     |  | 39
|3.                            |  | Quantitative and Qualitative Disclosures About Market Risk                                                                                |  | 69
|4.                            |  | Controls and Procedures                                                                                                                   |  | 69
|4T.                           |  | Controls and Procedures                                                                                                                   |  | 69
|                              | 
|PART II. OTHER INFORMATION    |  |                                                                                                                                          
|1.                            |  | Legal Proceedings                                                                                                                         |  | 70
|1A.                           |  | Risk Factors                                                                                                                              |  | 70
|2.                            |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                               |  | 71
|3.                            |  | Defaults Upon Senior Securities                                                                                                           |  | 71
|4.                            |  | (Removed and Reserved)                                                                                                                    |  | 71
|5.                            |  | Other Information                                                                                                                         |  | 71
|6.                            |  | Exhibits                                                                                                                                  |  | 72
|                              | 
|SIGNATURES                    |  | 73                                                                                                                                       



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##### Table of Contents

PART I. FINANCIAL INFORMATION



|ITEM 1. | CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|------- | -------------------------------------------------------

CB RICHARD ELLIS REALTY TRUST

Condensed Consolidated Balance Sheets

as of March 31, 2010 and December 31, 2009 (unaudited)

(In Thousands, Except Share Data)



|                                                                                                                                                                                                  |  |               |           |   |                  |   |           |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | --------- | - | ---------------- | - | --------- | -
|                                                                                                                                                                                                  |  | March 31,2010 |           |   | December 31,2009 |  
|ASSETS                                                                                                                                                                                            |  |               |           |   |                  |   |           |  
|Investments in Real Estate:                                                                                                                                                                       |  |               |           |   |                  |   |           |  
|Land                                                                                                                                                                                              |  | $             | 131,009   |   |                  | $ | 140,892   |  
|Site Improvements                                                                                                                                                                                 |  |               | 43,601    |   |                  |   | 45,859    |  
|Buildings and Improvements                                                                                                                                                                        |  |               | 431,800   |   |                  |   | 456,285   |  
|Tenant Improvements                                                                                                                                                                               |  |               | 26,682    |   |                  |   | 28,095    |  
|                                                                                                                                                                                                  |  |               |           |   |                  |   |           |  
|                                                                                                                                                                                                  |  |               | 633,092   |   |                  |   | 671,131   |  
|Less: Accumulated Depreciation and Amortization                                                                                                                                                   |  |               | (35,553   | ) |                  |   | (31,558   | )
|                                                                                                                                                                                                  |  |               |           |   |                  |   |           |  
|Net Investments in Real Estate                                                                                                                                                                    |  |               | 597,539   |   |                  |   | 639,573   |  
|Investments in Unconsolidated Entities                                                                                                                                                            |  |               | 268,968   |   |                  |   | 214,097   |  
|Cash and Cash Equivalents                                                                                                                                                                         |  |               | 208,123   |   |                  |   | 112,631   |  
|Restricted Cash                                                                                                                                                                                   |  |               | 1,415     |   |                  |   | 1,923     |  
|Accounts and Other Receivables, Net of Allowance of $334 and $183, respectively                                                                                                                   |  |               | 3,330     |   |                  |   | 4,246     |  
|Deferred Rent                                                                                                                                                                                     |  |               | 4,142     |   |                  |   | 3,570     |  
|Acquired Above-Market Leases, Net of Accumulated Amortization of $6,621 and $5,886, respectively                                                                                                  |  |               | 14,937    |   |                  |   | 17,996    |  
|Acquired In-Place Lease Value, Net of Accumulated Amortization of $27,825 and $25,566, respectively                                                                                               |  |               | 50,285    |   |                  |   | 61,375    |  
|Deferred Financing Costs, Net of Accumulated Amortization of $1,611 and $1,380, respectively                                                                                                      |  |               | 2,073     |   |                  |   | 2,342     |  
|Lease Commissions, Net of Accumulated Amortization of $313 and $263, respectively                                                                                                                 |  |               | 1,068     |   |                  |   | 889       |  
|Other Assets                                                                                                                                                                                      |  |               | 167       |   |                  |   | 377       |  
|                                                                                                                                                                                                  |  |               |           |   |                  |   |           |  
|Total Assets                                                                                                                                                                                      |  | $             | 1,152,047 |   |                  | $ | 1,059,019 |  
|                                                                                                                                                                                                  |  |               |           |   |                  |   |           |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                                                              |  |               |           |   |                  |   |           |  
|LIABILITIES                                                                                                                                                                                       |  |               |           |   |                  |   |           |  
|Notes Payable, Less Discount of $4,381 and $4,615, respectively                                                                                                                                   |  | $             | 191,506   |   |                  | $ | 203,451   |  
|Note Payable at Fair Value                                                                                                                                                                        |  |               | 8,505     |   |                  |   | 8,974     |  
|Security Deposits                                                                                                                                                                                 |  |               | 591       |   |                  |   | 593       |  
|Accounts Payable and Accrued Expenses                                                                                                                                                             |  |               | 9,372     |   |                  |   | 11,000    |  
|Accrued Offering Costs Payable to Related Parties                                                                                                                                                 |  |               | 1,151     |   |                  |   | 1,114     |  
|Acquired Below-Market Leases, Net of Accumulated Amortization of $7,384 and $6,687, respectively                                                                                                  |  |               | 13,317    |   |                  |   | 14,108    |  
|Property Management Fee Payable to Related Party                                                                                                                                                  |  |               | 116       |   |                  |   | 106       |  
|Investment Management Fee Payable to Related Party                                                                                                                                                |  |               | 805       |   |                  |   | 757       |  
|Distributions Payable                                                                                                                                                                             |  |               | 16,841    |   |                  |   | 14,750    |  
|Interest Rate Swaps at Fair ValueNon-Qualifying Hedges                                                                                                                                           |  |               | 1,711     |   |                  |   | 1,410     |  
|Interest Rate Swap at Fair ValueQualifying Hedge                                                                                                                                                 |  |               | 873       |   |                  |   | 293       |  
|                                                                                                                                                                                                  |  |               |           |   |                  |   |           |  
|Total Liabilities                                                                                                                                                                                 |  |               | 244,788   |   |                  |   | 256,556   |  
|COMMITMENTS AND CONTINGENCIES (NOTE 17)                                                                                                                                                           |  |               |           |   |                  |   |           |  
|                                                                                                                                                                                                  |  |              
|NON-CONTROLLING INTEREST                                                                                                                                                                          |  |               |           |   |                  |   |           |  
|Operating Partnership Units                                                                                                                                                                       |  |               | 2,464     |   |                  |   | 2,464     |  
|SHAREHOLDERS EQUITY                                                                                                                                                                              |  |               |           |   |                  |   |           |  
|Common Shares of Beneficial Interest, $0.01 par value, 990,000,000 shares authorized; 120,483,460 and 106,465,683 issued and outstanding as
of March 31, 2010 and December 31, 2009, respectively |  |               | 1,205     |   |                  |   | 1,065     |  
|Additional Paid-in-Capital                                                                                                                                                                        |  |               | 1,058,424 |   |                  |   | 933,088   |  
|Accumulated Deficit                                                                                                                                                                               |  |               | (138,528  | ) |                  |   | (121,832  | )
|Accumulated Other Comprehensive Loss                                                                                                                                                              |  |               | (16,306   | ) |                  |   | (12,322   | )
|                                                                                                                                                                                                  |  |               |           |   |                  |   |           |  
|Total Shareholders Equity                                                                                                                                                                        |  |               | 904,795   |   |                  |   | 799,999   |  
|                                                                                                                                                                                                  |  |               |           |   |                  |   |           |  
|Total Liabilities and Shareholders Equity                                                                                                                                                        |  | $             | 1,152,047 |   |                  | $ | 1,059,019 |  
|                                                                                                                                                                                                  |  |               |           |   |                  |   |           |  

See accompanying notes to condensed consolidated financial statements.



1



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CB RICHARD ELLIS REALTY TRUST

Condensed Consolidated Statements of Operations

For the Three Months Ended March 31, 2010 and 2009 (unaudited)

(In Thousands, Except Share Data)



|                                                                                                      |  |                             |             |   |      |   |            |  
|----------------------------------------------------------------------------------------------------- |  | --------------------------- | ----------- | - | ---- | - | ---------- | -
|                                                                                                      |  | Three Months EndedMarch 31, |            
|                                                                                                      |  | 2010                        |             |   | 2009 |  
|REVENUES                                                                                              |  |                             |             |   |      |   |            |  
|Rental                                                                                                |  | $                           | 15,002      |   |      | $ | 10,342     |  
|Tenant Reimbursements                                                                                 |  |                             | 2,918       |   |      |   | 1,946      |  
|                                                                                                      |  |                             |             |   |      |   |            |  
|Total Revenues                                                                                        |  |                             | 17,920      |   |      |   | 12,288     |  
|                                                                                                      |  |                             |             |   |      |   |            |  
|                                                                                                      |  |                            
|EXPENSES                                                                                              |  |                             |             |   |      |   |            |  
|Operating and Maintenance                                                                             |  |                             | 1,575       |   |      |   | 1,227      |  
|Property Taxes                                                                                        |  |                             | 2,621       |   |      |   | 1,666      |  
|Interest                                                                                              |  |                             | 3,095       |   |      |   | 2,807      |  
|General and Administrative                                                                            |  |                             | 839         |   |      |   | 1,043      |  
|Property Management Fee to Related Party                                                              |  |                             | 164         |   |      |   | 142        |  
|Investment Management Fee to Related Party                                                            |  |                             | 2,431       |   |      |   | 1,703      |  
|Acquisition Expenses                                                                                  |  |                             | 378         |   |      |   |           |  
|Depreciation and Amortization                                                                         |  |                             | 7,243       |   |      |   | 5,722      |  
|                                                                                                      |  |                             |             |   |      |   |            |  
|Total Expenses                                                                                        |  |                             | 18,346      |   |      |   | 14,310     |  
|                                                                                                      |  |                             |             |   |      |   |            |  
|                                                                                                      |  |                            
|OTHER INCOME AND EXPENSES                                                                             |  |                             |             |   |      |   |            |  
|Interest and Other Income                                                                             |  |                             | 598         |   |      |   | 121        |  
|Net Settlement Payments on Interest Rate Swaps                                                        |  |                             | (214        | ) |      |   | (81        | )
|Loss on Interest Rate Swaps and Cap                                                                   |  |                             | (388        | ) |      |   | (168       | )
|Loss on Note Payable at Fair Value                                                                    |  |                             | (73         | ) |      |   | (565       | )
|Loss on Early Extinguishment of Debt                                                                  |  |                             | (73         | ) |      |   |           |  
|                                                                                                      |  |                             |             |   |      |   |            |  
|Total Other Income and (Expenses)                                                                     |  |                             | (150        | ) |      |   | (693       | )
|                                                                                                      |  |                             |             |   |      |   |            |  
|LOSS BEFORE PROVISION FOR INCOME TAXES AND EQUITY IN INCOME (LOSS) OF UNCONSOLIDATED ENTITIES         |  |                             | (576        | ) |      |   | (2,715     | )
|PROVISION FOR INCOME TAXES                                                                            |  |                             | (15         | ) |      |   | (29        | )
|EQUITY IN INCOME (LOSS) OF UNCONSOLIDATED ENTITIES                                                    |  |                             | 737         |   |      |   | (798       | )
|                                                                                                      |  |                             |             |   |      |   |            |  
|NET INCOME (LOSS)                                                                                     |  |                             | 146         |   |      |   | (3,542     | )
|                                                                                                      |  |                             |             |   |      |   |            |  
|Net (Income) Loss Attributable to Non-Controlling Operating Partnership Units                         |  |                             | (1          | ) |      |   | 13         |  
|                                                                                                      |  |                             |             |   |      |   |            |  
|NET INCOME (LOSS) ATTRIBUTABLE TO CB RICHARD ELLIS REALTY TRUST SHAREHOLDERS                          |  | $                           | 145         |   |      | $ | (3,529     | )
|                                                                                                      |  |                             |             |   |      |   |            |  
|Basic and Diluted Net Income (Loss) Per ShareAttributable CB Richard Ellis Realty Trust Shareholders |  | $                           | 0.00        |   |      | $ | (0.05      | )
|                                                                                                      |  |                             |             |   |      |   |            |  
|Weighted Average Common Shares OutstandingBasic and Diluted                                          |  |                             | 112,264,838 |   |      |   | 67,105,252 |  

See accompanying notes to condensed
consolidated financial statements.



2



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##### Table of Contents

CB RICHARD ELLIS REALTY TRUST

Condensed Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2010 and 2009 (unaudited)

(In Thousands)



|                                                                                                |  |                              |         |   |      |   |        |  
|----------------------------------------------------------------------------------------------- |  | ---------------------------- | ------- | - | ---- | - | ------ | -
|                                                                                                |  | Three Months Ended March 31, |        
|                                                                                                |  | 2010                         |         |   | 2009 |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                                            |  |                              |         |   |      |   |        |  
|Net Income (Loss)                                                                               |  | $                            | 146     |   |      | $ | (3,542 | )
|Adjustments to Reconcile Net Loss to Net Cash Flows Provided by Operating Activities:           |  |                              |         |   |      |   |        |  
|Equity in (Income) Loss of Unconsolidated Entities                                              |  |                              | (737    | ) |      |   | 798    |  
|Distributions from Unconsolidated Entities                                                      |  |                              | 7,168   |   |      |   | 2,582  |  
|Loss on Interest Rate Swaps and Cap                                                             |  |                              | 388     |   |      |   | 168    |  
|Loss on Note Payable at Fair Value                                                              |  |                              | 73      |   |      |   | 565    |  
|Loss on Early Extinguishment of Debt                                                            |  |                              | 53      |   |      |   |       |  
|Gain on Transfer of Real Estate                                                                 |  |                              | (154    | ) |      |   |       |  
|Depreciation and Amortization of Building and Improvements                                      |  |                              | 4,413   |   |      |   | 3,291  |  
|Amortization of Deferred Financing Costs                                                        |  |                              | 178     |   |      |   | 148    |  
|Amortization of Acquired In-Place Lease Value                                                   |  |                              | 2,780   |   |      |   | 2,395  |  
|Amortization of Above and Below Market Leases                                                   |  |                              | 121     |   |      |   | (19    | )
|Amortization of Lease Commissions                                                               |  |                              | 50      |   |      |   | 36     |  
|Amortization of Discount on Notes Payable                                                       |  |                              | 235     |   |      |   | 187    |  
|Changes in Assets and Liabilities:                                                              |  |                              |         |   |      |   |        |  
|Accounts and Other Receivables                                                                  |  |                              | 916     |   |      |   | 1,260  |  
|Deferred Rent                                                                                   |  |                              | (572    | ) |      |   | (196   | )
|Other Assets                                                                                    |  |                              | 210     |   |      |   | 988    |  
|Accounts Payable and Accrued Expenses                                                           |  |                              | (1,720  | ) |      |   | (2,452 | )
|Investment and Property Management Fees Payable to Related Party                                |  |                              | 58      |   |      |   | (148   | )
|                                                                                                |  |                              |         |   |      |   |        |  
|Net Cash Flows Provided By Operating Activities                                                 |  |                              | 13,606  |   |      |   | 6,061  |  
|                                                                                                |  |                              |         |   |      |   |        |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                                            |  |                              |         |   |      |   |        |  
|Acquisitions of Real Estate Property                                                            |  |                              |        |   |      |   | (370   | )
|Investments in Unconsolidated Entities                                                          |  |                              | (22,085 | ) |      |   | (435   | )
|Distributions from Unconsolidated Entities                                                      |  |                              | 2,545   |   |      |   | 80     |  
|Restricted Cash                                                                                 |  |                              | 508     |   |      |   | 357    |  
|Lease Commissions                                                                               |  |                              | (229    | ) |      |   | (79    | )
|Improvements to Investments in Real Estate                                                      |  |                              | (171    | ) |      |   | (20    | )
|                                                                                                |  |                              |         |   |      |   |        |  
|Net Cash Flows Used in Investing Activities                                                     |  |                              | (19,432 | ) |      |   | (467   | )
|                                                                                                |  |                              |         |   |      |   |        |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                            |  |                              |         |   |      |   |        |  
|Proceeds from Common SharesPublic Offering                                                     |  |                              | 138     |   |      |   | 61     |  
|Proceeds from Additional Paid-in-CapitalPublic Offering                                        |  |                              | 135,470 |   |      |   | 60,394 |  
|Redemption of Common Shares                                                                     |  |                              | (4,255  | ) |      |   | (2,775 | )
|Payment of Offering Costs                                                                       |  |                              | (11,945 | ) |      |   | (7,557 | )
|Payment of Distributions                                                                        |  |                              | (8,553  | ) |      |   | (8,988 | )
|Distribution to Non-Controlling Interest                                                        |  |                              | (37     | ) |      |   | (37    | )
|Principal Payments on Notes Payable                                                             |  |                              | (9,483  | ) |      |   | (1,062 | )
|Security Deposits                                                                               |  |                              | (2      | ) |      |   | 46     |  
|                                                                                                |  |                              |         |   |      |   |        |  
|Net Cash Flows Provided by Financing Activities                                                 |  |                              | 101,333 |   |      |   | 40,082 |  
|                                                                                                |  |                              |         |   |      |   |        |  
|EFFECT OF FOREIGN CURRENCY TRANSLATION                                                          |  |                              | (15     | ) |      |   | 41     |  
|                                                                                                |  |                              |         |   |      |   |        |  
|Net Increase in Cash and Cash Equivalents                                                       |  |                              | 95,492  |   |      |   | 45,717 |  
|Cash and Cash Equivalents, Beginning of the Period                                              |  |                              | 112,631 |   |      |   | 30,330 |  
|                                                                                                |  |                              |         |   |      |   |        |  
|Cash and Cash Equivalents, End of the Period                                                    |  | $                            | 208,123 |   |      | $ | 76,047 |  
|                                                                                                |  |                              |         |   |      |   |        |  
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                                                |  |                              |         |   |      |   |        |  
|Cash Paid During the Year for Interest                                                          |  | $                            | 2,734   |   |      | $ | 2,568  |  
|SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES                          |  |                              |         |   |      |   |        |  
|Distributions Declared and Payable                                                              |  | $                            | 16,841  |   |      | $ | 10,066 |  
|Proceeds from Dividend Reinvestment Program                                                     |  | $                            | 6,197   |   |      | $ | 3,663  |  
|Accrued Acquisition Costs Related to Real Property                                              |  | $                            |        |   |      | $ | 15     |  
|Accrued Acquisition Costs Related to Investment in Unconsolidated Entities Due to Related Party |  | $                            |        |   |      | $ | 10     |  
|Deconsolidation of Real Estate Transferred to Duke joint venture                                |  | $                            | (41,888 | ) |      | $ |       |  
|Increase in Investment in Duke joint venture from Transfer of Consolidated Real Estate          |  | $                            | 42,378  |   |      | $ |       |  

See accompanying notes to condensed
consolidated financial statements.



3



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##### Table of Contents

CB RICHARD ELLIS REALTY TRUST

Condensed Consolidated Statements of Shareholders Equity and Non-Controlling Interest

For the Three Months Ended March 31, 2010 and 2009 (unaudited)

(In Thousands, Except Share Data)



|                                                                         |  |               |   |  |                           |       |   |                    |   |           |                                            |  |   |                          |   |  |                                                                   |         |   |             |   |         |   |  |   |       |   |  |   |         |  
|------------------------------------------------------------------------ |  | ------------- | - |  | ------------------------- | ----- | - | ------------------ | - | --------- | ------------------------------------------ |  | - | ------------------------ | - |  | ----------------------------------------------------------------- | ------- | - | ----------- | - | ------- | - |  | - | ----- | - |  | - | ------- | -
|                                                                         |  | Common Shares |   |  | AdditionalPaid-in-Capital |       |   | AccumulatedDeficit |   |           | AccumulatedOtherComprehensiveIncome (Loss) |  |   | TotalShareholdersEquity |   |  | Temporary EquityNon-ControllingInterestOperatingPartnership Units |         |   | TotalEquity |  
|                                                                         |  | Shares        |   |  | Amount                    |       |   |                    |   |           |                                            | 
|Balance at December 31, 2009                                             |  | 106,465,683   |   |  | $                         | 1,065 |   |                    | $ | 933,088   |                                            |  | $ | (121,832                 | ) |  | $                                                                 | (12,322 | ) |             | $ | 799,999 |   |  | $ | 2,464 |   |  | $ | 802,463 |  
|Net Income                                                               |  |              |   |  |                           |      |   |                    |   |          |                                            |  |   | 145                      |   |  |                                                                   |        |   |             |   | 145     |   |  |   | 1     |   |  |   | 146     |  
|Foreign Currency Translation Loss                                        |  |              |   |  |                           |      |   |                    |   |          |                                            |  |   |                         |   |  |                                                                   | (3,405  | ) |             |   | (3,405  | ) |  |   | (7    | ) |  |   | (3,412  | )
|Swap Fair Value Adjustment                                               |  |              |   |  |                           |      |   |                    |   |          |                                            |  |   |                         |   |  |                                                                   | (579    | ) |             |   | (579    | ) |  |   | (1    | ) |  |   | (580    | )
|                                                                         |  |               |   |  |                           |       |   |                    |   |           |                                            |  |   |                          |   |  |                                                                   |         |   |             |   |         |   |  |   |       |   |  |   |         |  
|Total Comprehensive Loss                                                 |  |              |   |  |                           |      |   |                    |   |          |                                            |  |   | 145                      |   |  |                                                                   | (3,984  | ) |             |   | (3,839  | ) |  |   | (7    | ) |  |   | (3,846  | )
|                                                                         |  |               |   |  |                           |       |   |                    |   |           |                                            |  |   |                          |   |  |                                                                   |         |   |             |   |         |   |  |   |       |   |  |   |         |  
|Net Contributions From Public Offering of Common Shares, $0.01 Par Value |  | 14,487,964    |   |  |                           | 145   |   |                    |   | 141,704   |                                            |  |   |                         |   |  |                                                                   |        |   |             |   | 141,849 |   |  |   |      |   |  |   | 141,849 |  
|Costs Associated with Public Offering                                    |  |              |   |  |                           |      |   |                    |   | (12,074   | )                                          |  |   |                         |   |  |                                                                   |        |   |             |   | (12,074 | ) |  |   |      |   |  |   | (12,074 | )
|Redemption of Common Shares                                              |  | (470,187      | ) |  |                           | (5    | ) |                    |   | (4,250    | )                                          |  |   |                         |   |  |                                                                   |        |   |             |   | (4,255  | ) |  |   |      |   |  |   | (4,255  | )
|Adjustment to Record Non-Controlling Interest at Redemption Value        |  |              |   |  |                           |      |   |                    |   | (44       | )                                          |  |   |                         |   |  |                                                                   |        |   |             |   | (44     | ) |  |   | 44    |   |  |   |        |  
|Distributions                                                            |  |              |   |  |                           |      |   |                    |   |          |                                            |  |   | (16,841                  | ) |  |                                                                   |        |   |             |   | (16,841 | ) |  |   | (37   | ) |  |   | (16,878 | )
|                                                                         |  |               |   |  |                           |       |   |                    |   |           |                                            |  |   |                          |   |  |                                                                   |         |   |             |   |         |   |  |   |       |   |  |   |         |  
|Balance at March 31, 2010                                                |  | 120,483,460   |   |  | $                         | 1,205 |   |                    | $ | 1,058,424 |                                            |  | $ | (138,528                 | ) |  | $                                                                 | (16,306 | ) |             | $ | 904,795 |   |  | $ | 2,464 |   |  | $ | 907,259 |  
|                                                                         |  |               |   |  |                           |       |   |                    |   |           |                                            |  |   |                          |   |  |                                                                   |         |   |             |   |         |   |  |   |       |   |  |   |         |  



|                                                                         |  |              |   |  |                           |     |   |                    |   |         |                                   |  |   |                                   |   |  |                                                                    |         |   |             |   |         |   |  |   |       |   |  |   |         |  
|------------------------------------------------------------------------ |  | ------------ | - |  | ------------------------- | --- | - | ------------------ | - | ------- | --------------------------------- |  | - | --------------------------------- | - |  | ------------------------------------------------------------------ | ------- | - | ----------- | - | ------- | - |  | - | ----- | - |  | - | ------- | -
|                                                                         |  | Common Stock |   |  | AdditionalPaid-in-Capital |     |   | AccumulatedDeficit |   |         | AccumulatedOtherComprehensiveLoss |  |   | TotalPermanentShareholdersEquity |   |  | Temporary 
EquityNon-controllingInterestOperatingPartnership Units |         |   | TotalEquity |  
|                                                                         |  | Shares       |   |  | Amount                    |     |   |                    |   |         |                                   | 
|Balance at January 1, 2009                                               |  | 64,490,068   |   |  | $                         | 645 |   |                    | $ | 560,110 |                                   |  | $ | (54,221                           | ) |  | $                                                                  | (19,327 | ) |             | $ | 487,207 |   |  | $ | 2,464 |   |  | $ | 489,671 |  
|Net Loss                                                                 |  |              |   |  |                           |    |   |                    |   |        |                                   |  |   | (3,529                            | ) |  |                                                                    |        |   |             |   | (3,529  | ) |  |   | (13   | ) |  |   | (3,542  | )
|Foreign Currency Translation Loss                                        |  |             |   |  |                           |    |   |                    |   |        |                                   |  |   |                                  |   |  |                                                                    | (1,305  | ) |             |   | (1,305  | ) |  |   | (5    | ) |  |   | (1,310  | )
|                                                                         |  |              |   |  |                           |     |   |                    |   |         |                                   |  |   |                                   |   |  |                                                                    |         |   |             |   |         |   |  |   |       |   |  |   |         |  
|Total Comprehensive Loss                                                 |  |             |   |  |                           |    |   |                    |   |        |                                   |  |   | (3,529                            | ) |  |                                                                    | (1,305  | ) |             |   | (4,834  | ) |  |   | (18   | ) |  |   | (4,852  | )
|                                                                         |  |              |   |  |                           |     |   |                    |   |         |                                   |  |   |                                   |   |  |                                                                    |         |   |             |   |         |   |  |   |       |   |  |   |         |  
|Net Contributions From Public Offering of Common Shares, $0.01 Par Value |  | 6,164,220    |   |  |                           | 61  |   |                    |   | 60,395  |                                   |  |   |                                  |   |  |                                                                    |        |   |             |   | 60,456  |   |  |   |      |   |  |   | 60,456  |  
|Costs Associated with Public Offering                                    |  |             |   |  |                           |    |   |                    |   | (7,343  | )                                 |  |   |                                  |   |  |                                                                    |        |   |             |   | (7,343  | ) |  |   |      |   |  |   | (7,343  | )
|Redemption of Common Shares                                              |  | (313,565     | ) |  |                           | (3  | ) |                    |   | (2,772  | )                                 |  |   |                                  |   |  |                                                                    |        |   |             |   | (2,775  | ) |  |   |      |   |  |   | (2,775  | )
|Adjustment to Record Non-controlling Interest at Redemption Value        |  |              |   |  |                           |     |   |                    |   | (55     | )                                 |  |   |                                   |   |  |                                                                    |         |   |             |   | (55     | ) |  |   | 55    |   |  |   |        |  
|Distributions                                                            |  |             |   |  |                           |    |   |                    |   |        |                                   |  |   | (10,065                           | ) |  |                                                                    |        |   |             |   | (10,065 | ) |  |   | (37   | ) |  |   | (10,102 | )
|                                                                         |  |              |   |  |                           |     |   |                    |   |         |                                   |  |   |                                   |   |  |                                                                    |         |   |             |   |         |   |  |   |       |   |  |   |         |  
|Balance at March 31, 2009                                                |  | 70,340,723   |   |  | $                         | 703 |   |                    | $ | 610,335 |                                   |  | $ | (67,815                           | ) |  | $                                                                  | (20,632 | ) |             | $ | 522,591 |   |  | $ | 2,464 |   |  | $ | 525,055 |  
|                                                                         |  |              |   |  |                           |     |   |                    |   |         |                                   |  |   |                                   |   |  |                                                                    |         |   |             |   |         |   |  |   |       |   |  |   |         |  

See accompanying notes to condensed consolidated financial statements.



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##### Table of Contents

CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2010 and 2009 (unaudited)

1. Organization and Nature of Business

CB Richard Ellis Realty Trust (the Company) was formed on March 30, 2004 under the laws of the state of Maryland. CBRE Operating
Partnership, L.P. (CBRE OP) was formed in Delaware on March 30, 2004, with the Company as the sole general partner (the General Partner). The Company has elected to be taxed as a real estate investment trust
(REIT) under sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code), beginning with its taxable period ended December 31, 2004. The Company was incorporated to raise capital
and acquire ownership interests in high quality real estate properties, including office, retail, industrial, and multi-family residential properties, as well as other real estate-related assets.

On July 1, 2004, the Company commenced operations and issued 6,844,313 common shares of beneficial interest in connection with the initial
capitalization of the Company. For each common share the Company issued, one limited partnership unit in CBRE OP was issued to the Company in exchange for the cash proceeds from the issuance of the common shares. In addition, CBRE REIT Holdings, LLC
(REIT Holdings) an affiliate of CBRE Advisors LLC (the Investment Advisor), purchased 29,937 limited partnership units in CBRE OP as a limited partner. During October 2004, the Company issued an additional 123,449 common
shares of beneficial interest to an unrelated third-party investor. On July 2, 2007, in conjunction with the Carolina Portfolio acquisition, the Company formed a taxable REIT subsidiary, CBRE RT Carolina TRS, Inc., (Carolina TRS),
to hold certain real estate assets designated by management as held for sale which represent non-qualified REIT assets. On September 30, 2008, the real estate assets held by Carolina TRS were reclassified as held for investment and were
transferred to CBRE OP.

The registration statement relating to our initial public offering was declared effective by the Securities
Exchange Commission (the SEC) on October 24, 2006. CNL Securities Corp., a related party, acted as the dealer manager of this offering. The registration statement covered up to $2,000,000,000 in common shares of beneficial interest,
90% of which were offered at a price of $10.00 per share, and 10% of which were offered pursuant to our dividend reinvestment plan at a purchase price equal to the higher of $9.50 per share or 95% of the fair market value of a common share on the
reinvestment date, as determined by the Investment Advisor, or another firm we choose for that purpose. During the period October 24, 2006 through January 29, 2009, the Company issued 60,808,967 additional common shares of beneficial
interest. We terminated the initial public offering effective as of the close of business on January 29, 2009.

The registration
statement relating to our follow-on public offering was declared effective by the SEC on January 30, 2009. CNL Securities Corp. is the dealer manager (the Dealer Manager) of this offering. The registration statement covers up to
$3,000,000,000 in common shares of beneficial interest, 90% of which will be offered at a price of $10.00 per share, and 10% of which will be offered pursuant to our dividend reinvestment plan at a purchase price equal to the higher of $9.50 per
share or 95% of the fair market value of a common share on the reinvestment date, as determined by the Investment Advisor, or another firm we choose for that purpose. We reserve the right to reallocate the shares between the primary offering and our
dividend reinvestment plan. From January 30, 2009 (effective date) through March 31, 2010, the Company received gross offering proceeds of approximately $558,098,008 from the sale of 55,915,772 shares.

The Company operates in an umbrella partnership REIT structure in which its majority-owned subsidiary, CBRE OP, owns, directly or indirectly,
substantially all of the properties acquired on behalf of the Company. As of March 31, 2010, the Company, as the sole general partner of CBRE OP, owns approximately 99.80% of the common partnership units therein. REIT Holdings, an affiliate of
the Investment Advisor, holds the remaining interest through 246,361 limited partnership units representing approximately a 0.20% ownership interest in the total limited partnership units. In exchange for services provided to the Company relating to
its formation and future services, REIT Holdings also owns a Class B limited partnership interest (Class B interest). The Investment Advisor is affiliated with the Company in that the two entities have common officers and trustees, some
of whom also own equity interests in the Investment Advisor and the Company. All business activities of the Company are managed by the Investment Advisor.

Unless the context otherwise requires or indicates, references to CBRE REIT, we, the Company our,
and us refer to the activities of and the assets and liabilities of the business and operations of CB Richard Ellis Realty Trust and its subsidiaries.



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##### Table of Contents

CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying
condensed consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Principles (U.S. GAAP) and the rules applicable to Form 10-Q and reflect all adjustments, which are, in our opinion, of a
normal recurring nature and necessary for a fair presentation of our financial position, results of operations and cash flows for the interim period. Certain information and footnotes required for annual financial statement presentation have been
condensed or excluded pursuant to SEC rules and regulations. Accordingly, our interim financial statements do not include all of the information and disclosures required under U.S. GAAP for complete financial statements. The condensed consolidated
financial statements and notes thereto should be read in conjunction with our current Annual Report on Form 10-K, which contains the latest available audited consolidated financial statements and notes thereto, which are as of and for the year ended
December 31, 2009.

In the opinion of management, all adjustments of a normal recurring nature considered necessary in all material
respects to present fairly our financial position, results of our operations and cash flows as of and for the three months and ended March 31, 2010 have been made. The results of operations for the three months ended March 31, 2010 are not
necessarily indicative of the results of operations to be expected for the entire year. We have evaluated subsequent events for recognition or disclosure through May 14, 2010, which was the date we filed this Form 10-Q with the SEC.

Principles of Consolidation

Because we are
the sole general partner and majority owner of CBRE OP and have majority control over their management and major operating decisions, the accounts of CBRE OP are consolidated in our financial statements. The interests of REIT Holdings are reflected
in non-controlling interest in the accompanying consolidated financial statements. All significant inter-company accounts and transactions are eliminated in consolidation. CB Richard Ellis Investors, LLC (CBRE Investors), an affiliate of
the Investment Advisor, also owns an interest in us through its ownership of 243,229 common shares of beneficial interest at March 31, 2010 and December 31, 2009.

Investments in Unconsolidated Entities

Our
determination of the appropriate accounting method with respect to our investment in CB Richard Ellis Strategic Partners Asia II-A, L.P. (CBRE Strategic Partners Asia), which is not considered a Variable Interest Entity
(VIE), is partially based on CBRE Strategic Partners Asias sufficiency of equity investment at risk which was triggered by a substantial paydown during 2009 of its subscription line of credit backed by investor capital commitments
to fund its operations. We account for this investment under the equity method of accounting.

We determine if an entity is a VIE based
on several factors, including whether the entitys total equity investment at risk upon inception is sufficient to finance the entitys activities without additional subordinated financial support. We make judgments regarding the
sufficiency of the equity at risk based first on a qualitative analysis, then a quantitative analysis, if necessary. In a quantitative analysis, we incorporate various estimates, including estimated future cash flows, asset hold periods and discount
rates, as well as estimates of the probabilities of various scenarios occurring. If the entity is a VIE, we then determine whether we consolidate the entity as the primary beneficiary. We determine whether an entity is a VIE and, if so, whether it
should be consolidated by utilizing judgments and estimates that are inherently subjective. If we made different judgments or utilized different estimates in these evaluations, it could result in differing conclusions as to whether or not an entity
is a VIE and whether or not we consolidate such entity.

With respect to our majority limited membership interest in the Duke/Hulfish,
LLC joint venture (the Duke joint venture) and the Afton Ridge Joint Venture, LLC (Afton Ridge), we considered the Codification Topic Consolidation (FASB ASC 810) in determining that we did not
have control over the financial and operating decisions of such entities due to the existence of substantive participating rights held by the minority limited members who are also the managing members of the Duke joint venture and Afton Ridge,
respectively.

We carry our investments in CBRE Strategic Partners Asia, the Duke joint venture and Afton Ridge on the equity method of
accounting because we have the ability to exercise significant influence (but not control) over operating and financial policies of each such entity.



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CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



We eliminate transactions with such equity method entities to the extent of our ownership in each such entity. Accordingly, our share of net income (loss) of these equity method entities is
included in consolidated net income (loss). CBRE Strategic Partners Asia is a limited partnership that qualifies for specialized industry accounting for investment companies. Specialized industry accounting allows investment companies to carry their
investments at fair value, with changes in the fair value of the investments recorded in the statement of operations. On the basis of the guidance in ASC 970-323, the Company accounts for its investment in CBRE Strategic Partners Asia under the
equity method. As a result, and in accordance with ASC 810-10-25-15 the specialized accounting treatment, principally fair value basis, applied by CBRE Strategic Partners Asia under the investment company guide is retained in the recognition of
equity method earnings in the statement of operations of the Company. See Note 15 Fair Value of Financial Instruments and Investments for further discussion of the application of the fair value accounting to our investment in CBRE
Strategic Partners Asia.

Use of Estimates

The preparation of financial statements, in conformity with U.S. GAAP, requires us to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those
estimates.

Segment Information

We currently operate in two geographic areas, the United States and the United Kingdom. We view our operations as three reportable segments, a
Domestic Industrial segment, a Domestic Office segment and an International Office/Retail segment, which participate in the acquisition, development, ownership, and operation of high quality real estate in their respective segments.

Cash Equivalents

We consider short-term
investments with maturities of three months or less when purchased to be cash equivalents. As of March 31, 2010 and December 31, 2009, cash equivalents consisted primarily of investments in money market funds.

Restricted Cash

Restricted cash represents
those cash accounts for which the use of funds is restricted by loan covenants. As of March 31, 2010 and December 31, 2009, our restricted cash balance was $1,415,000 and $1,923,000, respectively, which represents amounts set aside as
impounds for future property tax payments, property insurance payments and tenant improvement payments as required by our agreements with our lenders.

Discontinued Operations and Real Estate Held for Sale

In a period in which a property has been disposed of or is classified as held for sale, the statements of operations for current and prior periods
report the results of operations of the property as discontinued operations.

At such time as a property is deemed held for sale, such
property is carried at the lower of: (1) its carrying amount or (2) fair value less costs to sell. In addition, a property being held for sale ceases to be depreciated. We classify operating properties as property held for sale in the
period in which all of the following criteria are met:



| |  |  | management, having the authority to approve the action, commits to a plan to sell the asset;
| | - |  | --------------------------------------------------------------------------------------------



| |  |  | the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | an active program to locate a buyer and other actions required to complete the plan to sell the asset has been initiated;
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | the sale of the asset is probable and the transfer of the asset is expected to qualify for recognition as a completed sale within one year;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------



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CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



| |  |  | given the actions required to complete the plan to sell the asset, it is unlikely that significant changes to the plan would be made or that the plan would be
withdrawn.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As of March 31, 2010 and December 31, 2009, we did not have any properties held for sale.

Accounting for Derivative Financial Instruments and Hedging Activities

All of our derivative instruments are carried at fair value on the balance sheet. Derivative instruments designated in a hedge relationship to
mitigate exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. We formally document all relationships between hedging instruments and hedged items, as well as our
risk-management objective and strategy for undertaking each hedge transaction. We periodically review the effectiveness of each hedging transaction, which involves estimating future cash flows. Cash flow hedges are accounted for by recording the
fair value of the derivative instrument on the balance sheet as either an asset or liability, with a corresponding amount recorded in other comprehensive income within shareholders equity. Calculation of a fair value of derivative instruments
also requires management to use estimates. Amounts will be reclassified from other comprehensive income to the income statement in the period or periods the hedged forecasted transaction affects earnings. Derivative instruments designated in a hedge
relationship to mitigate exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. The changes in fair value hedges are accounted
for by recording the fair value of the derivative instruments on the balance sheet as either assets or liabilities, with the corresponding amount recorded in current period earnings. We have certain interest rate swap derivatives that are designated
as qualifying cash flow hedges and follow the accounting treatment discussed above. We also have certain interest rate swap derivatives that do not qualify for hedge accounting, and accordingly, changes in fair values are recognized in current
earnings.

We disclose the fair values of derivative instruments and their gains and losses in a tabular format. We also provide more
information about our liquidity by disclosing derivative features that are credit risk-related. Finally, we cross-reference within these footnotes to enable financial statement users to locate important information about derivative instruments (see
Note 14 Derivative Instruments and Note 15 Fair Value of Financial Instruments and Investments for a further discussion of our derivative financial instruments).

Investments in Real Estate

Our investments
in real estate is stated at depreciated cost. Depreciation and amortization are recorded on a straight-line basis over the estimated useful lives as follows:



|                           |  |                                                               
|-------------------------- |  | --------------------------------------------------------------
|Buildings and Improvements |  | 39 years                                                      
|Site Improvements          |  | 15 and 25 years                                               
|Tenant Improvements        |  | Shorter of the useful lives or the terms of the related leases

Improvements and replacements are capitalized when they extend the useful life, increase capacity, or improve the efficiency of the asset. Repairs
and maintenance are charged to expense as incurred. As of March 31, 2010 and December 31, 2009, we owned, on a consolidated basis, 58 and 60 real estate investments, respectively.

We adopted the provisions of Accounting Standard Codification Topic Business Combinations (FASB ASC 805) which
required us to expense the related acquisition costs of acquisitions made during the years following December 31, 2008. The adoption of the provisions of FASB ASC 805 effects our consolidated financial statements, results of operations and cash
flows from operations. We expensed $378,000 of acquisition costs during the three months ended March 31, 2010. There were no acquisition costs incurred during the three months ended March 31, 2009.



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##### Table of Contents

CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



Other Assets

Other assets include the following as of March 31, 2010 and December 31, 2009 (in thousands):



|                                |  |               |     |                  |   |    
|------------------------------- |  | ------------- | --- | ---------------- | - | ---
|                                |  | March 31,2010 |     | December 31,2009
|Prepaid insurance               |  | $             | 89  |                  | $ | 260
|Prepaid real estate taxes       |  |               | 38  |                  |   | 76 
|Interest rate cap at fair value |  |               |    |                  |   | 1  
|Other                           |  |               | 40  |                  |   | 40 
|                                |  |               |     |                  |   |    
|Total                           |  | $             | 167 |                  | $ | 377
|                                |  |               |     |                  |   |    

Concentration of Credit Risk

Our properties are located throughout the United States and in the United Kingdom. The ability of the tenants to honor the terms of their respective
leases is dependent upon the economic, regulatory, and social factors affecting the communities in which the tenants operate. Our credit risk relates primarily to cash, restricted cash, and interest rate swap and cap agreements. Cash accounts at
each institution are insured by the Federal Deposit Insurance Corporation up to $250,000 through December 31, 2013.

We have not
experienced any losses to date on our invested cash and restricted cash. The interest rate cap and swap agreements create credit risk. Credit risk arises from the potential failure of counterparties to perform in accordance with the terms of their
contracts. Our risk management policies define parameters of acceptable market risk and limit exposure to credit risk. Credit exposure resulting from derivative financial instruments is represented by their fair value amounts, increased by an
estimate of potential adverse position exposure arising from changes over time in interest rates, maturities, and other relevant factors. We do not anticipate nonperformance by any of our counterparties.

Non-Controlling Interest

We owned a 99.80%,
99.77%, and 99.65% partnership interest in CBRE OP as of March 31, 2010, December 31, 2009 and March 31, 2009, respectively. The remaining 0.20%, 0.23% and 0.35% partnership interest as of March 31, 2010, December 31, 2009
and March 31, 2009, respectively, was owned by REIT Holdings in the form of 246,361 non-controlling operating partnership units which were exchangeable on a one for one basis for common shares of CBRE REIT, with an estimated aggregate
redemption value of $2,464,000.

Impairment of Long-Lived Assets

We assess whether there has been impairment in the value of our long-lived assets whenever events or changes in circumstances indicate the carrying
amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount to the future net cash flows, undiscounted and without interest, expected to be generated by the asset. If
such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying
amount or fair value, less costs to sell. In spite of intensive leasing efforts and preliminary interest exhibited by a variety of tenants since our acquisition in 2008, the Kings Mountain III property remains vacant. Due to the currently
challenging economic environment, we recognized an impairment of our consolidated investment in Kings Mountain III in the amount of $9,160,000 during the year ended December 31, 2009 which reduced our carrying value of the property to
$15,300,000. Based on the adjusted basis in the Kings Mountain III property no further impairment was recognized during the three months ended March 31, 2010. No impairment of consolidated investments was recognized during the three months
ended March 31, 2010.

Purchase Accounting for Acquisition of Investments in Real Estate

We apply the acquisition method to all acquired real estate investments. The purchase consideration of the real estate is allocated to the acquired
tangible assets, consisting primarily of land, site improvements, building and tenant improvements and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, other value of in-place leases,
value



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##### Table of Contents

CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



of tenant relationships and acquired ground leases, based in each case on their fair values. Loan premiums, in the case of above-market rate loans, or loan discounts, in the case of below-market
loans, will be recorded based on the fair value of any loans assumed in connection with acquiring the real estate.

The fair value of
the tangible assets of an acquired property is determined by valuing the property as if it were vacant, and the as-if-vacant value is then allocated to land (or acquired ground lease if the land is subject to a ground lease), site
improvements, building and tenant improvements based on managements determination of the relative fair values of these assets. Management determines the as-if-vacant fair value of a property using methods similar to those used by independent
appraisers. Factors considered by management in performing these analyses include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating carrying
costs, management includes real estate taxes, insurance and other operating expenses and estimates of lost rental revenue during the expected lease-up periods based on current market demand. Management also estimates costs to execute similar leases
including leasing commissions, legal and other related costs.

In allocating the purchase consideration of the identified intangible
assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference
between (i) the contractual amounts to be paid pursuant to the in-place leases; and (ii) managements estimate of fair market lease rates for the corresponding in-place leases measured over a period equal to the remaining
non-cancelable term of the lease and, for below-market leases, over a period equal to the initial term plus any below-market fixed rate renewal periods. The capitalized below-market lease values, also referred to as acquired lease obligations, are
amortized as an increase to rental income over the initial terms of the respective leases and any below-market fixed rate renewal periods. The capitalized above-market lease values are amortized as a decrease to rental income over the initial terms
of the prospective leases.

The aggregate value of other acquired intangible assets, consisting of in-place leases and tenant
relationships, is measured by the estimated cost of operations during a theoretical lease-up period to replace in-place leases, including lost revenues and any unreimbursed operating expenses, plus an estimate of deferred leasing commissions for
in-place leases. This aggregate value is allocated between in-place lease value and tenant relationships based on managements evaluation of the specific characteristics of each tenants lease; however, the value of tenant relationships
has not been separated from in-place lease value for the real estate acquired as such value and its consequence to amortization expense is immaterial for these particular acquisitions. Should future acquisitions of properties result in allocating
material amounts to the value of tenant relationships, an amount would be separately allocated and amortized over the estimated life of the relationship. The value of in-place leases is amortized to expense over the remaining non-cancelable periods
of the respective leases. If a lease were to be terminated prior to its stated expiration, all unamortized amounts relating to that lease would be written-off.

Comprehensive Income (Loss)

Comprehensive
income (loss) consists of net income (loss) and other comprehensive income (loss). In the accompanying consolidated balance sheets, accumulated other comprehensive income (loss) consists of foreign currency translation adjustments and swap fair
value adjustments for qualifying hedges.

Income Taxes

We have elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code, beginning with our taxable period ended
December 31, 2004. To qualify as a REIT, we must distribute annually at least 90% of our REIT taxable income (determined without regard to the dividends paid deduction and excluding net capital gains) adjusted taxable income, as defined in the
Code, to our shareholders and satisfy certain other organizational and operating requirements. We generally will not be subject to U.S. federal income taxes if we distribute 100% of our taxable income for each year to our shareholders. If we fail to
qualify as a REIT in any taxable year, we will be subject to U.S. federal income taxes (including any applicable alternative minimum tax) on our taxable income at regular corporate rates and may not be able to qualify as a REIT for the four
subsequent taxable years. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and property, and to U.S. federal income taxes and excise taxes on our undistributed taxable income. Except as
discussed below, we believe that we have met all of the REIT distribution and technical requirements for the three months ended March 31, 2010 and the year ended December 31, 2009. Management intends to continue to adhere to these
requirements and maintain our REIT qualification.



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CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



In order for distributions to be deductible for U.S. federal income tax purposes and count towards
our distribution requirement, they must not be preferential dividends. A distribution will not be treated as preferential if it is pro rata among all outstanding shares of stock within a particular class. IRS guidance, however, allows a
REIT to offer shareholders participating in its dividend reinvestment program (DRIP) up to a 5% discount on shares purchased through the DRIP without treating such reinvested dividends as preferential. Our DRIP offers a 5% discount. In
2007, 2008 and the first two quarters of 2009, common shares issued pursuant to our DRIP were treated as issued as of the first day following the close of the quarter for which the distributions were declared, and not on the date that the cash
distributions were paid to shareholders not participating in our DRIP. Because we declare dividends on a daily basis, including with respect to common shares issued pursuant to our DRIP, the IRS could take the position that distributions paid by us
during these periods were preferential on the grounds that the discount provided to DRIP participants effectively exceeded the authorized 5% discount or, alternatively, that the overall distributions were not pro rata among all shareholders. In
addition, in the years 2007 through 2009 we paid certain individual retirement account (IRA) custodial fees in respect of IRA accounts that invested in our common shares. The payment of certain of such amounts could be treated as
dividend distributions to the IRAs, and therefore as preferential dividends as such amounts were not paid in respect of our other outstanding common shares. Although we believe that the effect of the operation of our DRIP and the payment of such
fees was immaterial, the REIT rules do not provide an exception for de minimis preferential dividends.

Accordingly, we submitted a
request to the IRS for a closing agreement under which the IRS would grant us relief for preferential dividends that may have been paid as a result of the manner in which we operated our DRIP and in respect of our payment of certain of such
custodial fees. There can be no assurance that the IRS will accept our proposal for a closing agreement. Even if the IRS accepts the proposal, we may be required to pay a fine if the IRS were to view the prior operation of our DRIP or the payment of
such fees as preferential dividends. We cannot predict whether such a penalty would be imposed or, if so, the amount of the penalty. If the IRS does not agree to our proposal for a closing agreement and treats the foregoing amounts as preferential
dividends, we may be able to rectify its failure to meet the REIT distribution requirements for a year by paying deficiency dividends, which would be paid in respect of all of its common shares pro rata and which would be included in our
deduction for dividends paid in the prior years. If required, such deficiency dividends could be as much as approximately $22 million. In such a case, we would be able to avoid losing our qualification as a REIT or being taxed on amounts distributed
as deficiency dividends. However, we would be required to pay an interest-like penalty based on the amount of its deficiency dividends. Amounts paid as deficiency dividends should generally be treated as taxable income for U.S. federal income tax
purposes.

Revenue Recognition and Valuation of Receivables

All leases are classified as operating leases and minimum rents are recognized on a straight-line basis over the terms of the leases. The excess of
rents recognized over amounts contractually due pursuant to the underlying leases is recorded as deferred rent. In connection with various leases, we have received irrevocable stand-by letters of credit totaling $6,785,000 as security for such
leases at March 31, 2010 and December 31, 2009.

Reimbursements from tenants, consisting of amounts due from tenants for
common area maintenance, real estate taxes, insurance and other recoverable costs, are recognized as revenue in the period the expenses are incurred. Tenant reimbursements are recognized and presented on a gross basis, when we are the primary
obligor with respect to incurring expenses and with respect to having the credit risk.

Tenant receivables and deferred rent receivables
are carried net of the allowances for uncollectible current tenant receivables and deferred rent. Managements determination of the adequacy of these allowances is based primarily upon evaluations of historical loss experience, individual
receivables, current economic conditions, and other relevant factors. The allowances are increased or decreased through the provision for bad debts. The allowance for uncollectible rent receivable was $334,000 and $183,000 as of March 31, 2010
and December 31, 2009 respectively. During the three months ended March 31, 2010, we wrote off $62,000 of the uncollectible rent receivables for the tenant Randal C. Espey at the Deerfield Commons I property and for the tenants Cell Arch
Technologies, Inc. and Keogh Consulting, Inc. at the Lakeside Office Center. $213,000 of allowance for doubtful accounts was recognized during the three months ended March 31, 2010. In addition, the unamortized tangible and intangible asset
balances totaling $23,000 were also written off during the three months ended March 31, 2010, of which ($4,000), $5,000, $7,000 and $15,000 are related to below market leases, lease commissions, tenant improvements and in place lease value,
respectively.



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CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



Offering Costs

Offering costs totaling $12,074,000 and $7,343,000 were incurred during the three months ended March 31, 2010 and 2009, respectively, and are
recorded as a reduction of additional paid-in-capital in the consolidated statement of shareholders equity. Offering costs incurred through March 31, 2010 totaled $104,576,000. Of the total amount, $93,040,000 was incurred to CNL
Securities Corp., as Dealer Manager; $3,969,000 was incurred to CB Richard Ellis Group, Inc., an affiliate of the Investment Advisor; $384,000 was incurred to the Investment Advisor for reimbursable marketing costs and $7,183,000 was incurred to
other service providers. Each party will be paid the amount incurred from proceeds of the public offering. As of March 31, 2010 and December 31, 2009, the accrued offering costs payable to related parties included in our consolidated
balance sheets were $1,151,000 and $1,114,000, respectively. Offering costs payable to unrelated parties of $107,000 and $83,000 at March 31, 2010 and December 31, 2009, respectively, were included in accounts payable and accrued expenses.

Deferred Financing Costs and Discounts on Notes Payable

Direct costs incurred in connection with obtaining financing are amortized over the respective term of the loan on a straight-line basis, which
approximates the effective interest method.

Discounts on notes payable are amortized to interest expense based on the effective
interest method.

Translation of Non-U.S. Currency Amounts

The financial statements and transactions of our United Kingdom real estate operation are recorded in its functional currency, namely the Great
Britain Pound (GBP) and are then translated into U.S. dollars (USD).

Assets and liabilities of this operation
are denominated in the functional currency and are then translated at exchange rates in effect at the balance sheet date. Revenues and expenses are translated at the average exchange rate for the reporting period. Translation adjustments are
reported in Accumulated Other Comprehensive Loss, a component of Shareholders Equity.

The carrying value of our
United Kingdom assets and liabilities fluctuate due to changes in the exchange rate between the USD and the GBP. The exchange rate of the USD to the GBP was $1.5182 and $1.6156 at March 31, 2010 and December 31, 2009, respectively.

The profit and loss weighted average exchange rate of the USD to the GBP was approximately $1.5800 and $1.4475, respectively, for the
three months ended March 31, 2010 and 2009.

Class B InterestRelated Party

Effective July 1, 2004, REIT Holdings, an affiliate of the Investment Advisor, was granted a Class B interest in CBRE OP. The Class B interest
is an equity instrument issued to non-employees in exchange for services. As modified by the second amended and restated agreement of limited partnership of CBRE OP entered into on January 30, 2009 (the Second Amended Partnership
Agreement), the holder is entitled to receive distributions made by CBRE OP in an amount equal to 15% of all net sales proceeds on dispositions of properties or other assets (including by liquidation, merger or otherwise) after the other
partners including us, have received in the aggregate, cumulative distributions from property income, sales proceeds or other services equal to (i) the total capital contributions made to CBRE OP and (ii) a 7% annual, uncompounded return
on such capital contributions. The terms of the termination provision relating to the Class B interest requires its forfeiture in the event the Advisor unilaterally terminates the agreement between the Company, CBRE OP and the Investment Advisor
(the Advisory Agreement). As a result future changes in the fair value of the Class B interest will be deferred from recognition in the financial statements until a listing of the common shares on a national securities exchange or a
change in control transaction takes place.

Earnings Per Share Attributable to CB Richard Ellis Realty Trust Shareholders

Basic net income (loss) per share is computed by dividing income (loss) by the weighted average number of common shares outstanding during each
period. The computation of diluted net income (loss) further assumes the dilutive effect of stock options, stock warrants and contingently issuable shares, if any. No stock options, stock warrants or contingently issuable shares have been issued
since the inception of the REIT and through March 31, 2010. As a result, there is no difference in basic and diluted shares.



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##### Table of Contents

CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



Fair Value of Financial Instruments and Investments

We elected to apply the fair value option for one of our eligible mortgage notes payable that was newly issued debt during the year ended
December 31, 2008. The measurement of the elected mortgage note payable at its fair value and its impact on the statement of operations is described in Note 15 Fair Value of Financial Instruments and Investments and Note 16
Fair Value Option-Note Payable.

We generally determine or calculate the fair value of financial instruments using
appropriate present value or other valuation techniques, such as discounted cash flow analyses, incorporating available market discount rate information for similar types of instruments and our estimates for non-performance and liquidity risk. These
techniques are significantly affected by the assumptions used, including the discount rate, credit spreads, and estimates of future cash flow. The Investment Manager of CBRE Strategic Partners Asia applies valuation techniques for our investment
carried at fair value based upon the application of the income approach, the replacement cost approach or third party appraisals to the underlying assets held in the unconsolidated entity in determining the net asset value attributable to our
ownership interest therein. The financial assets and liabilities recorded at fair value in our consolidated financial statements are the two interest rate swaps, one interest rate cap, our investment in CBRE Strategic Partners Asia (a real estate
entity which qualifies as an investment company under the Investment Company Act), and one mortgage note payable that is economically hedged by one of the interest rate swaps.

The remaining financial assets and liabilities which are only disclosed at fair value are comprised of all other notes payable, the unsecured line
of credit and other debt instruments. We determined the fair value of our secured notes payable and other debt instruments by performing discounted cash flow analyses using an appropriate market discount rate. We calculate the market discount rate
by obtaining period-end treasury rates for fixed-rate debt, or London Inter-Bank Offering Rate (LIBOR) rates for variable-rate debt, for maturities that correspond to the maturities of our debt and then adding an appropriate credit
spread derived from information obtained from third-party financial institutions. These credit spreads take into account factors such as our credit standing, the maturity of the debt, whether the debt is secured or unsecured, and the
loan-to-value ratios of the debt.

The carrying amounts of our cash and cash equivalents, restricted cash, accounts receivable and
accounts payable approximate fair value due to their short-term maturities.

We adopted the fair value measurement criteria described
herein for our non-financial assets and non-financial liabilities on January 1, 2009. The adoption of the fair value measurement criteria to our non-financial assets and liabilities did not have a material impact to our consolidated financial
statements. Assets and liabilities typically recorded at fair value on a non-recurring basis include:



| | ¡ |  | Non-financial assets and liabilities initially measured at fair value in an acquisition or business combination;
| | - |  | ----------------------------------------------------------------------------------------------------------------



| | ¡ |  | Long-lived assets measured at fair value due to an impairment assessment; and
| | - |  | -----------------------------------------------------------------------------



| | ¡ |  | Asset retirement obligations initially measured under the Codification Topic Asset Retirement and Environmental Obligations (FASB ASC
410).
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------

Non-controlling (Minority) Interests in the Operating Partnership

Effective January 1, 2009, we adopted FASB ASC 810. The new accounting provisions require that amounts formerly reported as minority interests
in our consolidated financial statements be reported as non-controlling interests. In connection with the issuance of this adoption, certain revisions were also made to the Codification Topic Distinguishing Liabilities from Equity
(FASB ASC 480-10-S99-3A). These revisions clarify that non-controlling interests with redemption provisions outside of the control of the issuer and non-controlling interests with redemption provisions that permit the issuer to settle in
either cash or common shares at the option of the issuer are subject to evaluation to determine the appropriate balance sheet classification and measurement of such instruments.

With respect to the operating partnership units, FASB ASC 480-10-S99-3A requires non-controlling interests with redemption provisions that permit
the issuer to settle in either cash or common shares at the option of the issuer to be further evaluated under the Codification Sub-Topic Derivatives and HedgingConditions Necessary for Equity Classification (FASB ASC
815-40-25-10) (Paragraphs 815-40-25-39 through 815-40-25-42) to determine whether permanent equity or temporary equity classification on the balance sheet is appropriate. Since the operating partnership units contain such a provision, the
Company evaluated this guidance and determined that the operating partnership units do not meet the requirements to qualify for equity presentation. As a result, upon the



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##### Table of Contents

CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



adoption of FASB ASC 810 and the related revisions to FASB ASC 480-10-S99-3A, the operating partnership units are presented in the temporary equity section of the consolidated balance sheets and
reported at the higher of their proportionate share of the net assets of CBRE OP or fair value, with period to period changes in value reported as an adjustment to shareholders equity. Under the terms of the Second Amended Partnership
Agreement the fair value of the operating partnership units is determined as an amount equal to the redemption value as defined therein.

Subsequent
Events

Effective for the second quarter of 2009, we adopted the provisions of FASB ASC 855-10Subsequent Events
(FASB ASC 855-10), as amended by Accounting Standard Update 2010-09. ASC 855-10 establishes principles and requirements for evaluating and reporting subsequent events and distinguishes which subsequent events should be recognized in the
financial statements versus which subsequent events should be disclosed in the financial statements. The adoption of ASC 855-10 did not have a material impact on our financial statements.

In preparing our accompanying financial statements, management has evaluated subsequent events through the financial statement issuance date.

Adoption of Accounting Standards

Consolidations

In December 2009, the
Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2009-17, Consolidations (Topic 810): Improvements to Financial Reporting by Enterprises Involved with Variable Interest
Entities which incorporates Statement of Financial Accounting Standards (SFAS) No. 167, Amendments to FASB Interpretation No. 46(R), issued by the FASB in June 2009. The amendments in ASU 200917 replace
the quantitative-based risks and rewards calculation for determining which reporting entity, if any, has a controlling financial interest in a VIE with an approach focused on identifying which reporting entity has the power to direct the activities
of a VIE that most significantly impact such entitys economic performance and (i) the obligation to absorb losses of such entity or (ii) the right to receive benefits from such entity. ASU 2009-17 also requires additional disclosures
about a reporting entitys involvement in VIEs, which enhances the information provided to users of financial statements. We adopted ASU 2009-17 effective January 1, 2010. As a result of the fact that we have no variable interests in
VIEs, the adoption of ASU 2009-17 did not have a material impact on our financial statements.

Fair Value Measurements and Disclosures

In January 2010, the FASB issued ASU 2010-06 which was an update to the Fair Value Measurements and Disclosure topic of the
FASB Accounting Standards Codification (the Codification). ASU 2010-06 clarifies disclosure requirements relating to the level of disaggregation of disclosures relating to classes of assets and liabilities and disclosures about inputs
and valuation techniques used to measure fair value for both recurring and nonrecurring fair value estimates for Level 2 or Level 3 assets and liabilities. These requirements of ASU 2010-06 are effective for interim and annual disclosures for
interim and annual reporting periods beginning after December 15, 2009. The adoption of these requirements of the ASU did not have a material impact on our financial statements.

New Accounting Standards

ASU 2010-06 also
requires additional disclosures regarding the transfers of classifications among the fair value classification levels as well as the reasons for those changes and a separate presentation of purchases, sales, issuances and settlements in the
presentation of the roll-forward of Level 3 assets and liabilities. Those disclosures are effective for interim and annual reporting periods for fiscal years beginning after December 15, 2010. The adoption of this portion of ASU 2010-06 is not
expected to have a material impact on our financial statements.

Other Accounting Standards Updates not effective until after
December 31, 2010 are not expected to have a significant effect on our consolidated financial position or results of operations.



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##### Table of Contents

CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



3. Acquisition and Transfer of Real Estate

The fair value of the real estate acquired is allocated to the acquired tangible assets, consisting of land, site improvements, building and tenant
improvements, and identified intangible assets and liabilities, consisting of the value of above and below-market leases and the value of in-place leases and tenant relationships, if any, based in each case on their respective fair values. Loan
premiums, in the case of above-market rate loans, or loan discounts, in the case of below-market loans, will be recorded based on the fair value of any loans assumed in connection with acquiring the real estate. Acquisition costs are expensed as
incurred.

There were no acquisitions of consolidated real estate during the three months ended March 31, 2010.

Building Improvements are depreciated over 39 years; Site Improvements are depreciated over 15 and 25 years; Tenant Improvements, Acquired In-Place
Lease Value, Above Market Lease Value and Below Market Lease Value are amortized over the remaining lease terms at the time of acquisition.

The following table summarizes the net assets transferred to the Duke joint venture on March 31, 2010 relating to the contribution of our 100%
ownership interests in the Miramar I and Miramar II properties (amounts in thousands):



|                                          |  |      |       |                  |   |       |                      |  |   |                    |   |  |                              |       |   |                       |   |       |                      |  |   |       |   |  |   |        |  
|----------------------------------------- |  | ---- | ----- | ---------------- | - | ----- | -------------------- |  | - | ------------------ | - |  | ---------------------------- | ----- | - | --------------------- | - | ----- | -------------------- |  | - | ----- | - |  | - | ------ | -
|Property                                  |  | Land |       | SiteImprovements |   |       | BuildingImprovements |  |   | TenantImprovements |   |  | Acquired In-Place LeaseValue |       |   | AboveMarketLeaseValue |   |       | NetAssetsTransferred | 
|Miramar I                                 |  | $    | 3,347 |                  | $ | 1,000 |                      |  | $ | 7,607              |   |  | $                            | 716   |   |                       | $ | 3,380 |                      |  | $ | 950   |   |  | $ | 17,000 |  
|Miramar II                                |  |      | 4,477 |                  |   | 1,142 |                      |  |   | 13,110             |   |  |                              | 827   |   |                       |   | 4,550 |                      |  |   | 1,373 |   |  |   | 25,479 |  
|                                          |  |      |       |                  |   |       |                      |  |   |                    |   |  |                              |       |   |                       |   |       |                      |  |   |       |   |  |   |        |  
|Total Assets                              |  |      | 7,824 |                  |   | 2,142 |                      |  |   | 20,717             |   |  |                              | 1,543 |   |                       |   | 7,930 |                      |  |   | 2,323 |   |  |   | 42,479 |  
|                                          |  |      |       |                  |   |       |                      |  |   |                    |   |  |                              |       |   |                       |   |       |                      |  |   |       |   |  |   |        |  
|Accumulated Depreciation and Amortization |  |      |      |                  |   | (36   | )                    |  |   | (133               | ) |  |                              | (55   | ) |                       |   | (284  | )                    |  |   | (83   | ) |  |   | (591   | )
|                                          |  |      |       |                  |   |       |                      |  |   |                    |   |  |                              |       |   |                       |   |       |                      |  |   |       |   |  |   |        |  
|Net Assets                                |  | $    | 7,824 |                  | $ | 2,106 |                      |  | $ | 20,584             |   |  | $                            | 1,488 |   |                       | $ | 7,646 |                      |  | $ | 2,240 |   |  | $ | 41,888 |  
|                                          |  |      |       |                  |   |       |                      |  |   |                    |   |  |                              |       |   |                       |   |       |                      |  |   |       |   |  |   |        |  

The contribution resulted in the deconsolidation of the Miramar I and Miramar II properties from our balance sheet on
March 31, 2010 based on the contribution from consolidated subsidiaries to an unconsolidated investee entity, the Duke joint venture. As a result of the contribution, our investment in the Duke joint venture increased by $42,378,000 (inclusive
of proration credits of $281,000 transferred to the Duke joint venture). We recorded a gain on the contribution of $154,000. Included in operations for the three months ended March 31, 2010, were revenues of $1,348,000 and operating expenses of
$817,000. There were no comparable amounts of operations during the three months ended March 31, 2009 as the two contributed properties were not acquired until December 31, 2009.

4. Investments in Unconsolidated Entities

Investments in unconsolidated entities at March 31, 2010 and December 31, 2009 consist of the following (in thousands):



|                             |  |               |         |                  |   |        
|---------------------------- |  | ------------- | ------- | ---------------- | - | -------
|                             |  | March 31,2010 |         | December 31,2009
|CBRE Strategic Partners Asia |  | $             | 7,966   |                  | $ | 8,142  
|Duke Joint Venture           |  |               | 240,190 |                  |   | 185,088
|Afton Ridge Joint Venture    |  |               | 20,812  |                  |   | 20,867 
|                             |  |               |         |                  |   |        
|                             |  | $             | 268,968 |                  | $ | 214,097
|                             |  |               |         |                  |   |        



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##### Table of Contents

CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



The following is a summary of the investments in unconsolidated entities for the three months
ended March 31, 2010 and for the year ended December 31, 2009 (in thousands):



|                                                                             |  |                                         |         |   |                                     |   |         |  
|---------------------------------------------------------------------------- |  | --------------------------------------- | ------- | - | ----------------------------------- | - | ------- | -
|                                                                             |  | For the Three MonthsEnded
March 31,2010 |         |   | For the Year EndedDecember 
31,2009 |  
|Investment Balance, January 1                                                |  | $                                       | 214,097 |   |                                     | $ | 131,703 |  
|Contributions                                                                |  |                                         | 64,463  |   |                                     |   | 91,536  |  
|Company Basis Additions                                                      |  |                                         |        |   |                                     |   | 43      |  
|REIT Basis Adjustments                                                       |  |                                         | (617    | ) |                                     |   | (142    | )
|Companys Equity in Net Income (including adjustments for basis differences) |  |                                         | 737     |   |                                     |   | 2,743   |  
|Distributions                                                                |  |                                         | (9,712  | ) |                                     |   | (11,786 | )
|                                                                             |  |                                         |         |   |                                     |   |         |  
|Investment Balance, End of Period                                            |  | $                                       | 268,968 |   |                                     | $ | 214,097 |  
|                                                                             |  |                                         |         |   |                                     |   |         |  

CBRE Strategic Partners Asia

We have agreed to a capital commitment of $20,000,000 in CBRE Strategic Partners Asia, which extends for 36 months (to January 31, 2011) after
the close of the final capital commitment. The investment commitment period was extended in January 2010 for a one year period from January 31, 2010 through January 31, 2011. As of March 31, 2010, we have contributed $11,514,000 of
our capital commitment which was funded using net proceeds from our public offerings. CBRE Investors, our sponsor, formed CBRE Strategic Partners Asia to purchase, reposition, develop, hold for investment and sell institutional quality real estate
and related assets in targeted markets in Asia, including China, Japan, India, South Korea, Hong Kong, Singapore and other Asia Pacific markets. The initial closing date of CBRE Strategic Partners Asia was in July 2007, with additional commitments
being accepted through January 2008. CBRE Strategic Partners Asia closed on January 31, 2008, with aggregate capital commitments of $394,200,000. CBRE Strategic Partners Asia has an eight year term, which may be extended for up to two one-year
periods with the approval of two-thirds of the limited partners.

As of March 31, 2010, CBRE Strategic Partners Asia, with its
parallel fund, CB Richard Ellis Strategic Partners Asia II, L.P., had aggregate investor commitments of approximately $394,200,000 from institutional investors including CBRE Investors. We own an ownership interest of approximately 5.07% in CBRE
Strategic Partners Asia. As of March 31, 2010, CBRE Strategic Partners Asia had acquired ownership interests in 10 properties, five in China and five in Japan and had sold one of the residential properties in China. Our capital commitment is
currently being pledged as collateral for borrowings of CBRE Strategic Partners Asia of which our pro-rata portion of such borrowing was approximately $2,903,000 and $5,208,000, based on our 5.07% ownership interest at March 31, 2010 and
December 31, 2009, respectively.

On March 4, 2010, we received a distribution of net sales proceeds from CBRE Strategic
Partners Asia totaling $2,435,000 from the February 23, 2010 sale of a residential property located in Beijing, China. The cash distributions in connection with the Beijing residential property sale are subject to recall and reinvestment into
appropriate investments until the expiration of the CBRE Strategic Partners Asia commitment period on January 31, 2011.

We carry
our investment in CBRE Strategic Partners Asia on the equity method of accounting. Those investments where we have the ability to exercise significant influence (but not control) over operating and financial policies of such entities (including
certain entities where we have less than 20% ownership) are accounted for using the equity method. Accordingly, our share of the income or loss of these equity method entities is included in consolidated net income or loss. CBRE Strategic Partners
Asia is a limited partnership that qualifies for specialized industry accounting for investment companies. Specialized industry accounting allows investment companies to carry their investments at fair value, with changes in the fair value of the
investments recorded in the statement of operations. On the basis of the guidance in ASC 970-323, the Company accounts for its investment in CBRE Strategic Partners Asia under the equity method. As a result, and in accordance with ASC 810-10-25-15
the specialized accounting treatment, principally fair value basis, applied by CBRE Strategic Partners Asia under the investment company guide is retained in the recognition of equity method earnings in the statement of operations of the Company.
See Note 15 Fair Value of Financial Instruments and Investments for further discussion of the application of the fair value accounting to our investment in CBRE Strategic Partners Asia.



16



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##### Table of Contents

CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



Consolidated Balance Sheets of CBRE Strategic Partners Asia as of March 31, 2010 (unaudited)
and December 31, 2009 (in thousands):



|                             |  |               |         |                  |   |        
|---------------------------- |  | ------------- | ------- | ---------------- | - | -------
|                             |  | March 31,2010 |         | December 31,2009
|Assets                       |  |               |         |                  |   |        
|Real Estate                  |  | $             | 254,743 |                  | $ | 332,712
|Other Assets                 |  |               | 14,474  |                  |   | 11,224 
|                             |  |               |         |                  |   |        
|Total Assets                 |  | $             | 269,217 |                  | $ | 343,936
|                             |  |               |         |                  |   |        
|Liabilities and Equity       |  |               |         |                  |   |        
|Notes Payable                |  | $             | 43,282  |                  | $ | 68,686 
|Loan Payable                 |  |               | 57,260  |                  |   | 102,716
|Other Liabilities            |  |               | 9,818   |                  |   | 10,509 
|                             |  |               |         |                  |   |        
|Total Liabilities            |  |               | 110,360 |                  |   | 181,911
|                             |  |               |         |                  |   |        
|Companys Equity             |  |               | 7,966   |                  |   | 8,142  
|Other Investors Equity      |  |               | 150,891 |                  |   | 153,883
|                             |  |               |         |                  |   |        
|Total Liabilities and Equity |  | $             | 269,217 |                  | $ | 343,936
|                             |  |               |         |                  |   |        

Consolidated Statements of Operations of CBRE Strategic Partners
Asia for the three months ended March 31, 2010 and 2009 (unaudited) (in thousands):



|                                               |  |                            |        |   |      |   |         |  
|---------------------------------------------- |  | -------------------------- | ------ | - | ---- | - | ------- | -
|                                               |  | ThreeMonths EndedMarch 31, |       
|                                               |  | 2010                       |        |   | 2009 |  
|Total Revenues and Appreciation (Depreciation) |  | $                          | (614   | ) |      | $ | 294     |  
|Total Expenses                                 |  |                            | 2,666  |   |      |   | 20,174  |  
|                                               |  |                            |        |   |      |   |         |  
|Net Loss                                       |  |                            | (3,280 | ) |      |   | (19,980 | )
|                                               |  |                            |        |   |      |   |         |  
|Companys Equity in Net Loss                   |  | $                          | (176   | ) |      | $ | (1,019  | )
|                                               |  |                            |        |   |      |   |         |  

Duke Joint Venture

On May 5, 2008, we entered into a contribution agreement with Duke Realty Limited Partnership (Duke), a subsidiary of Duke Realty
Corporation (NYSE: DRE), to form the Duke joint venture to acquire $248,900,500 in industrial real property assets (the Industrial Portfolio). The Industrial Portfolio consists of six bulk industrial built-to-suit, fully leased
properties. On September 12, 2008, we entered into an amendment to the contribution agreement to acquire a fully leased office building for $37,111,000 and to increase and revise the total purchase commitment to $282,400,000. We own an 80%
interest and Duke owns a 20% interest in the Duke joint venture.

On June 12, 2008, September 30, 2008 and December 10,
2008, the Duke joint venture acquired fee interests in seven properties pursuant to the contribution agreement. All of the properties acquired were new built-to-suit, 100% leased, single-tenant buildings that do not have an operating history. The
Duke joint venture obtained financing from 40/86 Mortgage Capital, Inc. for each of the seven properties. The financings, totaling $150,000,000, carry an interest rate of 5.58%, a term of five years and are cross-collateralized among the properties.
The seven buildings were completed in 2008.

On May 13, 2009, the Duke joint venture acquired each of (i) 22535 Colonial
Pkwy., located at 22535 Colonial Pkwy., Katy, TX, a suburb of Houston, (ii) Celebration Office Center III, located at 1390 Celebration Blvd., Celebration, FL, a suburb of Orlando, and (iii) Fairfield Distribution Ctr. IX located 4543-4561
Oak Fair Blvd., Tampa FL. The Duke joint venture acquired 22535 Colonial Pkwy. for approximately $14,700,000, Celebration Office Center III for approximately $17,050,000 and Fairfield Distribution Ctr. IX for approximately $9,300,000, exclusive of
customary closing costs which were both expensed as incurred. We made cash contributions totaling approximately $32,840,000 to the Duke joint venture in connection with these acquisitions, using the net proceeds from our current public offering.



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CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



On October 15, 2009, the Duke joint venture acquired Northpoint III, located at 3300 Exchange
Place, Lake Mary, FL, a suburb of Orlando, for approximately $18,240,000, exclusive of customary closing costs and acquisition fees which were both expensed as incurred. We made cash contributions totaling approximately $14,592,000 to the
Duke joint venture in connection with the acquisition.

On December 7, 2009, the Duke joint venture acquired Goodyear Crossing
Ind. Park II, located at 16920 W. Commerce Drive, Goodyear, AZ, a suburb of Phoenix, for approximately $45,645,000, exclusive of customary closing costs and acquisition fees which were both expensed as incurred. We own an 80% interest in
the Duke joint venture and we made cash contributions of approximately $36,516,000 to the Duke joint venture in connection with the acquisition.

On March 31, 2010, the Duke joint venture acquired 3900 North Paramount Parkway, 3900 South Paramount Parkway and 1400 Perimeter Park Drive in
Morrisville, NC, a suburb of Raleigh, for approximately $35,250,000, exclusive of customary closing costs and acquisition fees which are both expensed as incurred. We made contributions of approximately of $28,125,000 ($19,649,000 was made in cash
and $8,476,000 in-kind as discussed below) to the Duke joint venture in connection with the acquisition.

On
March 31, 2010, we contributed our Miramar I and Miramar II properties, located at 2300 and 2200 SW
145thAvenue in Miramar, FL, a suburb of Miami, to the Duke joint venture for
approximately our cost of $42,650,000. Our cost of $42,650,000, of which $8,476,000 was considered an in-kind contribution by us to the Duke joint venture representing our 20% divestiture of the Miramar I and Miramar II properties, was part of a
structured transaction as an offset to the $28,125,000 owed by us for our 80% share of the Duke joint ventures purchase of 3900 North Paramount Parkway, 3900 South Paramount Parkway and 1400 Perimeter Park Drive.

As of March 31, 2010, the Duke joint venture has purchased approximately $465,766,000 of assets, exclusive of acquisition fees and closing
costs, and holds interests in 17 properties, six located in Florida, three located in North Carolina, two located in Indiana, two located in Texas, two located in Arizona and one in each of Ohio and Tennessee.

The following table provides further detailed information concerning the properties held in the Duke joint venture at March 31, 2010:



|                                              |  |                        |  |                       |  |                            |  |                 |  |                             |             |                                              |   |                          |  |                   |             |  |   |          
|--------------------------------------------- |  | ---------------------- |  | --------------------- |  | -------------------------- |  | --------------- |  | --------------------------- | ----------- | -------------------------------------------- | - | ------------------------ |  | ----------------- | ----------- |  | - | ---------
|Property and Market                           |  | PropertyType           |  | NetRentableSquareFeet |  | Tenant                     |  | LeaseExpiration |  | ApproximatePurchasePrice(1) |             | Pro RataShare ofApproximatePurchasePrice
(2) |   | ApproximateDebtFinancing |  | AcquisitionFee(3)
|Buckeye Logistics Center / Phoenix, AZ        |  | Warehouse/Distribution |  | 604,678               |  | Amazon.com(4)              |  | 06/2018         |  | $                           | 43,601,000  |                                              | $ | 34,880,800               |  | $                 | 20,000,000  |  | $ | 349,000  
|201 Sunridge Blvd. /Dallas, TX                |  | Warehouse/Distribution |  | 822,550               |  | Unilever(5)                |  | 09/2018         |  |                             | 31,626,000  |                                              |   | 25,300,800               |  |                   | 19,400,000  |  |   | 253,000  
|12200 Presidents Court / Jacksonville, FL    |  | Warehouse/Distribution |  | 772,210               |  | Unilever(5)                |  | 09/2018         |  |                             | 36,956,000  |                                              |   | 29,564,800               |  |                   | 21,600,000  |  |   | 296,000  
|AllPoints at Anson Bldg. 1 / Indianapolis, IN |  | Warehouse/Distribution |  | 630,573               |  | Amazon.com(4)              |  | 07/2018         |  |                             | 33,401,000  |                                              |   | 26,720,800               |  |                   | 17,000,000  |  |   | 267,000  
|Aspen Corporate Center 500 /Nashville, TN     |  | Office                 |  | 180,147               |  | VerizonWireless(6)         |  | 10/2018         |  |                             | 37,111,000  |                                              |   | 29,688,800               |  |                   | 21,200,000  |  |   | 297,000  
|125 Enterprise Parkway / Columbus, OH         |  | Warehouse/Distribution |  | 1,142,400             |  | Kelloggs                  |  | 03/2019         |  |                             | 47,905,000  |                                              |   | 38,324,000               |  |                   | 26,800,000  |  |   | 383,000  
|AllPoints Midwest Bldg. 1 /Indianapolis, IN   |  | Warehouse/Distribution |  | 1,200,420             |  | PrimeDistribution          |  | 05/2019         |  |                             | 51,800,000  |                                              |   | 41,440,000               |  |                   | 24,000,000  |  |   | 414,000  
|22535 Colonial Pkwy. /Houston, TX             |  | Office                 |  | 89,750                |  | Det NorskeVeritas          |  | 06/2019         |  |                             | 14,700,000  |                                              |   | 11,760,000               |  |                   |            |  |   | 176,000  
|Celebration Office Center III / Orlando, FL   |  | Office                 |  | 100,924               |  | Disney VacationDevelopment |  | 04/2016         |  |                             | 17,050,000  |                                              |   | 13,640,000               |  |                   |            |  |   | 205,000  
|Fairfield Distribution Ctr. IX / Tampa, FL    |  | Warehouse/Distribution |  | 136,212               |  | Iron Mountain              |  | 08/2025         |  |                             | 9,300,000   |                                              |   | 7,440,000                |  |                   |            |  |   | 112,000  
|Northpoint III / Orlando, FL                  |  | Office                 |  | 108,499               |  | Florida Power              |  | 10/2021         |  |                             | 18,240,000  |                                              |   | 14,592,000               |  |                   |            |  |   | 219,000  
|Goodyear Crossing Ind. Park II / Phoenix, AZ  |  | Warehouse/Distribution |  | 820,384               |  | Amazon.com(4)              |  | 09/2019         |  |                             | 45,645,000  |                                              |   | 36,516,000               |  |                   |            |  |   | 548,000  
|3900 N. Paramount Pkwy. /Raleigh, NC          |  | Office                 |  | 100,987               |  | PPD Development            |  | 11/2023         |  |                             | 13,970,000  |                                              |   | 11,176,000               |  |                   |            |  |   | 168,000  
|3900 S. Paramount Pkwy. / Raleigh, NC         |  | Office                 |  | 119,170               |  | PPD Development/LSSI       |  | 11/202310/2012  |  |                             | 16,319,000  |                                              |   | 13,055,200               |  |                   |            |  |   | 196,000  
|1400 Perimeter Park Drive / Raleigh, NC       |  | Office                 |  | 44,916                |  | PPD Development            |  | 11/2023         |  |                             | 4,962,000   |                                              |   | 3,969,600                |  |                   |            |  |   | 60,000   
|Miramar I/ Miami, FL(7)                       |  | Office                 |  | 94,060                |  | DeVry                      |  | 11/2017         |  |                             | 17,056,000  |                                              |   | 13,644,800               |  |                   |            |  |   |         
|Miramar II/ Miami, FL(7)                      |  | Office                 |  | 128,540               |  | Royal Caribbean            |  | 05/2016         |  |                             | 26,124,000  |                                              |   | 20,899,200               |  |                   |            |  |   |         
|                                              |  |                        |  |                       |  |                            |  |                 |  |                             |             |                                              |   |                          |  |                   |             |  |   |          
|                                              |  |                        |  | 7,096,420             |  |                            |  |                 |  | $                           | 465,766,000 |                                              | $ | 372,612,800              |  | $                 | 150,000,000 |  | $ | 3,943,000
|                                              |  |                        |  |                       |  |                            |  |                 |  |                             |             |                                              |   |                          |  |                   |             |  |   |          



|(1) | Approximate total purchase price, exclusive of closing costs, paid by the Duke joint venture for each of these properties.
|--- | --------------------------------------------------------------------------------------------------------------------------



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CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



|(2) | Pro rata share of approximate purchase price is at our pro rata share of effective ownership for each of these properties, which was funded using net proceeds
of our public offerings.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | Acquisition fees paid to our Investment Advisor are included in the total acquisition cost for the properties acquired prior to January 1, 2009, but are
included as acquisition expenses for properties acquired subsequent to December 31, 2008.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(4) | Our tenants Amazon.com.indc, LLC, Amazon.com.axdc, Inc. and Amazon.com.azdc, Inc. are wholly-owned subsidiaries of Amazon.com. AllPoints at Anson Bldg. 1,
Buckeye Logistics Center and Goodyear Crossing Ind. Park II are among Amazons largest fulfillment centers in North America by square footage.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(5) | Our tenant CONOPCO, Inc. is a wholly-owned subsidiary of Unilever United States, Inc., which is wholly-owned by Unilever N.V. and Unilever PLC, together
Unilever.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(6) | Our tenant Cello Partnership does business as Verizon Wireless.
|--- | ---------------------------------------------------------------



|(7) | Consolidated properties acquired on December 31, 2009 and contributed to the Duke joint venture on March 31, 2010.
|--- | ------------------------------------------------------------------------------------------------------------------

We entered into an operating agreement for the Duke joint venture with Duke on June 12, 2008. Duke acts as the managing member of the Duke
joint venture and is entitled to receive fees in connection with the services it provides to the Duke joint venture, including asset management, construction, development, leasing and property management services. Duke is also entitled to a promoted
interest in the Duke joint venture. We have joint approval rights over all major decisions.

For a period of three years from the date
of the operating agreement, the Duke joint venture will have the right of first offer to acquire additional newly developed bulk industrial built-to-suit properties from Duke if such properties satisfy certain specified conditions. We will retain
the right to approve the acquisition and purchase price of each such property. The total amount of properties (inclusive of the Industrial Portfolio) that may be contributed to the Duke joint venture over this period may be up to $800,000,000. As of
March 31, 2010, we have no further required capital commitments to fund the Duke joint venture, but may continue to participate in future available properties at our discretion.

We carry our investment in the Duke joint venture on the equity method of accounting because it is an entity under common control with
Duke. Those investments where we have the ability to exercise significant influence (but not control) over operating and financial policies of such entities are accounted for using the equity method. We eliminate transactions with such equity
method subsidiaries to the extent of our ownership in such entities.

Consolidated Balance Sheet of the Duke joint venture as of
March 31, 2010 (unaudited) (in thousands):



|                             |  |               |         |                            |   |       |  |   |        
|---------------------------- |  | ------------- | ------- | -------------------------- | - | ----- |  | - | -------
|                             |  | March 31,2010 |         | REIT BasisAdjustments 
(1) |   | Total
|Assets                       |  |               |         |                            |   |       |  |   |        
|Real Estate Net              |  | $             | 414,902 |                            | $ | 2,257 |  | $ | 417,159
|Other Assets                 |  |               | 37,364  |                            |   |      |  |   | 37,364 
|                             |  |               |         |                            |   |       |  |   |        
|Total Assets                 |  | $             | 452,266 |                            | $ | 2,257 |  | $ | 454,523
|                             |  |               |         |                            |   |       |  |   |        
|Liabilities and Equity       |  |               |         |                            |   |       |  |   |        
|Notes Payable                |  | $             | 150,000 |                            |   |      |  | $ | 150,000
|Other Liabilities            |  |               | 4,850   |                            |   |      |  |   | 4,850  
|                             |  |               |         |                            |   |       |  |   |        
|Total Liabilities            |  |               | 154,850 |                            |   |      |  |   | 154,850
|                             |  |               |         |                            |   |       |  |   |        
|Companys Equity             |  |               | 237,933 |                            |   | 2,257 |  |   | 240,190
|Other Investors Equity      |  |               | 59,483  |                            |   |      |  |   | 59,483 
|                             |  |               |         |                            |   |       |  |   |        
|Total Liabilities and Equity |  | $             | 452,266 |                            | $ | 2,257 |  | $ | 454,523
|                             |  |               |         |                            |   |       |  |   |        



|(1) | REIT Basis Adjustments include those costs incurred by the Company outside of the Duke joint venture that are directly capitalizable to its investment in real
estate assets acquired within the Duke joint venture including acquisition costs paid to our Investment Advisor prior to January 1, 2009. Thereafter such acquisition fees were expensed as incurred.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



Consolidated Balance Sheet of the Duke joint venture as of December 31, 2009 (in thousands):



|                             |  |                  |         |                            |   |       |  |   |        
|---------------------------- |  | ---------------- | ------- | -------------------------- | - | ----- |  | - | -------
|                             |  | December 31,2009 |         | REIT BasisAdjustments 
(1) |   | Total
|Assets                       |  |                  |         |                            |   |       |  |   |        
|Real Estate Net              |  | $                | 339,746 |                            | $ | 2,906 |  | $ | 342,652
|Other Assets                 |  |                  | 41,979  |                            |   |      |  |   | 41,979 
|                             |  |                  |         |                            |   |       |  |   |        
|Total Assets                 |  | $                | 381,725 |                            | $ | 2,906 |  | $ | 384,631
|                             |  |                  |         |                            |   |       |  |   |        
|Liabilities and Equity       |  |                  |         |                            |   |       |  |   |        
|Notes Payable                |  | $                | 150,000 |                            |   |      |  | $ | 150,000
|Other Liabilities            |  |                  | 4,295   |                            |   |      |  |   | 4,295  
|                             |  |                  |         |                            |   |       |  |   |        
|Total Liabilities            |  |                  | 154,295 |                            |   |      |  |   | 154,295
|                             |  |                  |         |                            |   |       |  |   |        
|Companys Equity             |  |                  | 182,182 |                            |   | 2,906 |  |   | 185,088
|Other Investors Equity      |  |                  | 45,248  |                            |   |      |  |   | 45,248 
|                             |  |                  |         |                            |   |       |  |   |        
|Total Liabilities and Equity |  | $                | 381,725 |                            | $ | 2,906 |  | $ | 384,631
|                             |  |                  |         |                            |   |       |  |   |        





|(1) | REIT Basis Adjustments include those costs incurred by the Company outside of the Duke joint venture that are directly capitalizable to its investment in real
estate assets acquired within the Duke joint venture including acquisition costs paid to our Investment Advisor prior to January 1, 2009. Thereafter such acquisition fees were expensed as incurred.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Consolidated Statement of Operations of the Duke joint venture for the three months ended March 31, 2010 and 2009, (unaudited) (in thousands);



|                               |  |                             |       |   |      |   |       |  
|------------------------------ |  | --------------------------- | ----- | - | ---- | - | ----- | -
|                               |  | Three Months EndedMarch 31, |      
|                               |  | 2010                        |       |   | 2009 |  
|Total Revenues                 |  | $                           | 9,960 |   |      | $ | 6,211 |  
|Operating Expenses             |  |                             | 2,378 |   |      |   | 1,161 |  
|Interest                       |  |                             | 2,144 |   |      |   | 2,144 |  
|Depreciation and Amortization  |  |                             | 4,086 |   |      |   | 2,789 |  
|                               |  |                             |       |   |      |   |       |  
|Net Income                     |  | $                           | 1,352 |   |      | $ | 117   |  
|                               |  |                             |       |   |      |   |       |  
|Companys Share in Net Income  |  | $                           | 844   |   |      | $ | 117   |  
|Adjustments for Company Basis  |  |                             | (32   | ) |      |   | (32   | )
|                               |  |                             |       |   |      |   |       |  
|Companys Equity in Net Income |  | $                           | 811   |   |      | $ | 85    |  
|                               |  |                             |       |   |      |   |       |  

Afton Ridge Joint Venture

On September 18, 2008, we acquired a 90% ownership interest in Afton Ridge, the owner of Afton Ridge Shopping Center, from unrelated third
parties. CK Afton Ridge Shopping Center, LLC, a subsidiary of Childress Klein Properties, Inc. (CK Afton Ridge), retained a 10% ownership interest in Afton Ridge and continues to manage Afton Ridge Shopping Center. CK Afton Ridge acts as
the managing member of Afton Ridge and is entitled to receive fees, including management, construction management and property management fees. We have joint approval rights over all major policy decisions.

Afton Ridge Shopping Center is located at the intersection of I-85 and Kannapolis Parkway, in Kannapolis, North Carolina. We acquired our ownership
interest in Afton Ridge for approximately $45,000,000, exclusive of customary closing costs, which was funded using net proceeds from our initial public offering. Upon closing, we paid our Investment Advisor an acquisition fee of approximately
$450,000. This acquisition fee is not included in the $45,000,000 total acquisition cost of Afton Ridge, but is included as additional cost basis at our wholly-owned investment subsidiary.

The purchase agreement with the seller contained a two year master lease agreement whereby rental revenues were guaranteed by the seller on the 9%
unoccupied space at the date of the acquisition up to a maximum of $1,102,000. In addition, leasing commissions and



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CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



tenant improvement allowances were to be reimbursed under the purchase agreement up to $934,000 over the same two year period for leasing activities incurred by Afton Ridge to lease this
unoccupied space. As of March 31, 2010, $691,000 in rental revenue guarantee payments and $521,000 in leasing commission and tenant reimbursement payments, respectively, have been received by Afton Ridge and treated as purchase price
adjustments in the period when the contingency was resolved on the Afton Ridge standalone financial statements. Our pro rata share of such purchase price adjustments have been treated as a reduction of our investment in Afton Ridge.

Afton Ridge Shopping Center is a 470,288 square foot regional shopping center, completed in 2006, in which Afton Ridge owns 296,388 rentable square
feet that is currently 94% leased. One of the shopping centers anchors, a 173,900 square foot SuperTarget, is not owned by us. Additional anchor tenants in Afton Ridge Shopping Center are Best Buy, Marshalls, PetSmart, Dicks Sporting
Goods, Stein Mart and Ashley Furniture. Afton Ridge Shopping Center is the retail component of a 260 acre master planned mixed-use development.

On October 15, 2008, Afton Ridge obtained a $25,500,000 loan from the Metropolitan Life Insurance Company, secured by the Afton Ridge Shopping
Center originally acquired on September 18, 2008. The loan is for a term of five years, plus a 12 month extension option, and bears interest at a fixed rate of 5.70%. Interest payments only are due monthly for the term of the loan with
principal due at maturity.

We carry our investment in Afton Ridge on the equity method of accounting because it is an entity under
common control with CK Afton Ridge. Those investments where we have the ability to exercise significant influence (but not control) over operating and financial policies of such entities are accounted for using the equity method. We eliminate
transactions with such equity investees to the extent of our ownership in such entities.

Consolidated Balance Sheet of Afton Ridge as
of March 31, 2010 (unaudited) (in thousands):



|                             |  |               |        |                          |   |       |  |   |       
|---------------------------- |  | ------------- | ------ | ------------------------ | - | ----- |  | - | ------
|                             |  | March 31,2010 |        | REIT BasisAdjustments(1) |   | Total
|Assets                       |  |               |        |                          |   |       |  |   |       
|Real Estate Net              |  | $             | 47,386 |                          | $ | 616   |  | $ | 48,002
|Other Assets                 |  |               | 4,404  |                          |   |      |  |   | 4,404 
|                             |  |               |        |                          |   |       |  |   |       
|Total Assets                 |  | $             | 51,790 |                          | $ | 616   |  | $ | 52,406
|                             |  |               |        |                          |   |       |  |   |       
|Liabilities and Equity       |  |               |        |                          |   |       |  |   |       
|Note Payable                 |  | $             | 25,500 |                          |   |      |  | $ | 25,500
|Other Liabilities            |  |               | 3,850  |                          |   |      |  |   | 3,850 
|                             |  |               |        |                          |   |       |  |   |       
|Total Liabilities            |  |               | 29,350 |                          |   |      |  |   | 29,350
|                             |  |               |        |                          |   |       |  |   |       
|Companys Equity             |  |               | 20,196 |                          |   | 616   |  |   | 20,812
|Other Investors Equity      |  |               | 2,244  |                          |   |      |  |   | 2,244 
|                             |  |               |        |                          |   |       |  |   |       
|Total Liabilities and Equity |  | $             | 51,790 |                          | $ | 616   |  | $ | 52,406
|                             |  |               |        |                          |   |       |  |   |       



|(1) | REIT Basis Adjustments include those costs incurred by the Company outside of Afton Ridge that are directly capitalizable to its investment in real estate
assets acquired within Afton Ridge including acquisition costs paid to our Investment Advisor prior to January 1, 2009. Thereafter such acquisitions fees were expensed as incurred.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



Consolidated Balance Sheet of Afton Ridge as of December 31, 2009 (in thousands):



|                             |  |                  |        |                          |   |       |  |   |       
|---------------------------- |  | ---------------- | ------ | ------------------------ | - | ----- |  | - | ------
|                             |  | December 31,2009 |        | REIT BasisAdjustments(1) |   | Total
|Assets                       |  |                  |        |                          |   |       |  |   |       
|Real Estate Net              |  | $                | 47,743 |                          | $ | 623   |  | $ | 48,366
|Other Assets                 |  |                  | 4,073  |                          |   |      |  |   | 4,073 
|                             |  |                  |        |                          |   |       |  |   |       
|Total Assets                 |  | $                | 51,816 |                          | $ | 623   |  | $ | 52,439
|                             |  |                  |        |                          |   |       |  |   |       
|Liabilities and Equity       |  |                  |        |                          |   |       |  |   |       
|Note Payable                 |  | $                | 25,500 |                          |   |      |  | $ | 25,500
|Other Liabilities            |  |                  | 3,822  |                          |   |      |  |   | 3,822 
|                             |  |                  |        |                          |   |       |  |   |       
|Total Liabilities            |  |                  | 29,322 |                          |   |      |  |   | 29,322
|                             |  |                  |        |                          |   |       |  |   |       
|Companys Equity             |  |                  | 20,244 |                          |   | 623   |  |   | 20,867
|Other Investors Equity      |  |                  | 2,250  |                          |   |      |  |   | 2,250 
|                             |  |                  |        |                          |   |       |  |   |       
|Total Liabilities and Equity |  | $                | 51,816 |                          | $ | 623   |  | $ | 52,439
|                             |  |                  |        |                          |   |       |  |   |       



|(1) | REIT Basis Adjustments include those costs incurred by the Company outside of Afton Ridge that are directly capitalizable to its investment in real estate
assets acquired within Afton Ridge including acquisition costs paid to our Investment Advisor prior to January 1, 2009. Thereafter such acquisitions fees were expensed as incurred.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Consolidated Statements of Operations of Afton Ridge for the three months ended March 31, 2010 and 2009 (unaudited) (in thousands);



|                               |  |                             |       |   |      |   |       |  
|------------------------------ |  | --------------------------- | ----- | - | ---- | - | ----- | -
|                               |  | Three Months EndedMarch 31, |      
|                               |  | 2010                        |       |   | 2009 |  
|Total Revenues                 |  | $                           | 1,300 |   |      | $ | 1,283 |  
|Operating Expenses             |  |                             | 351   |   |      |   | 301   |  
|Interest                       |  |                             | 376   |   |      |   | 376   |  
|Depreciation and Amortization  |  |                             | 452   |   |      |   | 450   |  
|                               |  |                             |       |   |      |   |       |  
|Net Income                     |  | $                           | 121   |   |      | $ | 156   |  
|                               |  |                             |       |   |      |   |       |  
|Companys Share in Net Income  |  | $                           | 109   |   |      | $ | 141   |  
|Adjustments for REIT Basis     |  |                             | (7    | ) |      |   | (5    | )
|                               |  |                             |       |   |      |   |       |  
|Companys Equity in Net Income |  | $                           | 102   |   |      | $ | 136   |  
|                               |  |                             |       |   |      |   |       |  

5. Acquisition Related Intangible Assets

Our acquisition related intangible assets are included in the consolidated balance sheets as acquired in-place lease value, acquired above market
lease value and acquired below market lease value.

The following is a schedule of future amortization of acquisition related intangible
assets as of March 31, 2010 (in thousands):



|                                            |  |                             |        |                         |   |                         |  |   |       
|------------------------------------------- |  | --------------------------- | ------ | ----------------------- | - | ----------------------- |  | - | ------
|                                            |  | AcquiredIn-PlaceLease Value |        | Below MarketLease Value |   | Above MarketLease Value
|2010 (Nine months ending December 31, 2010) |  | $                           | 7,300  |                         | $ | 2,058                   |  | $ | 2,354 
|2011                                        |  |                             | 9,230  |                         |   | 2,727                   |  |   | 3,071 
|2012                                        |  |                             | 7,663  |                         |   | 1,990                   |  |   | 3,023 
|2013                                        |  |                             | 6,177  |                         |   | 1,209                   |  |   | 2,203 
|2014                                        |  |                             | 4,964  |                         |   | 1,114                   |  |   | 1,104 
|2015                                        |  |                             | 4,743  |                         |   | 1,078                   |  |   | 1,033 
|Thereafter                                  |  |                             | 10,208 |                         |   | 3,141                   |  |   | 2,149 
|                                            |  |                             |        |                         |   |                         |  |   |       
|                                            |  | $                           | 50,285 |                         | $ | 13,317                  |  | $ | 14,937
|                                            |  |                             |        |                         |   |                         |  |   |       



22



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CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



The amortization of the above and below-market lease values included in rental revenue were
($818,000) and $697,000, respectively, for the three months ended March 31, 2010, ($693,000) and $712,000, respectively, for the three months ended March 31, 2009. The amortization of in-place lease value included in amortization
expense was $2,780,000 and $2,395,000 for the years ended March 31, 2010 and 2009, respectively.

6. Debt

Notes Payable secured by real property are summarized as follows (in thousands):



|                                                      |  |                     |   |  |                  |   |                     |                   |               |   |         |                  |  |   |         |  
|----------------------------------------------------- |  | ------------------- | - |  | ---------------- | - | ------------------- | ----------------- | ------------- | - | ------- | ---------------- |  | - | ------- | -
|                                                      |  | Interest Rate as of |   |  | Maturity Date    |   | Notes Payable as of |                  
|Property                                              |  | March 31,2010       |   |  | December 31,2009 |   |                     |                   | March 31,2010 |   |         | December 31,2009 | 
|REMEC                                                 |  | 4.79                | % |  | 4.79             | % |                     | November 1, 2011  |               | $ | 13,250  |                  |  | $ | 13,250  |  
|300 Constitution                                      |  | 4.84                |   |  | 4.84             |   |                     | April 1, 2012     |               |   | 12,000  |                  |  |   | 12,000  |  
|Deerfield Commons
I.(1)                               |  | 5.23                |   |  | 5.23             |   |                     | December 1, 2015  |               |   | 9,725   |                  |  |   | 9,725   |  
|602 Central
Blvd.(2)                                  |  |                    |   |  | 1.25             |   |                     |                  |               |   |        |                  |  |   | 8,886   |  
|Bolingbrook Point III                                 |  | 5.26                |   |  | 5.26             |   |                     | January 1, 2015   |               |   | 9,000   |                  |  |   | 9,000   |  
|Fairforest Bldg.
5(3)                                 |  | 6.33                |   |  | 6.33             |   |                     | February 1, 2024  |               |   | 10,216  |                  |  |   | 10,330  |  
|Fairforest Bldg.
6(3)                                 |  | 5.42                |   |  | 5.42             |   |                     | June 1, 2019      |               |   | 3,191   |                  |  |   | 3,257   |  
|HJ ParkBldg.
1(3)                                    |  | 4.98                |   |  | 4.98             |   |                     | March 1, 2013     |               |   | 849     |                  |  |   | 914     |  
|North Rhett I(3)                                      |  | 5.65                |   |  | 5.65             |   |                     | August 1, 2019    |               |   | 4,163   |                  |  |   | 4,246   |  
|North Rhett
II(3)                                     |  | 5.20                |   |  | 5.20             |   |                     | October 1, 2020   |               |   | 2,305   |                  |  |   | 2,345   |  
|North Rhett
III(3)                                    |  | 5.75                |   |  | 5.75             |   |                     | February 1, 2020  |               |   | 1,880   |                  |  |   | 1,903   |  
|North Rhett
IV(3)                                     |  | 5.80                |   |  | 5.80             |   |                     | February 1, 2025  |               |   | 10,221  |                  |  |   | 10,328  |  
|Mt Holly
Bldg.(3)                                     |  | 5.20                |   |  | 5.20             |   |                     | October 1, 2020   |               |   | 2,305   |                  |  |   | 2,345   |  
|Orangeburg Park
Bldg(3)                               |  | 5.20                |   |  | 5.20             |   |                     | October 1, 2020   |               |   | 2,344   |                  |  |   | 2,385   |  
|Kings Mountain
I(3)                                   |  | 5.27                |   |  | 5.27             |   |                     | October 1, 2020   |               |   | 1,995   |                  |  |   | 2,030   |  
|Kings Mountain
II(3)                                  |  | 5.47                |   |  | 5.47             |   |                     | January 1, 2020   |               |   | 5,944   |                  |  |   | 6,057   |  
|Union Cross Bldg.
I(3)                                |  | 5.50                |   |  | 5.50             |   |                     | July 1, 2021      |               |   | 2,889   |                  |  |   | 2,935   |  
|Union Cross Bldg.
II(3)                               |  | 5.53                |   |  | 5.53             |   |                     | June 1, 2021      |               |   | 8,831   |                  |  |   | 8,972   |  
|Thames Valley
Five(4)(5)                              |  | 6.42                |   |  | 6.42             |   |                     | May 30, 2013      |               |   | 11,386  |                  |  |   | 12,117  |  
|Lakeside Office
Center(6)                             |  | 6.03                |   |  | 6.03             |   |                     | September 1, 2015 |               |   | 9,000   |                  |  |   | 9,000   |  
|Enclave on the
Lake(7)                                |  | 5.45                |   |  | 5.45             |   |                     | May 1, 2011       |               |   | 18,184  |                  |  |   | 18,274  |  
|Albion Mills Retail
Park(4)(8)(9)                     |  | 5.25                |   |  | 5.25             |   |                     | October 10, 2013  |               |   | 8,761   |                  |  |   | 9,323   |  
|Avion Midrise III &
IV(10)                            |  | 5.52                |   |  | 5.52             |   |                     | April 1, 2014     |               |   | 21,660  |                  |  |   | 21,765  |  
|12650 Ingenuity
Drive(11)                             |  | 5.62                |   |  | 5.62             |   |                     | October 1, 2014   |               |   | 13,332  |                  |  |   | 13,424  |  
|Maskew Retail
Park(4) (12)                            |  | 5.68                |   |  | 5.68             |   |                     | August 10, 2014   |               |   | 21,217  |                  |  |   | 22,578  |  
|                                                      |  |                     |   |  |                  |   |                     |                   |               |   |         |                  |  |   |         |  
|Notes Payable                                         |  |                     |   |  |                  |   |                     |                   |               |   | 204,648 |                  |  |   | 217,389 |  
|Less Discount                                         |  |                     |   |  |                  |   |                     |                   |               |   | (4,381  | )                |  |   | (4,615  | )
|Less Albion Mills Retail Park Fair Value Adjustment   |  |                     |   |  |                  |   |                     |                   |               |   | (256    | )                |  |   | (349    | )
|                                                      |  |                     |   |  |                  |   |                     |                   |               |   |         |                  |  |   |         |  
|Notes Payable Less Discount and Fair Value Adjustment |  |                     |   |  |                  |   |                     |                   |               | $ | 200,011 |                  |  | $ | 212,425 |  
|                                                      |  |                     |   |  |                  |   |                     |                   |               |   |         |                  |  |   |         |  



|(1) | Interest only payments are due monthly for the first 60 months of the loan term. Principal and interest payments are due monthly for the remaining 60 months
of the loan term.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | This loan was fully paid off on March 11, 2010.
|--- | -----------------------------------------------



|(3) | These notes payable were assumed from the seller of the Carolina Portfolio on August 30, 2007 as part of the property acquisitions and were recorded at
estimated fair value which includes the discount.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(4) | These loans are subject to certain financial covenants (interest coverage and loan to value).
|--- | ---------------------------------------------------------------------------------------------



|(5) | We entered into the interest rate swap agreement that fixed the GBP-based LIBOR rate at 5.41% plus 1.01% or 6.42% per annum as of March 31, 2010
which expires on May 30, 2013. The stated rates on the mortgage note payable were 1.62% and 1.59% at March 31, 2010 and December 31, 2009, respectively, and were based on GBP-based LIBOR plus a spread of 1.01%.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



|(6) | Interest only payments are due monthly for the first 36 months of the loan term. Principal and interest payments are due monthly for the remaining 48 months
of the loan term.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(7) | The loan was assumed from the seller of Enclave on the Lake on July 1, 2008 and was recorded at estimated fair value which includes the discount.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------



|(8) | The Albion Mills Retail Park notes payable balance is presented at cost basis. This loan is carried on our balance sheet at fair value (see Note 15).
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------



|(9) | We entered into the interest rate swap agreement that fixed the GBP-based LIBOR rate at 3.94% plus 1.31% or 5.25% per annum as of March 31, 2010
which expires on October 10, 2013. The stated rates on the mortgage note payable were 1.92% and 1.88% at March 31, 2010 and December 31, 2009, respectively, and were based on GBP-based LIBOR plus a spread of 1.31%.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(10) | The loan was assumed from the seller of Avion Midrise III & IV on November 18, 2008 and was recorded at estimated fair value which includes the
discount.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------



|(11) | The loan was assumed from the seller of 12650 Ingenuity Drive on August 5, 2009 and was recorded at estimated fair value which includes the discount.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------



|(12) | We entered into the interest rate swap agreement that fixed the GBP-based LIBOR rate at 3.42% plus 2.26 or 5.68% per annum as of March 31, 2010
which expires on August 10, 2014. The stated rates on the mortgage note payable was 2.87% and 2.83% at March 31, 2010 and December 31, 2009, respectively, and were based on GBP-based LIBOR plus a spread of 2.26%.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Notes Payable

On April 27, 2007, we, in connection with the acquisition of 602 Central Blvd., entered into a £5,500,000 financing arrangement with the
Royal Bank of Scotland secured by the property. The loan was for a term of seven years with interest at a variable rate, adjusted quarterly, based on three month GBP-based LIBOR plus 0.67%, per annum. On March 11, 2010, we paid off the
£5,500,000 ($8,281,000 at March 11, 2010) loan and expensed certain closing costs plus the unamortized deferred financing costs associated with obtaining the loan totaling $73,000. The interest rate cap agreement was cancelled concurrent
with the loan payoff.

In connection with our acquisition of the Carolina Portfolio on August 30, 2007, we assumed 13 loans with
principal balances totaling $66,110,000 ($62,944,000 at estimated fair value including the discount of $3,166,000) from various lenders that are secured by first deeds of trust on the properties and the assignment of related rents and leases.
Assumption fees and other loan closing costs totaling $765,500 were capitalized as incurred. The loans bear interest at rates ranging from 4.98% to 6.33% per annum and mature between March 1, 2013 and February 1, 2025. The loans
require monthly payments of interest and principal, fully amortized over the lives of the loans. Principal payments totaling $916,000 were made during the three months ended March 31, 2010. We indemnify the lenders against environmental costs
and expenses and guarantee the loans under certain conditions.

On May 30, 2008, we entered into a £7,500,000 ($11,386,000 at
March 31, 2010) financing arrangement with the Royal Bank of Scotland plc secured by the Thames Valley Five property. The loan is for a term of five years (with a two year extension option) and bears interest at a variable rate adjusted
quarterly, based on three month GBP-based LIBOR plus 1.01%. In addition, we incurred financing costs of approximately £67,000 ($102,000 at March 31, 2010) associated with obtaining this loan. On August 14, 2008, we entered into the
interest rate swap agreement that fixed the GBP-based LIBOR rate at 5.41% plus 1.01% or 6.42% per annum as of March 31, 2010 and expires on May 30, 2013. Interest only payments are due quarterly for the term of the loan with principal
due at maturity.

On July 1, 2008, in connection with the acquisition of Enclave on the Lake, we assumed an $18,281,000
($18,790,000 face value less discount of $509,000) loan from NorthMarq Capital, Inc. that bears interest at a fixed rate of 5.45% per annum and matures on May 1, 2011. Principal and interest payments are due monthly for the remaining loan
term and principal payments totaling $90,000 were made during the three months ended March 31, 2010. In addition, we incurred financing costs totaling $241,000 in conjunction with the assumption of the loan.

On October 10, 2008, we entered into a £5,771,000 ($8,761,000 at March 31, 2010) financing agreement with the Royal Bank of
Scotland plc secured by Albion Mills Retail Park property. The loan is for a term of five years and bears interest at a variable rate adjusted quarterly, based on three month GBP-based LIBOR plus 1.31%. In addition, we incurred financing costs of
approximately £75,000 ($114,000 at March 31, 2010) associated with obtaining this loan. On November 25, 2008, we entered into the interest rate



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CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



swap agreement that fixed the GBP-based LIBOR rate at 3.94% plus 1.31% or 5.25% per annum as of March 31, 2010 and expires on October 10, 2013. Interest only payments are due
quarterly for the term of the loan with principal due at maturity.

On November 18, 2008, in connection with the acquisition of
Avion Midrise III & IV, we assumed $20,851,000 ($22,186,000 face value less discount of $1,335,000) fixed rate mortgage loan from Capmark Finance, Inc. that bears interest at a rate of 5.52% per annum and matures on April 1, 2014.
Principal and interest payments are due monthly for the remaining loan term and principal payments totaling $105,000 were made during the three months ended March 31, 2010. In addition, we incurred financing costs totaling $344,000 in
conjunction with the assumption of the loan.

On August 5, 2009, in connection with the acquisition of 12650 Ingenuity Drive, we
assumed a $12,522,000 ($13,539,000 face value less a discount of $967,000) fixed rate mortgage loan from PNC Bank, National Association that bears interest at a rate of 5.62% and matures on October 1, 2014. Principal and interest payments are
due monthly for the remaining loan term and principal payments totaling $91,000 were made during the three months ended March 31, 2010. In addition, we incurred financing costs totaling $284,000 in conjunction with the assumption of the loan.

On August 10, 2009, we entered into a £13,975,000 ($21,217,000 at March 31, 2010) financing agreement with the Abbey
National Treasury Services plc secured by the Maskew Retail Park property. On September 24, 2009, we drew the full amount of the loan and concurrently entered into an interest rate swap agreement that fixed the GBP-based LIBOR rate at 3.42%
plus 2.26% or 5.68% per annum for the five-year term of the loan. Interest only payments are due quarterly for the term of the loan with principal due at maturity. In addition, we incurred financing costs of approximately £268,000
($407,000 at March 31, 2010) associated with obtaining this loan.

The minimum principal payments due for the notes payable are as
follows as of March 31, 2010 (in thousands):



|                                            |  |   |        
|------------------------------------------- |  | - | -------
|2010 (Nine months ending December 31, 2010) |  | $ | 3,728  
|2011                                        |  |   | 36,152 
|2012                                        |  |   | 17,351 
|2013                                        |  |   | 25,578 
|2014                                        |  |   | 57,732 
|2015                                        |  |   | 31,397 
|Thereafter                                  |  |   | 32,710 
|                                            |  |   |        
|                                            |  | $ | 204,648
|                                            |  |   |        

Loan Payable

On August 8, 2008, we entered into an amended and restated credit agreement with Bank of America, N.A. (Bank of America), which
amended the terms of our prior credit agreement with Bank of America, to provide us with a new $45,000,000 unsecured revolving line of credit (the Revolving Credit Facility), and to replace our prior Bank of America term loan and
revolving credit facility which matured in August 2008. The new Revolving Credit Facility was fully drawn upon at closing, with such proceeds utilized to pay down the full $45,000,000 amount outstanding under our prior Bank of America term loan
(as of August 8, 2008, no amount was outstanding under our prior $10,000,000 Bank of America revolving credit facility). The new Revolving Credit Facility matures in August 2010 and bears interest at a floating rate of LIBOR plus 2.00% to
2.75%, based upon our leverage ratio as defined in the credit agreement (at our current leverage ratio, the Revolving Credit Facility bears interest at a floating rate of LIBOR plus 2.00%). An upfront fee of $292,500 was paid to Bank of America, and
a fee equal to the actual daily amount by which the aggregate commitments exceed the total outstanding (both as defined in the amended and restated credit agreement) times 0.20% per annum if the total outstandings are equal to or more than 50%
of the aggregate commitments, or 0.25% per annum otherwise, is accrued on unfunded balances under the Revolving Credit Facility. The loan contains various financial covenants and restrictions including a fixed charge coverage ratio of at least
1.75 to 1.00, as defined in the amended and restated credit agreement. As of March 31, 2010, there was no amount outstanding under the Revolving Credit Facility.



25



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CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



Our organizational documents contain a limitation on the amount of indebtedness that we may incur,
so that unless our shares are listed on a national securities exchange, our aggregate borrowing may not exceed 300% of our net assets unless any excess borrowing is approved by a majority of our independent trustees and is disclosed to shareholders
in our next quarterly report.

7. Minimum Future Rents Receivable

The following is a schedule of minimum future rentals to be received on non-cancelable operating leases from consolidated properties as of
March 31, 2010 (in thousands):



|                                            |  |   |        
|------------------------------------------- |  | - | -------
|2010 (Nine months ending December 31, 2010) |  | $ | 38,776 
|2011                                        |  |   | 50,702 
|2012                                        |  |   | 44,259 
|2013                                        |  |   | 37,331 
|2014                                        |  |   | 33,696 
|2015                                        |  |   | 32,600 
|Thereafter                                  |  |   | 171,131
|                                            |  |   |        
|                                            |  | $ | 408,495
|                                            |  |   |        

8. Concentrations

Tenant Revenue Concentrations

For the three
months ended March 31, 2010, there were no significant revenue concentrations.

For the three months ended March 31, 2009, the
tenant in Enclave on the Lake accounted for approximately $1,407,000 or approximately 11% of total revenues from consolidated properties. The lease under which the tenant occupies our Enclave on the Lake property expires in February 2012.

Geographic Concentrations

As of
March 31, 2010, we owned 58 consolidated properties located in ten states (California, Florida, Georgia, Illinois, Massachusetts, Minnesota, North Carolina, South Carolina, Texas and Virginia) and in the United Kingdom.

As of March 31, 2009, we owned 52 consolidated properties located in eight states (California, Georgia, Illinois, Massachusetts, North
Carolina, South Carolina, Texas and Virginia) and in the United Kingdom.



26



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##### Table of Contents

CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



Our geographic revenue concentrations from consolidated properties for the three months ended
March 31, 2010, and 2009 are as follows:



|               |  |                             |   |  |        |  
|-------------- |  | --------------------------- | - |  | ------ | -
|               |  | Three Months EndedMarch 31, |  
|               |  | 2010                        |   |  | 2009   |  
|Domestic       |  |                             |   |  |        |  
|South Carolina |  | 19.78                       | % |  | 29.48  | %
|Florida        |  | 15.86                       |   |  |       |  
|Texas          |  | 13.03                       |   |  | 20.17  |  
|California     |  | 12.17                       |   |  | 5.68   |  
|Minnesota      |  | 7.83                        |   |  |       |  
|Virginia       |  | 6.39                        |   |  | 9.03   |  
|Massachusetts  |  | 5.63                        |   |  | 4.39   |  
|Georgia        |  | 3.72                        |   |  | 5.56   |  
|North Carolina |  | 3.07                        |   |  | 6.80   |  
|Illinois       |  | 1.22                        |   |  | 2.85   |  
|               |  |                             |   |  |        |  
|Total Domestic |  | 88.70                       |   |  | 83.96  |  
|International  |  |                             |   |  |        |  
|United Kingdom |  | 11.30                       |   |  | 16.04  |  
|               |  |                             |   |  |        |  
|Total          |  | 100.00                      | % |  | 100.00 | %
|               |  |                             |   |  |        |  

Our geographic long-lived asset concentrations from consolidated properties as of March 31, 2010 and
December 31, 2009 are as follows:



|               |  |               |   |  |                  |  
|-------------- |  | ------------- | - |  | ---------------- | -
|               |  | March 31,2010 |   |  | December 31,2009 |  
|Domestic       |  |               |   |  |                  |  
|South Carolina |  | 25.66         | % |  | 23.95            | %
|California     |  | 10.64         |   |  | 9.90             |  
|Texas          |  | 10.10         |   |  | 9.43             |  
|Florida        |  | 7.91          |   |  | 13.26            |  
|North Carolina |  | 7.91          |   |  | 7.35             |  
|Minnesota      |  | 6.57          |   |  | 6.12             |  
|Virginia       |  | 5.92          |   |  | 5.53             |  
|Massachusetts  |  | 5.61          |   |  | 5.22             |  
|Illinois       |  | 2.51          |   |  | 2.33             |  
|Georgia        |  | 2.05          |   |  | 1.95             |  
|               |  |               |   |  |                  |  
|Total Domestic |  | 84.88         |   |  | 85.04            |  
|International  |  |               |   |  |                  |  
|United Kingdom |  | 15.12         |   |  | 14.96            |  
|               |  |               |   |  |                  |  
|Total          |  | 100.00        | % |  | 100.00           | %
|               |  |               |   |  |                  |  

9. Segment Disclosure

Our reportable segments consist of three types of commercial real estate properties, namely, Domestic Industrial Properties, Domestic Office
Properties and International Office/Retail Properties. Management internally evaluates the operating performance and financial results of our segments based on net operating income. We also have certain general and administrative level activities
including legal, accounting, tax preparation and shareholder servicing costs that are not considered separate operating segments. Our reportable segments are on the same basis of accounting as described in Note 2Basis of Presentation and
Summary of Significant Accounting Policies.



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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



We evaluate the performance of our segments based on net operating income, defined as: rental
income and tenant reimbursements less property and related expenses (operating and maintenance, property management fees, property level general and administrative expenses and real estate taxes) and excludes other non-property income and expenses,
interest expense, depreciation and amortization, and our general and administrative expenses. The following table compares the net operating income for the three months ended March 31, 2010 and 2009 (in thousands):



|                                         |  |                             |       |      |   |      
|---------------------------------------- |  | --------------------------- | ----- | ---- | - | -----
|                                         |  | Three Months EndedMarch 31,
|                                         |  | 2010                        |       | 2009
|Domestic Industrial Properties           |  |                             |       |      |   |      
|Revenues:                                |  |                             |       |      |   |      
|Rental                                   |  | $                           | 5,813 |      | $ | 4,686
|Tenant Reimbursements                    |  |                             | 1,258 |      |   | 1,099
|                                         |  |                             |       |      |   |      
|Total Revenues                           |  |                             | 7,071 |      |   | 5,785
|                                         |  |                             |       |      |   |      
|Property and Related Expenses:           |  |                             |       |      |   |      
|Operating and Maintenance                |  |                             | 338   |      |   | 357  
|General and Administrative               |  |                             | 46    |      |   | 45   
|Property Management Fee to Related Party |  |                             | 61    |      |   | 93   
|Property Taxes                           |  |                             | 1,431 |      |   | 1,056
|                                         |  |                             |       |      |   |      
|Total Expenses                           |  |                             | 1,876 |      |   | 1,551
|                                         |  |                             |       |      |   |      
|Net Operating Income                     |  |                             | 5,195 |      |   | 4,234
|                                         |  |                             |       |      |   |      
|Domestic Office Properties               |  |                             |       |      |   |      
|Revenues:                                |  |                             |       |      |   |      
|Rental                                   |  |                             | 7,249 |      |   | 3,772
|Tenant Reimbursements                    |  |                             | 1,579 |      |   | 761  
|                                         |  |                             |       |      |   |      
|Total Revenues                           |  |                             | 8,828 |      |   | 4,533
|                                         |  |                             |       |      |   |      
|Property and Related Expenses:           |  |                             |       |      |   |      
|Operating and Maintenance                |  |                             | 1,157 |      |   | 789  
|General and Administrative               |  |                             | 87    |      |   | 59   
|Property Management Fee to Related Party |  |                             | 33    |      |   | 37   
|Property Taxes                           |  |                             | 1,190 |      |   | 610  
|                                         |  |                             |       |      |   |      
|Total Expenses                           |  |                             | 2,467 |      |   | 1,495
|                                         |  |                             |       |      |   |      
|Net Operating Income                     |  |                             | 6,361 |      |   | 3,038
|                                         |  |                             |       |      |   |      



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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



|                                                                                              |  |                           |        |   |      |   |        |  
|--------------------------------------------------------------------------------------------- |  | ------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                              |  | Three MonthsEndedMarch 31 |       
|                                                                                              |  | 2010                      |        |   | 2009 |  
|International Office/Retail Properties                                                        |  |                           |        |   |      |   |        |  
|Revenues:                                                                                     |  |                           |        |   |      |   |        |  
|Rental                                                                                        |  |                           | 1,940  |   |      |   | 1,884  |  
|Tenant Reimbursements                                                                         |  |                           | 81     |   |      |   | 86     |  
|                                                                                              |  |                           |        |   |      |   |        |  
|Total Revenues                                                                                |  |                           | 2,021  |   |      |   | 1,970  |  
|                                                                                              |  |                           |        |   |      |   |        |  
|Property and Related Expenses:                                                                |  |                           |        |   |      |   |        |  
|Operating and Maintenance                                                                     |  |                           | 80     |   |      |   | 81     |  
|General and Administrative                                                                    |  |                           | 35     |   |      |   | 53     |  
|Property Management Fee to Related Party                                                      |  |                           | 70     |   |      |   | 12     |  
|                                                                                              |  |                           |        |   |      |   |        |  
|Total Expenses                                                                                |  |                           | 185    |   |      |   | 146    |  
|                                                                                              |  |                           |        |   |      |   |        |  
|Net Operating Income                                                                          |  |                           | 1,836  |   |      |   | 1,824  |  
|                                                                                              |  |                           |        |   |      |   |        |  
|Reconciliation to Consolidated Net Income (Loss)                                              |  |                           |        |   |      |   |        |  
|Total Segment Net Operating Income                                                            |  |                           | 13,392 |   |      |   | 9,096  |  
|Interest Expense                                                                              |  |                           | 3,095  |   |      |   | 2,807  |  
|General and Administrative                                                                    |  |                           | 671    |   |      |   | 886    |  
|Investment Management Fee to Related Party                                                    |  |                           | 2,431  |   |      |   | 1,703  |  
|Acquisition Expenses                                                                          |  |                           | 378    |   |      |   |       |  
|Depreciation and Amortization                                                                 |  |                           | 7,243  |   |      |   | 5,722  |  
|                                                                                              |  |                           |        |   |      |   |        |  
|                                                                                              |  |                           | (426   | ) |      |   | (2,022 | )
|                                                                                              |  |                           |        |   |      |   |        |  
|Other Income and Expenses                                                                     |  |                           |        |   |      |   |        |  
|Interest and Other Income                                                                     |  |                           | 598    |   |      |   | 121    |  
|Net Settlement Payments on Interest Rate Swaps                                                |  |                           | (214   | ) |      |   | (81    | )
|Loss on Interest Rate Swaps and Cap                                                           |  |                           | (388   | ) |      |   | (168   | )
|Loss on Note Payable at Fair Value                                                            |  |                           | (73    | ) |      |   | (565   | )
|Loss on Early Extinguishment of Debt                                                          |  |                           | (73    | ) |      |   |       |  
|                                                                                              |  |                           |        |   |      |   |        |  
|Loss Before Provision for Income Taxes and Equity in Income (Loss) of Unconsolidated Entities |  |                           | (576   | ) |      |   | (2,715 | )
|                                                                                              |  |                           |        |   |      |   |        |  
|Provision for Income Taxes                                                                    |  |                           | (15    | ) |      |   | (29    | )
|Equity in Income (Loss) of Unconsolidated Entities                                            |  |                           | 737    |   |      |   | (798   | )
|                                                                                              |  |                           |        |   |      |   |        |  
|Net Income (Loss)                                                                             |  |                           | 146    |   |      |   | (3,542 | )
|                                                                                              |  |                           |        |   |      |   |        |  
|Net (Income) Loss Attributable to Non-Controlling Operating Partnership Units                 |  |                           | (1     | ) |      |   | 13     |  
|                                                                                              |  |                           |        |   |      |   |        |  
|Net Income (Loss) Attributable to CB Richard Ellis Realty Trust Shareholders                  |  | $                         | 145    |   |      | $ | (3,529 | )
|                                                                                              |  |                           |        |   |      |   |        |  



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CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



|                                       |  |               |           |                  |   |          
|-------------------------------------- |  | ------------- | --------- | ---------------- | - | ---------
|Condensed Assets                       |  | March 31,2010 |           | December 31,2009
|Domestic Industrial Properties         |  | $             | 342,390   |                  | $ | 346,681  
|Domestic Office Properties             |  |               | 234,570   |                  |   | 279,658  
|International Office/Retail Properties |  |               | 103,461   |                  |   | 115,223  
|Non-Segment Assets                     |  |               | 471,626   |                  |   | 317,457  
|                                       |  |               |           |                  |   |          
|Total Assets                           |  | $             | 1,152,047 |                  | $ | 1,059,019
|                                       |  |               |           |                  |   |          



|                                       |  |                             |     |      |   |    
|-------------------------------------- |  | --------------------------- | --- | ---- | - | ---
|                                       |  | Three Months EndedMarch 31,
|Capital Expenditures                   |  | 2010                        |     | 2009
|Domestic Industrial Properties         |  | $                           | 113 |      | $ | 60 
|Domestic Office Properties             |  |                             | 58  |      |   | 157
|International Office/Retail Properties |  |                             |    |      |   | 190
|                                       |  |                             |     |      |   |    
|Total Capital Expenditures             |  | $                           | 171 |      | $ | 407
|                                       |  |                             |     |      |   |    

10. Investment Management and Other Fees to Related Parties

Pursuant to the agreement between our company, CBRE OP and the Investment Advisor (the Advisory Agreement), the
Investment Advisor and its affiliates perform services relating to our ongoing public offering and the management of our assets. Items of compensation and equity participation are as follows:

Offering Costs Relating to Public Offerings

Offering costs totaling $12,074,000 and $7,343,000 were incurred during the three months ended March 31, 2010 and 2009, respectively, and are
recorded as a reduction of additional paid-in-capital in the consolidated statement of shareholders equity. Of the total amounts, $11,369,000 and $5,117,000 was incurred to CNL Securities Corp., as dealer manager and $45,000 and $22,000 was
incurred to the Investment Advisor for reimbursable marketing for the three months ended March 31, 2010 and 2009, respectively. Each party will be paid the amount incurred from proceeds of the public offering. As of March 31, 2010 and
December 2009 the accrued offering costs payable to related parties included in our consolidated balance sheets were $1,151,000 and $1,114,000.

Investment Management Fee to Related Party

Prior to October 24, 2006, the Investment Advisor received an annual fee equal to 0.75% of the book value of the total assets, as defined in
the Advisory Agreement, based on the assets of CBRE OP. The investment management fee was calculated monthly based on the average of total assets, as defined, during such period. On October 24, 2006, the Board of Trustees, including our
independent trustees, approved and the Company entered into the Amended and Restated Agreement of Limited Partnership of CBRE OP (the Amended Partnership Agreement) and the Amended and Restated Advisory Agreement (the Amended
Advisory Agreement and, together with the Amended Partnership Agreement, the Amended Agreements). The Amended Advisory Agreement provides an investment management fee of (i) a monthly fee equal to one twelfth of 0.6% of the
aggregate cost (before non-cash reserves and depreciation) of all real estate investments within our portfolio and (ii) a monthly fee equal to 7.0% of the aggregate monthly net operating income derived from all real estate investments within
our portfolio. On January 30, 2009, we entered into that certain second amended and restated advisory agreement (the Second Amended Advisory Agreement) with CBRE OP and the Investment Advisor. The Second Amended Advisory Agreement
modified, among other things, the investment management fee to consist of (a) a monthly fee equal to one twelfth of 0.5% of the aggregate costs (before non-cash reserves and depreciation) of all real estate investment in our portfolio and
(b) a monthly fee equal to 5.0% of the aggregate monthly net operating income derived from all real estate investments in our portfolio. All or any portion of the investment management fee not taken as to any fiscal year may be deferred or
waived without interest at the option of the Investment Advisor.

The Investment Advisor earned investment management fees of $2,431,000
and $1,703,000 for the three months ended March 31, 2010 and 2009, respectively. As of March 31, 2010 and December 31, 2009, the investment management fees payable to related party in our consolidated balance sheets were $805,000 and
$757,000, respectively. In connection with services provided to the Investment



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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



Advisor, CNL Fund Management Company, the Sub-Advisor and affiliate of the Dealer Manager pursuant to a sub-advisory agreement dated August 21, 2006, was paid by the Investment Advisor
$336,000 and $235,000 for the three months ended March 31, 2010 and 2009, respectively.

Acquisition Fee and Expenses to Related Party

On January 30, 2009, we entered into that certain Second Amendment Advisory Agreement that permits the Investment Advisor to
earn an acquisition fee of up to 1.5% of (i) the purchase price of real estate investments acquired by us, including any debt attributable to such investments, or (ii) when we make an investment indirectly through another entity, such
investments pro rata share of the gross asset value of real estate investments held by that entity. The Investment Advisor earned acquisition fees of $296,000 and $0 for the three months ended March 31, 2010 and 2009, respectively. In
connection with services provided to the Investment Advisor, the Sub Advisor, pursuant to a sub advisory agreement, was paid by the Investment Advisor acquisition fees of $55,000 and $0 for the three months ended March 31, 2010 and 2009,
respectively. The Investment Advisor earned $42,000 and $0 in acquisition related expenses during the three months ended March 31, 2010 and 2009. Prior to the adoption of Business Combinations on January 1, 2009, these
acquisitions fees and expenses were capitalized to investments in real estate and related intangibles.

Management Services to Related Party

Affiliates of the Investment Advisor may also provide leasing, brokerage, property management, or mortgage banking services for us. CB
Richard Ellis Group, Inc., an affiliate of the Investment Advisor, received property management fees of approximately $164,000 and $142,000 for the three months ended March 31, 2010 and 2009, respectively. As of March 31, 2010 and
December 31, 2009 the property management fees payable to related party included in our consolidated balance sheets were $116,000 and $106,000, respectively. No brokerage fees were paid to affiliates of the Investment Advisor for the three
months ended March 31, 2010 and 2009 and no mortgage banking fees were paid to CBRE Capital Markets, as affiliate of the Investment Advisor, for three months ended March 31, 2010 and 2009 respectively.

Affiliates of the Investment Advisor received leasing fees of $95,000 and $67,000 for the three months ended March 31, 2010 and 2009.

No management services fees were paid to CB Richard Ellis, UK for the three months ended March 31, 2010 and 2009, respectively.

11. Equity Incentive Plan and Performance Bonus Plan

Equity Incentive Plan

We have adopted a
2004 equity incentive plan. The purpose of the 2004 equity incentive plan is to provide us with the flexibility to use share options and other awards to provide a means of performance-based compensation. Our key employees, directors, trustees,
officers, advisors, consultants or other personnel and our subsidiaries or other persons expected to provide significant services or our subsidiaries, including employees of the Investment Advisor, would be eligible to be granted share options,
restricted shares, phantom shares, distribution equivalent rights and other share- based awards under the 2004 equity incentive plan. No awards of any kind have been made under this plan during the three months ended March 31, 2010 and 2009,
respectively. See Managements Discussion and Analysis of Financial Condition and Results of OperationsSubsequent Events for additional disclosure.

Performance Bonus Plan

We have adopted a
2004 performance bonus plan. Annual bonuses under our 2004 performance bonus plan are awarded by our Compensation Committee to selected key employees, including employees of the Investment Advisor, based on corporate factors or individual factors
(or a combination of both). Subject to the provisions of the 2004 performance bonus plan, the Compensation Committee will (i) determine and designate those key employees to whom bonuses are to be granted; (ii) determine, consistently with
the 2004 performance bonus plan, the amount of the bonus to be granted to any key employee for any performance period; and (iii) determine, consistently with the 2004 performance bonus plan, the terms and conditions of each bonus. Bonuses may
be so awarded by the Compensation Committee prior to the commencement of any performance period, during or after any performance period. No bonus shall exceed 200% of the key employees aggregate salary for the year. The Compensation Committee
may provide



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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



for partial bonus payments at target and other levels. Corporate performance hurdles for bonuses may be adjusted by the Compensation Committee in its discretion to reflect (i) dilution from
corporate acquisitions and share offerings, and (ii) changes in applicable accounting rules and standards. The Compensation Committee may determine that bonuses shall be paid in cash or shares or other equity-based grants, or a combination
thereof. The Compensation Committee may also provide that any such share grants be made under our 2004 equity incentive plan or any other equity-based plan or program we may establish. The Compensation Committee may provide for programs under which
the payment of bonuses may be deferred at the election of the employee. No bonuses were awarded and no bonus related expenses were incurred by us during the three months ended March 31, 2010 and 2009, respectively.

12. Shareholders Equity

Under
our declaration of trust, we have the authority to issue a total of 1,000,000,000 shares of beneficial interest. Of the total shares authorized, 990,000,000 shares are designated as common shares with a par value of $0.01 per share and 10,000,000
shares are designated as preferred shares.

The registration statement relating to our initial public offering was declared effective by
the SEC on October 24, 2006. CNL Securities Corp. acted as the dealer manager of this offering. The registration statement covered up to $2,000,000,000 in common shares of beneficial interest, 90% of which were offered at a price of $10.00 per
share, and 10% of which were offered pursuant to our dividend reinvestment plan at a purchase price equal to the higher of $9.50 per share or 95% of the fair market value of a common share on the reinvestment date, as determined by the Investment
Advisor, or another firm we choose for that purpose. As of January 29, 2009, we had issued 60,808,967 common shares in our initial public offering. We terminated the initial public offering effective as of the close of business on
January 29, 2009. The registration statement relating to our follow-on public offering was declared effective by the SEC on January 30, 2009. CNL Securities Corp. is the dealer manager of this offering. The registration statement covers up
to $3,000,000,000 in common shares of beneficial interest, 90% of which will be offered at a price of $10.00 per share, and 10% of which will be offered pursuant to our dividend reinvestment plan at a purchase price equal to the higher of $9.50 per
share or 95% of the fair market value of a common share on the reinvestment date, as determined by the Investment Advisor, or another firm we choose for that purpose. We reserve the right to reallocate the shares between the primary offering and our
dividend reinvestment plan. From January 30, 2009 (effective date) through March 31, 2010, we received gross offering proceeds of approximately $558,098,008 from the sale of 55,915,772 shares.

During the three months ended March 31, 2010 and 2009, we repurchased 470,187 common shares, and 313,565 common shares, respectively, under
our Share Redemption Program for $4,253,000 and $2,775,000, respectively.

13. Distributions

Earnings and profits, which determine the taxability of distributions to shareholders, will differ from income reported for financial reporting
purposes due to the differences for federal income tax purposes including the treatment of loss on extinguishment of debt, revenue recognition, compensation expense and in the basis of depreciable assets and estimated useful lives used to compute
depreciation.

The following table reconciles the distributions declared per common share to the distributions paid per common share
during the three months ended March 31, 2010 and 2009:



|                                                                                      |  |                             |        |   |      |   |        |  
|------------------------------------------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                      |  | Three Months EndedMarch 31, |       
|                                                                                      |  | 2010                        |        |   | 2009 |  
|Distributions declared per common share                                               |  | $                           | 0.150  |   |      | $ | 0.150  |  
|Less: Distributions declared in the current period, and paid in the subsequent period |  |                             | (0.150 | ) |      |   | (0.150 | )
|Add: Distributions declared in the prior year, and paid in the current year           |  |                             | 0.150  |   |      |   | 0.150  |  
|                                                                                      |  |                             |        |   |      |   |        |  
|Distributions paid per common share                                                   |  | $                           | 0.150  |   |      | $ | 0.150  |  
|                                                                                      |  |                             |        |   |      |   |        |  

Distributions to shareholders during the three months ended March 31, 2010 and 2009 totaled $14,750,000, and
$8,988,000, respectively.



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CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



We issued 652,363 common shares and 385,616 common shares pursuant to our dividend reinvestment
plan for the three months ended March 31, 2010 and 2009, respectively.

14. Derivative Instruments

The following table sets forth the terms of our interest rate swap derivative instruments at March 31, 2010 (amounts in thousands):



|                                                                   |  |                 |        |            |   |        |                |  |      |                          |  |               |  |                 
|------------------------------------------------------------------ |  | --------------- | ------ | ---------- | - | ------ | -------------- |  | ---- | ------------------------ |  | ------------- |  | ----------------
|Type of Instrument                                                 |  | Notional Amount |        | Fair Value |   |        | Pay Fixed Rate |  |      | Receive VariableRate (1) |  | Maturity Date
|Non-qualifying Interest Rate Swap on Thames Valley Five debt       |  | $               | 11,386 |            | $ | (1,177 | )              |  | 5.41 | %                        |  | 0.64%         |  | May 30, 2013    
|Non-qualifying Interest Rate Swap on Albion Mills Retail Park debt |  | $               | 8,675  |            | $ | (534   | )              |  | 3.94 | %                        |  | 0.61%         |  | October 10, 2013
|Qualifying Interest Rate Swap on Maskew Retail Park debt           |  | $               | 21,217 |            | $ | (873   | )              |  | 3.42 | %                        |  | 0.62%         |  | August 10, 2014 

The following
table sets forth the terms of our interest rate swap derivative instruments at December 31, 2009 (amounts in thousands):



|                                                                   |  |                 |        |            |   |        |                |  |      |                          |  |      |               |  |                 
|------------------------------------------------------------------ |  | --------------- | ------ | ---------- | - | ------ | -------------- |  | ---- | ------------------------ |  | ---- | ------------- |  | ----------------
|Type of Instrument                                                 |  | Notional Amount |        | Fair Value |   |        | Pay Fixed Rate |  |      | Receive VariableRate (1) |  |      | Maturity Date
|Non-qualifying Interest Rate Swap on Thames Valley Five debt       |  | $               | 12,117 |            | $ | (1,049 | )              |  | 5.41 | %                        |  | 0.61 | %             |  | May 30, 2013    
|Non-qualifying Interest Rate Swap on Albion Mills Retail Park debt |  | $               | 9,231  |            | $ | (361   | )              |  | 3.94 | %                        |  | 0.56 | %             |  | October 10, 2013
|Qualifying Interest Rate Swap on Maskew Retail Park debt           |  | $               | 22,578 |            | $ | (293   | )              |  | 3.42 | %                        |  | 0.58 | %             |  | August 10, 2014 



|(1) | Based on three month GBP-based
LIBOR BBA Index with variable rate reset dates every 90 days during the term of swaps.
|--- | ---------------------------------------------------------------------------------------------------------------------

We marked our two
non-qualifying economic hedge interest rate swap instruments to their estimated fair value of ($1,711,000) and ($1,410,000) on the consolidated balance sheet at March 31, 2010 and December 31, 2009 included in Liabilities as Interest Rate
Swaps at Fair Value. We recognized a loss on interest rate swaps of $388,000 and $168,000 for the three months ended March 31, 2010 and 2009 included in Loss on Interest Rate Swaps and Cap on the Consolidated Statement of Operations.

Our $21,217,000 notional amount interest rate swap has been designated as a qualifying cash flow hedge of the LIBOR base payments due
under our Maskew Retail Park variable rate note payable from its inception on September 24, 2009. The estimated fair value of the interest rate swap value of ($873,000) and ($293,000) as of March 31, 2010 and December 31, 2009,
respectively, has resulted in a swap fair value adjustment being recorded to other comprehensive loss totaling $580,000 for the three months ended March 31, 2010. There was no measured ineffectiveness for the qualifying hedge during the year
ended December 31, 2009.

As discussed in Note 2, Basis of Presentation and Summary of Significant Accounting Policies,
all of our derivative instruments are used as economic hedges to swap identified variable rate debt interest payments to fixed rate payments through the use of interest rate swap agreements. Our Maskew Retail Park hedge is our only qualifying cash
flow hedge in accordance with the accounting for derivative instruments and hedging activities. Further disclosures regarding our derivative financial instruments are included in Note 16 (Fair Value of Financial Instruments and Investments) of these
consolidated financial statements.

15. Fair Value of Financial Instruments and Investments

We apply the three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as
observable inputs such as quoted prices for identical financial instruments in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as
instruments that have little to no pricing observability as of the reported date. These financial instruments do not have two-way markets and are measured using managements best estimate of fair value, where the inputs into the
determination of fair value require significant management



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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



judgment or estimation. We have classified the Albion Mills Retail Park notes payable as Level 3 as of March 31, 2010 and December 31, 2009 due to the lack of current market activity
and our reliance on unobservable inputs to estimate the fair value of the mortgage note payable.

As of March 31, 2010 and
December 31, 2009, we held certain items that are required to be measured at fair value on a recurring basis. These included cash equivalents, an interest rate cap, interest rate swap derivative contracts and our equity method investment in
CBRE Strategic Partners Asia. Cash equivalents consist of short-term, highly liquid, income-producing investments, all of which have maturities of 90 days or less, including money market funds and U.S. Government obligations. Derivative instruments
are related to our economic hedging activities with respect to interest rates.

The fair values of the interest rate cap and swap
derivative agreements are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rate fell above the strike rate of the interest rate cap agreement, and by discounting
the future expected cash payments and receipts on the pay and receive legs of the interest rate swap agreements that swap the estimated variable rate mortgage note payment stream for a fixed rate payment stream over the period of the loan. The
variable interest rates used in the calculation of projected receipts on the interest rate cap agreement and on the interest rate swap agreements are based on an expectation of future interest rates derived from observable market interest rate
curves and volatilities. We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterpartys nonperformance risk in the fair value measurements (where appropriate). Although we
have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of
current credit spreads to evaluate the likelihood of default by us and our counterparties. However, as of March 31, 2010 and December 31, 2009, we have assessed the significance of the impact of the credit valuation adjustments on the
overall valuation and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are classified in
Level 2 of the fair value hierarchy. We have consistently applied these valuation techniques in all periods presented and believe we have obtained the most accurate information available for the types of derivative contracts we hold.

Our investment in CBRE Strategic Partners Asia is based on the Level 3 valuation inputs applied by the Investment Manager of this
investment company utilizing the following approaches for valuing the underlying real estate related investments within the investment company:



| | ¡ |  | The income approach is generally based on a discounted cash flow analysis. Such an analysis for a real property includes projecting net cash flows from the
property from a buyers perspective and computing the present value of the cash flows using a market discount rate. The cash flows include a projection of the net sales proceeds at the end of our estimate of a market participant holding period,
computed using market reversionary capitalization rates and projected cash flows from the property for the year following the holding period.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ¡ |  | The replacement cost approach to property valuation is a theoretical breakdown of the property into land and building components. The theory is that the value
of a property can be estimated by summing the land value and the depreciated value of any improvements. While the replacement cost of the improvements can be determined by adding the labor, material, and other costs, land values must be derived from
an analysis of comparable data. The cost approach is considered reliable when used on newer structures, but the method tends to become less reliable for older properties.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ¡ |  | For investments owned more than one year, except for investments under construction or incurring significant renovation, it is CBRE Strategic Partners
Asias policy to obtain a third-party appraisal. For investments in real estate under construction or incurring significant renovation, the valuation analysis is prepared by the Investment Manager.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



The following items are measured at fair value on a recurring basis at March 31, 2010 and
December 31, 2009 (in thousands):



|                                           |  |                         |         |   |                 |   |         |                                |  |                                      |         |  |                                        |        |   |  |   |        |  
|------------------------------------------ |  | ----------------------- | ------- | - | --------------- | - | ------- | ------------------------------ |  | ------------------------------------ | ------- |  | -------------------------------------- | ------ | - |  | - | ------ | -
|                                           |  | As of March 31, 2010    |        
|                                           |  |                         |         |   |                 |   |         | Fair Value Measurements Using: | 
|                                           |  | CarryingValue           |         |   | TotalFair Value |   |         | QuotedMarketsPrices(Level 1)   |  | SignificantObservableInputs(Level 2) |         |  | SignificantUnobservableInputs(Level 3) |       
|Financial Assets (Liabilities)             |  |                         |         |   |                 |   |         |                                |  |                                      |         |  |                                        |        |   |  |   |        |  
|Cash and Cash Equivalents                  |  | $                       | 169,919 |   |                 | $ | 169,919 |                                |  | $                                    | 169,919 |  | $                                      |       |   |  | $ |       |  
|Interest Rate Swaps at Fair Value          |  | $                       | (2,584  | ) |                 | $ | (2,584  | )                              |  | $                                    |        |  | $                                      | (2,584 | ) |  | $ |       |  
|Investment in CBRE Strategic Partners Asia |  | $                       | 7,966   |   |                 | $ | 7,966   |                                |  | $                                    |        |  | $                                      |       |   |  | $ | 7,966  |  
|Note Payable at Fair Value                 |  | $                       | (8,505  | ) |                 | $ | (8,505  | )                              |  | $                                    |        |  | $                                      |       |   |  | $ | (8,505 | )
|                                           | 
|                                           |  | As of December 31, 2009 |        
|                                           |  |                         |         |   |                 |   |         | Fair Value Measurements Using: | 
|                                           |  | CarryingValue           |         |   | TotalFair Value |   |         | QuotedMarketsPrices(Level 1)   |  | SignificantObservableInputs(Level 2) |         |  | SignificantUnobservableInputs(Level 3) |       
|Financial Assets (Liabilities)             |  |                         |         |   |                 |   |         |                                |  |                                      |         |  |                                        |        |   |  |   |        |  
|Cash and Cash Equivalents                  |  | $                       | 79,997  |   |                 | $ | 79,997  |                                |  | $                                    | 79,997  |  | $                                      |       |   |  | $ |       |  
|Interest Rate Cap at Fair Value            |  | $                       | 1       |   |                 | $ | 1       |                                |  | $                                    |        |  | $                                      | 1      |   |  | $ |       |  
|Interest Rate Swaps at Fair Value          |  | $                       | (1,703  | ) |                 | $ | (1,703  | )                              |  | $                                    |        |  | $                                      | (1,703 | ) |  | $ |       |  
|Investment in CBRE Strategic Partners Asia |  | $                       | 8,142   |   |                 | $ | 8,142   |                                |  | $                                    |        |  | $                                      |       |   |  | $ | 8,142  |  
|Note Payable at Fair Value                 |  | $                       | (8,974  | ) |                 | $ | (8,974  | )                              |  | $                                    |        |  | $                                      |       |   |  | $ | (8,974 | )

The following table presents our activity for
the variable rate note payable and our investment in CBRE Strategic Partners Asia measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2010 (in thousands):



|                                                                                                                                           |  |              |        |   |                                          |   |        |  
|------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------ | ------ | - | ---------------------------------------- | - | ------ | -
|Fair Value Measurements Using Significant Unobservable Inputs (Level 3)                                                                    |  | Note Payable |        |   | Investment inCBRE StrategicPartners Asia |  
|Balance at January 1, 2010                                                                                                                 |  | $            | (8,974 | ) |                                          | $ | 8,142  |  
|Transfers to Level 3                                                                                                                       |  |              |       |   |                                          |   |       |  
|Contributions                                                                                                                              |  |              |       |   |                                          |   | 2,435  |  
|Distributions                                                                                                                              |  |              |       |   |                                          |   | (2,435 | )
|Total Loss on Fair Value Adjustment                                                                                                        |  |              | (73    | ) |                                          |   | (176   | )
|Translation Adjustment                                                                                                                     |  |              | 542    |   |                                          |   |       |  
|                                                                                                                                           |  |              |        |   |                                          |   |        |  
|Balance at March 31, 2010                                                                                                                  |  | $            | (8,505 | ) |                                          | $ | 7,966  |  
|                                                                                                                                           |  |              |        |   |                                          |   |        |  
|The Amount of Total Loss for the Period Included in Earnings Attributable to the Note Payable and Investment still held at March 31,
2010. |  | $            | (73    | ) |                                          | $ | (176   | )
|                                                                                                                                           |  |              |        |   |                                          |   |        |  

Gains and losses (realized and unrealized) included in earnings related to the interest rate cap and swaps, as well as
for the elected fair value note payable for the three months ended March 31, 2010 and 2009 are reported as components of Other Income and Expense on the consolidated statements of operations.



35



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##### Table of Contents

CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



Disclosure of Fair Value Financial Instruments

For disclosure purposes only, the following table summarizes our notes payable and their estimated fair value at March 31, 2010 and
December 31, 2009 (in thousands):



|                           |  |               |         |                  |   |               |  |                  |         |  |   |        
|-------------------------- |  | ------------- | ------- | ---------------- | - | ------------- |  | ---------------- | ------- |  | - | -------
|                           |  | Book Value    |         | Fair Value      
|Financial Instrument       |  | March 31,2010 |         | December 31,2009 |   | March 31,2010 |  | December 31,2009
|Notes Payable              |  | $             | 191,506 |                  | $ | 203,451       |  | $                | 190,182 |  | $ | 201,113
|Note Payable at Fair Value |  | $             | 8,505   |                  | $ | 8,974         |  | $                | 8,505   |  | $ | 8,974  

For purposes of this fair value
disclosure, we based our fair value estimate for notes payable on our internal valuation that includes a representative sample of our lenders market interest rate quotes as of March 31, 2010 and December 31, 2009 for debt with
similar risk characteristics and maturities. We based the Note Payable carried at fair value on a third party appraisers valuation which used similar techniques as our internal valuation model as of March 31, 2010 and December 31,
2009.

16. Fair Value OptionNote Payable

During the fourth quarter of 2008 we elected to apply the fair value option on a note payable which bears interest at a variable rate and is
currently subject to an economic hedge by an interest rate swap with similar terms and the same notional amount. We have elected to apply the fair value option on the Albion Mills Retail Park variable rate note payable to match the fair value
treatment of interest rate swap derivative on the same note payable thereby achieving a reduction in the artificial volatility in net income or loss that occurs when related financial assets and liabilities are measured and reported on a different
basis in the consolidated financial statements.

We applied the fair value option for the Albion Mills Retail Park note payable at each
reporting period. Included in loss on notes payable at fair value in the statement of operations were $73,000 and $565,000 for the three months ended March 31, 2010 and 2009, respectively. In addition, there were $542,000 and $70,000
translation losses recorded to Other Comprehensive Loss at March 31, 2010 and 2009, respectively.

17. Commitments and Contingencies

We have agreed to a capital commitment of up to $20,000,000 in CBRE Strategic Partners Asia, which extends to January 31, 2011. As
of March 31, 2010, we funded $11,513,983 of our capital commitment. CBRE Investors, our sponsor, formed CBRE Strategic Partners Asia, to purchase, reposition, develop, hold for investment and sell institutional quality real estate and related
assets in targeted markets in China, Japan, India, South Korea, Hong Kong, Singapore and other Asia Pacific markets. If we and all other currently committed capital investors had funded our entire commitments in CBRE Strategic Partners Asia as of
March 31, 2010, we would have owned an ownership interest of approximately 5.07% in CBRE Strategic Partners Asia. A majority of our trustees (including a majority of our independent trustees) not otherwise interested in this transaction
approved the transaction as being fair, competitive and commercially reasonable. CBRE Strategic Partners Asia is managed by CB Richard Ellis Investors SP Asia II, LLC or the Fund Manager, a subsidiary of CBRE Investors.

LitigationFrom time to time, we and our properties may be subject to legal proceedings, which arise in the ordinary course of our business.
Currently, neither our company nor any of our properties are subject to, or threatened with, any legal proceedings for which the outcome is reasonably likely to have a material adverse effect on our results of operations or financial condition.

Environmental MattersWe are not aware of any environmental liability or any unasserted claim or assessment with respect to an
environmental liability that we believe would require additional disclosure or the recording of a loss contingency.



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##### Table of Contents

CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



18. Comprehensive Loss

U.S. GAAP requires that the effect of foreign currency translation adjustments be classified as comprehensive income (loss). The following table
sets forth our comprehensive loss for the three months ended March 31, 2010 and 2009, (in thousands):



|                                                                              |  |                             |        |   |      |   |        |  
|----------------------------------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                                                                              |  | Three Months EndedMarch 31, |       
|                                                                              |  | 2010                        |        |   | 2009 |  
|Net Income (Loss)                                                             |  | $                           | 146    |   |      | $ | (3,542 | )
|Foreign Currency Translation Loss                                             |  |                             | (3,412 | ) |      |   | (1,310 | )
|Swap Fair Value Adjustment                                                    |  |                             | (580   | ) |      |   |       |  
|                                                                              |  |                             |        |   |      |   |        |  
|Total Comprehensive Loss                                                      |  |                             | (3,846 | ) |      |   | (4,852 | )
|Comprehensive Loss Attributable to Non-Controlling Interest                   |  |                             | 7      |   |      |   | 18     |  
|                                                                              |  |                             |        |   |      |   |        |  
|Comprehensive Loss Attributable to CB Richard Ellis Realty Trust Shareholders |  | $                           | (3,839 | ) |      | $ | (4,834 | )
|                                                                              |  |                             |        |   |      |   |        |  

19. Income Taxes

We elected to be taxed as a REIT under the Internal Revenue Code commencing with our taxable year ended December 31, 2004. To qualify as a
REIT, we must meet a number of organizational and operational requirements, including a requirement that we generally distribute at least 90% of our REIT taxable income (determined without regard to the dividends paid deduction and excluding net
capital gain). It is our current intention to adhere to these requirements and maintain our REIT qualification. As a REIT, we generally will not be subject to corporate level U.S. federal income tax on net income we distribute currently to our
shareholders. If we fail to qualify as a REIT in any taxable year, then we will be subject to U.S. federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four
subsequent taxable years. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and property and to U.S. federal income and excise taxes on our undistributed taxable income, if any.

On March 31, 2009, the Carolina TRS was dissolved. We had made a taxable REIT subsidiary election for all held for sale properties during the
tax years beginning January 1, 2007. On September 30, 2008 all held for sale properties were reclassified as held for investment and transferred to CBRE OP.

SFAS No. 109 requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been
included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in
effect for the year in which the differences are expected to reverse.

Included as a component of our tax provision, we have incurred
income and other taxes (franchise, local and state government and international) related to our continuing operations in the amount of $15,000 and $29,000 for California, Georgia, Minnesota, Texas, North Carolina, and United Kingdom impacting our
operations during the three months ended March 31, 2010 and 2009, respectively. The United Kingdom taxes real property operating results at a statutory rate of 22%. The United Kingdom taxable losses to date have generated a deferred tax asset
of approximately $224,000 consisting of these net operating carryforwards. We have provided for a full valuation allowance of ($224,000) as of three months ended March 31, 2010 on deferred tax assets because it is not likely that future
operating profits in the United Kingdom would be sufficient to absorb the net operating losses.

20. Subsequent Events

From April 1, 2010 through May 7, 2010, we received gross proceeds from our current public offering of approximately $75,628,321 from the
sale of 7,601,348 common shares.

On April 8, 2010, we acquired 5160 Hacienda Drive, located in Dublin, CA, in the Greater San
Francisco/East Bay area. We acquired 5160 Hacienda Drive for approximately $38,500,000, exclusive of customary closing costs, using the net proceeds from our current public offering. Upon closing, we paid the Investment Advisor a $577,500
acquisition fee. 5160 Hacienda Drive is a 201,620 square



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##### Table of Contents

CB RICHARD ELLIS REALTY TRUST

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three Months Ended March 31, 2010 and 2009 (unaudited)



foot corporate headquarters and research and development building that was completed in 1998. The property is 100% leased to Carl Zeiss Meditec, Inc. and guaranteed by Carl Zeiss Meditec AG,
through September 2019. Carl Zeiss Meditec, Inc. is a market leader in the medical optics industry and utilizes the property as its U.S. corporate headquarters and research and development facility.

On April 22, 2010, we contributed an additional $583,456 of our CBRE Strategic Partners Asia capital commitment which was funded using net
proceeds from our current public offering.

On May 7, 2010, we acquired 10450 Pacific Center Court, located in San Diego. We
acquired 10450 Pacific Center Court for approximately for $32,750,000, exclusive of customary closing costs, using net proceeds from our current public offering. Upon closing, we paid the Investment Advisor a $491,250 acquisition fee. 10450 Pacific
Center Court is a 134,000 square foot office building that was completed in 1985. The property is 100% leased to Time Warner Cable Inc. through February 2018. Time Warner Cable Inc. is one of the
nations largest cable services providers and utilizes the property as its regional corporate headquarters for its San Diego operations.



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##### Table of Contents

|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

Explanatory Note

The following discussion
and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements, the notes thereto, and the other financial data included elsewhere in this Form 10-Q.

Cautionary Note Regarding Forward-Looking Statements

This document contains various forward-looking statements. You can identify forward-looking statements by the use of forward-looking
terminology such as believes, expects, may, will, would, could, should, seeks, approximately, intends, plans,
projects, estimates or anticipates or the negative of these words and phrases or similar words or phrases. You can also identify forward-looking statements by discussions of strategy, plans or intentions.
Statements regarding the following subjects may be impacted by a number of risks and uncertainties:



| | ¡ |  | our business strategy;
| | - |  | ----------------------



| | ¡ |  | our ability to obtain future financing arrangements;
| | - |  | ----------------------------------------------------



| | ¡ |  | estimates relating to our future distributions;
| | - |  | -----------------------------------------------



| | ¡ |  | our understanding of our competition;
| | - |  | -------------------------------------



| | ¡ |  | market trends;
| | - |  | --------------



| | ¡ |  | projected capital expenditures;
| | - |  | -------------------------------



| | ¡ |  | the impact of technology on our products, operations and business; and
| | - |  | ----------------------------------------------------------------------



| | ¡ |  | the use of the proceeds of our current offering and subsequent offerings.
| | - |  | -------------------------------------------------------------------------

The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all
information currently available to us. These beliefs, assumptions and expectations are subject to risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to us. If a change occurs, our
business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. You should carefully consider these risks before you make an investment decision with respect to our
common shares, along with the following factors that could cause actual results to vary from our forward-looking statements:



| | ¡ |  | national, regional and local economic climates;
| | - |  | -----------------------------------------------



| | ¡ |  | the continued volatility and disruption of capital and credit markets;
| | - |  | ----------------------------------------------------------------------



| | ¡ |  | changes in supply and demand for office, retail, industrial, and multi-family residential properties;
| | - |  | -----------------------------------------------------------------------------------------------------



| | ¡ |  | adverse changes in the real estate markets, including increasing vacancy, decreasing rental revenue and increasing insurance costs;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------



| | ¡ |  | availability and credit worthiness of prospective tenants;
| | - |  | ----------------------------------------------------------



| | ¡ |  | our ability to maintain rental rates and maximize occupancy;
| | - |  | ------------------------------------------------------------



| | ¡ |  | our ability to identify acquisitions;
| | - |  | -------------------------------------



| | ¡ |  | our pace of acquisitions and/or dispositions of properties;
| | - |  | -----------------------------------------------------------



| | ¡ |  | our corporate debt ratings and changes in the general interest rate environment;
| | - |  | --------------------------------------------------------------------------------



| | ¡ |  | availability of capital (debt and equity);
| | - |  | ------------------------------------------



| | ¡ |  | our ability to refinance existing indebtedness or incur additional indebtedness;
| | - |  | --------------------------------------------------------------------------------



| | ¡ |  | unanticipated increases in financing and other costs, including a rise in interest rates;
| | - |  | -----------------------------------------------------------------------------------------



| | ¡ |  | the actual outcome of the resolution of any conflict;
| | - |  | -----------------------------------------------------



| | ¡ |  | our ability to successfully operate acquired properties;
| | - |  | --------------------------------------------------------



| | ¡ |  | availability of and ability to retain qualified personnel;
| | - |  | ----------------------------------------------------------



| | ¡ |  | CBRE Advisors LLC remaining as our Investment Advisor;
| | - |  | ------------------------------------------------------



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##### Table of Contents

| | ¡ |  | future terrorist attacks in the United States or abroad;
| | - |  | --------------------------------------------------------



| | ¡ |  | our ability to satisfy complex rules in order for us to qualify as a REIT for U.S. federal income tax purposes and our operating partnerships ability to
satisfy the rules in order for it to qualify as a partnership for U.S. federal income tax purposes;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ¡ |  | foreign currency fluctuations;
| | - |  | ------------------------------



| | ¡ |  | accounting principles and policies and guidelines applicable to REITs;
| | - |  | ----------------------------------------------------------------------



| | ¡ |  | legislative or regulatory changes adversely affecting REITs and the real estate business;
| | - |  | -----------------------------------------------------------------------------------------



| | ¡ |  | environmental, regulatory and/or safety requirements; and
| | - |  | ---------------------------------------------------------



| | ¡ |  | other factors discussed under Item 1A Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2009 and those
factors that may be contained in any filing we make with the SEC, including Part II, Item 1A of this Form 10-Q.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of future events, new information or
otherwise.

Overview

We are a
Maryland real estate investment trust that invests in real estate properties, focusing on office, retail, industrial (primarily warehouse/distribution) and multi-family residential properties, as well as other real estate-related assets. We may also
utilize our expertise and resources to capitalize on unique opportunities that may exist elsewhere in the marketplace, in which we might also acquire interests in mortgages or other investments where we could seek to acquire the underlying property.
We will not invest more than 20% of our total assets in any single investment. We intend to invest primarily in properties located in geographically-diverse major metropolitan areas in the United States. In addition, we currently intend to invest up
to 30% of our total assets in properties outside of the United States. Our international investments may be in markets in which CBRE Investors has existing operations or previous investment experience, or may be in partnership with other entities
that have significant local-market expertise. We expect that our international investments will focus on properties typically located in significant business districts and suburban markets.

As of March 31, 2010, we owned, on a consolidated basis, 58 office, retail, and industrial (primarily warehouse/distribution) properties
located in 10 states (California, Florida, Georgia, Illinois, Massachusetts, Minnesota, North Carolina, South Carolina, Texas and Virginia) and in the United Kingdom, encompassing approximately 8,407,000 rentable square feet, as well as one
undeveloped land parcel in Georgia. In addition, we have ownership interests in three unconsolidated entities that, as of March 31, 2010, owned interests in 27 properties. Excluding those properties owned through our investment in CBRE
Strategic Partners Asia, we owned on an unconsolidated basis, 18 industrial, office and retail properties located in seven states (Arizona, Florida, Indiana, North Carolina, Ohio, Tennessee and Texas) encompassing approximately 7,392,000 rentable
square feet.

We commenced operations in July 2004, following an initial private placement of our common shares of beneficial interest.
We raised aggregate net proceeds (after commissions and expenses) of approximately $55,500,000 from July 2004 to October 2004 in private placements of our common shares. On October 24, 2006, we commenced an initial public offering of up to
$2,000,000,000 in our common shares.

Our initial public offering was terminated effective as of the close of business on
January 29, 2009. As of the close of business on January 29, 2009, we had sold a total of 60,808,967 common shares in the initial public offering, including 1,487,943 common shares which were issued pursuant to our dividend reinvestment
plan, and received $607,345,702 in gross proceeds. We withdrew from registration a total of 140,243,665 common shares that were registered but not sold in connection with the initial public offering.

The registration statement relating to our follow-on public offering was declared effective by the Securities and Exchange Commission (the
SEC) on January 30, 2009. CNL Securities Corp. is the dealer manager of our offering. The registration statement covers up to $3,000,000,000 in common shares of beneficial interest, 90% of which will be offered at a price of $10.00
per share, and 10% of which will be offered pursuant to our dividend reinvestment plan at a purchase price equal to the higher of $9.50 per share or 95% of the fair market value of a common share on the reinvestment date, as determined by the
Investment Advisor, or another firm we choose for that purpose. We reserve the right to reallocate the shares between the primary offering and our dividend reinvestment plan. From January 30, 2009 (effective date) through March 31, 2010,
we received gross offering proceeds of approximately $558,098,008 from the sale of 55,915,772 shares.

We are externally managed by CBRE
Advisors LLC (the Investment Advisor), and all of our real estate investments are held directly by, or indirectly through wholly owned subsidiaries of, CBRE Operating Partnership, L.P., (the CBRE OP). Generally, we contribute
the



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##### Table of Contents

proceeds we receive from the issuance of common shares for cash to CBRE OP and CBRE OP, in turn, issues units of limited partnership to us, which entitle us to receive our share of CBRE OPs
earnings or losses and net cash flow. Provided we have sufficient available cash flow, we intend to pay our shareholders quarterly cash dividends. We are structured in a manner that allows CBRE OP to issue limited partnership interests from time to
time in exchange for real estate properties. By structuring our acquisitions in this manner, the contributors of real estate to CBRE OP are generally able to defer gain recognition for U.S. federal income tax purposes. We have elected to be taxed as
a real estate investment trust, (REIT), for U.S. federal income tax purposes. As a REIT, our company generally will not be subject to U.S. federal income tax on that portion of income that is distributed to shareholders if at least 90%
of our companys REIT taxable income is distributed to our shareholders.

Our business objective is to maximize shareholder value
through: (1) maintaining an experienced management team of investment professionals; (2) investing in properties in certain markets where property fundamentals will support stable income returns and where capital appreciation is expected
to be above average; (3) acquiring properties at a discount to replacement cost and where there is expected positive rent growth; and (4) repositioning properties to increase their value in the market place. Operating results at our
individual properties are impacted by the supply and demand for office, retail, industrial and multifamily space, trends of the national regional economies, the financial health of current and prospective tenants and their customers, capital and
credit market trends, construction costs, and interest rate movements. Individual operating property performance is monitored and calculated using certain non-GAAP financial measures such as an analysis of net operating income. An analysis of net
operating income as compared to local regional and national statistics may provide insight into short or longer term trends exclusive of capital markets or capital structuring issues. Interest rates are a critical factor in our results of
operations. Our properties may be financed with significant amounts of debt, so changes in interest rates may affect both net income and the health of capital markets. For investments outside of the United States, in addition to monitoring local
property market fundamentals and capital and credit market trends, we evaluate currency hedging strategies, taxes, the stability of the local government and economy and the experience of our management team in the region.

Beginning in the second half of 2007, U.S. economic activity weakened due initially to stresses in the residential housing and financial sectors.
The weak economic environment continued through 2008 and 2009, and the timing of a full economic recovery remains uncertain at this time. The currently-weak economic environment may result in declining demand for office, industrial and retail space,
increasing tenant bankruptcies, lower average occupancy rates and effective rents, including potentially in our real estate portfolio which may impact our net income, funds from operations and cash flow.

Additionally, during the first half of 2009, the capital markets experienced significant distress during which many financial industry
participants, including commercial real estate owners, operators, investors and lenders found it challenging to obtain cost-effective debt capital to finance new investment activity or to refinance maturing debt. However, since then the capital
market environment has improved significantly such that it appeared to be substantially stabilized during the later part of 2009. Nonetheless, we expect that highly-levered real estate investors will continue to face significantly-reduced, or even
eliminated, availability of funding sources, or at significantly-increased cost. As such, with our modest levels of leverage, we expect we will continue to benefit from improved access to attractive investment opportunities and reduced competition
to acquire real estate assets.

The table below provides information relating to our properties, excluding those owned through our
investment in CBRE Strategic Partners Asia, as of March 31, 2010. We purchased all of these properties from unaffiliated third parties. These properties are subject to competition from similar properties within their market areas and their
economic performance could be affected by changes in local economic conditions. In evaluating these properties for acquisition, we considered a variety of factors including location, functionality and design, price per square foot, the credit
worthiness of tenants, length of lease terms, market fundamentals and the in-place rental rates compared to market rates.



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As of March 31, 2010, we owned the following properties:



|                                                         |  |              |  |           |  |                        |  |                       |   |  |                                       |  |                  |   |  |                                                    |       
|-------------------------------------------------------- |  | ------------ |  | --------- |  | ---------------------- |  | --------------------- | - |  | ------------------------------------- |  | ---------------- | - |  | -------------------------------------------------- | ------
|Property and Market                                      |  | DateAcquired |  | YearBuilt |  | Property Type          |  | OurEffectiveOwnership |   |  | Net RentableSquare Feet(in thousands) |  | PercentageLeased |   |  | ApproximateTotalAcquisition 
Cost(1)(in thousands)
|Domestic Consolidated Properties:                        |  |              |  |           |  |                        |  |                       |   |  |                                       |  |                  |   |  |                                                    |       
|REMEC Corporate Campus 1San Diego, CA                    |  | 9/15/2004    |  | 1983      |  | Office                 |  | 100.00                | % |  | 34                                    |  | 100.00           | % |  | $                                                  | 6,833 
|REMEC Corporate Campus 2San Diego, CA                    |  | 9/15/2004    |  | 1983      |  | Office                 |  | 100.00                | % |  | 30                                    |  | 100.00           | % |  |                                                    | 6,125 
|REMEC Corporate Campus 3San Diego, CA                    |  | 9/15/2004    |  | 1983      |  | Office                 |  | 100.00                | % |  | 37                                    |  | 100.00           | % |  |                                                    | 7,523 
|REMEC Corporate Campus 4San Diego, CA                    |  | 9/15/2004    |  | 1983      |  | Office                 |  | 100.00                | % |  | 31                                    |  | 100.00           | % |  |                                                    | 6,186 
|300 Constitution DriveBoston, MA                         |  | 11/3/2004    |  | 1998      |  | Warehouse/Distribution |  | 100.00                | % |  | 330                                   |  | 100.00           | % |  |                                                    | 19,805
|Deerfield Commons(2)Atlanta, GA                          |  | 6/21/2005    |  | 2000      |  | Office                 |  | 100.00                | % |  | 122                                   |  | 95.48            | % |  |                                                    | 21,834
|505 Century(3)Dallas, TX                                 |  | 1/9/2006     |  | 1997      |  | Warehouse/Distribution |  | 100.00                | % |  | 100                                   |  | 72.40            | % |  |                                                    | 6,095 
|631 International(3)Dallas, TX                           |  | 1/9/2006     |  | 1998      |  | Warehouse/Distribution |  | 100.00                | % |  | 73                                    |  | 100.00           | % |  |                                                    | 5,407 
|660 North Dorothy(3)Dallas, TX                           |  | 1/9/2006     |  | 1997      |  | Warehouse/Distribution |  | 100.00                | % |  | 120                                   |  | 97.29            | % |  |                                                    | 6,836 
|Bolingbrook Point IIIChicago, IL                         |  | 8/29/2007    |  | 2006      |  | Warehouse/Distribution |  | 100.00                | % |  | 185                                   |  | 100.00           | % |  |                                                    | 18,170
|Cherokee Corporate
Park(3)Spartanburg, SC                |  | 8/30/2007    |  | 2000      |  | Warehouse/Distribution |  | 100.00                | % |  | 60                                    |  | 100.00           | % |  |                                                    | 3,775 
|Community Cash Complex 1(3)Spartanburg,
SC               |  | 8/30/2007    |  | 1960      |  | Warehouse/Distribution |  | 100.00                | % |  | 205                                   |  | 35.26            | % |  |                                                    | 2,690 
|Community Cash Complex 2(3)Spartanburg,
SC               |  | 8/30/2007    |  | 1978      |  | Warehouse/Distribution |  | 100.00                | % |  | 145                                   |  | 35.07            | % |  |                                                    | 2,225 
|Community Cash
Complex 3(3)Spartanburg, SC               |  | 8/30/2007    |  | 1981      |  | Warehouse/Distribution |  | 100.00                | % |  | 116                                   |  | 100.00           | % |  |                                                    | 1,701 
|Community Cash Complex 4(3)Spartanburg,
SC               |  | 8/30/2007    |  | 1984      |  | Warehouse/Distribution |  | 100.00                | % |  | 33                                    |  | 100.00           | % |  |                                                    | 547   
|Community Cash Complex 5(3)Spartanburg,
SC               |  | 8/30/2007    |  | 1984      |  | Warehouse/Distribution |  | 100.00                | % |  | 53                                    |  | 84.85            | % |  |                                                    | 824   
|Fairforest Building 1(3)Spartanburg, SC                  |  | 8/30/2007    |  | 2000      |  | Manufacturing          |  | 100.00                | % |  | 51                                    |  | 100.00           | % |  |                                                    | 2,974 
|Fairforest Building 2(3)Spartanburg, SC                  |  | 8/30/2007    |  | 1999      |  | Manufacturing          |  | 100.00                | % |  | 104                                   |  | 100.00           | % |  |                                                    | 5,379 
|Fairforest Building 3(3)Spartanburg, SC                  |  | 8/30/2007    |  | 2000      |  | Manufacturing          |  | 100.00                | % |  | 100                                   |  | 100.00           | % |  |                                                    | 5,760 
|Fairforest Building 4(3)Spartanburg, SC                  |  | 8/30/2007    |  | 2001      |  | Manufacturing          |  | 100.00                | % |  | 101                                   |  | 100.00           | % |  |                                                    | 5,640 
|Fairforest Building 5Spartanburg, SC                     |  | 8/30/2007    |  | 2006      |  | Warehouse/Distribution |  | 100.00                | % |  | 316                                   |  | 100.00           | % |  |                                                    | 16,968
|Fairforest Building 6Spartanburg, SC                     |  | 8/30/2007    |  | 2005      |  | Manufacturing          |  | 100.00                | % |  | 101                                   |  | 100.00           | % |  |                                                    | 7,469 
|Fairforest Building 7(3)Spartanburg, SC                  |  | 8/30/2007    |  | 2006      |  | Warehouse/Distribution |  | 100.00                | % |  | 101                                   |  | 0.00             | % |  |                                                    | 5,626 
|Greenville/Spartanburg Industrial Park(3)Spartanburg,
SC |  | 8/30/2007    |  | 1990      |  | Manufacturing          |  | 100.00                | % |  | 67                                    |  | 100.00           | % |  |                                                    | 3,388 
|Highway 290
Commerce Park Building 1(3)Spartanburg, SC   |  | 8/30/2007    |  | 1995      |  | Warehouse/Distribution |  | 100.00                | % |  | 150                                   |  | 100.00           | % |  |                                                    | 5,388 
|Highway 290 Commerce Park Building 5(3)Spartanburg,
SC   |  | 8/30/2007    |  | 1993      |  | Warehouse/Distribution |  | 100.00                | % |  | 30                                    |  | 100.00           | % |  |                                                    | 1,420 
|Highway 290 Commerce Park Building 7(3)Spartanburg,
SC   |  | 8/30/2007    |  | 1994      |  | Warehouse/Distribution |  | 100.00                | % |  | 88                                    |  | 0.00             | % |  |                                                    | 4,889 
|HJ Park Building 1Spartanburg, SC                        |  | 8/30/2007    |  | 2003      |  | Manufacturing          |  | 100.00                | % |  | 70                                    |  | 100.00           | % |  |                                                    | 4,216 
|Jedburg Commerce Park(3)Charleston, SC                   |  | 8/30/2007    |  | 2007      |  | Manufacturing          |  | 100.00                | % |  | 513                                   |  | 100.00           | % |  |                                                    | 41,991
|Kings Mountain ICharlotte, NC                            |  | 8/30/2007    |  | 1998      |  | Warehouse/Distribution |  | 100.00                | % |  | 100                                   |  | 100.00           | % |  |                                                    | 5,497 



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|                                                       |  |              |       |           |       |                        |  |                       |   |  |                                       |  |                  |   |  |                                                   
|------------------------------------------------------ |  | ------------ | ----- | --------- | ----- | ---------------------- |  | --------------------- | - |  | ------------------------------------- |  | ---------------- | - |  | --------------------------------------------------
|Property and Market                                    |  | DateAcquired |       | YearBuilt |       | Property Type          |  | OurEffectiveOwnership |   |  | Net RentableSquare Feet(in thousands) |  | PercentageLeased |   |  | ApproximateTotalAcquisition 
Cost(1)(in thousands)
|Kings Mountain IICharlotte, NC                         |  | 8/30/2007    |       | 2002      |       | Warehouse/Distribution |  | 100.00                | % |  | 302                                   |  | 100.00           | % |  | 11,311                                            
|Mount Holly BuildingCharleston, SC                     |  | 8/30/2007    |       | 2003      |       | Warehouse/Distribution |  | 100.00                | % |  | 101                                   |  | 100.00           | % |  | 6,208                                             
|North Rhett ICharleston, SC                            |  | 8/30/2007    |       | 1973      |       | Warehouse/Distribution |  | 100.00                | % |  | 285                                   |  | 100.00           | % |  | 10,302                                            
|North Rhett IICharleston, SC                           |  | 8/30/2007    |       | 2001      |       | Warehouse/Distribution |  | 100.00                | % |  | 102                                   |  | 0.00             | % |  | 7,073                                             
|North Rhett IIICharleston, SC                          |  | 8/30/2007    |       | 2002      |       | Warehouse/Distribution |  | 100.00                | % |  | 80                                    |  | 100.00           | % |  | 4,812                                             
|North Rhett IVCharleston, SC                           |  | 8/30/2007    |       | 2005      |       | Warehouse/Distribution |  | 100.00                | % |  | 316                                   |  | 100.00           | % |  | 17,060                                            
|Orangeburg Park BuildingCharleston, SC                 |  | 8/30/2007    |       | 2003      |       | Warehouse/Distribution |  | 100.00                | % |  | 101                                   |  | 100.00           | % |  | 5,474                                             
|Orchard Business Park 2(3)Spartanburg, SC              |  | 8/30/2007    |       | 1993      |       | Warehouse/Distribution |  | 100.00                | % |  | 18                                    |  | 100.00           | % |  | 761                                               
|Union Cross Building IWinston-Salem, NC                |  | 8/30/2007    |       | 2005      |       | Warehouse/Distribution |  | 100.00                | % |  | 101                                   |  | 100.00           | % |  | 6,585                                             
|Union Cross Building IIWinston-Salem, NC               |  | 8/30/2007    |       | 2005      |       | Warehouse/Distribution |  | 100.00                | % |  | 316                                   |  | 0.00             | % |  | 17,216                                            
|Highway 290 Commerce Park Building 2(3)Spartanburg,
SC |  | 9/24/2007    |       | 1995      |       | Warehouse/Distribution |  | 100.00                | % |  | 100                                   |  | 100.00           | % |  | 4,626                                             
|Highway 290 Commerce Park Building 6(3)Spartanburg,
SC |  | 11/1/2007    |       | 1996      |       | Warehouse/Distribution |  | 100.00                | % |  | 105                                   |  | 0.00             | % |  | 3,760                                             
|Orchard Business Park 1(3)Spartanburg, SC              |  | 11/1/2007    |       | 1994      |       | Warehouse/Distribution |  | 100.00                | % |  | 33                                    |  | 100.00           | % |  | 1,378                                             
|Lakeside Office CenterDallas, TX                       |  | 3/5/2008     |       | 2006      |       | Office                 |  | 100.00                | % |  | 99                                    |  | 95.26            | % |  | 17,994                                            
|Kings Mountain III(3)Charlotte, NC                     |  | 3/14/2008    |       | 2007      |       | Warehouse/Distribution |  | 100.00                | % |  | 542                                   |  | 0.00             | % |  | 25,728                                            
|Enclave on the LakeHouston, TX                         |  | 7/1/2008     |       | 1999      |       | Office                 |  | 100.00                | % |  | 171                                   |  | 100.00           | % |  | 37,827                                            
|Avion Midrise IIIWashington, DC                        |  | 11/18/2008   |       | 2002      |       | Office                 |  | 100.00                | % |  | 71                                    |  | 100.00           | % |  | 21,111                                            
|Avion Midrise IVWashington, DC                         |  | 11/18/2008   |       | 2002      |       | Office                 |  | 100.00                | % |  | 72                                    |  | 100.00           | % |  | 21,112                                            
|13201 Wilfred(3)Minneapolis, MN                        |  | 6/29/2009    |       | 1999      |       | Warehouse/Distribution |  | 100.00                | % |  | 335                                   |  | 100.00           | % |  | 15,340                                            
|3011, 3055 & 3077 Comcast Place(3)Oakland,
CA          |  | 7/1/2009     |       | 1988      |       | Office                 |  | 100.00                | % |  | 220                                   |  | 100.00           | % |  | 49,000                                            
|140 Depot Street(3)Boston, MA                          |  | 7/31/2009    |       | 2007      |       | Warehouse/Distribution |  | 100.00                | % |  | 238                                   |  | 100.00           | % |  | 18,950                                            
|12650 Ingenuity DriveOrlando, FL                       |  | 8/5/2009     |       | 1999      |       | Office                 |  | 100.00                | % |  | 125                                   |  | 100.00           | % |  | 25,350                                            
|Crest Ridge Corporate Center 1(3)Minneapolis,
MN       |  | 8/17/2009    |       | 2009      |       | Office                 |  | 100.00                | % |  | 116                                   |  | 100.00           | % |  | 28,419                                            
|West Point Trade Center(3)Jacksonville, FL             |  | 12/30/2009   |       | 2009      |       | Warehouse/Distribution |  | 100.00                | % |  | 602                                   |  | 100.00           | % |  | 29,000                                            
|                                                       |  |              |       |           |       |                        |  |                       |   |  |                                       |  |                  |   |  |                                                   
|Total Domestic Consolidated Properties                 |  |              | 8,117 |           | 81.15 | %                      |  | 619,578              
|                                                       |  |              |       |           |       |                        |  |                       |   |  |                                       |  |                  |   |  |                                                   
|International Consolidated Properties:                 |  |              |       |           |       |                        |  |                       |   |  |                                       |  |                  |   |  |                                                   
|602 Central
Blvd.(3)Coventry, UK                       |  | 4/27/2007    |       | 2001      |       | Office                 |  | 100.00                | % |  | 50                                    |  | 0.00             | % |  | 23,847                                            
|Thames Valley FiveReading, UK                          |  | 3/20/2008    |       | 1998      |       | Office                 |  | 100.00                | % |  | 40                                    |  | 100.00           | % |  | 29,572                                            
|Albion Mills Retail ParkWakefield, UK                  |  | 7/11/2008    |       | 2000      |       | Retail                 |  | 100.00                | % |  | 55                                    |  | 100.00           | % |  | 22,098                                            
|Maskew Retail ParkPeterborough, UK                     |  | 10/23/2008   |       | 2007      |       | Retail                 |  | 100.00                | % |  | 145                                   |  | 100.00           | % |  | 53,740                                            
|                                                       |  |              |       |           |       |                        |  |                       |   |  |                                       |  |                  |   |  |                                                   
|Total International Consolidated Properties            |  |              | 290   |           | 82.77 | %                      |  | 129,257              
|                                                       |  |              |       |           |       |                        |  |                       |   |  |                                       |  |                  |   |  |                                                   
|Total Consolidated Properties                          |  |              | 8,407 |           | 81.20 | %                      |  | 748,835              
|                                                       |  |              |       |           |       |                        |  |                       |   |  |                                       |  |                  |   |  |                                                   



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|                                                |  |              |        |           |       |                        |  |                       |           |  |                                       |  |                  |   |  |                                                    |       
|----------------------------------------------- |  | ------------ | ------ | --------- | ----- | ---------------------- |  | --------------------- | --------- |  | ------------------------------------- |  | ---------------- | - |  | -------------------------------------------------- | ------
|Property and Market                             |  | DateAcquired |        | YearBuilt |       | Property Type          |  | OurEffectiveOwnership |           |  | Net RentableSquare Feet(in thousands) |  | PercentageLeased |   |  | ApproximateTotalAcquisition 
Cost(1)(in thousands)
|Unconsolidated
Properties(4):                   |  |              |        |           |       |                        |  |                       |           |  |                                       |  |                  |   |  |                                                    |       
|                                                |  |              |        |           |       |                        | 
|Buckeye Logistics Center
(5)Phoenix, AZ         |  | 6/12/2008    |        | 2008      |       | Warehouse/Distribution |  | 80.00                 | %         |  | 605                                   |  | 100.00           | % |  |                                                    | 35,573
|Afton Ridge Shopping
Center(6)Charlotte,
NC     |  | 9/18/2008    |        | 2007      |       | Retail                 |  | 90.00                 | %         |  | 296                                   |  | 94.33            | % |  |                                                    | 44,621
|AllPoints at Anson Bldg.
1(5)Indianapolis, IN   |  | 9/30/2008    |        | 2008      |       | Warehouse/Distribution |  | 80.00                 | %         |  | 631                                   |  | 100.00           | % |  |                                                    | 27,150
|12200 Presidents
Court(5)Jacksonville, FL      |  | 9/30/2008    |        | 2008      |       | Warehouse/Distribution |  | 80.00                 | %         |  | 772                                   |  | 100.00           | % |  |                                                    | 29,995
|201 Sunridge
Blvd.(5)Dallas, TX                 |  | 9/30/2008    |        | 2008      |       | Warehouse/Distribution |  | 80.00                 | %         |  | 823                                   |  | 100.00           | % |  |                                                    | 25,690
|Aspen Corporate Center
500(5)Nashville, TN      |  | 9/30/2008    |        | 2008      |       | Office                 |  | 80.00                 | %         |  | 180                                   |  | 100.00           | % |  |                                                    | 30,033
|125 Enterprise
Parkway(5)Columbus,
OH           |  | 12/10/2008   |        | 2008      |       | Warehouse/Distribution |  | 80.00                 | %         |  | 1,142                                 |  | 100.00           | % |  |                                                    | 38,088
|AllPoints Midwest Bldg.
I(5)Indianapolis, IN    |  | 12/10/2008   |        | 2008      |       | Warehouse/Distribution |  | 80.00                 | %         |  | 1,200                                 |  | 100.00           | % |  |                                                    | 41,428
|Celebration Office
Center(3)(5)Orlando,
FL      |  | 5/13/2009    |        | 2009      |       | Office                 |  | 80.00                 | %         |  | 101                                   |  | 100.00           | % |  |                                                    | 13,640
|22535 Colonial
Pkwy(3)(5)Houston,
TX            |  | 5/13/2009    |        | 2009      |       | Office                 |  | 80.00                 | %         |  | 90                                    |  | 100.00           | % |  |                                                    | 11,596
|Fairfield Distribution Ctr.
IX(3)(5)Tampa, FL   |  | 5/13/2009    |        | 2008      |       | Warehouse/Distribution |  | 80.00                 | %         |  | 136                                   |  | 100.00           | % |  |                                                    | 7,151 
|Northpoint
III(3)(5)Orlando, FL                 |  | 10/15/2009   |        | 2001      |       | Office                 |  | 80.00                 | %         |  | 108                                   |  | 100.00           | % |  |                                                    | 14,592
|Goodyear Crossing Ind. Park
II(3)(5)Phoenix, AZ |  | 12/07/2009   |        | 2009      |       | Warehouse/Distribution |  | 80.00                 | %         |  | 820                                   |  | 100.00           | % |  |                                                    | 36,516
|3900 North Paramount
Parkway(3)(5)Raleigh, NC   |  | 3/31/2010    |        | 1999      |       | Office                 |  | 80.00                 | %         |  | 101                                   |  | 100.00           | % |  |                                                    | 11,176
|3900 South Paramount
Parkway(3)(5)Raleigh, NC   |  | 3/31/2010    |        | 1999      |       | Office                 |  | 80.00                 | %         |  | 119                                   |  | 100.00           | % |  |                                                    | 13,055
|1400 Perimeter Park
Drive(3)(5)Raleigh, NC      |  | 3/31/2010    |        | 1991      |       | Office                 |  | 80.00                 | %         |  | 45                                    |  | 100.00           | % |  |                                                    | 3,970 
|Miramar
I(3)(5)(7)Fort Lauderdale, FL           |  | 3/31/2010    |        | 2001      |       | Office                 |  | 80.00                 | %         |  | 94                                    |  | 100.00           | % |  |                                                    | 13,645
|Miramar
II(3)(5)(7)Fort Lauderdale, FL          |  | 3/31/2010    |        | 2001      |       | Office                 |  | 80.00                 | %         |  | 129                                   |  | 100.00           | % |  |                                                    | 20,899
|                                                |  |              |        |           |       |                        |  |                       |           |  |                                       |  |                  |   |  |                                                    |       
|Total Unconsolidated
Properties(4)              |  |              | 7,392  |           | 99.77 | %                      |  |                       | 418,818  
|                                                |  |              |        |           |       |                        |  |                       |           |  |                                       |  |                  |   |  |                                                    |       
|Total
Properties(4)                             |  |              | 15,799 |           | 89.89 | %                      |  | $                     | 1,167,653
|                                                |  |              |        |           |       |                        |  |                       |           |  |                                       |  |                  |   |  |                                                    |       



|(1) | Approximate total acquisition cost represents the pro rata purchase price inclusive of customary closing costs and acquisition fees/acquisition expenses.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Includes undeveloped land zoned for future use.
|--- | -----------------------------------------------



|(3) | This property is unencumbered and not secured by mortgage debt.
|--- | ---------------------------------------------------------------



|(4) | Does not include CBRE Strategic Partners Asia properties.
|--- | ---------------------------------------------------------



|(5) | This property is held through the Duke joint venture.
|--- | -----------------------------------------------------



|(6) | This property is held through the Afton Ridge joint venture.
|--- | ------------------------------------------------------------



|(7) | Consolidated properties acquired on December 31, 2009 and contributed to the Duke joint venture.
|--- | ------------------------------------------------------------------------------------------------



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Property Type Concentration

Our property type concentrations as of March 31, 2010 are as follows (Net Rentable Square Feet and Approximate Total Acquisition Cost in
thousands):



|                       |  |                         |  |                               |  |                                            |         |            |    |                       |       |                                 |   |            |  |                       |  |                                 |  |   |          
|---------------------- |  | ----------------------- |  | ----------------------------- |  | ------------------------------------------ | ------- | ---------- | -- | --------------------- | ----- | ------------------------------- | - | ---------- |  | --------------------- |  | ------------------------------- |  | - | ---------
|                       |  | Consolidated Properties |  | Unconsolidated Properties
(1) |  | Consolidated & UnconsolidatedProperties(1)
|Property Type          |  | Properties              |  | NetRentableSquareFeet         |  | ApproximateTotalAcquisitionCost            |         | Properties |    | NetRentableSquareFeet |       | ApproximateTotalAcquisitionCost |   | Properties |  | NetRentableSquareFeet |  | ApproximateTotalAcquisitionCost
|Warehouse/Distribution |  | 34                      |  | 5,881                         |  | $                                          | 293,447 |            | 8  |                       | 6,129 |                                 | $ | 241,591    |  | 42                    |  | 12,010                          |  | $ | 535,038  
|Office                 |  | 14                      |  | 1,218                         |  |                                            | 302,733 |            | 9  |                       | 967   |                                 |   | 132,606    |  | 23                    |  | 2,185                           |  |   | 435,339  
|Retail                 |  | 2                       |  | 201                           |  |                                            | 75,838  |            | 1  |                       | 296   |                                 |   | 44,621     |  | 3                     |  | 497                             |  |   | 120,459  
|Manufacturing          |  | 8                       |  | 1,107                         |  |                                            | 76,817  |            |   |                       |      |                                 |   |           |  | 8                     |  | 1,107                           |  |   | 76,817   
|                       |  |                         |  |                               |  |                                            |         |            |    |                       |       |                                 |   |            |  |                       |  |                                 |  |   |          
|Total                  |  | 58                      |  | 8,407                         |  | $                                          | 748,835 |            | 18 |                       | 7,392 |                                 | $ | 418,818    |  | 76                    |  | 15,799                          |  | $ | 1,167,653
|                       |  |                         |  |                               |  |                                            |         |            |    |                       |       |                                 |   |            |  |                       |  |                                 |  |   |          



|(1) | Number of Properties and Net Rentable Square Feet for Unconsolidated Properties are at 100%. Approximate Total Acquisition Cost for Unconsolidated Properties
is at our pro rata share of effective ownership. Does not include our investment in CBRE Strategic Partners Asia.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Geographic
Concentration

Our geographic concentrations as of March 31, 2010 are as follows (Net Rentable Square Feet and Approximate Total
Acquisition Cost in thousands):



|               |  |                         |  |                               |  |                                            |         |            |    |                       |       |                                 |   |            |  |                       |  |                                 |  |   |          
|-------------- |  | ----------------------- |  | ----------------------------- |  | ------------------------------------------ | ------- | ---------- | -- | --------------------- | ----- | ------------------------------- | - | ---------- |  | --------------------- |  | ------------------------------- |  | - | ---------
|               |  | Consolidated Properties |  | Unconsolidated Properties
(1) |  | Consolidated & UnconsolidatedProperties(1)
|Domestic       |  | Properties              |  | NetRentableSquareFeet         |  | ApproximateTotalAcquisitionCost            |         | Properties |    | NetRentableSquareFeet |       | ApproximateTotalAcquisitionCost |   | Properties |  | NetRentableSquareFeet |  | ApproximateTotalAcquisitionCost
|South Carolina |  | 29                      |  | 3,647                         |  | $                                          | 184,324 |            |   |                       |      |                                 | $ |           |  | 29                    |  | 3,647                           |  | $ | 184,324  
|Florida        |  | 2                       |  | 725                           |  |                                            | 54,350  |            | 6  |                       | 1,340 |                                 |   | 99,922     |  | 8                     |  | 2,065                           |  |   | 154,272  
|North Carolina |  | 5                       |  | 1,360                         |  |                                            | 66,337  |            | 4  |                       | 561   |                                 |   | 72,822     |  | 9                     |  | 1,921                           |  |   | 139,159  
|Texas          |  | 5                       |  | 563                           |  |                                            | 74,159  |            | 2  |                       | 913   |                                 |   | 37,286     |  | 7                     |  | 1,476                           |  |   | 111,445  
|California     |  | 5                       |  | 352                           |  |                                            | 75,667  |            |   |                       |      |                                 |   |           |  | 5                     |  | 352                             |  |   | 75,667   
|Arizona        |  |                        |  |                              |  |                                            |        |            | 2  |                       | 1,425 |                                 |   | 72,089     |  | 2                     |  | 1,425                           |  |   | 72,089   
|Indiana        |  |                        |  |                              |  |                                            |        |            | 2  |                       | 1,831 |                                 |   | 68,578     |  | 2                     |  | 1,831                           |  |   | 68,578   
|Minnesota      |  | 2                       |  | 452                           |  |                                            | 43,759  |            |   |                       |      |                                 |   |           |  | 2                     |  | 452                             |  |   | 43,759   
|Virginia       |  | 2                       |  | 143                           |  |                                            | 42,223  |            |   |                       |      |                                 |   |           |  | 2                     |  | 143                             |  |   | 42,223   
|Massachusetts  |  | 2                       |  | 568                           |  |                                            | 38,755  |            |   |                       |      |                                 |   |           |  | 2                     |  | 568                             |  |   | 38,755   
|Ohio           |  |                        |  |                              |  |                                            |        |            | 1  |                       | 1,142 |                                 |   | 38,088     |  | 1                     |  | 1,142                           |  |   | 38,088   
|Tennessee      |  |                        |  |                              |  |                                            |        |            | 1  |                       | 180   |                                 |   | 30,033     |  | 1                     |  | 180                             |  |   | 30,033   
|Georgia        |  | 1                       |  | 122                           |  |                                            | 21,834  |            |   |                       |      |                                 |   |           |  | 1                     |  | 122                             |  |   | 21,834   
|Illinois       |  | 1                       |  | 185                           |  |                                            | 18,170  |            |   |                       |      |                                 |   |           |  | 1                     |  | 185                             |  |   | 18,170   
|               |  |                         |  |                               |  |                                            |         |            |    |                       |       |                                 |   |            |  |                       |  |                                 |  |   |          
|Total Domestic |  | 54                      |  | 8,117                         |  |                                            | 619,578 |            | 18 |                       | 7,392 |                                 |   | 418,818    |  | 72                    |  | 15,509                          |  |   | 1,038,396
|International  |  |                         |  |                               |  |                                            |         |            |    |                       |       |                                 |   |            |  |                       |  |                                 |  |   |          
|United Kingdom |  | 4                       |  | 290                           |  |                                            | 129,257 |            |   |                       |      |                                 |   |           |  | 4                     |  | 290                             |  |   | 129,257  
|               |  |                         |  |                               |  |                                            |         |            |    |                       |       |                                 |   |            |  |                       |  |                                 |  |   |          
|Total          |  | 58                      |  | 8,407                         |  | $                                          | 748,835 |            | 18 |                       | 7,392 |                                 | $ | 418,818    |  | 76                    |  | 15,799                          |  | $ | 1,167,653
|               |  |                         |  |                               |  |                                            |         |            |    |                       |       |                                 |   |            |  |                       |  |                                 |  |   |          



|(1) | Number of Properties and Net Rentable Square Feet for Unconsolidated Properties are at 100%. Approximate Total Acquisition Cost for Unconsolidated Properties
is at our pro rata share of effective ownership. Does not include our investment in CBRE Strategic Partners Asia.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



45



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##### Table of Contents

Significant Tenants

The following table details our largest tenants as of March 31, 2010 (in thousands):



|   |  |                                    |  |                                        |  |                         |  |                              |        |                                           |       |                     |   |                         |  |                     |  |   |       
|-- |  | ---------------------------------- |  | -------------------------------------- |  | ----------------------- |  | ---------------------------- | ------ | ----------------------------------------- | ----- | ------------------- | - | ----------------------- |  | ------------------- |  | - | ------
|   |  |                                    |  |                                        |  | Consolidated Properties |  | UnconsolidatedProperties
(1) |        | Consolidated
&UnconsolidatedProperties(1)
|   |  | Tenant                             |  | Primary Industry                       |  | Net RentableSquare Feet |  | AnnualizedBase Rent          |        | Net RentableSquare Feet                   |       | AnnualizedBase Rent |   | Net RentableSquare Feet |  | AnnualizedBase Rent
|1  |  | Amazon.com(2)                      |  | Internet Retail                        |  |                        |  | $                            |       |                                           | 2,056 |                     | $ | 7,705                   |  | 2,056               |  | $ | 7,705 
|2  |  | Comcast                            |  | Telecommunications                     |  | 220                     |  |                              | 4,578  |                                           |      |                     |   |                        |  | 220                 |  |   | 4,578 
|3  |  | SBM Offshore(3)                    |  | Petroleum and Mining                   |  | 171                     |  |                              | 4,277  |                                           |      |                     |   |                        |  | 171                 |  |   | 4,277 
|4  |  | Unilever(4)                        |  | Consumer Products                      |  |                        |  |                              |       |                                           | 1,595 |                     |   | 3,864                   |  | 1,595               |  |   | 3,864 
|5  |  | PPD Development                    |  | Pharmaceutical and Health Care Related |  |                        |  |                              |       |                                           | 251   |                     |   | 3,616                   |  | 251                 |  |   | 3,616 
|6  |  | Prime Distribution Services        |  | Logistics and Distribution             |  |                        |  |                              |       |                                           | 1,200 |                     |   | 2,958                   |  | 1,200               |  |   | 2,958 
|7  |  | American LaFrance                  |  | Vehicle Related Manufacturing          |  | 513                     |  |                              | 2,892  |                                           |      |                     |   |                        |  | 513                 |  |   | 2,892 
|8  |  | Kelloggs                          |  | Consumer Product                       |  |                        |  |                              |       |                                           | 1,142 |                     |   | 2,817                   |  | 1,142               |  |   | 2,817 
|9  |  | B&Q                                |  | Home Furnishings/ Home Improvement     |  | 104                     |  |                              | 2,536  |                                           |      |                     |   |                        |  | 104                 |  |   | 2,536 
|10 |  | Regus Business Centers             |  | Executive Office Suites                |  | 86                      |  |                              | 2,489  |                                           |      |                     |   |                        |  | 86                  |  |   | 2,489 
|11 |  | Syngenta Seed                      |  | Agriculture                            |  | 116                     |  |                              | 2,473  |                                           |      |                     |   |                        |  | 116                 |  |   | 2,473 
|12 |  | REMEC                              |  | Defense and Aerospace                  |  | 133                     |  |                              | 2,448  |                                           |      |                     |   |                        |  | 133                 |  |   | 2,448 
|13 |  | Dr. Pepper                         |  | Food service and Retail                |  | 602                     |  |                              | 2,388  |                                           |      |                     |   |                        |  | 602                 |  |   | 2,388 
|14 |  | US General Services Administration |  | Government                             |  | 72                      |  |                              | 2,197  |                                           |      |                     |   |                        |  | 72                  |  |   | 2,197 
|15 |  | Verizon Wireless                   |  | Telecommunications                     |  |                        |  |                              |       |                                           | 180   |                     |   | 2,181                   |  | 180                 |  |   | 2,181 
|16 |  | Royal Caribbean                    |  | Travel/Leisure                         |  |                        |  |                              |       |                                           | 129   |                     |   | 2,097                   |  | 129                 |  |   | 2,097 
|17 |  | Kaplan(6)                          |  | Education                              |  | 125                     |  |                              | 2,054  |                                           |      |                     |   |                        |  | 125                 |  |   | 2,054 
|18 |  | Best Buy                           |  | Specialty Retail                       |  | 238                     |  |                              | 1,657  |                                           | 30    |                     |   | 317                     |  | 268                 |  |   | 1,974 
|19 |  | Lockheed Martin                    |  | Defense and Aerospace                  |  | 72                      |  |                              | 1,793  |                                           |      |                     |   |                        |  | 72                  |  |   | 1,793 
|20 |  | Disney Vacation Development        |  | Entertainment                          |  |                        |  |                              |       |                                           | 101   |                     |   | 1,748                   |  | 101                 |  |   | 1,748 
|21 |  | DeVry                              |  | Education                              |  |                        |  |                              |       |                                           | 94    |                     |   | 1,517                   |  | 94                  |  |   | 1,517 
|22 |  | Womens Apparel Group              |  | Internet Retail                        |  | 330                     |  |                              | 1,426  |                                           |      |                     |   |                        |  | 330                 |  |   | 1,426 
|23 |  | Walgreens                          |  | Pharmaceutical and Health Care Related |  | 335                     |  |                              | 1,351  |                                           |      |                     |   |                        |  | 335                 |  |   | 1,351 
|24 |  | Florida Power                      |  | Utilities                              |  |                        |  |                              |       |                                           | 109   |                     |   | 1,280                   |  | 109                 |  |   | 1,280 
|25 |  | Echostar Satellite                 |  | Telecommunications                     |  | 316                     |  |                              | 1,225  |                                           |      |                     |   |                        |  | 316                 |  |   | 1,225 
|   |  | Other (92 tenants)                 |  |                                        |  | 3,393                   |  |                              | 16,488 |                                           | 488   |                     |   | 4,506                   |  | 3,881               |  |   | 20,994
|   |  |                                    |  |                                        |  |                         |  |                              |        |                                           |       |                     |   |                         |  |                     |  |   |       
|   |  |                                    |  |                                        |  | 6,826                   |  | $                            | 52,272 |                                           | 7,375 |                     | $ | 34,606                  |  | 14,201              |  | $ | 86,878
|   |  |                                    |  |                                        |  |                         |  |                              |        |                                           |       |                     |   |                         |  |                     |  |   |       



|(1) | Net Rentable Square Feet for Unconsolidated Properties is at 100%. Annualized Base Rent for Unconsolidated Properties is at our pro rata share of effective
ownership. Does not include our investment in CBRE Strategic Partners Asia.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Our tenants are Amazon.com.azdc, Inc., in our Buckeye Logistics Center and Goodyear Crossing Park II properties, and Amazon.com.indc, LLC, in our AllPoints at
Anson Bldg. 1 property, which are all wholly-owned subsidiaries of Amazon.com.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | Our tenant is Atlantic Offshore Ltd., a wholly-owned subsidiary of SBM Offshore.
|--- | --------------------------------------------------------------------------------



|(4) | Our tenant is CONOPCO, Inc., a wholly-owned subsidiary of Unilever.
|--- | -------------------------------------------------------------------



|(5) | Verizon Wireless is the d/b/a for Cellco Partnership.
|--- | -----------------------------------------------------



|(6) | Our tenant is Iowa College Acquisitions Corp., an operating subsidiary of Kaplan, Inc. The lease is guaranteed by Kaplan Inc.
|--- | -----------------------------------------------------------------------------------------------------------------------------



46



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##### Table of Contents

Tenant Industries

Our tenants operate across a wide range of industries. The following table details our tenant-industry concentrations as of March 31, 2010 (in
thousands):



|                                       |  |                         |  |                              |        |                                            |       |                     |   |                         |  |                     |  |   |       
|-------------------------------------- |  | ----------------------- |  | ---------------------------- | ------ | ------------------------------------------ | ----- | ------------------- | - | ----------------------- |  | ------------------- |  | - | ------
|                                       |  | Consolidated Properties |  | UnconsolidatedProperties (1) |        | Consolidated
&UnconsolidatedProperties (1)
|Primary Tenant Industry Category       |  | Net RentableSquare Feet |  | AnnualizedBase Rent          |        | Net RentableSquare Feet                    |       | AnnualizedBase Rent |   | Net RentableSquare Feet |  | AnnualizedBase Rent
|Internet Retail                        |  | 330                     |  | $                            | 1,426  |                                            | 2,056 |                     | $ | 7,708                   |  | 2,386               |  | $ | 9,134 
|Consumer Products                      |  | 256                     |  |                              | 1,260  |                                            | 2,747 |                     |   | 6,824                   |  | 3,003               |  |   | 8,084 
|Telecommunications                     |  | 536                     |  |                              | 5,811  |                                            | 180   |                     |   | 2,180                   |  | 716                 |  |   | 7,991 
|Logistics and Distribution             |  | 614                     |  |                              | 2,099  |                                            | 1,337 |                     |   | 3,427                   |  | 1,951               |  |   | 5,526 
|Pharmaceutical and Health Care Related |  | 357                     |  |                              | 1,663  |                                            | 253   |                     |   | 3,652                   |  | 610                 |  |   | 5,314 
|Home Furnishings/Home Improvement      |  | 549                     |  |                              | 4,792  |                                            | 35    |                     |   | 391                     |  | 584                 |  |   | 5,183 
|Petroleum and Mining                   |  | 171                     |  |                              | 4,277  |                                            |      |                     |   |                        |  | 171                 |  |   | 4,277 
|Defense and Aerospace                  |  | 204                     |  |                              | 4,241  |                                            |      |                     |   |                        |  | 204                 |  |   | 4,241 
|Vehicle Related Manufacturing          |  | 750                     |  |                              | 4,033  |                                            |      |                     |   |                        |  | 750                 |  |   | 4,033 
|Travel and Leisure                     |  |                        |  |                              |       |                                            | 231   |                     |   | 3,845                   |  | 231                 |  |   | 3,845 
|Education                              |  | 125                     |  |                              | 2,054  |                                            | 94    |                     |   | 1,517                   |  | 219                 |  |   | 3,572 
|Food Service and Retail                |  | 743                     |  |                              | 3,221  |                                            | 14    |                     |   | 278                     |  | 757                 |  |   | 3,499 
|Specialty Retail                       |  | 284                     |  |                              | 2,716  |                                            | 75    |                     |   | 712                     |  | 359                 |  |   | 3,428 
|Business Services                      |  | 474                     |  |                              | 1,986  |                                            | 103   |                     |   | 1,196                   |  | 577                 |  |   | 3,182 
|Other Manufacturing                    |  | 906                     |  |                              | 3,126  |                                            |      |                     |   |                        |  | 906                 |  |   | 3,126 
|Executive Office Suites                |  | 86                      |  |                              | 2,489  |                                            |      |                     |   |                        |  | 86                  |  |   | 2,489 
|Agriculture                            |  | 116                     |  |                              | 2,472  |                                            |      |                     |   |                        |  | 116                 |  |   | 2,472 
|Government                             |  | 72                      |  |                              | 2,197  |                                            |      |                     |   |                        |  | 72                  |  |   | 2,197 
|Financial Services                     |  | 182                     |  |                              | 1,607  |                                            |      |                     |   |                        |  | 182                 |  |   | 1,607 
|Utilities                              |  |                        |  |                              |       |                                            | 108   |                     |   | 1,280                   |  | 108                 |  |   | 1,280 
|Apparel Retail                         |  |                        |  |                              |       |                                            | 91    |                     |   | 832                     |  | 91                  |  |   | 832   
|Professional Services                  |  | 50                      |  |                              | 679    |                                            | 6     |                     |   | 124                     |  | 57                  |  |   | 803   
|Other Retail                           |  | 21                      |  |                              | 123    |                                            | 45    |                     |   | 640                     |  | 66                  |  |   | 763   
|                                       |  |                         |  |                              |        |                                            |       |                     |   |                         |  |                     |  |   |       
|Total                                  |  | 6,826                   |  | $                            | 52,272 |                                            | 7,375 |                     | $ | 34,606                  |  | 14,201              |  | $ | 86,878
|                                       |  |                         |  |                              |        |                                            |       |                     |   |                         |  |                     |  |   |       



|(1) | Net Rentable Square Feet for Unconsolidated Properties is at 100%. Annualized Base Rent for Unconsolidated Properties is at our pro rata share of effective
ownership. Does not include our investment in CBRE Strategic Partners Asia.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



47



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##### Table of Contents

Tenant Lease Expirations

The following table sets forth a schedule of expiring leases for our consolidated and unconsolidated properties as of March 31, 2010 (in
thousands):



|                                            |  |                                 |  |                              |        |                                           |       |                   |   |                                 |  |                   |  |   |       
|------------------------------------------- |  | ------------------------------- |  | ---------------------------- | ------ | ----------------------------------------- | ----- | ----------------- | - | ------------------------------- |  | ----------------- |  | - | ------
|                                            |  | Consolidated Properties         |  | UnconsolidatedProperties (1) |        | Consolidated
&UnconsolidatedProperties(1)
|                                            |  | ExpiringNet RentableSquare Feet |  | ExpiringBase Rent            |        | ExpiringNet RentableSquare Feet           |       | ExpiringBase Rent |   | ExpiringNet RentableSquare Feet |  | ExpiringBase Rent
|2010 (Nine months ending December 31, 2010) |  | 435                             |  | $                            | 2,312  |                                           |      |                   | $ |                                |  | 435               |  | $ | 2,312 
|2011                                        |  | 174                             |  |                              | 876    |                                           |      |                   |   |                                |  | 174               |  |   | 876   
|2012                                        |  | 691                             |  |                              | 10,100 |                                           | 33    |                   |   | 557                             |  | 724               |  |   | 10,657
|2013                                        |  | 1,296                           |  |                              | 8,169  |                                           | 20    |                   |   | 414                             |  | 1,316             |  |   | 8,583 
|2014                                        |  | 102                             |  |                              | 521    |                                           | 17    |                   |   | 299                             |  | 119               |  |   | 820   
|2015                                        |  | 771                             |  |                              | 3,466  |                                           |      |                   |   |                                |  | 771               |  |   | 3,466 
|2016                                        |  | 298                             |  |                              | 1,580  |                                           | 259   |                   |   | 4,684                           |  | 557               |  |   | 6,264 
|2017                                        |  | 200                             |  |                              | 3,492  |                                           | 210   |                   |   | 2,912                           |  | 410               |  |   | 6,404 
|2018                                        |  | 336                             |  |                              | 1,583  |                                           | 3,088 |                   |   | 12,840                          |  | 3,424             |  |   | 14,423
|2019                                        |  | 1,495                           |  |                              | 9,469  |                                           | 3,253 |                   |   | 11,311                          |  | 4,748             |  |   | 20,780
|2020                                        |  | 183                             |  |                              | 1,203  |                                           |      |                   |   |                                |  | 183               |  |   | 1,203 
|Thereafter                                  |  | 845                             |  |                              | 15,232 |                                           | 495   |                   |   | 7,021                           |  | 1,340             |  |   | 22,253
|                                            |  |                                 |  |                              |        |                                           |       |                   |   |                                 |  |                   |  |   |       
|Total                                       |  | 6,826                           |  | $                            | 58,003 |                                           | 7,375 |                   | $ | 40,038                          |  | 14,201            |  | $ | 98,041
|                                            |  |                                 |  |                              |        |                                           |       |                   |   |                                 |  |                   |  |   |       
|Weighted Average Expiration (years)         |  |                                 |  |                              | 7.91   |                                           |       |                   |   | 9.41                            |  |                   |  |   | 8.52  



|(1) | Expiring Net Rentable Square Feet
for Unconsolidated Properties is at 100%. Expiring Base Rent for Unconsolidated Properties is at our pro rata share of effective ownership. Does not include our investment in CBRE Strategic Partners Asia.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Property Portfolio Size

Our portfolio size
at the end of each quarter since commencement of our initial public offering through March 31, 2010 is as follows (Net Rentable Square Feet and Approximate Total Acquisition Cost in thousands):



|                                     |  |                         |  |                             |  |                                           |         |            |    |                       |       |                                 |   |            |  |                       |  |                                 |  |   |          
|------------------------------------ |  | ----------------------- |  | --------------------------- |  | ----------------------------------------- | ------- | ---------- | -- | --------------------- | ----- | ------------------------------- | - | ---------- |  | --------------------- |  | ------------------------------- |  | - | ---------
|                                     |  | Consolidated Properties |  | UnconsolidatedProperties(1) |  | Consolidated
&UnconsolidatedProperties(1)
|Cumulative Property
Portfolio as of: |  | Properties              |  | NetRentableSquareFeet       |  | ApproximateTotalAcquisitionCost           |         | Properties |    | NetRentableSquareFeet |       | ApproximateTotalAcquisitionCost |   | Properties |  | NetRentableSquareFeet |  | ApproximateTotalAcquisitionCost
|9/30/2006                            |  | 9                       |  | 878                         |  | $                                         | 86,644  |            |   |                       |      |                                 | $ |           |  | 9                     |  | 878                             |  | $ | 86,644   
|12/31/2006                           |  | 9                       |  | 878                         |  |                                           | 86,644  |            |   |                       |      |                                 |   |           |  | 9                     |  | 878                             |  |   | 86,644   
|3/31/2007                            |  | 9                       |  | 878                         |  |                                           | 86,644  |            |   |                       |      |                                 |   |           |  | 9                     |  | 878                             |  |   | 86,644   
|6/30/2007                            |  | 10                      |  | 928                         |  |                                           | 110,491 |            |   |                       |      |                                 |   |           |  | 10                    |  | 928                             |  |   | 110,491  
|9/30/2007                            |  | 42                      |  | 5,439                       |  |                                           | 348,456 |            |   |                       |      |                                 |   |           |  | 42                    |  | 5,439                           |  |   | 348,456  
|12/31/2007                           |  | 44                      |  | 5,576                       |  |                                           | 353,594 |            |   |                       |      |                                 |   |           |  | 44                    |  | 5,576                           |  |   | 353,594  
|3/31/2008                            |  | 47                      |  | 6,257                       |  |                                           | 426,856 |            |   |                       |      |                                 |   |           |  | 47                    |  | 6,257                           |  |   | 426,856  
|6/30/2008                            |  | 47                      |  | 6,257                       |  |                                           | 426,856 |            | 1  |                       | 605   |                                 |   | 35,636     |  | 48                    |  | 6,862                           |  |   | 462,492  
|9/30/2008                            |  | 49                      |  | 6,483                       |  |                                           | 486,777 |            | 6  |                       | 3,307 |                                 |   | 193,773    |  | 55                    |  | 9,790                           |  |   | 680,550  
|12/31/2008                           |  | 52                      |  | 6,771                       |  |                                           | 582,682 |            | 8  |                       | 5,649 |                                 |   | 273,205    |  | 60                    |  | 12,420                          |  |   | 855,887  
|3/31/2009                            |  | 52                      |  | 6,771                       |  |                                           | 582,717 |            | 8  |                       | 5,649 |                                 |   | 273,130    |  | 60                    |  | 12,420                          |  |   | 855,847  
|6/30/2009                            |  | 53                      |  | 7,106                       |  |                                           | 598,103 |            | 11 |                       | 5,976 |                                 |   | 305,308    |  | 64                    |  | 13,082                          |  |   | 903,411  
|9/30/2009                            |  | 57                      |  | 7,805                       |  |                                           | 719,822 |            | 11 |                       | 5,976 |                                 |   | 305,202    |  | 68                    |  | 13,781                          |  |   | 1,025,024
|12/31/2009                           |  | 60                      |  | 8,630                       |  |                                           | 791,314 |            | 13 |                       | 6,904 |                                 |   | 356,158    |  | 73                    |  | 15,534                          |  |   | 1,147,472
|3/31/2010                            |  | 58                      |  | 8,407                       |  |                                           | 748,835 |            | 18 |                       | 7,392 |                                 |   | 418,818    |  | 76                    |  | 15,799                          |  |   | 1,167,653



|(1) | Net Rentable Square Feet for unconsolidated properties is at 100%. Approximate Total Acquisition Cost is at our pro rata share of effective ownership and does
not include our investment in CBRE Strategic Partners Asia.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



48



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##### Table of Contents

Critical Accounting Policies

Management believes our most critical accounting policies are accounting for lease revenues (including straight-line rent), regular evaluation of
whether the value of a real estate asset has been impaired, real estate purchase price allocations and accounting for our derivatives and hedging activities, if any. Each of these items involves estimates that require management to make judgments
that are subjective in nature. Management relies on its experience, collects historical data and current market data, and analyzes these assumptions in order to arrive at what it believes to be reasonable estimates. Under different conditions or
assumptions, materially different amounts could be reported related to the accounting policies described below. In addition, application of these accounting policies involves the exercise of judgments on the use of assumptions as to future
uncertainties and, as a result, actual results could materially differ from these estimates.

Impairment of Long-Lived Assets

We assess whether there has been impairment in the value of our long-lived assets whenever events or changes in circumstances indicate the carrying
amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount to the future net cash flows, undiscounted and without interest, expected to be generated by the asset. If
such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying
amount or fair value, less costs to sell. In spite of intensive leasing efforts and preliminary interest exhibited by a variety of tenants since our acquisition in 2008, the Kings Mountain III property remains vacant. Due to the currently
challenging economic environment, we recognized impairment for our consolidated investment in Kings Mountain III in the amount of $9,160,000 during the year ended December 31, 2009 which reduced our carrying value of the property to
$15,300,000. The impairment reflects our estimates of the fair value of the Kings Mountain III property which is based on an appraisal using the sales comparable method which is a Level 3 Valuation Method as described in Note 15 Fair Value of
Financial Instruments and Investments. No impairment for consolidated investments was recognized during three months ended March 31, 2010.

Revenue Recognition and Valuation of Receivables

All leases are classified as operating leases and minimum rents are recognized on a straight-line basis over the terms of the leases. The excess of
rents recognized over amounts contractually due pursuant to the underlying leases is recorded as deferred rent. In connection with various leases, we have received irrevocable stand-by letters of credit totaling $6,785,000 as security for such
leases at March 31, 2010 and December 31, 2009.

Reimbursements from tenants, consisting of amounts due from tenants for
common area maintenance, real estate taxes, insurance and other recoverable costs, are recognized as revenue in the period the expenses are incurred. Tenant reimbursements are recognized and presented on a gross basis, when we are the primary
obligor with respect to incurring expenses and with respect to having the credit risk.

Tenant receivables and deferred rent receivables
are carried net of the allowances for uncollectible current tenant receivables and deferred rent. Managements determination of the adequacy of these allowances is based primarily upon evaluations of historical loss experience, individual
receivables, current economic conditions, and other relevant factors. The allowances are increased or decreased through the provision for bad debts. The allowance for uncollectible rent receivable was $334,000 and $183,000 as of March 31, 2010
and December 31, 2009, respectively. During the three months ended March 31, 2010, we wrote off $62,000 of the uncollectible rent receivables for the tenant Randal C. Espey at the Deerfield Commons I property and for the tenants Cell Arch
Technologies, Inc. and Keogh Consulting, Inc. at the Lakeside Office Center. $213,000 of allowance for doubtful accounts was recognized during the three months ended March 31, 2010. In addition, the unamortized tangible and intangible asset balances
totaling $23,000 were also written off during the three months ended March 31, 2010, of which ($4,000), $5,000, $7,000 and $15,000 are related to above/below market leases, lease commissions, tenant improvements and in place lease value,
respectively.

Investments in Real Estate

We record investments in real estate at cost (including third-party acquisition expenses) and we capitalize improvements and replacements when they
extend the useful life or improve the efficiency of the asset. We expense costs of repairs and maintenance as incurred. We compute depreciation using the straight-line method over the estimated useful lives of our real estate assets, which we expect
to be approximately 39 years for buildings and improvements, three to five years for equipment and fixtures and the shorter of the useful life or the remaining lease term for tenant improvements and leasehold interests.



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We are required to make subjective assessments as to the useful lives of our properties for purposes
of determining the amount of depreciation to record on an annual basis with respect to our investments in real estate. These assessments have a direct impact on our net income because, if we were to shorten the expected useful lives of our
investments in real estate, we would depreciate these investments over fewer years, resulting in more depreciation expense and lower net income on an annual basis throughout the expected useful lives of the related assets.

We have adopted, Accounting for the Impairment or Disposal of Long-Lived Assets (FASB ASC 360-10), which establishes
a single accounting model for the impairment or disposal of long-lived assets including discontinued operations. This accounting provision requires that the operations related to properties that have been sold or that we intend to sell be presented
as discontinued operations in the statement of operations for all periods presented, and properties we intend to sell be designated as held for sale on our balance sheet.

When circumstances such as adverse market conditions indicate a possible impairment of the value of a property, we review the recoverability of the
propertys carrying value. The review of recoverability is based on our estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the propertys use and eventual disposition. Our forecast of these
cash flows considers factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. These factors contain subjectivity and thus are
not able to be precisely estimated. If impairment exists due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property. We are
required to make subjective assessments as to whether there are impairments in the values of our investments in real estate.

Purchase Accounting for
Acquisition of Investments in Real Estate

We apply the acquisition method to all acquired real estate investments. The purchase
consideration of the real estate is allocated to the acquired tangible assets, consisting primarily of land, site improvements, building and tenant improvements and identified intangible assets and liabilities, consisting of the value of
above-market and below-market leases, other value of in-place leases, value of tenant relationships and acquired ground leases, based in each case on their fair values. Loan premiums, in the case of above-market rate loans, or loan discounts, in the
case of below-market loans, will be recorded based on the fair value of any loans assumed in connection with acquiring the real estate.

The fair value of the tangible assets of an acquired property is determined by valuing the property as if it were vacant, and the
as-if-vacant value is then allocated to land (or acquired ground lease if the land is subject to a ground lease), site improvements, building and tenant improvements based on managements determination of the relative fair values of
these assets. Management determines the as-if-vacant fair value of a property using methods similar to those used by independent appraisers. Factors considered by management in performing these analyses include an estimate of carrying costs during
the expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses and estimates of lost rental revenue
during the expected lease-up periods based on current market demand. Management also estimates costs to execute similar leases including leasing commissions, legal and other related costs.

In allocating the purchase consideration of the identified intangible assets and liabilities of an acquired property, above-market and below-market
in-place lease values are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place
leases; and (ii) managements estimate of fair market lease rates for the corresponding in-place leases measured over a period equal to the remaining non-cancelable term of the lease and, for below-market leases, over a period equal to the
initial term plus any below-market fixed rate renewal periods. The capitalized below-market lease values, also referred to as acquired lease obligations, are amortized as an increase to rental income over the initial terms of the respective leases
and any below-market fixed rate renewal periods. The capitalized above-market lease values are amortized as a decrease to rental income over the initial terms of the prospective leases.

The aggregate value of other acquired intangible assets, consisting of in-place leases and tenant relationships, is measured by the estimated cost
of operations during a theoretical lease-up period to replace in-place leases, including lost revenues and any unreimbursed operating expenses, plus an estimate of deferred leasing commissions for in-place leases. This aggregate value is allocated
between in-place lease value and tenant relationships based on managements evaluation of the specific characteristics of each tenants lease; however, the value of tenant relationships has not been separated from in-place lease value for
the real estate acquired as such value and its consequence to amortization expense is immaterial for these particular acquisitions. Should future acquisitions of properties result in allocating material amounts to the value of tenant relationships,
an amount would be separately allocated and amortized over the estimated life of the relationship. The value of in-place leases is amortized to expense over the remaining non-cancelable periods of the respective leases. If a lease were to be
terminated prior to its stated expiration, all unamortized amounts relating to that lease would be written-off.



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Discontinued Operations and Real Estate Held for Sale

In a period in which a property has been disposed of or is classified as held for sale, the statements of operations for current and prior periods
report the results of operations of the property as discontinued operations.

At such time as a property is deemed held for sale, such
property is carried at the lower of: (1) its carrying amount or (2) fair value less costs to sell. In addition, a property being held for sale ceases to be depreciated. We classify operating properties as property held for sale in the
period in which all of the following criteria are met:



| | ¡ |  | management, having the authority to approve the action, commits to a plan to sell the asset;
| | - |  | --------------------------------------------------------------------------------------------



| | ¡ |  | the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------



| | ¡ |  | an active program to locate a buyer and other actions required to complete the plan to sell the asset has been initiated;
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| | ¡ |  | the sale of the asset is probable and the transfer of the asset is expected to qualify for recognition as a completed sale within one year;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------



| | ¡ |  | the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------



| | ¡ |  | given the actions required to complete the plan to sell the asset, it is unlikely that significant changes to the plan would be made or that the plan would be
withdrawn.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As of March 31, 2010 and December 31, 2009, we did not have any properties held for sale.

Accounting for Derivative Financial Investments and Hedging Activities

All of our derivative instruments are carried at fair value on the balance sheet. Derivative instruments designated in a hedge relationship to
mitigate exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. We formally document all relationships between hedging instruments and hedged items, as well as our
risk-management objective and strategy for undertaking each hedge transaction. We periodically review the effectiveness of each hedging transaction, which involves estimating future cash flows. Cash flow hedges are accounted for by recording the
fair value of the derivative instrument on the balance sheet as either an asset or liability, with a corresponding amount recorded in other comprehensive income within shareholders equity. Calculation of a fair value of derivative instruments
also requires management to use estimates. Amounts will be reclassified from other comprehensive income to the income statement in the period or periods the hedged forecasted transaction affects earnings. Derivative instruments designated in a hedge
relationship to mitigate exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. The changes in fair value hedges are accounted
for by recording the fair value of the derivative instruments on the balance sheet as either assets or liabilities, with the corresponding amount recorded in current period earnings. We have certain interest rate swap derivatives that are designated
as qualifying cash flow hedges and follow the accounting treatment discussed above. We also have certain interest rate swap derivatives that do not qualify for hedge accounting, and accordingly, changes in fair values are recognized in current
earnings.

We disclose the fair values of derivative instruments and their gains and losses in a tabular format. We also provide more
information about our liquidity by disclosing derivative features that are credit risk-related. Finally, we cross-reference within footnotes to enable financial statement users to locate important information about derivative instruments.

Investments in Unconsolidated Entities

Our determination of the appropriate accounting method with respect to our investment in CB Richard Ellis Strategic Partners Asia II-A, L.P.
(CBRE Strategic Partners Asia), which is not considered a Variable Interest Entity (VIE), is partly based on CBRE Strategic Partners Asias sufficiency of equity investment at risk which was triggered by a substantial
paydown during 2009 of its subscription line of credit backed by investor capital commitments to fund its operations. We account for this investment under the equity method of accounting.

We determine if an entity is a VIE based on several factors, including whether the entitys total equity investment at risk upon inception is
sufficient to finance the entitys activities without additional subordinated financial support. We make judgments regarding the sufficiency of the equity at risk based first on a qualitative analysis, then a quantitative analysis, if
necessary. In a quantitative analysis, we incorporate various estimates, including estimated future cash flows, asset hold periods and discount rates, as well as estimates of the probabilities of various scenarios occurring. If the entity is a VIE,
we then determine whether we consolidate the entity as the primary beneficiary. We determine whether an entity is a VIE and, if so, whether it should be consolidated by utilizing judgments and



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estimates that are inherently subjective. If we made different judgments or utilized different estimates in these evaluations, it could result in differing conclusions as to whether or not an
entity is a VIE and whether or not we consolidate such entity.

With respect to our majority limited membership interest in the
Duke/Hulfish, LLC joint venture (the Duke joint venture) and the Afton Ridge Joint Venture, LLC (Afton Ridge), we considered the Codification Topic Consolidation (FASB ASC 810) in determining
that we did not have control over the financial and operating decisions of such entities due to the existence of substantive participating rights held by the minority limited members who are also the managing members of the Duke joint venture and
Afton Ridge, respectively.

We carry our investments in CBRE Strategic Partners Asia, the Duke joint venture and Afton Ridge on the
equity method of accounting because we have the ability to exercise significant influence (but not control) over operating and financial policies of each such entity. We eliminate transactions with such equity method entities to the extent of our
ownership in each such entity. Accordingly, our share of net income (loss) of these equity method entities is included in consolidated net income (loss). CBRE Strategic Partners Asia is a limited partnership that qualifies for specialized industry
accounting for investment companies. Specialized industry accounting allows investment companies to carry their investments at fair value, with changes in the fair value of the investments recorded in the statement of operations. On the basis of the
guidance in ASC 970-323 the Company accounts for its investment in CBRE Strategic Partners Asia under the equity method. As a result, and in accordance with ASC 810-10-25-15 the specialized accounting treatment, principally fair value basis, applied
by CBRE Strategic Partners Asia under the investment company guide is retained in the recognition of equity method earnings in the statement of operations of the Company. See Note 15 Fair Value of Financial Instruments and Investments
for further discussion of the application of the fair value accounting to our investment in CBRE Strategic Partners Asia.

Use of Estimates

The preparation of financial statements, in conformity with U.S. GAAP, requires us to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from
those estimates.

Income Taxes

We have elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code, beginning with our taxable period ended
December 31, 2004. To qualify as a REIT, we must distribute annually at least 90% of our REIT taxable income (determined without regard to the dividends paid deduction and excluding net capital gains) adjusted taxable income, as defined in the
Code, to our shareholders and satisfy certain other organizational and operating requirements. We generally will not be subject to U.S. federal income taxes if we distribute 100% of our taxable income for each year to our shareholders. If we fail to
qualify as a REIT in any taxable year, we will be subject to U.S. federal income taxes (including any applicable alternative minimum tax) on our taxable income at regular corporate rates and may not be able to qualify as a REIT for the four
subsequent taxable years. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and property, and to U.S. federal income taxes and excise taxes on our undistributed taxable income. Except as
discussed in Part II, Other Information, Item 1A, Risk Factors, we believe that we have met all of the REIT distribution and technical requirements for the three months ended March 31, 2010 and 2009. Management intends to continue to
adhere to these requirements and maintain our REIT qualification.

Fair Value of Financial Instruments and Investments

We elected to apply the fair value option for one of our eligible mortgage notes payable that was newly issued debt during the year ended
December 31, 2008. The measurement of the elected mortgage note payable at its fair value and its impact on the statement of operations is described in Notes 15 Fair Value of Financial Instruments and Investments and Note 16
Fair Value OptionNote Payable.

We generally determine or calculate the fair value of financial instruments using the
appropriate present value or other valuation techniques, such as discounted cash flow analyses, incorporating available market discount rate information for similar types of instruments and our estimates for non-performance and liquidity risk. These
techniques are significantly affected by the assumptions used, including the discount rate, credit spreads, and estimates of future cash flow. The Investment Manager of CBRE Strategic Partners Asia applies valuation techniques for our investment
carried at fair value based upon the application of the income approach, the replacement cost approach or third party appraisals to the underlying assets held in the unconsolidated entity in determining the net asset value attributable to our
ownership interest therein. The financial assets and liabilities recorded at fair value in our consolidated financial statements are the two interest rate swaps, one interest rate cap, our investment in CBRE Strategic Partners Asia (a real estate
entity which qualifies as an investment company under the Investment Company Act) and one mortgage note payable that is economically hedged by one of the interest rate swaps.



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The remaining financial assets and liabilities which are only disclosed at fair value are comprised of
all other notes payable, the unsecured line of credit and other debt instruments. We determined the fair value of our secured notes payable and other debt instruments by performing discounted cash flow analyses using an appropriate market discount
rate. We calculate the market discount rate by obtaining period-end treasury rates for fixed-rate debt, or London Inter-Bank Offering Rate (LIBOR) rates for variable-rate debt, for maturities that correspond to the maturities of our debt
and then adding an appropriate credit spread derived from information obtained from third-party financial institutions. These credit spreads take into account factors such as our credit standing, the maturity of the debt, whether the debt is
secured or unsecured, and the loan-to-value ratios of the debt.

The carrying amounts of our cash and cash equivalents, restricted cash,
accounts receivable and accounts payable approximate fair value due to their short-term maturities.

We adopted the fair value
measurement criteria described herein for our non-financial assets and non-financial liabilities on January 1, 2009. The adoption of the fair value measurement criteria to our non-financial assets and liabilities did not have a material impact
on our consolidated financial statements. Assets and liabilities typically recorded at fair value on a non-recurring basis include:



| | ¡ |  | Non-financial assets and liabilities initially measured at fair value in an acquisition or business combination;
| | - |  | ----------------------------------------------------------------------------------------------------------------



| | ¡ |  | Long-lived assets measured at fair value due to an impairment assessment and
| | - |  | ----------------------------------------------------------------------------



| | ¡ |  | Asset retirement obligations initially measured under the Codification Topic Asset Retirement and Environmental Obligations (FASB ASC
410).
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------

Non-controlling (Minority) Interests in the Operating Partnership

Effective January 1, 2009, we adopted FASB ASC 810. The new accounting provisions require that amounts formerly reported as minority interests
in our consolidated financial statements be reported as non-controlling interests. In connection with the issuance of this adoption, certain revisions were also made to the. Codification Topic Distinguishing Liabilities from
Equity (FASB ASC 480-10-S99-3A). These revisions clarify that non-controlling interests with redemption provisions outside of the control of the issuer and non-controlling interests with redemption provisions that permit the
issuer to settle in either cash or common shares at the option of the issuer are subject to evaluation to determine the appropriate balance sheet classification and measurement of such instruments.

With respect to the operating partnership units, FASB ASC 480-10-S99-3A requires non-controlling interests with redemption provisions that permit
the issuer to settle in either cash or common shares at the option of the issuer to be further evaluated under the Codification Sub-Topic Derivatives and HedgingConditions Necessary for Equity Classification (FASB ASC
815-40-25-10) (Paragraphs 815-40-25-39 through 815-40-25-42) to determine whether permanent equity or temporary equity classification on the balance sheet is appropriate. Since the operating partnership units contain such a provision, the
Company evaluated this guidance and determined that the operating partnership units do not meet the requirements to qualify for equity presentation. As a result, upon the adoption of FASB ASC 810 and the related revisions to FASB ASC 480-10-S99-3A,
the operating partnership units are presented in the temporary equity section of the consolidated balance sheets and reported at the higher of their proportionate share of the net assets of CBRE OP or fair value, with period to period changes in
value reported as an adjustment to shareholders equity. Under the terms of the second amended and restated agreement of limited partnership of CBRE OP (the Second Amended Partnership Agreement) the fair value of the operating
partnership units is determined as an amount equal to the redemption value as defined therein.

Operating Property Acquisitions

Effective January 1, 2009, we adopted the provisions of FASB ASC 805 which requires an acquiring entity to recognize acquired assets and
assumed liabilities in a transaction at fair value as of the acquisition date and changes the accounting treatment for certain items, including acquisition costs, which is required to be expensed as incurred. The provision of Business
Combinations is required to be applied on a prospective basis.

The adoption of the provisions of the FASB ASC 805 could have
an impact on the cost allocation of future acquisitions and requires us to expense acquisition costs for future property acquisitions. The adoption of the provisions of the new accounting standard FASB ASC 805 had an effect on our consolidated
financial statements, results of operations and cash flows for the three months ended March 31, 2010. We expensed $378,000 of acquisition costs during the three months ended March 31, 2010.

Subsequent Events

Effective for the second
quarter of 2009, we adopted the provisions of FASB ASC 855-10Subsequent Events (FASB ASC 855-10), as amended by Accounting Standard Update 2010-09. ASC 855-10 establishes principles and requirements for evaluating and
reporting



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subsequent events and distinguishes which subsequent events should be recognized in the financial statements versus which subsequent events should be disclosed in the financial statements. The
adoption of ASC 855-10 did not have a material impact on our financial statements.

In preparing our accompanying financial statements,
management has evaluated subsequent events through the financial statement issuance date.

Adoption of Accounting Standards

Consolidations

In December 2009, the
Financial Accounting Standards Board FASB issued Accounting Standards Update (ASU) 2009-17, Consolidations (Topic 810): Improvements to Financial Reporting by Enterprises Involved with Variable Interest
Entities which incorporates Statement of Financial Accounting Standards (SFAS) No. 167, Amendments to FASB Interpretation No. 46(R), issued by the FASB in June 2009. The amendments in ASU 2009-17 replace the
quantitative-based risks and rewards calculation for determining which reporting entity, if any, has a controlling financial interest in a VIE with an approach focused on identifying which reporting entity has the power to direct the activities of a
VIE that most significantly impact such entitys economic performance and (i) the obligation to absorb losses of such entity or (ii) the right to receive benefits from such entity. ASU 2009-17 also requires additional disclosures
about a reporting entitys involvement in VIEs, which enhances the information provided to users of financial statements. We adopted ASU 2009-17 effective January 1, 2010. As a result of the fact that we have no variable interests in
VIEs, the adoption of ASU 2009-17 did not have a material impact on our financial statements.

Fair Value Measurements and Disclosures

In January 2010, the FASB issued ASU 2010-06 which was an update to the Fair Value Measurements and Disclosure topic of the FASB
Accounting Standards Codification (the Codification). ASU 2010-06 clarifies disclosure requirements relating to the level of disaggregation of disclosures relating to classes of assets and liabilities and disclosures about inputs and
valuation techniques used to measure fair value for both recurring and nonrecurring fair value estimates for Level 2 or Level 3 assets and liabilities. These requirements of ASU 2010-06 are effective for interim and annual disclosures for interim
and annual reporting periods beginning after December 15, 2009. The adoption of these requirements of the ASU did not have a material impact on our financial statements.

New Accounting Standards

ASU 2010-06
also requires additional disclosures regarding the transfers of classifications among the fair value classification levels as well as the reasons for those changes and a separate presentation of purchases, sales, issuances and settlements in the
presentation of the roll-forward of Level 3 assets and liabilities. Those disclosures are effective for interim and annual reporting periods for fiscal years beginning after December 15, 2010. The adoption of this portion of ASU 2010-06 is not
expected to have a material impact on our financial statements.

Other Accounting Standards Updates not effective until after
December 31, 2010 are not expected to have a significant effect on our consolidated financial position or results of operations.

Treatment of
Management Compensation, Expense Reimbursements

Management of our operations is conducted by the Investment Advisor. Fees related to
services provided by our Investment Advisor are accounted for based on the nature of such service and the relevant accounting literature. Fees for services performed that represent our period costs, such as cash payments for investment management
fees paid to the Investment Advisor, are expensed as incurred. In addition, an affiliate of the Investment Advisor owns a partnership interest which represents a profits interest in CBRE OP related to these services.

Subject to certain limitations, we are obligated to reimburse the Investment Advisor for the organizational and offering costs incurred on our
behalf. This treatment is consistent with Staff Accounting Bulletin, or SAB, Topic 1.B.1, which requires that we include all of the costs associated with our operations and formation in our financial statements. These costs will then be analyzed and
segregated between those which are organizational in nature, those which are offering-related salaries and other general and administrative expenses of the Investment Advisor and its affiliates, and those which qualify as offering expenses in
accordance with SAB Topic 5.A. Organizational costs are expensed as incurred in accordance with AICPA Statement of Position 98-5, Reporting on the Costs of Start-Up Activities. Offering-related salaries and other general and
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will be expensed as incurred and third-party offering expenses will be taken as a reduction against the net proceeds of the offering within additional paid-in capital, (APIC), in
accordance with SAB Topic 5.A. Offering costs totaling $12,074,000 and $7,343,000 were incurred during the three months ended March 31, 2010 and 2009, respectively, and are recorded as a reduction of additional paid-in-capital in the
consolidated statement of shareholders equity. Of the total amounts, $11,369,000 and $5,117,000 was incurred to CNL Securities Corp., as dealer manager and $45,000 and $22,000 was incurred to the Investment Advisor for reimbursable marketing
costs for the three months ended March 31, 2010 and 2009, respectively. Each party will be paid the amount incurred from proceeds of the public offering. As of March 31, 2010 and December 2009 the accrued offering costs payable to related
parties included in our consolidated balance sheets were $1,151,000 and $1,114,000.

Prior to October 24, 2006, the Investment
Advisor received an annual fee equal to 0.75% of the book value of the total assets, as defined in the Advisory Agreement, based on the assets of CBRE OP. The investment management fee was calculated monthly based on the average of total assets, as
defined, during such period. On October 24, 2006, the Board of Trustees, including our independent trustees, approved and the Company entered into the Amended and Restated Agreement of Limited Partnership of CBRE OP (the Amended
Partnership Agreement) and the Amended and Restated Advisory Agreement (the Amended Advisory Agreement and, together with the Amended Partnership Agreement, the Amended Agreements). The Amended Advisory Agreement
provides an investment management fee of (i) a monthly fee equal to one twelfth of 0.6% of the aggregate cost (before non-cash reserves and depreciation) of all real estate investments within our portfolio and (ii) a monthly fee equal to
7.0% of the aggregate monthly net operating income derived from all real estate investments within our portfolio. On January 30, 2009, we entered into that certain second amended and restated advisory agreement (the Second Amended
Advisory Agreement) with CBRE OP and the Investment Advisor. The Second Amended Advisory Agreement modified, among other things, the investment management fee to consist of (a) a monthly fee equal to one twelfth of 0.5% of the aggregate
costs (before non-cash reserves and depreciation) of all real estate investment in our portfolio and (b) a monthly fee equal to 5.0% of the aggregate monthly net operating income derived from all real estate investments in our portfolio. All or
any portion of the investment management fee not taken as to any fiscal year may be deferred or waived without interest at the option of the Investment Advisor.

The Investment Advisor earned investment management fees of $2,431,000 and $1,703,000 for the three months ended March 31, 2010 and 2009,
respectively. As of March 31, 2010 and December 31, 2009, the investment management fees payable to related party in our consolidated balance sheets were $805,000 and $757,000, respectively. In connection with services provided to the
Investment Advisor, CNL Fund Management Company, the Sub-Advisor and affiliate of the Dealer Manager pursuant to a sub-advisory agreement dated August 21, 2006, was paid by the Investment Advisor $336,000 and $235,000 for the three months ended
March 31, 2010 and 2009, respectively.

On January 30, 2009, we entered into that certain Second Amendment Advisory Agreement
that permits the Investment Advisor to earn an acquisition fee of up to 1.5% of (i) the purchase price of real estate investments acquired by us, including any debt attributable to such investments, or (ii) when we make an investment
indirectly through another entity, such investments pro rata share of the gross asset value of real estate investments held by that entity. The Investment Advisor earned acquisition fees of $296,000 and $0 for the three months ended
March 31, 2010 and 2009, respectively. In connection with services provided to the Investment Advisor, the Sub Advisor, pursuant to a sub advisory agreement, was paid by the Investment Advisor acquisition fees of $55,000 and $0 for the three
months ended March 31, 2010 and 2009, respectively. The Investment Advisor earned $42,000 and $0 in acquisition related expenses during the three months ended March 31, 2010 and 2009. Prior to the adoption of Business
Combinations on January 1, 2009, these acquisitions fees and expenses were capitalized to investments in real estate and related intangibles.



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Rental Operations

Our reportable segments consist of three types of commercial real estate properties for which our management internally evaluates operating
performance and financial results: the Domestic Industrial Properties, Domestic Office Properties and International Office/Retail Properties. All periods presented have been revised to report our segment results under our new reportable segment
structure. We evaluate the performance of our segments based on net operating income, defined as: rental income and tenant reimbursements less property and related expenses (operating and maintenance, management fees and real estate taxes) and
excludes other non-property income and expenses, interest expense, depreciation and amortization, and our company-level general and administrative expenses. The following tables compare the net operating income for the three months ended
March 31, 2010 and 2009 (in thousands):



|                                         |  |                              |       |      |   |      
|---------------------------------------- |  | ---------------------------- | ----- | ---- | - | -----
|                                         |  | Three Months EndedMarch 
31,
|                                         |  | 2010                         |       | 2009
|Domestic Industrial Properties           |  |                              |       |      |   |      
|Revenues:                                |  |                              |       |      |   |      
|Rental                                   |  | $                            | 5,813 |      | $ | 4,686
|Tenant Reimbursements                    |  |                              | 1,258 |      |   | 1,099
|                                         |  |                              |       |      |   |      
|Total Revenues                           |  |                              | 7,071 |      |   | 5,785
|                                         |  |                              |       |      |   |      
|Property and Related Expenses:           |  |                              |       |      |   |      
|Operating and Maintenance                |  |                              | 338   |      |   | 357  
|General and Administrative               |  |                              | 46    |      |   | 45   
|Property Management Fee to Related Party |  |                              | 61    |      |   | 93   
|Property Taxes                           |  |                              | 1,431 |      |   | 1,056
|                                         |  |                              |       |      |   |      
|Total Expenses                           |  |                              | 1,876 |      |   | 1,551
|                                         |  |                              |       |      |   |      
|Net Operating Income                     |  |                              | 5,195 |      |   | 4,234
|                                         |  |                              |       |      |   |      
|Domestic Office Properties               |  |                              |       |      |   |      
|Revenues:                                |  |                              |       |      |   |      
|Rental                                   |  |                              | 7,249 |      |   | 3,772
|Tenant Reimbursements                    |  |                              | 1,579 |      |   | 761  
|                                         |  |                              |       |      |   |      
|Total Revenues                           |  |                              | 8,828 |      |   | 4,533
|                                         |  |                              |       |      |   |      
|Property and Related Expenses:           |  |                              |       |      |   |      
|Operating and Maintenance                |  |                              | 1,157 |      |   | 789  
|General and Administrative               |  |                              | 87    |      |   | 59   
|Property Management Fee to Related Party |  |                              | 33    |      |   | 37   
|Property Taxes                           |  |                              | 1,190 |      |   | 610  
|                                         |  |                              |       |      |   |      
|Total Expenses                           |  |                              | 2,467 |      |   | 1,495
|                                         |  |                              |       |      |   |      
|Net Operating Income                     |  |                              | 6,361 |      |   | 3,038
|                                         |  |                              |       |      |   |      



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|                                                                                              |  |                    |        |   |                  |   |        |  
|--------------------------------------------------------------------------------------------- |  | ------------------ | ------ | - | ---------------- | - | ------ | -
|                                                                                              |  | Three Months Ended |       
|                                                                                              |  | March 31,2010      |        |   | December 31,2009 |  
|International Office/Retail Properties                                                        |  |                    |        |   |                  |   |        |  
|Revenues:                                                                                     |  |                    |        |   |                  |   |        |  
|Rental                                                                                        |  |                    | 1,940  |   |                  |   | 1,884  |  
|Tenant Reimbursements                                                                         |  |                    | 81     |   |                  |   | 86     |  
|                                                                                              |  |                    |        |   |                  |   |        |  
|Total Revenues                                                                                |  |                    | 2,021  |   |                  |   | 1,970  |  
|                                                                                              |  |                    |        |   |                  |   |        |  
|Property and Related Expenses:                                                                |  |                    |        |   |                  |   |        |  
|Operating and Maintenance                                                                     |  |                    | 80     |   |                  |   | 81     |  
|General and Administrative                                                                    |  |                    | 35     |   |                  |   | 53     |  
|Property Management Fee to Related Party                                                      |  |                    | 70     |   |                  |   | 12     |  
|                                                                                              |  |                    |        |   |                  |   |        |  
|Total Expenses                                                                                |  |                    | 185    |   |                  |   | 146    |  
|                                                                                              |  |                    |        |   |                  |   |        |  
|Net Operating Income                                                                          |  |                    | 1,836  |   |                  |   | 1,824  |  
|                                                                                              |  |                    |        |   |                  |   |        |  
|Reconciliation to Consolidated Net Income (Loss)                                              |  |                    |        |   |                  |   |        |  
|Total Segment Net Operating
Income(1)                                                         |  |                    | 13,392 |   |                  |   | 9,096  |  
|Interest Expense                                                                              |  |                    | 3,095  |   |                  |   | 2,807  |  
|General and Administrative                                                                    |  |                    | 671    |   |                  |   | 886    |  
|Investment Management Fee to Related Party                                                    |  |                    | 2,431  |   |                  |   | 1,703  |  
|Acquisition Expenses                                                                          |  |                    | 378    |   |                  |   |       |  
|Depreciation and Amortization                                                                 |  |                    | 7,243  |   |                  |   | 5,722  |  
|                                                                                              |  |                    |        |   |                  |   |        |  
|                                                                                              |  |                    | (426   | ) |                  |   | (2,022 | )
|                                                                                              |  |                    |        |   |                  |   |        |  
|Other Income and Expenses                                                                     |  |                    |        |   |                  |   |        |  
|Interest and Other Income                                                                     |  |                    | 598    |   |                  |   | 121    |  
|Net Settlement Payments on Interest Rate Swaps                                                |  |                    | (214   | ) |                  |   | (81    | )
|Loss on Interest Rate Swaps and Cap                                                           |  |                    | (388   | ) |                  |   | (168   | )
|Loss on Note Payable at Fair Value                                                            |  |                    | (73    | ) |                  |   | (565   | )
|Loss on Early Extinguishment of Debt                                                          |  |                    | (73    | ) |                  |   |       |  
|                                                                                              |  |                    |        |   |                  |   |        |  
|Loss Before Provision for Income Taxes and Equity in Income (Loss) of Unconsolidated Entities |  |                    | (576   | ) |                  |   | (2,715 | )
|                                                                                              |  |                    |        |   |                  |   |        |  
|Provision for Income Taxes                                                                    |  |                    | (15    | ) |                  |   | (29    | )
|Equity in Income (Loss) of Unconsolidated Entities                                            |  |                    | 737    |   |                  |   | (798   | )
|                                                                                              |  |                    |        |   |                  |   |        |  
|Net Income (Loss)                                                                             |  |                    | 146    |   |                  |   | (3,542 | )
|                                                                                              |  |                    |        |   |                  |   |        |  
|Net (Income) Loss Attributable to Non-Controlling Operating Partnership Units                 |  |                    | (1     | ) |                  |   | 13     |  
|                                                                                              |  |                    |        |   |                  |   |        |  
|Net Income (Loss) Attributable to CB Richard Ellis Realty Trust Shareholders                  |  | $                  | 145    |   |                  | $ | (3,529 | )
|                                                                                              |  |                    |        |   |                  |   |        |  



|(1) | Total Segment Net Operating Income is a Non-GAAP financial measure which may be useful as a supplemental measure for evaluating the relationship of each
reporting segment to the combined total. This measure should not be viewed as an alternative measure of operating performance to our U.S. GAAP presentations provided. Segment Net Operating Income is defined as operating revenues (rental
income, tenant reimbursements and other property income) less property and related expenses (property expenses, including real estate taxes) before depreciation and amortization expense. The Net Operating Income segment information presented
consists of the same Net Operating Income segment information disclosed in Note 9 to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Consolidated Results of Operations

Comparison of Three Months Ended March 31, 2010 to Three Months Ended March 31, 2009

Revenues

Rental

Rental revenue increased $4,660,000, or 45%, to $15,002,000 during the three months ended March 31, 2010 compared to $10,342,000 for the three
months ended March 31, 2009. The increase in rental revenue was primarily due to the acquisitions of 13201 Wilfred Lane, 3011, 3055 & 3077 Comcast Place, 140 Depot Street, 12650 Ingenuity Drive, Crest Ridge Corporate Center 1, West
Point Trade Center, Miramar I and Miramar II (the 2009 Acquisitions).

Tenant Reimbursements

Tenant reimbursements increased $972,000, or 50%, to $2,918,000 for the three months ended March 31, 2010 compared to $1,946,000 for the three
months ended March 31, 2009, due to tenant reimbursement revenue from the 2009 Acquisitions.

Expenses

Operating and Maintenance

Property operating and maintenance expenses increased $348,000, or 29%, to $1,575,000 for the three months ended March 31, 2010 compared to
$1,227,000 for the three months ended March 31, 2009. The increase was due to the 2009 Acquisitions and increased operating and maintenance expenses associated with our vacant properties.

Property Taxes

Property tax
expense increased $955,000, or 58%, to $2,621,000 for the three months ended March 31, 2010 compared to $1,666,000 for the three months ended March 31, 2009. The increase in property taxes was due to the 2009 Acquisitions and increased
property taxes in the Carolina portfolio.

Interest

Interest expense increased $288,000, or 11%, to $3,095,000 for the three months ended March 31, 2010 compared to $2,807,000 for the three
months ended March 31, 2009 as a result of placing debt on Maskew Retail Park during 2009 and the assumption of debt during the 2009 acquisition of 12650 Ingenuity Drive.

General and Administrative

General and administrative expense decreased $204,000, or 20%, to $839,000 for the three months ended March 31, 2010 compared to $1,043,000 for
the three months ended March 31, 2009. Of the total decrease, $104,000 was due to the decrease in legal expenses; $49,000 was due to the decrease in professional fees; $37,000 was due to the reduction of general audit fees and Sarbanes-Oxley
assistance; $23,000 was largely due to the decrease in print costs which were slightly offset by the increase in officer and director fees of $9,000.

Property Management Fee and Investment Management Fee to Related Party

Property management fee and investment management fee to related party increased $750,000, or 41%, to $2,595,000 for three months ended
March 31, 2010 compared to $1,845,000 for the three months ended March 31, 2009. The increase was due to additional investment management fees to related party earned relative to an increase in assets under management.

Acquisition Expenses

During
the three months ended March 31, 2010, we expensed acquisition costs of $378,000 related to the 2009 Acquisitions. There were no acquisition expenses incurred during the three months ended March 31, 2009.

Depreciation and Amortization

Depreciation and amortization expense increased $1,521,000, or 27%, to $7,243,000 for the three months ended March 31, 2010 as compared to
$5,722,000 for the three months ended March 31, 2009. The net increase is primarily due to depreciation and amortization expense related to the 2009 Acquisitions.



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Interest and Other Income

Interest and other income increased $477,000, or 395%, to $598,000 for the three months ended March 31, 2010 compared to $121,000 for the three
months ended March 31, 2009. The increase was primarily due to the recognition of $400,000 of revenue for the disposal of equipment at Kings Mountain I and $154,000 recognized profit on the contribution of the Miramar I and Miramar II
properties to the Duke joint venture.

Net Settlement Payments on Interest Rate Swaps

During the three months ended March 31, 2010, we made net payments on interest rate swaps of $214,000 compared to $81,000 during the three
months ended March 31, 2009. The increase is a result of lower variable interest rates for the three months ended March 31, 2010 as compared to the three months ended March 2009.

Loss on Interest Rate Swaps and Cap

Loss on interest rate swaps and cap increased $220,000, or 131%, to $388,000 for the three months ended March 31, 2010 compared to $168,000 for
the three months ended March 31, 2009. The increase was due to valuation losses on interest rate swaps for Thames Valley Five and Albion Mills Retail Park.

Loss on Note Payable on Fair Value

Loss on notes payables decreased by $492,000, or 87%, to $73,000 for the three months ended March 31, 2010 compared to $565,000 for the three
months ended March 31, 2009. The year to year change is attributable to a stabilization of UK interest rate spreads used to value the loan.

Loss on Early Extinguishment of Debt

During the three months ended March 31, 2010, we repaid in full the existing loan at 602 Central Blvd. and incurred expense of $73,000. There
was no extinguishment of debt activity during the three months ended March 31, 2009.

Provision for Income Taxes

Provision for income taxes decreased $14,000, or 49%, to $15,000 for the three months ended March 31, 2010 compared to $29,000 for the three
months ended March 31, 2010 resulting primarily from reduced state tax payments in North Carolina.

Equity in Income of
Unconsolidated Entity

Equity in income of unconsolidated entity increased $1,535,000 to $737,000 for the three months ended
March 31, 2010 compared to a loss of $798,000 for the three months ended March 31, 2009. The increase was primarily due to the acquisition of additional properties by the Duke joint venture and improved CBRE Strategic Partners Asia
performance during the three months ended March 31, 2010.

Non-Controlling Interest

Non-controlling interest increased $14,000 to $1,000 for the three months ended March 31, 2010 compared to ($13,000) for the three months ended
March 31, 2009.

Financial Condition, Liquidity and Capital Resources

Overview

Liquidity is a measurement
of the ability to meet cash requirements, including funding investments and ongoing commitments, to repay borrowings as well as paying dividends, fees and other costs associated with our public offerings and other general business needs. Our sources
of funds will primarily be the net proceeds of our initial public and follow-on offerings, operating cash flows and borrowings. We believe that these cash resources will be sufficient to satisfy our cash requirements and we do not anticipate a need
to raise funds from other than these sources within the next twelve months. Cash flow from operations is primarily dependent upon the occupancy level of our portfolio, the net effective rental rates achieved on our leases, the collectability of rent
and operating escalations and recoveries from our tenants and the level of operating and other costs. Depending on market conditions, we expect



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that once the net proceeds of our initial public and follow-on offerings are fully invested, our debt financing will be approximately 65% of the value of the cost of our assets before non-cash
reserves and depreciation. The amount of debt we place on an individual property, or the amount of debt incurred by an individual entity in which we invest, may be more or less than 65% of the value of such property or the value of the assets owned
by such entity, depending on market conditions and other factors. In fact, depending on market conditions and other factors, we may choose not to place debt on our portfolio or our assets and may choose not to borrow to finance our operations or to
acquire properties. Our declaration of trust limits our borrowing to 300% of our net assets unless any excess borrowing is approved by a majority of our independent trustees and is disclosed to our shareholders in our next quarterly report. Our
declaration of trust defines net assets as our total assets (other than intangibles) at cost, before deducting depreciation, reserves for bad debts or other non-cash reserves, less total liabilities, calculated at least quarterly by us
on a basis consistently applied; provided, however, that during such periods in which we are obtaining regular independent valuations of the current value of its net assets for purposes of enabling fiduciaries of employee benefit plan shareholders
to comply with applicable Department of Labor reporting requirements, net assets means the greater of (i) the amount determined pursuant to the foregoing and (ii) the assets aggregate valuation established by the most
recent such valuation report without reduction for depreciation, bad debts or other non-cash reserves. Any indebtedness we do incur will likely be subject to continuing covenants, and we will likely be required to make continuing representations and
warranties in connection with such debt. Moreover, some or all of our debt may be secured by some or all of our assets. If we default in the payment of interest or principal on any such debt, breach any representation or warranty in connection with
any borrowing or violate any covenant in any loan document, our lender may accelerate the maturity of such debt requiring us to immediately repay all outstanding principal. If we are unable to make such payment, our lender could foreclose on our
assets that are pledged as collateral to such lender. The lender could also sue us or force us into bankruptcy. Any such event would have a material adverse effect on the value of our common shares. We believe that, even without any proceeds raised
from our public offering, we have sufficient cash flow from operations to continue as a going concern for the next twelve months and into the foreseeable future.

In addition to making investments in accordance with our investment objectives, we expect to use our capital resources to make certain payments to
the Investment Advisor and the Dealer Manager. During the offering stage, assuming all of the shares in our primary offering are sold, these payments will include payments of up to $189,000,000 for selling commissions, up to $54,000,000 for the
dealer manager fee, up to $27,000,000 for the marketing support fee and up to $20,750,000 for organizational and offering expenses. During the acquisition and operational stages, certain services related to the acquisition and management of our
investments and our operations will be provided to us by the Investment Advisor pursuant to an advisory agreement entered into in July 2004 which was amended and restated in October 2006 and again in January 2009. Pursuant to that agreement, we
expect to make various payments to the Investment Advisor, including acquisition fees, investment management fees and payments for reimbursements of certain costs incurred by the Investment Advisor in providing related services to us. As the actual
amounts to be paid are dependent upon the total equity and debt capital we raise and our results of operations, we cannot determine these amounts at this time.

In order to avoid corporate-level tax on our net taxable income, we are required to pay distributions to our shareholders equal to our net taxable
income. In addition, to qualify as a REIT, we generally are required to pay annual distributions to our shareholders equal to at least 90% of our net ordinary taxable income. Therefore, once the net proceeds we receive from our public offerings are
substantially fully invested, we will need to raise additional capital in order to grow our business and acquire additional real estate investments. We anticipate borrowing funds to obtain additional capital, but there can be no assurance that we
will be able to do so on terms acceptable to us, if at all.

Historical Cash Flows

Our net cash provided by operating activities increased by $7,545,000 to $13,606,000 for the three months ended March 31, 2010, compared to
$6,061,000 for the three months ended March 31, 2009. The increase was due to an increase in operating distributions from the Duke joint venture of $4,970,000 and increased tenant billing collections from both consolidated and unconsolidated
properties; offset by lower interest income, the payment of annual property taxes for North Carolina, South Carolina and Texas properties and the expensing of acquisition costs of $378,000 during the three months ended March 31, 2010.

Net cash used in investing activities increased by $18,965,000 to $19,432,000 for the three months ended March 31, 2010, compared
to $468,000 for the three months ended March 31, 2009. The increase was due to investments in unconsolidated entities during the three months ended March 31, 2010.

Net cash provided by financing activities increased by $61,251,000 to $101,333,000 for the three months ended March 31, 2010, compared to
$40,082,000 for the three months ended March 31, 2009. The increase was due to an increase in proceeds from the public offering of $75,152,000 and a decrease in distributions to shareholders and non-controlling interest holders of $435,000,
offset by an increase in principal payments on notes payable of $8,421,000 (602 Central Blvd. note payable of $8,281,000 was paid off on March 11, 2010), an increase in offering costs of $4,388,000, an increase in shareholder redemptions of
$1,480,000 and a decrease in security deposits of $47,000.



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Non-GAAP Supplemental Financial Measure: Funds from Operations

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 instead have historically risen or fallen with market conditions, many industry analysts and investors consider presentations of operating results for REITs that use historical cost accounting to be
insufficient by themselves. Consequently, the National Association of Real Estate Investment Trusts, or NAREIT, created Funds from Operations, or FFO, as a supplemental measure of REIT operating performance.

FFO is a non-GAAP measure that is commonly used in the real estate industry. The most directly comparable GAAP measure to FFO is net income. FFO,
as we define it, is presented as a supplemental financial measure. Management believes that FFO is a useful supplemental measure of REIT performance. FFO does not present, nor do we intend for it to present, a complete picture of our financial
condition and/or operating performance. We believe that net income, as computed under GAAP, appropriately remains the primary measure of our performance and that FFO, when considered in conjunction with net income, improves the investing
publics understanding of the operating results of REITs and makes comparisons of REIT operating results more meaningful.

We
compute FFO in accordance with standards established by NAREIT. Modifications to the NAREIT calculation of FFO are common among REITs, as companies seek to provide financial measures that meaningfully reflect their business and provide greater
transparency to the investing public as to how our management team considers our results of operations. As a result, our FFO may not be comparable to FFO as reported by other REITs that do not compute FFO in accordance with the NAREIT definition, or
that interpret the NAREIT definition differently than we do. The revised NAREIT White Paper on FFO defines FFO as net income or loss computed in accordance with GAAP, excluding extraordinary items, as defined by GAAP, and gains and losses from sales
of depreciable operating property, plus real estate related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets), and after adjustment for unconsolidated partnerships and joint
ventures.

Management believes that NAREITs definition of FFO reflects the fact that real estate, as an asset class, generally
appreciates over time, and that depreciation charges required by GAAP do not always reflect the underlying economic realities. Likewise, the exclusion from NAREITs definition of FFO of gains and losses from the sales of previously depreciated
operating real estate assets allows investors and analysts to readily identify the operating results of the long-term assets that form the core of a REITs activity and assists in comparing those operating results between periods. Thus, FFO
provides a performance measure that, when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates and operating costs. Management also believes that FFO provides useful information to the
investment community about our financial performance when compared to other REITs, since FFO is generally recognized as the industry standard for reporting the operations of REITs.

In addition to presenting FFO in accordance with the NAREIT definition, we also disclose FFO, as adjusted, which excludes the effects of
acquisition costs and non-cash impairment charges. We believe that adjusting FFO to exclude these acquisition costs and impairment charges more appropriately presents our results of operations on a comparative basis. The items that we exclude from
net income are subject to significant fluctuations from period to period that cause both positive and negative effects on our results of operations, often in inconsistent and unpredictable directions. The economics underlying these excluded items
are not the primary factors in managements decision-making process. Period to period fluctuations in these items can be driven by accounting for short-term factors that are not relevant to long-term investment decisions, long-term capital
structures or long-term tax planning and tax structuring decisions. Therefore, while our FFO, as adjusted, clearly differs from NAREITs definition of FFO, and may not be comparable to similarly named measures of other REITs and real estate
companies, we believe that it provides a meaningful supplemental measure of our operating performance. We believe that investors are best served if the information that is made available to them allows them to align their analysis and evaluation of
our operating results along the same lines that our management uses in planning and executing our business strategy, thus fostering a greater degree of transparency into our management process.

Neither FFO, nor FFO as adjusted, represents cash generated from operating activities in accordance with GAAP and should not be considered as
alternatives to (i) net income (determined in accordance with GAAP), as indications of our financial performance, or (ii) to cash flow from operating activities (determined in accordance with GAAP) as measures of our liquidity, nor are
they indicative of funds available to fund our cash needs, including our ability to make cash distributions. We believe that to further understand our performance, each of FFO and FFO, as adjusted, should be compared with our reported net income and
considered in addition to cash flows in accordance with GAAP, as presented in our Consolidated Financial Statements.



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The following table presents our FFO for the three months ended March 31, 2010 and 2009 (in
thousands):



|                                                                             |  |                             |        |   |      |   |        |  
|---------------------------------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                                                                             |  | Three Months EndedMarch 31, |       
|                                                                             |  | 2010                        |        |   | 2009 |  
|Reconciliation of net loss to funds from operations                          |  |                             |        |   |      |   |        |  
|Net Income (Loss) Attributable to CB Richard Ellis Realty Trust Shareholders |  | $                           | 145    |   |      | $ | (3,529 | )
|Adjustments:                                                                 |  |                             |        |   |      |   |        |  
|Non-controlling interest                                                     |  |                             | 1      |   |      |   | (13    | )
|Real estate depreciation and amortization                                    |  |                             | 7,243  |   |      |   | 5,722  |  
|Realized gain from transfer of real estate to unconsolidated entities        |  |                             | (154   | ) |      |   |       |  
|Net effect of FFO adjustment from unconsolidated
entities(1)                 |  |                             | 3,715  |   |      |   | 3,261  |  
|                                                                             |  |                             |        |   |      |   |        |  
|FFO                                                                          |  | $                           | 10,950 |   |      | $ | 5,441  |  
|Other Adjustments:                                                           |  |                             |        |   |      |   |        |  
|Acquisition expenses                                                         |  |                             | 382    |   |      |   |       |  
|Unrealized loss in unconsolidated entity                                     |  |                             | 24     |   |      |   | 867    |  
|                                                                             |  |                             |        |   |      |   |        |  
|FFO, as adjusted                                                             |  | $                           | 11,356 |   |      | $ | 6,308  |  
|                                                                             |  |                             |        |   |      |   |        |  



|(1) | Represents our share of the FFO adjustments allowable under the NAREIT definition (primarily depreciation) for each of our unconsolidated entities multiplied
by our ownership interest in each of these unconsolidated entities during the quarter ended March 31, 2010 and multiplied by the percentage of income or loss recognized by us for each of these unconsolidated entities during the quarter ended
March 31, 2009.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Financing

Notes Payable

On April 27,
2007, we, in connection with the acquisition of 602 Central Blvd., entered into a £5,500,000 financing arrangement with the Royal Bank of Scotland secured by the property. The loan was for a term of seven years with interest at a variable rate
of interest, adjusted quarterly, based on three month GBP-based LIBOR plus 0.67%, per annum. On March 11, 2010, we paid off the £5,500,000 ($8,281,000 at March 11, 2010) loan and expensed certain closing costs plus the
unamortized deferred financing costs associated with obtaining the loan totaling $73,000. The interest rate cap agreement was cancelled concurrent with the loan payoff.

In connection with our acquisition of the Carolina Portfolio on August 30, 2007, we assumed 13 loans with principal balances totaling
$66,110,000 ($62,944,000 at estimated fair value including the discount of $3,166,000) from various lenders that are secured by first deeds of trust on the properties and the assignment of related rents and leases. Assumption fees and other loan
closing costs totaling $765,500 were capitalized as incurred. The loans bear interest at rates ranging from 4.98% to 6.33% per annum and mature between March 1, 2013 and February 1, 2025. The loans require monthly payments of interest
and principal, fully amortized over the lives of the loans. Principal payments totaling $916,000 were made during the three months ended March 31, 2010. We indemnify the lenders against environmental costs and expenses and guarantee the loans
under certain conditions.

On May 30, 2008, we entered into a £7,500,000 ($11,386,000 at March 31, 2010) financing
arrangement with the Royal Bank of Scotland plc secured by the Thames Valley Five property. The loan is for a term of five years (with a two year extension option) and bears interest at a variable rate adjusted quarterly, based on three month
GBP-based LIBOR plus 1.01%. In addition, we incurred financing costs of approximately £67,000 ($102,000 at March 31, 2010) associated with obtaining this loan. On August 14, 2008, we entered into the interest rate swap agreement that
fixed the GBP-based LIBOR rate at 5.41% plus 1.01% or 6.42% per annum as of March 31, 2010 and expires on May 30, 2013. Interest only payments are due quarterly for the term of the loan with principal due at maturity.

On July 1, 2008, in connection with the acquisition of Enclave on the Lake, we assumed an $18,281,000 ($18,790,000 face value less discount of
$509,000) loan from NorthMarq Capital, Inc. that bears interest at a fixed rate of 5.45% per annum and matures on May 1, 2011. Principal and interest payments are due monthly for the remaining loan term and principal payments totaling
$90,000 were made during the three months ended March 31, 2010. In addition, we incurred financing costs totaling $241,000 in conjunction with the assumption of the loan.

On October 10, 2008, we entered into a £5,771,000 ($8,761,000 at March 31, 2010) financing agreement with the Royal Bank of
Scotland plc secured by Albion Mills Retail Park property. The loan is for a term of five years and bears interest at a variable rate adjusted quarterly, based on three month GBP-based LIBOR plus 1.31%. In addition, we incurred financing costs of
approximately



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£75,000 ($114,000 at March 31, 2010) associated with obtaining this loan. On November 25, 2008, we entered into the interest rate swap agreement that fixed the GBP-based LIBOR
rate at 3.94% plus 1.31% or 5.25% per annum as of March 31, 2010 and expires on October 10, 2013. Interest only payments are due quarterly for the term of the loan with principal due at maturity.

On November 18, 2008, in connection with the acquisition of Avion Midrise III & IV, we assumed $20,851,000 ($22,186,000 face value
less discount of $1,335,000) fixed rate mortgage loan from Capmark Finance, Inc. that bears interest at a rate of 5.52% per annum and matures on April 1, 2014. Principal and interest payments are due monthly for the remaining loan term and
principal payments totaling $105,000 were made during the three months ended March 31, 2010. In addition, we incurred financing costs totaling $344,000 in conjunction with the assumption of the loan.

On August 5, 2009, in connection with the acquisition of 12650 Ingenuity Drive, we assumed a $12,522,000 ($13,539,000 face value less a
discount of $967,000) fixed rate mortgage loan from PNC Bank, National Association that bears interest at a rate of 5.62% and matures on October 1, 2014. Principal and interest payments are due monthly for the remaining loan term and principal
payments totaling $91,000 were made during the three months ended March 31, 2010. In addition, we incurred financing costs totaling $284,000 in conjunction with the assumption of the loan.

On August 10, 2009, we entered into a £13,975,000 ($21,217,000 at March 31, 2010) financing agreement with the Abbey National
Treasury Services plc secured by the Maskew Retail Park property. On September 24, 2009, we drew the full amount of the loan and concurrently entered into an interest rate swap agreement that fixed the GBP-based LIBOR rate at 3.42% plus 2.26%
or 5.68% per annum for the five-year term of the loan. Interest only payments are due quarterly for the term of the loan with principal due at maturity. In addition, we incurred financing costs of approximately £268,000 ($407,000 at
March 31, 2010) associated with obtaining this loan.

Loan Payable

On August 8, 2008, we entered into an amended and restated credit agreement with Bank of America, N.A. (Bank of America), which
amended the terms of our prior credit agreement with Bank of America, to provide us with a new $45,000,000 unsecured revolving line of credit (the Revolving Credit Facility), and to replace our prior Bank of America term loan and
revolving credit facility which matured in August 2008. The new Revolving Credit Facility was fully drawn upon at closing, with such proceeds utilized to pay down the full $45,000,000 amount outstanding under our prior Bank of America term loan (as
of August 8, 2008, no amount was outstanding under our prior $10,000,000 Bank of America revolving credit facility). The new Revolving Credit Facility matures in August 2010 and bears interest at a floating rate of LIBOR plus 2.00% to
2.75%, based upon our leverage ratio as defined in the credit agreement (at our current leverage ratio, the Revolving Credit Facility bears interest at a floating rate of LIBOR plus 2.00%). An upfront fee of $292,500 was paid to Bank of America, and
a fee equal to the actual daily amount by which the aggregate commitments exceed the total outstandings (both as defined in the amended and restated credit agreement) times 0.20% per annum if the total outstandings are equal to or more than 50%
of the aggregate commitments, or 0.25% per annum otherwise, is accrued on unfunded balances under the Revolving Credit Facility. The loan contains various financial covenants and restrictions including a fixed charge coverage ratio of at least
1.75 to 1.00, as defined in the amended and restated credit agreement. As of March 31, 2010, there was no amount outstanding under the Revolving Credit Facility.

Our organizational documents contain a limitation on the amount of indebtedness that we may incur, so that unless our shares are listed on a
national securities exchange, our aggregate borrowing may not exceed 300% of our net assets unless any excess borrowing is approved by a majority of our independent trustees and is disclosed to shareholders in our next quarterly report.

Distribution Policy

In order to qualify as
a REIT under the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code, we generally must make distributions to our shareholders each year in an amount at least equal to 90% of our REIT taxable income (as determined without regard
to the dividends paid deduction and excluding net capital gain).

It is anticipated that distributions generally will be taxable as
ordinary income to our shareholders, although a portion of such distributions may be designated by us as a return of capital or as capital gain. We will furnish annually to each of our shareholders a statement setting forth distributions paid during
the preceding year and their characterization as ordinary income, return of capital or capital gains.



|                                                                                                  |  |       |           
|------------------------------------------------------------------------------------------------- |  | ----- | ----------
|2010 Quarters                                                                                     |  | First
|Total distributions declared and paid                                                             |  | $     | 16,841,000
|Distributions per share                                                                           |  | $     | 0.15      
|Amount of distributions per share funded by cash flows provided by operating entities             |  | $     | 0.1212    
|Amount of distributions per share funded by uninvested proceeds from financings of our properties |  | $     | 0.0288    



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|                                                                                                  |  |       |            |        |   |            |  |        |            |  |   |           
|------------------------------------------------------------------------------------------------- |  | ----- | ---------- | ------ | - | ---------- |  | ------ | ---------- |  | - | ----------
|2009 Quarters                                                                                     |  | First |            | Second |   | Third      |  | Fourth
|Total distributions declared and paid                                                             |  | $     | 10,066,000 |        | $ | 11,181,000 |  | $      | 12,767,000 |  | $ | 14,750,000
|Distributions per share                                                                           |  | $     | 0.15       |        | $ | 0.15       |  | $      | 0.15       |  | $ | 0.15      
|Amount of distributions per share funded by cash flows provided by operating entities             |  | $     | 0.0903     |        | $ | 0.0643     |  | $      | 0.1309     |  | $ | 0.0434    
|Amount of distributions per share funded by uninvested proceeds from financings of our properties |  | $     | 0.0597     |        | $ | 0.0857     |  | $      | 0.0191     |  | $ | 0.1066    

For the quarter ended March 31,
2010, distributions were funded 80.79% by cash flows provided by operating activities and 19.21% from uninvested proceeds from financings of our properties. In addition, distributions totaling $6,197,000 were reinvested in our common shares pursuant
to our dividend reinvestment plan during the quarter ended March 31, 2010.

Our 2009 distributions were funded 53.78% by cash flows
provided by operating activities and 46.22% from uninvested proceeds from financings of our properties. In addition, distributions totaling $17,600,000 were reinvested in our common shares pursuant to our dividend reinvestment plan during 2009.

To the extent that our cash available for distribution is less than the amount we are required to distribute to qualify as a REIT, we
may consider various funding sources to cover any shortfall, including borrowing funds on a short-term, or possibly long-term, basis or selling properties. In addition, we may utilize these funding sources to make distributions that exceed the
amount we are required to distribute to qualify as a REIT.

Off-Balance Sheet Arrangements

As of March 31, 2010, we had three Investments in Unconsolidated Entities: (i) a 5.07% ownership interest in CBRE Strategic Partners Asia,
(ii) an 80% ownership interest in the Duke joint venture and (iii) a 90% ownership interest in Afton Ridge. Our investments are discussed in Note 4, Investments in Unconsolidated Entities in the accompanying consolidated
financial statements.

Contractual Obligations and Commitments

The following table provides information with respect to our consolidated property contractual obligations at March 31, 2010 (in thousands):



|                                                                                   |  |       |          |   |                   |   |         |                   |  |   |                    |   |  |                     |          |   |  |   |         |  
|---------------------------------------------------------------------------------- |  | ----- | -------- | - | ----------------- | - | ------- | ----------------- |  | - | ------------------ | - |  | ------------------- | -------- | - |  | - | ------- | -
|Contractual Obligations                                                            |  | Total |          |   | Less thanOne Year |   |         | One to ThreeYears |  |   | Three to FiveYears |   |  | More thanFive Years |         
|Note Payable (and interest payments) Collateralized by REMEC Corporate Campus      |  | $     | (14,308  | ) |                   | $ | (635    | )                 |  | $ | (13,673            | ) |  | $                   |         |   |  | $ |        |  
|Note Payable (and interest payments) Collateralized by 300 Constitution Drive      |  |       | (13,210  | ) |                   |   | (581    | )                 |  |   | (12,629            | ) |  |                     |         |   |  |   |        |  
|Note Payable (and interest payments) Collateralized by Deerfield Commons I         |  |       | (12,522  | ) |                   |   | (509    | )                 |  |   | (1,286             | ) |  |                     | (1,286   | ) |  |   | (9,441  | )
|Note Payable (and interest payments) Collateralized by Bolingbrook Point III       |  |       | (11,288  | ) |                   |   | (473    | )                 |  |   | (947               | ) |  |                     | (9,868   | ) |  |   |        |  
|Notes Payable (and interest payments) Collateralized by the Carolina Portfolio     |  |       | (78,646  | ) |                   |   | (6,980  | )                 |  |   | (13,961            | ) |  |                     | (13,350  | ) |  |   | (44,355 | )
|Note Payable (and interest payments) Collateralized by Lakeside Office Center      |  |       | (11,885  | ) |                   |   | (543    | )                 |  |   | (1,255             | ) |  |                     | (1,299   | ) |  |   | (8,788  | )
|Note Payable (and interest payments) Collateralized by Thames Valley
Five(1)       |  |       | (12,033  | ) |                   |   | (185    | )                 |  |   | (369               | ) |  |                     | (11,479  | ) |  |   |        |  
|Note Payable (and interest payments) Collateralized by Enclave on the Lake         |  |       | (19,327  | ) |                   |   | (1,355  | )                 |  |   | (17,972            | ) |  |                     |         |   |  |   |        |  
|Note Payable (and interest payments) Collateralized by Albion Mills Retail
Park(1) |  |       | (9,391   | ) |                   |   | (168    | )                 |  |   | (336               | ) |  |                     | (8,887   | ) |  |   |        |  
|Note Payable (and interest payments) Collateralized by Avion Midrise III & IV      |  |       | (26,417  | ) |                   |   | (1,618  | )                 |  |   | (3,237             | ) |  |                     | (21,562  | ) |  |   |        |  
|Note Payable (and interest payments) Collateralized by 12650 Ingenuity Drive       |  |       | (16,590  | ) |                   |   | (1,118  | )                 |  |   | (2,236             | ) |  |                     | (13,236  | ) |  |   |        |  
|Note Payable (and interest payments) Collateralized by Maskew Retail
Park(1)       |  |       | (24,111  | ) |                   |   | (609    | )                 |  |   | (1,219             | ) |  |                     | (22,283  | ) |  |   |        |  
|                                                                                   |  |       |          |   |                   |   |         |                   |  |   |                    |   |  |                     |          |   |  |   |         |  
|Total                                                                              |  | $     | (249,728 | ) |                   | $ | (14,774 | )                 |  | $ | (69,120            | ) |  | $                   | (103,250 | ) |  | $ | (62,584 | )
|                                                                                   |  |       |          |   |                   |   |         |                   |  |   |                    |   |  |                     |          |   |  |   |         |  







|(1) | These contractual obligations included the expected net payments due under interest rate swap agreements where in each case we have swapped our variable
interest rate payments due under the debt agreements for fixed rates of interest payments.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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The following table provides information with respect to our unconsolidated property contractual
obligations at March 31, 2010 (in thousands):



|                                                                                 |  |       |          |   |                   |   |        |                   |  |   |                    |   |  |                     |          |   |  |   |  
|-------------------------------------------------------------------------------- |  | ----- | -------- | - | ----------------- | - | ------ | ----------------- |  | - | ------------------ | - |  | ------------------- | -------- | - |  | - | -
|Contractual Obligations                                                          |  | Total |          |   | Less thanOne Year |   |        | One to ThreeYears |  |   | Three to FiveYears |   |  | More thanFive Years
|Note Payable (and interest payments) Collateralized by Duke joint venture        |  | $     | (144,003 | ) |                   | $ | (6,696 | )                 |  | $ | (13,392            | ) |  | $                   | (123,915 | ) |  | $ | 
|Note Payable (and interest payments) Collateralized by Afton Ridge joint venture |  |       | (27,638  | ) |                   |   | (1,308 | )                 |  |   | (2,616             | ) |  |                     | (23,714  | ) |  |   | 
|                                                                                 |  |       |          |   |                   |   |        |                   |  |   |                    |   |  |                     |          |   |  |   |  
|Total Notes Payable Collateralized by Unconsolidated
Properties(1)               |  | $     | (171,641 | ) |                   | $ | (8,004 | )                 |  | $ | (16,008            | ) |  | $                   | (147,629 | ) |  | $ | 
|                                                                                 |  |       |          |   |                   |   |        |                   |  |   |                    |   |  |                     |          |   |  |   |  



|(1) | Unconsolidated payment amounts are at our pro rata share of effective ownership and exclude our investment in CBRE Strategic Partners Asia.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------

As of March 31, 2010, we were committed to pay $1,258,000 in accrued offering costs. The timing of future
payments is uncertain.

As of March 31, 2010, we had an unfunded investment commitment in CBRE Strategic Partners Asia totaling
$8,468,000. The timing of future payments is uncertain.

Income Taxes

We have elected to be taxed as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2004. As a REIT,
we generally will not be subject to U.S. federal income tax on income that we distribute currently to our shareholders. Under the Internal Revenue Code, REITs are subject to numerous organizational and operational requirements, including a
requirement that they generally distribute at least 90% of their annual net taxable income (excluding net capital gains) to their shareholders. If we fail to qualify for taxation as a REIT in any year, our income will be taxed at regular corporate
rates, and we may be precluded from qualifying for treatment as a REIT for the four-year period following our failure to qualify. Even if we qualify as a REIT for U.S. federal income tax purposes, we may still be subject to state, local and foreign
taxes on our income and property and to U.S. federal income and excise taxes on our undistributed gross income. Our properties located in Texas are subject to a Texas Gross Margin Tax, Deerfield Commons I is subject to a Georgia Corporation Income
Tax and properties located in North Carolina are subject to a North Carolina Franchise Tax under which we incurred a total of approximately $15,000 and $29,000 of taxes for the three months ended March 31, 2010 and 2009.

Inflation

The real estate market has not
been affected significantly by inflation in the past several years due to the relatively low inflation rate. With the exception of leases with tenants in multifamily properties, we expect to include provisions in the majority of our tenant leases
designed to protect us from the impact of inflation. These provisions will include reimbursement billings for operating expense pass-through charges, real estate tax and insurance reimbursements, or in some cases, annual reimbursement of operating
expenses above a certain allowance. Due to the generally long-term nature of these leases, annual rent increases may not be sufficient to cover inflation and rent may be below market. Leases in multifamily properties generally turn over on an annual
basis and do not typically present the same issue regarding inflation protection due to their short-term nature.

Quantitative and Qualitative
Disclosures About Market Risk

Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates,
commodity prices, equity prices and other market changes that affect market sensitive instruments. In pursuing our business plan, we expect that the primary market risk to which we will be exposed is interest rate risk.

We may be exposed to the effects of interest rate changes primarily as a result of long-term debt used to maintain liquidity and fund expansion of
our real estate investment portfolio and operations. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower overall borrowing costs. To achieve our objectives, we will
borrow primarily at fixed rates or variable rates and, in some cases, with the ability to convert variable rates to fixed rates. We may also enter into derivative financial instruments such as interest rate swaps and caps in order to mitigate our
interest rate risk on a related financial instrument. We will not enter into derivative or interest rate transactions for speculative purposes.



65



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Notes Payable secured by real property are summarized as follows (in thousands):



|                                                      |  |                     |         |   |                  |   |                     |                   |               |   |        |                  |  |   |        | 
|----------------------------------------------------- |  | ------------------- | ------- | - | ---------------- | - | ------------------- | ----------------- | ------------- | - | ------ | ---------------- |  | - | ------ | 
|                                                      |  | Interest Rate as of |         |   | Maturity Date    |   | Notes Payable as of |                  
|Property                                              |  | March 31,2010       |         |   | December 31,2009 |   |                     |                   | March 31,2010 |   |        | December 31,2009 | 
|REMEC                                                 |  | 4.79                | %       |   | 4.79             | % |                     | November 1, 2011  |               | $ | 13,250 |                  |  | $ | 13,250 | 
|300 Constitution                                      |  | 4.84                |         |   | 4.84             |   |                     | April 1, 2012     |               |   | 12,000 |                  |  |   | 12,000 | 
|Deerfield Commons
I.(1)                               |  | 5.23                |         |   | 5.23             |   |                     | December 1, 2015  |               |   | 9,725  |                  |  |   | 9,725  | 
|602 Central
Blvd.(2)                                  |  |                    |         |   | 1.25             |   |                     |                  |               |   |       |                  |  |   | 8,886  | 
|Bolingbrook Point III                                 |  | 5.26                |         |   | 5.26             |   |                     | January 1, 2015   |               |   | 9,000  |                  |  |   | 9,000  | 
|Fairforest Bldg.
5(3)                                 |  | 6.33                |         |   | 6.33             |   |                     | February 1, 2024  |               |   | 10,216 |                  |  |   | 10,330 | 
|Fairforest Bldg.
6(3)                                 |  | 5.42                |         |   | 5.42             |   |                     | June 1, 2019      |               |   | 3,191  |                  |  |   | 3,257  | 
|HJ ParkBldg.
1(3)                                    |  | 4.98                |         |   | 4.98             |   |                     | March 1, 2013     |               |   | 849    |                  |  |   | 914    | 
|North Rhett I(3)                                      |  | 5.65                |         |   | 5.65             |   |                     | August 1, 2019    |               |   | 4,163  |                  |  |   | 4,246  | 
|North Rhett
II(3)                                     |  | 5.20                |         |   | 5.20             |   |                     | October 1, 2020   |               |   | 2,305  |                  |  |   | 2,345  | 
|North Rhett
III(3)                                    |  | 5.75                |         |   | 5.75             |   |                     | February 1, 2020  |               |   | 1,880  |                  |  |   | 1,903  | 
|North Rhett
IV(3)                                     |  | 5.80                |         |   | 5.80             |   |                     | February 1, 2025  |               |   | 10,221 |                  |  |   | 10,328 | 
|Mt Holly
Bldg.(3)                                     |  | 5.20                |         |   | 5.20             |   |                     | October 1, 2020   |               |   | 2,305  |                  |  |   | 2,345  | 
|Orangeburg Park
Bldg.(3)                              |  | 5.20                |         |   | 5.20             |   |                     | October 1, 2020   |               |   | 2,344  |                  |  |   | 2,385  | 
|Kings Mountain
I(3)                                   |  | 5.27                |         |   | 5.27             |   |                     | October 1, 2020   |               |   | 1,995  |                  |  |   | 2,030  | 
|Kings Mountain I
I(3)                                 |  | 5.47                |         |   | 5.47             |   |                     | January 1, 2020   |               |   | 5,944  |                  |  |   | 6,057  | 
|Union Cross Bldg.
I(3)                                |  | 5.50                |         |   | 5.50             |   |                     | July 1, 2021      |               |   | 2,889  |                  |  |   | 2,935  | 
|Union Cross Bldg.
II(3)                               |  | 5.53                |         |   | 5.53             |   |                     | June 1, 2021      |               |   | 8,831  |                  |  |   | 8,972  | 
|Thames Valley
Five(4)(5)                              |  | 6.42                |         |   | 6.42             |   |                     | May 30, 2013      |               |   | 11,386 |                  |  |   | 12,117 | 
|Lakeside Office
Center(6)                             |  | 6.03                |         |   | 6.03             |   |                     | September 1, 2015 |               |   | 9,000  |                  |  |   | 9,000  | 
|Enclave on the
Lake(7)                                |  | 5.45                |         |   | 5.45             |   |                     | May 1, 2011       |               |   | 18,184 |                  |  |   | 18,274 | 
|Albion Mills Retail
Park(4)(8)(9)                     |  | 5.25                |         |   | 5.25             |   |                     | October 10, 2013  |               |   | 8,761  |                  |  |   | 9,323  | 
|Avion Midrise III &
IV(10)                            |  | 5.52                |         |   | 5.52             |   |                     | April 1, 2014     |               |   | 21,660 |                  |  |   | 21,765 | 
|12650 Ingenuity
Drive(11)                             |  | 5.62                |         |   | 5.62             |   |                     | October 1, 2014   |               |   | 13,332 |                  |  |   | 13,424 | 
|Maskew Retail
Park(4)(12)                             |  | 5.68                |         |   | 5.68             |   |                     | August 10, 2014   |               |   | 21,217 |                  |  |   | 22,578 | 
|                                                      |  |                     |         |   |                  |   |                     |                   |               |   |        |                  |  |   |        | 
|Notes Payable                                         |  |                     | 204,648 |   |                  |   | 217,389             |                  
|Less Discount                                         |  |                     | (4,381  | ) |                  |   | (4,615              | )                
|Less Albion Mills Retail Park Fair Value Adjustment   |  |                     | (256    | ) |                  |   | (349                | )                
|                                                      |  |                     |         |   |                  |   |                     |                   |               |   |        |                  |  |   |        | 
|Notes Payable Less Discount and Fair Value Adjustment |  | $                   | 200,011 |   |                  | $ | 212,425             |                  
|                                                      |  |                     |         |   |                  |   |                     |                   |               |   |        |                  |  |   |        | 



|(1) | Interest only payments are due monthly for the first 60 months of the loan term. Principal and interest payments are due monthly for the remaining 60 months
of the loan term.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | This loan was fully paid off on March 11, 2010.
|--- | -----------------------------------------------



|(3) | These notes payable were assumed from the seller of the Carolina Portfolio on August 30, 2007 as part of the property acquisitions and were recorded at
estimated fair value which includes the discount.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(4) | These loans are subject to certain financial covenants (interest coverage and loan to value).
|--- | ---------------------------------------------------------------------------------------------



|(5) | We entered into the interest rate swap agreement that fixed the GBP-based LIBOR rate at 5.41% plus 1.01% or 6.42% per annum as of March 31, 2010 and
expires on May 30, 2013. The stated rates on the mortgage note payable were 1.62% and 1.59% at March 31, 2010 and December 31, 2009, respectively, which were based on GBP-based LIBOR plus a spread of 1.01%.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(6) | Interest only payments are due monthly for the first 36 months of the loan term. Principal and interest payments are due monthly for the remaining 48 months
of the loan term.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(7) | The loan was assumed from the seller of Enclave on the Lake on July 1, 2008 and was recorded at estimated fair value which includes the discount.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------



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|(8) | The Albion Mills Retail Park notes payable balance is presented at cost basis. This loan is carried on our balance sheet at fair value (see Note 15).
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------



|(9) | We entered into the interest rate swap agreement that fixed the GBP-based LIBOR rate at 3.94% plus 1.31% or 5.25% per annum as of March 31, 2010 and
expires on October 10, 2013. The stated rates on the mortgage note payable were 1.92% and 1.88% at March 31, 2010 and December 31, 2009, respectively, which were based on GBP-based LIBOR plus a spread of 1.31%.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(10) | The loan was assumed from the seller of Avion Midrise III & IV on November 18, 2008 and was recorded at estimated fair value which includes the
discount.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------



|(11) | The loan was assumed from the seller of 12650 Ingenuity Drive on August 5, 2009 and was recorded at estimated fair value which includes the discount.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------



|(12) | We entered into the interest rate swap agreement that fixed the GBP-based LIBOR rate at 3.42% plus 2.26 or 5.68% per annum as of March 31, 2010 and
expires on August 10, 2014. The stated rates on the mortgage note payable was 2.87% and 2.83% at March 31, 2010 and December 31, 2009, respectively, which were based on GBP-based LIBOR plus a spread of 2.26%.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Upon the maturity of our debt, there is a market risk as to the prevailing rates at the time of refinancing. Changes
in market rates on our fixed-rate debt affect the fair market value of our debt but it has no impact on interest expense or cash flow. A 100 basis point increase or decrease in interest rates on our fixed rate debt would not increase or decrease our
annual interest expense on our fixed rate debt.

The fair value of long-term debt was estimated based on current interest rates
available to us for debt instruments with similar terms. The following table summarizes our financial instruments and their calculated fair value at March 31, 2010 and December 31, 2009 (in thousands):



|                       |  |                      |          |   |                 |   |          |  
|---------------------- |  | -------------------- | -------- | - | --------------- | - | -------- | -
|                       |  | As of March 31, 2010 |         
|                       |  | CarryingValue        |          |   | Total FairValue |  
|Financial Liabilities: |  |                      |          |   |                 |   |          |  
|Interest Rate Swaps    |  | $                    | (2,584   | ) |                 | $ | (2,584   | )
|Notes Payable          |  |                      | (200,011 | ) |                 |   | (198,687 | )

A 100 basis point increase or decrease in
interest rates would increase or decrease the fair market value of our notes payable by $7,173,000 at March 31, 2010. In addition, a 100 basis point increase or decrease in interest rates would either increase or decrease annual variable
interest expense as follows; approximately $114,000 on the Thames Valley Five property, approximately $88,000 on the Albion Mills Retail Park property and approximately $212,000 on the Maskew Retail Park property.



|                                |  |                         |          |   |                 |   |          |  
|------------------------------- |  | ----------------------- | -------- | - | --------------- | - | -------- | -
|                                |  | As of December 31, 2009 |         
|                                |  | CarryingValue           |          |   | Total FairValue |  
|Financial Assets (Liabilities): |  |                         |          |   |                 |   |          |  
|Interest Rate Cap               |  | $                       | 1        |   |                 | $ | 1        |  
|Interest Rate Swaps             |  |                         | (1,703   | ) |                 |   | (1,703   | )
|Notes Payable                   |  |                         | (212,425 | ) |                 |   | (210,087 | )

In addition to changes in interest rates, the
value of our real estate is subject to fluctuations based on changes in local and regional economic conditions and changes in the creditworthiness of lessees, which may affect our ability to refinance our debt if necessary.



67



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##### Table of Contents

Debt Maturities

The following table details our consolidated and unconsolidated debt maturities as of March 31, 2010 (in thousands):



|                                            |  |                       |        |                |                        |         |  |                                      |                       |   |                |   |       |  |   |                       |  |                |         |       |  |   |        |  |   |         |  |   |         |  
|------------------------------------------- |  | --------------------- | ------ | -------------- | ---------------------- | ------- |  | ------------------------------------ | --------------------- | - | -------------- | - | ----- |  | - | --------------------- |  | -------------- | ------- | ----- |  | - | ------ |  | - | ------- |  | - | ------- | -
|                                            |  | Consolidated Debt     |        |                | Unconsolidated Debt(1) |         |  | Consolidated &Unconsolidated
Debt(1) |                      
|                                            |  | ScheduledAmortization |        | TermMaturities |                        | Total   |  |                                      | ScheduledAmortization |   | TermMaturities |   | Total |  |   | ScheduledAmortization |  | TermMaturities |         | Total | 
|2010 (Nine months ending December 31, 2010) |  | $                     | 3,728  |                | $                      |         |  | $                                    | 3,728                 |   |                | $ |       |  | $ |                       |  | $              |         |       |  | $ | 3,728  |  | $ |         |  | $ | 3,728   |  
|2011                                        |  |                       | 5,124  |                |                        | 31,028  |  |                                      | 36,152                |   |                |   |      |  |   |                      |  |                |        |       |  |   | 5,124  |  |   | 31,028  |  |   | 36,152  |  
|2012                                        |  |                       | 5,351  |                |                        | 12,000  |  |                                      | 17,351                |   |                |   |      |  |   |                      |  |                |        |       |  |   | 5,351  |  |   | 12,000  |  |   | 17,351  |  
|2013(2)                                     |  |                       | 5,430  |                |                        | 20,148  |  |                                      | 25,578                |   |                |   |      |  |   | 102,310               |  |                | 102,310 |       |  |   | 5,430  |  |   | 122,458 |  |   | 127,888 |  
|2014                                        |  |                       | 5,203  |                |                        | 52,529  |  |                                      | 57,732                |   |                |   |      |  |   | 40,640                |  |                | 40,640  |       |  |   | 5,203  |  |   | 93,169  |  |   | 98,372  |  
|2015                                        |  |                       | 4,906  |                |                        | 26,491  |  |                                      | 31,397                |   |                |   |      |  |   |                      |  |                |        |       |  |   | 4,906  |  |   | 26,491  |  |   | 31,397  |  
|2016                                        |  |                       | 4,930  |                |                        |        |  |                                      | 4,930                 |   |                |   |      |  |   |                      |  |                |        |       |  |   | 4,930  |  |   |        |  |   | 4,930   |  
|2017                                        |  |                       | 5,215  |                |                        |        |  |                                      | 5,215                 |   |                |   |      |  |   |                      |  |                |        |       |  |   | 5,215  |  |   |        |  |   | 5,215   |  
|2018                                        |  |                       | 5,516  |                |                        |        |  |                                      | 5,516                 |   |                |   |      |  |   |                      |  |                |        |       |  |   | 5,516  |  |   |        |  |   | 5,516   |  
|2019                                        |  |                       | 5.420  |                |                        |        |  |                                      | 5,420                 |   |                |   |      |  |   |                      |  |                |        |       |  |   | 5,420  |  |   |        |  |   | 5,420   |  
|2020                                        |  |                       | 3,959  |                |                        |        |  |                                      | 3,959                 |   |                |   |      |  |   |                      |  |                |        |       |  |   | 3,959  |  |   |        |  |   | 3,959   |  
|Thereafter                                  |  |                       | 7,670  |                |                        |        |  |                                      | 7,670                 |   |                |   |      |  |   |                      |  |                |        |       |  |   | 7,670  |  |   |        |  |   | 7,670   |  
|                                            |  |                       |        |                |                        |         |  |                                      |                       |   |                |   |       |  |   |                       |  |                |         |       |  |   |        |  |   |         |  |   |         |  
|Total                                       |  | $                     | 62,452 |                | $                      | 142,196 |  | $                                    | 204,648               |   |                | $ |      |  | $ | 142,950               |  | $              | 142,950 |       |  | $ | 62,452 |  | $ | 285,146 |  | $ | 347,598 |  
|                                            |  |                       |        |                |                        |         |  |                                      |                       |   |                |   |       |  |   |                       |  |                |         |       |  |   |        |  |   |         |  |   |         |  
|Weighted Average Maturity (years)           |  |                       |        |                |                        |         |  |                                      | 4.80                  |   |                |   |       |  |   |                       |  |                | 4.03    |       |  |   |        |  |   |         |  |   | 4.48    |  
|Weighted Average Interest Rate              |  |                       |        |                |                        |         |  |                                      | 5.53                  | % |                |   |       |  |   |                       |  |                | 5.60    | %     |  |   |        |  |   |         |  |   | 5.56    | %



|(1) | Unconsolidated debt amounts are at our pro rata share of effective ownership.
|--- | -----------------------------------------------------------------------------



|(2) | The Thames Valley Five consolidated debt ($11,386,000 at March 31, 2010) maturity date may be extended for an additional two years from May, 2013 to May,
2015. In addition, Afton Ridge has the option to extend the maturity date of the unconsolidated debt ($22,950,000 at March 31, 2010  our share) for one additional year from October, 2013 to October, 2014.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Encumbered and Unencumbered Properties

The
following table details our Encumbered and Unencumbered properties as of March 31, 2010 (Approximate Acquisition Cost and Debt Balance in thousands):



|                        |  |                         |  |                              |         |                                             |   |            |  |                             |  |             |         |            |   |                             |  |             |  |   |           |  |   |        
|----------------------- |  | ----------------------- |  | ---------------------------- | ------- | ------------------------------------------- | - | ---------- |  | --------------------------- |  | ----------- | ------- | ---------- | - | --------------------------- |  | ----------- |  | - | --------- |  | - | -------
|                        |  | Consolidated Properties |  | Unconsolidated
Properties(1) |         | Consolidated &Unconsolidated 
Properties(1)
|                        |  | Properties              |  | ApproximateAcquisition Cost  |         | DebtBalance                                 |   | Properties |  | ApproximateAcquisition Cost |  | DebtBalance |         | Properties |   | ApproximateAcquisition Cost |  | DebtBalance
|Encumbered Properties   |  | 28                      |  | $                            | 435,471 |                                             | $ | 204,648    |  | 8                           |  | $           | 272,578 |            | $ | 142,950                     |  | 36          |  | $ | 708,049   |  | $ | 347,598
|Unencumbered Properties |  | 30                      |  |                              | 313,364 |                                             |   |           |  | 10                          |  |             | 146,240 |            |   |                            |  | 40          |  |   | 459,604   |  |   |       
|                        |  |                         |  |                              |         |                                             |   |            |  |                             |  |             |         |            |   |                             |  |             |  |   |           |  |   |        
|Total Properties        |  | 58                      |  | $                            | 748,835 |                                             | $ | 204,648    |  | 18                          |  | $           | 418,818 |            | $ | 142,950                     |  | 76          |  | $ | 1,167,653 |  | $ | 347,598
|                        |  |                         |  |                              |         |                                             |   |            |  |                             |  |             |         |            |   |                             |  |             |  |   |           |  |   |        



|(1) | Number of Properties at 100%. Approximate Acquisition Cost and Debt Balance for Unconsolidated Properties are at our pro rata share of effective ownership. Does
not include our investment in CBRE Strategic Partners Asia.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Subsequent Events

From April 1, 2010 through May 7, 2010, we received gross proceeds from our current public offering of approximately $75,628,321 from the
sale of 7,601,348 common shares.

On April 8, 2010, we acquired 5160 Hacienda Drive, located in Dublin, CA, in the Greater San
Francisco/East Bay area. We acquired 5160 Hacienda Drive for approximately $38,500,000, exclusive of customary closing costs, using the net proceeds from our current public offering. Upon closing, we paid the Investment Advisor a $577,500
acquisition fee. 5160 Hacienda Drive is a 201,620 square foot corporate headquarters and research and development building that was completed in 1998. The property is 100% leased to Carl Zeiss Meditec, Inc. and guaranteed by Carl Zeiss Meditec AG,
through September 2019. Carl Zeiss Meditec, Inc. is a market leader in the medical optics industry and utilizes the property as its U.S. corporate headquarters and research and development facility.



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Effective April 20, 2010, each of our independent trustees was granted 8,000 common shares
pursuant to our equity incentive plan. All of the common shares vested upon issuance. An independent trustee will not be eligible to redeem such shares prior to the third anniversary of the date of issuance.

On April 22, 2010, we contributed an additional $583,456 of our CBRE Strategic Partners Asia capital commitment which was funded using net
proceeds from our current public offering.

On May 7, 2010, we acquired 10450 Pacific Center Court, located in San Diego. We
acquired 10450 Pacific Center Court for approximately for $32,750,000, exclusive of customary closing costs, using net proceeds from our current public offering. Upon closing, we paid the Investment Advisor a $491,250 acquisition fee. 10450 Pacific
Center Court is a 134,000 square foot office building that was completed in 1985. The property is 100% leased to Time Warner Cable Inc. through February 2018. Time Warner Cable Inc. is one of the
nations largest cable services providers and utilizes the property as its regional corporate headquarters for its San Diego operations.



|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | ----------------------------------------------------------

For a discussion of quantitative and qualitative disclosures about market risk, see the Quantitative and Qualitative Disclosures About Market
Risk section of Managements Discussion and Analysis of Financial Condition and Results of Operations above.



|ITEM 4. | CONTROLS AND PROCEDURES
|------- | -----------------------

Not Applicable



|ITEM 4T. | CONTROLS AND PROCEDURES
|-------- | -----------------------

Disclosure Controls and
Procedures

We have formally adopted a policy for disclosure controls and procedures that provides guidance on the evaluation of
disclosure controls and procedures and is designed to ensure that all corporate disclosure is complete and accurate in all material respects and that all information required to be disclosed in the periodic reports submitted by us under the
Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods and in the manner specified in the Securities and Exchange Commissions rules and forms and that disclosure controls and
procedures were effective to ensure that the information required to be disclosed by us is accumulated and communicated to our management, including our chief executive officer and chief financial offer, as appropriate to allow timely decisions
regarding required disclosure. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within our company to disclose
material information otherwise required to be set forth in our periodic reports. Also, we have an investment in three unconsolidated entities. As we do not control these entities, our disclosure controls and procedures with respect to these entities
are necessarily substantially more limited than those we maintain with respect to our consolidated subsidiaries.

As of the end of the
period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and
procedures. Based upon that evaluation, as required by the Securities Exchange Act Rule 13(a)-15(e), our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of the end of the
period covered by this report.

Changes in Internal Controls Over Financial Reporting

No changes in internal control over financial reporting occurred during the fiscal quarter ended March 31, 2010 that have materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.



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PART II. OTHER INFORMATION



|ITEM 1. | LEGAL PROCEEDINGS
|------- | -----------------

We are not party to any
material legal proceedings as of March 31, 2010.



|ITEM 1A. | RISK FACTORS
|-------- | ------------

Other than the risk factor set
forth below, there have been no material changes to the risk factors set forth in Item 1.A. to Part I of our Annual Report on Form 10-K for the year ended December 31, 2009.

If the Company does not meet its REIT distribution requirements the Company will fail to qualify as a REIT, and the Company may be forced to
borrow funds to make distributions necessary to meet our minimum REIT distribution requirements or to make distributions necessary to avoid U.S. federal income and excise taxes.

As a REIT, the Company generally must distribute at least 90% of its annual net taxable income (excluding net capital gains) to its shareholders and
the Company is subject to regular corporate income tax to the extent that the Company distributes less than 100% of its annual net taxable income. In addition, the Company is subject to a 4% nondeductible excise tax on the amount, if any, by which
distributions paid by it in any calendar year are less than the sum of 85% of the Companys ordinary income, 95% of the Companys capital gain net income and 100% of the Companys undistributed income from prior years. In order to
make distributions necessary to qualify as a REIT and avoid the payment of income and excise taxes, the Company may need to borrow funds on a short-term, or possibly long-term, basis, use proceeds from its current public offering or future public
offerings, or sell properties, even if the then prevailing market conditions are not favorable for borrowings or sales. The Companys need for cash to make distributions could result from, among other things, a difference in timing between the
actual receipt of cash and inclusion of income for U.S. federal income tax purposes, the effect of non-deductible capital expenditures, the creation of reserves and the repayment of indebtedness.

In order for distributions to be deductible for U.S. federal income tax purposes and count towards the Companys distribution requirement,
they must not be preferential dividends. A distribution will not be treated as preferential if it is pro rata among all outstanding shares of stock within a particular class. IRS guidance, however, allows a REIT to offer shareholders
participating in its dividend reinvestment program (DRIP) up to a 5% discount on shares purchased through the DRIP without treating such reinvested dividends as preferential. The Companys DRIP offers a 5% discount. In 2007, 2008
and the first two quarters of 2009, common shares issued pursuant to the Companys DRIP were treated as issued as of the first day following the close of the quarter for which the distributions were declared, and not on the date that the cash
distributions were paid to shareholders not participating in the Companys DRIP. Because the Company declares dividends on a daily basis, including with respect to common shares issued pursuant to its DRIP, the IRS could take the position that
distributions paid by the Company during these periods were preferential on the grounds that the discount provided to DRIP participants effectively exceeded the authorized 5% discount or, alternatively, that the overall distributions were not pro
rata among all shareholders. In addition, in the years 2007 through 2009 the Company paid certain individual retirement account (IRA) custodial fees in respect of IRA accounts that invested in the Companys common shares. The
payment of certain of such amounts could be treated as dividend distributions to the IRAs, and therefore as preferential dividends as such amounts were not paid in respect of the Companys other outstanding common shares. Although the Company
believes that the effect of the operation of its DRIP and the payment of such fees was immaterial, the REIT rules do not provide an exception for de minimis preferential dividends.

Accordingly, the Company submitted a request to the IRS for a closing agreement under which the IRS would grant the Company relief for preferential
dividends that may have been paid as a result of the manner in which the Company operated its DRIP and in respect of the Companys payment of certain of such custodial fees. There can be no assurance that the IRS will accept the Companys
proposal for a closing agreement. Even if the IRS accepts the proposal, the Company may be required to pay a fine if the IRS were to view the prior operation of its DRIP or the payment of such fees as preferential dividends. The Company cannot
predict whether such a penalty would be imposed or, if so, the amount of the penalty. If the IRS does not agree to the Companys proposal for a closing agreement and treats the foregoing amounts as preferential dividends, the Company may be
able to rectify its failure to meet the REIT distribution requirements for a year by paying deficiency dividends, which would be paid in respect of all of its common shares pro rata and which would be included in the Companys
deduction for dividends paid in the prior years. If required, such deficiency dividends could be as much as approximately $22 million. In such a case, the Company would be able to avoid losing its qualification as a REIT or being taxed on amounts
distributed as deficiency dividends. However, the Company would be required to pay an interest-like penalty based on the amount of its deficiency dividends. Amounts paid as deficiency dividends should generally be treated as taxable income for U.S.
federal income tax purposes.



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|ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|------- | -----------------------------------------------------------

Unregistered Sales of Securities and Repurchases of Securities

During the three months ended March 31, 2010, we did not sell any equity securities that are not registered under the Securities Act of 1933,
as amended.

The following table provides information with respect to our Share Redemption Program for the three months ended
March 31, 2010:



|         |  |                                 |  |                            |      |                                                                               |     |                                                                                                            |    
|-------- |  | ------------------------------- |  | -------------------------- | ---- | ----------------------------------------------------------------------------- | --- | ---------------------------------------------------------------------------------------------------------- | ---
|Period   |  | Total Number ofShares Purchased |  | Average PricePaid PerShare |      | Total Number of SharesPurchased as Part
ofPublicly Announced Plansor Programs |     | Maximum Number (orapproximate dollar value) 
ofShares that May Yet Be PurchasedUnder the Plans or Programs
|January  |  | 470,187.19                      |  | $                          | 9.05 |                                                                               | N/A |                                                                                                            | N/A
|February |  |                                |  |                            |     |                                                                               | N/A |                                                                                                            | N/A
|March    |  |                                 |  |                            |      |                                                                               | N/A |                                                                                                            | N/A
|Total    |  | 470,187.19                      |  | $                          | 9.05 |                                                                               | N/A |                                                                                                            | N/A

Use of Proceeds from Sale of Registered Securities

The registration statement relating to our initial public offering (No. 333-127405) was declared effective on October 24, 2006. CNL
Securities Corp. is the Dealer Manager of our offering. The registration statement covered up to $2,000,000,000 in common shares of beneficial interest, 90% of which were offered at a price of $10.00 per share, and 10% of which were offered pursuant
to our dividend reinvestment plan at a purchase price equal to the higher of $9.50 per share or 95% of the fair market value of a common share on the reinvestment date, as determined by the Investment Advisor or another firm we choose for that
purpose. Our initial public offering was terminated effective as of the close of business on January 29, 2009. As of the close of business on January 29, 2009, we had sold a total of 60,808,967 common shares in the initial public offering,
including 1,487,943 common shares which were issued pursuant to our dividend reinvestment plan. We withdrew from registration a total of 140,243,665 common shares that were registered but not sold in connection with the initial public offering. From
October 24, 2006 (effective date) through January 29, 2009 (termination date), we had accepted subscriptions from 13,270 investors, issued 60,808,967 common shares and received $607,345,702 in gross offering proceeds pursuant to our
initial public offering. After payment of approximately $8,290,000 in acquisition fees and related expenses, payment of approximately $26,335,000 in selling commission, $8,898,000 in dealer manager fees, $4,008,000 in marketing support fees and
payment of approximately $12,147,000 in organization and offering expenses, as of January 29, 2009, we had raised aggregate net offering proceeds of approximately $548,000,000.

The registration statement relating to our follow-on public offering (No. 333-152653) was declared effective on January 30, 2009. CNL
Securities Corp. is the Dealer Manager of our follow-on offering. The registration statement covers up to $3,000,000,000 in common shares of beneficial interest, 90% of which will be offered at a price of $10.00 per share, and 10% of which will be
offered pursuant to our dividend reinvestment plan at a purchase price equal to the higher of $9.50 per share or 95% of the fair market value of a common share on the reinvestment date, as determined by the Investment Advisor or another firm we
choose for that purpose. We reserve the right to reallocate the shares between the primary offering and our dividend reinvestment plan. From January 30, 2009 (effective date) through March 31, 2010, we had accepted subscriptions from
15,198 investors, issued 55,915,772 common shares and received $558,098,008 in gross offering proceeds pursuant to our public offering after payment of $6,210,000 in acquisition fees and related expenses, payment of approximately $29,009,000 in
selling commissions, $10,759,000 in dealer manager fees, $4,357,000 in marketing support fees and payment of approximately $9,062,000 in organization and offering expenses, as of March 31, 2010, we had raised aggregate net offering proceeds of
approximately $498,701,000.



|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES
|------- | -------------------------------

None.



|ITEM 4. | (REMOVED AND RESERVED)
|------- | ----------------------



|ITEM 5. | OTHER INFORMATION
|------- | -----------------

None.



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|ITEM 6. | EXHIBITS
|------- | --------



|     |  |                                                                                                                                                                       
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1 |  | Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.                                               
|     | 
|31.2 |  | Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.                                               
|     | 
|32.1 |  | Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed
herewith.
|     | 
|32.2 |  | Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed
herewith.



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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



|                   |  |  |  |                                      
|------------------ |  |  |  | -------------------------------------
|                   |  |  |  | CB RICHARD ELLIS REALTY TRUST        
|                   |  | 
|Date: May 14, 2010 |  |  |  | /S/    JACK A. CUNEO                 
|                   |  |  |  | Jack A. Cuneo                        
|                   |  |  |  | President and Chief Executive Officer
|                   |  | 
|Date: May 14, 2010 |  |  |  | /S/    LAURIE E.
ROMANAK             
|                   |  |  |  | Laurie E. Romanak                    
|                   |  |  |  | Chief Financial Officer              



73