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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

|(Mark One)                                   |                                                                                         
|-------------------------------------------- | ----------------------------------------------------------------------------------------
|ý                                            | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934       
|For the quarterly period ended June 30, 2003
|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 333-57103-01

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Mack-Cali Realty, L.P.(Exact name of registrant as specified in its charter)

|Delaware(State or other jurisdiction of
incorporation or organization)                                |  | 22-3315804(I.R.S. Employer
Identification Number)
|----------------------------------------------------------------------------------------------------- |  | -------------------------------------------------
|11 Commerce Drive, Cranford, New Jersey 07016-3501
(Address of principal executive office)
(Zip Code)
|(908) 272-8000(Registrant's telephone number, including area code)                                   
|Not Applicable(Former name, former address and former fiscal year, if changed since last report)     

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

Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange
Act). Yes ý    No o

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MACK-CALI REALTY, L.P.  FORM 10-Q    INDEX

|        |  |                                  |  |                                                                                                        |  | Page 
|------- |  | -------------------------------- |  | ------------------------------------------------------------------------------------------------------ |  | -----
|Part I  |  | Financial Information            |  |                                                                                                       
|        |  | Item 1.                          |  | Financial Statements:                                                                                  |  |      
|        |  |                                  |  | Consolidated Balance Sheets as of June 30, 2003 and December 31, 2002                                  |  | 4    
|        |  |                                  |  | Consolidated Statements of Operations for the three and six month periods ended June 30, 2003 and 2002 |  | 5    
|        |  |                                  |  | Consolidated Statement of Changes in Partners' Capital for the six months ended June 30, 2003          |  | 6    
|        |  |                                  |  | Consolidated Statements of Cash Flows for the six months ended June 30, 2003 and 2002                  |  | 7    
|        |  |                                  |  | Notes to Consolidated Financial Statements                                                             |  | 8-36 
|        |  | Item 2.                          |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                  |  | 37-52
|        |  | Item 3.                          |  | Quantitative and Qualitative Disclosures about Market Risk                                             |  | 52   
|        |  | Item 4.                          |  | Controls and Procedures                                                                                |  | 53   
|Part II |  | Other Information and Signatures |  |                                                                                                       
|        |  | Item 1.                          |  | Legal Proceedings                                                                                      |  | 54   
|        |  | Item 2.                          |  | Changes in Securities and Use of Proceeds                                                              |  | 54   
|        |  | Item 3.                          |  | Defaults Upon Senior Securities                                                                        |  | 54   
|        |  | Item 4.                          |  | Submission of Matters to a Vote of Security Holders                                                    |  | 54   
|        |  | Item 5.                          |  | Other Information                                                                                      |  | 54   
|        |  | Item 6.                          |  | Exhibits and Reports on Form 8-K                                                                       |  | 55-60
|        |  |                                  |  | Signatures                                                                                             |  | 61   
|        |  |                                  |  | Certifications                                                                                         |  | 62-63

2

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MACK-CALI REALTY, L.P.    Part IFinancial Information

Item I.    Financial Statements



3

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MACK-CALI REALTY, L.P. AND SUBSIDIARIES        CONSOLIDATED BALANCE SHEETS        (in thousands, except per unit amounts)

|                                                                                 |                                                | June 30,
2003                     |           | December 31,
2002 |          
|-------------------------------------------------------------------------------- | ---------------------------------------------- | --------------------------------- | --------- | ----------------- | ---------
|
|ASSETS                                                                           |                                                |                                   |           |                   |          
|Rental property                                                                  |                                                |                                   |           |                   |          
|                                                                                 | Land and leasehold interests                   |                                   | $         | 545,838           |          
|                                                                                 | Buildings and improvements                     |                                   |           | 3,165,161         |          
|                                                                                 | Tenant improvements                            |                                   |           | 178,702           |          
|                                                                                 | Furniture, fixtures and equipment              |                                   |           | 7,626             |          
|                                                                                 |                                                |                                   |           |                   |          
|                                                                                 |                                                |                                   | 3,897,327 |                   |          
|                                                                                 | Lessaccumulated depreciation and amortization |                                   |           | (495,071          | )        
|                                                                                 |                                                |                                   |           |                   |          
|                                                                                 |                                                | Net investment in rental property |           |                   | 3,402,256
|Cash and cash equivalents                                                        |                                                |                                   | 8,585     |                   |          
|Investments in unconsolidated joint ventures, net                                |                                                |                                   | 178,601   |                   |          
|Unbilled rents receivable, net                                                   |                                                |                                   | 70,253    |                   |          
|Deferred charges and other assets, net                                           |                                                |                                   | 123,778   |                   |          
|Restricted cash                                                                  |                                                |                                   | 8,115     |                   |          
|Accounts receivable, net of allowance for doubtful accounts of $1,288 and $1,856 |                                                |                                   | 3,285     |                   |          
|                                                                                 |                                                |                                   |           |                   |          
|Total assets                                                                     |                                                | $                                 | 3,794,873 |                   | $        
|                                                                                 |                                                |                                   |           |                   |          
|LIABILITIES AND PARTNERS' CAPITAL                                                |                                                |                                   |           |                   |          
|Senior unsecured notes                                                           |                                                | $                                 | 1,127,300 |                   | $        
|Revolving credit facilities                                                      |                                                |                                   | 95,000    |                   |          
|Mortgages and loans payable                                                      |                                                |                                   | 505,335   |                   |          
|Distributions payable                                                            |                                                |                                   | 46,081    |                   |          
|Accounts payable and accrued expenses                                            |                                                |                                   | 48,520    |                   |          
|Rents received in advance and security deposits                                  |                                                |                                   | 34,542    |                   |          
|Accrued interest payable                                                         |                                                |                                   | 24,946    |                   |          
|                                                                                 |                                                |                                   |           |                   |          
|                                                                                 |                                                | Total liabilities                 |           |                   | 1,881,724
|                                                                                 |                                                |                                   |           |                   |          
|Commitments and contingencies                                                    |                                                |                                   |           |                   |          
|Partners' Capital:                                                               |                                                |                                   |           |                   |          
|General Partner, 10,000 and 0 preferred units outstanding                        |                                                |                                   | 24,836    |                   |          
|Limited partners, 215,456 and 215,894 preferred units outstanding                |                                                |                                   | 220,996   |                   |          
|General Partner, 58,011,329 and 57,318,478 common units outstanding              |                                                |                                   | 1,460,268 |                   |          
|Limited partners, 7,800,497 and 7,813,806 common units outstanding               |                                                |                                   | 207,049   |                   |          
|                                                                                 |                                                |                                   |           |                   |          
|                                                                                 |                                                | Total partners' capital           |           |                   | 1,913,149
|                                                                                 |                                                |                                   |           |                   |          
|Total liabilities and partners' capital                                          |                                                | $                                 | 3,794,873 |                   | $        
|                                                                                 |                                                |                                   |           |                   |          

The accompanying notes are an integral part of these consolidated financial statements.

4

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MACK-CALI REALTY, L.P. AND SUBSIDIARIES  CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per unit amounts)  (unaudited)

|                                                                                             |                                                 | Three Months Ended
June 30, |         | Six Months Ended
June 30, |  
|-------------------------------------------------------------------------------------------- | ----------------------------------------------- | --------------------------- | ------- | ------------------------- | -
|
|REVENUES                                                                                     |                                                 |                             |         |                           |  
|Base rents                                                                                   |                                                 | $                           | 127,841 |                           | $
|Escalations and recoveries from tenants                                                      |                                                 |                             | 14,191  |                           |  
|Parking and other                                                                            |                                                 |                             | 3,292   |                           |  
|Interest income                                                                              |                                                 |                             | 265     |                           |  
|                                                                                             |                                                 |                             |         |                           |  
|                                                                                             | Total revenues                                  |                             |         | 145,589                   |  
|                                                                                             |                                                 |                             |         |                           |  
|EXPENSES                                                                                     |                                                 |                             |         |                           |  
|Real estate taxes                                                                            |                                                 |                             | 16,133  |                           |  
|Utilities                                                                                    |                                                 |                             | 9,541   |                           |  
|Operating services                                                                           |                                                 |                             | 18,042  |                           |  
|General and administrative                                                                   |                                                 |                             | 6,914   |                           |  
|Depreciation and amortization                                                                |                                                 |                             | 29,354  |                           |  
|Interest expense                                                                             |                                                 |                             | 28,722  |                           |  
|Loss on early retirement of debt, net                                                        |                                                 |                             | 970     |                           |  
|                                                                                             |                                                 |                             |         |                           |  
|                                                                                             | Total expenses                                  |                             |         | 109,676                   |  
|                                                                                             |                                                 |                             |         |                           |  
|Income from continuing operations before equity in earnings of unconsolidated joint ventures |                                                 |                             | 35,913  |                           |  
|Equity in earnings of unconsolidated joint ventures, net                                     |                                                 |                             | 6,819   |                           |  
|                                                                                             |                                                 |                             |         |                           |  
|Income from continuing operations                                                            |                                                 |                             | 42,732  |                           |  
|Discontinued operations:                                                                     |                                                 |                             |         |                           |  
|                                                                                             | Income from discontinued operations             |                             |         |                          |  
|                                                                                             | Realized gain on disposition of rental property |                             |         |                          |  
|                                                                                             |                                                 |                             |         |                           |  
|Total discontinued operations, net                                                           |                                                 |                             |        |                           |  
|Realized gains (losses) and unrealized losses on disposition of rental property, net         |                                                 |                             |        |                           |  
|                                                                                             |                                                 |                             |         |                           |  
|Net income                                                                                   |                                                 | $                           | 42,732  |                           | $
|                                                                                             | Series C Preferred unit distributions           |                             |         | (672                      | )
|                                                                                             | Series B Preferred unit distributions           |                             |         | (3,917                    | )
|                                                                                             |                                                 |                             |         |                           |  
|Net income available to common unitholders                                                   |                                                 | $                           | 38,143  |                           | $
|                                                                                             |                                                 |                             |         |                           |  
|Basic earnings per common unit:                                                              |                                                 |                             |         |                           |  
|Income from continuing operations                                                            |                                                 | $                           | 0.58    |                           | $
|Discontinued operations                                                                      |                                                 |                             |        |                           |  
|                                                                                             |                                                 |                             |         |                           |  
|Net income available to common unitholders                                                   |                                                 | $                           | 0.58    |                           | $
|                                                                                             |                                                 |                             |         |                           |  
|Diluted earnings per common unit:                                                            |                                                 |                             |         |                           |  
|Income from continuing operations                                                            |                                                 | $                           | 0.58    |                           | $
|Discontinued operations                                                                      |                                                 |                             |        |                           |  
|                                                                                             |                                                 |                             |         |                           |  
|Net income available to common unitholders                                                   |                                                 | $                           | 0.58    |                           | $
|                                                                                             |                                                 |                             |         |                           |  
|Distributions declared per common unit                                                       |                                                 | $                           | 0.63    |                           | $
|                                                                                             |                                                 |                             |         |                           |  
|Basic weighted average units outstanding                                                     |                                                 |                             | 65,331  |                           |  
|                                                                                             |                                                 |                             |         |                           |  
|Diluted weighted average units outstanding                                                   |                                                 |                             | 65,761  |                           |  
|                                                                                             |                                                 |                             |         |                           |  

The accompanying notes are an integral part of these consolidated financial statements.

5

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MACK-CALI REALTY, L.P. AND SUBSIDIARIES  CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL        For the Six Months Ended June 30, 2003(in thousands) (unaudited)

|                           |                                                                | General
Partner
Preferred
Units |    | Limited
Partners
Preferred
Units |    | General
Partner
Common
Units |     | Limited
Partners
Common
Units |     | General
Partner
Preferred
Unitholders |        | Limited
Partners
Preferred
Unitholders |   | General
Partner
Common
Unitholders |        | Limited
Partners
Common
Unitholders |           | Total   |  
|-------------------------- | -------------------------------------------------------------- | ------------------------------- | -- | -------------------------------- | -- | ---------------------------- | --- | ----------------------------- | --- | ------------------------------------- | ------ | -------------------------------------- | - | ---------------------------------- | ------ | ----------------------------------- | --------- | ------- | -
|Balance at January 1, 2003 |                                                                |                                |    | 216                              |    | 57,318                       |     | 7,813                         |     |                                       |       |                                        | $ | 221,445                            |        | $                                   | 1,454,194 |         | $
|                           | Net income                                                     |                                 |   |                                  |   |                              |    |                               |    |                                       |        | 672                                    |   |                                    | 7,842  |                                     |           | 63,569  |  
|                           | Distributions                                                  |                                 |   |                                  |   |                              |    |                               |    |                                       |        | (672                                   | ) |                                    | (7,842 | )                                   |           | (72,879 | )
|                           | Issuance of preferred stock                                    |                                 | 10 |                                  |   |                              |    |                               |    |                                       |        | 24,836                                 |   |                                    |       |                                     |           |        |  
|                           | Redemption of Preferred Units for limited partner units        |                                 |   |                                  | (1 | )                            |    |                               | 13  |                                       |        |                                       |   |                                    | (449   | )                                   |           |        |  
|                           | Redemption of limited partner units for shares of common stock |                                 |   |                                  |   |                              | 26  |                               | (26 | )                                     |        |                                       |   |                                    |       |                                     |           | 803     |  
|                           | Contributions  proceeds from stock options exercised          |                                 |   |                                  |   |                              | 498 |                               |    |                                       |        |                                       |   |                                    |       |                                     |           | 13,483  |  
|                           | Contributions  proceeds from Stock Warrants exercised         |                                 |   |                                  |   |                              | 29  |                               |    |                                       |        |                                       |   |                                    |       |                                     |           | 973     |  
|                           | Stock options expense                                          |                                 |   |                                  |   |                              |    |                               |    |                                       |        |                                       |   |                                    |       |                                     |           | 88      |  
|                           | Deferred compensation plan for directors                       |                                 |   |                                  |   |                              |    |                               |    |                                       |        |                                       |   |                                    |       |                                     |           | 112     |  
|                           | Issuance of Restricted Stock Awards                            |                                 |   |                                  |   |                              | 175 |                               |    |                                       |        |                                       |   |                                    |       |                                     |           | 40      |  
|                           | Amortization of stock compensation                             |                                 |   |                                  |   |                              |    |                               |    |                                       |        |                                       |   |                                    |       |                                     |           | 915     |  
|                           | Repurchase of general partner units                            |                                 |   |                                  |   |                              | (35 | )                             |    |                                       |        |                                       |   |                                    |       |                                     |           | (1,030  | )
|                           |                                                                |                                 |    |                                  |    |                              |     |                               |     |                                       |        |                                        |   |                                    |        |                                     |           |         |  
|Balance at June 30, 2003   |                                                                | 10                              |    | 215                              |    | 58,011                       |     | 7,800                         |     | $                                     | 24,836 |                                        | $ | 220,996                            |        | $                                   | 1,460,268 |         | $
|                           |                                                                |                                 |    |                                  |    |                              |     |                               |     |                                       |        |                                        |   |                                    |        |                                     |           |         |  

The accompanying notes are an integral part of these consolidated financial statements.

6

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MACK-CALI REALTY, L.P. AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)

|                                                                                  |                                                                                      | Six Months Ended
June 30, |         
|--------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------ | ------------------------- | --------
|
|
|Net income                                                                        |                                                                                      | $                         | 80,731  
|Adjustments to reconcile net income to net cash provided by operating activities: |                                                                                      |                           |         
|                                                                                  | Depreciation and amortization                                                        |                           |         
|                                                                                  | Stock options expense                                                                |                           |         
|                                                                                  | Amortization of stock compensation                                                   |                           |         
|                                                                                  | Amortization of deferred financing costs and debt discount                           |                           |         
|                                                                                  | Write-off of unamortized interest rate contract                                      |                           |         
|                                                                                  | Discount on early retirement of debt                                                 |                           |         
|                                                                                  | Equity in earnings of unconsolidated joint ventures, net                             |                           |         
|                                                                                  | Realized (gains) losses and unrealized losses on disposition of rental property, net |                           |         
|Changes in operating assets and liabilities:                                      |                                                                                      |                           |         
|                                                                                  | Increase in unbilled rents receivable, net                                           |                           |         
|                                                                                  | Increase in deferred charges and other assets, net                                   |                           |         
|                                                                                  | Decrease in accounts receivable, net                                                 |                           |         
|                                                                                  | Decrease in accounts payable and accrued expenses                                    |                           |         
|                                                                                  | Decrease in rents received in advance and security deposits                          |                           |         
|                                                                                  | (Decrease) increase in accrued interest payable                                      |                           |         
|                                                                                  |                                                                                      |                           |         
|                                                                                  | Net cash provided by operating activities                                            |                           | $       
|                                                                                  |                                                                                      |                           |         
|CASH FLOWS FROM INVESTING ACTIVITIES                                              |                                                                                      |                           |         
|Additions to rental property                                                      |                                                                                      | $                         | (44,202 
|Proceeds from repayment of mortgage note receivable                               |                                                                                      |                           | 2,362   
|Investments in unconsolidated joint ventures                                      |                                                                                      |                           | (6,201  
|Distributions from unconsolidated joint ventures                                  |                                                                                      |                           | 13,596  
|Proceeds from sales of rental property                                            |                                                                                      |                           | 5,469   
|Increase in restricted cash                                                       |                                                                                      |                           | (338    
|                                                                                  |                                                                                      |                           |         
|                                                                                  | Net cash used in investing activities                                                |                           | $       
|                                                                                  |                                                                                      |                           |         
|CASH FLOWS FROM FINANCING ACTIVITIES                                              |                                                                                      |                           |         
|Proceeds from senior unsecured notes                                              |                                                                                      | $                         | 124,714 
|Proceeds from revolving credit facilities                                         |                                                                                      |                           | 196,500 
|Repayments of revolving credit facilities                                         |                                                                                      |                           | (174,500
|Repayment of senior unsecured notes                                               |                                                                                      |                           | (95,284 
|Repayments of mortgages and loans payable                                         |                                                                                      |                           | (74,202 
|Net proceeds from preferred stock issuance                                        |                                                                                      |                           | 24,836  
|Repurchase of common units                                                        |                                                                                      |                           | (1,030  
|Payment of financing costs                                                        |                                                                                      |                           | (570    
|Proceeds from stock options exercised                                             |                                                                                      |                           | 13,483  
|Proceeds from stock warrants exercised                                            |                                                                                      |                           | 973     
|Payment of distributions                                                          |                                                                                      |                           | (90,216 
|                                                                                  |                                                                                      |                           |         
|                                                                                  | Net cash used in financing activities                                                |                           | $       
|                                                                                  |                                                                                      |                           |         
|Net increase in cash and cash equivalents                                         |                                                                                      | $                         | 7,418   
|Cash and cash equivalents, beginning of period                                    |                                                                                      |                           | 1,167   
|                                                                                  |                                                                                      |                           |         
|Cash and cash equivalents, end of period                                          |                                                                                      | $                         | 8,585   
|                                                                                  |                                                                                      |                           |         

The accompanying notes are an integral part of these consolidated financial statements.

7

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MACK-CALI REALTY, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share/unit amounts)

1.     ORGANIZATION AND BASIS OF PRESENTATION

ORGANIZATION

Mack-Cali Realty, L.P., a Delaware limited partnership, and its subsidiaries (the "Operating Partnership") was formed on May 31, 1994 to
conduct the business of leasing, management, acquisition, development, construction and tenant-related services for its sole general partner, Mack-Cali Realty Corporation and its
subsidiaries (the "Corporation" or "General Partner"). The Operating Partnership, through its operating divisions and subsidiaries, including the Mack-Cali property-owning partnerships and
limited liability companies (collectively, the "Property Partnerships"), as described below, is the entity through which all of the General Partner's operations are conducted.

The
General Partner is a fully integrated, self-administered, self-managed real estate investment trust ("REIT"). The General Partner controls the Operating
Partnership as its sole general partner, and owned an 88.1 percent and 88.0 percent common unit interest in the Operating Partnership as of June 30, 2003 and December 31,
2002, respectively.

The
General Partner's business is the ownership of interests in and operation of the Operating Partnership, and all of the General Partner's expenses are incurred for the benefit of the
Operating Partnership. The General Partner is reimbursed by the Operating Partnership for all expenses it incurs relating to the ownership and operation of the Operating Partnership. The Operating
Partnership earns
a management fee of between three percent and five percent of revenues, as defined, for its management of the Property Partnerships.

As
of June 30, 2003, the Operating Partnership owned or had interests in 263 properties plus developable land (collectively, the "Properties"). The Properties aggregate
approximately 28.9 million square feet, which are comprised of 154 office buildings and 96 office/flex buildings totaling approximately 28.4 million square feet (which include five
office buildings and one office/flex building aggregating 1.8 million square feet owned by unconsolidated joint ventures in which the Operating Partnership has investment interests), six
industrial/warehouse buildings totaling approximately 387,400 square feet, three stand-alone retail properties totaling approximately 118,040 square feet (which include one retail property totaling
approximately 100,740 square feet owned by an unconsolidated joint venture in which the Operating Partnership has an investment interest), one hotel (which is owned by an unconsolidated joint venture
in which the Operating Partnership has an investment interest) and three land leases. The Properties are located in eight states, primarily in the Northeast, plus the District of Columbia.

BASIS OF PRESENTATION

The accompanying consolidated financial statements include all accounts of the Operating Partnership, its majority-owned and/or controlled subsidiaries, which
consist principally of Mack-Cali Realty, L.P. See Investments in Unconsolidated Joint Ventures in Note 2 for the Operating Partnership's treatment of unconsolidated joint venture
interests. All significant intercompany accounts and transactions have been eliminated.

8

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The
preparation of financial statements in conformity with generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

2.     SIGNIFICANT ACCOUNTING POLICIES

Rental Property

Rental properties are stated at cost less accumulated depreciation and amortization. Costs directly related to the acquisition, development and construction of
rental properties are capitalized. Capitalized development and construction costs include pre-construction costs essential to the development of the property, development and construction
costs, interest, property taxes, insurance, salaries and other project costs incurred during the period of development. Included in total rental property is construction and development
in-progress of $151,314 and $168,700 (including land of $52,816 and $50,481) as of June 30, 2003 and December 31, 2002, respectively. Ordinary repairs and maintenance are
expensed as incurred; major replacements and betterments, which improve or extend the life of the asset, are capitalized and depreciated over their estimated useful lives. Fully-depreciated assets are
removed from the accounts.

The
Operating Partnership considers a construction project as substantially completed and held available for occupancy upon the completion of tenant improvements, but no later than one
year from cessation of major construction activity (as distinguished from activities such as routine maintenance and cleanup). If portions of a rental project are substantially completed and occupied
by tenants, or held available for occupancy, and other portions have not yet reached that stage, the substantially completed portions are accounted for as a separate project. The Operating Partnership
allocates costs incurred between the portions under construction and the portions substantially completed and held available for occupancy, and capitalizes only those costs associated with the portion
under construction.

Properties
are depreciated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows:

Leasehold interests

Remaining lease termBuildings and improvements

5 to 40 yearsTenant improvements

The shorter of the term of
the related lease or useful lifeFurniture, fixtures and equipment

5 to 10 years


On
a periodic basis, management assesses whether there are any indicators that the value of the Operating Partnership's real estate properties may be impaired. A property's value is
impaired only if management's estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property are less than the carrying value of the property.
To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the property over the fair value of the property. The Operating Partnership's estimates of
aggregate future cash flows expected to be generated by each property are based on a number of assumptions that are subject to economic and market uncertainties including, among others, demand for
space, competition for tenants, changes in market rental rates, and costs to operate each property. As these factors are difficult to predict and are subject to future events that may alter
management's assumptions, the

9

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future
cash flows estimated by management in its impairment analyses may not be achieved. Management does not believe that the value of any of the Operating Partnership's rental properties is
impaired.

Rental Property Held for Sale and Discontinued Operations

When assets are identified by management as held for sale, the Operating Partnership discontinues depreciating the assets and estimates the sales price, net of
selling costs, of such assets. If, in management's opinion, the net sales price of the assets which have been identified as held for sale is less than the net book value of the assets, a valuation
allowance is established.

If
circumstances arise that previously were considered unlikely and, as a result, the Operating Partnership decides not to sell a property previously classified as held for sale, the
property is reclassified as held and used. A property that is reclassified is measured and recorded individually at the lower of (a) its carrying amount before the property was classified as
held for sale, adjusted for any depreciation (amortization) expense that would have been recognized had the property been continuously classified as held and used, or (b) the fair value at the
date of the subsequent decision not to sell.

Effective
January 1, 2002, the Operating Partnership adopted the provisions of Statement of Financial Accounting Standards ("FASB") No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets, which supercedes FASB No. 121. FASB No. 144 requires that long-lived assets that are to be disposed of by sale be measured at
the lower of book value or fair value less cost to sell. FASB No. 144 retains the requirements of FASB No. 121 regarding impairment loss recognition and measurement. In addition, it
requires that one accounting model be used for long-lived assets to be disposed of by sale and broadens the presentation of discontinued operations to include more disposal transactions.
As the statement requires implementation on a prospective basis, properties which were identified as held for sale by the Operating Partnership prior to January 1, 2002 are presented in the
accompanying financial statements in a manner consistent with the presentation prior to January 1, 2002. Properties identified as held for
sale and/or sold from January 1, 2002 forward are presented in discontinued operations for all periods presented. See Note 6.

Investments in Unconsolidated Joint Ventures, Net

The Operating Partnership accounts for its investments in unconsolidated joint ventures under the equity method of accounting as the Operating Partnership
exercises significant influence, but does not control these entities. These investments are recorded initially at cost, as Investments in Unconsolidated Joint Ventures, and subsequently adjusted for
equity in earnings and cash contributions and distributions.

On
a periodic basis, management assesses whether there are any indicators that the value of the Operating Partnership's investments in unconsolidated joint ventures may be impaired. An
investment is impaired only if management's estimate of the value of the investment is less than the carrying value of the investment. To the extent impairment has occurred, the loss shall be measured
as the excess of the carrying amount of the investment over the value of the investment. Management does not believe that the value of any of the Operating Partnership's investments in unconsolidated
joint ventures is impaired. See Note 4.

10

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Cash and Cash Equivalents

All highly liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents.

Deferred Financing Costs

Costs incurred in obtaining financing are capitalized and amortized on a straight-line basis, which approximates the effective interest method, over
the term of the related indebtedness. Amortization of such costs is included in interest expense and was $1,233 and $1,176 for the three months ended June 30, 2003 and 2002, respectively, and
$2,485 and $2,353 for the six months ended June 30, 2003 and 2002, respectively.

Deferred Leasing Costs

Costs incurred in connection with leases are capitalized and amortized on a straight-line basis over the terms of the related leases and included in
depreciation and amortization. Unamortized deferred leasing costs are charged to amortization expense upon early termination of the lease. Certain employees of the Operating Partnership are
compensated for providing leasing services to the Properties. The portion of such compensation, which is capitalized and amortized, approximated $730 and $706 for the three months ended
June 30, 2003 and 2002, respectively, and $1,492 and $1,696 for the six months ended June 30, 2003 and 2002, respectively.

Restricted Cash

Restricted cash includes tenant security deposits and escrow and reserve funds for debt service, real estate taxes, property insurance, capital improvements,
tenant improvements, and leasing costs established pursuant to certain mortgage financing arrangements.

Derivative Instruments

The Operating Partnership measures derivative instruments, including certain derivative instruments embedded in other contracts, at fair value and records them as
an asset or liability, depending on the Operating Partnership's rights or obligations under the applicable derivative contract. For derivatives designated as fair value hedges, the changes in the fair
value of both the derivative instrument and the hedged item are recorded in earnings. For derivatives designated as cash flow hedges, the effective portions of the derivative are reported in other
comprehensive income ("OCI") and are subsequently reclassified into earnings when the hedged item affects earnings. Changes in fair value of derivative instruments not designated as hedging and
ineffective portions of hedges are recognized in earnings in the affected period. See Note 9Interest Rate Contract.

Revenue Recognition

Base rental revenue is recognized on a straight-line basis over the terms of the respective leases. Unbilled rents receivable represents the amount by
which straight-line rental revenue exceeds rents currently billed in accordance with the lease agreements. Parking and other revenue includes income from parking spaces leased to tenants,
income from tenants for additional services provided by the Operating Partnership, income from tenants for early lease terminations and income from managing and/or leasing properties for third
parties.

11

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Reimbursements
are received from tenants for certain costs as provided in the lease agreements. These costs generally include real estate taxes, utilities, insurance, common area
maintenance and other recoverable costs. See Note 14.

Allowance for Doubtful Accounts

Management periodically performs a detailed review of amounts due from tenants to determine if accounts receivable balances are impaired based on factors
affecting the collectibility of those balances. Management's estimate of the allowance for doubtful accounts requires management to exercise significant judgment about the timing, frequency and
severity of collection losses, which affects the allowance and net income.

Income and Other Taxes

The Operating Partnership is a partnership and, as a result, all income and losses of the partnership are allocated to the partners for inclusion in their
respective income tax returns. Accordingly, no provision or benefit for income taxes has been made in the accompanying financial statements.

Earnings Per Unit

The Operating Partnership presents both basic and diluted earnings per unit ("EPU"). Basic EPU excludes dilution and is computed by dividing net income available
to common unitholders by the weighted average number of units outstanding for the period. Diluted EPU reflects the potential
dilution that could occur if securities or other contracts to issue common units were exercised or converted into common units, where such exercise or conversion would result in a lower EPU amount.

Distributions Payable

The distributions payable at June 30, 2003 represents distributions payable to preferred unitholders of record as of July 3, 2003 (10,000
Series C preferred units), distributions payable to common unitholders (65,859,497 common units) on that same date and preferred distributions payable to preferred unitholders (215,456
Series B preferred units) for the second quarter 2003. The second quarter 2003 Series C Preferred Unit distribution of $0.6722 per unit, common unit distributions of $0.63 per common
unit, as well as the second quarter preferred unit distributions of $18.1818 per Series B preferred unit were approved by the Board of Directors of the Corporation on June 17, 2003. The
Series C preferred unit distributions payable were paid on July 15, 2003. The common and Series B preferred unit distributions payable were paid on July 21, 2003.

The
distributions payable at December 31, 2002 represents distributions payable to common unitholders of record as January 6, 2003 (65,304,223 common units) and preferred
distributions payable to Series B preferred unitholders (215,894 Series B preferred units) for the fourth quarter 2002. The fourth quarter 2002 common unit distributions of $0.63 per
common unit, as well as the fourth quarter preferred unit distribution of $18.1818 per preferred unit, were approved by the Board of Directors of the Corporation on December 19, 2002 and paid
on January 17, 2003.

12

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Costs Incurred for Preferred Stock Issuances

Costs incurred in connection with the Corporation's preferred stock issuances are reflected as a reduction of General Partners' capital.

Stock Options

With respect to the Corporation's stock options which were granted prior to 2002, the Operating Partnership accounted for stock-based compensation using the
intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and related Interpretations ("APB No. 25"). Under APB
No. 25, compensation cost is measured as the excess, if any, of the quoted market price of the Corporation's stock at the date of grant over the exercise price of the option granted.
Compensation cost for stock options, if any, is recognized ratably over the vesting
period. The Corporation's policy is to grant options with an exercise price equal to the quoted closing market price of the Corporation's stock on the business day preceding the grant date.
Accordingly, no compensation cost has been recognized under the Corporation's stock option plans for the granting of stock options made prior to 2002. In 2002, the Operating Partnership adopted the
provisions of FASB No. 123, which requires, on a prospective basis, that the value of stock options at the grant date be amortized ratably into expense over the appropriate vesting period. The
Corporation did not grant any stock options in 2002. For the three and six month periods ended June 30, 2003, the Operating Partnership recorded stock options expense of $50 and $88,
respectively, for stock options granted in 2003. FASB No. 148, Accounting for Stock-Based CompensationTransition and Disclosure, was issued in December 2002 and amends FASB
No. 123, Accounting for Stock Based Compensation. FASB No. 148 provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock
based compensation. In addition, this Statement amends the disclosure requirements of FASB No. 123 to require prominent disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of the method used on reported results. FASB No. 148 disclosure requirements are presented as follows:

The
following table illustrates the effect on net income and earnings per unit if the fair value based method had been applied to all outstanding and unvested stock awards in each
period:

|                                                                                                                                |                       | Three Months Ended
June 30, |        | Six Months Ended
June 30, |  
|------------------------------------------------------------------------------------------------------------------------------- | --------------------- | --------------------------- | ------ | ------------------------- | -
|
|Net income available to common unitholders, as reported                                                                         |                       | $                           | 38,143 |                           | $
|Add: Stock-based employee compensation expense
        included in reported net income                                          |                       |                             | 50     |                           |  
|Deduct: Total stock-based employee compensation
        expense determined under fair value based method
        for all awards |                       |                             | (470   | )                         |  
|                                                                                                                                |                       |                             |        |                           |  
|Pro forma net income available to common unitholders  basic                                                                    |                       | $                           | 37,723 |                           | $
|                                                                                                                                |                       |                             |        |                           |  
|Earnings Per Common Unit:                                                                                                       |                       |                             |        |                           |  
|                                                                                                                                | Basic  as reported   |                             | $      | 0.58                      |  
|                                                                                                                                | Basic  pro forma     |                             | $      | 0.58                      |  
|                                                                                                                                | Diluted  as reported |                             | $      | 0.58                      |  
|                                                                                                                                | Diluted  pro forma   |                             | $      | 0.57                      |  
|                                                                                                                                |                       |                             |        |                           |  

13

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Reclassifications

Certain reclassifications have been made to prior period amounts in order to conform with current period presentation.

3.     REAL ESTATE PROPERTY TRANSACTIONS

On March 28, 2003, the Operating Partnership sold 1770 St. James Place, a 103,689 square-foot office building located in Houston, Harris
County, Texas, for net sales proceeds of approximately $5,469. The Operating Partnership recognized a gain of $1,324 from the sale, which is presented in discontinued operations for the six months
ended June 30, 2003. See Note 6.

4.     INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES

The debt of the Operating Partnership's unconsolidated joint ventures aggregating $156,019 as of June 30, 2003 is non-recourse to the Operating
Partnership, except for customary exclusions pertaining to such matters as intentional misuse of funds, environmental conditions and material misrepresentations, and except as otherwise indicated
below.

HPMC

On April 23, 1998, the Operating Partnership entered into a joint venture agreement with HCG Development, L.L.C. and Summit Partners I, L.L.C. to form HPMC
Development Partners, L.P. and, on July 21, 1998, entered into a second joint venture, HPMC Development Partners II, L.P. (formerly known as HPMC Lava Ridge Partners, L.P.), with these same
parties. HPMC Development Partners, L.P.'s efforts focused on two development projects, commonly referred to as Continental Grand II and Summit Ridge. HPMC Development Partners II, L.P.'s efforts have
focused on six development projects, commonly referred to as Lava Ridge, Pacific Plaza I & II and Stadium Gateway.

The
Operating Partnership has a 50 percent ownership interest and HCG Development, L.L.C. and Summit Partners I, L.L.C. (both of which are not affiliated with the Operating
Partnership) collectively have a 50 percent ownership interest in HPMC Development Partners, L.P. and HPMC Development Partners II, L.P. (the "HPMC Joint Ventures"). Significant terms of the
applicable partnership agreements, among other things, call for the Operating Partnership to provide 80 percent and HCG Development, L.L.C. and Summit Partners I, L.L.C. to collectively provide
20 percent of the development equity capital to the HPMC Joint Ventures. As the Operating Partnership has agreed to fund development equity capital disproportionate to its ownership interest,
it was granted a preferred return of 10 percent on its invested capital as a priority. Profits and losses of each of the HPMC Joint Ventures are allocated to the partners based upon the
priority of distributions specified in the respective agreements and entitle the Operating Partnership to a preferred return, as well as 50 percent of each of the HPMC Joint Ventures' residual
profits above the preferred returns. Equity in earnings recognized by the Operating Partnership consists of preferred returns and the Operating Partnership's equity in the HPMC Joint Ventures'
earnings (loss) after giving effect to the HPMC Joint Ventures' payment of such preferred returns.



Continental Grand II is a 239,085 square-foot office building located in El Segundo, Los Angeles County, California, which was constructed and placed
in service by the venture. On June 29, 2001, the venture sold the office property for approximately $67,000.

14

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Summit Ridge is an office complex comprised of six one-story buildings, aggregating 133,841 square feet, located in San Diego, San Diego County,
California, which was constructed and placed in service by the venture. On January 29, 2001, the venture sold the office complex for approximately $17,450.



Lava Ridge is an office complex comprised of six two-story buildings, aggregating 183,200 square feet, located in Roseville, Placer County,
California, which was constructed and placed in service by the venture. On May 30, 2002, the venture sold the office complex for approximately $31,700.



Pacific Plaza I & II is a two-phase development joint venture project, located in Daly City, San Mateo County, California between HPMC
Development Partners II, L.P. and a third-party entity. Phase I of the project, which commenced initial operations in August 2001, consists of a nine-story office building,
aggregating 364,384 square feet. Phase II comprises a six-story retail and theater complex. The theater portion of Phase II commenced initial operations in June 2002, with a portion
of the retail space commencing operations in August 2002. The Operating Partnership performs management services for these properties owned by the joint venture and recognized $78 and $71 in
fees for such services for the three months ended June 30, 2003 and 2002, respectively, and $153 and $122 for the six months ended June 30, 2003 and 2002, respectively.



Stadium Gateway is a development joint venture project, located in Anaheim, Orange County, California between HPMC Development Partners II, L.P. and a third-party
entity. The venture has constructed a six-story, 273,194 square-foot office building, which commenced initial operations in January 2002. On April 1, 2003, the
venture sold the office property for approximately $52,500.

G&G MARTCO (Convention Plaza)

On April 30, 1998, the Operating Partnership acquired a 49.9 percent interest in an existing joint venture, G&G Martco, which owns Convention Plaza,
a 305,618 square-foot office building, located in San Francisco, San Francisco County, California. A portion of the Operating Partnership's initial investment was financed through the
issuance of common units, as well as funds drawn from the Operating Partnership's revolving credit facilities. On June 4, 1999, the Operating Partnership acquired an additional
0.1 percent interest in G&G Martco through the issuance of common units. The venture has a mortgage loan with a $50,000 balance at June 30, 2003 secured by its office property. The
mortgage bears interest at a rate of the London Inter-Bank Offered Rate ("LIBOR") (1.12 percent at June 30, 2003) plus 162.5 basis points and matures in August 2003.
The venture is currently pursing an extension on the mortgage loan, although no assurance can be given that such extension will be obtained. The Operating Partnership has posted a $1,816 letter of
credit with the lender as a reserve for re-leasing costs. The Operating Partnership performs management and leasing services for the property owned by the joint venture and recognized $62
and $63 in fees for such services for the three months ended June 30, 2003 and 2002, respectively, and $123 and $126 for the six months ended June 30, 2003 and 2002, respectively.

15

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AMERICAN FINANCIAL EXCHANGE L.L.C.

On May 20, 1998, the Operating Partnership entered into a joint venture agreement with Columbia Development Company, L.L.C. to form American Financial
Exchange L.L.C. The venture was formed to acquire land for future development, located on the Hudson River waterfront in Jersey City, Hudson County, New Jersey, adjacent to the Operating Partnership's
Harborside Financial Center office complex. The Operating Partnership holds a 50 percent interest in the joint venture. Among other things, the partnership agreement provides for a preferred
return on the Operating Partnership's invested capital in the venture, in addition to the Operating Partnership's proportionate share of the venture's profit, as defined in the agreement. The joint
venture acquired land on which it constructed a parking facility, a portion of which is currently licensed to a parking operator. Such parking facility serves a ferry service between the Operating
Partnership's Harborside property and Manhattan. In the fourth quarter 2000, the joint venture started construction of Plaza 10, a 577,575 square-foot office building, on certain of the
land owned by the venture. Plaza 10 is 100 percent pre-leased to Charles Schwab & Co. Inc. ("Schwab") for a 15-year term. The lease agreement obligates the
venture, among other things, to deliver space to the tenant by required timelines and offers expansion options, at the tenant's election. Such options may obligate the venture to construct an
additional building or, at the Operating Partnership's option, to make space available in any of its existing Harborside properties. Should the venture be unable to or choose not to provide such
expansion space, the venture would be liable to Schwab for its actual damages, in no event to exceed $15,000. The amount of Schwab's actual damages, up to $15,000, has been guaranteed by the Operating
Partnership. The project, which commenced initial operations in September 2002, is currently projected to cost the Operating Partnership approximately $145,000, of which $134,720 has been
incurred by the Operating Partnership through June 30, 2003. The venture has an agreement with the City of Jersey City, New Jersey, in which it is required to make payments in lieu of property
taxes ("PILOT"). The agreement is for a term of 20 years. The PILOT is equal to two percent of Total Project Costs, as defined, with periodic increases, as defined. Total Project Costs, per the
agreement, are the greater of $78,821 or actual Total Project Costs, as defined. The Operating Partnership performs management and leasing services for the property owned by the joint venture and
recognized $78 and $0 in fees for such services for the three months ended June 30, 2003 and 2002, respectively, and $303 and $0 for the six months ended June 30, 2003 and 2002,
respectively.

RAMLAND REALTY ASSOCIATES L.L.C. (One Ramland Road)

On August 20, 1998, the Operating Partnership entered into a joint venture agreement with S.B. New York Realty Corp. to form Ramland Realty Associates
L.L.C. The venture was formed to own, manage and operate One Ramland Road, a 232,000 square-foot office/flex building and adjacent developable land, located in Orangeburg, Rockland County,
New York. In August 1999, the joint venture completed redevelopment of the property and placed the office/flex building in service. The Operating Partnership holds a 50 percent interest
in the joint venture. The venture has a mortgage loan with a $15,109 balance at June 30, 2003 secured by its office/flex property. The mortgage bears interest at a rate of LIBOR plus 175 basis
points and matures in January 2004. The loan provides for a one-year extension option upon payment of a fee and subject to certain conditions. In 2001, the property's then principal
tenant, Superior Bank was closed by the Office of Thrift Supervision, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. The tenant continued to meet its rental payment
obligations through June 2002. In July 2002, the tenant vacated the premises and the FDIC notified the joint venture that it was rejecting the lease as of July 16, 2002. As a
result of the uncertainty regarding the tenant's ability to meet its obligations through the remainder of the term of its lease, the joint venture wrote off unbilled rents receivable of $1,573 and
deferred leasing costs of $705, which is included in the Operating Partnership's equity in earnings for the six months ended June 30, 2002. Following Superior Bank's closure in
June 2002, the venture's management determined it was unlikely a prospective tenant would retain tenant improvements previously made to Superior

16

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Bank's
space and, accordingly, the venture accelerated amortization of those tenant improvements and recorded a charge of $3,586, which is included in the Operating Partnership's equity in earnings
for the six months ended June 30, 2003. The Operating Partnership performs management, leasing and other services for the property owned by the joint venture and recognized $3 and $25 in fees
for such services for the three months ended June 30, 2003 and 2002, respectively, and $8 and $49 for the six months ended June 30, 2003 and 2002, respectively.

ASHFORD LOOP ASSOCIATES L.P. (1001 South Dairy Ashford/2100 West Loop South)

On September 18, 1998, the Operating Partnership entered into a joint venture agreement with Prudential to form Ashford Loop Associates L.P. The venture
was formed to own, manage and operate 1001 South Dairy Ashford, a 130,000 square-foot office building acquired on September 18, 1998, and 2100 West Loop South, a 168,000
square-foot office building acquired on November 25, 1998, both located in Houston, Harris County, Texas. The Operating Partnership holds a 20 percent interest in the joint
venture. The Operating Partnership performed management and leasing services through March 2002 for the properties owned by the joint venture and recognized $0 and $45 in fees for such services
for the three and six month periods ended June 30, 2002, respectively. Under certain circumstances, Prudential has the right to convert its interest in the venture into common stock of the
Corporation at a discount to the stock's fair market value, based on the underlying fair value of Prudential's interest in the venture at the time of conversion. The Operating Partnership, at its
option, can elect to exchange cash in lieu of stock in an amount equal to the fair value of Prudential's interest.

In
May 2002, the Operating Partnership sent a notice to Prudential electing to exercise its option under the buy-sell provisions of the joint venture agreement.
Subsequently, Prudential sent notice to the Operating Partnership that it was exercising its option to put its interest in the joint venture to the Operating Partnership in exchange for common stock
of the Corporation as described above. In November 2002, the Operating Partnership and Prudential entered into a first amendment to their joint venture agreement pursuant to which:
(i) the Operating Partnership retracted its notice of exercise of the buy-sell provisions of the joint venture agreement, (ii) Prudential retracted its notice of exercise of
its option to put its interest in the joint venture to the Operating Partnership in exchange for common stock of the Corporation, as described above, (iii) the mechanics of the exercise by
either party of their respective buy-sell, sale and exchange rights ("Exit Rights") were clarified and confirmed, and (iv) each party agreed to a one-year moratorium on
the exercise of their respective Exit Rights while the parties attempt to reposition the assets of the joint venture.

ARCAP INVESTORS, L.L.C.

In 1999, the Operating Partnership invested $20,000 in ARCap Investors, L.L.C., a joint venture with several participants, which was formed to invest in
sub-investment grade tranches of commercial mortgage-backed securities ("CMBS"). William L. Mack, Chairman of the Board of Directors of the Corporation, is a principal of an entity that
owns approximately 28 percent of the venture and has nominated a member of its board of directors. As of December 31, 2001, the Operating Partnership held a 20.1 percent interest
in the common equity of ARCap Investors, L.L.C. On December 12, 2002, the Operating Partnership sold its interest in the venture for $20,225.

MC-SJP MORRIS V REALTY, LLC AND MC-SJP MORRIS VI REALTY, LLC

The Operating Partnership has an agreement with SJP Properties, which provides for a cooperative effort in seeking approvals to develop up to approximately
1.8 million square feet of office development on certain vacant land owned by the Operating Partnership and SJP Properties, located in Hanover and Parsippany, Morris County, New Jersey. The
agreement provides that the parties share equally in the costs associated with seeking such requisite approvals. Upon mutual consent, the Operating Partnership and SJP Properties may enter into one or
more joint ventures to construct on

17

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the
vacant land, or seek to dispose of their respective vacant land parcels subject to the agreement. Pursuant to the agreement with SJP Properties, on August 24, 2000, the Operating
Partnership entered into a joint venture with SJP Properties to form MC-SJP Morris V Realty, LLC and MC-SJP Morris VI Realty, LLC, which acquired developable land for
approximately $16,193. The acquired land is able to accommodate approximately 650,000 square feet of office space and is located in Parsippany, Morris County, New Jersey. The venture entered into an
agreement pertaining to the acquired land and two other land parcels in Parsippany with an insurance company to provide for a guarantee on the funding of the development of four office properties,
aggregating 850,000 square feet. Such agreement provides, if the venture elects to develop, that the insurance company will be admitted to the joint venture and provide all the equity required to fund
the development, subject to certain conditions. The venture has a mortgage loan with a $17,983 balance at June 30, 2003 secured by its land, which is guaranteed by the insurance company. The
mortgage bears interest at a rate of LIBOR plus 125 basis points and matures in March 2004.

SOUTH PIER AT HARBORSIDEHOTEL DEVELOPMENT

On November 17, 1999, the Operating Partnership entered into an agreement with Hyatt Corporation ("Hyatt") to develop a 350-room hotel on the
South Pier at Harborside Financial Center, Jersey City, Hudson County, New Jersey, which was completed and commenced initial operations in July 2002. The Operating Partnership owns a
50 percent interest in the venture. The venture has a mortgage loan with a commercial bank with a $62,868 balance at June 30, 2003 secured by its hotel property, which each partner,
including the Operating Partnership, has severally guaranteed repayment of approximately $11,148. The debt bears interest at a rate of LIBOR plus 275 basis points and matures in December 2003.
The loan provides for two one-year extension options upon payment of a fee and subject to certain conditions. Additionally, the venture has an $8,000 loan with the City of Jersey City,
provided by the U.S. Department of Housing and Urban Development. The loan currently bears interest at fixed rates ranging from 6.09 percent to 6.62 percent and matures in
August 2020. The Operating Partnership has posted an $8,000 letter of credit in support of this loan, $4,000 of which is indemnified by Hyatt.

18

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SUMMARIES OF UNCONSOLIDATED JOINT VENTURES

The following is a summary of the financial position of the unconsolidated joint ventures in which the Operating Partnership had investment interests as of
June 30, 2003 and December 31, 2002:

|                                                                         |                                                            | June 30, 2003
|------------------------------------------------------------------------ | ---------------------------------------------------------- | -------------
|
|Assets:                                                                  |                                                            |              
|                                                                         | Rental property, net                                       |              
|                                                                         | Other assets                                               |              
|                                                                         |                                                            |              
|                                                                         | Total assets                                               |              
|                                                                         |                                                            |              
|Liabilities and partners'/members' capital (deficit):                    |                                                            |              
|                                                                         | Mortgages and loans payable                                |              
|                                                                         | Other liabilities                                          |              
|                                                                         | Partners'/members' capital (deficit)                       |              
|                                                                         |                                                            |              
|                                                                         | Total liabilities and partners'/members' capital (deficit) |              
|                                                                         |                                                            |              
|Operating Partnership's investment in unconsolidated joint ventures, net |                                                            | $            
|                                                                         |                                                            |              

|                                                                         |                                                            | December 31, 2002
|------------------------------------------------------------------------ | ---------------------------------------------------------- | -----------------
|
|Assets:                                                                  |                                                            |                  
|                                                                         | Rental property, net                                       |                  
|                                                                         | Other assets                                               |                  
|                                                                         |                                                            |                  
|                                                                         | Total assets                                               |                  
|                                                                         |                                                            |                  
|Liabilities and partners'/members' capital (deficit):                    |                                                            |                  
|                                                                         | Mortgages and loans payable                                |                  
|                                                                         | Other liabilities                                          |                  
|                                                                         | Partners'/members' capital (deficit)                       |                  
|                                                                         |                                                            |                  
|                                                                         | Total liabilities and partners'/members' capital (deficit) |                  
|                                                                         |                                                            |                  
|Operating Partnership's investment in unconsolidated joint ventures, net |                                                            | $                
|                                                                         |                                                            |                  

19

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The following is a summary of the results of operations of the unconsolidated joint ventures for the period in which the Operating Partnership had investment interests during the three
months ended June 30, 2003 and 2002:

|                                                                                   |  | Three Months Ended June 30, 2003 |      
|---------------------------------------------------------------------------------- |  | -------------------------------- | -----
|
|Total revenues                                                                     |  | $                                | 4,645
|Operating and other expenses                                                       |  |                                  | (17  
|Depreciation and amortization                                                      |  |                                  |     
|Interest expense                                                                   |  |                                  |     
|                                                                                   |  |                                  |      
|Net income (loss)                                                                  |  | $                                | 4,628
|                                                                                   |  |                                  |      
|Operating Partnership's equity in earnings (loss) of unconsolidated joint ventures |  | $                                | 2,339
|                                                                                   |  |                                  |      

|                                                                            |  | Three Months Ended June 30, 2002 |       
|--------------------------------------------------------------------------- |  | -------------------------------- | ------
|
|Total revenues                                                              |  | $                                | 10,779
|Operating and other expenses                                                |  |                                  | (268  
|Depreciation and amortization                                               |  |                                  | (256  
|Interest expense                                                            |  |                                  | (82   
|                                                                            |  |                                  |       
|Net income (loss)                                                           |  | $                                | 10,173
|                                                                            |  |                                  |       
|Operating Partnership's equity in earnings of unconsolidated joint ventures |  | $                                | 4,718 
|                                                                            |  |                                  |       

20

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The following is a summary of the results of operations of the unconsolidated joint ventures for the period in which the Operating Partnership had investment interests during the six
months ended June 30, 2003 and 2002:

|                                                                                   |  | Six Months Ended June 30, 2003 |      
|---------------------------------------------------------------------------------- |  | ------------------------------ | -----
|
|Total revenues                                                                     |  | $                              | 4,623
|Operating and other expenses                                                       |  |                                | (20  
|Depreciation and amortization                                                      |  |                                |     
|Interest expense                                                                   |  |                                |     
|                                                                                   |  |                                |      
|Net income (loss)                                                                  |  | $                              | 4,603
|                                                                                   |  |                                |      
|Operating Partnership's equity in earnings (loss) of unconsolidated joint ventures |  | $                              | 2,423
|                                                                                   |  |                                |      

|                                                                                   |  | Six Months Ended June 30, 2002 |       
|---------------------------------------------------------------------------------- |  | ------------------------------ | ------
|
|Total revenues                                                                     |  | $                              | 12,087
|Operating and other expenses                                                       |  |                                | (660  
|Depreciation and amortization                                                      |  |                                | (641  
|Interest expense                                                                   |  |                                | (233  
|                                                                                   |  |                                |       
|Net income (loss)                                                                  |  | $                              | 10,553
|                                                                                   |  |                                |       
|Operating Partnership's equity in earnings (loss) of unconsolidated joint ventures |  | $                              | 6,020 
|                                                                                   |  |                                |       

21

---

5.     DEFERRED CHARGES AND OTHER ASSETS

|                                             |  | June 30,
2003 |         | December 31,
2002 |  
|-------------------------------------------- |  | ------------- | ------- | ----------------- | -
|Deferred leasing costs                       |  | $             | 125,197 |                   | $
|Deferred financing costs                     |  |               | 24,508  |                   |  
|                                             |  |               |         |                   |  
|                                             |  |               | 149,705 |                   |  
|Accumulated amortization                     |  |               | (47,315 | )                 |  
|                                             |  |               |         |                   |  
|Deferred charges, net                        |  |               | 102,390 |                   |  
|Notes receivable                             |  |               | 9,930   |                   |  
|Prepaid expenses and other assets            |  |               | 11,458  |                   |  
|                                             |  |               |         |                   |  
|Total deferred charges and other assets, net |  | $             | 123,778 |                   | $
|                                             |  |               |         |                   |  

6.     DISCONTINUED OPERATIONS

Effective January 1, 2002, the Operating Partnership adopted the provisions of FASB No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, which supercedes FASB No. 121. FASB No. 144 requires that long-lived assets that are to be disposed of by sale be measured at the lower of book
value or fair value less cost to sell. FASB No. 144 retains the requirements of FASB No. 121 regarding impairment loss recognition and measurement. In addition, it requires that one
accounting model be used for long-lived assets to be disposed of by sale and broadens the presentation of discontinued operations to include more disposal transactions. As the statement
requires implementation on a prospective basis, properties which were identified as held for sale by the Operating Partnership prior to January 1, 2002 are presented in the accompanying
financial statements in a manner consistent with the presentation prior to January 1, 2002. As the Operating Partnership sold 1770 St. James Place (see Note 3) during the six months
ended June 30, 2003, the Operating Partnership has presented this property as discontinued operations in its statements of operations for the three and six months ended June 30, 2003 and
2002.

The
following tables summarize income from discontinued operations and the related realized gain on sale of rental property for the three and six months ended June 30, 2003 and
2002:

|                                    |  | Three Months Ended
June 30, |   | Six Months Ended
June 30, |  
|----------------------------------- |  | --------------------------- | - | ------------------------- | -
|
|Total revenues                      |  | $                           |  |                           | $
|Operating and other expenses        |  |                             |  |                           |  
|Depreciation and amortization       |  |                             |  |                           |  
|                                    |  |                             |   |                           |  
|Income from discontinued operations |  | $                           |  |                           | $
|                                    |  |                             |   |                           |  

|                                         |  | Three Months Ended
June 30, |   | Six Months Ended
June 30,
|---------------------------------------- |  | --------------------------- | - | -------------------------
|
|Realized gain on sale of rental property |  | $                           |  |                          
|                                         |  |                             |   |                          

22

---

7.     SENIOR UNSECURED NOTES

A summary of the Operating Partnership's senior unsecured notes as of June 30, 2003 and December 31, 2002 is as follows:

|                                                          |  | June 30,
2003 |           | December 31,
2002 |   | Effective
Rate(a) | 
|--------------------------------------------------------- |  | ------------- | --------- | ----------------- | - | ----------------- | 
|7.180%, $95,283 Face Amount Notes, due December 31, 2003  |  | $             |          |                   | $ | 95,283            | 
|7.000%, $300,000 Face Amount Notes, due March 15, 2004    |  |               | 299,943   |                   |   | 299,904           | 
|7.250%, $300,000 Face Amount Notes, due March 15, 2009    |  |               | 298,659   |                   |   | 298,542           | 
|7.835%, $15,000 Face Amount Notes, due December 15, 2010  |  |               | 15,000    |                   |   | 15,000            | 
|7.750%, $300,000 Face Amount Notes, due February 15, 2011 |  |               | 298,689   |                   |   | 298,602           | 
|6.150%, $94,914 Face Amount Notes, due December 15, 2012  |  |               | 90,261    |                   |   | 90,015            | 
|5.820%, $26,105 Face Amount Notes, due March 15, 2013     |  |               | 25,033    |                   |   |                  | 
|4.600%, $100,000 Face Amount Notes, due June 15, 2013     |  |               | 99,715    |                   |   |                  | 
|                                                          |  |               |           |                   |   |                   | 
|Total Senior Unsecured Notes                              |  | $             | 1,127,300 |                   | $ | 1,097,346         | 
|                                                          |  |               |           |                   |   |                   | 

---

On
March 14, 2003, the Operating Partnership exchanged $25,000 face amount of existing 7.18 percent senior unsecured notes due December 31, 2003,
with interest payable monthly in arrears, for $26,105 face amount of 5.82 percent senior unsecured notes due March 15, 2013, with interest payable semi-annually in arrears.
The exchange was completed with Teachers Insurance and Annuity Association ("TIAA"). In addition, the Operating Partnership also repurchased $25,000 face amount of notes due December 31, 2003
from TIAA for $26,105. The Operating Partnership recorded $1,402 in loss on early retirement of debt, net, for the six months ended June 30, 2003 for costs incurred in connection with the notes
transactions.

On
June 12, 2003, the Operating Partnership issued $100,000 face amount of 4.60 percent senior unsecured notes due June 15, 2013 with interest payable
semi-annually in arrears. The total proceeds from the issuance (net of selling commissions and discount) of approximately $99,064 was used primarily to repay $62,800 of mortgage debt at a
discount of $1,700 (recorded as a reduction in loss on early retirement of debt, net), and to reduce outstanding borrowings under the 2002 Unsecured Facility, as defined in Note 8. For the
three months ended June 30, 2003, the Operating Partnership recorded $1,540 in loss on early retirement of debt, net, for the write-off of the unamortized balance of an interest
rate contract in conjunction with the repayment of mortgage debt (see Note 9: Mortgages and Loans PayableInterest Rate Contract). The unsecured notes were issued at a discount of
approximately $286, which is being amortized over the term as an adjustment to interest expense.

On
June 25, 2003, the Operating Partnership repurchased $45,283 face amount of existing 7.18 percent senior unsecured notes due December 31, 2003, with interest
payable monthly in arrears, for $46,707 from TIAA. The repurchase fully retired the 7.18 percent senior unsecured notes which were due December 31, 2003. The Operating Partnership
recorded $1,437 in loss on early retirement of debt, net, for the three months ended June 30, 2003 for costs incurred in connection with the notes repurchase.

8.     REVOLVING CREDIT FACILITIES

2002 UNSECURED FACILITY

On September 27, 2002, the Operating Partnership obtained an unsecured revolving credit facility ("2002 Unsecured Facility") with a current borrowing
capacity of $600,000 from a group of 14 lenders. The interest rate on outstanding borrowings under the credit line is currently LIBOR plus 70 basis points. The Operating Partnership may instead elect
an interest rate representing the higher of the lender's prime rate or the Federal Funds rate plus 50 basis points. The 2002 Unsecured Facility also requires a 20 basis point facility fee on the
current borrowing capacity payable quarterly in arrears. The 2002 Unsecured Facility matures in September 2005, with an extension option of one year, which would require upon exercise a payment
of 25 basis points of the then borrowing capacity of the credit line.

23

---

In
the event of a change in the Operating Partnership's unsecured debt rating, the interest and facility fee rates will be adjusted in accordance with the following table:

|Operating Partnership's
Unsecured Debt Ratings:
S&P/Moody's/Fitch (a) |  | Interest Rate
Applicable Basis Points
Above LIBOR |  | Facility Fee
Basis Points
|--------------------------------------------------------------------- |  | -------------------------------------------------- |  | -------------------------
|No rating or less than BBB-/Baa3/BBB-                                 |  | 120.0                                              |  | 30.0                     
|BBB-/Baa3/BBB-                                                        |  | 95.0                                               |  | 20.0                     
|BBB/Baa2/BBB (current)                                                |  | 70.0                                               |  | 20.0                     
|BBB+/Baa1/BBB+                                                        |  | 65.0                                               |  | 15.0                     
|A-/A3/A- or higher                                                    |  | 60.0                                               |  | 15.0                     

---

The
Operating Partnership previously had an unsecured revolving credit facility ("2000 Unsecured Facility") with a borrowing capacity of $800,000 from a group of 24
lenders. The interest rate on outstanding borrowings under the credit line was LIBOR plus 80 basis points. The Operating Partnership had the option to elect an interest rate representing the higher of
the lender's prime rate or the Federal Funds rate plus 50 basis points. The 2000 Unsecured Facility also required a 20 basis point facility fee on the current borrowing capacity payable quarterly in
arrears. In conjunction with obtaining the 2002 Unsecured Facility, the Operating Partnership repaid in full and terminated the 2000 Unsecured Facility on September 27, 2002.

SUMMARY

As of June 30, 2003 and December 31, 2002, the Operating Partnership had outstanding borrowings of $95,000 and $73,000, respectively, under the 2002
Unsecured Facility (with an aggregate borrowing capacity of $600,000).

9.     MORTGAGES AND LOANS PAYABLE

The Operating Partnership has mortgages and loans payable collateralized by certain of the Operating Partnership's rental properties. Payments on mortgages and
loans payable are generally due in monthly installments of principal and interest, or interest only.

A
summary of the Operating Partnership's mortgages and loans payable as of June 30, 2003 and December 31, 2002 is as follows:

|                                  |  |                              |  |            |         | Principal Balance at |         |        
|--------------------------------- |  | ---------------------------- |  | ---------- | ------- | -------------------- | ------- | -------
|
|HarborsidePlaza 1                |  | U.S. West Pension Trust      |  | 4.36       | %       | $                    |        |        
|Mack-Cali Willowbrook             |  | CIGNA                        |  | 8.67       | %       |                      |        |        
|1633 Littleton Road               |  | First Union/Maher Partners   |  | 3.87       | %       |                      |        |        
|400 Chestnut Ridge                |  | Prudential Insurance Co.     |  | 9.44       | %       |                      | 11,055  |        
|Mack-Cali Centre VI               |  | Principal Life Insurance Co. |  | 6.87       | %       |                      | 35,000  |        
|Various (b)                       |  | Prudential Insurance Co.     |  | 7.10       | %       |                      | 150,000 |        
|Mack-Cali Bridgewater I           |  | New York Life Ins. Co.       |  | 7.00       | %       |                      | 23,000  |        
|Mack-Cali Woodbridge II           |  | New York Life Ins. Co.       |  | 7.50       | %       |                      | 17,500  |        
|Mack-Cali Short Hills             |  | Prudential Insurance Co.     |  | 7.74       | %       |                      | 24,074  |        
|500 West Putnam Avenue            |  | New York Life Ins. Co.       |  | 6.52       | %       |                      | 7,965   |        
|HarborsidePlazas 2 and 3         |  | Northwestern/Principal       |  | 7.36       | %       |                      | 156,091 |        
|Mack-Cali Airport                 |  | Allstate Life Insurance Co.  |  | 7.05       | %       |                      | 10,137  |        
|Kemble Plaza I                    |  | Mitsubishi Tr & Bk Co.       |  | LIBOR+0.65 | %       |                      | 32,178  |        
|2200 Renaissance Boulevard        |  | TIAA                         |  | 5.89       | %       |                      | 18,977  |        
|Soundview Plaza                   |  | TIAA                         |  | 6.02       | %       |                      | 19,358  |        
|                                  |  |                              |  |            |         |                      |         |        
|Total Mortgages and Loans Payable |  |                              |  | $          | 505,335 |                      | $       | 582,026
|                                  |  |                              |  |            |         |                      |         |        

24

---

---

INTEREST RATE CONTRACT

On July 18, 2002, the Operating Partnership entered into a forward treasury rate lock agreement with a commercial bank. The agreement was used to fix the
index rate on $61,525 of the Harborside-Plaza 1 mortgage at 3.285 percent per annum, for which the interest rate was re-set to the three-year U.S. Treasury Note plus 130
basis points for the three years beginning November 4, 2002. On November 4, 2002, the Operating Partnership paid $1,888 in settlement of the forward treasury rate lock agreement entered
into in July 2002, which was being amortized to interest expense over a three-year period.

In
conjunction with the repayment of the HarborsidePlaza 1 mortgage on June 12, 2003, the Operating Partnership wrote off the unamortized balance of the interest rate
contract of $1,540, which was recorded in loss on early retirement of debt, net, for the three months ended June 30, 2003.

CASH PAID FOR INTEREST AND INTEREST CAPITALIZED

Cash paid for interest for the six months ended June 30, 2003 and 2002 was $61,168 and $61,080, respectively. Interest capitalized by the Operating
Partnership for the six months ended June 30, 2003 and 2002 was $4,664 and $11,647, respectively.

SUMMARY OF INDEBTEDNESS

As of June 30, 2003, the Operating Partnership's total indebtedness of $1,727,635 (weighted average interest rate of 6.82 percent) was comprised of
$127,178 of revolving credit facility borrowings and other variable rate mortgage debt (weighted average rate of 1.96 percent) and fixed rate debt of $1,600,457 (weighted average rate of
7.21 percent).

As
of December 31, 2002, the Operating Partnership's total indebtedness of $1,752,372 (weighted average interest rate of 7.03 percent) was comprised of $105,178 of
revolving credit facility borrowings and other variable rate mortgage debt (weighted average rate of 2.41 percent) and fixed rate debt of $1,647,194 (weighted average rate of
7.33 percent).

10.   PARTNERS' CAPITAL

Partners' capital in the accompanying consolidated financial statements relates to common units held by the Corporation in the Operating Partnership, common units
held by the limited partners, preferred units ("Preferred Units") held by the Corporation in the Operating Partnership, and preferred units held by preferred unitholders of the Operating Partnership.

Net
income allocated to the preferred unitholders and limited partners reflects their pro-rata share of net income and distributions.

PREFERRED STOCK

On March 14, 2003, in a publicly registered transaction with a single institutional buyer, the Corporation completed the sale and issuance of 10,000 shares
of eight-percent Series C cumulative redeemable perpetual preferred stock ("Series C Preferred Stock") in the form of 1,000,000 depositary shares ($25 stated value per depositary share).
Each depositary share represents 1/100th of a share of Series C Preferred Stock. The
Corporation received net proceeds of approximately $24,836 from the sale. See Note 11: Redeemable Partnership Units.

The
Series C Preferred Stock has preference rights with respect to liquidation and distributions over the common stock. Holders of the Series C Preferred Stock, except
under certain limited conditions, will not be entitled to vote on any matters. In the event of a cumulative arrearage equal to six quarterly dividends, holders of the Series C Preferred Stock
will have the right to elect two additional members to serve on the Corporation's Board of Directors until dividends have been paid in full. At June 30, 2003, there were no dividends in
arrears. The Corporation may issue unlimited additional preferred stock ranking on a parity with the Series C Preferred Stock but may not issue any preferred stock senior to the Series C
Preferred Stock without the consent of two-thirds of its holders. The Series C Preferred Stock is essentially on an equivalent basis in priority with the Series B Preferred
Units.

25

---

Except
under certain conditions relating to the Corporation's qualification as a REIT, the Series C Preferred Stock is not redeemable prior to March 14, 2008. On and after
such date, the Series C Preferred Stock will be redeemable at the option of the Corporation, in whole or in part, at $25 per depositary share, plus accrued and unpaid dividends.

REPURCHASE OF GENERAL PARTNER UNITS

The Corporation has a share repurchase program which was authorized by its Board of Directors in September 2000 to purchase up to $150,000 of the
Corporation's outstanding common stock ("Repurchase Program"). During the six months ended June 30, 2003, the Corporation purchased and retired 35,000 shares of its outstanding common stock for
an aggregate cost of approximately $1,030. The Corporation purchased and retired a total of 3,746,400 shares of its outstanding common stock for an aggregate cost of approximately $104,512 from
September 2000 through June 30, 2003, with a remaining authorization under the Repurchase Program of $45,488. Concurrent with these purchases, the Corporation sold to the Operating
Partnership 3,746,400 common units for approximately $104,512.

STOCK OPTION PLANS

In September 2000, the Corporation established the 2000 Employee Stock Option Plan ("2000 Employee Plan") and the 2000 Director Stock Option Plan ("2000
Director Plan"). In May 2002, shareholders of the Corporation approved amendments to both plans to increase the total shares reserved for issuance under both plans from 2,700,000 to 4,350,000
shares (subject to adjustment) of the Corporation's common stock (from 2,500,000 to 4,000,000 shares under the 2000 Employee Plan and from 200,000 to 350,000 shares under the 2000 Director Plan). In
1994, and as subsequently amended, the Corporation established the Mack-Cali Employee Stock Option Plan ("Employee Plan") and the Mack-Cali Director Stock Option Plan
("Director Plan") under which a total of 5,380,188 shares (subject to adjustment) of the Corporation's common stock have been reserved for issuance (4,980,188 shares under the Employee Plan and
400,000 shares under the Director Plan). Stock options granted under the Employee Plan in 1994 and 1995 have become exercisable over a three-year period and those options granted under
both the 2000 Employee Plan and Employee Plan subsequent to 1995 become exercisable over a five-year period. All stock options granted under both the 2000 Director Plan and Director Plan
become exercisable in one year. All options were granted at the fair market value at the dates of grant and have terms of ten years. As of June 30, 2003 and December 31, 2002, the stock
options outstanding had a weighted average remaining contractual life of approximately 6.6 and 6.4 years, respectively.

Information
regarding the Corporation's stock options activity for the six months ended June 30, 2003 is summarized below:

|                                     |  | Shares
Under
Options |   | Weighted
Average
Exercise
Price
|------------------------------------ |  | -------------------- | - | -------------------------------
|Outstanding at January 1, 2003       |  | 3,585,930            |   | $                              
|Granted                              |  | 954,800              |   | $                              
|Exercised                            |  | (498,062             | ) | $                              
|Lapsed or canceled                   |  | (82,040              | ) | $                              
|                                     |  |                      |   |                                
|Outstanding at June 30, 2003         |  | 3,960,628            |   | $                              
|                                     |  |                      |   |                                
|Options Exercisable at June 30, 2003 |  | 2,027,248            |   | $                              
|Available for grant at June 30, 2003 |  | 2,357,093            |   |                                
|                                     |  |                      |   |                                

26

---

The Corporation recognized stock options expense of $50 and none for the three month periods ended June 30, 2003 and 2002, respectively, and $88 and none for the six month periods
ended June 30, 2003 and 2002, respectively.

STOCK WARRANTS

The Corporation has 223,000 warrants outstanding which enable the holders to purchase an equal number of shares of its common stock ("Stock Warrants") at $33 per
share (the market price at date of issuance). Such warrants are all currently exercisable and expire on January 31, 2007.

The
Corporation also has 339,976 Stock Warrants outstanding which enable the holders to purchase an equal number of its shares of common stock at $38.75 per share (the market price at
date of issuance). Such warrants are all currently exercisable and expire on December 12, 2007.

Information
regarding the Corporation's Stock Warrants activity for the six months ended June 30, 2003 is summarized below:

|                               |  | Warrants |  
|------------------------------ |  | -------- | -
|Outstanding at January 1, 2003 |  | 642,476  |  
|Exercised                      |  | (29,500  | )
|Lapsed or canceled             |  | (50,000  | )
|                               |  |          |  
|Outstanding at June 30, 2003   |  | 562,976  |  
|                               |  |          |  
|Exercisable at June 30, 2003   |  | 562,976  |  
|                               |  |          |  

STOCK COMPENSATION

The Corporation has granted stock awards to officers, directors, and certain other employees of the Corporation (collectively, "Restricted Stock Awards"), which
allow each person to receive a certain amount of shares of the Corporation's common stock generally over a five-year vesting period. Certain Restricted Stock Awards are contingent upon the
Operating Partnership meeting certain performance objectives.

On
January 2, 2003, the Corporation issued 168,000 shares of Restricted Stock Awards to its five executive officers (Mitchell E. Hersh, Timothy M. Jones, Barry Lefkowitz, Roger W.
Thomas and Michael Grossman) and entered into certain other agreements in connection therewith, as well as certain agreements amending the terms of the restricted share award agreements with such
executive officers originally entered into in 1999 and 2001.

On
June 27, 2003, the Corporation issued 5,500 shares of Restricted Stock Awards to its non-employee directors, which are scheduled to vest on January 1, 2004.

All
Restricted Stock Awards provided to the officers, directors, and certain other employees were granted under the Employee Plan, the 2000 Employee Plan and the 2000 Director Plan.

Information
regarding the Restricted Stock Awards activity for the six months ended June 30, 2003 is summarized below:

|                               |  | Shares  |  
|------------------------------ |  | ------- | -
|Outstanding at January 1, 2003 |  | 153,736 |  
|Granted                        |  | 174,839 |  
|Vested                         |  | (58,206 | )
|Canceled                       |  | (500    | )
|                               |  |         |  
|Outstanding at June 30, 2003   |  | 269,869 |  
|                               |  |         |  

27

---

DEFERRED STOCK COMPENSATION PLAN FOR DIRECTORS

The Deferred Compensation Plan for Directors, which commenced January 1, 1999, allows non-employee directors of the Corporation to elect to
defer up to 100 percent of their annual retainer fee into deferred stock units. The deferred stock units are convertible into an equal number of shares of common stock upon the directors'
termination of service from the Board of Directors or a change in control of the Corporation, as defined in the plan. Deferred stock units are credited to each director quarterly using the closing
price of the Corporation's common stock on the applicable dividend record date for the respective quarter. Each participating director's account is also credited for an equivalent amount of deferred
stock units based on the dividend rate for each quarter.

During
the six months ended June 30, 2003 and 2002, 3,345 and 2,463 deferred stock units were earned, respectively. As of June 30, 2003 and 2002, there were 20,099 and
14,202 director stock units outstanding, respectively.

EARNINGS PER UNIT

Basic EPU excludes dilution and is computed by dividing net income available to common unitholders by the weighted average number of units outstanding for the
period. Diluted EPU reflects the potential dilution that could occur if securities or other contracts to issue common units were exercised or converted into common units.

The
following information presents the Operating Partnership's results for the three months ended June 30, 2003 and 2002 in accordance with FASB No. 128:

|                                                                                          |  | Three Months Ended
June 30, |       
|----------------------------------------------------------------------------------------- |  | --------------------------- | ------
|
|Computation of Basic EPU                                                                  |  |                             |       
|Income from continuing operations                                                         |  | $                           | 42,732
|Deduct: Series C Preferred Unit distributions                                             |  |                             | (672  
|Series B Preferred Unit distributions                                                     |  |                             | (3,917
|Add: Realized gains (losses) and unrealized losses on disposition of rental property, net |  |                             |      
|                                                                                          |  |                             |       
|Income from continuing operations available to common units                               |  |                             | 38,143
|Income from discontinued operations                                                       |  |                             |      
|                                                                                          |  |                             |       
|Net income available to common unitholders                                                |  | $                           | 38,143
|                                                                                          |  |                             |       
|Weighted average common units                                                             |  |                             | 65,331
|                                                                                          |  |                             |       
|Basic EPU:                                                                                |  |                             |       
|Income from continuing operations                                                         |  | $                           | 0.58  
|Income from discontinued operations                                                       |  |                             |      
|                                                                                          |  |                             |       
|Net income available to common unitholders                                                |  | $                           | 0.58  
|                                                                                          |  |                             |       

28

---

|                                                                                                       |  | Three Months Ended
June 30,
|------------------------------------------------------------------------------------------------------ |  | ---------------------------
|
|Computation of Diluted EPU                                                                             |  |                            
|Income from continuing operations available to common units                                            |  | $                          
|Add:Income from continuing operations attributable to Operating Partnership  Series B preferred units |  |                            
|                                                                                                       |  |                            
|Income from continuing operations for diluted earnings per unit                                        |  |                            
|Income from discontinued operations for diluted earnings per unit                                      |  |                            
|                                                                                                       |  |                            
|Net income available to common unitholders                                                             |  | $                          
|                                                                                                       |  |                            
|Weighted average units                                                                                 |  |                            
|                                                                                                       |  |                            
|Diluted EPU:                                                                                           |  |                            
|Income from continuing operations                                                                      |  | $                          
|Income from discontinued operations                                                                    |  |                            
|                                                                                                       |  |                            
|Net income available to common unitholders                                                             |  | $                          
|                                                                                                       |  |                            

29

---

The
following information presents the Operating Partnership's results for the six months ended June 30, 2003 and 2002 in accordance with FASB No. 128:

|                                                                                          |  | Six Months Ended
June 30, |       
|----------------------------------------------------------------------------------------- |  | ------------------------- | ------
|
|Computation of Basic EPU                                                                  |  |                           |       
|Income from continuing operations                                                         |  | $                         | 79,377
|Deduct: Series C Preferred Unit distributions                                             |  |                           | (672  
|Series B Preferred Unit distributions                                                     |  |                           | (7,842
|Add: Realized gains (losses) and unrealized losses on disposition of rental property, net |  |                           |      
|                                                                                          |  |                           |       
|Income from continuing operations available to common units                               |  |                           | 70,863
|Income from discontinued operations                                                       |  |                           | 1,354 
|                                                                                          |  |                           |       
|Net income available to common unitholders                                                |  | $                         | 72,217
|                                                                                          |  |                           |       
|Weighted average common units                                                             |  |                           | 65,186
|                                                                                          |  |                           |       
|Basic EPU:                                                                                |  |                           |       
|Income from continuing operations                                                         |  | $                         | 1.09  
|Income from discontinued operations                                                       |  |                           | 0.02  
|                                                                                          |  |                           |       
|Net income available to common unitholders                                                |  | $                         | 1.11  
|                                                                                          |  |                           |       

|                                                                                                       |  | Six Months Ended
June 30,
|------------------------------------------------------------------------------------------------------ |  | -------------------------
|
|Computation of Diluted EPU                                                                             |  |                          
|Income from continuing operations available to common units                                            |  | $                        
|Add:Income from continuing operations attributable to Operating Partnership  Series B Preferred Units |  |                          
|                                                                                                       |  |                          
|Income from continuing operations for diluted earnings per unit                                        |  |                          
|Income from discontinued operations for diluted earnings per unit                                      |  |                          
|                                                                                                       |  |                          
|Net income available to common unitholders                                                             |  | $                        
|                                                                                                       |  |                          
|Weighted average units                                                                                 |  |                          
|                                                                                                       |  |                          
|Diluted EPU:                                                                                           |  |                          
|Income from continuing operations                                                                      |  | $                        
|Income from discontinued operations                                                                    |  |                          
|                                                                                                       |  |                          
|Net income available to common unitholders                                                             |  | $                        
|                                                                                                       |  |                          

30

---

The
following schedule reconciles the units used in the basic EPU calculation to the units used in the diluted EPU calculation:

|                                                                                         |  | Three Months Ended
June 30, |  | Six Months Ended
June 30,
|---------------------------------------------------------------------------------------- |  | --------------------------- |  | -------------------------
|
|Basic EPU Units                                                                          |  | 65,331                      |  | 65,168                   
|Add: Operating Partnership  Series B Preferred Units (after conversion to common units) |  |                            |  |                         
|Stock options                                                                            |  | 427                         |  | 429                      
|Stock Warrants                                                                           |  | 3                           |  | 9                        
|                                                                                         |  |                             |  |                          
|Diluted EPU Units                                                                        |  | 65,761                      |  | 65,606                   
|                                                                                         |  |                             |  |                          

Not
included in the computations of diluted EPU were 3,533,216 and 3,354,809 stock options, 560,300 and 635,816 Stock Warrants, 6,219,316 and 6,333,639 Series B Preferred Units,
and 0 and 2,000,000 Unit Warrants, as such securities were anti-dilutive during the three months ended June 30, 2003 and 2002, respectively. Also excluded from diluted EPU
computations were 3,694,018 and 3,354,809 stock options, 561,638 and 640,396 Stock Warrants, 6,224,980 and 0 Series B Preferred Units, and 0 and 2,000,000 Unit Warrants, as such securities were
anti-dilutive during the six months ended June 30, 2003 and 2002, respectively. Unvested restricted stock outstanding as of June 30, 2003 and June 30, 2002 were
269,869 and 153,736, respectively.

Through
June 30, 2003, under the Repurchase Program, the Corporation purchased and retired a total of 5,615,600 shares of its outstanding common stock for an aggregate cost of
approximately $157,074.
Concurrent with these purchases the Corporation sold an equal number of common units to the Operating Partnership for approximately $157,074.

11.   REDEEMABLE PARTNERSHIP UNITS

Preferred Units

The Operating Partnership has two classes of preferred unitsSeries B and Series C, which are described as follows:

Series B

The Series B Preferred Units have a stated value of $1,000 per unit and are preferred as to assets over any class of common units or other class of
preferred units of the Operating Partnership, based on circumstances per the applicable unit certificates. The quarterly distribution on each Series B Preferred Unit is an amount equal to the
greater of (i) $16.875 (representing 6.75 percent of the Series B Preferred Unit stated value on an annualized basis) or (ii) the quarterly distribution attributable to a
Series B Preferred Unit determined as if such unit had been converted into common units, subject to adjustment for customary anti-dilution rights. Each of the Series B
Preferred Units may be converted at any time into common units at a conversion price of $34.65 per unit. Common units received pursuant to such conversion may be redeemed for an equal number of shares
of common stock. At any time after June 11, 2005, the Operating Partnership may cause the mandatory conversion of the Series B Preferred Units into common units at the conversion price
of $34.65 per unit if, for at least 20 of the prior consecutive 30 days, the closing price of the Corporation's common stock equals or exceeds $34.65. The Operating Partnership is prohibited
from taking certain actions that would adversely affect the rights of the holders of Series B Preferred Units without the consent of at least 662/3 percent of the outstanding
Series B Preferred Units, including authorizing, creating or issuing any additional preferred units ranking senior to or equal with the Series B Preferred Units; provided, however, that
such

31

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consent
is not required if the Operating Partnership issues preferred units ranking equal (but not senior) to the Series B Preferred Units in an aggregate amount up to the greater of
(a) $200,000 in stated value and (b) 10 percent of the sum of (1) the combined market capitalization of the Corporation's common stock and the Operating Partnership's
common and Series B Preferred Units, as if converted into common stock, and (2) the aggregate liquidation preference on any of the Corporation's non-convertible preferred
stock or the Operating Partnership's non-convertible preferred units. As of June 30, 2003, the calculation in the above clause (b) was $264,545.

Series C

In connection with the Corporation's issuance of $25,000 of Series C cumulative redeemable perpetual preferred stock, the Corporation acquired from the
Operating Partnership $25,000 of Series C Preferred Units (the "Series C Preferred Units"), which have terms essentially identical to the Series C preferred stock and rank equal
with the Series B Preferred Units. See Note 10: Partners' Capital.

Common Units

Certain individuals and entities own common units in the Operating Partnership. A common unit and a share of common stock of the Corporation have substantially
the same economic characteristics in as much as they effectively share equally in the net income or loss of the Operating Partnership. Common units are redeemable by the common unitholders at their
option, subject to certain restrictions, on the basis of one common unit for either one share of common stock or cash equal to the fair market value of a share at the time of the redemption. The
Corporation has the option to deliver shares of common stock in exchange for all or any portion of the cash requested. The common unitholders may not put the units for cash to the Corporation or the
Operating Partnership. When a unitholder redeems a common unit for common stock of the Corporation, limited partners' capital is reduced and the General Partners' capital is increased.

12.   EMPLOYEE BENEFIT PLAN

All employees of the Corporation who meet certain minimum age and period of service requirements are eligible to participate in a 401(k) defined contribution plan
(the "401(k) Plan"). The 401(k) Plan allows eligible employees to defer up to 15 percent of their annual compensation, subject to certain limitations imposed by federal law. The amounts
contributed by employees are immediately vested and non-forfeitable. Under the 401(k) Plan, the Corporation, at management's discretion, may match employee contributions and/or make
discretionary contributions. Total expense incurred by the Operating Partnership for the three months ended June 30, 2003 and 2002 was $100 and $100, respectively, and for the six months ended
June 30, 2003 and 2002 was $200 and $200, respectively.

32

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13.   COMMITMENTS AND CONTINGENCIES

TAX ABATEMENT AGREEMENTS

Harborside Financial Center

Pursuant to an agreement with the City of Jersey City, New Jersey, the Operating Partnership is required to make payments in lieu of property taxes ("PILOT") on
its Harborside Plaza 2 and 3 properties. The agreement, which commenced in 1990, is for a term of 15 years. Such PILOT is equal to two percent of Total Project Costs, as defined, in year one
and increases by $75 per annum through year 15. Total Project Costs, as defined, are $145,644. The PILOT totaled $953 and $934 for the three months ended June 30, 2003 and 2002, respectively,
and $1,906 and $1,869 for the six months ended June 30, 2003 and 2002, respectively. The PILOT on these two properties had been challenged as part of a larger effort by several neighboring
towns to question past practices of the City of Jersey City in attracting large development. In May 2003, the Operating Partnership, together with most of the other property owners whose
abatements had been similarly challenged, entered into settlement agreements with the challenging towns, pursuant to which these challenges were being resolved. These settlement agreements are
currently before the tax court hearing the challenges for ratification, and therefore have not yet been finalized. The Operating Partnership does not believe that the final outcome will result in a
material adverse impact to the Operating Partnership as there is the potential that the majority of the expense at the properties may be passed along to the properties' tenants.

The
Operating Partnership entered into a similar PILOT agreement with the City of Jersey City, New Jersey on its Harborside Plaza 4-A property. The agreement, which commenced
in 2000, is for a term of 20 years. The PILOT is equal to two percent of Total Project costs, as defined, and increases by 10 percent in years 7, 10 and 13 and by 50 percent in
year 16. Total Project costs, as defined, are $45,497. The PILOT totaled $227 and $252 for the three months ended June 30, 2003 and 2002, respectively, and $454 and $497 for the six months
ended June 30, 2003 and 2002, respectively.

Additionally,
the Operating Partnership entered into a similar PILOT agreement with the City of Jersey City, New Jersey on its Harborside Plaza 5 property. The agreement, which commences
upon substantial completion of the property, as defined, is for a term of 20 years. The PILOT is equal to two percent of Total Project Costs, as defined, and increases by 10 percent in
years 7, 10 and 13, and by 50 percent in year 16. Total Project Costs, per the agreement, are the greater of $132,294 or actual Total Project Costs, as defined. The PILOT totaled $961 and none
for the three months ended June 30, 2003 and 2002, respectively, and $1,623 and none for the six months ended June 30, 2003 and 2002, respectively.

The
Operating Partnership is a defendant in other litigation arising in the normal course of business activities. Management does not believe that the ultimate resolution of these
matters will have a materially adverse effect upon the Operating Partnership.

14.   TENANT LEASES

The Properties are leased to tenants under operating leases with various expiration dates through 2018. Substantially all of the leases provide for annual base
rents plus recoveries and escalation charges based upon the tenant's proportionate share of and/or increases in real estate taxes and certain operating costs, as defined, and the pass through of
charges for electrical usage.

15.   SEGMENT REPORTING

The Operating Partnership operates in one business segmentreal estate. The Operating Partnership provides leasing, management, acquisition,
development, construction and tenant-related services for its portfolio. The Operating Partnership does not have any foreign operations. The

33

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accounting
policies of the segments are the same as those described in Note 2, excluding straight-line rent adjustments, depreciation and amortization and non-recurring
charges.

The
Operating Partnership evaluates performance based upon net operating income from the combined properties in the segment.

Selected
results of operations for the three and six months ended June 30, 2003 and 2002 and selected asset information as of June 30, 2003 and December 31, 2002
regarding the Operating Partnership's operating segment are as follows:

|                                           |                   | Total Segment |   | Corporate & Other (e) |  | Total Operating
Partnership |        
|------------------------------------------ | ----------------- | ------------- | - | --------------------- |  | --------------------------- | -------
|Total contract revenues (a)                |                   |               |   |                       |  |                             |        
|Three months ended:                        |                   |               |   |                       |  |                             |        
|                                           | June 30, 2003     |               | $ | 145,658               |  | $                           | (4,248 
|                                           | June 30, 2002     |               |   | 139,532               |  |                             | 394    
|Six months ended:                          |                   |               |   |                       |  |                             |        
|                                           | June 30, 2003     |               | $ | 293,639               |  | $                           | (7,371 
|                                           | June 30, 2002     |               |   | 280,248               |  |                             | 712    
|Total operating and interest expenses (b): |                   |               |   |                       |  |                             |        
|Three months ended:                        |                   |               |   |                       |  |                             |        
|                                           | June 30, 2003     |               | $ | 58,666                |  | $                           | 21,656 
|                                           | June 30, 2002     |               |   | 41,355                |  |                             | 33,138 
|Six months ended:                          |                   |               |   |                       |  |                             |        
|                                           | June 30, 2003     |               | $ | 121,407               |  | $                           | 43,718 
|                                           | June 30, 2002     |               |   | 82,646                |  |                             | 66,377 
|Equity in earnings:                        |                   |               |   |                       |  |                             |        
|Three months ended:                        |                   |               |   |                       |  |                             |        
|                                           | June 30, 2003     |               | $ | 6,819                 |  | $                           |       
|                                           | June 30, 2002     |               |   | 5,871                 |  |                             | 3,503  
|Six months ended:                          |                   |               |   |                       |  |                             |        
|                                           | June 30, 2003     |               | $ | 9,199                 |  | $                           |       
|                                           | June 30, 2002     |               |   | 6,783                 |  |                             | 1,286  
|Net operating income (c):                  |                   |               |   |                       |  |                             |        
|Three months ended:                        |                   |               |   |                       |  |                             |        
|                                           | June 30, 2003     |               | $ | 93,811                |  | $                           | (25,904
|                                           | June 30, 2002     |               |   | 104,048               |  |                             | (29,241
|Six months ended:                          |                   |               |   |                       |  |                             |        
|                                           | June 30, 2003     |               | $ | 181,431               |  | $                           | (51,089
|                                           | June 30, 2002     |               |   | 204,385               |  |                             | (64,379
|Total assets:                              |                   |               |   |                       |  |                             |        
|                                           | June 30, 2003     |               | $ | 3,760,062             |  | $                           | 34,811 
|                                           | December 31, 2002 |               |   | 3,761,665             |  |                             | 34,764 
|Total long-lived assets (d):               |                   |               |   |                       |  |                             |        
|                                           | June 30, 2003     |               | $ | 3,645,496             |  | $                           | 5,614  
|                                           | December 31, 2002 |               |   | 3,648,390             |  |                             | 5,254  

---

34

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16.   IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

FASB No. 145

In April 2002, the FASB issued FASB No. 145, Rescission of FASB No. 4, 44, and 64, Amendment of FASB No. 13 and Technical Corrections.
This statement eliminates the requirement to report gains and losses from extinguishment of debt as extraordinary unless they meet the criteria of APB Opinion 30.
Debt extinguishments that were classified as extraordinary in prior periods presented that do not meet the criteria of APB Opinion 30 shall be reclassified. FASB No. 145 is effective for fiscal
years beginning after May 15, 2002. As of January 1, 2003, the Operating Partnership adopted FASB No. 145, and recorded costs associated with the early retirement of debt in
continuing operations as "loss on early retirement of debt, net" in 2003.

FASB Interpretation No. 45

In November 2002, the FASB issued Interpretation No. 45 ("FIN 45"), Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others, which changes the accounting for, and disclosure of certain guarantees. Beginning with transactions entered into after December 31, 2002, certain
guarantees are to be recorded at fair value, which is different from prior practice, under which a liability was recorded only when a loss was probable and reasonably estimable. In general, the change
applies to contracts or indemnification agreements that contingently require the Operating Partnership to make payments to a guaranteed third-party based on changes in an underlying asset, liability,
or an equity security of the guaranteed party.

35

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The
accounting provisions apply for new or modified guarantees entered into after December 31, 2002. The Operating Partnership has adopted the new disclosure requirements
effective in the financial statements for the year ended December 31, 2002. The adoption of FIN 45 did not have a material adverse impact on the Operating Partnership's financial position or
results of operations.

FASB Interpretation No. 46

On January 17, 2003, the FASB issued Interpretation No. 46 ("FIN 46"), Consolidation of Variable Interest Entities, the primary objective of which
is to provide guidance on the identification of entities for which control is achieved through means other than voting rights ("variable interest entities" or "VIEs") and to determine when and which
business enterprise should consolidate the VIE (the "primary beneficiary"). This new model applies when either (1) the equity investors (if any) do not have a controlling financial interest or
(2) the equity investment at risk is insufficient to finance that entity's activities without additional financial support. In addition, FIN 46 requires additional disclosures.

FIN
46 applies immediately to VIEs created after January 31, 2003, and to VIEs in which an enterprise obtains an interest after that date. It applies in the first interim period
beginning after June 15, 2003, to VIEs in which the Operating Partnership held a variable interest that it acquired before February 1, 2003. The Operating Partnership is evaluating the
potential impact of FIN 46 on the Operating Partnership's financial position and results of operations.

FASB No. 150

In May 2003, the FASB issued FASB No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. This
statement establishes standards for how an issuer classifies and measures in its balance sheet certain financial instruments with characteristics of both liabilities and equity. It requires that an
issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances) because that financial instrument embodies an obligation of the issuer. Many of those
instruments were previously classified as equity.

This
Statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003, except for mandatorily redeemable financial instruments of nonpublic entities. For financial instruments created before the issuance date of this Statement and
still existing at the beginning of the interim period of adoption, transition shall be achieved by reporting the cumulative effect of a change in an accounting principle by initially measuring the
financial instruments at fair value or other measurement attribute required by this Statement. Restatement is not permitted. The Operating Partnership is evaluating the potential impact of the
adoption of FASB No. 150 on the Operating Partnership's financial position and results of operations.

36

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

The
following discussion should be read in conjunction with the Consolidated Financial Statements of Mack-Cali Realty, L.P. and the notes thereto
(collectively, the "Financial Statements"). Certain defined terms used herein have the meaning ascribed to them in the Financial Statements.

Critical Accounting Policies

Rental Property

Rental properties are stated at cost less accumulated depreciation and amortization. Costs directly related to the acquisition, development and construction of
rental properties are capitalized. Capitalized development and construction costs include pre-construction costs essential to the development of the property, development and construction
costs, interest, property taxes, insurance, salaries and other project costs incurred during the period of development. Interest capitalized by the Operating Partnership for the three months ended
June 30, 2003 and 2002 was $2.3 million and $6.2 million, respectively, and $4.7 million and $11.6 million for the six months ended June 30, 2003 and 2002,
respectively. Ordinary repairs and maintenance are expensed as incurred; major replacements and betterments, which improve or extend the life of the asset, are capitalized and depreciated over their
estimated useful lives. Fully-depreciated assets are removed from the accounts.

The
Operating Partnership considers a construction project as substantially completed and held available for occupancy upon the completion of tenant improvements, but no later than one
year from cessation of major construction activity (as distinguished from activities such as routine maintenance and cleanup). If portions of a rental project are substantially completed and occupied
by tenants, or held available for occupancy, and other portions have not yet reached that stage, the substantially completed portions are accounted for as a separate project. The Operating Partnership
allocates costs incurred between the portions under construction and the portions substantially completed and held available for occupancy and capitalizes only those costs associated with the portion
under construction.

On
a periodic basis, management assesses whether there are any indicators that the value of the Operating Partnership's rental properties may be impaired. A property's value is impaired
only if management's estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property are less than the carrying value of the property. To the
extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the property over the fair value of the property. The Operating Partnership's estimates of aggregate
future cash flows expected to be generated by each property are based on a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space,
competition for tenants, changes in market rental rates, and costs to operate each property. As these factors are difficult to predict and are subject to future events that may alter management's
assumptions, the future cash flows estimated by management in its impairment analyses may not be achieved.

Rental Property Held for Sale

When assets are identified by management as held for sale, the Operating Partnership discontinues depreciating the assets and estimates the sales price, net of
selling costs, of such assets. If, in management's opinion, the net sales price of the assets which have been identified as held for sale is less than the net book value of the assets, a valuation
allowance is established.

If
circumstances arise that previously were considered unlikely and, as a result, the Operating Partnership decides not to sell a property previously classified as held for sale, the
property is reclassified as held and used. A property that is reclassified is measured and recorded individually at the lower of (a) its carrying amount before the property was classified as
held for sale, adjusted for any

37

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depreciation
(amortization) expense that would have been recognized had the property been continuously classified as held and used, or (b) the fair value at the date of the subsequent decision
not to sell.

Effective
January 1, 2002, the Operating Partnership adopted the provisions of FASB No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets,
which supercedes FASB No. 121. FASB No. 144 requires that long-lived assets that are to be disposed of by sale be measured at the lower of book value or fair value less cost
to sell. SFAS No. 144 retains the requirements of FASB No. 121 regarding impairment loss recognition and measurement. In addition, it requires that one accounting model be used for
long-lived assets to be disposed of by sale and broadens the presentation of discontinued operations to include more disposal transactions. As the statement requires implementation on a
prospective basis, properties which were identified as held for sale by the Operating Partnership prior to January 1, 2002 are presented in the accompanying financial statements in a manner
consistent with the prior year's presentation. Properties identified as held for sale and/or sold from January 1, 2002 forward are presented in discontinued operations for all periods
presented. See Note 6 to the Financial Statements.

Investments in Unconsolidated Joint Ventures

The Operating Partnership accounts for its investments in unconsolidated joint ventures under the equity method of accounting as the Operating Partnership
exercises significant influence, but does not control these entities. These investments are recorded initially at cost, as Investments in Unconsolidated Joint Ventures, and subsequently adjusted for
equity in earnings and cash contributions and distributions.

On
a periodic basis, management assesses whether there are any indicators that the value of the Operating Partnership's investments in unconsolidated joint ventures may be impaired. An
investment is impaired only if management's estimate of the value of the investment is less than the carrying value of the investment. To the extent impairment has occurred, the loss shall be measured
as the excess of the carrying amount of the investment over the value of the investment. See Note 4 to the Financial Statements.

Deferred Leasing Costs

Costs incurred in connection with leases are capitalized and amortized on a straight-line basis over the terms of the related leases and included in
depreciation and amortization. Unamortized deferred leasing costs are charged to amortization expense upon early termination of the lease. Certain employees of the Operating Partnership provide
leasing services to the Properties and receive compensation based on space leased. The portion of such compensation, which is capitalized and amortized, approximated $0.7 million and
$0.7 million for the three months ended June 30, 2003 and 2002, respectively, and $1.5 million and $1.7 million for the six months ended June 30, 2003 and 2002,
respectively.

Derivative Instruments

The Operating Partnership measures derivative instruments, including certain derivative instruments embedded in other contracts, at fair value and records them as
an asset or liability, depending on the Operating Partnership's rights or obligations under the applicable derivative contract. For derivatives designated as fair value hedges, the changes in the fair
value of both the derivative instrument and the hedged item are recorded in earnings. For derivatives designated as cash flow hedges, the effective portions of the derivative are reported in other
comprehensive income ("OCI") and are subsequently reclassified into earnings when the hedged item affects earnings. Changes in fair value of derivative instruments not designated as hedging and
ineffective portions of hedges are

38

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recognized
in earnings in the affected period. See Note 9 to the Financial StatementsInterest Rate Contract.

Revenue Recognition

Base rental revenue is recognized on a straight-line basis over the terms of the respective leases. Unbilled rents receivable represents the amount by
which straight-line rental revenue exceeds rents currently billed in accordance with the lease agreements. Parking and other revenue includes income from parking spaces leased to tenants,
income from tenants for
additional services provided by the Operating Partnership, income from tenants for early lease terminations and income from managing properties for third parties. Escalations and recoveries are
received from tenants for certain costs as provided in the lease agreements. These costs generally include real estate taxes, utilities, insurance, common area maintenance and other recoverable costs.
See Note 14 to the Financial Statements.

Allowance for Doubtful Accounts

Management periodically performs a detailed review of amounts due from tenants to determine if accounts receivable balances are impaired based on factors
affecting the collectibility of those balances. Management's estimate of the allowance for doubtful accounts requires management to exercise significant judgment about the timing, frequency and
severity of collection losses, which affects the allowance and net income.

Results from Operations

As a result of the economic climate in 2002 and thus far in 2003, substantially all of the real estate markets the Operating Partnership operates in materially
softened. Demand for office space declined significantly and vacancy rates increased in each of the Operating Partnership's markets since the first quarter of 2001. Through July 31, 2003, the
Operating Partnership's markets continued to be weak. The percentage leased in the Operating Partnership's consolidated portfolio of stabilized operating properties at June 30, 2003 remained
relatively unchanged at 92.2 percent from 92.3 percent at December 31, 2002 and decreased from 93.9 percent at June 30, 2002. Percentage leased includes all leases
in effect as of the period end date, some of which have commencement dates in the future and leases that expire at the period end date. Market rental rates have declined in most markets from peak
levels in late 2000 and early 2001. Rental rates on the Operating Partnership's space that was re-leased during the six months ended June 30, 2003 decreased an average of
7.7 percent compared to rates that were in effect under expiring leases, as compared to a 3.2 percent decrease for the same period in 2002. The Operating Partnership believes that
vacancy rates may continue to increase in most of its markets for the remainder of 2003.

The
Operating Partnership has a focused strategy geared to attractive opportunities in high-barrier-to-entry markets, primarily predicated on the
Operating Partnership's strong presence in the Northeast region.

Consistent
with its strategy, in the fourth quarter 2000, the Operating Partnership started construction of a 980,000 square-foot office property, known as Plaza 5, at its
Harborside Financial Center office complex in Jersey City, Hudson County, New Jersey. The project, which commenced initial operations in September 2002, is currently projected to cost
approximately $260 million, of which $215.1 million has been incurred by the Operating Partnership through June 30, 2003. Plaza 5 was approximately 51 percent leased as of
June 30, 2003. As Plaza 5 is currently a development property in lease-up, it is excluded from percentage leased in the Operating Partnership's consolidated portfolio of stabilized
operating properties referred to above. Had Plaza 5 been included in the Operating Partnership's consolidated portfolio of stabilized operating properties, the percentage leased would have been
1.5 percent lower as of June 30, 2003. Additionally, in the fourth quarter 2000, the Operating

39

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Partnership,
through a joint venture, started construction of a 577,575 square-foot office property, known as Plaza 10, on land owned by the joint venture located adjacent to the Operating
Partnership's Harborside complex. The Operating Partnership holds a 50 percent interest in the joint venture. Among other things, the joint venture agreement provides for a preferred return on
the Operating Partnership's invested capital in the venture in addition to the Operating Partnership's proportionate share of the venture's profit, as defined in the agreement. Plaza 10 is currently
projected to cost the Operating Partnership approximately $145 million, of which $134.7 million has been incurred by the Operating Partnership through June 30, 2003. The project,
which is 100 percent leased to Charles Schwab & Co. Inc. ("Schwab") for a 15-year term, commenced initial operations in September 2002. The lease agreement with
Schwab obligates the venture, among other things, to deliver space to the tenant by required timelines and offers expansion options at the tenant's election. Such options may obligate the venture to
construct an additional building or, at the Operating Partnership's option, to make space available in any of its existing Harborside properties. Should the venture be unable to, or choose not to,
provide such expansion space, the venture would be liable to Schwab for its actual damages, in no event to exceed $15 million. The amount of Schwab's actual damages, up to $15 million,
has been guaranteed by the Operating Partnership. The Operating Partnership anticipates expending an additional approximately $55.2 million for the completion of Plaza 5 and Plaza 10, which it
expects to fund primarily through drawing on its revolving credit facility.

The
following comparisons for the three and six month periods ended June 30, 2003 ("2003"), as compared to the three and six month periods ended June 30, 2002 ("2002"),
make reference to the following: (i) the effect of the "Same-Store Properties," which represents all in-service properties owned by the Operating Partnership at
March 31, 2002 (for the three-month period comparison), and which represents all in-service properties owned by the Operating Partnership at December 31, 2001 (for the
six-month period comparisons), excluding Dispositions as defined below; (ii) the effect of the "Acquired Properties," which represent all properties acquired by the Operating
Partnership or commencing initial operations from April 1, 2002 through June 30, 2003 (for the three-month periods comparisons), and which represent all properties acquired by the
Operating Partnership or commencing initial operations from January 1, 2002 through June 30, 2003 (for the six-month period comparisons),and; (iii) the effect of the
"Dispositions", which represent results for each period for those rental properties sold by the Operating Partnership during the respective periods.

40

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Three Months Ended June 30, 2003 Compared to Three Months Ended June 30, 2002

|                                                                                             |                                                 | Three Months Ended June 30, |         |         |   |         |        
|-------------------------------------------------------------------------------------------- | ----------------------------------------------- | --------------------------- | ------- | ------- | - | ------- | -------
|
|
|
|Revenue from rental operations:                                                              |                                                 |                             |         |         |   |         |        
|Base rents                                                                                   |                                                 | $                           | 127,841 |         | $ | 121,764 |        
|Escalations and recoveries from tenants                                                      |                                                 |                             | 14,191  |         |   | 14,394  |        
|Parking and other                                                                            |                                                 |                             | 3,292   |         |   | 4,531   |        
|                                                                                             |                                                 |                             |         |         |   |         |        
|                                                                                             | Sub-total                                       |                             |         | 145,324 |   |         | 140,689
|Interest income                                                                              |                                                 |                             | 265     |         |   | 446     |        
|                                                                                             |                                                 |                             |         |         |   |         |        
|                                                                                             | Total revenues                                  |                             |         | 145,589 |   |         | 141,135
|                                                                                             |                                                 |                             |         |         |   |         |        
|Property expenses:                                                                           |                                                 |                             |         |         |   |         |        
|Real estate taxes                                                                            |                                                 |                             | 16,133  |         |   | 15,319  |        
|Utilities                                                                                    |                                                 |                             | 9,541   |         |   | 9,257   |        
|Operating services                                                                           |                                                 |                             | 18,042  |         |   | 16,428  |        
|                                                                                             |                                                 |                             |         |         |   |         |        
|                                                                                             | Sub-total                                       |                             |         | 43,716  |   |         | 41,004 
|General and administrative                                                                   |                                                 |                             | 6,914   |         |   | 7,893   |        
|Depreciation and amortization                                                                |                                                 |                             | 29,354  |         |   | 27,520  |        
|Interest expense                                                                             |                                                 |                             | 28,722  |         |   | 25,596  |        
|Loss on early retirement of debt, net                                                        |                                                 |                             | 970     |         |   |        |        
|                                                                                             |                                                 |                             |         |         |   |         |        
|                                                                                             | Total expenses                                  |                             |         | 109,676 |   |         | 102,013
|                                                                                             |                                                 |                             |         |         |   |         |        
|Income from continuing operations before equity in earnings of unconsolidated joint ventures |                                                 |                             | 35,913  |         |   | 39,122  |        
|Equity in earnings of unconsolidated joint ventures, net                                     |                                                 |                             | 6,819   |         |   | 9,374   |        
|                                                                                             |                                                 |                             |         |         |   |         |        
|Income from continuing operations                                                            |                                                 |                             | 42,732  |         |   | 48,496  |        
|Discontinued operations:                                                                     |                                                 |                             |         |         |   |         |        
|                                                                                             | Income from discontinued operations             |                             |         |        |   |         | 98     
|                                                                                             | Realized gain on disposition of rental property |                             |         |        |   |         |       
|                                                                                             |                                                 |                             |         |         |   |         |        
|Total discontinued operations, net                                                           |                                                 |                             |        |         |   | 98      |        
|Realized gains (losses) and unrealized losses on disposition of rental property, net         |                                                 |                             |        |         |   | (4,840  | )      
|                                                                                             |                                                 |                             |         |         |   |         |        
|Net income                                                                                   |                                                 | $                           | 42,732  |         | $ | 43,754  |        
|Series C Preferred unit distributions                                                        |                                                 |                             | (672    | )       |   |        |        
|Series B Preferred unit distributions                                                        |                                                 |                             | (3,917  | )       |   | (3,863  | )      
|                                                                                             |                                                 |                             |         |         |   |         |        
|Net income available to common unitholders                                                   |                                                 | $                           | 38,143  |         | $ | 39,891  |        
|                                                                                             |                                                 |                             |         |         |   |         |        

41

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The following is a summary of the changes in revenue from rental operations and property expenses divided into Same-Store Properties, Acquired Properties and Dispositions
(dollars in thousands):

|                                        |  | Total Operating
Partnership |        | Same-Store Properties |       | Acquired Properties |   | Dispositions |  
|--------------------------------------- |  | --------------------------- | ------ | --------------------- | ----- | ------------------- | - | ------------ | -
|
|Revenue from rental operations:         |  |                             |        |                       |       |                     |   |              |  
|Base rents                              |  | $                           | 6,077  |                       | 5.0   | %                   | $ | 1,200        |  
|Escalations and recoveries from tenants |  |                             | (203   | )                     | (1.4  | )                   |   | (632         | )
|Parking and other                       |  |                             | (1,239 | )                     | (27.3 | )                   |   | (1,369       | )
|                                        |  |                             |        |                       |       |                     |   |              |  
|Total                                   |  | $                           | 4,635  |                       | 3.3   | %                   | $ | (801         | )
|                                        |  |                             |        |                       |       |                     |   |              |  
|Property expenses:                      |  |                             |        |                       |       |                     |   |              |  
|Real estate taxes                       |  | $                           | 814    |                       | 5.3   | %                   | $ | 12           |  
|Utilities                               |  |                             | 284    |                       | 3.1   |                     |   | (205         | )
|Operating services                      |  |                             | 1,614  |                       | 9.8   |                     |   | 1,115        |  
|                                        |  |                             |        |                       |       |                     |   |              |  
|Total                                   |  | $                           | 2,712  |                       | 6.6   | %                   | $ | 922          |  
|                                        |  |                             |        |                       |       |                     |   |              |  
|OTHER DATA:                             |  |                             |        |                       |       |                     |   |              |  
|Number of Consolidated Properties       |  |                             | 255    |                       |       |                     |   | 245          |  
|Square feet (in thousands)              |  |                             | 27,006 |                       |       |                     |   | 25,155       |  

Base
rents for the Same-Store Properties increased $1.2 million, or 1.0 percent, for 2003 as compared to 2002, due primarily to the effect of the
straight-line rent adjustments on account of amendments to lease agreements with Regus Business Centre Corp. in 2002. Escalations and recoveries from tenants for the Same-Store
Properties decreased $0.6 million, or 4.4 percent, for 2003 over 2002, due primarily to a reduction in the recovery of property expenses in 2003. Parking and other income for the
Same-Store Properties decreased $1.4 million, or 30.1 percent, due primarily to a decrease in lease termination fees in 2003.

Real
estate taxes on the Same-Store Properties increased $12,000, or 0.1 percent, for 2003 as compared to 2002. Utilities for the Same-Store Properties
decreased $0.2 million, or 2.2 percent, for 2003 as compared to 2002, due primarily to decreased usage in 2003. Operating services for the Same-Store Properties increased
$1.1 million, or 6.8 percent, due primarily to increased insurance costs and repair and maintenance expenses in 2003.

Interest
income decreased $0.2, or 40.6 percent, for 2003 as compared to 2002. This decrease was due primarily to lower notes receivable balances in 2003.

General
and administrative decreased by $1.0 million, or 12.4 percent, for 2003 as compared to 2002. This decrease was due primarily to a write-off of $500,000
from technology investments in 2002 and approximately $250,000 in costs for transactions not consummated in 2002.

Depreciation
and amortization increased by $1.8 million, or 6.7 percent, for 2003 over 2002. Of this increase, $2.8 million, or 10.2 percent, is due to the
Acquired Properties, which is partially offset by a decrease of $1.0 million or 3.5 percent, attributable to the Same-Store Properties.

Interest
expense increased $3.1 million, or 12.2 percent, for 2003 as compared to 2002. This increase is due primarily to lower capitalized interest in 2003 on account of
less development projects. See Note 7 to the Financial Statements.

Loss
on early retirement of debt, net, amounted to $1.0 million in 2003, which consisted primarily of a write-off of the unamortized balance of $1.5 million of
an interest rate contract in conjunction with

42

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the
repayment of certain mortgage debt and $1.4 million of costs incurred in connection with the repurchase of $45.3 million of 7.18 percent senior unsecured notes due
December 31, 2003, which are reduced by a discount of $1.7 million taken in conjunction with the early retirement of the same mortgage debt referred to above. See Note 7 to the
Financial Statements.

Equity
in earnings of unconsolidated joint ventures decreased $2.5 million, or 27.3 percent, for 2003 as compared to 2002. This is due primarily to the sale of the ARCap
joint venture investment in late 2002 resulting in a reduction in equity in earnings of $3.5 million in 2003, the sale of properties owned by the HPMC joint ventures in late 2002 and 2003
resulting in a reduction of $2.4 million in 2003, partially offset by the initial operations of a 577,575 square foot office property owned by the American Financial Exchange joint venture,
resulting in an increase in 2003 of $3.8 million. See Note 4 to the Financial Statements.

Income
from continuing operations before equity in earnings of unconsolidated joint ventures decreased to $35.9 million in 2003 from $39.1 million in 2002. The decrease of
approximately $3.2 million is due to the factors discussed above.

Net
income available to common unithholders decreased by $1.8 million, from $39.9 million in 2002 to $38.1 million in 2003. This decrease was a result of a decrease
in 2003 in income from continuing operations before equity in earnings of unconsolidated joint ventures of $3.2 million, a decrease in equity in earnings of unconsolidated joint ventures, net
of $2.5 million, Series C preferred unit distributions of $0.7 million in 2003, an increase in Series B preferred unit distributions of $0.1 million and a decrease
in income from discontinued operations of $0.1 million in 2003. This was partially offset by a realized gain on disposition of rental property of $4.8 million in 2002.

43

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Six Months Ended June 30, 2003 Compared to Six Months Ended June 30, 2002

|                                                                                             |                                                 | Six Months Ended
June 30, |         |         |   |         |        
|-------------------------------------------------------------------------------------------- | ----------------------------------------------- | ------------------------- | ------- | ------- | - | ------- | -------
|
|
|Revenue from rental operations:                                                              |                                                 |                           |         |         |   |         |        
|Base rents                                                                                   |                                                 | $                         | 254,089 |         | $ | 247,920 |        
|Escalations and recoveries from tenants                                                      |                                                 |                           | 30,024  |         |   | 27,586  |        
|Parking and other                                                                            |                                                 |                           | 9,154   |         |   | 7,592   |        
|                                                                                             |                                                 |                           |         |         |   |         |        
|                                                                                             | Sub-total                                       |                           |         | 293,267 |   |         | 283,098
|Interest income                                                                              |                                                 |                           | 591     |         |   | 784     |        
|                                                                                             |                                                 |                           |         |         |   |         |        
|                                                                                             | Total revenues                                  |                           |         | 293,858 |   |         | 283,882
|                                                                                             |                                                 |                           |         |         |   |         |        
|Property expenses:                                                                           |                                                 |                           |         |         |   |         |        
|Real estate taxes                                                                            |                                                 |                           | 32,046  |         |   | 30,604  |        
|Utilities                                                                                    |                                                 |                           | 20,437  |         |   | 19,333  |        
|Operating services                                                                           |                                                 |                           | 38,365  |         |   | 32,537  |        
|                                                                                             |                                                 |                           |         |         |   |         |        
|                                                                                             | Sub-total                                       |                           |         | 90,848  |   |         | 82,474 
|General and administrative                                                                   |                                                 |                           | 13,672  |         |   | 14,594  |        
|Depreciation and amortization                                                                |                                                 |                           | 58,555  |         |   | 51,472  |        
|Interest expense                                                                             |                                                 |                           | 58,233  |         |   | 51,955  |        
|Loss on early retirement of debt, net                                                        |                                                 |                           | 2,372   |         |   |        |        
|                                                                                             |                                                 |                           |         |         |   |         |        
|                                                                                             | Total expenses                                  |                           |         | 223,680 |   |         | 200,495
|                                                                                             |                                                 |                           |         |         |   |         |        
|Income from continuing operations before equity in earnings of unconsolidated joint ventures |                                                 |                           | 70,178  |         |   | 83,387  |        
|Equity in earnings of unconsolidated joint ventures, net                                     |                                                 |                           | 9,199   |         |   | 8,069   |        
|                                                                                             |                                                 |                           |         |         |   |         |        
|Income from continuing operations                                                            |                                                 |                           | 79,377  |         |   | 91,456  |        
|Discontinued operations:                                                                     |                                                 |                           |         |         |   |         |        
|                                                                                             | Income from discontinued operations             |                           |         | 30      |   |         | 284    
|                                                                                             | Realized gain on disposition of rental property |                           |         | 1,324   |   |         |       
|                                                                                             |                                                 |                           |         |         |   |         |        
|Total discontinued operations, net                                                           |                                                 |                           | 1,354   |         |   | 284     |        
|Realized gains (losses) and unrealized losses on disposition of rental property, net         |                                                 |                           |        |         |   | 2,258   |        
|                                                                                             |                                                 |                           |         |         |   |         |        
|Net income                                                                                   |                                                 | $                         | 80,731  |         | $ | 93,998  |        
|Series C Preferred unit distributions                                                        |                                                 |                           | (672    | )       |   |        |        
|Series B Preferred unit distributions                                                        |                                                 |                           | (7,842  | )       |   | (7,806  | )      
|                                                                                             |                                                 |                           |         |         |   |         |        
|Net income available to common unitholders                                                   |                                                 | $                         | 72,217  |         | $ | 86,192  |        
|                                                                                             |                                                 |                           |         |         |   |         |        

44

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The following is a summary of the changes in revenue from rental operations and property expenses divided into Same-Store Properties, Acquired Properties and Dispositions
(dollars in thousands):

|                                        |  | Total Operating
Partnership |        | Same-Store Properties |      | Acquired Properties |   | Dispositions |  
|--------------------------------------- |  | --------------------------- | ------ | --------------------- | ---- | ------------------- | - | ------------ | -
|
|Revenue from rental operations:         |  |                             |        |                       |      |                     |   |              |  
|Base rents                              |  | $                           | 6,169  |                       | 2.5  | %                   | $ | (1,842       | )
|                                        |  |                             |        |                       |      |                     |   |              |  
|Escalations and recoveries from tenants |  |                             | 2,438  |                       | 8.8  |                     |   | 2,430        |  
|Parking and other                       |  |                             | 1,562  |                       | 20.6 |                     |   | 98           |  
|                                        |  |                             |        |                       |      |                     |   |              |  
|Total                                   |  | $                           | 10,169 |                       | 3.6  | %                   | $ | 686          |  
|                                        |  |                             |        |                       |      |                     |   |              |  
|Property expenses:                      |  |                             |        |                       |      |                     |   |              |  
|Real estate taxes                       |  | $                           | 1,442  |                       | 4.7  | %                   | $ | 526          |  
|Utilities                               |  |                             | 1,104  |                       | 5.7  |                     |   | 250          |  
|Operating services                      |  |                             | 5,828  |                       | 17.9 |                     |   | 5,152        |  
|                                        |  |                             |        |                       |      |                     |   |              |  
|Total                                   |  | $                           | 8,374  |                       | 10.2 | %                   | $ | 5,928        |  
|                                        |  |                             |        |                       |      |                     |   |              |  
|OTHER DATA:                             |  |                             |        |                       |      |                     |   |              |  
|Number of Consolidated Properties       |  |                             | 255    |                       |      |                     |   | 245          |  
|Square feet (in thousands)              |  |                             | 27,006 |                       |      |                     |   | 25,155       |  

Base rents for the Same-Store Properties decreased $1.8 million, or 0.7 percent, for 2003 as compared to 2002, due
primarily to decreases in space leased and rental rates at the properties in 2003. Escalations and recoveries from tenants for the Same-Store Properties increased $2.4 million, or
8.7 percent, for 2003 over 2002, due primarily to the increased amount of total property expenses in 2003. Parking and other income for the Same-Store Properties increased
$0.1 million, or 1.3 percent.

Real
estate taxes on the Same-Store Properties increased $0.5 million, or 1.7 percent, for 2003 as compared to 2002, due primarily to property tax rate
increases in certain municipalities in 2003, partially offset by lower assessments on certain properties in 2003. Utilities for the Same-Store Properties increased $0.2 million, or
1.3 percent, for 2003 as compared to 2002, due primarily to increased usage in 2003 on account of the harsh winter. Operating services for the Same-Store Properties increased
$5.2 million, or 15.8 percent, due primarily to increased snow removal costs from the harsh winter in 2003.

Interest
income decreased $0.2, or 24.6 percent, for 2003 as compared to 2002. This decrease was due primarily to lower notes receivable balances in 2003.

General
and administrative decreased by $0.9 million, or 6.3 percent, for 2003 as compared to 2002. This decrease is due primarily to a write-off of $500,000
from technology investments in 2002, as well as lower salaries and related expense in 2003 over 2002 of $400,000.

Depreciation
and amortization increased by $7.1 million, or 13.8 percent, for 2003 over 2002. Of this increase, $1.1 million, or 2.1 percent, was attributable
to the Same-Store Properties, primarily on account of properties previously held for sale in 2002 not being depreciated during the period held for sale, which were no longer being held for
sale in 2003, and $6.0 million, or 11.7 percent, is due to the Acquired Properties.

Interest
expense increased $6.3 million, or 12.1 percent, for 2003 as compared to 2002. This increase was due primarily to lower capitalized interest in 2003 on account of
less development projects.

45

---

Loss
on early retirement of debt, net, amounted to $2.4 million in 2003, which consisted primarily of (a) $1.4 million in costs in connection with the exchange and
repurchase of $50.0 million in 7.18 percent senior unsecured notes due December 31, 2003, (b) a write-off of the unamortized balance of $1.5 million of
an interest rate contract in conjunction with the repayment of mortgage debt, and (c) $1.4 million of costs incurred in connection with the repurchase of $45.3 million of
7.18 percent senior unsecured notes due December 31, 2003, partially offset by a discount of $1.7 million taken in conjunction with the early retirement of the same mortgage debt
referred to above. See Note 7 to the Financial Statements.

Equity
in earnings of unconsolidated joint ventures increased $1.0 million, or 14.2 percent, for 2003 as compared to 2002. This was due primarily to the initial operations
of a 577,575 square foot office property owned by the American Financial Exchange joint venture resulting in an increase in 2003 of $8.0 million, partially offset by (a) the sale of the
ARCap joint venture investment in late 2002 resulting in a reduction $1.3 million in 2003, (b) the sale of properties owned by the HPMC joint ventures in late 2002 and 2003 resulting in
a reduction of $3.6 million in 2003, and (c) a loss in 2003 of $1.6 million from the initial operations of the Harborside South Pier hotel. See Note 4 to the Financial
Statements.

Income
from continuing operations before equity in earnings of unconsolidated joint ventures decreased to $70.2 million in 2003 from $83.4 million in 2002. The decrease of
approximately $13.2 million is due to the factors discussed above.

Net
income available to common unitholders decreased by $14.0 million, from $86.2 million in 2002 to $72.2 million in 2003. This decrease was a result of realized
gains (losses) and unrealized losses on disposition of rental property, net, of $2.2 million in 2002, a decrease in 2003 in income from continuing operations before equity in earnings of
unconsolidated joint ventures of $13.2 million, Series C preferred unit distributions of $0.7 million in 2003 and a decrease in income from discontinued operations of
$0.3 million in 2003. This was partially offset by an increase in equity in earnings of unconsolidated joint ventures, net, of $1.1 million, and a realized gain on disposition of rental
property of $1.3 million in 2002.

Liquidity and Capital Resources

Historically, rental revenue has been the principal source of funds to pay operating expenses, debt service and capital expenditures, excluding
non-recurring capital expenditures. To the extent that the Operating Partnership's cash flow from operating activities is insufficient to finance its non-recurring capital
expenditures such as property acquisition and development and construction costs and other capital expenditures, the Operating Partnership has and expects to continue to finance such activities
through borrowings under its revolving credit facility and other debt and equity financings.

The
Operating Partnership believes that with the current downturn in the economy in general, and the softening of the Operating Partnership's markets specifically, it is reasonably
likely that vacancy rates may continue to increase, effective rental rates on new and renewed leases may continue to decrease and tenant installation costs may continue to increase in most or all of
its markets during 2003. As a result of the potential negative effects on the Operating Partnership's rental revenue from the overall reduced demand for office space, the Operating Partnership's cash
flow may be insufficient to cover increased tenant installation costs over the short-term. If this situation were to occur, the Operating Partnership expects to finance any shortfall
through borrowings under its revolving credit facility and other debt and equity financings.

The
Operating Partnership expects to meet its short-term liquidity requirements generally through its working capital, net cash provided by operating activities and from its
revolving credit facility. The Operating Partnership frequently examines potential property acquisitions and development projects and, at any given time, one or more of such acquisitions or
development projects may be under

46

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consideration.
Accordingly, the ability to fund property acquisitions and development projects is a major part of the Operating Partnership's financing requirements. The Operating Partnership expects
to meet its financing requirements through funds generated from operating activities, proceeds from property sales, long-term and short-term borrowings (including draws on the
Operating Partnership's revolving credit facility) and the issuance of additional debt and/or equity securities.

As
of June 30, 2003, the Operating Partnership's total indebtedness of $1.7 billion (weighted average interest rate of 6.82 percent) was comprised of
$127.2 million of revolving credit facility borrowings and other variable rate mortgage debt (weighted average rate of 1.96 percent) and fixed rate debt of $1.6 billion (weighted
average rate of 7.21 percent).

The
Operating Partnership has three investment grade credit ratings. Standard & Poor's Rating Services ("S&P") and Fitch, Inc. ("Fitch") have each assigned their BBB rating
to existing and prospective senior unsecured debt of the Operating Partnership. S&P and Fitch have also assigned their BBB-rating to existing and prospective preferred stock offerings of
the Corporation. Moody's Investors Service ("Moody's") has assigned its Baa2 rating to existing and prospective senior unsecured debt of the Operating Partnership and its Baa3 rating to its existing
and prospective preferred stock offerings of the Corporation.

On
September 27, 2002, the Operating Partnership obtained an unsecured revolving credit facility with a current borrowing capacity of $600.0 million from a group of 14
lenders, as described in Note 8 to the Financial Statements. As of June 30, 2003, the Operating Partnership had outstanding borrowings of $95.0 million under its unsecured
revolving credit facility.

The
interest rate on outstanding borrowings under the unsecured facility is currently LIBOR plus 70 basis points. The Operating Partnership may instead elect an interest rate
representing the higher of the lender's prime rate or the Federal Funds rate plus 50 basis points. The unsecured facility also currently requires a 20 basis point facility fee on the current borrowing
capacity payable quarterly in arrears.

In
the event of a change in the Operating Partnership's unsecured debt rating, the interest and facility fee rates will be adjusted in accordance with the following table:

|Operating Partnership's
Unsecured Debt Ratings:
S&P/Moody's/Fitch (a) |  | Interest Rate
Applicable Basis Points
Above LIBOR |  | Facility Fee
Basis Points
|--------------------------------------------------------------------- |  | -------------------------------------------------- |  | -------------------------
|No rating or less than BBB-/Baa3/BBB-                                 |  | 120.0                                              |  | 30.0                     
|BBB-/Baa3/BBB-                                                        |  | 95.0                                               |  | 20.0                     
|BBB/Baa2/BBB (current)                                                |  | 70.0                                               |  | 20.0                     
|BBB+/Baa1/BBB+                                                        |  | 65.0                                               |  | 15.0                     
|A-/A3/A- or higher                                                    |  | 60.0                                               |  | 15.0                     

---

The
unsecured facility matures in September 2005, with an extension option of one year, which would require a payment of 25 basis points of the then borrowing capacity of the
credit line upon exercise. The Operating Partnership believes that the unsecured facility is sufficient to meet its revolving credit facility needs.

47

---

The
terms of the unsecured facility include certain restrictions and covenants which limit, among other things, the payment of dividends (as discussed below), the incurrence of
additional indebtedness, the incurrence of liens and the disposition of assets, and which require compliance with financial ratios relating to the maximum leverage ratio, the maximum amount of secured
indebtedness, the minimum amount of tangible net worth, the minimum amount of debt service coverage, the minimum amount of fixed charge coverage, the maximum amount of unsecured indebtedness, the
minimum amount of unencumbered property debt service coverage and certain investment limitations. The dividend restriction referred to above provides that, except to enable the Corporation to continue
to qualify as a REIT under the Code, the Corporation will not during any four consecutive fiscal quarters make distributions with respect to common stock or other equity interests in an aggregate
amount in excess of 90 percent of funds from operations (as defined) for such period, subject to certain other adjustments.

The
terms of the Operating Partnership's Senior Unsecured Notes, as defined in Note 7 to the Financial Statements (which totaled approximately $1.1 billion as of
June 30, 2003), include certain restrictions and covenants which require compliance with financial ratios relating to the maximum amount of debt leverage, the maximum amount of secured
indebtedness, the minimum amount of debt service coverage and the maximum amount of unsecured debt as a percent of unsecured assets.

As
of June 30, 2003, the Operating Partnership had 233 unencumbered properties, totaling 21.4 million square feet, representing 79.2 percent of the Operating
Partnership's total portfolio on a square footage basis.

The
debt of the Operating Partnership's unconsolidated joint ventures aggregating $156 million are non-recourse to the Operating Partnership except for
(i) customary exceptions pertaining
to such matters as intentional misuse of funds, environmental conditions and material misrepresentations and (ii) approximately $11.1 million of debt on the Harborside South Pier joint
venture with Hyatt Corporation ("Hyatt"). Additionally, the Operating Partnership has posted an $8.0 million letter of credit in support of another loan to that joint venture,
$4.0 million of which is indemnified by Hyatt, and a $1.8 million letter of credit as a reserve for re-leasing costs on a mortgage loan with the G&G Martco joint venture.

The
following table outlines the timing of payment requirements related to the Operating Partnership's debt, PILOT agreements, and ground lease agreements(in
thousands):

|                                  |  | Payments Due by Period
|--------------------------------- |  | ----------------------
|
|Senior unsecured notes            |  | $                     
|Revolving credit facility         |  |                       
|Mortgages and loans payable       |  |                       
|Payments in lieu of taxes (PILOT) |  |                       
|Ground lease payments             |  |                       

As
of June 30, 2003, the Operating Partnership's total debt had a weighted average term to maturity of approximately 4.7 years. The Operating Partnership has a total of
$300.0 million of senior unsecured notes scheduled to mature through March 2004. The Operating Partnership does not intend to reserve funds to retire the Operating Partnership's Senior
Unsecured Notes or its mortgages and loans payable upon maturity. Instead, the Operating Partnership will seek to refinance such debt at maturity or retire such debt through the issuance of additional
equity or debt securities on or before the applicable maturity dates. If it cannot timely raise such proceeds, the Operating Partnership may draw on its revolving credit facility to retire the
maturing indebtedness, which would reduce the future availability of funds under such facility. The Operating Partnership is reviewing various refinancing options, including the purchase of its senior
unsecured notes in privately-negotiated transactions, the

48

---

issuance
of additional, or exchange of current, unsecured debt, preferred stock, and/or obtaining additional mortgage debt, some or all of which may be completed during the remainder of 2003. The
Operating Partnership anticipates that its available cash and cash equivalents and cash flows from operating activities, together with cash available from borrowings and other sources, will be
adequate to meet the Operating Partnership's capital and liquidity needs both in the short and long-term. However, if these sources of funds are insufficient or unavailable, the Operating
Partnership's ability to make the expected distributions discussed below may be adversely affected.

The
Corporation has an effective shelf registration statement with the SEC for an aggregate amount of $2.0 billion in equity securities of the Corporation. The Corporation and
Operating Partnership also have an effective shelf registration statement with the SEC for an aggregate of $2.0 billion in debt securities, preferred stock and preferred stock represented by
depositary shares, under which the Operating Partnership has issued an aggregate of $1.2 billion of senior unsecured notes and the Corporation has issued $25 million of preferred stock.

On
September 13, 2000, the Board of Directors of the Corporation authorized an increase to the Corporation's repurchase program under which the Corporation was permitted to
purchase up to an additional $150.0 million of the Corporation's outstanding common stock ("Repurchase Program"). From that date through July 31, 2003, the Corporation purchased and
retired, under the Repurchase
Program, 3.7 million shares of its outstanding common stock for an aggregate cost of approximately $104.5 million. Concurrent with the purchases, the Corporation sold to the Operating
Partnership 3.7 million common units for approximately $104.5 million. The Corporation has a remaining authorization to repurchase up to an additional $45.5 million of its
outstanding common stock, which it may repurchase from time to time in open market transactions at prevailing prices or through privately negotiated transactions.

The
Operating Partnership may not dispose of or distribute certain of its properties, currently comprising 140 properties with an aggregate net book value of approximately
$1.8 billion, which were originally contributed by members of either the Mack Group (which includes William L. Mack, Chairman of the Corporation's Board of Directors; Earle I. Mack, director of
the Corporation; and Mitchell E. Hersh, chief executive officer and director of the Corporation), the Robert Martin Group (which includes Robert F. Weinberg, a former director of the Corporation;
Martin S. Berger, director of the Corporation; and Timothy M. Jones, president of the Corporation), or the Cali Group (which includes John J. Cali, a former director of the Corporation and John R.
Cali, director of the Corporation) without the express written consent of a representative of the Mack Group, the Robert Martin Group or the Cali Group, as applicable, except in a manner which does
not result in recognition of any built-in-gain (which may result in an income tax liability) or which reimburses the appropriate Mack Group, Robert Martin Group or Cali Group
members for the tax consequences of the recognition of such built-in-gains (collectively, the "Property Lock-Ups"). The aforementioned restrictions do not apply in
the event that the Operating Partnership sells all of its properties or in connection with a sale transaction which the Corporation's Board of Directors determines is reasonably necessary to satisfy a
material monetary default on any unsecured debt, judgment or liability of the Operating Partnership or to cure any material monetary default on any mortgage secured by a property. The Property
Lock-Ups expire periodically through 2008. Upon the expiration of the Property Lock-Ups, the Operating Partnership is required to use commercially reasonable efforts to prevent
any sale, transfer or other disposition of the subject properties from resulting in the recognition of built-in gain to the appropriate Mack Group, Robert Martin Group or Cali Group
members.

To
maintain its qualification as a REIT, the Corporation must make annual distributions to its stockholders of at least 90 percent of its REIT taxable income, determined without
regard to the dividends paid deduction and by excluding net capital gains. Moreover, the Corporation intends to continue to make regular quarterly distributions to its common stockholders which, based
upon current policy, in the aggregate would equal approximately $146.4 million on an annualized basis. However, any

49

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such
distribution, whether for federal income tax purposes or otherwise, would only be paid out of available cash after meeting operating requirements, preferred unit and stock distributions, and
scheduled debt service on the Operating Partnership's debt.

Off-Balance Sheet Arrangements

The Operating Partnership's off-balance sheet arrangements are discussed in Note 4: "Investments in Unconsolidated Joint Ventures" to the
Financial Statements. Additional information about the debt of the Operating Partnership's unconsolidated joint ventures is included in "Liquidity and Capital Resources" herein.

Funds from Operations

The Operating Partnership considers funds from operations ("FFO") a relevant measure of REIT financial performance which the financial community desires REITs to
provide. FFO is defined as net income (loss) before minority interest of unitholders, computed in accordance with generally accepted accounting principles ("GAAP"), excluding gains (or losses) from
extraordinary items and sales of depreciable rental property, plus real estate-related depreciation and amortization. FFO should not be considered as an alternative to net income as an indication of
the Operating Partnership's performance or to cash flows as a measure of liquidity. FFO presented herein is not necessarily comparable to FFO presented by other real estate companies due to the fact
that not all real estate companies use the same definition. However, the Operating Partnership's FFO is comparable to the FFO of real estate companies that use the current definition of the National
Association of Real Estate Investment Trusts ("NAREIT"). Effective with this filing of the Operating Partnership's second quarter 2003 Form 10-Q, in order to best report FFO in
accordance with the Securities and Exchange Commission's recent guidance in respect of Regulation G concerning non-GAAP financial measures and to disclose FFO on a comparable basis
with the vast majority of other companies in the industry, the Operating Partnership has revised its definition of FFO to adhere to NAREIT's definition of FFO by including the effect of income arising
from the straight-lining of rents in the periods presented. Income from the straight-lining of rents (including the Operating Partnership's share from unconsolidated joint ventures) amounted to $4,179
and $1,210 for the three months ended June 30, 2003 and 2002, respectively, and $7,589 and $2,923 for the six months ended June 30, 2003 and 2002, respectively. Such amounts are included
in the reported FFO below.

50

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FFO
for the three and six months ended June 30, 2003 and 2002, as calculated in accordance with NAREIT's definition as published in October 1999, are summarized in the
following table (in thousands):

|                                                                                           |                                                                                          | Three Months Ended
June 30, |        | Six Months Ended
June 30, |  
|------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------- | --------------------------- | ------ | ------------------------- | -
|
|Net income available to common unitholders                                                 |                                                                                          | $                           | 38,143 |                           | $
|Add:    Real estate-related depreciation and
    amortization on continuing operations (1) |                                                                                          |                             | 31,047 |                           |  
|                                                                                           | Real estate-related depreciation and amortization on discontinued operations             |                             |        |                          |  
|(Deduct)/Add:                                                                              |                                                                                          |                             |        |                           |  
|                                                                                           | Realized (gains) losses and unrealized losses on disposition of rental property, net (2) |                             |        |                          |  
|                                                                                           | Discontinued OperationsRealized (gains) losses and unrealized losses, net               |                             |        |                          |  
|                                                                                           | Equity in earnings from gain on sale                                                     |                             |        | (2,427                    | )
|                                                                                           |                                                                                          |                             |        |                           |  
|Funds from operationsbasic                                                                |                                                                                          | $                           | 66,763 |                           | $
|Add:    Distributions to Series B preferred unitholders                                    |                                                                                          |                             | 3,917  |                           |  
|                                                                                           |                                                                                          |                             |        |                           |  
|Funds from operationsdiluted                                                              |                                                                                          | $                           | 70,680 |                           | $
|                                                                                           |                                                                                          |                             |        |                           |  
|Basic weighted average units outstanding (3)                                               |                                                                                          |                             | 65,331 |                           |  
|Diluted weighted average units outstanding (3)                                             |                                                                                          |                             | 71,980 |                           |  

---

The
following schedule reconciles the Operating Partnership's basic weighted average units outstanding to the basic and diluted weighted average units outstanding presented above (in thousands):

|                                                                                  |                | Three Months Ended
June 30, |     | Six Months Ended
June 30,
|--------------------------------------------------------------------------------- | -------------- | --------------------------- | --- | -------------------------
|
|Basic weighted average units                                                      |                | 65,331                      |     | 65,168                   
|Add: Weighted average Series B Preferred Units (after conversion to common units) |                | 6,219                       |     | 6,334                    
|                                                                                  | Stock options  |                             | 427 |                          
|                                                                                  | Stock Warrants |                             | 3   |                          
|                                                                                  |                |                             |     |                          
|Diluted weighted average units outstanding:                                       |                | 71,980                      |     | 71,940                   
|                                                                                  |                |                             |     |                          

51

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Inflation

The
Operating Partnership's leases with the majority of its tenants provide for recoveries and escalation charges based upon the tenant's proportionate share of, and/or increases in,
real estate taxes and certain operating costs, which reduce the Operating Partnership's exposure to increases in operating costs resulting from inflation.

Disclosure Regarding Forward-Looking Statements

The Operating Partnership considers portions of this information to be forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934. The Operating Partnership intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of
the Exchange Act. Such forward-looking statements relate to, without limitation, the Operating Partnership's future economic performance, plans and objectives for future operations and projections of
revenue and other financial items. Forward-looking statements can be identified by the use of words such as "may," "will," "should," "expect," "anticipate," "estimate," "continue" or comparable
terminology. Forward-looking statements are inherently subject to risks and uncertainties, many of which the Operating Partnership cannot predict with accuracy and some of which the Operating
Partnership might not even anticipate. Although the Operating Partnership believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions at the time
made, it can give no assurance that its expectations will be achieved. Future events and actual results, financial and otherwise, may differ materially from the results discussed in the
forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements. Among the factors about which the Operating Partnership has made assumptions are
changes in the general economic climate; conditions, including those affecting industries in which the Operating Partnership's principal tenants compete; any failure of the general economy to recover
from the current economic downturn; the extent of any tenant bankruptcies; the Operating Partnership's ability to lease or re-lease space at current or anticipated rents; changes in the
supply of and demand for office, office/flex and industrial/warehouse properties; changes in interest rate levels; changes in operating costs; the Operating Partnership's ability to obtain adequate
insurance, including coverage for terrorist acts; the availability of financing; and other risks associated with the development and acquisition of properties, including risks that the development may
not be completed on schedule, that the tenants will not take occupancy or pay rent, or that development or operating costs may be greater than anticipated. For further information on factors which
could impact the Operating Partnership and the statements contained herein, see the "Risk Factors" section contained in the Annual Report on Form 10-K for the year ended
December 31, 2002. The Operating Partnership assumes no obligation to update and supplement forward-looking statements that become untrue because of subsequent events.

ITEM 3.    Quantitative and Qualitative Disclosures about Market Risk

Market risk is the exposure to loss resulting from changes in interest rates, foreign currency exchange rates, commodity prices and equity prices. In pursuing its
business plan, the primary market risk to which the Operating Partnership is exposed is interest rate risk. Changes in the general level of interest rates prevailing in the financial markets may
affect the spread between the Operating Partnership's yield on invested assets and cost of funds and, in turn, its ability to make distributions or payments to its investors.

Approximately
$1.6 billion of the Operating Partnership's long-term debt bears interest at fixed rates and therefore the fair value of these instruments is affected by
changes in market interest rates. The following table presents principal cash flows (in thousands) based upon maturity dates of the debt obligations and the related weighted-average interest rates by
expected maturity dates for the fixed rate

52

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debt.
The interest rate on the variable rate debt as of June 30, 2003 ranged from LIBOR plus 65 basis points to LIBOR plus 70 basis points.

|June 30, 2003
Debt,
including current portion |  | 7/1/03-
12/31/03 |       | 2004 |   | 2005    |  | 2006 |         | 2007 |   | Thereafter |  | Total |       | Fair Value
|--------------------------------------------- |  | ---------------- | ----- | ---- | - | ------- |  | ---- | ------- | ---- | - | ---------- |  | ----- | ----- | ----------
|Fixed Rate                                    |  | $                | 3,448 |      | $ | 316,654 |  | $    | 259,523 |      | $ | 144,595    |  | $     | 9,199 |           
|Average Interest Rate                         |  |                  | 7.35% |      |   | 7.33%   |  |      | 7.13%   |      |   | 7.12%      |  |       | 6.96% |           
|Variable Rate                                 |  |                  |       |      |   |         |  | $    | 95,000  |      |   |            |  |       |       |           

While the Operating Partnership has not experienced any significant credit losses, in the event of a significant rising interest rate environment
and/or economic downturn, defaults could increase and result in losses to the Operating Partnership which could adversely affect its operating results and liquidity.

Item 4.    Controls and Procedures

Disclosure Controls and Procedures.The Operating Partnership's management, with the participation of the Corporation's chief
executive officer and chief financial officer, has evaluated the effectiveness of the Operating Partnership's disclosure controls and procedures (as such term is defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on
such evaluation, the Corporation's chief executive officer and chief financial officer have concluded that, as of the end of such period, the Operating Partnership's disclosure controls and procedures
are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Operating Partnership in the reports that it files or submits under
the Exchange Act.

Internal Control Over Financial Reporting.There have not been any changes in the Operating Partnership's internal control
over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that
have materially affected, or are reasonably likely to materially affect, the Operating Partnership's internal control over financial reporting.

53

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MACK-CALI REALTY, L.P.  Part IIOther Information

Item 1. Legal Proceedings

Pursuant to an agreement with the City of Jersey City, New Jersey, the Operating Partnership is required to make payments in lieu of property taxes ("PILOT") on
its Harborside Plaza 2 and 3 properties. The agreement, which commenced in 1990, is for a term of 15 years. Such PILOT is equal to two percent of Total Project Costs, as defined, in year one
and increases by $75,000 per annum through year 15. Total Project Costs, as defined, are $145.6 million. The PILOT totaled $953 and $934 for the three months ended June 30, 2003 and
2002, respectively and totaled $1,906 and $1,869 for the six months ended June 30, 2003 and 2002, respectively. The PILOT on these two properties had been challenged in the Superior Court of
the State of New Jersey, Appellate Division, as part of a larger effort by several neighboring towns to question past practices of the City of Jersey City in attracting large development. In
May 2003, the Operating Partnership, together with most of the other property owners whose abatements had been similarly challenged, entered into settlement agreements with the challenging
towns, pursuant to which these challenges were being resolved. These settlement agreements are currently before the tax court hearing the challenges for ratification, and therefore have not yet
finalized. The Operating Partnership does not believe that the final outcome will result in a material adverse impact to the Operating Partnership as there is the potential that the majority of the
expense at the properties may be passed along to the properties' tenants. See Note 13 to Financial Statements.

There
are no other material pending legal proceedings, other than ordinary routine litigation incidental to its business, to which the Operating Partnership is a party or to which any of
the Properties is subject.

Item 2. Changes in Securities and Use of Proceeds

Not Applicable.

Item 3. Defaults Upon Senior Securities

Not Applicable.

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

On May 13, 2003, the Corporation held its Annual Meeting of Stockholders to elect four directors to the Board of Directors of the Corporation, among other
things. At the Annual Meeting, the Corporation's stockholders re-elected the following Class III directors to serve until the Annual Meeting of Stockholders to be held in 2006:
Martin S. Berger (Number of shares for: 50,750,081, Number of shares against: 967,428), John R. Cali (Number of shares for: 50,754,939, Number of shares against: 962,570), Mitchell E. Hersh (Number of
shares for: 50,744,709, Number of shares against: 972,800) and Irvin D. Reid (Number of shares for: 50,366,876, Number of shares against: 1,350,633). Effective immediately following the Annual
Meeting, John J. Cali, a Class III director, resigned from the Corporation's Board of Directors, and the Corporation reduced the size of its Board of Directors to 12 members.

At
the Annual Meeting, the Corporation's stockholders also voted upon and approved the ratification of the appointment of PricewaterhouseCoopers LLP, independent accountants, as the
Corporation's independent accountants for the ensuing year (Number of shares for: 50,773,718, Number of shares against: 891,638, Number of shares abstained: 52,153, Number of broker
non-votes: 0). In addition, at the Annual Meeting the Corporation's stockholders voted upon and adopted an amendment to, and restatement of, the 2000 Director Stock Option Plan to provide
for the issuance of

54

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restricted
stock and other stock-based awards to members of the Board of Directors of the Corporation (Number of shares for: 47,502,085, Number of shares against: 3,940,488, Number of shares
abstained: 274,936, Number of broker non-votes: 0).

Item 5. Other Information

Not Applicable.

MACK-CALI REALTY, L.P.  Part IIOther Information (continued)

Item 6 Exhibits and Reports on Form 8-K



The
following exhibits are filed herewith or are incorporated by reference to exhibits previously filed:

|Exhibit
Number |  | Exhibit Title                                                                                                                                                                                                                                                                                                        
|-------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1            |  | Restated Charter of Mack-Cali Realty Corporation dated June 11, 2001 (filed as Exhibit 3.1 to the Operating Partnership's Form 10-Q dated June 30, 2001 and incorporated herein by reference).                                                                                                                       
|3.2            |  | Amended and Restated Bylaws of Mack-Cali Realty Corporation dated June 10, 1999 (filed as Exhibit 3.2 to the Corporation's Form 8-K dated June 10, 1999 and incorporated herein by reference).                                                                                                                       
|3.3            |  | Amendment No. 1 to the Amended and Restated Bylaws of Mack-Cali Realty Corporation dated March 4, 2003, (filed as Exhibit 3.3 to the Operating Partnership's Form 10-Q dated March 31, 2003 and incorporated herein by reference).                                                                                   
|3.4            |  | Second Amended and Restated Agreement of Limited Partnership of Mack-Cali Realty, L.P. dated December 11, 1997 (filed as Exhibit 10.110 to the Corporation's Form 8-K dated December 11, 1997 and incorporated herein by reference).                                                                                 
|3.5            |  | Amendment No. 1 to the Second Amended and Restated Agreement of Limited Partnership of Mack-Cali Realty, L.P. dated August 21, 1998 (filed as Exhibit 3.1 to the Corporation's and the Operating Partnership's Registration Statement on Form S-3,
Registration No. 333-57103, and incorporated herein by reference).
|3.6            |  | Second Amendment to the Second Amended and Restated Agreement of Limited Partnership of Mack-Cali Realty, L.P. dated July 6, 1999 (filed as Exhibit 10.1 to the Operating Partnership's Form 8-K dated July 6, 1999 and incorporated herein by
reference).                                                           
|3.7            |  | Certificate of Designation of Series B Preferred Operating Partnership Units of Limited Partnership Interest of Mack-Cali Realty, L.P. (filed as Exhibit 10.101 to the Corporation's Form 8-K dated December 11, 1997 and incorporated herein by
reference).                                                         
|3.8            |  | Articles Supplementary for the 8% Series C Cumulative Redeemable Perpetual Preferred Stock dated March 11, 2003 (filed as Exhibit 3.1 to the Corporation's Form 8-K dated March 14, 2003 and incorporated herein by reference).                                                                                      
|               |  |                                                                                                                                                                                                                                                                                                                      

55

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|3.9  |  | Certificate of Designation for the 8% Series C Cumulative Redeemable Perpetual Preferred Operating Partnership Units dated March 14, 2003 (filed as Exhibit 3.1 to the Operating Partnership's Form 8-K dated March 14, 2003 and incorporated herein by
reference).                                      
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.1  |  | Amended and Restated Shareholder Rights Agreement, dated as of March 7, 2000, between Mack-Cali Realty Corporation and EquiServe Trust Company, N.A., as Rights Agent (filed as Exhibit 4.1 to the Operating Partnership's Form 8-K dated March 7, 2000
and incorporated herein by reference).           
|4.2  |  | Amendment No. 1 to the Amended and Restated Shareholder Rights Agreement, dated as of June 27, 2000, by and among Mack-Cali Realty Corporation and EquiServe Trust Company, N.A. (filed as Exhibit 4.1 to the Operating Partnership's Form 8-K dated June
27, 2000 and incorporated herein by reference).
|4.3  |  | Indenture dated as of March 16, 1999, by and among Mack-Cali Realty, L.P., as issuer, Mack-Cali Realty Corporation, as guarantor, and Wilmington Trust Company, as trustee (filed as Exhibit 4.1 to the Operating Partnership's Form 8-K dated March 16,
1999 and incorporated herein by reference).     
|4.4  |  | Supplemental Indenture No. 1 dated as of March 16, 1999, by and among Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Operating Partnership's Form 8-K dated March 16, 1999 and incorporated
herein by reference).                              
|4.5  |  | Supplemental Indenture No. 2 dated as of August 2, 1999, by and among Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.4 to the Operating Partnership's Form 10-Q dated June 30, 1999 and incorporated
herein by reference).                              
|4.6  |  | Supplemental Indenture No. 3 dated as of December 21, 2000, by and among Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Operating Partnership's Form 8-K dated December 21, 2000 and
incorporated herein by reference).                        
|4.7  |  | Supplemental Indenture No. 4 dated as of January 29, 2001, by and among Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Operating Partnership's Form 8-K dated January 29, 2001 and incorporated
herein by reference).                          
|4.8  |  | Supplemental Indenture No. 5 dated as of December 20, 2002, by and between Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Operating Partnership's Form 8-K dated December 20, 2002 and
incorporated herein by reference).                      
|4.9  |  | Supplemental Indenture No. 6 dated as of March 14, 2003, by and between Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Operating Partnership's Form 8-K dated March 14, 2003 and incorporated
herein by reference).                            
|4.10 |  | Supplemental Indenture No. 7 dated as of June 12, 2003, by and between Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Operating Partnership's Form 8-K dated June 12, 2003 and incorporated
herein by reference).                              
|     |  |                                                                                                                                                                                                                                                                                                          

56

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|4.11  |  | Deposit Agreement dated March 14, 2003 by and among Mack-Cali Realty Corporation, EquiServe Trust Company, N.A., and the holders from time to time of the Depositary Receipts described therein (filed as Exhibit 4.1 to the Corporation's Form 8-K dated
March 14, 2003 and incorporated herein by reference).
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1  |  | Amended and Restated Employment Agreement dated as of July 1, 1999 between Mitchell E. Hersh and Mack-Cali Realty Corporation (filed as Exhibit 10.2 to the Operating Partnership's Form 10-Q dated June 30, 1999 and incorporated herein by
reference).                                                       
|10.2  |  | Second Amended and Restated Employment Agreement dated as of July 1, 1999 between Timothy M. Jones and Mack-Cali Realty Corporation (filed as Exhibit 10.3 to the Operating Partnership's Form 10-Q dated June 30, 1999 and incorporated herein by
reference).                                                 
|10.3  |  | Second Amended and Restated Employment Agreement dated as of July 1, 1999 between Barry Lefkowitz and Mack-Cali Realty Corporation (filed as Exhibit 10.6 to the Operating Partnership's Form 10-Q dated June 30, 1999 and incorporated herein by
reference).                                                  
|10.4  |  | Second Amended and Restated Employment Agreement dated as of July 1, 1999 between Roger W. Thomas and Mack-Cali Realty Corporation (filed as Exhibit 10.7 to the Operating Partnership's Form 10-Q dated June 30, 1999 and incorporated herein by
reference).                                                  
|10.5  |  | Employment Agreement dated as of December 5, 2000 between Michael Grossman and Mack-Cali Realty Corporation (filed as Exhibit 10.5 to the Operating Partnership's Form 10-K for the year ended December 31, 2000 and incorporated herein by
reference).                                                        
|10.6  |  | Restricted Share Award Agreement dated as of July 1, 1999 between Mitchell E. Hersh and Mack-Cali Realty Corporation (filed as Exhibit 10.8 to the Operating Partnership's Form 10-Q dated June 30, 1999 and incorporated herein by
reference).                                                                
|10.7  |  | Restricted Share Award Agreement dated as of July 1, 1999 between Timothy M. Jones and Mack-Cali Realty Corporation (filed as Exhibit 10.9 to the Operating Partnership's Form 10-Q dated June 30, 1999 and incorporated herein by reference).                                                                 
|10.8  |  | Restricted Share Award Agreement dated as of July 1, 1999 between Barry Lefkowitz and Mack-Cali Realty Corporation (filed as Exhibit 10.12 to the Operating Partnership's Form 10-Q dated June 30, 1999 and incorporated herein by reference).                                                                 
|10.9  |  | Restricted Share Award Agreement dated as of July 1, 1999 between Roger W. Thomas and Mack-Cali Realty Corporation (filed as Exhibit 10.13 to the Operating Partnership's Form 10-Q dated June 30, 1999 and incorporated herein by reference).                                                                 
|10.10 |  | Restricted Share Award Agreement dated as of March 12, 2001 between Roger W. Thomas and Mack-Cali Realty Corporation (filed as Exhibit 10.10 to the Operating Partnership's Form 10-Q dated March 31, 2001 and incorporated herein by
reference).                                                              
|10.11 |  | Restricted Share Award Agreement dated as of March 12, 2001 between Michael Grossman and Mack-Cali Realty Corporation (filed as Exhibit 10.11 to the Operating Partnership's Form 10-Q dated March 31, 2001 and incorporated herein by
reference).                                                             
|10.12 |  | Restricted Share Award Agreement effective as of January 2, 2003 by and between Mack-Cali Realty Corporation and Mitchell E. Hersh (filed as Exhibit 10.1 to the Corporation's Form 8-K dated January 2, 2003 and incorporated herein by
reference).                                                           
|10.13 |  | Tax Gross Up Agreement effective as of January 2, 2003 by and between Mack-Cali Realty Corporation and Mitchell E. Hersh (filed as Exhibit 10.2 to the Corporation's Form 8-K dated January 2, 2003 and incorporated herein by reference).                                                                     
|      |  |                                                                                                                                                                                                                                                                                                                

57

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|10.14 |  | First Amendment effective as of January 2, 2003 to the Restricted Share Award Agreement dated July 1, 1999 between Mack-Cali Realty Corporation and Mitchell E. Hersh (filed as Exhibit 10.3 to the Corporation's Form 8-K dated January 2, 2003 and
incorporated herein by reference). 
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.15 |  | Restricted Share Award Agreement effective as of January 2, 2003 by and between Mack-Cali Realty Corporation and Timothy M. Jones (filed as Exhibit 10.4 to the Corporation's Form 8-K dated January 2, 2003 and incorporated herein by
reference).                                     
|10.16 |  | Tax Gross Up Agreement effective as of January 2, 2003 by and between Mack-Cali Realty Corporation and Timothy M. Jones (filed as Exhibit 10.5 to the Corporation's Form 8-K dated January 2, 2003 and incorporated herein by reference).                                               
|10.17 |  | First Amendment effective as of January 2, 2003 to the Restricted Share Award Agreement dated July 1, 1999 between Mack-Cali Realty Corporation and Timothy M. Jones (filed as Exhibit 10.6 to the Corporation's Form 8-K dated January 2, 2003 and
incorporated herein by reference).  
|10.18 |  | Restricted Share Award Agreement effective as of January 2, 2003 by and between Mack-Cali Realty Corporation and Barry Lefkowitz (filed as Exhibit 10.7 to the Corporation's Form 8-K dated January 2, 2003 and incorporated herein by
reference).                                      
|10.19 |  | Tax Gross Up Agreement effective as of January 2, 2003 by and between Mack-Cali Realty Corporation and Barry Lefkowitz (filed as Exhibit 10.8 to the Corporation's Form 8-K dated January 2, 2003 and incorporated herein by reference).                                                
|10.20 |  | First Amendment effective as of January 2, 2003 to the Restricted Share Award Agreement dated July 1, 1999 between Mack-Cali Realty Corporation and Barry Lefkowitz (filed as Exhibit 10.9 to the Corporation's Form 8-K dated January 2, 2003 and
incorporated herein by reference).   
|10.21 |  | Restricted Share Award Agreement effective as of January 2, 2003 by and between Mack-Cali Realty Corporation and Roger W. Thomas (filed as Exhibit 10.10 to the Corporation's Form 8-K dated January 2, 2003 and incorporated herein by
reference).                                     
|10.22 |  | Tax Gross Up Agreement effective as of January 2, 2003 by and between Mack-Cali Realty Corporation and Roger W. Thomas (filed as Exhibit 10.11 to the Corporation's Form 8-K dated January 2, 2003 and incorporated herein by reference).                                               
|10.23 |  | First Amendment effective as of January 2, 2003 to the Restricted Share Award Agreement dated July 1, 1999 between Mack-Cali Realty Corporation and Roger W. Thomas (filed as Exhibit 10.12 to the Corporation's Form 8-K dated January 2, 2003 and
incorporated herein by reference).  
|10.24 |  | First Amendment effective as of January 2, 2003 to the Restricted Share Award Agreement dated March 12, 2001 between Mack-Cali Realty Corporation and Roger W. Thomas (filed as Exhibit 10.13 to the Corporation's Form 8-K dated January 2, 2003 and
incorporated herein by reference).
|10.25 |  | Restricted Share Award Agreement effective as of January 2, 2003 by and between Mack-Cali Realty Corporation and Michael A. Grossman (filed as Exhibit 10.14 to the Corporation's Form 8-K dated January 2, 2003 and incorporated herein by
reference).                                 
|      |  |                                                                                                                                                                                                                                                                                         

58

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|10.26 |  | Tax Gross Up Agreement effective as of January 2, 2003 by and between Mack-Cali Realty Corporation and Michael A. Grossman (filed as Exhibit 10.15 to the Corporation's Form 8-K dated January 2, 2003 and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.27 |  | Restricted Share Award Agreement dated December 6, 1999 by and between Mack-Cali Realty Corporation and Michael A. Grossman (filed as Exhibit 10.16 to the Corporation's Form 8-K dated January 2, 2003 and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10.28 |  | First Amendment effective as of January 2, 2003 to the Restricted Share Award Agreement dated December 6, 1999 between Mack-Cali Realty Corporation and Michael A. Grossman (filed as Exhibit 10.17 to the Corporation's Form 8-K dated January 2, 2003
and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                     
|10.29 |  | First Amendment effective as of January 2, 2003 to the Restricted Share Award Agreement dated March 12, 2001 between Mack-Cali Realty Corporation and Michael A. Grossman (filed as Exhibit 10.18 to the Corporation's Form 8-K dated January 2, 2003 and
incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                       
|10.30 |  | Amended and Restated Revolving Credit Agreement dated as of September 27, 2002, among Mack-Cali Realty, L.P. and JPMorgan Chase Bank, Fleet National Bank and Other Lenders Which May Become Parties Thereto with JPMorgan Chase Bank, as administrative
agent, swing lender and fronting bank, Fleet National Bank and Commerzbank AG, New York and Grand Cayman branches as syndication agents, Bank of America, N.A. and Wells Fargo Bank, National Association, as documentation agents, and J.P. Morgan
Securities Inc. and Fleet Securities, Inc, as arrangers (filed as Exhibit 10.1 to the Operating Partnership's Form 8-K dated September 27, 2002 and incorporated herein by reference).
|10.31 |  | Contribution and Exchange Agreement among The MK Contributors, The MK Entities, The Patriot Contributors, The Patriot Entities, Patriot American Management and Leasing Corp., Cali Realty, L.P. and Cali Realty Corporation, dated September 18, 1997
(filed as Exhibit 10.98 to the Corporation's Form 8-K dated September 19, 1997 and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                       
|10.32 |  | First Amendment to Contribution and Exchange Agreement, dated as of December 11, 1997, by and among the Company and the Mack Group (filed as Exhibit 10.99 to the Corporation's Form 8-K dated December 11, 1997 and incorporated herein by
reference).                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.33 |  | Employee Stock Option Plan of Mack-Cali Realty Corporation (filed as Exhibit 10.1 to the Corporation's Post-Effective Amendment No. 1 to Form S-8, Registration No. 333-44443, and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|10.34 |  | Director Stock Option Plan of Mack-Cali Realty Corporation (filed as Exhibit 10.2 to the Corporation's Post-Effective Amendment No. 1 to Form S-8, Registration No. 333-44443, and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|10.35 |  | 2000 Employee Stock Option Plan (filed as Exhibit 10.1 to the Corporation's Registration Statement on Form S-8, Registration No. 333-52478, and incorporated herein by reference), as amended by the First Amendment to the 2000 Employee Stock Option
Plan (filed as Exhibit 10.17 to the Operating Partnership's Form 10-Q dated June 30, 2002 and incorporated herein by reference).                                                                                                                                                                                                                                                                                                            
|10.36 |  | Amended and Restated 2000 Director Stock Option Plan (filed as Exhibit 10.2 to the Corporation's Post-Effective Amendment No. 1 to Registration Statement on Form S-8, Registration No. 333-100244, and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

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|10.37 |  | Deferred Compensation Plan for Directors (filed as Exhibit 10.1 to the Corporation's Registration Statement on Form S-8, Registration No. 333-80081, and incorporated herein by reference).                                                                                                                                                                                         
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.38 |  | Warrant Agreement, dated December 12, 1997, executed in favor Mitchell E. Hersh to purchase shares of common stock, par value $.01 per share, of the Corporation (filed as Exhibit 10.106 to the Corporation's Form 8-K dated December 11, 1997 and
incorporated herein by reference).                                                                                              
|10.39 |  | Warrant issued by Cali Realty Corporation to Brad W. Berger, dated January 31, 1997 (filed as Exhibit 10.84 to the Corporation's Form 10-K dated December 31, 1996 and incorporated herein by reference).                                                                                                                                                                           
|10.40 |  | Warrant issued by Cali Realty Corporation to Timothy M. Jones, dated January 31, 1997 (filed as Exhibit 10.86 to the Corporation's Form 10-K dated December 31, 1996 and incorporated herein by reference).                                                                                                                                                                         
|10.41 |  | Warrant issued by Cali Realty Corporation to Michael Grossman, dated January 31, 1997 (filed as Exhibit 10.89 to the Corporation's Form 10-K dated December 31, 1996 and incorporated herein by reference).                                                                                                                                                                         
|10.42 |  | Second Amendment to Contribution and Exchange Agreement, dated as of June 27, 2000, between RMC Development Company, LLC f/k/a Robert Martin Company, LLC, Robert Martin Eastview North Company, L.P., the Corporation and the Operating Partnership
(filed as Exhibit 10.44 to the Operating Partnership's Form 10-K dated December 31, 2002 and incorporated herein by reference.)
|31.1* |  | Certification of the Corporation's Chief Executive Officer, Mitchell E. Hersh, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                           
|31.2* |  | Certification of the Corporation's Chief Financial Officer, Barry Lefkowitz, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                             
|32.1* |  | Certification of the Corporation's Chief Executive Officer, Mitchell E. Hersh, and the Corporation's Chief Financial Officer, Barry Lefkowitz, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                           

During
the second quarter of 2003, the Operating Partnership filed or furnished the following report on Form 8-K:



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MACK-CALI REALTY, L.P.  Signatures

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

|                      |  |     | Mack-Cali Realty, L.P.(Registrant)                                                  
|--------------------- |  | --- | ------------------------------------------------------------------------------------
|                      |  |     | By:  Mack-Cali Realty Corporation,
        its General Partner                      
|                      |  |     |                                                                                     
|Date: August 13, 2003 |  | By: | /s/MITCHELL E. HERSHMitchell E. Hersh
Chief Executive Officer                       
|Date: August 13, 2003 |  | By: | /s/BARRY LEFKOWITZBarry Lefkowitz
Executive Vice President &
Chief Financial Officer

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MACK-CALI REALTY, L.P.    CERTIFICATION

I,
Mitchell E. Hersh, Chief Executive Officer of Mack-Cali Realty Corporation, the general partner of Mack-Cali Realty, L.P., certify that:

|Date: August 13, 2003 |  | By: | /s/MITCHELL E. HERSHMitchell E. Hersh
Chief Executive Officer of Mack-Cali Realty Corporation, the general partner of Mack-Cali Realty, L.P.
|--------------------- |  | --- | --------------------------------------------------------------------------------------------------------------------------------------------

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CERTIFICATION

I,
Barry Lefkowitz, Chief Financial Officer of Mack-Cali Realty Corporation, the general partner of Mack-Cali Realty, L.P., certify that:

|Date: August 13, 2003 |  | By: | /s/BARRY LEFKOWITZBarry Lefkowitz
Executive Vice President and Chief Financial Officer of Mack-Cali Realty Corporation, the general partner of Mack-Cali Realty, L.P.
|--------------------- |  | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

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EXHIBIT INDEX

|Exhibit
Number |  | Exhibit Title                                                                                                                                                                                                                                                                                                        
|-------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1            |  | Restated Charter of Mack-Cali Realty Corporation dated June 11, 2001 (filed as Exhibit 3.1 to the Operating Partnership's Form 10-Q dated June 30, 2001 and incorporated herein by reference).                                                                                                                       
|3.2            |  | Amended and Restated Bylaws of Mack-Cali Realty Corporation dated June 10, 1999 (filed as Exhibit 3.2 to the Corporation's Form 8-K dated June 10, 1999 and incorporated herein by reference).                                                                                                                       
|3.3            |  | Amendment No. 1 to the Amended and Restated Bylaws of Mack-Cali Realty Corporation dated March 4, 2003, (filed as Exhibit 3.3 to the Operating Partnership's Form 10-Q dated March 31, 2003 and incorporated herein by reference).                                                                                   
|3.4            |  | Second Amended and Restated Agreement of Limited Partnership of Mack-Cali Realty, L.P. dated December 11, 1997 (filed as Exhibit 10.110 to the Corporation's Form 8-K dated December 11, 1997 and incorporated herein by reference).                                                                                 
|3.5            |  | Amendment No. 1 to the Second Amended and Restated Agreement of Limited Partnership of Mack-Cali Realty, L.P. dated August 21, 1998 (filed as Exhibit 3.1 to the Corporation's and the Operating Partnership's Registration Statement on Form S-3,
Registration No. 333-57103, and incorporated herein by reference).
|3.6            |  | Second Amendment to the Second Amended and Restated Agreement of Limited Partnership of Mack-Cali Realty, L.P. dated July 6, 1999 (filed as Exhibit 10.1 to the Operating Partnership's Form 8-K dated July 6, 1999 and incorporated herein by
reference).                                                           
|3.7            |  | Certificate of Designation of Series B Preferred Operating Partnership Units of Limited Partnership Interest of Mack-Cali Realty, L.P. (filed as Exhibit 10.101 to the Corporation's Form 8-K dated December 11, 1997 and incorporated herein by
reference).                                                         
|3.8            |  | Articles Supplementary for the 8% Series C Cumulative Redeemable Perpetual Preferred Stock dated March 11, 2003 (filed as Exhibit 3.1 to the Corporation's Form 8-K dated March 14, 2003 and incorporated herein by reference).                                                                                      
|3.9            |  | Certificate of Designation for the 8% Series C Cumulative Redeemable Perpetual Preferred Operating Partnership Units dated March 14, 2003 (filed as Exhibit 3.1 to the Operating Partnership's Form 8-K dated March 14, 2003 and incorporated herein by
reference).                                                  
|4.1            |  | Amended and Restated Shareholder Rights Agreement, dated as of March 7, 2000, between Mack-Cali Realty Corporation and EquiServe Trust Company, N.A., as Rights Agent (filed as Exhibit 4.1 to the Operating Partnership's Form 8-K dated March 7, 2000
and incorporated herein by reference).                       
|4.2            |  | Amendment No. 1 to the Amended and Restated Shareholder Rights Agreement, dated as of June 27, 2000, by and among Mack-Cali Realty Corporation and EquiServe Trust Company, N.A. (filed as Exhibit 4.1 to the Operating Partnership's Form 8-K dated June
27, 2000 and incorporated herein by reference).            
|4.3            |  | Indenture dated as of March 16, 1999, by and among Mack-Cali Realty, L.P., as issuer, Mack-Cali Realty Corporation, as guarantor, and Wilmington Trust Company, as trustee (filed as Exhibit 4.1 to the Operating Partnership's Form 8-K dated March 16,
1999 and incorporated herein by reference).                 
|               |  |                                                                                                                                                                                                                                                                                                                      

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|4.4  |  | Supplemental Indenture No. 1 dated as of March 16, 1999, by and among Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Operating Partnership's Form 8-K dated March 16, 1999 and incorporated
herein by reference).                                    
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.5  |  | Supplemental Indenture No. 2 dated as of August 2, 1999, by and among Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.4 to the Operating Partnership's Form 10-Q dated June 30, 1999 and incorporated
herein by reference).                                    
|4.6  |  | Supplemental Indenture No. 3 dated as of December 21, 2000, by and among Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Operating Partnership's Form 8-K dated December 21, 2000 and
incorporated herein by reference).                              
|4.7  |  | Supplemental Indenture No. 4 dated as of January 29, 2001, by and among Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Operating Partnership's Form 8-K dated January 29, 2001 and incorporated
herein by reference).                                
|4.8  |  | Supplemental Indenture No. 5 dated as of December 20, 2002, by and between Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Operating Partnership's Form 8-K dated December 20, 2002 and
incorporated herein by reference).                            
|4.9  |  | Supplemental Indenture No. 6 dated as of March 14, 2003, by and between Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Operating Partnership's Form 8-K dated March 14, 2003 and incorporated
herein by reference).                                  
|4.10 |  | Supplemental Indenture No. 7 dated as of June 12, 2003, by and between Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Operating Partnership's Form 8-K dated June 12, 2003 and incorporated
herein by reference).                                    
|4.11 |  | Deposit Agreement dated March 14, 2003 by and among Mack-Cali Realty Corporation, EquiServe Trust Company, N.A., and the holders from time to time of the Depositary Receipts described therein (filed as Exhibit 4.1 to the Corporation's Form 8-K dated
March 14, 2003 and incorporated herein by reference).
|10.1 |  | Amended and Restated Employment Agreement dated as of July 1, 1999 between Mitchell E. Hersh and Mack-Cali Realty Corporation (filed as Exhibit 10.2 to the Operating Partnership's Form 10-Q dated June 30, 1999 and incorporated herein by
reference).                                                       
|10.2 |  | Second Amended and Restated Employment Agreement dated as of July 1, 1999 between Timothy M. Jones and Mack-Cali Realty Corporation (filed as Exhibit 10.3 to the Operating Partnership's Form 10-Q dated June 30, 1999 and incorporated herein by
reference).                                                 
|10.3 |  | Second Amended and Restated Employment Agreement dated as of July 1, 1999 between Barry Lefkowitz and Mack-Cali Realty Corporation (filed as Exhibit 10.6 to the Operating Partnership's Form 10-Q dated June 30, 1999 and incorporated herein by
reference).                                                  
|10.4 |  | Second Amended and Restated Employment Agreement dated as of July 1, 1999 between Roger W. Thomas and Mack-Cali Realty Corporation (filed as Exhibit 10.7 to the Operating Partnership's Form 10-Q dated June 30, 1999 and incorporated herein by
reference).                                                  
|     |  |                                                                                                                                                                                                                                                                                                                

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|10.5  |  | Employment Agreement dated as of December 5, 2000 between Michael Grossman and Mack-Cali Realty Corporation (filed as Exhibit 10.5 to the Operating Partnership's Form 10-K for the year ended December 31, 2000 and incorporated herein by
reference).                                
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.6  |  | Restricted Share Award Agreement dated as of July 1, 1999 between Mitchell E. Hersh and Mack-Cali Realty Corporation (filed as Exhibit 10.8 to the Operating Partnership's Form 10-Q dated June 30, 1999 and incorporated herein by
reference).                                        
|10.7  |  | Restricted Share Award Agreement dated as of July 1, 1999 between Timothy M. Jones and Mack-Cali Realty Corporation (filed as Exhibit 10.9 to the Operating Partnership's Form 10-Q dated June 30, 1999 and incorporated herein by reference).                                         
|10.8  |  | Restricted Share Award Agreement dated as of July 1, 1999 between Barry Lefkowitz and Mack-Cali Realty Corporation (filed as Exhibit 10.12 to the Operating Partnership's Form 10-Q dated June 30, 1999 and incorporated herein by reference).                                         
|10.9  |  | Restricted Share Award Agreement dated as of July 1, 1999 between Roger W. Thomas and Mack-Cali Realty Corporation (filed as Exhibit 10.13 to the Operating Partnership's Form 10-Q dated June 30, 1999 and incorporated herein by reference).                                         
|10.10 |  | Restricted Share Award Agreement dated as of March 12, 2001 between Roger W. Thomas and Mack-Cali Realty Corporation (filed as Exhibit 10.10 to the Operating Partnership's Form 10-Q dated March 31, 2001 and incorporated herein by
reference).                                      
|10.11 |  | Restricted Share Award Agreement dated as of March 12, 2001 between Michael Grossman and Mack-Cali Realty Corporation (filed as Exhibit 10.11 to the Operating Partnership's Form 10-Q dated March 31, 2001 and incorporated herein by
reference).                                     
|10.12 |  | Restricted Share Award Agreement effective as of January 2, 2003 by and between Mack-Cali Realty Corporation and Mitchell E. Hersh (filed as Exhibit 10.1 to the Corporation's Form 8-K dated January 2, 2003 and incorporated herein by
reference).                                   
|10.13 |  | Tax Gross Up Agreement effective as of January 2, 2003 by and between Mack-Cali Realty Corporation and Mitchell E. Hersh (filed as Exhibit 10.2 to the Corporation's Form 8-K dated January 2, 2003 and incorporated herein by reference).                                             
|10.14 |  | First Amendment effective as of January 2, 2003 to the Restricted Share Award Agreement dated July 1, 1999 between Mack-Cali Realty Corporation and Mitchell E. Hersh (filed as Exhibit 10.3 to the Corporation's Form 8-K dated January 2, 2003 and
incorporated herein by reference).
|10.15 |  | Restricted Share Award Agreement effective as of January 2, 2003 by and between Mack-Cali Realty Corporation and Timothy M. Jones (filed as Exhibit 10.4 to the Corporation's Form 8-K dated January 2, 2003 and incorporated herein by
reference).                                    
|10.16 |  | Tax Gross Up Agreement effective as of January 2, 2003 by and between Mack-Cali Realty Corporation and Timothy M. Jones (filed as Exhibit 10.5 to the Corporation's Form 8-K dated January 2, 2003 and incorporated herein by reference).                                              
|10.17 |  | First Amendment effective as of January 2, 2003 to the Restricted Share Award Agreement dated July 1, 1999 between Mack-Cali Realty Corporation and Timothy M. Jones (filed as Exhibit 10.6 to the Corporation's Form 8-K dated January 2, 2003 and
incorporated herein by reference). 
|      |  |                                                                                                                                                                                                                                                                                        

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|10.18 |  | Restricted Share Award Agreement effective as of January 2, 2003 by and between Mack-Cali Realty Corporation and Barry Lefkowitz (filed as Exhibit 10.7 to the Corporation's Form 8-K dated January 2, 2003 and incorporated herein by
reference).                                            
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.19 |  | Tax Gross Up Agreement effective as of January 2, 2003 by and between Mack-Cali Realty Corporation and Barry Lefkowitz (filed as Exhibit 10.8 to the Corporation's Form 8-K dated January 2, 2003 and incorporated herein by reference).                                                      
|10.20 |  | First Amendment effective as of January 2, 2003 to the Restricted Share Award Agreement dated July 1, 1999 between Mack-Cali Realty Corporation and Barry Lefkowitz (filed as Exhibit 10.9 to the Corporation's Form 8-K dated January 2, 2003 and
incorporated herein by reference).         
|10.21 |  | Restricted Share Award Agreement effective as of January 2, 2003 by and between Mack-Cali Realty Corporation and Roger W. Thomas (filed as Exhibit 10.10 to the Corporation's Form 8-K dated January 2, 2003 and incorporated herein by
reference).                                           
|10.22 |  | Tax Gross Up Agreement effective as of January 2, 2003 by and between Mack-Cali Realty Corporation and Roger W. Thomas (filed as Exhibit 10.11 to the Corporation's Form 8-K dated January 2, 2003 and incorporated herein by reference).                                                     
|10.23 |  | First Amendment effective as of January 2, 2003 to the Restricted Share Award Agreement dated July 1, 1999 between Mack-Cali Realty Corporation and Roger W. Thomas (filed as Exhibit 10.12 to the Corporation's Form 8-K dated January 2, 2003 and
incorporated herein by reference).        
|10.24 |  | First Amendment effective as of January 2, 2003 to the Restricted Share Award Agreement dated March 12, 2001 between Mack-Cali Realty Corporation and Roger W. Thomas (filed as Exhibit 10.13 to the Corporation's Form 8-K dated January 2, 2003 and
incorporated herein by reference).      
|10.25 |  | Restricted Share Award Agreement effective as of January 2, 2003 by and between Mack-Cali Realty Corporation and Michael A. Grossman (filed as Exhibit 10.14 to the Corporation's Form 8-K dated January 2, 2003 and incorporated herein by
reference).                                       
|10.26 |  | Tax Gross Up Agreement effective as of January 2, 2003 by and between Mack-Cali Realty Corporation and Michael A. Grossman (filed as Exhibit 10.15 to the Corporation's Form 8-K dated January 2, 2003 and incorporated herein by reference).                                                 
|10.27 |  | Restricted Share Award Agreement dated December 6, 1999 by and between Mack-Cali Realty Corporation and Michael A. Grossman (filed as Exhibit 10.16 to the Corporation's Form 8-K dated January 2, 2003 and incorporated herein by reference).                                                
|10.28 |  | First Amendment effective as of January 2, 2003 to the Restricted Share Award Agreement dated December 6, 1999 between Mack-Cali Realty Corporation and Michael A. Grossman (filed as Exhibit 10.17 to the Corporation's Form 8-K dated January 2, 2003
and incorporated herein by reference).
|10.29 |  | First Amendment effective as of January 2, 2003 to the Restricted Share Award Agreement dated March 12, 2001 between Mack-Cali Realty Corporation and Michael A. Grossman (filed as Exhibit 10.18 to the Corporation's Form 8-K dated January 2, 2003 and
incorporated herein by reference).  
|      |  |                                                                                                                                                                                                                                                                                               

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|10.30 |  | Amended and Restated Revolving Credit Agreement dated as of September 27, 2002, among Mack-Cali Realty, L.P. and JPMorgan Chase Bank, Fleet National Bank and Other Lenders Which May Become Parties Thereto with JPMorgan Chase Bank, as administrative
agent, swing lender and fronting bank, Fleet National Bank and Commerzbank AG, New York and Grand Cayman branches as syndication agents, Bank of America, N.A. and Wells Fargo Bank, National Association, as documentation agents, and J.P. Morgan
Securities Inc. and Fleet Securities, Inc, as arrangers (filed as Exhibit 10.1 to the Operating Partnership's Form 8-K dated September 27, 2002 and incorporated herein by reference).
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.31 |  | Contribution and Exchange Agreement among The MK Contributors, The MK Entities, The Patriot Contributors, The Patriot Entities, Patriot American Management and Leasing Corp., Cali Realty, L.P. and Cali Realty Corporation, dated September 18, 1997
(filed as Exhibit 10.98 to the Corporation's Form 8-K dated September 19, 1997 and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                       
|10.32 |  | First Amendment to Contribution and Exchange Agreement, dated as of December 11, 1997, by and among the Company and the Mack Group (filed as Exhibit 10.99 to the Corporation's Form 8-K dated December 11, 1997 and incorporated herein by
reference).                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.33 |  | Employee Stock Option Plan of Mack-Cali Realty Corporation (filed as Exhibit 10.1 to the Corporation's Post-Effective Amendment No. 1 to Form S-8, Registration No. 333-44443, and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|10.34 |  | Director Stock Option Plan of Mack-Cali Realty Corporation (filed as Exhibit 10.2 to the Corporation's Post-Effective Amendment No. 1 to Form S-8, Registration No. 333-44443, and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|10.35 |  | 2000 Employee Stock Option Plan (filed as Exhibit 10.1 to the Company's Registration Statement on Form S-8, Registration No. 333-52478, and incorporated herein by reference), as amended by the First Amendment to the 2000 Employee Stock Option Plan
(filed as Exhibit 10.17 to the Operating Partnership's Form 10-Q dated June 30, 2002 and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                
|10.36 |  | Amended and Restated 2000 Director Stock Option Plan (filed as Exhibit 10.2 to the Corporation's Post-Effective Amendment No. 1 to Registration Statement on Form S-8, Registration No. 333-100244, and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.37 |  | Deferred Compensation Plan for Directors (filed as Exhibit 10.1 to the Corporation's Registration Statement on Form S-8, Registration No. 333-80081, and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|10.38 |  | Warrant Agreement, dated December 12, 1997, executed in favor Mitchell E. Hersh to purchase shares of common stock, par value $.01 per share, of the Company (filed as Exhibit 10.106 to the Corporation's Form 8-K dated December 11, 1997 and
incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                 
|10.39 |  | Warrant issued by Cali Realty Corporation to Brad W. Berger, dated January 31, 1997 (filed as Exhibit 10.84 to the Corporation's Form 10-K dated December 31, 1996 and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10.40 |  | Warrant issued by Cali Realty Corporation to Timothy M. Jones, dated January 31, 1997 (filed as Exhibit 10.86 to the Corporation's Form 10-K dated December 31, 1996 and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

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|10.41 |  | Warrant issued by Cali Realty Corporation to Michael Grossman, dated January 31, 1997 (filed as Exhibit 10.89 to the Corporation's Form 10-K dated December 31, 1996 and incorporated herein by reference).                                                                                                                                                                     
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.42 |  | Second Amendment to Contribution and Exchange Agreement, dated as of June 27, 2000, between RMC Development Company, LLC f/k/a Robert Martin Company, LLC, Robert Martin Eastview North Company, L.P., the Company and the Operating Partnership (filed as
Exhibit 10.44 to the Operating Partnership's Form 10-K dated December 31, 2002 and incorporated herein by reference.)
|31.1* |  | Certification of the Corporation's Chief Executive Officer, Mitchell E. Hersh, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                       
|31.2* |  | Certification of the Corporation's Chief Financial Officer, Barry Lefkowitz, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                         
|32.1* |  | Certification of the Corporation's Chief Executive Officer, Mitchell E. Hersh, and The Corporation's Chief Financial Officer, Barry Lefkowitz, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                       

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