##### Table of Contents









SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-K


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1933    
|          
|           |  | For the fiscal year ended December 31, 2004                                                 
|          
|or        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
|          
|           |  | For the transition period
    from           to                                             

Commission file number: 0-51098





NNN 2002 Value Fund, LLC


(Exact name of registrant as specified in its charter)


|                                                                   |  |                                         
|------------------------------------------------------------------ |  | ----------------------------------------
|Virginia                                                           |  | 75-3060438                              
|(State or other jurisdiction
    of incorporation or organization) |  | (I.R.S. Employer
    Identification No.)

1551 N. Tustin Avenue, Suite 200


Santa Ana, California 92705


(Address of principal executive offices)


(877) 888-7348


(Registrants telephone number, including area code)





Securities registered pursuant to Section 12(b) of the
Act:


|                     |  |                                          
|-------------------- |  | -----------------------------------------
|Title of Each Class: |  | Name of Each Exchange on Which Registered
|                     |  |                                          
|None                 |  | None                                     

Securities registered pursuant to Section 12(g) of the
Act:


Title of Class:





Class A LLC Membership Interests


Class B LLC Membership Interests


Class C LLC Membership Interests


o þ


þ




o þ












---










NNN 2002 VALUE FUND, LLC


TABLE OF CONTENTS


|             |  |                                                                                                                      |      |      |     | 
|------------ |  | -------------------------------------------------------------------------------------------------------------------- | ---- | ---- | --- | 
|             |  |                                                                                                                      |      | Page |    
|             |  |                                                                                                                      |      |      |    
|PART I      
|Item 1.      |  | Business                                                                                                             |      |      | 1   | 
|Item 2.      |  | Properties                                                                                                           |      |      | 5   | 
|Item 3.      |  | Legal Proceedings                                                                                                    |      |      | 11  | 
|Item 4.      |  | Submission of Matters to a Vote of Security Holders                                                                  |      |      | 12  | 
|            
|PART II     
|Item 5.      |  | Market for Registrants Common Equity, Related Security
    Holder Matters and Issuer Purchases of Equity Securities |      |      | 13  | 
|Item 6.      |  | Selected Financial Data                                                                                              |      |      | 14  | 
|Item 7.      |  | Managements Discussion and Analysis of Financial Condition
    and Results of Operation                             |      |      | 15  | 
|Item 7A.     |  | Quantitative and Qualitative Disclosures About Market Risk                                                           |      |      | 37  | 
|Item 8.      |  | Financial Statements and Supplementary Data                                                                          |      |      | 38  | 
|Item 9.      |  | Changes in and Disagreements with Accountants on Accounting and
    Financial Disclosure                             |      |      | 38  | 
|Item 9A.     |  | Controls and Procedures                                                                                              |      |      | 38  | 
|Item 9B.     |  | Other Information                                                                                                    |      |      | 39  | 
|            
|PART III    
|Item 10.     |  | Managers and Executive Officers of the Registrant                                                                    |      |      | 39  | 
|Item 11.     |  | Executive Compensation                                                                                               |      |      | 43  | 
|Item 12.     |  | Security Ownership of Certain Beneficial Owners and Management
    and Related Security Holders                      |      |      | 43  | 
|Item 13.     |  | Certain Relationships and Related Transactions                                                                       |      |      | 43  | 
|Item 14.     |  | Principal Accountant Fees and Services                                                                               |      |      | 46  | 
|            
|PART IV     
|Item 15.     |  | Exhibits, Financial Statement Schedules                                                                              |      |      | F-1 | 
|SIGNATURES   |  |                                                                                                                      | F-47 |     
|EXHIBIT 31.1
|EXHIBIT 31.2
|EXHIBIT 32.1
|EXHIBIT 32.2



i



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##### Table of Contents






PART I





Item 1.     Business


Significant events occurring since December 31, 2004
include:




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | On September 16, 2004, Triple Net Properties, LLC, or our
    Manager, advised us that it learned that the Securities and
    Exchange Commission, or the SEC, is conducting an investigation
    referred to as In the matter of Triple Net Properties,
    LLC.The SEC has requested information from our
    Manager relating to disclosure in securities offerings
    (including offerings by G REIT, Inc., T REIT, Inc. and A REIT,
    Inc.) and the exemption from the registration requirements of
    the Securities Act for the private offerings in which our
    Manager and its affiliated entities were involved and exemptions
    from the registration requirements of the Exchange Act for
    several entities. The SEC has requested financial and other
    information regarding these entities as well as the limited
    liability companies advised by our Manager, including us. Our
    Manager has advised us that it intends to cooperate fully with
    the SECs investigation. This investigation could focus on
    or involve our failure to timely file our Form 10 and our
    required reports under the Securities Exchange Act of 1934, or
    the Exchange Act, and could result in fines, penalties or
    administrative remedies.                                                    
|
| |  | In connection with our offering of the sale of our units from
    May 15, 2002 through July 14, 2003, we disclosed the
    prior performance of all public and non-public investment
    programs sponsored by our Manager. We now have determined that
    there were certain errors in those prior performance tables. In
    particular, the financial information in the tables was stated
    to be presented in accordance with accounting principles
    generally accepted in the United States of America, or GAAP,
    basis. Generally the tables for the public programs were not
    presented on a GAAP basis and the tables for the non-public
    programs were prepared and presented on a tax or cash accounting
    basis. Moreover, a number of the prior performance data figures
    were themselves erroneous, even as presented on a tax or cash
    basis. In particular, certain calculations of depreciation and
    amortization were not on an income tax basis for a limited
    liability company investment. In general, the resulting effect
    is an overstatement of our Managers program and aggregate
    portfolio operating results. Our Managers board of
    managers, or the Board of Managers, is considering alternatives
    to address the errors in the prior performance tables.
|
| |  | On March 15, 2005, we sold our wholly owned property, the
    Bank of America Plaza West building in Las Vegas, Nevada, for
    $24,000,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | On February 8, 2005, the Board of Managers listed for sale
    each of the Congress Center and Netpark properties of which we
    own 12.3% and 50.0%, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

Our Company










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##### Table of Contents







Plan of Liquidation




Private Placement




Current Investment Objectives and Policies


General






| |   |                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | preserve our members capital investment;                                                                                                                                                     
|
| |  | realize income through the acquisition, operation and sale of
    the properties;                                                                                                             
|
| |  | make monthly distributions to our members from cash generated by
    operations in an amount estimated to equal approximately an 8%
    annual return of our members investment; however, the

2



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| |   |                                                                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | distributions among the Class A Unit holders, Class B
    Unit holders and Class C Unit holders may vary; and                                                                
|
| |  | within approximately three to five years from the date of
    acquisition of each asset and subject to market conditions,
    realize income from the sale of the properties.

Disposition Strategies






| |   |                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------
| |  | the ability to sell the property at a price we believe would
    provide an attractive return to the unit holders;
|
| |  | whether the property is strategically located;                                                                    
|
| |  | tenant composition and lease rollover for the property;                                                           
|
| |  | general economic conditions and outlook, including job growth in
    the local market; and                        
|
| |  | the general quality of the asset.                                                                                 

Operating Strategies






| |   |                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | managing costs and seeking to minimize operating expenses by
    centralizing management, leasing, marketing, financing,
    accounting, renovation and data processing activities;
|
| |  | improving rental income and cash flow by aggressively marketing
    rentable space and raising rents when feasible;                                                                
|
| |  | emphasizing regular maintenance and periodic renovation to meet
    the needs of tenants and to maximize long-term returns;                                                        
|
| |  | re-positioning properties, including, for example, shifting from
    single to multi-tenant use in order to maximize desirability and
    utility for prospective tenants; and     
|
| |  | financing acquisitions and refinancing properties when favorable
    financing terms are available to increase the cash flow.                                                      

Financing Policies






3



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##### Table of Contents



Competition






Government Regulations




Costs of Compliance with the Americans with Disabilities
Act.


Costs of Government Environmental Regulation and Private
Litigation.


Use of Hazardous Substances by Some of Our Tenants.


4



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Other Federal, State and Local Regulations.


Significant Tenants




|                |  |              |           |               |             |  |      |          |  |                               |       |  |            |  |  |  |          | 
|--------------- |  | ------------ | --------- | ------------- | ----------- |  | ---- | -------- |  | ----------------------------- | ----- |  | ---------- |  |  |  | -------- | 
|                |  |              |           | Percentage of |             |  |      |          |  |                               | Lease | 
|                |  | 2004 Annual  |           |               | 2004 Annual |  |      |          |  | Square                        |       |  | Expiration | 
|Tenant          |  | Base Rent(1) |           |               | Base Rent   |  |      | Property |  | Footage                       |       |  | Date       | 
|                |  |              |           |               |             |  |      |          |  |                               |       |  |            | 
|Merck Medco     |  | $            | 1,566,000 |               |             |  | 14.5 | %        |  | Netpark                       |       |  | 143,000    |  |  |  | 10/31/11 | 
|GMC Worldwide   |  | $            | 1,495,000 |               |             |  | 13.8 | %        |  | Netpark                       |       |  | 100,000    |  |  |  | 11/30/06 | 
|Bank of America |  | $            | 1,175,000 |               |             |  | 10.9 | %        |  | Bank of America Plaza West(2) |       |  | 40,000     |  |  |  | 10/31/20 | 






|    |                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------
|(1) | Annualized rental income based on contractual base rent from
    leases in effect at December 31, 2004.
|   
|(2) | Bank of America Plaza West was sold on March 15, 2005.                                                 



Employees




Financial Information about Industry Segments









|        |           
|------- | ----------
|Item 2. | Properties



|                           |  |          |               |  |      |              |        |             |               |  |           |         |  |       |             |   |              |  |       |   |  |   |            | 
|-------------------------- |  | -------- | ------------- |  | ---- | ------------ | ------ | ----------- | ------------- |  | --------- | ------- |  | ----- | ----------- | - | ------------ |  | ----- | - |  | - | ---------- | 
|                           |  |          |               |  |      | Net Rentable |        |             | % of Physical |  |           | Percent |  |       | 2004 Annual |  
|Property                   |  | Location |               |  | Type |              |        | Square Feet |               |  | Occupancy |         |  | Owned |             |   | Base Rent(*) | 
|                           |  |          |               |  |      |              |        |             |               |  |           |         |  |       |             |   |              | 
|Consolidated Properties    |  |          |               |  |      |              |        |             |               |  |           |         |  |       |             |   |              |  |       |   |  |   |            | 
|                           |  |          |               |  |      |              |        |             |               |  |           |         |  |       |             |   |              | 
|Bank of America Plaza West |  |          | Las Vegas, NV |  |      |              | Office |             |               |  | 82,000    |         |  |       | 95.2        | % |              |  | 100.0 | % |  | $ | 2,252,000  | 
|Netpark                    |  |          | Tampa, FL     |  |      |              | Office |             |               |  | 911,000   |         |  |       | 73.2        | % |              |  | 50.0  | % |  | $ | 8,597,000  | 
|Unconsolidated Properties  |  |          |               |  |      |              |        |             |               |  |           |         |  |       |             |   |              |  |       |   |  |   |            | 
|                           |  |          |               |  |      |              |        |             |               |  |           |         |  |       |             |   |              | 
|Congress Center            |  |          | Chicago, IL   |  |      |              | Office |             |               |  | 525,000   |         |  |       | 90.0        | % |              |  | 12.3  | % |  | $ | 12,460,000 | 

5



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|    |                                                   
|--- | --------------------------------------------------
|(*) | Annual base rent is the contractual rent for 2004.





| |   |                                                                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | we believe all of our properties are adequately covered by
    insurance and are suitable for their intended purposes;                                                                                                                  
|
| |  | we have no plans for any material renovations, improvements or
    development of our properties, except in accordance with planned
    budgets;                                                                                        
|
| |  | our properties are located in markets where we are subject to
    competition in attracting new tenants and retaining current
    tenants; and                                                                                          
|
| |  | depreciation is provided on a straight-line basis over the
    estimated useful lives of the buildings, ranging primarily from
    15 to 39 years and over the shorter of the lease term or
    useful lives of the tenant improvements.

Organizational Structure




NNN 2002 Value Fund, LLC





6



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Netpark Ownership












|    |                                                                          
|--- | -------------------------------------------------------------------------
|(1) | No one tenant in common owns more than a 4% interest in the
    property.

7



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Congress Center Ownership







8



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##### Table of Contents



Affiliated Companies







Consolidated Properties




| |                                              
| | ---------------------------------------------
| | Bank of America Plaza West, Las Vegas, Nevada







| |                        
| | -----------------------
| | Netpark, Tampa, Florida





9



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##### Table of Contents





Unconsolidated Property




| |                                   
| | ----------------------------------
| | Congress Center, Chicago, Illinois





|                                         |  |               |                  | 
|---------------------------------------- |  | ------------- | ---------------- | 
|Tenants in Common                        |  | Interest Held |                 
|                                         |  |               |                 
|G REIT, Inc. (our affiliate)             |  |               | 30.0%            | 
|NNN Congress Center, LLC (our affiliate) |  |               | 28.9%            | 
|Unaffiliated third parties               |  |               | 41.1% (combined) | 



|                         |  |                          |                  |  |                             |  |                 | 
|------------------------ |  | ------------------------ | ---------------- |  | --------------------------- |  | --------------- | 
|                         |  | Membership Interest in   |                  |  |                            
|Members                  |  | NNN Congress Center, LLC |                  |  | Interest in Congress Center | 
|                         |  |                          |                  |  |                             | 
|NNN 2002 Value Fund, LLC |  |                          | 42.5%            |  |                             |  | 12.3%           | 
|T REIT, Inc.             |  |                          | 35.5%            |  |                             |  | 10.3%           | 
|Unaffiliated members     |  |                          | 22.0% (combined) |  |                             |  | 6.3% (combined) | 







10



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Lease Expiration Table




|                        |       |           |   |    |                 |            |         |                 |  |  |                  |       |                  |                 |           |            |  |  |      |       |  
|----------------------- | ----- | --------- | - | -- | --------------- | ---------- | ------- | --------------- |  |  | ---------------- | ----- | ---------------- | --------------- | --------- | ---------- |  |  | ---- | ----- | -
|                        |       |           |   |    |                 | Percent of |         |                 |  |  | Percent of Total |      
|                        |       | Number of |   |    | Total Square    |            |         | Total GLA       |  |  |                  |       | Annual Base Rent |                
|                        |       | Leases    |   |    | Footage of      |            |         | Represented by  |  |  | Annual           |       |                  | Represented by  |          
|Year Ended December 31, |       | Expiring  |   |    | Expiring Leases |            |         | Expiring Leases |  |  | Base Rent        |       |                  | Expiring Leases |          
|                        |       |           |   |    |                 |            |         |                 |  |  |                  |       |                  |                 |          
|2005                    |       |           | 8 |    |                 |            | 85,000  |                 |  |  | 11.5             | %     |                  | $               | 1,294,000 |            |  |  | 12.0 | %    
|2006                    |       |           | 8 |    |                 |            | 127,000 |                 |  |  | 17.1             |       |                  |                 | 2,184,000 |            |  |  | 20.3 |      
|2007                    |       |           | 7 |    |                 |            | 88,000  |                 |  |  | 11.9             |       |                  |                 | 1,199,000 |            |  |  | 11.1 |      
|2008                    |       |           | 4 |    |                 |            | 71,000  |                 |  |  | 9.6              |       |                  |                 | 1,034,000 |            |  |  | 9.6  |      
|2009                    |       |           | 8 |    |                 |            | 69,000  |                 |  |  | 9.3              |       |                  |                 | 949,000   |            |  |  | 8.8  |      
|2010                    |       |           | 2 |    |                 |            | 5,000   |                 |  |  | 0.7              |       |                  |                 | 76,000    |            |  |  | 0.7  |      
|2011                    |       |           | 2 |    |                 |            | 201,000 |                 |  |  | 27.0             |       |                  |                 | 2,340,000 |            |  |  | 21.7 |      
|2012                    |       |           | 0 |    |                 |            |        |                 |  |  |                 |       |                  |                 |          |            |  |  |     |      
|2013                    |       |           | 1 |    |                 |            | 22,000  |                 |  |  | 3.0              |       |                  |                 |          |            |  |  |     |      
|2014                    |       |           | 3 |    |                 |            | 33,000  |                 |  |  | 4.5              |       |                  |                 | 528,000   |            |  |  | 4.9  |      
|Thereafter              |       |           | 1 |    |                 |            | 40,000  |                 |  |  | 5.4              |       |                  |                 | 1,175,000 |            |  |  | 10.9 |      
|                        |       |           |   |    |                 |            |         |                 |  |  |                  |       |                  |                 |          
|                        | Total |           |   | 44 |                 |            |         | 741,000         |  |  |                  | 100.0 | %                |                 | $         | 10,779,000 |  |  |      | 100.0 | %
|                        |       |           |   |    |                 |            |         |                 |  |  |                  |       |                  |                 |          

Geographic Diversification




Indebtedness









|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings



| |                  
| | -----------------
| | SEC Investigation

In the matter of Triple
Net Properties, LLC.


11



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##### Table of Contents







| |                         
| | ------------------------
| | Prior Performance Tables





| |           
| | ----------
| | Litigation








|        |                                                    
|------- | ---------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security Holders



12



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PART II







|        |                                                                                                                         
|------- | ------------------------------------------------------------------------------------------------------------------------
|Item 5. | Market for Registrants Common Equity, Related
    Security Holder Matters and Issuer Purchases of Equity
    Securities

Market Information






Unit Holders




Distributions






|               |  |      |     |  |      |   |     |      |  |   |     | 
|-------------- |  | ---- | --- |  | ---- | - | --- | ---- |  | - | --- | 
|Quarters Ended |  | 2004 |     |  | 2003 |   |     | 2002 | 
|               |  |      |     |  |      |   |     |      | 
|March 31       |  | $    | 100 |  |      | $ | 100 |      |  |   | N/A | 
|June 30        |  | $    | 100 |  |      | $ | 100 |      |  |   | N/A | 
|September 30   |  | $    | 104 |  |      | $ | 100 |      |  |   | N/A | 
|December 31    |  | $    | 106 |  |      | $ | 100 |      |  | $ | 100 | 



|               |  |      |     |  |      |   |     |      |  |  |     | 
|-------------- |  | ---- | --- |  | ---- | - | --- | ---- |  |  | --- | 
|Quarters Ended |  | 2004 |     |  | 2003 |   |     | 2002 | 
|               |  |      |     |  |      |   |     |      | 
|March 31       |  | $    | 100 |  |      | $ | 100 |      |  |  | N/A | 
|June 30        |  | $    | 100 |  |      | $ | 100 |      |  |  | N/A | 
|September 30   |  | $    | 104 |  |      | $ | 100 |      |  |  | N/A | 
|December 31    |  | $    | 106 |  |      | $ | 100 |      |  |  | N/A | 



|               |  |      |     |  |      |   |      |      |  |  |     | 
|-------------- |  | ---- | --- |  | ---- | - | ---- | ---- |  |  | --- | 
|Quarters Ended |  | 2004 |     |  | 2003 |   |      | 2002 | 
|               |  |      |     |  |      |   |      |      | 
|March 31       |  | $    | 100 |  |      |   | N/A  |      |  |  | N/A | 
|June 30        |  | $    | 100 |  |      | $ | 66.7 |      |  |  | N/A | 
|September 30   |  | $    | 104 |  |      | $ | 100  |      |  |  | N/A | 
|December 31    |  | $    | 106 |  |      | $ | 100  |      |  |  | N/A | 



13



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Distribution Policy




Equity Compensation Plan Information









|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data



Selected Financial Data


NNN 2002 VALUE FUND, LLC


|                                                                            |                                             |                          |            |                   |                     |                |           |         |   |   |          |         |  
|--------------------------------------------------------------------------- | ------------------------------------------- | ------------------------ | ---------- | ----------------- | ------------------- | -------------- | --------- | ------- | - | - | -------- | ------- | -
|                                                                            |                                             |                          |            |                   |                     | For the Period |          
|                                                                            |                                             |                          |            | from May 15, 2002 |                    
|                                                                            |                                             | Years Ended December 31, |            |                   | (Date of Inception) |               
|                                                                            |                                             |                          |            |                   | to December 31,     |               
|                                                                            |                                             | 2004                     |            |                   | 2003                |                |           | 2002    |  
|                                                                            |                                             |                          |            |                   |                     |                |           |         |  
|OPERATING DATA:                                                             |                                             |                          |            |                   |                     |                |           |         |   |   |          |        
|Total revenues                                                              |                                             | $                        | 10,008,000 |                   |                     | $              | 4,904,000 |         |   | $ |         |        
|Income (loss) from continuing operations before discontinued
    operations |                                             |                          |            |                   |                     |                |           |         |   |   |          |        
|and minority interest                                                       |                                             |                          | 243,000    |                   |                     |                | 170,000   |         |   |   | (63,000  | )      
|Loss from discontinued operations                                           |                                             |                          | (115,000   | )                 |                     |                | (651,000  | )       |   |   | (109,000 | )      
|Net loss                                                                    |                                             | $                        | (184,000   | )                 |                     | $              | (535,000  | )       |   | $ | (172,000 | )      
|                                                                            |                                             |                          |            |                   |                     |                |           |         |  
|Net income (loss) per member unit:                                          |                                             |                          |            |                   |                     |                |           |         |   |   |          |        
|                                                                            | Continuing operations  basic and diluted   |                          | $          | (11.58            | )                   |                | $         | 23.88   |   |   | $        | (160.72 | )
|                                                                            | Discontinued operations  basic and diluted |                          | $          | (19.30            | )                   |                | $         | (134.03 | ) |   | $        | (278.06 | )
|                                                                            |                                             |                          |            |                   |                     |                |           |         |  
|Total net loss per member unit  basic and diluted                          |                                             | $                        | (30.88     | )                 |                     | $              | (110.15   | )       |   | $ | (438.78  | )      
|                                                                            |                                             |                          |            |                   |                     |                |           |         |  

|                                                         |  |              |            |   |              |   |             |              |  |   |            |  
|-------------------------------------------------------- |  | ------------ | ---------- | - | ------------ | - | ----------- | ------------ |  | - | ---------- | -
|                                                         |  | December 31, |            |   | December 31, |   |             | December 31, | 
|                                                         |  | 2004         |            |   | 2003         |   |             | 2002         | 
|                                                         |  |              |            |   |              |   |             |              | 
|BALANCE SHEET DATA:                                      |  |              |            |   |              |   |             |              |  |   |            |  
|Total assets                                             |  | $            | 73,236,000 |   |              | $ | 75,228,000  |              |  | $ | 21,836,000 |  
|Mortgage loans payable                                   |  |              | 33,047,000 |   |              |   | 31,642,000  |              |  |   |           |  
|Mortgage loans payable secured by property held for sale |  |              | 9,124,000  |   |              |   | 9,394,000   |              |  |   | 14,141,000 |  
|Members equity                                          |  |              | 19,331,000 |   |              |   | 21,965,000  |              |  |   | 6,926,000  |  
|Total liabilities                                        |  | $            | 47,437,000 |   |              | $ | 46,600,000  |              |  | $ | 14,910,000 |  
|OTHER DATA:                                              |  |              |            |   |              |   |             |              |  |   |            |  
|Cash flows provided by operating activities              |  | $            | 2,984,000  |   |              | $ | 2,140,000   |              |  | $ | 698,000    |  
|Cash flows used in investing activities                  |  |              | (2,170,000 | ) |              |   | (47,060,000 | )            |  |   | (7,959,000 | )
|Cash flows provided by (used in) financing activities    |  |              | (1,326,000 | ) |              |   | 42,176,000  |              |  |   | 11,584,000 |  
|Number of consolidated properties                        |  |              | 1          |   |              |   | 1           |              |  |   |           |  
|Rentable square feet                                     |  |              | 911,000    |   |              |   | 911,000     |              |  |   |           |  

14



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|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operation



Forward-Looking Statements




Overview and Background






Plan of Liquidation




15



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Critical Accounting Policies






| |                       
| | ----------------------
| | Property Held for Sale

Accounting for Impairment
or Disposal of Long-Lived Assets,




| |   |                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | management, having the authority to approve the action, commits
    to a plan to sell the asset;                                                             
|
| |  | the asset is available for immediate sale in its present
    condition subject only to terms that are usual and customary for
    sales of such assets;      
|
| |  | an active program to locate a buyer and other actions required
    to complete the plan to sell the asset have been initiated;                               
|
| |  | the sale of the asset is probable and the transfer of the asset
    is expected to qualify for recognition as a completed sale
    within one year;          
|
| |  | the asset is being actively marketed for sale at a price that is
    reasonable in relation to its current fair value; and                                   
|
| |  | given the actions required to complete the plan, it is unlikely
    that significant changes to the plan will be made or that the
    plan will be withdrawn.



| |                                 
| | --------------------------------
| | Derivative Financial Instruments





| |                                                            
| | -----------------------------------------------------------
| | Revenue Recognition and Allowance for Doubtful
    Accounts



16



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| |           
| | ----------
| | Impairment





| |   |                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------
| |  | significant negative industry or economic trend;                                                    
|
| |  | a significant underperformance relative to historical or
    projected future operating results; and
|
| |  | a significant change in the manner in which the asset is used.                                      







| |                          
| | -------------------------
| | Purchase Price Allocation

Business Combinations,








17



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| |                
| | ---------------
| | Deferred Assets



2003 Acquisitions




| |                                   
| | ----------------------------------
| | Congress Center, Chicago, Illinois





|                                         |  |               |                  | 
|---------------------------------------- |  | ------------- | ---------------- | 
|Tenants in Common                        |  | Interest Held |                 
|                                         |  |               |                 
|G REIT, Inc. (our affiliate)             |  |               | 30.0%            | 
|NNN Congress Center, LLC (our affiliate) |  |               | 28.9%            | 
|Unaffiliated third parties               |  |               | 41.1% (combined) | 



|                         |  |                          |                  |  |                             |  |                 | 
|------------------------ |  | ------------------------ | ---------------- |  | --------------------------- |  | --------------- | 
|                         |  | Membership Interest in   |                  |  |                            
|Members                  |  | NNN Congress Center, LLC |                  |  | Interest in Congress Center | 
|                         |  |                          |                  |  |                             | 
|NNN 2002 Value Fund, LLC |  |                          | 42.5%            |  |                             |  | 12.3%           | 
|T REIT, Inc.             |  |                          | 35.5%            |  |                             |  | 10.3%           | 
|Unaffiliated members     |  |                          | 22.0% (combined) |  |                             |  | 6.3% (combined) | 





18



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| |                        
| | -----------------------
| | Netpark, Tampa, Florida







Factors Which May Influence Results of Operations




| |              
| | -------------
| | Rental Income





| |                                                             
| | ------------------------------------------------------------
| | Scheduled Lease Expirations at Our Consolidated
    Property



19



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| |         
| | --------
| | Expenses



Results of Operations






| |                                                                          
| | -------------------------------------------------------------------------
| | Year Ended December 31, 2004 Compared to Year Ended
    December 31, 2003

|                                                                                            |                                                                           |                          |           |            |      |   |           |           |   |   |           |           |   |  |       |       |  
|------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------- | ------------------------ | --------- | ---------- | ---- | - | --------- | --------- | - | - | --------- | --------- | - |  | ----- | ----- | -
|                                                                                            |                                                                           | Years Ended December 31, |           |            |      |   |          
|                                                                                            |                                                                           |                          |           |            |      |   | Percent   |          
|                                                                                            |                                                                           | 2004                     |           |            | 2003 |   |           | Change    |   |   | Change    |          
|                                                                                            |                                                                           |                          |           |            |      |   |           |           |   |   |           |          
|Revenues:                                                                                   |                                                                           |                          |           |            |      |   |           |           |   |   |           |           |   |  |       |      
|                                                                                            | Rental income                                                             |                          | $         | 10,008,000 |      |   | $         | 4,904,000 |   |   | $         | 5,104,000 |   |  |       | 104.1 | %
|Expenses:                                                                                   |                                                                           |                          |           |            |      |   |           |           |   |   |           |           |   |  |       |      
|                                                                                            | Rental expenses                                                           |                          |           | 3,885,000  |      |   |           | 2,311,000 |   |   |           | 1,574,000 |   |  |       | 68.1  | %
|                                                                                            | General and administrative                                                |                          |           | 380,000    |      |   |           | 119,000   |   |   |           | 261,000   |   |  |       | 219.3 | %
|                                                                                            | Depreciation and amortization                                             |                          |           | 3,630,000  |      |   |           | 1,559,000 |   |   |           | 2,071,000 |   |  |       | 132.8 | %
|                                                                                            |                                                                           |                          |           |            |      |   |           |           |   |   |           |          
|                                                                                            |                                                                           |                          | 7,895,000 |            |      |   | 3,989,000 |           |   |   | 3,906,000 |           |   |  | 97.9  | %    
|                                                                                            |                                                                           |                          |           |            |      |   |           |           |   |   |           |          
|Income before other income, discontinued operations and minority
    interests              |                                                                           |                          | 2,113,000 |            |      |   | 915,000   |           |   |   | 1,198,000 |           |   |  | 130.9 | %    
|Other (expense) income:                                                                     |                                                                           |                          |           |            |      |   |           |           |   |   |           |           |   |  |       |      
|                                                                                            | Interest expense (including amortization of deferred financing
    costs) |                          |           | (1,647,000 | )    |   |           | (886,000  | ) |   |           | (761,000  | ) |  |       | 85.9  | %
|                                                                                            | Other income                                                              |                          |           | 55,000     |      |   |           | 11,000    |   |   |           | 44,000    |   |  |       | 400.0 | %
|                                                                                            | Interest income                                                           |                          |           |           |      |   |           | 46,000    |   |   |           | (46,000   | ) |  |       | 100.0 | %
|Equity in earnings (loss) of unconsolidated real estate                                     |                                                                           |                          | (278,000  | )          |      |   | 84,000    |           |   |   | (362,000  | )         |   |  | 431.0 | %    
|                                                                                            |                                                                           |                          |           |            |      |   |           |           |   |   |           |          
|Income from continuing operations before discontinued operations
    and minority interests |                                                                           |                          | 243,000   |            |      |   | 170,000   |           |   |   | 73,000    |           |   |  | 42.9  | %    
|Loss from discontinued operations                                                           |                                                                           |                          | (115,000  | )          |      |   | (651,000  | )         |   |   | 536,000   |           |   |  | 82.3  | %    
|                                                                                            |                                                                           |                          |           |            |      |   |           |           |   |   |           |          
|Net income (loss) before minority interests                                                 |                                                                           |                          | 128,000   |            |      |   | (481,000  | )         |   |   | 609,000   |           |   |  | 126.6 | %    
|Minority interests                                                                          |                                                                           |                          | 312,000   |            |      |   | 54,000    |           |   |   | 258,000   |           |   |  | 477.8 | %    
|                                                                                            |                                                                           |                          |           |            |      |   |           |           |   |   |           |          
|Net loss                                                                                    |                                                                           | $                        | (184,000  | )          |      | $ | (535,000  | )         |   | $ | 351,000   |           |   |  | 65.6  | %    
|                                                                                            |                                                                           |                          |           |            |      |   |           |           |   |   |           |          







20



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21



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| |                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------
| | Year Ended December 31, 2003 Compared to the Period
    From May 15, 2002 (Date of Inception) Through
    December 31, 2002

|                                                                                                   |                                                                           |              |           |                   |                     |   |          |         |   |         |           |           |   |  |          |         |  
|-------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------- | ------------ | --------- | ----------------- | ------------------- | - | -------- | ------- | - | ------- | --------- | --------- | - |  | -------- | ------- | -
|                                                                                                   |                                                                           |              |           | For the Period    |                     |   |          |         |  
|                                                                                                   |                                                                           |              |           | from May 15, 2002 |                     |   |          |         |  
|                                                                                                   |                                                                           | Year Ended   |           |                   | (Date of Inception) |   |          |         |   |        
|                                                                                                   |                                                                           | December 31, |           |                   | to December 31,     |   |          |         |   | Percent |          
|                                                                                                   |                                                                           | 2003         |           |                   | 2002                |   |          | Change  |   |         | Change    |          
|                                                                                                   |                                                                           |              |           |                   |                     |   |          |         |   |         |           |          
|Revenues:                                                                                          |                                                                           |              |           |                   |                     |   |          |         |   |         |           |           |   |  |          |        
|                                                                                                   | Rental income                                                             |              | $         | 4,904,000         |                     |   | $        |        |   |         | $         | 4,904,000 |   |  |          |        |  
|Expenses:                                                                                          |                                                                           |              |           |                   |                     |   |          |         |   |         |           |           |   |  |          |        
|                                                                                                   | Rental expenses                                                           |              |           | 2,311,000         |                     |   |          |        |   |         |           | 2,311,000 |   |  |          |        |  
|                                                                                                   | General and administrative                                                |              |           | 119,000           |                     |   |          | 25,000  |   |         |           | 94,000    |   |  |          | 376.0   | %
|                                                                                                   | Depreciation and amortization                                             |              |           | 1,559,000         |                     |   |          |        |   |         |           | 1,559,000 |   |  |          |        |  
|                                                                                                   |                                                                           |              |           |                   |                     |   |          |         |   |         |           |          
|                                                                                                   |                                                                           |              | 3,989,000 |                   |                     |   | 25,000   |         |   |         | 3,964,000 |           |   |  | 15,856.0 | %      
|                                                                                                   |                                                                           |              |           |                   |                     |   |          |         |   |         |           |          
|Income (loss) before other income, discontinued operations and
    minority interests              |                                                                           |              | 915,000   |                   |                     |   | (25,000  | )       |   |         | 940,000   |           |   |  | 3,760.0  | %      
|Other (expense) income:                                                                            |                                                                           |              |           |                   |                     |   |          |         |   |         |           |           |   |  |          |        
|                                                                                                   | Interest expense (including amortization of deferred financing
    costs) |              |           | (886,000          | )                   |   |          | (40,000 | ) |         |           | (846,000  | ) |  |          | 2,115.0 | %
|                                                                                                   | Other income                                                              |              |           | 11,000            |                     |   |          |        |   |         |           | 11,000    |   |  |          |        |  
|                                                                                                   | Interest income                                                           |              |           | 46,000            |                     |   |          | 2,000   |   |         |           | 44,000    |   |  |          | 2,200.0 | %
|Equity in earnings of unconsolidated real estate                                                   |                                                                           |              | 84,000    |                   |                     |   |         |         |   |         | 84,000    |           |   |  |         |        
|Income (loss) from continuing operations before discontinued
    operations and minority interests |                                                                           |              | 170,000   |                   |                     |   | (63,000  | )       |   |         | 233,000   |           |   |  | 369.0    | %      
|Loss from discontinued operations                                                                  |                                                                           |              | (651,000  | )                 |                     |   | (109,000 | )       |   |         | (542,000  | )         |   |  | 497.2    | %      
|                                                                                                   |                                                                           |              |           |                   |                     |   |          |         |   |         |           |          
|Net loss before minority interests                                                                 |                                                                           |              | (481,000  | )                 |                     |   | (172,000 | )       |   |         | (309,000  | )         |   |  | 179.7    | %      
|Minority interests                                                                                 |                                                                           |              | 54,000    |                   |                     |   |         |         |   |         | 54,000    |           |   |  |         |        
|                                                                                                   |                                                                           |              |           |                   |                     |   |          |         |   |         |           |          
|Net loss                                                                                           |                                                                           | $            | (535,000  | )                 |                     | $ | (172,000 | )       |   | $       | (363,000  | )         |   |  | 211.0    | %      
|                                                                                                   |                                                                           |              |           |                   |                     |   |          |         |   |         |           |          









Liquidity and Capital Resources




| |           
| | ----------
| | Cash Flows



| |                                                                              
| | -----------------------------------------------------------------------------
| | Year Ended December 31, 2004 Compared to the Year Ended
    December 31, 2003



22



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| |                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------
| | Year Ended December 31, 2003 Compared to the Period From
    May 15, 2002 (Date of Inception) Through December 31,
    2002











| |                  
| | -----------------
| | Capital Resources





23



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Other Liquidity Needs








24



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|                  |  |                          |           |                |                     |                 |       |      |  |   |           |  |  |  |       |   |  |   |         |  |  |  |       |  
|----------------- |  | ------------------------ | --------- | -------------- | ------------------- | --------------- | ----- | ---- |  | - | --------- |  |  |  | ----- | - |  | - | ------- |  |  |  | ----- | -
|                  |  |                          |           | For the Period |                    
|                  |  | Years Ended December 31, |           |                | from May 15, 2002   |                
|                  |  |                          |           |                | (Date of Inception) |                
|                  |  |                          |           |                |                     | to December 31, |      
|                  |  | 2004                     |           |                | 2003                |                 |       | 2002 | 
|                  |  |                          |           |                |                     |                 |       |      | 
|Ordinary income   |  | $                        | 732,000   |                |                     |                 | 30.0  | %    |  | $ | 137,000   |  |  |  | 7.7   | % |  | $ | 132,000 |  |  |  | 100.0 | %
|Return of Capital |  | $                        | 1,705,000 |                |                     |                 | 70.0  | %    |  | $ | 1,646,000 |  |  |  | 92.3  | % |  |   |        |  |  |  |      |  
|                  |  |                          |           |                |                     |                 |       |      |  |   |           |  |  |  |       |   |  |  
|                  |  | $                        | 2,437,000 |                |                     |                 | 100.0 | %    |  | $ | 1,783,000 |  |  |  | 100.0 | % |  | $ | 132,000 |  |  |  | 100.0 | %
|                  |  |                          |           |                |                     |                 |       |      |  |   |           |  |  |  |       |   |  |  







| |                                
| | -------------------------------
| | Sale of Unregistered Securities





| |          
| | ---------
| | Financing





25



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|                |             |  |            |  |      |      |  |  |          |   |  |  |          | 
|--------------- | ----------- |  | ---------- |  | ---- | ---- |  |  | -------- | - |  |  | -------- | 
|Notional Amount |             |  | Instrument |  |      | Rate |  |  | Maturity |  
|                |             |  |            |  |      |      |  |  |          |  
|                | $31,500,000 |  |            |  | Swap |      |  |  | 2.3      | % |  |  | 06/06/06 | 



| |              
| | -------------
| | Notes Payable











| |                   
| | ------------------
| | 2004 Notes Program





| |                    
| | -------------------
| | Unconsolidated Debt





26



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| |          
| | ---------
| | Insurance



| |                                                                     
| | --------------------------------------------------------------------
| | Property Damage, Business Interruption, Earthquake and
    Terrorism



|                                          |  |                                                                                                                      
|----------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------
|Type of Insurance Coverage                |  | Loss Exposure/Deductible                                                                                             
|                                          |  |                                                                                                                      
|Property damage and business interruption |  | $200 million annual aggregate exposure, plus
    $10,000 per occurrence deductible                                   
|Earthquake                                |  | $90 million annual aggregate exposure plus 5 percent
    ($100,000 minimum) per occurrence deductible                
|Earthquake (California properties)        |  | $50 million in excess of $10 million                                                                                 
|Flood  named storm                       |  | $10 million annual aggregate exposure plus 5 percent
    ($100,000 minimum) per occurrence deductible                
|Flood  all other                         |  | $10 million annual aggregate exposure plus 5 percent
    ($25,000 minimum/$100,000 maximum) per occurrence deductible
|Liability                                 |  | $2 million annual aggregate exposure plus $1 million
    each occurrence                                             
|Umbrella (excess liability)               |  | $100 million aggregate exposure                                                                                      
|Acts of terrorism                         |  | $100 million annual aggregate exposure, plus
    $10,000 per occurrence deductible                                   



| |                          
| | -------------------------
| | Debt Service Requirements



27



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|      |  |        |            | 
|----- |  | ------ | ---------- | 
|Year  |  | Amount |           
|      |  |        |           
|2005  |  | $      | 9,124,000  | 
|2006  |  |        | 33,047,000 | 
|2007  |  |        |           | 
|2008  |  |        |           | 
|2009  |  |        |           | 
|      |  |        |           
|Total |  | $      | 42,171,000 | 
|      |  |        |           



| |                        
| | -----------------------
| | Contractual Obligations



|                                                                                 |  |                        |            |  |             |   |            |             |  |              |   |       |  |   |   |  |  |   |            | 
|-------------------------------------------------------------------------------- |  | ---------------------- | ---------- |  | ----------- | - | ---------- | ----------- |  | ------------ | - | ----- |  | - | - |  |  | - | ---------- | 
|                                                                                 |  | Payments Due by Period |           
|                                                                                 |  |                        |           
|                                                                                 |  | Less Than              |            |  |             |   | More Than  |             | 
|                                                                                 |  | 1 Year                 |            |  | 1-3 Years   |   |            | 4-5 Years   |  | 5 Years      |   |      
|                                                                                 |  | (2005)                 |            |  | (2006-2008) |   |            | (2009-2010) |  | (After 2010) |   | Total | 
|                                                                                 |  |                        |            |  |             |   |            |             |  |              |   |       | 
|Principal payments  fixed rate debt                                             |  | $                      | 9,124,000  |  |             | $ |           |             |  | $            |  |       |  | $ |  |  |  | $ | 9,124,000  | 
|Interest payments  fixed rate debt                                              |  |                        | 391,000    |  |             |   |           |             |  |              |  |       |  |   |  |  |  |   | 391,000    | 
|Principal payments  variable rate debt                                          |  |                        |           |  |             |   | 33,047,000 |             |  |              |  |       |  |   |  |  |  |   | 33,047,000 | 
|Interest payments  variable rate debt (rate in effect
    at December 31, 2004) |  |                        | 1,769,000  |  |             |   | 737,000    |             |  |              |  |       |  |   |  |  |  |   | 2,506,000  | 
|                                                                                 |  |                        |            |  |             |   |            |             |  |              |   |       |  |   |  
|Total                                                                            |  | $                      | 11,284,000 |  |             | $ | 33,784,000 |             |  | $            |  |       |  | $ |  |  |  | $ | 45,068,000 | 
|                                                                                 |  |                        |            |  |             |   |            |             |  |              |   |       |  |   |  



| |                               
| | ------------------------------
| | Off-Balance Sheet Arrangements





| |                  
| | -----------------
| | SEC Investigation

In the matter of Triple Net Properties, LLC.


28



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Inflation




Subsequent Events






New Accounting Pronouncements






29



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Consolidation of Variable Interest Entities, Consolidated Financial Statements


Risk Factors




| |                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As a result of our failure to timely file our Form 10
    and other reports and documents required by the Exchange Act, we
    may be subject to SEC enforcement action or other legal
    action.





| |                                                                                                       
| | ------------------------------------------------------------------------------------------------------
| | The pending SEC investigation of our Manager could result
    in lawsuits or other actions against us.

In the matter of Triple Net Properties, LLC.




| |                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Erroneous disclosures in the prior performance tables in
    our public offerings could result in lawsuits or other actions
    against us which could have a material adverse effect upon our
    business and results of operations.



30



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| |                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | We expect to incur significant costs in connection with
    Exchange Act compliance and we may become subject to liability
    for any failure to comply.





| |                                                                                        
| | ---------------------------------------------------------------------------------------
| | Distributions by us have included and will continue to
    include a return of capital.





| |                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Due to the risks involved in the ownership of real estate,
    there is no guarantee of any return on your investment and you
    may lose some or all of your investment.





| |   |                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------
| |  | changes in the general economic climate:                                                                        
|
| |  | changes in local conditions such as an oversupply of space or
    reduction in demand for real estate;          
|
| |  | changes in interest rates and the availability of financing; and                                                
|
| |  | changes in laws and governmental regulations, including those
    governing real estate usage, zoning and taxes.





| |                                             
| | --------------------------------------------
| | Our properties face significant competition.



31



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| |                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We depend upon our tenants to pay rent, and their
    inability to pay rent may substantially reduce our revenues and
    cash available for distribution to our members.





| |   |                                                                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | downturns in national, regional or local economic conditions
    where our properties are located, which generally will
    negatively impact the demand for office space and rental rates;                                                                                                                            
|
| |  | changes in local market conditions such as an oversupply of
    office properties, including space available by sublease, or a
    reduction in demand for office properties, making it more
    difficult for us to lease space at attractive rental rates or at
    all;                                             
|
| |  | competition from other available office properties, which could
    cause our to lose current or prospective tenants or cause us to
    reduce rental rates;                                                                                                                                                           
|
| |  | the ability to pay for adequate maintenance, insurance, utility,
    security and other operating costs, including real estate taxes
    and debt service payments, that are not necessarily reduced when
    circumstances such as market factors and competition cause a
    reduction in income from a property; and
|
| |  | changes in federal, state or local regulations and controls
    affecting rents, prices of goods, interest rates, fuel and
    energy consumption.                                                                                                                                                                     





| |                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Lack of diversification and illiquidity of real estate may
    make it difficult for us to sell underperforming properties or
    recover our investment in one or more properties.





| |                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Lack of geographic diversity may expose us to regional
    economic downturns that could adversely impact our operations or
    our ability to recover our investment in one or more of our
    properties.



32



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| |                                                                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Due to the limited number of properties in our portfolio,
    we are dependent upon those tenants that generate significant
    rental income, which may have a negative impact on our financial
    condition if these tenants are unable to meet their rental
    obligations.





| |                                                                                                                                                                                                                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our use of borrowings to partially fund acquisitions and
    improvements on properties could result in foreclosures and
    unexpected debt service expenses upon refinancing, both of which
    could have an adverse impact on our operations and cash flow,
    and restrictive covenants in our loan documents may restrict our
    operating or acquisition activities.









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| |                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The pending SEC investigation of our Manager could result
    in defaults or alleged defaults under our loan documents or
    limit our ability to obtain debt financing in the future.





| |                                                                                                         
| | --------------------------------------------------------------------------------------------------------
| | Losses for which we either could not or did not obtain
    insurance will adversely affect our earnings.





| |                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our co-ownership arrangements with affiliated entities may
    not reflect solely our members best interests and may
    subject these investments to increased risks.





| |   |                                                                                                                                                                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the risk that the co-owner(s) in the investment might become
    bankrupt;                                                                                                                                                                                                                                   
|
| |  | the risk that the co-owner(s) may at any time have economic or
    business interests or goals which are inconsistent with our
    business interests or goals;                                                                                                                                              
|
| |  | the risk that the co-owner(s) may be unable to make required
    payments on loans under which we are jointly and severally
    liable;                                                                                                                                                                      
|
| |  | the risk that the other co-owners may breach the terms of a loan
    secured by a co-owned property, thereby triggering an event of
    default that affords the lender the right to exercise all of its
    remedies under the loan documents, including possible
    foreclosure of the entire property; or
|
| |  | the risk that the co-owner(s) may be in a position to take
    action contrary to our instructions or requests or contrary to
    our policies or objectives, such as selling a property at a time
    when it would have adverse consequences to us.                                                        



Conflicts of Interest




| |                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------
| | The conflicts of interest described below may mean we will
    not be managed solely in the best interests of our Unit
    holders.



34



---



##### Table of Contents









| |   |                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | limit the time and services that our Manager devotes to us,
    because it will be providing similar services to G REIT,
    T REIT, 2003 Value Fund and other real estate programs and
    properties;
|
| |  | impair our ability to compete for tenants in geographic areas
    where other properties are advised by our Manager and its
    affiliates; and                                                        
|
| |  | impair our ability to compete for the acquisition of properties
    with other real estate entities that are also advised by our
    Manager and its affiliates.                                       





| |                                                                                                        
| | -------------------------------------------------------------------------------------------------------
| | Our success is dependent on the performance of our Manager
    as well as key employees of our Manager.





| |                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The absence of arms length bargaining may mean that
    our agreements are not as favorable to Unit holders as these
    agreements otherwise would have been.





| |                                                                                    
| | -----------------------------------------------------------------------------------
| | Since our cash flow is not assured, we may not pay
    distributions in the future.





| |                                                                   
| | ------------------------------------------------------------------
| | Our past performance is not a predictor of our future
    results.



35



---



##### Table of Contents





| |                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | There is currently no public market for our Units.
    Therefore, it will likely be difficult for you to sell your
    Units and, if you are able to sell your Units, you will likely
    do so at a substantial discount from the price you paid.





| |                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We do not expect to register as an investment company
    under the Investment Company Act of 1940 and therefore we will
    not be subject to the requirements imposed on an investment
    company by such Act.





| |   |                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------
| |  | limitations on the capital structure of the entity;                                                                                              
|
| |  | restrictions on certain investments;                                                                                                             
|
| |  | prohibitions on transactions with affiliated entities; and                                                                                       
|
| |  | public reporting disclosures, record keeping, voting procedures,
    proxy disclosure and similar corporate governance rules and
    regulations.









| |                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If we are required to register as an investment company
    under the Investment Company Act of 1940, the additional
    expenses and operational limitations associated with such
    registration may reduce your investment return.







36



---



##### Table of Contents






Item 7A.     Quantitative
and Qualitative Disclosures About Market Risk






|                                           |  |      |           |   |      |   |            |      |  |      |   |      |  |            |   |       |  |   |            |  |  |   |   |  |  |   |            |   |  |   |            | 
|------------------------------------------ |  | ---- | --------- | - | ---- | - | ---------- | ---- |  | ---- | - | ---- |  | ---------- | - | ----- |  | - | ---------- |  |  | - | - |  |  | - | ---------- | - |  | - | ---------- | 
|                                           |  | 2005 |           |   | 2006 |   |            | 2007 |  | 2008 |   | 2009 |  | Thereafter |   | Total |  |   | Fair Value | 
|                                           |  |      |           |   |      |   |            |      |  |      |   |      |  |            |   |       |  |   |            | 
|Fixed rate debt  principal payments       |  | $    | 9,124,000 |   |      | $ |           |      |  | $    |  |      |  | $          |  |       |  | $ |           |  |  | $ |  |  |  | $ | 9,124,000  |   |  | $ | 9,345,000  | 
|Average interest rate on
    maturing debt |  |      | 8.63      | % |      |   |           |      |  |      |  |      |  |            |  |       |  |   |           |  |  |   |  |  |  |   | 8.63       | % |  |   |            | 
|Variable rate debt  principal payments    |  | $    |          |   |      | $ | 33,047,000 |      |  | $    |  |      |  | $          |  |       |  | $ |           |  |  | $ |  |  |  | $ | 33,047,000 |   |  | $ | 34,551,000 | 
|Average interest rate on
    maturing debt |  |      |          |   |      |   | 5.35       | %    |  |      |  |      |  |            |  |       |  |   |           |  |  |   |  |  |  |   | 5.35       | % |  |   |            | 









|                                           |  |      |         |   |      |   |           |      |  |   |            |   |      |   |            |  |       |   |   |            |  |   |   |  |  |   |            |   |  |   |            | 
|------------------------------------------ |  | ---- | ------- | - | ---- | - | --------- | ---- |  | - | ---------- | - | ---- | - | ---------- |  | ----- | - | - | ---------- |  | - | - |  |  | - | ---------- | - |  | - | ---------- | 
|                                           |  | 2004 |         |   | 2005 |   |           | 2006 |  |   | 2007       |   | 2008 |   | Thereafter |  | Total |   |   | Fair Value | 
|                                           |  |      |         |   |      |   |           |      |  |   |            |   |      |   |            |  |       |   |   |            | 
|Fixed rate debt                            |  | $    | 269,000 |   |      | $ | 9,124,000 |      |  | $ |           |   |      | $ |           |  |       | $ |  |            |  | $ |  |  |  | $ | 9,393,000  |   |  | $ | 10,087,000 | 
|Average interest rate on
    maturing debt |  |      | 8.63    | % |      |   | 8.63      | %    |  |   |           |   |      |   |           |  |       |   |  |            |  |   |  |  |  |   | 8.63       | % |  |   |            | 
|Variable rate debt                         |  | $    |        |   |      | $ |          |      |  | $ | 31,642,000 |   |      | $ |           |  |       | $ |  |            |  | $ |  |  |  | $ | 31,642,000 |   |  | $ | 32,267,000 | 
|Average interest rate on
    maturing debt |  |      |        |   |      |   |          |      |  |   | 4.05       | % |      |   |           |  |       |   |  |            |  |   |  |  |  |   | 4.05       | % |  |   |            | 







37



---



##### Table of Contents






Item 8.     Financial
Statements and Supplementary Data







Item 9.     Changes in and
Disagreements with Accountants on Accounting and Financial
Disclosure







Item 9A.     Controls and
Procedures












38



---



##### Table of Contents
















Item 9B.Other
Information









|         |                                                  
|-------- | -------------------------------------------------
|Item 10. | Managers and Executive Officers of the Registrant



39



---



##### Table of Contents





|                       |  |     |    |  |          |                                                                                           |                |  |            | 
|---------------------- |  | --- | -- |  | -------- | ----------------------------------------------------------------------------------------- | -------------- |  | ---------- | 
|Name                   |  | Age |    |  | Position |                                                                                           | Term of Office | 
|                       |  |     |    |  |          |                                                                                           |                | 
|Anthony W. Thompson    |  |     | 58 |  |          | Chief Executive Officer and Chairman of the Board of Managers                             |                |  | Since 1998 | 
|Louis J. Rogers        |  |     | 48 |  |          | President and Member of the Board of Managers                                             |                |  | Since 2004 | 
|Talle A. Voorhies      |  |     | 57 |  |          | Chief Operating Officer, Secretary and Member of the Board of
    Managers                |                |  | Since 1998 | 
|Jack R. Maurer         |  |     | 61 |  |          | Executive Vice President and Member of the Board of Managers                              |                |  | Since 1998 | 
|Daniel R. Baker        |  |     | 53 |  |          | Member of the Board of Managers                                                           |                |  | Since 1998 | 
|Scott D. Peters        |  |     | 47 |  |          | Chief Financial Officer, Executive Vice President and Member of
    the Board of Managers |                |  | Since 2004 | 
|Andrea R. Biller       |  |     | 54 |  |          | General Counsel                                                                           |                |  | Since 2003 | 
|Kelly J. Caskey        |  |     | 37 |  |          | Chief Accounting Officer  REITs                                                          |                |  | Since 2004 | 
|Shannon Alter          |  |     | 51 |  |          | Senior Vice President  Director of Operations                                            |                |  | Since 2002 | 
|Richard T. Hutton, Jr. |  |     | 52 |  |          | Executive Vice President and Chief Investment Officer                                     |                |  | Since 1999 | 

Anthony W. Tony Thompson


Louis J. Rogers


Talle A. Voorhies


40



---



##### Table of Contents



Jack R. Maurer


Daniel R. Dan Baker cum laude


Scott D. Peters


Andrea R. Biller


Kelly J. Caskey


Shannon Alter


41



---



##### Table of Contents





Richard T. Hutton Jr.


Fiduciary Relationship of Our Manager and Us








Audit Committee




Compensation of the Manager




Code of Ethics




42



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##### Table of Contents








|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation








|         |                                                                                                       
|-------- | ------------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management and Related Security Holder Matters

Units.




| |   |                                                                                              
| | - | ---------------------------------------------------------------------------------------------
| |  | each person who is known to us to hold more than a 5% interest
    in us;                    
|
| |  | the chief executive officer of our Manager(1)(2);                                            
|
| |  | the members of the Board of Managers(1); and                                                 
|
| |  | the members of the Board of Managers and our Managers
    executive officers (1) as a group.

|                                                             |                           |              |      |               |       |  |   |   |  
|------------------------------------------------------------ | ------------------------- | ------------ | ---- | ------------- | ----- |  | - | - | -
|                                                             |                           |              |      | Percentage of |      
|                                                             |                           |              |      | Outstanding   |      
|Name                                                         |                           | No. of Units |      |               | Units | 
|                                                             |                           |              |      |               |       | 
|Triple Net Properties, LLC(2)                                |                           |              | None |               |       |  | 0 | %
|Anthony W. Thompson(2)                                       |                           |              | None |               |       |  | 0 | %
|Members of the Board of Managers as a group(1)(2)            |                           |              | None |               |       |  | 0 | %
|Members of the Board of Managers and our Managers executive |                           |              |      |               |       |  |   |  
|                                                             | officers as a group(1)(2) |              |      | None          |       |  |   | 0 | %






|    |                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------
|(1) | We have no directors or executive officers.                                                            
|   
|(2) | The address for all persons named is 1551 N. Tustin
    Avenue, Suite 200, Santa Ana, California 92705.



Equity Compensation Plan Information









|         |                                               
|-------- | ----------------------------------------------
|Item 13. | Certain Relationships and Related Transactions

The Operating Agreement




|                                                      |  |              |   |  |              |   |           | 
|----------------------------------------------------- |  | ------------ | - |  | ------------ | - | --------- | 
|                                                      |  | Year Ended   |   |  | Year Ended   |  
|                                                      |  | December 31, |   |  | December 31, |  
|Managers Compensation from Us for:                   |  | 2004         |   |  | 2003         |  
|                                                      |  |              |   |  |              |  
|Acquisition Fees(1)                                   |  |              |  |  |              | $ | 1,192,000 | 
|Organizational & Marketing Costs(2)                   |  |              |  |  |              | $ | 132,000   | 
|Expenses, Costs or Fees(3)                            |  |              |  |  |              |   |          | 
|Operating Expenses(4)                                 |  |              |  |  |              |   |          | 
|Distributions  Cash from Operations(5)               |  |              |  |  |              |   |          | 
|Distributions  Cash from Capital
    Transactions(6) |  |              |  |  |              |   |          | 

43



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##### Table of Contents








|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Our Manager is entitled to receive from us 4% of the funds
    raised in our private placement of Units, for services rendered
    in connection with the due diligence investigation and
    acquisition of interests in real estate properties by us during
    the course of the investment and holding period.                                                                                                                                                                                                                                         
|   
|(2) | We have agreed to reimburse our Manager for organizational costs
    and marketing expenses incurred by our Manager in connection
    with over private placement of Units. We reimbursed our Manager
    for the amounts incurred listed in the table above. These
    reimbursed costs are not all of the costs of the offering, but
    rather the reimbursable costs incurred by our Manager.                                                                                                                                                          
|   
|(3) | We have agreed to reimburse our Manager and its affiliates
    certain expenses, costs and fees incurred by the Manager,
    including, without limitation, for the cash payments, certain
    closing costs, escrow deposits, loan commitment fees, project
    studies and travel expenses related to the analysis and
    acquisitions of our properties. Our Manager did not incur and,
    therefore, was not reimbursed for, any such expenses, costs or
    fees for the years ended December 31, 2004 and 2003.                                    
|   
|(4) | We have agreed to reimburse our Manager for reasonable and
    necessary expenses paid or incurred by our Manager in connection
    with our operation, including any legal and accounting costs and
    the costs incurred in connection with the acquisition of our
    properties, including travel, surveys, environmental and other
    studies and interest expense incurred on deposits or expenses.
    Our Manager did not incur and, therefore, was not reimbursed
    for, any such expenses for the years ended December 31,
    2004 and 2003.
|   
|(5) | Our Manager is entitled to receive from us distributions that
    relate to cash from operations. The Manager did not receive any
    such distributions for the years ended December 31, 2004
    and 2003.                                                                                                                                                                                                                                                                                                                                               
|   
|(6) | Our Manager is entitled to receive from us distributions that
    relate to cash from capital transactions. Our Manager did not
    receive any such distributions for the years ended
    December 31, 2004 and 2003.                                                                                                                                                                                                                                                                                                                                     

The Management Agreement






|                                   |  |              |         |  |              |   |         |                 |  |   |        | 
|---------------------------------- |  | ------------ | ------- |  | ------------ | - | ------- | --------------- |  | - | ------ | 
|                                   |  | Year Ended   |         |  | Year Ended   |   |         | May 15, 2002    | 
|                                   |  | December 31, |         |  | December 31, |   |         | to December 31, | 
|Realtys Compensation from Us for: |  | 2004         |         |  | 2003         |   |         | 2002            | 
|                                   |  |              |         |  |              |   |         |                 | 
|Management Fees(1)                 |  | $            | 840,000 |  |              | $ | 463,000 |                 |  | $ | 21,000 | 
|Lease Commissions(2)               |  | $            | 630,000 |  |              | $ | 141,000 |                 |  |   |       | 
|Project Fees(3)                    |  |              |        |  |              |   |        |                 |  |   |       | 
|Selling Commissions(4)             |  |              |        |  |              |   |        |                 |  |   |       | 
|Loan Fees(5)                       |  |              |        |  |              |   |        |                 |  | $ | 1,000  | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Realty is entitled to receive, for its services in managing our
    properties, a monthly management fee equal to 5% of the gross
    receipts revenue of the properties. 100% of all management fees
    are passed through to our Manager pursuant to the terms of the
    Realty-Triple Net Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(2) | Realty is entitled to receive, for its services in leasing our
    properties, a leasing commission equal to 6% of the value of any
    lease entered into during the term of the Management Agreement
    and 3% with respect to any renewal. The value of the lease will
    be calculated by totaling the minimum monthly rent for the term
    of the lease. The term of the lease will not exceed five years
    for purposes of the computation and will not include option
    periods. For the period from May 15, 2002 (date of
    inception) to December 31, 2002, there were no leases that
    expired, nor any new leases entered into, and, therefore, there
    were no leasing commissions paid to Realty. 100% of all leasing
    commissions

44



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##### Table of Contents



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | received by Realty are passed through to our Manager pursuant to
    the terms of the Realty-Triple Net Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|(3) | Realty is entitled to receive, for its services in supervising
    any construction or repair project at our properties, a
    construction management fee equal to 5% of any amount up to
    $25,000, 4% of any amount over $25,000 but less than $50,000,
    and 3% of any amount over $50,000 which is expended in any
    calendar year for construction or repair projects. Realty has
    not supervised any such construction or repair project. 100% of
    all construction fees received by Realty are passed through to
    our Manager pursuant to the terms of the Realty-Triple Net
    Agreement.
|   
|(4) | Realty is entitled to receive a selling commission up to 5% of
    the gross sales price of any of the properties if the terms of
    the sale are approved by us. No properties have been sold by us.
    75% of all selling commissions received by Realty are passed
    through to our Manager pursuant to the terms of the
    Realty-Triple Net Agreement.                                                                                                                                                                                                                                                  
|   
|(5) | Realty is entitled to receive a loan fee in the amount of 1% of
    the principal amount of all loans obtained by it for our
    properties during the term of the Property Management Agreement.
    100% of all loan fees received by Realty are passed through to
    our Manager pursuant to the terms of the Realty-Triple Net
    Agreement.                                                                                                                                                                                                                                                                

Selling Commissions




Cunningham Lending Group, LLC










45



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##### Table of Contents



NNN 2004 Notes Program, LLC




Managers Ownership Interest in the Company




Costs Incurred in Connection with Public Company Filings and
Rent






| |                                          
| | -----------------------------------------
| | Business relationships with legal counsel








|         |                                       
|-------- | --------------------------------------
|Item 14. | Principal Accountant Fees and Services





|                      |  |      |         |  |      |   |        | 
|--------------------- |  | ---- | ------- |  | ---- | - | ------ | 
|Services              |  | 2004 |         |  | 2003 |  
|                      |  |      |         |  |      |  
|Audit Fees(1)         |  | $    | 109,000 |  |      | $ | 72,000 | 
|Audit-Related Fees(2) |  |      |        |  |      |   |       | 
|Tax Fees(3)           |  |      | 83,000  |  |      |   |       | 
|All Other Fees(4)     |  |      | 9,000   |  |      |   |       | 
|                      |  |      |         |  |      |  
|Total                 |  | $    | 201,000 |  |      | $ | 72,000 | 
|                      |  |      |         |  |      |  

46



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##### Table of Contents








|    |                                                                                                                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Audit fees billed in 2004 and 2003 consisted of the audit of our
    annual financial statements, acquisition audits, reviews of our
    quarterly financial statements, and statutory and regulatory
    audits, consents and other services related to filings with the
    SEC. These costs were borne by our Manager.
|   
|(2) | There were no audit-related fees billed in 2004 and 2003.                                                                                                                                                                                                                                                                
|   
|(3) | Tax services billed in 2004 and 2003 consisted of tax compliance
    and tax planning and advice.                                                                                                                                                                                                                        
|   
|(4) | There were no fees billed for other services in 2003.                                                                                                                                                                                                                                                                    







| |   |                                                                         
| | - | ------------------------------------------------------------------------
| |  | consultations related to SEC filings and registration statements;       
|
| |  | consultation of accounting matters; and                                 
|
| |  | tax planning and tax compliance for the U.S. income and
    other taxes.



47



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##### Table of Contents






PART IV







|         |                                           
|-------- | ------------------------------------------
|Item 15. | Exhibits and Financial Statement Schedules



| |     |                      
| | --- | ---------------------
| | (1) | Financial Statements.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


|                                                       |                                                             |      |  |      | 
|------------------------------------------------------ | ----------------------------------------------------------- | ---- |  | ---- | 
|                                                       |                                                             | Page | 
|                                                       |                                                             |      | 
|NNN 2002 Value Fund, LLC and Subsidiaries:             |                                                             |      |  |     
|                                                       | Report of Independent Registered Public
    Accounting Firm |      |  | F-2  | 
|                                                       | Consolidated Balance Sheets                                 |      |  | F-3  | 
|                                                       | Consolidated Statements of Operations                       |      |  | F-4  | 
|                                                       | Consolidated Statements of Members
    Equity              |      |  | F-5  | 
|                                                       | Consolidated Statements of Cash Flows                       |      |  | F-6  | 
|                                                       | Notes to Consolidated Financial
    Statements              |      |  | F-8  | 
|NNN Congress Center, LLC and Congress Center Property: |                                                             |      |  |     
|                                                       | Report of Independent Registered Public Accounting Firm     |      |  | F-29 | 
|                                                       | Combined Balance Sheets                                     |      |  | F-30 | 
|                                                       | Combined Statements of Operations                           |      |  | F-31 | 
|                                                       | Combined Statements of Owners Equity                       |      |  | F-32 | 
|                                                       | Combined Statements of Cash Flows                           |      |  | F-33 | 
|                                                       | Notes to Combined Financial Statements                      |      |  | F-35 | 



| |     |                               
| | --- | ------------------------------
| | (2) | Financial Statement Schedules.



|                                           |                                                             |      |  |      | 
|------------------------------------------ | ----------------------------------------------------------- | ---- |  | ---- | 
|                                           |                                                             | Page | 
|                                           |                                                             |      | 
|NNN 2002 Value Fund, LLC and Subsidiaries: |                                                             |      |  |     
|                                           | Valuation and Qualifying Accounts
    (Schedule II)         |      |  | F-46 | 
|                                           | Real Estate and Accumulated Depreciation
    (Schedule III) |      |  | F-47 | 





| |     |          
| | --- | ---------
| | (3) | Exhibits.



F-1



---



##### Table of Contents






REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
















| |                               
| | ------------------------------
| | /s/ Deloitte &
    Touche, LLP





F-2



---



##### Table of Contents



NNN 2002 VALUE FUND, LLC





CONSOLIDATED BALANCE SHEETS


December 31, 2004 and 2003


|                                                                                                                                                  |                                                       |              |            |            |      |   |            |            | 
|------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------- | ------------ | ---------- | ---------- | ---- | - | ---------- | ---------- | 
|                                                                                                                                                  |                                                       | December 31, |           
|                                                                                                                                                  |                                                       |              |           
|                                                                                                                                                  |                                                       | 2004         |            |            | 2003 |  
|                                                                                                                                                  |                                                       |              |            |            |      |  
|ASSETS                                                                                                                                           
|Real estate investments:                                                                                                                          |                                                       |              |            |            |      |   |            |           
|                                                                                                                                                  | Operating properties, net of accumulated depreciation |              | $          | 42,762,000 |      |   | $          | 42,361,000 | 
|                                                                                                                                                  | Property held for sale                                |              |            | 13,620,000 |      |   |            | 14,055,000 | 
|                                                                                                                                                  | Investments in unconsolidated real estate             |              |            | 4,954,000  |      |   |            | 5,844,000  | 
|                                                                                                                                                  |                                                       |              |            |            |      |  
|                                                                                                                                                  |                                                       |              | 61,336,000 |            |      |   | 62,260,000 |           
|Cash and cash equivalents                                                                                                                         |                                                       |              | 1,067,000  |            |      |   | 1,579,000  |           
|Accounts receivable, net of allowance for doubtful accounts                                                                                       |                                                       |              | 35,000     |            |      |   | 40,000     |           
|Accounts receivable from related parties                                                                                                          |                                                       |              | 30,000     |            |      |   |           |           
|Restricted cash                                                                                                                                   |                                                       |              | 248,000    |            |      |   | 246,000    |           
|Identified intangible assets, net                                                                                                                 |                                                       |              | 6,003,000  |            |      |   | 7,743,000  |           
|Other assets  discontinued operations                                                                                                            |                                                       |              | 2,218,000  |            |      |   | 2,394,000  |           
|Other assets, net                                                                                                                                 |                                                       |              | 2,299,000  |            |      |   | 966,000    |           
|                                                                                                                                                  |                                                       |              |            |            |      |  
|Total assets                                                                                                                                      |                                                       | $            | 73,236,000 |            |      | $ | 75,228,000 |           
|                                                                                                                                                  |                                                       |              |            |            |      |  
|                                                                                                                                                 
|LIABILITIES, MINORITY INTERESTS AND MEMBERS EQUITY                                                                                              
|Liabilities:                                                                                                                                      |                                                       |              |            |            |      |   |            |           
|Mortgage loans payable                                                                                                                            |                                                       | $            | 33,047,000 |            |      | $ | 31,642,000 |           
|Mortgage loans payable secured by property held for sale                                                                                          |                                                       |              | 9,124,000  |            |      |   | 9,394,000  |           
|Accounts payable and accrued liabilities                                                                                                          |                                                       |              | 776,000    |            |      |   | 1,050,000  |           
|Notes payable to related parties                                                                                                                  |                                                       |              | 482,000    |            |      |   |           |           
|Security deposits and prepaid rent                                                                                                                |                                                       |              | 670,000    |            |      |   | 454,000    |           
|Identified intangible liabilities net of accumulated
    amortization of $1,226,000 and $487,000 at December 31,
    2004 and, 2003, respectively |                                                       |              | 3,126,000  |            |      |   | 3,861,000  |           
|Distributions payable                                                                                                                             |                                                       |              | 212,000    |            |      |   | 199,000    |           
|                                                                                                                                                  |                                                       |              |            |            |      |  
|Total liabilities                                                                                                                                 |                                                       |              | 47,437,000 |            |      |   | 46,600,000 |           
|                                                                                                                                                  |                                                       |              |            |            |      |  
|Minority interests                                                                                                                                |                                                       |              | 6,468,000  |            |      |   | 6,663,000  |           
|                                                                                                                                                  |                                                       |              |            |            |      |  
|Commitments and contingencies (Note 9)                                                                                                            |                                                       |              |            |            |      |   |            |           
|Total members equity                                                                                                                             |                                                       |              | 19,331,000 |            |      |   | 21,965,000 |           
|                                                                                                                                                  |                                                       |              |            |            |      |  
|Total liabilities, minority interests and members equity                                                                                         |                                                       | $            | 73,236,000 |            |      | $ | 75,228,000 |           
|                                                                                                                                                  |                                                       |              |            |            |      |  



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##### Table of Contents



NNN 2002 VALUE FUND, LLC





CONSOLIDATED STATEMENTS OF OPERATIONS


For the Years Ended December 31, 2004, 2003 and the
Period From


May 15, 2002 (Date of Inception) to December 31,
2002


|                                                                                                   |                                                                           |                          |           |                   |                     |                |           |           |   |   |          |         |  
|-------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------- | ------------------------ | --------- | ----------------- | ------------------- | -------------- | --------- | --------- | - | - | -------- | ------- | -
|                                                                                                   |                                                                           |                          |           |                   |                     | For the Period |          
|                                                                                                   |                                                                           |                          |           | from May 15, 2002 |                    
|                                                                                                   |                                                                           | Years Ended December 31, |           |                   | (Date of Inception) |               
|                                                                                                   |                                                                           |                          |           |                   | to December 31,     |               
|                                                                                                   |                                                                           | 2004                     |           |                   | 2003                |                |           | 2002      |  
|                                                                                                   |                                                                           |                          |           |                   |                     |                |           |           |  
|Revenues:                                                                                          |                                                                           |                          |           |                   |                     |                |           |           |   |   |          |        
|                                                                                                   | Rental                                                                    |                          | $         | 10,008,000        |                     |                | $         | 4,904,000 |   |   | $        |        |  
|                                                                                                   |                                                                           |                          |           |                   |                     |                |           |           |  
|Expenses:                                                                                          |                                                                           |                          |           |                   |                     |                |           |           |   |   |          |        
|                                                                                                   | Rental                                                                    |                          |           | 3,885,000         |                     |                |           | 2,311,000 |   |   |          |        |  
|                                                                                                   | General and administrative                                                |                          |           | 380,000           |                     |                |           | 119,000   |   |   |          | 25,000  |  
|                                                                                                   | Depreciation and amortization                                             |                          |           | 3,630,000         |                     |                |           | 1,559,000 |   |   |          |        |  
|                                                                                                   |                                                                           |                          |           |                   |                     |                |           |           |  
|                                                                                                   |                                                                           |                          | 7,895,000 |                   |                     |                | 3,989,000 |           |   |   | 25,000   |        
|                                                                                                   |                                                                           |                          |           |                   |                     |                |           |           |  
|Income (loss) before other income, discontinued operations and
    minority interests              |                                                                           |                          | 2,113,000 |                   |                     |                | 915,000   |           |   |   | (25,000  | )      
|Other (expense) income:                                                                            |                                                                           |                          |           |                   |                     |                |           |           |   |   |          |        
|                                                                                                   | Interest expense (including amortization of deferred financing
    costs) |                          |           | (1,647,000        | )                   |                |           | (886,000  | ) |   |          | (40,000 | )
|                                                                                                   | Other income                                                              |                          |           | 55,000            |                     |                |           | 11,000    |   |   |          |        |  
|                                                                                                   | Interest income                                                           |                          |           |                  |                     |                |           | 46,000    |   |   |          | 2,000   |  
|Equity in earnings (loss) of unconsolidated real estate                                            |                                                                           |                          | (278,000  | )                 |                     |                | 84,000    |           |   |   |         |        
|                                                                                                   |                                                                           |                          |           |                   |                     |                |           |           |  
|Income (loss) from continuing operations before discontinued
    operations and minority interests |                                                                           |                          | 243,000   |                   |                     |                | 170,000   |           |   |   | (63,000  | )      
|Loss from discontinued operations                                                                  |                                                                           |                          | (115,000  | )                 |                     |                | (651,000  | )         |   |   | (109,000 | )      
|                                                                                                   |                                                                           |                          |           |                   |                     |                |           |           |  
|Net income (loss) before minority interests                                                        |                                                                           |                          | 128,000   |                   |                     |                | (481,000  | )         |   |   | (172,000 | )      
|Minority interests                                                                                 |                                                                           |                          | 312,000   |                   |                     |                | 54,000    |           |   |   |         |        
|                                                                                                   |                                                                           |                          |           |                   |                     |                |           |           |  
|Net loss                                                                                           |                                                                           | $                        | (184,000  | )                 |                     | $              | (535,000  | )         |   | $ | (172,000 | )      
|                                                                                                   |                                                                           |                          |           |                   |                     |                |           |           |  
|Net income (loss) per member unit:                                                                 |                                                                           |                          |           |                   |                     |                |           |           |   |   |          |        
|                                                                                                   | Continuing operations  basic and diluted                                 |                          | $         | (11.58            | )                   |                | $         | 23.88     |   |   | $        | (160.72 | )
|                                                                                                   | Discontinued operations  basic and diluted                               |                          | $         | (19.30            | )                   |                | $         | (134.03   | ) |   | $        | (278.06 | )
|                                                                                                   |                                                                           |                          |           |                   |                     |                |           |           |  
|Total net loss per member unit  basic and diluted                                                 |                                                                           | $                        | (30.88    | )                 |                     | $              | (110.15   | )         |   | $ | (438.78  | )      
|                                                                                                   |                                                                           |                          |           |                   |                     |                |           |           |  
|Weighted average number of member units outstanding 
    basic and diluted                        |                                                                           |                          | 5,960     |                   |                     |                | 4,857     |           |   |   | 392      |        
|                                                                                                   |                                                                           |                          |           |                   |                     |                |           |           |  



F-4



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##### Table of Contents



NNN 2002 VALUE FUND, LLC





CONSOLIDATED STATEMENTS OF MEMBERS EQUITY


For the Years Ended December 31, 2004, 2003 and the
Period From


May 15, 2002 (Date of Inception) to December 31,
2002


|                                             |  |       |            |  
|-------------------------------------------- |  | ----- | ---------- | -
|                                             |  | Total |           
|                                             |  |       |           
|BALANCE  May 15, 2002 (date of inception)   |  | $     |           |  
|Capital contributions, net of offering costs |  |       | 7,178,000  |  
|Distributions                                |  |       | (80,000    | )
|Net loss                                     |  |       | (172,000   | )
|                                             |  |       |           
|BALANCE  December 31, 2002                  |  |       | 6,926,000  |  
|Capital contributions, net of offering costs |  |       | 17,521,000 |  
|Distributions                                |  |       | (1,947,000 | )
|Net loss                                     |  |       | (535,000   | )
|                                             |  |       |           
|BALANCE  December 31, 2003                  |  |       | 21,965,000 |  
|Distributions                                |  |       | (2,450,000 | )
|Net loss                                     |  |       | (184,000   | )
|                                             |  |       |           
|BALANCE  December 31, 2004                  |  | $     | 19,331,000 |  
|                                             |  |       |           



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##### Table of Contents



NNN 2002 VALUE FUND, LLC





CONSOLIDATED STATEMENTS OF CASH FLOWS


For the Years Ended December 31, 2004, 2003 and the
Period From


May 15, 2002 (Date of Inception) to December 31,
2002


|                                                                                                                                                                         |                                                          |                                                     |           |                   |                     |                |            |             |             |   |           |            |            |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------- | --------------------------------------------------- | --------- | ----------------- | ------------------- | -------------- | ---------- | ----------- | ----------- | - | --------- | ---------- | ---------- | -
|                                                                                                                                                                         |                                                          |                                                     |           |                   |                     | For the Period |           
|                                                                                                                                                                         |                                                          |                                                     |           | from May 15, 2002 |                    
|                                                                                                                                                                         |                                                          | Years Ended December 31,                            |           |                   | (Date of Inception) |               
|                                                                                                                                                                         |                                                          |                                                     |           |                   | to December 31,     |               
|                                                                                                                                                                         |                                                          | 2004                                                |           |                   | 2003                |                |            | 2002        |            
|                                                                                                                                                                         |                                                          |                                                     |           |                   |                     |                |            |             |            
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                                                                                                    |                                                          |                                                     |           |                   |                     |                |            |             |             |   |           |           
|Net loss                                                                                                                                                                 |                                                          | $                                                   | (184,000  | )                 |                     | $              | (535,000   | )           |             | $ | (172,000  | )         
|Adjustments to reconcile net loss to net cash provided by
    operating activities:                                                                                      |                                                          |                                                     |           |                   |                     |                |            |             |             |   |           |           
|Depreciation and amortization including amortization of deferred
    financing costs and amortization of below market
    leases  continued and discontinued operations |                                                          |                                                     | 3,974,000 |                   |                     |                | 1,978,000  |             |             |   | 199,000   |           
|Distributions received in excess of equity in earnings of
    unconsolidated properties                                                                                  |                                                          |                                                     | 890,000   |                   |                     |                | 967,000    |             |             |   |          |           
|Minority interests                                                                                                                                                       |                                                          |                                                     | 312,000   |                   |                     |                | 54,000     |             |             |   |          |           
|Change in operating assets and liabilities:                                                                                                                              |                                                          |                                                     |           |                   |                     |                |            |             |             |   |           |           
|                                                                                                                                                                         | Accounts receivable                                      |                                                     |           | (29,000           | )                   |                |            | (224,000    | )           |   |           |           |           
|                                                                                                                                                                         | Other assets                                             |                                                     |           | (1,921,000        | )                   |                |            | (296,000    | )           |   |           |           |           
|                                                                                                                                                                         | Accounts payable and accrued liabilities                 |                                                     |           | (274,000          | )                   |                |            | (180,000    | )           |   |           | 593,000    |           
|                                                                                                                                                                         | Security deposits and prepaid rent                       |                                                     |           | 216,000           |                     |                |            | 376,000     |             |   |           | 78,000     |           
|                                                                                                                                                                         |                                                          |                                                     |           |                   |                     |                |            |             |            
|                                                                                                                                                                         |                                                          | Net cash provided by operating activities           |           |                   | 2,984,000           |                |            |             | 2,140,000   |   |           |            | 698,000    |  
|                                                                                                                                                                         |                                                          |                                                     |           |                   |                     |                |            |             |            
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                                                                                                    |                                                          |                                                     |           |                   |                     |                |            |             |             |   |           |           
|                                                                                                                                                                         | Purchase of real estate operating properties             |                                                     |           |                  |                     |                |            | (40,205,000 | )           |   |           | (7,856,000 | )         
|                                                                                                                                                                         | Acquisition of investments in unconsolidated real estate |                                                     |           |                  |                     |                |            | (6,707,000  | )           |   |           |           |           
|                                                                                                                                                                         | Capital expenditures                                     |                                                     |           | (2,168,000        | )                   |                |            | (159,000    | )           |   |           |           |           
|                                                                                                                                                                         | Restricted cash                                          |                                                     |           | (2,000            | )                   |                |            | 11,000      |             |   |           |           |           
|                                                                                                                                                                         | Real estate deposits                                     |                                                     |           |                  |                     |                |            |            |             |   |           | (103,000   | )         
|                                                                                                                                                                         |                                                          |                                                     |           |                   |                     |                |            |             |            
|                                                                                                                                                                         |                                                          | Net cash used in investing activities               |           |                   | (2,170,000          | )              |            |             | (47,060,000 | ) |           |            | (7,959,000 | )
|                                                                                                                                                                         |                                                          |                                                     |           |                   |                     |                |            |             |            
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                                                                                                    |                                                          |                                                     |           |                   |                     |                |            |             |             |   |           |           
|                                                                                                                                                                         | Principal repayments on mortgages payable                |                                                     |           | (269,000          | )                   |                |            | (4,605,000  | )           |   |           | (59,000    | )         
|                                                                                                                                                                         | Borrowings on mortgages payable                          |                                                     |           | 1,405,000         |                     |                |            | 31,500,000  |             |   |           | 4,500,000  |           
|                                                                                                                                                                         | Borrowings from related party                            |                                                     |           | 482,000           |                     |                |            |            |             |   |           |           |           
|                                                                                                                                                                         | Distributions                                            |                                                     |           | (2,437,000        | )                   |                |            | (1,793,000  | )           |   |           | (35,000    | )         
|                                                                                                                                                                         | Distributions to minority interests                      |                                                     |           | (957,000          | )                   |                |            | (447,000    | )           |   |           |           |           
|                                                                                                                                                                         | Contributions from minority interests                    |                                                     |           | 450,000           |                     |                |            |            |             |   |           |           |           
|                                                                                                                                                                         | Issuance of members units, net of offering costs        |                                                     |           |                  |                     |                |            | 17,521,000  |             |   |           | 7,178,000  |           
|                                                                                                                                                                         |                                                          |                                                     |           |                   |                     |                |            |             |            
|                                                                                                                                                                         |                                                          | Net cash provided by (used in) financing activities |           |                   | (1,326,000          | )              |            |             | 42,176,000  |   |           |            | 11,584,000 |  
|                                                                                                                                                                         |                                                          |                                                     |           |                   |                     |                |            |             |            
|NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                                                                                                     |                                                          |                                                     | (512,000  | )                 |                     |                | (2,744,000 | )           |             |   | 4,323,000 |           
|CASH AND CASH EQUIVALENTS  beginning of period                                                                                                                          |                                                          |                                                     | 1,579,000 |                   |                     |                | 4,323,000  |             |             |   |          |           
|                                                                                                                                                                         |                                                          |                                                     |           |                   |                     |                |            |             |            
|CASH AND CASH EQUIVALENTS  end of period                                                                                                                                |                                                          | $                                                   | 1,067,000 |                   |                     | $              | 1,579,000  |             |             | $ | 4,323,000 |           
|                                                                                                                                                                         |                                                          |                                                     |           |                   |                     |                |            |             |            



F-6



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##### Table of Contents



NNN 2002 VALUE FUND, LLC


CONSOLIDATED STATEMENTS OF CASH FLOWS 
SUPPLEMENTAL INFORMATION


For the Years Ended December 31, 2004, 2003 and the
Period From


May 15, 2002 (Date of Inception) to December 31,
2002


|                                                  |                                                                               |                          |           |                   |                     |                |           |            |  |   |         |            | 
|------------------------------------------------- | ----------------------------------------------------------------------------- | ------------------------ | --------- | ----------------- | ------------------- | -------------- | --------- | ---------- |  | - | ------- | ---------- | 
|                                                  |                                                                               |                          |           |                   |                     | For the Period |          
|                                                  |                                                                               |                          |           | from May 15, 2002 |                    
|                                                  |                                                                               | Years Ended December 31, |           |                   | (Date of Inception) |               
|                                                  |                                                                               |                          |           |                   | to December 31,     |               
|                                                  |                                                                               | 2004                     |           |                   | 2003                |                |           | 2002       | 
|                                                  |                                                                               |                          |           |                   |                     |                |           |            | 
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |                                                                               |                          |           |                   |                     |                |           |            |  |   |         |           
|Cash paid during the period for: interest         |                                                                               | $                        | 2,454,000 |                   |                     | $              | 2,236,000 |            |  | $ | 317,000 |           
|                                                  |                                                                               |                          |           |                   |                     |                |           |            | 
|NONCASH INVESTING ACTIVITIES:                     |                                                                               |                          |           |                   |                     |                |           |            |  |   |         |           
|                                                  | Increase in intangible assets less intangible liabilities of
    acquisitions |                          | $         |                  |                     |                | $         | 9,320,000  |  |   | $       | 3,035,000  | 
|                                                  |                                                                               |                          |           |                   |                     |                |           |            | 
|                                                  | Increase in investment in operating properties                                |                          | $         |                  |                     |                | $         | 11,543,000 |  |   | $       | 10,021,000 | 
|                                                  |                                                                               |                          |           |                   |                     |                |           |            | 
|                                                  | Mortgage loan upon acquisition of property                                    |                          | $         |                  |                     |                | $         |           |  |   | $       | 4,500,000  | 
|                                                  |                                                                               |                          |           |                   |                     |                |           |            | 
|                                                  | Minority interests of acquired property                                       |                          | $         |                  |                     |                | $         | 7,056,000  |  |   | $       |           | 
|                                                  |                                                                               |                          |           |                   |                     |                |           |            | 

F-7



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##### Table of Contents



NNN 2002 VALUE FUND, LLC


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


For the Years Ended December 31, 2004, 2003 and the
Period From


May 15, 2002 (Date of Inception) to December 31,
2002


1.     Organization










| |                    
| | -------------------
| | Plan of Liquidation



2.     Summary of Significant
Accounting Policies






| |                      
| | ---------------------
| | Basis of Presentation



F-8



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##### Table of Contents



NNN 2002 VALUE FUND, LLC


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Accounting for the
Impairment or Disposal of Long Lived Assets






| |                          
| | -------------------------
| | Cash and Cash Equivalents





| |                
| | ---------------
| | Restricted Cash





| |                                     
| | ------------------------------------
| | Allowance for Uncollectible Accounts





| |                          
| | -------------------------
| | Purchase Price Allocation

Business Combinations


F-9



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##### Table of Contents



NNN 2002 VALUE FUND, LLC


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










| |                     
| | --------------------
| | Operating Properties







| |                       
| | ----------------------
| | Property Held for Sale

Accounting for Impairment
or Disposal of Long-Lived Assets




| |   |                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | management, having the authority to approve the action, commits
    to a plan to sell the asset;                                                       
|
| |  | the asset is available for immediate sale in its present
    condition subject only to terms that are usual and customary for
    sales of such assets;
|
| |  | an active program to locate a buyer and other actions required
    to complete the plan to sell the asset have been initiated;                         
|
| |  | the sale of the asset is probable and the transfer of the asset
    is expected to qualify for recognition as a completed sale
    within one year;    

F-10



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##### Table of Contents



NNN 2002 VALUE FUND, LLC


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |   |                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the asset is being actively marketed for sale at a price that is
    reasonable in relation to its current fair value; and                                   
|
| |  | given the actions required to complete the plan, it is unlikely
    that significant changes to the plan will be made or that the
    plan will be withdrawn.



| |             
| | ------------
| | Other Assets





| |                                 
| | --------------------------------
| | Derivative Financial Instruments





| |                    
| | -------------------
| | Revenue Recognition





| |                             
| | ----------------------------
| | Concentration of Credit Risk





F-11



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##### Table of Contents



NNN 2002 VALUE FUND, LLC


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                |  |              |           |               |             |  |      |          |  |                            |  |       |                 |  |  |  |          | 
|--------------- |  | ------------ | --------- | ------------- | ----------- |  | ---- | -------- |  | -------------------------- |  | ----- | --------------- |  |  |  | -------- | 
|                |  |              |           | Percentage of |             |  |      |          |  |                            | 
|                |  | 2004 Annual  |           |               | 2004 Annual |  |      |          |  |                            |  | Lease |                
|Tenant          |  | Base Rent(*) |           |               | Base Rent   |  |      | Property |  | Square Footage             |  |       | Expiration Date | 
|                |  |              |           |               |             |  |      |          |  |                            |  |       |                 | 
|Merck Medco     |  | $            | 1,566,000 |               |             |  | 14.5 | %        |  | Netpark                    |  |       | 143,000         |  |  |  | 10/31/11 | 
|GMC Worldwide   |  | $            | 1,495,000 |               |             |  | 13.8 | %        |  | Netpark                    |  |       | 100,000         |  |  |  | 11/30/06 | 
|Bank of America |  | $            | 1,175,000 |               |             |  | 10.9 | %        |  | Bank of America Plaza West |  |       | 40,000          |  |  |  | 10/31/20 | 








|                            |  |              |           |               |             |  |      |          |  |                            |  |       |                 |  |  |  |          | 
|--------------------------- |  | ------------ | --------- | ------------- | ----------- |  | ---- | -------- |  | -------------------------- |  | ----- | --------------- |  |  |  | -------- | 
|                            |  |              |           | Percentage of |             |  |      |          |  |                            | 
|                            |  | 2003 Annual  |           |               | 2003 Annual |  |      |          |  |                            |  | Lease |                
|Tenant                      |  | Base Rent(*) |           |               | Base Rent   |  |      | Property |  | Square Footage             |  |       | Expiration Date | 
|                            |  |              |           |               |             |  |      |          |  |                            |  |       |                 | 
|Merck Medco                 |  | $            | 1,520,000 |               |             |  | 15.9 | %        |  | Netpark                    |  |       | 143,000         |  |  |  | 10/31/11 | 
|GMC Worldwide               |  | $            | 1,306,000 |               |             |  | 13.7 | %        |  | Netpark                    |  |       | 100,000         |  |  |  | 11/30/06 | 
|Bank of America             |  | $            | 1,152,000 |               |             |  | 12.1 | %        |  | Bank of America Plaza West |  |       | 40,000          |  |  |  | 10/31/20 | 
|Alltel Communications, Inc. |  | $            | 1,022,000 |               |             |  | 10.7 | %        |  | Netpark                    |  |       | 73,000          |  |  |  | 11/30/05 | 






|    |                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------
|(*) | Annualized rental income based on contractual base rent from
    leases in effect at December 31, 2003.



|                |  |              |           |               |             |  |      |          |  |                            |  |       |                 |  |  |  |          | 
|--------------- |  | ------------ | --------- | ------------- | ----------- |  | ---- | -------- |  | -------------------------- |  | ----- | --------------- |  |  |  | -------- | 
|                |  |              |           | Percentage of |             |  |      |          |  |                            | 
|                |  | 2002 Annual  |           |               | 2002 Annual |  |      |          |  |                            |  | Lease |                
|Tenant          |  | Base Rent(*) |           |               | Base Rent   |  |      | Property |  | Square Footage             |  |       | Expiration Date | 
|                |  |              |           |               |             |  |      |          |  |                            |  |       |                 | 
|Bank of America |  | $            | 1,130,000 |               |             |  | 51.4 | %        |  | Bank of America Plaza West |  |       | 40,000          |  |  |  | 10/31/20 | 






|    |                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------
|(*) | Annualized rental income based on contractual base rent from
    leases in effect at December 31, 2002.



| |                                    
| | -----------------------------------
| | Fair Value of Financial Instruments

Disclosures About Fair Value of
Financial Instruments,


F-12



---



##### Table of Contents



NNN 2002 VALUE FUND, LLC


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |             
| | ------------
| | Income Taxes





| |                     
| | --------------------
| | Comprehensive Income

Reporting Comprehensive Income.




| |              
| | -------------
| | Per Unit Data





|                                                                            |                         |                          |          |              |                     |                     |          |         |   |   |          |         |  
|--------------------------------------------------------------------------- | ----------------------- | ------------------------ | -------- | ------------ | ------------------- | ------------------- | -------- | ------- | - | - | -------- | ------- | -
|                                                                            |                         |                          |          |              |                     | For the period from |         
|                                                                            |                         |                          |          | May 15, 2002 |                    
|                                                                            |                         | Years Ended December 31, |          |              | (Date of Inception) |                    
|                                                                            |                         |                          |          |              | to December 31,     |                    
|                                                                            |                         | 2004                     |          |              | 2003                |                     |          | 2002    |  
|                                                                            |                         |                          |          |              |                     |                     |          |         |  
|Income (loss) from continuing operations                                    |                         | $                        | (69,000  | )            |                     | $                   | 116,000  |         |   | $ | (63,000  | )      
|Loss from discontinued operations                                           |                         |                          | (115,000 | )            |                     |                     | (651,000 | )       |   |   | (109,000 | )      
|                                                                            |                         |                          |          |              |                     |                     |          |         |  
|Net loss                                                                    |                         | $                        | (184,000 | )            |                     | $                   | (535,000 | )       |   | $ | (172,000 | )      
|                                                                            |                         |                          |          |              |                     |                     |          |         |  
|Net income (loss) per member unit:                                          |                         |                          |          |              |                     |                     |          |         |   |   |          |        
|                                                                            | Continuing operations   |                          | $        | (11.58       | )                   |                     | $        | 23.88   |   |   | $        | (160.72 | )
|                                                                            | Discontinued operations |                          | $        | (19.30       | )                   |                     | $        | (134.03 | ) |   | $        | (278.06 | )
|                                                                            |                         |                          |          |              |                     |                     |          |         |  
|Total net loss per member unit  basic and diluted                          |                         | $                        | (30.88   | )            |                     | $                   | (110.15  | )       |   | $ | (438.78  | )      
|                                                                            |                         |                          |          |              |                     |                     |          |         |  
|Weighted average number of member units outstanding 
    basic and diluted |                         |                          | 5,960    |              |                     |                     | 4,857    |         |   |   | 392      |        

F-13



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##### Table of Contents



NNN 2002 VALUE FUND, LLC


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                 
| | ----------------
| | Use of Estimates





| |        
| | -------
| | Segment





| |                   
| | ------------------
| | Minority Interests





| |                  
| | -----------------
| | Reclassifications





| |                                          
| | -----------------------------------------
| | Recently Issued Accounting Pronouncements





Consolidation of Variable Interest Entities, Consolidated Financial Statements


F-14



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##### Table of Contents



NNN 2002 VALUE FUND, LLC


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|   |                        
|-- | -----------------------
|3. | Real Estate Investments



| |                     
| | --------------------
| | Operating Properties



|                                                |  |              |            |   |              |   |            |  
|----------------------------------------------- |  | ------------ | ---------- | - | ------------ | - | ---------- | -
|                                                |  | December 31, |            |   | December 31, |  
|                                                |  | 2004         |            |   | 2003         |  
|                                                |  |              |            |   |              |  
|Buildings and tenant improvements               |  | $            | 35,459,000 |   |              | $ | 33,291,000 |  
|Land                                            |  |              | 9,897,000  |   |              |   | 9,897,000  |  
|                                                |  |              |            |   |              |  
|                                                |  |              | 45,356,000 |   |              |   | 43,188,000 |  
|Less: accumulated depreciation and amortization |  |              | (2,594,000 | ) |              |   | (827,000   | )
|                                                |  |              |            |   |              |  
|                                                |  | $            | 42,762,000 |   |              | $ | 42,361,000 |  
|                                                |  |              |            |   |              |  



| |                        
| | -----------------------
| | Netpark, Tampa, Florida







F-15



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##### Table of Contents



NNN 2002 VALUE FUND, LLC


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                          
| | -----------------------------------------
| | Investments in Unconsolidated Real Estate



|                               |  |              |             |  |              |   |             | 
|------------------------------ |  | ------------ | ----------- |  | ------------ | - | ----------- | 
|                               |  | December 31, |             |  | December 31, |  
|                               |  | 2004         |             |  | 2003         |  
|                               |  |              |             |  |              |  
|Assets (primarily real estate) |  | $            | 140,870,000 |  |              | $ | 144,491,000 | 
|                               |  |              |             |  |              |  
|Mortgage notes payable         |  |              | 97,500,000  |  |              |   | 96,989,000  | 
|Other liabilities              |  |              | 4,736,000   |  |              |   | 1,053,000   | 
|Equity                         |  |              | 38,634,000  |  |              |   | 46,449,000  | 
|                               |  |              |             |  |              |  
|Total liabilities and equity   |  | $            | 140,870,000 |  |              | $ | 144,491,000 | 
|                               |  |              |             |  |              |  
|Companys share of equity      |  | $            | 4,954,000   |  |              | $ | 5,844,000   | 
|                               |  |              |             |  |              |  

|                                    |  |              |            |   |              |   |            | 
|----------------------------------- |  | ------------ | ---------- | - | ------------ | - | ---------- | 
|                                    |  | For the      |            |   | For the      |  
|                                    |  | Year Ended   |            |   | Year Ended   |  
|                                    |  | December 31, |            |   | December 31, |  
|                                    |  | 2004         |            |   | 2003         |  
|                                    |  |              |            |   |              |  
|Revenues                            |  | $            | 17,304,000 |   |              | $ | 14,261,000 | 
|Rental and other expenses           |  |              | 19,769,000 |   |              |   | 13,576,000 | 
|                                    |  |              |            |   |              |  
|Net Income (loss)                   |  | $            | (2,465,000 | ) |              | $ | 685,000    | 
|                                    |  |              |            |   |              |  
|Companys equity in earnings (loss) |  | $            | (278,000   | ) |              | $ | 84,000     | 
|                                    |  |              |            |   |              |  



| |                                   
| | ----------------------------------
| | Congress Center, Chicago, Illinois





|                                         |  |                 
|---------------------------------------- |  | ----------------
|Tenants in Common                        |  | Interest Held   
|                                         |  |                 
|G REIT, Inc. (our affiliate)             |  | 30.0%           
|NNN Congress Center, LLC (our affiliate) |  | 28.9%           
|Unaffiliated third parties               |  | 41.1% (combined)



|                         |  |                          |  |                            
|------------------------ |  | ------------------------ |  | ---------------------------
|                         |  | Membership Interest in   |  |                            
|Members                  |  | NNN Congress Center, LLC |  | Interest in Congress Center
|                         |  |                          |  |                            
|NNN 2002 Value Fund, LLC |  | 42.5%                    |  | 12.3%                      
|T REIT, Inc.             |  | 35.5%                    |  | 10.3%                      
|Unaffiliated members     |  | 22.0% (combined)         |  | 6.3% (combined)            



F-16



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##### Table of Contents



NNN 2002 VALUE FUND, LLC


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|   |                             
|-- | ----------------------------
|4. | Identified Intangible Assets



|                                                                                                                                                                                                                                                                                |  |              |           |  |      |   |           | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | --------- |  | ---- | - | --------- | 
|                                                                                                                                                                                                                                                                                |  | December 31, |          
|                                                                                                                                                                                                                                                                                |  |              |          
|                                                                                                                                                                                                                                                                                |  | 2004         |           |  | 2003 |  
|                                                                                                                                                                                                                                                                                |  |              |           |  |      |  
|In place leases and tenant relationships, net of accumulated
    amortization of $2,470,000 and $732,000 at December 31,
    2004 and 2003, respectively (with a weighted average life of 62
    and 117 months for in-place leases and tenant
    relationships, respectively) |  | $            | 6,003,000 |  |      | $ | 7,743,000 | 
|                                                                                                                                                                                                                                                                                |  |              |           |  |      |  





|     |  |        |           | 
|---- |  | ------ | --------- | 
|Year |  | Amount |          
|     |  |        |          
|2005 |  | $      | 1,063,000 | 
|2006 |  | $      | 867,000   | 
|2007 |  | $      | 827,000   | 
|2008 |  | $      | 786,000   | 
|2009 |  | $      | 700,000   | 



|   |             
|-- | ------------
|5. | Other Assets



|                                                                                                                                        |                    |              |           |           |      |   |         |         | 
|--------------------------------------------------------------------------------------------------------------------------------------- | ------------------ | ------------ | --------- | --------- | ---- | - | ------- | ------- | 
|                                                                                                                                        |                    | December 31, |          
|                                                                                                                                        |                    |              |          
|                                                                                                                                        |                    | 2004         |           |           | 2003 |  
|                                                                                                                                        |                    |              |           |           |      |  
|Deferred rents receivable                                                                                                               |                    | $            | 752,000   |           |      | $ | 238,000 |        
|Lease Commissions, net of accumulated amortization of $122,000
    and $0 December 31, 2004 and 2003, respectively                      |                    |              | 493,000   |           |      |   | 236,000 |        
|Deferred financing costs, net of accumulated amortization of
    $321,000 and $118,000, at December 31, 2004 and 2003,
    respectively |                    |              | 1,039,000 |           |      |   | 489,000 |        
|Prepaid expenses, deposits and other                                                                                                    |                    |              | 15,000    |           |      |   | 3,000   |        
|                                                                                                                                        |                    |              |           |           |      |  
|                                                                                                                                        | Total other assets |              | $         | 2,299,000 |      |   | $       | 966,000 | 
|                                                                                                                                        |                    |              |           |           |      |  

6.     Mortgage Loans Payable




F-17



---



##### Table of Contents



NNN 2002 VALUE FUND, LLC


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|      |  |        |            | 
|----- |  | ------ | ---------- | 
|Year  |  | Amount |           
|      |  |        |           
|2005  |  |        | 9,124,000  | 
|2006  |  |        | 33,047,000 | 
|2007  |  |        |           | 
|2008  |  |        |           | 
|2009  |  |        |           | 
|      |  |        |           
|Total |  | $      | 42,171,000 | 
|      |  |        |           



Derivative Instruments and Hedging
Activities




|                |  |            |      |  |      |  |     |          |  |  |          | 
|--------------- |  | ---------- | ---- |  | ---- |  | --- | -------- |  |  | -------- | 
|Notional Amount |  | Instrument |      |  | Rate |  |     | Maturity | 
|                |  |            |      |  |      |  |     |          | 
|$31,500,000     |  |            | Swap |  |      |  | 2.3 | %        |  |  | 06/06/06 | 

F-18



---



##### Table of Contents



NNN 2002 VALUE FUND, LLC


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


7. Identified Intangible Liabilities




|                                                                                                                                                                                |  |              |           |  |      |   |           | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | --------- |  | ---- | - | --------- | 
|                                                                                                                                                                                |  | December 31, |          
|                                                                                                                                                                                |  |              |          
|                                                                                                                                                                                |  | 2004         |           |  | 2003 |  
|                                                                                                                                                                                |  |              |           |  |      |  
|Below market leases, net of accumulated amortization of
    $1,226,000 and $487,000 at December 31, 2004 and 2003,
    respectively( with a weighted average life of 63 months) |  | $            | 3,126,000 |  |      | $ | 3,861,000 | 
|                                                                                                                                                                                |  |              |           |  |      |  





|     |  |        |         | 
|---- |  | ------ | ------- | 
|Year |  | Amount |        
|     |  |        |        
|2005 |  | $      | 694,000 | 
|2006 |  | $      | 721,000 | 
|2007 |  | $      | 626,000 | 
|2008 |  | $      | 432,000 | 
|2009 |  | $      | 253,000 | 

8.     Minority Interests






| |   |                                                                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Netpark  44.625% owned by unaffiliated TICs; 0.625%
    owned by affiliated TIC; and 4.750% owned by NNN Netpark, LLC
    unaffiliated limited liability members.

9.     Members Equity




| |                
| | ---------------
| | Members Equity







F-19



---



##### Table of Contents



NNN 2002 VALUE FUND, LLC


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










10.     Future Minimum Rent




| |              
| | -------------
| | Rental Income



|                         |  |        |           | 
|------------------------ |  | ------ | --------- | 
|Year Ending December 31, |  | Amount |          
|                         |  |        |          
|2005                     |  | $      | 7,425,000 | 
|2006                     |  | $      | 5,738,000 | 
|2007                     |  | $      | 4,825,000 | 
|2008                     |  | $      | 3,918,000 | 
|2009                     |  | $      | 3,013,000 | 
|Thereafter               |  | $      | 4,872,000 | 



F-20



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##### Table of Contents



NNN 2002 VALUE FUND, LLC


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


11.     Related Party
Transactions




| |                  
| | -----------------
| | Offering expenses





| |                        
| | -----------------------
| | Real estate commissions





| |                         
| | ------------------------
| | Property management fees





| |                  
| | -----------------
| | Lease commissions





| |              
| | -------------
| | Notes Payable







F-21



---



##### Table of Contents



NNN 2002 VALUE FUND, LLC


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                            
| | ---------------------------
| | NNN 2004 Notes Program, LLC





| |                                          
| | -----------------------------------------
| | Related party accounts receivable/payable





| |                                                               
| | --------------------------------------------------------------
| | Costs incurred with compliance with public company
    filings





|    |                              
|--- | -----------------------------
|12. | Commitments and Contingencies



| |                  
| | -----------------
| | SEC Investigation

In the matter of Triple Net Properties, LLC.






| |                         
| | ------------------------
| | Prior Performance Tables



F-22



---



##### Table of Contents



NNN 2002 VALUE FUND, LLC


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                    
| | -------------------
| | Unconsolidated debt

















| |           
| | ----------
| | Litigation



F-23



---



##### Table of Contents



NNN 2002 VALUE FUND, LLC


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                      
| | ---------------------
| | Environmental matters





| |      
| | -----
| | Other





|    |                                                 
|--- | ------------------------------------------------
|13. | Discontinued Operations  Property Held for Sale



Accounting for the
Impairment or Disposal of Long-Lived Assets,


|                                                                          |  |                          |           |              |                     |                     |            |      |  |   |          |  
|------------------------------------------------------------------------- |  | ------------------------ | --------- | ------------ | ------------------- | ------------------- | ---------- | ---- |  | - | -------- | -
|                                                                          |  |                          |           |              |                     | For the period from |           
|                                                                          |  |                          |           | May 15, 2002 |                    
|                                                                          |  | Years Ended December 31, |           |              | (Date of Inception) |                    
|                                                                          |  |                          |           |              | to December 31      |                    
|                                                                          |  | 2004                     |           |              | 2003                |                     |            | 2002 | 
|                                                                          |  |                          |           |              |                     |                     |            |      | 
|Rental income                                                             |  | $                        | 2,350,000 |              |                     | $                   | 2,471,000  |      |  | $ | 670,000  |  
|Rental expenses                                                           |  |                          | 782,000   |              |                     |                     | 877,000    |      |  |   | 210,000  |  
|Depreciation and amortization                                             |  |                          | 803,000   |              |                     |                     | 580,000    |      |  |   | 169,000  |  
|                                                                          |  |                          |           |              |                     |                     |            |      | 
|Income before other income and minority interests                         |  |                          | 765,000   |              |                     |                     | 1,014,000  |      |  |   | 291,000  |  
|Interest expense (including amortization of deferred financing
    costs) |  |                          | (882,000  | )            |                     |                     | (1,670,000 | )    |  |   | (401,000 | )
|Other income                                                              |  |                          | 2,000     |              |                     |                     | 5,000      |      |  |   | 1,000    |  
|                                                                          |  |                          |           |              |                     |                     |            |      | 
|Loss from discontinued operations  property held for
    sale, net       |  | $                        | (115,000  | )            |                     | $                   | (651,000   | )    |  | $ | (109,000 | )
|                                                                          |  |                          |           |              |                     |                     |            |      | 

F-24



---



##### Table of Contents



NNN 2002 VALUE FUND, LLC


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                                                               |  |              |            |  |      |   |            | 
|---------------------------------------------------------------------------------------------- |  | ------------ | ---------- |  | ---- | - | ---------- | 
|                                                                                               |  | December 31, |           
|                                                                                               |  |              |           
|                                                                                               |  | 2004         |            |  | 2003 |  
|                                                                                               |  |              |            |  |      |  
|Operating property, net of accumulated depreciation of $906,000
    and $479,000, respectively |  | $            | 13,620,000 |  |      | $ | 14,055,000 | 
|Total assets                                                                                   |  |              | 16,350,000 |  |      |   | 16,965,000 | 
|Mortgage loans payable                                                                         |  |              | 9,124,000  |  |      |   | 9,394,000  | 
|Total liabilities                                                                              |  |              | 9,668,000  |  |      |   | 9,667,000  | 
|Total equity                                                                                   |  |              | 6,682,000  |  |      |   | 7,298,000  | 



|    |                               
|--- | ------------------------------
|14. | Tax Treatment of Distributions



|                  |  |                          |           |  |      |  |       |      |  |   |           |  |  |  |       |   |  |   |         |  |  |  |       |  
|----------------- |  | ------------------------ | --------- |  | ---- |  | ----- | ---- |  | - | --------- |  |  |  | ----- | - |  | - | ------- |  |  |  | ----- | -
|                  |  | Years Ended December 31, |          
|                  |  |                          |          
|                  |  | 2004                     |           |  | 2003 |  |       | 2002 | 
|                  |  |                          |           |  |      |  |       |      | 
|Ordinary income   |  | $                        | 732,000   |  |      |  | 30.0  | %    |  | $ | 137,000   |  |  |  | 7.7   | % |  | $ | 132,000 |  |  |  | 100.0 | %
|Return of Capital |  | $                        | 1,705,000 |  |      |  | 70.0  | %    |  | $ | 1,646,000 |  |  |  | 92.3  | % |  |   |        |  |  |  |      |  
|                  |  |                          |           |  |      |  |       |      |  |   |           |  |  |  |       |   |  |  
|                  |  | $                        | 2,437,000 |  |      |  | 100.0 | %    |  | $ | 1,783,000 |  |  |  | 100.0 | % |  | $ | 132,000 |  |  |  | 100.0 | %
|                  |  |                          |           |  |      |  |       |      |  |   |           |  |  |  |       |   |  |  

F-25



---



##### Table of Contents



NNN 2002 VALUE FUND, LLC


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                                    
|--- | -----------------------------------
|15. | Selected Quarterly Data (unaudited)



|                                                                               |                         |                              |           |        |             |   |           |             |   |   |             |       |  |   |           |       |  
|------------------------------------------------------------------------------ | ----------------------- | ---------------------------- | --------- | ------ | ----------- | - | --------- | ----------- | - | - | ----------- | ----- |  | - | --------- | ----- | -
|                                                                               |                         | Year Ended December 31, 2004 |          
|                                                                               |                         |                              |          
|                                                                               |                         | 4th Quarter                  |           |        | 3rd Quarter |   |           | 2nd Quarter |   |   | 1st Quarter |      
|                                                                               |                         |                              |           |        |             |   |           |             |   |   |             |      
|Revenues                                                                       |                         | $                            | 2,632,000 |        |             | $ | 2,491,000 |             |   | $ | 2,627,000   |       |  | $ | 2,258,000 |      
|Expenses                                                                       |                         |                              | 1,894,000 |        |             |   | 1,947,000 |             |   |   | 2,160,000   |       |  |   | 1,894,000 |      
|                                                                               |                         |                              |           |        |             |   |           |             |   |   |             |      
|Income before other income, discontinued operations and minority
    interests |                         |                              | 738,000   |        |             |   | 544,000   |             |   |   | 467,000     |       |  |   | 364,000   |      
|Interest expense (including amortization of deferred financing
    costs)      |                         |                              | (374,000  | )      |             |   | (455,000  | )           |   |   | (401,000    | )     |  |   | (417,000  | )    
|Other income                                                                   |                         |                              | 32,000    |        |             |   | 6,000     |             |   |   | 9,000       |       |  |   | 8,000     |      
|Equity in earnings (loss) of unconsolidated real estate                        |                         |                              | (211,000  | )      |             |   | (139,000  | )           |   |   | 69,000      |       |  |   | 3,000     |      
|                                                                               |                         |                              |           |        |             |   |           |             |   |   |             |      
|Income (loss) from continuing operations                                       |                         |                              | 185,000   |        |             |   | (44,000   | )           |   |   | 144,000     |       |  |   | (42,000   | )    
|Income (loss) from discontinued operations                                     |                         |                              | (136,000  | )      |             |   | (57,000   | )           |   |   | 27,000      |       |  |   | 51,000    |      
|Minority interests                                                             |                         |                              | 205,000   |        |             |   | 49,000    |             |   |   | 80,000      |       |  |   | (22,000   | )    
|                                                                               |                         |                              |           |        |             |   |           |             |   |   |             |      
|Net income (loss)                                                              |                         | $                            | (156,000  | )      |             | $ | (150,000  | )           |   | $ | 91,000      |       |  | $ | 31,000    |      
|                                                                               |                         |                              |           |        |             |   |           |             |   |   |             |      
|Earnings (loss) per member unit  basic and diluted                            |                         |                              |           |        |             |   |           |             |   |   |             |       |  |   |           |      
|                                                                               | Continuing operations   |                              | $         | (3.36  | )           |   | $         | (15.60      | ) |   | $           | 10.74 |  |   | $         | (3.36 | )
|                                                                               |                         |                              |           |        |             |   |           |             |   |   |             |      
|                                                                               | Discontinued operations |                              | $         | (22.82 | )           |   | $         | (9.56       | ) |   | $           | 4.53  |  |   | $         | 8.56  |  
|                                                                               |                         |                              |           |        |             |   |           |             |   |   |             |      
|Total net income (loss) per member unit  basic and
    diluted                |                         | $                            | (26.18    | )      |             | $ | (25.16    | )           |   | $ | 15.27       |       |  | $ | 5.20      |      
|                                                                               |                         |                              |           |        |             |   |           |             |   |   |             |      

F-26



---



##### Table of Contents



NNN 2002 VALUE FUND, LLC


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                                                                      |                         |                              |           |        |             |   |           |             |   |   |             |        |   |   |         |        |  
|------------------------------------------------------------------------------------- | ----------------------- | ---------------------------- | --------- | ------ | ----------- | - | --------- | ----------- | - | - | ----------- | ------ | - | - | ------- | ------ | -
|                                                                                      |                         | Year Ended December 31, 2003 |          
|                                                                                      |                         |                              |          
|                                                                                      |                         | 4th Quarter                  |           |        | 3rd Quarter |   |           | 2nd Quarter |   |   | 1st Quarter |       
|                                                                                      |                         |                              |           |        |             |   |           |             |   |   |             |       
|Revenues                                                                              |                         | $                            | 2,261,000 |        |             | $ | 2,166,000 |             |   | $ | 477,000     |        |   | $ |        |       
|Expenses                                                                              |                         |                              | 1,627,000 |        |             |   | 1,837,000 |             |   |   | 510,000     |        |   |   | 15,000  |       
|                                                                                      |                         |                              |           |        |             |   |           |             |   |   |             |       
|Income (loss) before other income, discontinued operations and
    minority interests |                         |                              | 634,000   |        |             |   | 329,000   |             |   |   | (33,000     | )      |   |   | (15,000 | )     
|Interest expense (including amortization of deferred financing
    costs)             |                         |                              | (278,000  | )      |             |   | (516,000  | )           |   |   | (92,000     | )      |   |   |        |       
|Other (expense) income                                                                |                         |                              | (20,000   | )      |             |   | 35,000    |             |   |   | 33,000      |        |   |   | 9,000   |       
|Equity in earnings (loss) of unconsolidated real estate                               |                         |                              | (17,000   | )      |             |   | 97,000    |             |   |   | 64,000      |        |   |   | (60,000 | )     
|                                                                                      |                         |                              |           |        |             |   |           |             |   |   |             |       
|Income (loss) from continuing operations                                              |                         |                              | 319,000   |        |             |   | (55,000   | )           |   |   | (28,000     | )      |   |   | (66,000 | )     
|Loss from discontinued operations                                                     |                         |                              | (388,000  | )      |             |   | (182,000  | )           |   |   | (50,000     | )      |   |   | (31,000 | )     
|Minority interests                                                                    |                         |                              | 126,000   |        |             |   | (50,000   | )           |   |   | (22,000     | )      |   |   |        |       
|                                                                                      |                         |                              |           |        |             |   |           |             |   |   |             |       
|Net loss                                                                              |                         | $                            | (195,000  | )      |             | $ | (187,000  | )           |   | $ | (56,000     | )      |   | $ | (97,000 | )     
|                                                                                      |                         |                              |           |        |             |   |           |             |   |   |             |       
|Earnings (loss) per member unit  basic and diluted                                   |                         |                              |           |        |             |   |           |             |   |   |             |        |   |   |         |       
|                                                                                      | Continuing operations   |                              | $         | 39.74  |             |   | $         | (1.03       | ) |   | $           | (1.24  | ) |   | $       | (13.59 | )
|                                                                                      |                         |                              |           |        |             |   |           |             |   |   |             |       
|                                                                                      | Discontinued operations |                              | $         | (79.89 | )           |   | $         | (37.47      | ) |   | $           | (10.29 | ) |   | $       | (6.38  | )
|                                                                                      |                         |                              |           |        |             |   |           |             |   |   |             |       
|Total net income (loss) per member unit  basic and
    diluted                       |                         | $                            | (40.15    | )      |             | $ | (38.50    | )           |   | $ | (11.53      | )      |   | $ | (19.97  | )     
|                                                                                      |                         |                              |           |        |             |   |           |             |   |   |             |       



|    |                  
|--- | -----------------
|16. | Subsequent Events



| |             
| | ------------
| | Dispositions





| |                
| | ---------------
| | Congress Center





| |        
| | -------
| | Netpark





| |              
| | -------------
| | Notes Payable



F-27



---



##### Table of Contents



NNN 2002 VALUE FUND, LLC


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |   |                                                     
| | - | ----------------------------------------------------
| |  | September 23, 2004 loan in the amount of $186,000;  
|
| |  | November 23, 2004 loan in the amount of $31,000; and
|
| |  | December 13, 2004 loan in the amount of $55,000.    

F-28



---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM














| |                               
| | ------------------------------
| | /s/ Deloitte &
    Touche, LLP





F-29



---



##### Table of Contents



NNN CONGRESS CENTER, LLC and CONGRESS CENTER PROPERTY


COMBINED BALANCE SHEETS


December 31, 2004 and 2003 (Unaudited)


|                                         |                         |              |             |             |      |   |             |             | 
|---------------------------------------- | ----------------------- | ------------ | ----------- | ----------- | ---- | - | ----------- | ----------- | 
|                                         |                         | December 31, |            
|                                         |                         |              |            
|                                         |                         | 2004         |             |             | 2003 |  
|                                         |                         |              |             |             |      |  
|                                         |                         |              |             | (Unaudited) |     
|ASSETS                                  
|Real estate investments:                 |                         |              |             |             |      |   |             |            
|                                         | Operating property, net |              | $           | 127,275,000 |      |   | $           | 128,613,000 | 
|Cash and cash equivalents                |                         |              | 2,359,000   |             |      |   | 5,535,000   |            
|Tenant receivables                       |                         |              | 186,000     |             |      |   | 629,000     |            
|Accounts receivable from related parties |                         |              | 4,000       |             |      |   | 6,000       |            
|Restricted cash                          |                         |              | 1,347,000   |             |      |   |            |            
|Identified intangible assets, net        |                         |              | 4,777,000   |             |      |   | 5,429,000   |            
|Other assets, net                        |                         |              | 4,922,000   |             |      |   | 4,279,000   |            
|                                         |                         |              |             |             |      |  
|Total assets                             |                         | $            | 140,870,000 |             |      | $ | 144,491,000 |            
|                                         |                         |              |             |             |      |  
|                                        
|LIABILITIES, AND OWNERS EQUITY         
|Mortgages payable                        |                         | $            | 97,500,000  |             |      | $ | 96,989,000  |            
|Accounts payable and accrued liabilities |                         |              | 4,517,000   |             |      |   | 1,011,000   |            
|Security deposits and prepaid rent       |                         |              | 219,000     |             |      |   | 42,000      |            
|                                         |                         |              |             |             |      |  
|Total liabilities                        |                         |              | 102,237,000 |             |      |   | 98,042,000  |            
|Commitments and contingencies (Note 9)   |                         |              |             |             |      |   |             |            
|Total owners equity                     |                         |              | 38,634,000  |             |      |   | 46,449,000  |            
|                                         |                         |              |             |             |      |  
|Total liabilities and owners equity     |                         | $            | 140,870,000 |             |      | $ | 144,491,000 |            
|                                         |                         |              |             |             |      |  



F-30



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##### Table of Contents



NNN CONGRESS CENTER, LLC and CONGRESS CENTER PROPERTY


COMBINED STATEMENTS OF OPERATIONS


For the Year Ended December 31, 2004 and the Period from
January 9, 2003


(Date of Inception) to December 31, 2003 (Unaudited)


|                        |                                                                           |                               |            |                     |                   |  |            |            |            | 
|----------------------- | ------------------------------------------------------------------------- | ----------------------------- | ---------- | ------------------- | ----------------- |  | ---------- | ---------- | ---------- | 
|                        |                                                                           |                               |            | For the Period from |                  
|                        |                                                                           |                               |            | January 9, 2003     |                  
|                        |                                                                           |                               |            | (date of inception) |                  
|                        |                                                                           | Year Ended                    |            |                     | through           | 
|                        |                                                                           | December 31, 2004             |            |                     | December 31, 2003 | 
|                        |                                                                           |                               |            |                     |                   | 
|                        |                                                                           |                               |            | (Unaudited)         |                  
|Revenues:               |                                                                           |                               |            |                     |                   |  |            |           
|                        |                                                                           | Rental income                 |            | $                   | 17,304,000        |  |            | $          | 14,261,000 | 
|                        |                                                                           |                               |            |                     |                   | 
|Expenses:               |                                                                           |                               |            |                     |                   |  |            |           
|                        |                                                                           | Rental                        |            |                     | 8,995,000         |  |            |            | 5,424,000  | 
|                        |                                                                           | General and administrative    |            |                     | 83,000            |  |            |            | 165,000    | 
|                        |                                                                           | Depreciation and amortization |            |                     | 4,474,000         |  |            |            | 4,427,000  | 
|                        |                                                                           |                               |            |                     |                   | 
|                        |                                                                           |                               | 13,552,000 |                     |                   |  | 10,016,000 |           
|                        |                                                                           |                               |            |                     |                   | 
|Operating income        |                                                                           |                               | 3,752,000  |                     |                   |  | 4,245,000  |           
|Other income (expense): |                                                                           |                               |            |                     |                   |  |            |           
|                        | Dividend income                                                           |                               |            | 22,000              |                   |  |            |           |           
|                        | Interest expense (including amortization of deferred financing
    costs) |                               |            | (6,229,000          | )                 |  |            | (3,560,000 | )         
|                        |                                                                           |                               |            |                     |                   | 
|                        | Income (loss) before income taxes                                         |                               |            | (2,455,000          | )                 |  |            | 685,000    |           
|                        | Income taxes                                                              |                               |            | 10,000              |                   |  |            |           |           
|                        |                                                                           |                               |            |                     |                   | 
|                        | Net income (loss)                                                         |                               | $          | (2,465,000          | )                 |  | $          | 685,000    |           
|                        |                                                                           |                               |            |                     |                   | 



F-31



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##### Table of Contents



NNN CONGRESS CENTER, LLC and CONGRESS CENTER PROPERTY


COMBINED STATEMENTS OF OWNERS EQUITY


For the Year Ended December 31, 2004 and the Period from
January 9, 2003


(Date of Inception) through December 31, 2003
(Unaudited)


|                                                  |  |       |            |  
|------------------------------------------------- |  | ----- | ---------- | -
|                                                  |  | Total |           
|                                                  |  |       |           
|BALANCE  January 9, 2003 (date of
    inception) |  |       |           |  
|Capital contributions, net of offering costs      |  | $     | 47,770,000 |  
|Distributions                                     |  |       | (2,006,000 | )
|Net income                                        |  |       | 685,000    |  
|                                                  |  |       |           
|BALANCE  December 31, 2003 (Unaudited)           |  |       | 46,449,000 |  
|Capital contributions, net of offering costs      |  |       | 24,000     |  
|Distributions                                     |  |       | (5,374,000 | )
|Net loss                                          |  |       | (2,465,000 | )
|                                                  |  |       |           
|BALANCE  December 31, 2004                       |  | $     | 38,634,000 |  
|                                                  |  |       |           



F-32



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##### Table of Contents



NNN CONGRESS CENTER, LLC and CONGRESS CENTER PROPERTY


COMBINED STATEMENTS OF CASH FLOWS


For the Year Ended December 31, 2004 and the Period from
January 9, 2003


(Date of Inception) through December 31, 2003
(Unaudited)


|                                                                                            |                                                                                                                              |                                                     |            |                     |                   |   |           |              |              |  
|------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------- | ---------- | ------------------- | ----------------- | - | --------- | ------------ | ------------ | -
|                                                                                            |                                                                                                                              |                                                     |            | For the Period from |                  
|                                                                                            |                                                                                                                              |                                                     |            | January 9, 2003     |                  
|                                                                                            |                                                                                                                              |                                                     |            | (Date of Inception) |                  
|                                                                                            |                                                                                                                              | Year Ended                                          |            |                     | through           |  
|                                                                                            |                                                                                                                              | December 31, 2004                                   |            |                     | December 31, 2003 |  
|                                                                                            |                                                                                                                              |                                                     |            |                     |                   |  
|                                                                                            |                                                                                                                              |                                                     |            | (Unaudited)         |                  
|CASH FLOWS FROM OPERATING ACTIVITIES                                                        |                                                                                                                              |                                                     |            |                     |                   |   |           |             
|Net income(loss)                                                                            |                                                                                                                              | $                                                   | (2,465,000 | )                   |                   | $ | 685,000   |             
|Adjustments to reconcile net income (loss) to net cash provided
    by operating activities |                                                                                                                              |                                                     |            |                     |                   |   |           |             
|                                                                                            | Depreciation and amortization including amortization of deferred
    financing costs and amortization of below market leases |                                                     |            | 4,927,000           |                   |   |           | 2,050,000    |             
|                                                                                            | Swap collar interest                                                                                                         |                                                     |            | (455,000            | )                 |   |           | 455,000      |             
|Change in operating assets and liabilities:                                                 |                                                                                                                              |                                                     |            |                     |                   |   |           |             
|                                                                                            | Accounts receivable                                                                                                          |                                                     |            | 443,000             |                   |   |           | (629,000     | )           
|                                                                                            | Accounts receivable from related parties                                                                                     |                                                     |            | 2,000               |                   |   |           | (6,000       | )           
|                                                                                            | Other assets                                                                                                                 |                                                     |            | (55,000             | )                 |   |           | (574,000     | )           
|                                                                                            | Accounts payable and accrued liabilities                                                                                     |                                                     |            | 3,961,000           |                   |   |           | 556,000      |             
|                                                                                            | Security deposits and prepaid rent                                                                                           |                                                     |            | 177,000             |                   |   |           | 42,000       |             
|                                                                                            |                                                                                                                              |                                                     |            |                     |                   |  
|                                                                                            |                                                                                                                              | Net cash provided by operating activities           |            |                     | 6,535,000         |   |           |              | 2,579,000    |  
|                                                                                            |                                                                                                                              |                                                     |            |                     |                   |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                                        |                                                                                                                              |                                                     |            |                     |                   |   |           |             
|                                                                                            | Acquisition of properties                                                                                                    |                                                     |            |                    |                   |   |           | (137,620,000 | )           
|                                                                                            | Restricted cash                                                                                                              |                                                     |            | (1,347,000          | )                 |   |           |             |             
|                                                                                            | Capital expenditures                                                                                                         |                                                     |            | (2,945,000          | )                 |   |           | (879,000     | )           
|                                                                                            |                                                                                                                              |                                                     |            |                     |                   |  
|                                                                                            |                                                                                                                              | Net cash used in investing activities               |            |                     | (4,292,000        | ) |           |              | (139,499,000 | )
|                                                                                            |                                                                                                                              |                                                     |            |                     |                   |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                        |                                                                                                                              |                                                     |            |                     |                   |   |           |             
|                                                                                            | Contributions from owners                                                                                                   |                                                     |            | 24,000              |                   |   |           | 47,767,000   |             
|                                                                                            | Borrowings under notes payable                                                                                               |                                                     |            | 97,500,000          |                   |   |           | 96,989,000   |             
|                                                                                            | Principal payments on notes payable                                                                                          |                                                     |            | (96,989,000         | )                 |   |           |             |             
|                                                                                            | Payment of loan fees                                                                                                         |                                                     |            | (580,000            | )                 |   |           | (1,298,000   | )           
|                                                                                            | Distributions                                                                                                                |                                                     |            | (5,374,000          | )                 |   |           | (2,003,000   | )           
|                                                                                            |                                                                                                                              |                                                     |            |                     |                   |  
|                                                                                            |                                                                                                                              | Net cash (used in) provided by financing activities |            |                     | (5,419,000        | ) |           |              | 141,455,000  |  
|                                                                                            |                                                                                                                              |                                                     |            |                     |                   |  
|NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                        |                                                                                                                              |                                                     | (3,176,000 | )                   |                   |   | 5,535,000 |             
|CASH AND CASH EQUIVALENTS  beginning of period                                             |                                                                                                                              |                                                     | 5,535,000  |                     |                   |   |          |             
|                                                                                            |                                                                                                                              |                                                     |            |                     |                   |  
|CASH AND CASH EQUIVALENTS  end of period                                                   |                                                                                                                              | $                                                   | 2,359,000  |                     |                   | $ | 5,535,000 |             
|                                                                                            |                                                                                                                              |                                                     |            |                     |                   |  



F-33



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##### Table of Contents



NNN CONGRESS CENTER, LLC and CONGRESS CENTER PROPERTY


COMBINED STATEMENTS OF CASH FLOWS


For the Year Ended December 31, 2004 and the Period from
January 9, 2003


(Date of Inception) through December 31, 2003
(Unaudited)


|                                                  |                                                |                   |   |                     |                   |  |   |             | 
|------------------------------------------------- | ---------------------------------------------- | ----------------- | - | ------------------- | ----------------- |  | - | ----------- | 
|                                                  |                                                |                   |   | For the Period from |                  
|                                                  |                                                |                   |   | January 9, 2003     |                  
|                                                  |                                                |                   |   | (Date of Inception) |                  
|                                                  |                                                | Year Ended        |   |                     | through           | 
|                                                  |                                                | December 31, 2004 |   |                     | December 31, 2003 | 
|                                                  |                                                |                   |   |                     |                   | 
|                                                  |                                                |                   |   | (Unaudited)         |                  
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |                                                |                   |   |                     |                   |  |   |            
|Cash paid during the year for:                    |                                                |                   |   |                     |                   |  |   |            
|                                                  | Interest                                       |                   | $ | 5,088,000           |                   |  | $ | 3,540,000   | 
|                                                  | Income taxes                                   |                   | $ | 10,000              |                   |  |   |            | 
|                                                  | NON CASH INVESTING ACTIVITIES:                 |                   |   |                     |                   |  |   |             | 
|                                                  | Increase of intangible assets of acquisitions  |                   |   |                    |                   |  | $ | 6,080,000   | 
|                                                  | Increase of investment in operating properties |                   |   |                    |                   |  | $ | 131,540,000 | 



F-34



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##### Table of Contents



NNN CONGRESS CENTER, LLC and CONGRESS CENTER PROPERTY


NOTES TO COMBINED FINANCIAL STATEMENTS


For the Year Ended December 31, 2004 and the Period from
January 9, 2003


(Date of Inception) through December 31, 2003
(Unaudited)




|   |                                         
|-- | ----------------------------------------
|1. | Organization and Description of Business







|                                      |  |               |      |  
|------------------------------------- |  | ------------- | ---- | -
|Tenants in Common                     |  | Interest Held |     
|                                      |  |               |     
|G REIT Inc.                           |  |               | 30.0 | %
|NNN Congress Center, LLC              |  |               | 28.9 | %
|Unaffiliated third parties (combined) |  |               | 41.1 | %



|                                |  |                          |      |             |                 |  |      |  
|------------------------------- |  | ------------------------ | ---- | ----------- | --------------- |  | ---- | -
|                                |  |                          |      | Interest in |                
|                                |  | Membership Interest in   |      |             | Congress Center | 
|Members                         |  | NNN Congress Center, LLC |      |             | Property        | 
|                                |  |                          |      |             |                 | 
|NNN 2002 Value Fund, LLC        |  |                          | 42.5 | %           |                 |  | 12.3 | %
|T REIT, Inc.                    |  |                          | 35.5 | %           |                 |  | 10.3 | %
|Unaffiliated members (combined) |  |                          | 22.0 | %           |                 |  | 6.3  | %







|   |                                           
|-- | ------------------------------------------
|2. | Summary of Significant Accounting Policies



F-35



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##### Table of Contents



NNN CONGRESS CENTER, LLC and CONGRESS CENTER PROPERTY


NOTES TO COMBINED FINANCIAL
STATEMENTS  (Continued)




| |                          
| | -------------------------
| | Principles of Combination





| |                        
| | -----------------------
| | Real Estate Investments



| |                   
| | ------------------
| | Operating Property







| |                          
| | -------------------------
| | Cash and Cash Equivalents





| |                
| | ---------------
| | Restricted Cash





| |                          
| | -------------------------
| | Purchase Price Allocation

Business Combinations




F-36



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##### Table of Contents



NNN CONGRESS CENTER, LLC and CONGRESS CENTER PROPERTY


NOTES TO COMBINED FINANCIAL
STATEMENTS  (Continued)










| |                                     
| | ------------------------------------
| | Allowance for Uncollectible Accounts





| |                             
| | ----------------------------
| | Concentration of Credit Risk







|                                             |  |              |           |               |             |  |      |                |  |       |                 |  |  |  |            | 
|-------------------------------------------- |  | ------------ | --------- | ------------- | ----------- |  | ---- | -------------- |  | ----- | --------------- |  |  |  | ---------- | 
|                                             |  |              |           | Percentage of |             |  |      |                | 
|                                             |  | 2004 Annual  |           |               | 2004 Annual |  |      |                |  | Lease |                
|Tenant                                       |  | Base Rent(*) |           |               | Base Rent   |  |      | Square Footage |  |       | Expiration Date | 
|                                             |  |              |           |               |             |  |      |                |  |       |                 | 
|GSA/ Social Security                         |  | $            | 3,214,000 |               |             |  | 25.8 | %              |  |       | 76,000          |  |  |  | 04/25/2012 | 
|North American Co. Life and Health Insurance |  |              | 2,220,000 |               |             |  | 17.8 |                |  |       | 101,000         |  |  |  | 02/28/2012 | 
|Akzo Nobel, Inc.                             |  |              | 1,893,000 |               |             |  | 15.2 |                |  |       | 90,000          |  |  |  | 12/31/2013 | 
|GSA/ ATF                                     |  |              | 1,519,000 |               |             |  | 12.2 |                |  |       | 37,000          |  |  |  | 02/28/2013 | 
|GE Insurance Solutions                       |  |              | 1,414,000 |               |             |  | 11.3 |                |  |       | 67,000          |  |  |  | 12/31/2012 | 

F-37



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##### Table of Contents



NNN CONGRESS CENTER, LLC and CONGRESS CENTER PROPERTY


NOTES TO COMBINED FINANCIAL
STATEMENTS  (Continued)




|                       |  |              |           |               |             |  |      |                |  |       |                 |  |  |  |            | 
|---------------------- |  | ------------ | --------- | ------------- | ----------- |  | ---- | -------------- |  | ----- | --------------- |  |  |  | ---------- | 
|                       |  |              |           | Percentage of |             |  |      |                | 
|                       |  | 2003 Annual  |           |               | 2003 Annual |  |      |                |  | Lease |                
|Tenant                 |  | Base Rent(*) |           |               | Base Rent   |  |      | Square Footage |  |       | Expiration Date | 
|                       |  |              |           |               |             |  |      |                |  |       |                 | 
|GSA/ Social Security   |  | $            | 3,149,000 |               |             |  | 25.3 | %              |  |       | 76,000          |  |  |  | 04/25/2012 | 
|North American Co.     |  |              |           |               |             |  |      |                |  |       |                 |  |  |  |            | 
|Life and Health        |  |              |           |               |             |  |      |                |  |       |                 |  |  |  |            | 
|Insurance              |  |              | 1,834,000 |               |             |  | 14.7 |                |  |       | 101,000         |  |  |  | 02/28/2012 | 
|GSA/ ATF               |  |              | 1,487,000 |               |             |  | 11.9 |                |  |       | 37,000          |  |  |  | 04/15/2013 | 
|GE Insurance Solutions |  |              | 1,347,000 |               |             |  | 10.8 |                |  |       | 67,000          |  |  |  | 12/31/2012 | 






|    |                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------
|(*) | Annualized rental income based on contractual base rent set
    forth in leases in effect at December 31, 2004 and 2003,
    respectively.



| |                                    
| | -----------------------------------
| | Fair Value of Financial Instruments

Disclosures About Fair Value of Financial Instruments






| |                                 
| | --------------------------------
| | Derivative financial instruments



Derivative Instruments and Hedging
Activities.


F-38



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##### Table of Contents



NNN CONGRESS CENTER, LLC and CONGRESS CENTER PROPERTY


NOTES TO COMBINED FINANCIAL
STATEMENTS  (Continued)






| |                    
| | -------------------
| | Revenue Recognition





| |                                              
| | ---------------------------------------------
| | Identified Intangible Assets and Other Assets





| |             
| | ------------
| | Income Taxes





| |                 
| | ----------------
| | Use of Estimates





| |                                          
| | -----------------------------------------
| | Recently Issued Accounting Pronouncements

Consolidation of
Variable Interest Entities, Consolidated Financial Statements


F-39



---



##### Table of Contents



NNN CONGRESS CENTER, LLC and CONGRESS CENTER PROPERTY


NOTES TO COMBINED FINANCIAL
STATEMENTS  (Continued)




|   |                        
|-- | -----------------------
|3. | Real Estate Investments



|                                  |  |              |             |             |      |   |             | 
|--------------------------------- |  | ------------ | ----------- | ----------- | ---- | - | ----------- | 
|                                  |  | December 31, |            
|                                  |  |              |            
|                                  |  | 2004         |             |             | 2003 |  
|                                  |  |              |             |             |      |  
|                                  |  |              |             | (Unaudited) |     
|Buildings and tenant improvements |  | $            | 127,674,000 |             |      | $ | 124,729,000 | 
|Land                              |  |              | 7,690,000   |             |      |   | 7,690,000   | 
|                                  |  |              |             |             |      |  
|                                  |  |              | 135,364,000 |             |      |   | 132,419,000 | 
|Less: accumulated depreciation    |  |              | 8,089,000   |             |      |   | 3,806,000   | 
|                                  |  |              |             |             |      |  
|                                  |  | $            | 127,275,000 |             |      | $ | 128,613,000 | 
|                                  |  |              |             |             |      |  





|   |                             
|-- | ----------------------------
|4. | Identified Intangible Assets



|                                                                                                                                                                                                                                                                                                                              |  |              |           |             |      |   |           | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | --------- | ----------- | ---- | - | --------- | 
|                                                                                                                                                                                                                                                                                                                              |  | December 31, |          
|                                                                                                                                                                                                                                                                                                                              |  |              |          
|                                                                                                                                                                                                                                                                                                                              |  | 2004         |           |             | 2003 |  
|                                                                                                                                                                                                                                                                                                                              |  |              |           |             |      |  
|                                                                                                                                                                                                                                                                                                                              |  |              |           | (Unaudited) |     
|Acquired in-place leases, above market leases and tenant
    relationships, net of accumulated amortization of $1,303,000 and
    $652,000 (unaudited) at December 31, 2004 and 2003,
    respectively (with a weighted average life of 62 and
    117 months for in place leases and tenant relationships,
    respectively) |  | $            | 4,777,000 |             |      | $ | 5,429,000 | 
|                                                                                                                                                                                                                                                                                                                              |  |              |           |             |      |  





|     |  |        |         | 
|---- |  | ------ | ------- | 
|Year |  | Amount |        
|     |  |        |        
|2005 |  | $      | 652,000 | 
|2006 |  | $      | 652,000 | 
|2007 |  | $      | 652,000 | 
|2008 |  | $      | 652,000 | 
|2009 |  | $      | 650,000 | 

F-40



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##### Table of Contents



NNN CONGRESS CENTER, LLC and CONGRESS CENTER PROPERTY


NOTES TO COMBINED FINANCIAL
STATEMENTS  (Continued)




|   |             
|-- | ------------
|5. | Other Assets



|                                                                                                                                                    |                    |      |           |             |      |   |           |           | 
|--------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------ | ---- | --------- | ----------- | ---- | - | --------- | --------- | 
|                                                                                                                                                    |                    | 2004 |           |             | 2003 |  
|                                                                                                                                                    |                    |      |           |             |      |  
|                                                                                                                                                    |                    |      |           | (Unaudited) |     
|Deferred rent receivable                                                                                                                            |                    | $    | 4,032,000 |             |      | $ | 2,851,000 |          
|Lease commissions, net of accumulated amortization of $50,000
    and $14,000 (unaudited) at December 31, 2004 and 2003,
    respectively           |                    |      | 328,000   |             |      |   | 361,000   |          
|Deferred financing costs, net of accumulated amortization of
    $1,316,000 and 429,000 (unaudited) at December 31,
    2004 and 2003, respectively |                    |      | 562,000   |             |      |   | 869,000   |          
|Prepaid expenses                                                                                                                                    |                    |      |          |             |      |   | 198,000   |          
|                                                                                                                                                    |                    |      |           |             |      |  
|                                                                                                                                                    | Total other assets |      | $         | 4,922,000   |      |   | $         | 4,279,000 | 
|                                                                                                                                                    |                    |      |           |             |      |  



|   |              
|-- | -------------
|6. | Notes Payable



|                                                                                                                                                                                                                                                                                          |  |              |            |             |      |   |            | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ---------- | ----------- | ---- | - | ---------- | 
|                                                                                                                                                                                                                                                                                          |  | December 31, |           
|                                                                                                                                                                                                                                                                                          |  |              |           
|                                                                                                                                                                                                                                                                                          |  | 2004         |            |             | 2003 |  
|                                                                                                                                                                                                                                                                                          |  |              |            |             |      |  
|                                                                                                                                                                                                                                                                                          |  |              |            | (Unaudited) |     
|Note payable to a mortgage company, secured by a deed of trust,
    interest at a fixed interest rate of 5.635% per annum.
    Interest only payments are payable monthly, with the principal
    due on October 1, 2014                                                                  |  | $            | 80,000,000 |             |      |   |           | 
|Note payable to a mortgage company, secured by a second deed of
    trust, interest at a fixed interest rate of 5.635% per
    annum. Interest only payments are payable monthly, with the
    principal due on October 1, 2014                                                           |  |              | 15,000,000 |             |      |   |           | 
|Note payable to a mortgage company, secured by a third deed of
    trust, interest at a fixed interest rate of 7.0% per annum.
    Interest only payments are payable monthly until October 1,
    2006 at which time principal and interest is due monthly on a
    30-year amortization |  |              | 2,500,000  |             |      |   |           | 
|Note payable to a mortgage company, secured by a deed of trust,
    interest at the 30-day LIBOR rate plus 175 basis points.
    Interest only payments are payable monthly, the note was repaid
    in 2004                                                                              |  |              |           |             |      | $ | 81,989,000 | 
|Mezzanine note payable to a mortgage company, interest at the
    30-day LIBOR plus 675 basis points. Interest only payments
    are payable monthly, the note was repaid in 2004                                                                                                         |  |              |           |             |      |   | 15,000,000 | 
|                                                                                                                                                                                                                                                                                          |  |              |            |             |      |  
|                                                                                                                                                                                                                                                                                          |  | $            | 97,500,000 |             |      | $ | 96,989,000 | 
|                                                                                                                                                                                                                                                                                          |  |              |            |             |      |  



F-41



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##### Table of Contents



NNN CONGRESS CENTER, LLC and CONGRESS CENTER PROPERTY


NOTES TO COMBINED FINANCIAL
STATEMENTS  (Continued)






|           |  |        |            | 
|---------- |  | ------ | ---------- | 
|Year       |  | Amount |           
|           |  |        |           
|2005       |  |        |           | 
|2006       |  | $      | 6,000      | 
|2007       |  | $      | 23,000     | 
|2008       |  | $      | 25,000     | 
|2009       |  | $      | 27,000     | 
|Thereafter |  | $      | 97,419,000 | 





|   |                    
|-- | -------------------
|7. | Future Minimum Rent



| |              
| | -------------
| | Rental Income



|            |       |        |            |            | 
|----------- | ----- | ------ | ---------- | ---------- | 
|Year Ending |       | Amount |           
|            |       |        |           
|2005        |       | $      | 12,459,000 |           
|2006        |       |        | 12,459,000 |           
|2007        |       |        | 12,459,000 |           
|2008        |       |        | 12,459,000 |           
|2009        |       |        | 12,459,000 |           
|Thereafter  |       |        | 37,324,000 |           
|            |       |        |           
|            | Total |        | $          | 99,664,000 | 
|            |       |        |           





|   |                           
|-- | --------------------------
|8. | Related Party Transactions



| |                  
| | -----------------
| | Offering expenses



F-42



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##### Table of Contents



NNN CONGRESS CENTER, LLC and CONGRESS CENTER PROPERTY


NOTES TO COMBINED FINANCIAL
STATEMENTS  (Continued)






| |                         
| | ------------------------
| | Property management fees





| |                        
| | -----------------------
| | Real estate commissions





| |                                         
| | ----------------------------------------
| | Accounts receivable from related parties





| |                            
| | ---------------------------
| | Debt due to related parties



2004 Notes Program






|   |                              
|-- | -----------------------------
|9. | Commitments and Contingencies



| |                  
| | -----------------
| | SEC Investigation

In the matter of Triple Net Properties, LLC.


F-43



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##### Table of Contents



NNN CONGRESS CENTER, LLC and CONGRESS CENTER PROPERTY


NOTES TO COMBINED FINANCIAL
STATEMENTS  (Continued)






| |           
| | ----------
| | Litigation





| |                      
| | ---------------------
| | Environmental Matters





| |      
| | -----
| | Other





|    |                  
|--- | -----------------
|10. | Subsequent Events



F-44



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##### Table of Contents






NNN 2002 Value Fund, LLC


SCHEDULE II  VALUATION AND QUALIFYING
ACCOUNTS


For the Year Ended December 31, 2004


Allowance for Doubtful Accounts


|                                                                   |  |               |         |           |            |            |         |            |  |               |   |  |            |   |        |  |  |   |         | 
|------------------------------------------------------------------ |  | ------------- | ------- | --------- | ---------- | ---------- | ------- | ---------- |  | ------------- | - |  | ---------- | - | ------ |  |  | - | ------- | 
|                                                                   |  |               |         | Additions |            |            |         |           
|                                                                   |  |               |         |           |            | Deductions |         |            | 
|                                                                   |  | Balance at    |         |           | Charged to |            |         | Charged to |  | (Write-off of |   |  | Balance at |  
|                                                                   |  | the Beginning |         |           | Costs and  |            |         | Other      |  | uncollectible |   |  | End of     |  
|                                                                   |  | of the Period |         |           | Expenses   |            |         | Accounts   |  | account)      |   |  | the Period |  
|                                                                   |  |               |         |           |            |            |         |            |  |               |   |  |            |  
|Year Ended December 31, 2004  Allowance for
    doubtful accounts |  | $             | 126,000 |           |            | $          | 100,000 |            |  | $             |  |  |            | $ | 96,000 |  |  | $ | 130,000 | 
|Year Ended December 31, 2003  Allowance for
    doubtful accounts |  | $             | 7,000   |           |            | $          | 119,000 |            |  | $             |  |  |            | $ |       |  |  | $ | 126,000 | 

F-45



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##### Table of Contents






NNN 2002 Value Fund, LLC


SCHEDULE III  REAL ESTATE AND ACCUMULATED
DEPRECIATION


As of December 31, 2004


|           |  |                          |            |             |                                                  |              |            |              |              |   |             |           |  |      |         |  |              |   |           |       |  |   |              |  |  |              |            |  |          |   |            |          |  |  |            |  |  |  |      |  |  |  |    | 
|---------- |  | ------------------------ | ---------- | ----------- | ------------------------------------------------ | ------------ | ---------- | ------------ | ------------ | - | ----------- | --------- |  | ---- | ------- |  | ------------ | - | --------- | ----- |  | - | ------------ |  |  | ------------ | ---------- |  | -------- | - | ---------- | -------- |  |  | ---------- |  |  |  | ---- |  |  |  | -- | 
|           |  | Initial Costs to Company |            |             | Gross Amount at Which Carried at Close of Period |             
|           |  |                          |            |             |                                                  |             
|           |  |                          |            |             |                                                  | Maximum Life |           
|           |  |                          |            |             |                                                  | on Which     |           
|           |  |                          |            | Costs       |                                                  |              |            |              | Depreciation |  
|           |  |                          |            | Capitalized |                                                  |              |            |              | in Latest    |  
|           |  |                          |            | Buildings   |                                                  |              | Subsequent |              |              |   |             | Buildings |  |      |         |  | Income       |  
|           |  |                          |            | and         |                                                  |              | to         |              |              |   |             | and       |  |      |         |  | Accumulated  |   |           | Date  |  |   | Date         |  |  | Statement is |           
|Properties |  | Encumbrance              |            |             | Land                                             |              |            | Improvements |              |   | Acquisition |           |  | Land |         |  | Improvements |   |           | Total |  |   | Depreciation |  |  | Constructed  |            |  | Acquired |   |            | Computed | 
|           |  |                          |            |             |                                                  |              |            |              |              |   |             |           |  |      |         |  |              |   |           |       |  |   |              |  |  |              |            |  |          |   |            |          | 
|Netpark    |  | $                        | 31,500,000 |             |                                                  | $            | 9,897,000  |              |              | $ | 33,145,000  |           |  | $    | 146,000 |  |              | $ | 9,897,000 |       |  | $ | 35,459,000   |  |  | $            | 45,356,000 |  |          | $ | (2,594,000 | )        |  |  | 1976, 2000 |  |  |  | 2003 |  |  |  | 39 | 
|           |  |                          |            |             |                                                  |              |            |              |              |   |             |           |  |      |         |  |              |   |           |       |  |   |              |  |  |              |            |  |          |   |            |          | 



|                             |  |      |            | 
|---------------------------- |  | ---- | ---------- | 
|                             |  | 2004 |           
|                             |  |      |           
|Balance at beginning of year |  | $    | 43,188,000 | 
|Acquisitions                 |  |      | 2,168,000  | 
|Dispositions                 |  |      |           | 
|                             |  |      |           
|Balance at end of year       |  | $    | 45,356,000 | 
|                             |  |      |           



|                             |  |      |           | 
|---------------------------- |  | ---- | --------- | 
|                             |  | 2004 |          
|                             |  |      |          
|Balance at beginning of year |  | $    | 827,000   | 
|Additions                    |  |      | 1,767,000 | 
|Disposals                    |  |      |          | 
|                             |  |      |          
|Balance at end of year       |  | $    | 2,594,000 | 
|                             |  |      |          

F-46



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##### Table of Contents






SIGNATURES






| |                         
| | ------------------------
| | NNN 2002 Value Fund, LLC



| |     |                                        
| | --- | ---------------------------------------
| | By: | Triple Net Properties, LLC, its Manager
|
| | By: | /s/ Anthony W. Thompson                

| |                        
| | -----------------------
| |                        
| | Anthony W. Thompson    
| | Chief Executive Officer





|                                               |  |                                                       |  |                |  | 
|---------------------------------------------- |  | ----------------------------------------------------- |  | -------------- |  | 
|Name                                           |  | Title                                                 |  | Date          
|                                               |  |                                                       |  |               
|                                              
|/s/ Anthony W. ThompsonAnthony
    W. Thompson |  | Chief Executive Officer, Triple Net Properties, LLC   |  | April 27, 2005
|                                              
|/s/ Scott D. PetersScott
    D. Peters         |  | Chief Financial Officer, Triple Net Properties, LLC   |  | April 27, 2005
|                                              
|/s/ Daniel R. BakerDaniel
    R. Baker         |  | Member, Board of Managers, Triple Net Properties, LLC |  | April 27, 2005
|                                              
|/s/ Jack R. MaurerJack
    R. Maurer           |  | Member, Board of Managers, Triple Net Properties, LLC |  | April 27, 2005
|                                              
|/s/ Louis J. RogersLouis
    J. Rogers         |  | Member, Board of Managers, Triple Net Properties, LLC |  | April 27, 2005
|                                              
|/s/ Talle A. VoorhiesTalle
    A. Voorhies     |  | Member, Board of Managers, Triple Net Properties, LLC |  | April 27, 2005
|                                              
|/s/ Kelly J. CaskeyKelly
    J. Caskey         |  | Chief Accounting Officer-REITs                        |  | April 27, 2005

F-47



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##### Table of Contents



EXHIBIT INDEX


|        |    |             |  |                                                                                                                                                                                          
|------- | -- | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 3  | .1(2)       |  | Articles of Organization of NNN 2002 Value Fund, LLC, dated
    May 1, 2002.                                                                                                             
|        | 10 | .1(3)       |  | Operating Agreement of NNN 2002 Value Fund, LLC, by an between
    Triple Net Properties, LLC, as the Manager, and Anthony W.
    Thompson, as the Initial Member.                       
|        | 10 | .2(3)       |  | Management Agreement between NNN 2002 Value Fund, LLC and Triple
    Net Properties Realty, Inc.                                                                                         
|        | 10 | .3(3)       |  | Promissory Note A by and between NNN BOA West, LLC and
    Massachusetts Mutual Life Insurance Company.                                                                                  
|        | 10 | .4(3)       |  | Promissory Note B by and between NNN BOA West, LLC and
    Massachusetts Mutual Life Insurance Company.                                                                                  
|        | 10 | .5(3)       |  | Loan Agreement by and among Principal Commercial Funding, LLC,
    Principal Life Insurance Company, NNN Congress Center, LLC and
    other tenant-in-common borrowers thereunder.       
|        | 10 | .6(3)       |  | Senior Loan Agreement among Fleet National Bank, Fleet
    Securities, LLC, NNN Netpark 25, LLC and other
    tenant-in-common borrowers thereunder.                                     
|        | 10 | .7(3)       |  | Form of Tenants in Common Agreement among the Tenants in Common
    of Congress Center.                                                                                                  
|        | 10 | .8(3)       |  | Form of Tenants in Common Agreement among the Tenants in Common
    of Netpark.                                                                                                          
|        | 10 | .9(4)       |  | Agreement for Purchase and Sale of Real Property and Escrow
    Instructions dated January 7, 2005 by and between NNN BOA
    West, LLC and First States Group, L.P.                     
|        | 10 | .10(5)      |  | First Amendment to Agreement for Purchase and Sale of Real
    Property and Escrow Instructions dated February 24, 2005 by
    and between NNN BOA West, LLC and First States Group, L.P.
|        | 21 | .1(3)       |  | Subsidiaries of the registrant.                                                                                                                                                          
|        | 31 | .1(1)       |  | Certification of Chief Executive Officer, pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                 
|        | 31 | .2(1)       |  | Certification of Chief Financial Officer, pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                 
|        | 32 | .1(1)       |  | Certification of Chief Executive Officer, pursuant to
    18 U.S.C. Section 1350, as created by Section 906
    of the Sarbanes-Oxley Act of 2002.                                       
|        | 32 | .2(1)       |  | Certification of Chief Financial Officer, pursuant to
    18 U.S.C. Section 1350, as created by Section 906
    of the Sarbanes-Oxley Act of 2002.                                       






|    |                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Filed herewith.                                                                                                                                                   
|   
|(2) | Incorporated by reference from the Registrants
    Form 10, as filed with the Securities and Exchange
    Commission on December 30, 2004.                       
|   
|(3) | Incorporated by reference from the Registrants Amendment
    No. 1 to its Form 10, as filed with the Securities and
    Exchange Commission on February 28, 2005.
|   
|(4) | Incorporated by reference from the Registrants Current
    Report on Form 8-K, as filed with the Securities and
    Exchange Commission on January 24, 2005.     
|   
|(5) | Incorporated by reference from the Registrants Current
    Report on Form 8-K, as filed with the Securities and
    Exchange Commission on February 28, 2005.