**UNITEDSTATES**

**SECURITIESAND EXCHANGE COMMISSION**

**WASHINGTON,D.C. 20549**

##### **FORM10-Q**

**(Mark One)**

| **x**                                            | **QUARTERLY  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**  |
|--------------------------------------------------|-----------------------------------------------------------------------------------------------|
| ** **                                       |                                                                                          | ** ** |
| **For the quarterly period ended June 30, 2007** |
|                                             |                                                                                          |   |
| **or**                                           |
| ** **                                       |                                                                                          |   |
| **o**                                            | **TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |

** **

**For the transition period from                              to                              **

**CommissionFile Number:            333-57103**

**Mack-CaliRealty, L.P.**

(Exact name ofregistrant as specified in its charter)

| **Delaware**                                                                        | ** ** | **22-3315804**                        |
|-------------------------------------------------------------------------------------|------------|---------------------------------------|
| (State or other  jurisdiction of incorporation or organization)                     |       | (I.R.S. Employer  Identification No.) |
|                                                                                |       |                                  |
| **343  Thornall Street, Edison, New Jersey**                                        | ** ** | **08837-2206**                        |
| (Address of  principal executive offices)                                           |       | (Zip Code)                            |
|                                                                                |       |                                  |
| **(732)  590-1000**                                                                 |
| (Registrant’s  telephone number, including area code)                          |
|                                                                                |
| **Not  Applicable**                                                                 |
| (Former name,  former address and former fiscal year, if changed since last report) |

 

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements for thepast ninety (90) days.  YES xNO o

Indicateby check mark whether the registrant is a large accelerated filer, anaccelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” inRule 12b-2 of the Exchange Act.  (CheckOne):

Large acceleratedfiler  x   Acceleratedfiler  o       Non-acceleratedfiler  o

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2 of theExchange Act). YES o  NO x

 

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**MACK-CALIREALTY, L.P.**

**FORM 10-Q**

**INDEX**
| **Part  I**        |       | **Financial  Information** |                                                                                                    |   |
|--------------------|------------|----------------------------|---------------------------------------------------------------------------------------------------------|--------|
|               |       |                       |                                                                                                    |   |   |
|               |       | Item 1.                    | Financial  Statements*(unaudited):*                                                                     |   |   |
|               |       |                       |                                                                                                    |   |   |
|               |       |                       | Consolidated  Balance Sheets as of June 30, 2007 and December 31, 2006                                  |   |   |
|               |       |                       |                                                                                                    |   |   |
|               |       |                       | Consolidated Statements of  Operations for the three and six month periods ended June 30, 2007 and 2006 |   |   |
|               |       |                       |                                                                                                    |   |   |
|               |       |                       | Consolidated Statement of  Changes in Partners’ Capital for the six months ended June 30, 2007     |   |   |
|               |       |                       |                                                                                                    |   |   |
|               |       |                       | Consolidated  Statements of Cash Flows for the six months ended June 30, 2007 and 2006                  |   |   |
|               |       |                       |                                                                                                    |   |   |
|               |       |                       | Notes to  Consolidated Financial Statements                                                             |   |   |
|               |       |                       |                                                                                                    |   |   |
|               |       | Item 2.                    | Management’s  Discussion and Analysis of Financial Condition and Results of Operations             |   |   |
|               |       |                       |                                                                                                    |   |   |
|               |       | Item 3.                    | Quantitative  and Qualitative Disclosures About Market Risk                                             |   |   |
|               |       |                       |                                                                                                    |   |   |
|               |       | Item 4.                    | Controls and  Procedures                                                                                |   |   |
|               |       |                       |                                                                                                    |   |   |
| **Part II**        | ** ** | **Other Information**      |                                                                                                    |   |
| ** **         | ** ** | ** **                 | ** **                                                                                              |   |   |
|               |       | Item 1.                    | Legal Proceedings                                                                                       |   |   |
|               |       |                       |                                                                                                    |   |   |
|               |       | Item  1A.                  | Risk  Factors                                                                                           |   |   |
|               |       |                       |                                                                                                    |   |   |
|               |       | Item 2.                    | Unregistered  Sales of Equity Securities and Use of Proceeds                                            |   |   |
|               |       |                       |                                                                                                    |   |   |
|               |       | Item 3.                    | Defaults  Upon Senior Securities                                                                        |   |   |
|               |       |                       |                                                                                                    |   |   |
|               |       | Item 4.                    | Submission  of Matters to a Vote of Security Holders                                                    |   |   |
|               |       |                       |                                                                                                    |   |   |
|               |       | Item 5.                    | Other Information                                                                                       |   |   |
|               |       |                       |                                                                                                    |   |   |
|               |       | Item  6.                   | Exhibits                                                                                                |   |   |
|               |       |                       |                                                                                                    |   |   |
| **Signatures**     |       |                       |                                                                                                    |
| ** **         |       |                       |                                                                                                    |
| **Exhibit  Index** |       |                       |                                                                                                    |

 

2

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**MACK-CALI REALTY, L.P.**

**Part I – Financial Information**

**Item 1.**         **Financial Statements**

The accompanyingunaudited consolidated balance sheets, statements of operations, of changes instockholders’ equity, and of cash flows and related notes thereto, have beenprepared in accordance with generally accepted accounting principles (“GAAP”)for interim financial information and in conjunction with the rules andregulations of the Securities and Exchange Commission (“SEC”).  Accordingly, they do not include all of thedisclosures required by GAAP for complete financial statements.  The financial statements reflect alladjustments consisting only of normal, recurring adjustments, which are, in theopinion of management, necessary for a fair presentation for the interimperiods.

The aforementionedfinancial statements should be read in conjunction with the notes to theaforementioned financial statements and Management’s Discussion and Analysis ofFinancial Condition and Results of Operations and the financial statements andnotes thereto included in Mack-Cali Realty, L.P.’s Annual Report on Form 10-Kfor the fiscal year ended December 31, 2006.

The results of operationsfor the three and six month periods ended June 30, 2007 are not necessarilyindicative of the results to be expected for the entire fiscal year or anyother period.

3

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**MACK-CALIREALTY, L.P. AND SUBSIDIARIES**

**CONSOLIDATEDBALANCE SHEETS***(in thousands, except perunit amounts) (unaudited)*
| ** **                                                                        | ** ** | **June 30,  2007** | ** ** | **December 31,  2006** | ** ** |
|-----------------------------------------------------------------------------------|------------|-------------------------|------------|-----------------------------|------------|
| **ASSETS**                                                                        |       |                    |       |                        |       |
| Rental property                                                                   |       |                    |       |                        |       |
| Land and leasehold  interests                                                     |       | $                       | 722,777    |                        | $          | 659,169 |   |
| Buildings and  improvements                                                       |       | 3,736,777               |       | 3,549,699                   |       |
| Tenant  improvements                                                              |       | 365,469                 |       | 356,495                     |       |
| Furniture,  fixtures and equipment                                                |       | 8,496                   |       | 8,224                       |       |
|                                                                              |       | 4,833,519               |       | 4,573,587                   |       |
| Less –  accumulated depreciation and amortization                            |       | (833,492                | )          | (796,793                    | )          |
|                                                                              |       | 4,000,027               |       | 3,776,794                   |       |
| Rental property held  for sale, net                                               |       | 5,826                   |       | —                      |       |
| Net investment  in rental property                                                |       | 4,005,853               |       | 3,776,794                   |       |
| Cash and cash  equivalents                                                        |       | 18,903                  |       | 101,223                     |       |
| Investments in  unconsolidated joint ventures                                     |       | 181,059                 |       | 160,301                     |       |
| Unbilled rents  receivable, net                                                   |       | 106,215                 |       | 100,847                     |       |
| Deferred charges and  other assets, net                                           |       | 261,965                 |       | 240,637                     |       |
| Restricted cash                                                                   |       | 16,795                  |       | 15,448                      |       |
| Accounts receivable,  net of allowance for doubtful accounts of $2,715 and $1,260 |       | 29,432                  |       | 27,639                      |       |
|                                                                              |       |                    |       |                        |       |
| Total assets                                                                      |       | $                       | 4,620,222  |                        | $          | 4,422,889 |   |
|                                                                              |       |                    |       |                        |       |
| **LIABILITIES AND PARTNERS’  CAPITAL**                                       |       |                    |       |                        |       |
| Senior unsecured notes                                                            |       | $                       | 1,632,014  |                        | $          | 1,631,482 |   |
| Revolving credit  facility                                                        |       | 115,000                 |       | 145,000                     |       |
| Mortgages, loans  payable and other obligations                                   |       | 336,534                 |       | 383,477                     |       |
| Distributions payable                                                             |       | 53,689                  |       | 50,591                      |       |
| Accounts payable,  accrued expenses and other liabilities                         |       | 146,689                 |       | 122,134                     |       |
| Rents received in  advance and security deposits                                  |       | 51,116                  |       | 45,972                      |       |
| Accrued interest  payable                                                         |       | 33,832                  |       | 34,106                      |       |
| Total  liabilities                                                                |       | 2,368,874               |       | 2,412,762                   |       |
|                                                                              |       |                    |       |                        |       |
| Minority interest in  consolidated joint ventures                                 |       | 1,555                   |       | 2,117                       |       |
|                                                                              |       |                    |       |                        |       |
| Commitments and  contingencies                                                    |       |                    |       |                        |       |
|                                                                              |       |                    |       |                        |       |
| **Partners’ capital:**                                                       |       |                    |       |                        |       |
| General Partner, 10,000  and 10,000 preferred units outstanding                   |       | 24,836                  |       | 24,836                      |       |
| General Partner,  67,923,841 and 62,925,191 common units outstanding              |       | 1,754,974               |       | 1,503,071                   |       |
| Limited partners,  15,250,592 and 15,342,283 common units outstanding             |       | 469,983                 |       | 480,103                     |       |
| Total partners’  capital                                                     |       | 2,249,793               |       | 2,008,010                   |       |
|                                                                              |       |                    |       |                        |       |
| Total liabilities and  partners’ capital                                     |       | $                       | 4,620,222  |                        | $          | 4,422,889 |   |

 

*Theaccompanying notes are an integral part of these consolidated financialstatements.*

4

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###  

**MACK-CALIREALTY, L.P. AND SUBSIDIARIES**

**CONSOLIDATEDSTATEMENTS OF OPERATIONS***(in thousands, except perunit amounts) (unaudited)*
| ** **                                                                            | ** ** | **Three Months Ended** | ** ** | **Six Months Ended** | ** ** |
|---------------------------------------------------------------------------------------|------------|----------------------------------|------------|--------------------------------|------------|
| ** **                                                                            | ** ** | **June 30,**                | ** ** | **June 30,**              | ** ** |
| ** **                                                                            | ** ** | **2007**                         | ** ** | **2006**                       | ** ** | **2007** | ** ** | **2006** | ** ** |
| **REVENUES**                                                                          |       |                             |       |                           |       |   |   |   |   |
| Base rents                                                                            |       | $                                | 142,482    |                           | $          | 133,333 |   | $ | 282,039 |   | $ | 260,839 |   |
| Escalations and  recoveries from tenants                                              |       | 25,766                           |       | 23,272                         |       | 51,986 |   | 44,243 |   |
| Construction services                                                                 |       | 23,469                           |       | 13,049                         |       | 45,810 |   | 13,049 |   |
| Real estate services                                                                  |       | 4,959                            |       | 7,734                          |       | 7,700 |   | 8,363 |   |
| Other income                                                                          |       | 3,854                            |       | 5,401                          |       | 6,252 |   | 8,184 |   |
| Total revenues                                                                        |       | 200,530                          |       | 182,789                        |       | 393,787 |   | 334,678 |   |
|                                                                                  |       |                             |       |                           |       |   |   |   |   |
| **EXPENSES**                                                                          |       |                             |       |                           |       |   |   |   |   |
| Real estate taxes                                                                     |       | 23,852                           |       | 21,162                         |       | 47,322 |   | 41,932 |   |
| Utilities                                                                             |       | 15,329                           |       | 13,214                         |       | 32,874 |   | 27,670 |   |
| Operating services                                                                    |       | 27,348                           |       | 25,880                         |       | 51,974 |   | 46,036 |   |
| Direct construction  costs                                                            |       | 22,634                           |       | 12,579                         |       | 43,545 |   | 12,579 |   |
| General and  administrative                                                           |       | 12,870                           |       | 11,846                         |       | 23,940 |   | 20,621 |   |
| Depreciation and  amortization                                                        |       | 43,823                           |       | 39,476                         |       | 85,274 |   | 75,955 |   |
| Total expenses                                                                        |       | 145,856                          |       | 124,157                        |       | 284,929 |   | 224,793 |   |
| Operating income                                                                      |       | 54,674                           |       | 58,632                         |       | 108,858 |   | 109,885 |   |
| ** **                                                                            |       |                             |       |                           |       |   |   |   |   |
| **OTHER (EXPENSE) INCOME**                                                            |       |                             |       |                           |       |   |   |   |   |
| Interest expense                                                                      |       | (31,333                          | )          | (33,034                        | )          | (62,269 | ) | (64,109 | ) |
| Interest and other  investment income                                                 |       | 1,571                            |       | 399                            |       | 3,188 |   | 1,845 |   |
| Equity in earnings  (loss) of unconsolidated joint ventures                           |       | (1,696                           | )          | (846                           | )          | (3,927 | ) | (599 | ) |
| Minority interest in  consolidated joint ventures                                     |       | 214                              |       | 30                             |       | 441 |   | 30 |   |
| Gain on sale of  investment in marketable securities                                  |       | —                           |       | —                         |       | — |   | 15,060 |   |
| Total other (expense)  income                                                         |       | (31,244                          | )          | (33,451                        | )          | (62,567 | ) | (47,773 | ) |
| Income from continuing  operations                                                    |       | 23,430                           |       | 25,181                         |       | 46,291 |   | 62,112 |   |
| Discontinued  operations:                                                             |       |                             |       |                           |       |   |   |   |   |
| Income from  discontinued operations                                                  |       | 732                              |       | 3,730                          |       | 1,273 |   | 7,431 |   |
| Realized gains (losses)  and unrealized losses on disposition of rental property, net |       | 38,860                           |       | 4,905                          |       | 38,860 |   | 4,905 |   |
| Total discontinued  operations, net                                                   |       | 39,252                           |       | 8,635                          |       | 40,133 |   | 12,336 |   |
| Net income                                                                            |       | 63,022                           |       | 33,816                         |       | 86,424 |   | 74,448 |   |
| Preferred unit  distributions                                                         |       | (500                             | )          | (500                           | )          | (1,000 | ) | (1,000 | ) |
| Net income available to  common unitholders                                           |       | $                                | 62,522     |                           | $          | 33,316 |   | $ | 85,424 |   | $ | 73,448 |   |
|                                                                                  |       |                             |       |                           |       |   |   |   |   |
| **Basic earnings per common unit:**                                                   |       |                             |       |                           |       |   |   |   |   |
| Income from continuing  operations                                                    |       | $                                | 0.28       |                           | $          | 0.32 |   | $ | 0.55 |   | $ | 0.79 |   |
| Discontinued operations                                                               |       | $                                | 0.47       |                           | $          | 0.11 |   | $ | 0.49 |   | 0.16 |   |
| Net income available to  common unitholders                                           |       | $                                | 0.75       |                           | $          | 0.43 |   | $ | 1.04 |   | $ | 0.95 |   |
|                                                                                  |       |                             |       |                           |       |   |   |   |   |
| **Diluted earnings per common  unit:**                                                |       |                             |       |                           |       |   |   |   |   |
| Income from continuing  operations                                                    |       | $                                | 0.28       |                           | $          | 0.32 |   | $ | 0.55 |   | $ | 0.79 |   |
| Discontinued operations                                                               |       | $                                | 0.47       |                           | $          | 0.11 |   | $ | 0.49 |   | 0.16 |   |
| Net income available to  common unitholders                                           |       | $                                | 0.75       |                           | $          | 0.43 |   | $ | 1.04 |   | $ | 0.95 |   |
|                                                                                  |       |                             |       |                           |       |   |   |   |   |
| Distributions declared  per common unit                                               |       | $                                | 0.64       |                           | $          | 0.63 |   | $ | 1.28 |   | $ | 1.26 |   |
|                                                                                  |       |                             |       |                           |       |   |   |   |   |
| Basic weighted average  units outstanding                                             |       | 82,990                           |       | 77,781                         |       | 81,991 |   | 77,053 |   |
|                                                                                  |       |                             |       |                           |       |   |   |   |   |
| Diluted weighted average units outstanding                                            |       | 83,193                           |       | 78,067                         |       | 82,220 |   | 77,359 |   |

 

*Theaccompanying notes are an integral part of these consolidated financialstatements.*

5

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**MACK-CALIREALTY, L.P. AND SUBSIDIARIES**

### **CONSOLIDATEDSTATEMENT OF CHANGES IN PARTNERS’ CAPITAL***(in thousands) (unaudited)*

| ** **                                                                 | ** ** | **General**   | ** ** | **General** | ** ** | **Limited**  | ** ** | **General**     | ** ** | **General**     | ** ** | **Limited**     | ** ** | ** **         | ** ** |
|----------------------------------------------------------------------------|------------|---------------|------------|-------------|------------|--------------|------------|-----------------|------------|-----------------|------------|-----------------|------------|--------------------|------------|
| ** **                                                                 | ** ** | **Partner**   | ** ** | **Partner** | ** ** | **Partners** | ** ** | **Partner**     | ** ** | **Partner**     | ** ** | **Partners**    | ** ** | **Total**          | ** ** |
| ** **                                                                 | ** ** | **Preferred** | ** ** | **Common**  | ** ** | **Common**   | ** ** | **Preferred**   | ** ** | **Common**      | ** ** | **Common**      | ** ** | **Partners’** | ** ** |
| ** **                                                                 | ** ** | **Units**     | ** ** | **Units**   | ** ** | **Units**    | ** ** | **Unitholders** | ** ** | **Unitholders** | ** ** | **Unitholders** | ** ** | **Capital**        | ** ** |
|                                                                       |       |          |       |        |       |         |       |            |       |            |       |            |       |               |       |
| Balance at January 1,  2007                                                |       | 10            |       | 62,925      |       | 15,342       |       | $               | 24,836     |            | $          | 1,503,071       |       | $                  | 480,103    |   | $ | 2,008,010 |   |
| Net income                                                                 |       | —        |       | —      |       | —       |       | 1,000           |       | 69,657          |       | 15,767          |       | 86,424             |       |
| Distributions                                                              |       | —        |       | —      |       | —       |       | (1,000          | )          | (86,895         | )          | (19,445         | )          | (107,340           | )          |
| General Partner Common  Stock offering                                     |       | —        |       | 4,650       |       | —       |       | —          |       | 251,732         |       | —          |       | 251,732            |       |
| Issuance of Common  Units                                                  |       | —        |       | —      |       | 115          |       | —          |       | 5,243           |       | —          |       | 5,243              |       |
| Redemption of  limited partners  common units for  shares of  common stock |       | —        |       | 207         |       | (207         | )          | —          |       | 6,442           |       | (6,442          | )          | —             |       |
| Units issued  under Dividend Reinvestment and Stock Purchase Plan          |       | —        |       | 3           |       | —       |       | —          |       | 146             |       | —          |       | 146                |       |
| Contributions –  proceeds from stock options exercised                |       | —        |       | 126         |       | —       |       | —          |       | 3,614           |       | —          |       | 3,614              |       |
| Stock options  expense                                                     |       | —        |       | —      |       | —       |       | —          |       | 66              |       | —          |       | 66                 |       |
| Directors  Deferred compensation  plan                                     |       | —        |       | —      |       | —       |       | —          |       | 159             |       | —          |       | 159                |       |
| Issuance of  restricted stock awards                                       |       | —        |       | 13          |       | —       |       | —          |       | —          |       | —          |       | —             |       |
| Amortization of  stock compensation                                        |       | —        |       | —      |       | —       |       | —          |       | 1,739           |       | —          |       | 1,739              |       |
|                                                                       |       |          |       |        |       |         |       |            |       |            |       |            |       |               |       |
| Balance at June 30, 2007                                                   |       | 10            |       | 67,924      |       | 15,250       |       | $               | 24,836     |            | $          | 1,754,974       |       | $                  | 469,983    |   | $ | 2,249,793 |   |

* *

*Theaccompanying notes are an integral part of these consolidated financialstatements.*

6

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**MACK-CALIREALTY, L.P. AND SUBSIDIARIES**

### **CONSOLIDATEDSTATEMENTS OF CASH FLOWS***(inthousands) (unaudited)*

| ** **                                                                                                  | ** ** | **Six Months Ended** | ** ** |
|-------------------------------------------------------------------------------------------------------------|------------|--------------------------------|------------|
| ** **                                                                                                  | ** ** | **June 30,**              | ** ** |
| ** **                                                                                                  | ** ** | **2007**                       | ** ** | **2006** | ** ** |
| **CASH FLOWS FROM OPERATING  ACTIVITIES**                                                                   |       |                           |       |   |   |
| Net income                                                                                                  |       | $                              | 86,424     |   | $ | 74,448 |   |
| Adjustments to  reconcile net income to net cash provided by operating activities:                          |       |                           |       |   |   |
| Depreciation and  amortization                                                                              |       | 85,274                         |       | 75,955 |   |
| Depreciation and  amortization on discontinued operations                                                   |       | 424                            |       | 6,319 |   |
| Stock options  expense                                                                                      |       | 66                             |       | 176 |   |
| Amortization of  stock compensation                                                                         |       | 1,739                          |       | 1,438 |   |
| Amortization of  deferred financing costs and debt discount                                                 |       | 1,421                          |       | 1,446 |   |
| Distribution of  cumulative earnings from joint ventures                                                    |       | 1,000                          |       | — |   |
| Equity in  (earnings) losses of unconsolidated joint ventures, net                                          |       | 3,927                          |       | 599 |   |
| Gain on sale of  marketable securities available for sale                                                   |       | —                         |       | (15,060 | ) |
| Realized (gain)  losses and unrealized losses on disposition of rental property (net of  minority interest) |       | (38,860                        | )          | (4,905 | ) |
| Minority  interest in consolidated joint ventures                                                           |       | (441                           | )          | 30 |   |
| Changes in operating assets  and liabilities:                                                               |       |                           |       |   |   |
| Increase in  unbilled rents receivable, net                                                                 |       | (5,921                         | )          | (11,460 | ) |
| Increase in  deferred charges and other assets, net                                                         |       | (18,316                        | )          | (36,897 | ) |
| Increase in  accounts receivable, net                                                                       |       | (1,793                         | )          | (19,888 | ) |
| Increase in  accounts payable, accrued expenses and other liabilities                                       |       | 3,473                          |       | 36,421 |   |
| Increase in  rents received in advance and security deposits                                                |       | 5,144                          |       | 2,913 |   |
| (Decrease)  increase in accrued interest payable                                                            |       | (274                           | )          | 8,412 |   |
|                                                                                                        |       |                           |       |   |   |
| Net cash  provided by operating activities                                                                  |       | $                              | 123,287    |   | $ | 119,947 |   |
|                                                                                                        |       |                           |       |   |   |
| **CASH FLOWS FROM INVESTING  ACTIVITIES**                                                                   |       |                           |       |   |   |
| Additions to rental  property and related intangibles                                                       |       | $                              | (327,864   | ) | $ | (150,189 | ) |
| Repayments of notes  receivable                                                                             |       | 81                             |       | 77 |   |
| Investment in  unconsolidated joint ventures                                                                |       | (20,141                        | )          | (134,183 | ) |
| Purchase of marketable  securities available for sale                                                       |       | —                         |       | (11,912 | ) |
| Proceeds from sale of  rental property                                                                      |       | 45,755                         |       | 18,912 |   |
| Proceeds from sale of  marketable securities available for sale                                             |       | —                         |       | 78,609 |   |
| Increase in restricted  cash                                                                                |       | (1,347                         | )          | (7,120 | ) |
|                                                                                                        |       |                           |       |   |   |
| Net cash used in  investing activities                                                                      |       | $                              | (303,516   | ) | $ | (205,806 | ) |
|                                                                                                        |       |                           |       |   |   |
| **CASH FLOWS FROM FINANCING  ACTIVITIES**                                                                   |       |                           |       |   |   |
| Proceeds from senior  unsecured notes                                                                       |       | —                         |       | $ | 199,914 |   |
| Borrowings from  revolving credit facility                                                                  |       | $                              | 269,000    |   | 530,250 |   |
| Repayment of revolving  credit facility                                                                     |       | (299,000                       | )          | (440,250 | ) |
| Repayment of mortgages,  loans payable and other obligations                                                |       | (21,781                        | )          | (152,521 | ) |
| Payment of financing  costs                                                                                 |       | (1,414                         | )          | (385 | ) |
| Proceeds from offering  of Common Stock                                                                     |       | 251,732                        |       | — |   |
| Proceeds from stock  options exercised                                                                      |       | 3,614                          |       | 5,773 |   |
| Payment of  distributions                                                                                   |       | (104,242                       | )          | (96,902 | ) |
|                                                                                                        |       |                           |       |   |   |
| Net cash  provided by financing activities                                                                  |       | $                              | 97,909     |   | $ | 45,879 |   |
|                                                                                                        |       |                           |       |   |   |
| Net decrease in cash  and cash equivalents                                                                  |       | $                              | (82,320    | ) | $ | (39,980 | ) |
| Cash and cash  equivalents, beginning of period                                                             |       | 101,223                        |       | 60,397 |   |
|                                                                                                        |       |                           |       |   |   |
| Cash and cash equivalents, end of period                                                                    |       | $                              | 18,903     |   | $ | 20,417 |   |

 

*Theaccompanying notes are an integral part of these consolidated financialstatements.*

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**MACK-CALIREALTY, L.P. AND SUBSIDIARIES**

**NOTES TOCONSOLIDATED FINANCIAL STATEMENTS***(unaudited)*

**1.****              ORGANIZATION ANDBASIS OF PRESENTATION**

**ORGANIZATION**

Mack-Cali Realty,L.P., a Delaware limited partnership, together with its subsidiaries(collectively, the “Operating Partnership”), was formed on May 31, 1994 toconduct the business of leasing, management, acquisition, development,construction and tenant-related services for its sole general partner,Mack-Cali Realty Corporation (the “Corporation” or “General Partner”).  The Operating Partnership, through itsoperating divisions and subsidiaries, including the Mack-Cali property-owningpartnerships and limited liability companies (collectively, the “PropertyPartnerships”) is the entity through which all of the General Partner’soperations are conducted.

The General Partner is a fully integrated,self-administered, self-managed real estate investment trust (“REIT”).  The General Partner controls the OperatingPartnership as its sole general partner, and owned an 81.7 percent and 80.4percent common unit interest in the Operating Partnership as of June 30, 2007and December 31, 2006, respectively.

The General Partner’s business is the ownership ofinterests in and operation of the Operating Partnership, and all of the GeneralPartner’s expenses are incurred for the benefit of the OperatingPartnership.  The General Partner isreimbursed by the Operating Partnership for all expenses it incurs relating tothe ownership and operation of the Operating Partnership.

As of June 30,2007, the Operating Partnership owned or had interests in 302 properties plusdevelopable land (collectively, the “Properties”).  The Properties aggregate approximately 34.8million square feet, which are comprised of 291 buildings, primarily office andoffice/flex buildings, totaling approximately 34.4 million square feet (whichinclude 44 buildings, primarily office buildings aggregating approximately 5.4million square feet owned by unconsolidated joint ventures in which theOperating Partnership has investment interests), six industrial/warehousebuildings totaling approximately 387,400 square feet, two retail propertiestotaling approximately 17,300 square feet, one hotel (which is owned by anunconsolidated joint venture in which the Operating Partnership has aninvestment interest) and two parcels of land leased to others.  The Properties are located in seven states,primarily in the Northeast, plus the District of Columbia.

### **BASISOF PRESENTATION**

The accompanyingconsolidated financial statements include all accounts of the OperatingPartnership, its majority-owned and/or controlled subsidiaries, and variableinterest entities for which the Operating Partnership has determined itself tobe the primary beneficiary, if any.  SeeNote 2: Significant Accounting Policies – Investments in Unconsolidated JointVentures, Net for the Operating Partnership’s treatment of unconsolidated jointventure interests.  Intercompany accountsand transactions have been eliminated.

The preparation offinancial statements in conformity with generally accepted accountingprinciples (“GAAP”) requires management to make estimates and assumptions thataffect the reported amounts of assets and liabilities and disclosure ofcontingent assets and liabilities at the date of the financial statements andthe reported amounts of revenues and expenses during the reporting period.  Actual results could differ from thoseestimates.

**2.****              SIGNIFICANTACCOUNTING POLICIES**

***Rental***

***Property***                                                                        Rentalproperties are stated at cost less accumulated depreciation andamortization.  Costs directly related tothe acquisition, development and construction of rental properties arecapitalized.  Capitalized development andconstruction costs include pre-construction costs essential to the developmentof the property, development and construction costs, interest, property taxes,insurance, salaries and other project costs incurred during the period ofdevelopment.  Included in total rentalproperty is construction and development in-progress of 

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$117,594,000 and$116,151,000 (including land of $65,853,000 and $63,136,000) as of June 30,2007 and December 31, 2006, respectively. Ordinary repairs and maintenance are expensed as incurred; majorreplacements 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 theaccounts.

The Operating Partnership considers a constructionproject as substantially completed and held available for occupancy upon thecompletion of tenant improvements, but no later than one year from cessation ofmajor construction activity (as distinguished from activities such as routinemaintenance and cleanup).  If portions ofa rental project are substantially completed and occupied by tenants, or heldavailable for occupancy, and other portions have not yet reached that stage,the substantially completed portions are accounted for as a separateproject.  The Operating Partnershipallocates costs incurred between the portions under construction and theportions substantially completed and held available for occupancy, andcapitalizes only those costs associated with the portion under construction.

Properties are depreciated using the straight-linemethod over the estimated useful lives of the assets.  The estimated useful lives are as follows:
| Leasehold interests                |   | Remaining lease term                                           |
|------------------------------------|--------|----------------------------------------------------------------|
| Buildings and  improvements        |   | 5 to 40 years                                                  |
| Tenant improvements                |   | The shorter of the term  of the

related lease or useful  life |
| Furniture,  fixtures and equipment |   | 5 to 10 years                                                  |

 

Upon acquisition of rental property, the OperatingPartnership estimates the fair value of acquired tangible assets, consisting ofland, building and improvements, and identified intangible assets andliabilities, generally consisting of the fair value of (i) above and belowmarket leases, (ii) in-place leases and (iii) tenant relationships.  The Operating Partnership allocates the purchaseprice to the assets acquired and liabilities assumed based on their relativefair values.  In estimating the fairvalue of the tangible and intangible assets acquired, the Operating Partnershipconsiders information obtained about each property as a result of its duediligence and marketing and leasing activities, and utilizes various valuationmethods, such as estimated cash flow projections utilizing appropriate discountand capitalization rates, estimates of replacement costs net of depreciation,and available market information.  Thefair value of the tangible assets of an acquired property considers the valueof the property as if it were vacant.

Above-market and below-market lease values foracquired properties are recorded based on the present value, (using a discountrate which reflects the risks associated with the leases acquired) of thedifference between (i) the contractual amounts to be paid pursuant to eachin-place lease and (ii) management’s estimate of fair market lease rates foreach corresponding in-place lease, measured over a period equal to theremaining term of the lease for above-market leases and the initial term plusthe term of any below-market fixed rate renewal options for below-marketleases. The capitalized above-market lease values are amortized as a reductionof base rental revenue over the remaining term of the respective leases, andthe capitalized below-market lease values are amortized as an increase to baserental revenue over the remaining initial terms plus the terms of anybelow-market fixed rate renewal options of the respective leases.

Other intangible assets acquired include amounts forin-place lease values and tenant relationship values, which are based onmanagement’s evaluation of the specific characteristics of each tenant’s leaseand the Operating Partnership’s overall relationship with the respectivetenant.  Factors to be considered bymanagement in its analysis of in-place lease values include an estimate ofcarrying costs during hypothetical expected lease-up periods consideringcurrent market conditions, and costs to execute similar leases.  In 

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estimating carrying costs, management includes realestate taxes, insurance and other operating expenses and estimates of lostrentals at market rates during the expected lease-up periods, depending onlocal market conditions.  In estimatingcosts to execute similar leases, management considers leasing commissions,legal and other related expenses. Characteristics considered by management in valuing tenant relationshipsinclude the nature and extent of the Operating Partnership’s existing businessrelationships with the tenant, growth prospects for developing new businesswith the tenant, the tenant’s credit quality and expectations of leaserenewals.  The value of in-place leasesare amortized to expense over the remaining initial terms of the respectiveleases.  The value of tenant relationshipintangibles are amortized to expense over the anticipated life of the relationships.

On a periodic basis, management assesses whether thereare any indicators that the value of the Operating Partnership’s real estateproperties held for use may be impaired. A property’s value is impaired only if management’s estimate of theaggregate future cash flows (undiscounted and without interest charges) to begenerated by the property is less than the carrying value of the property.  To the extent impairment has occurred, theloss shall be measured as the excess of the carrying amount of the propertyover the fair value of the property.  TheOperating Partnership’s estimates of aggregate future cash flows expected to begenerated by each property are based on a number of assumptions that aresubject to economic and market uncertainties including, among others, demandfor space, competition for tenants, changes in market rental rates, and coststo operate each property.  As thesefactors are difficult to predict and are subject to future events that mayalter management’s assumptions, the future cash flows estimated by managementin its impairment analyses may not be achieved. Management does not believe that the value of any of the OperatingPartnership’s rental properties is impaired.

***Rental Property***

***Held for Sale and***

***Discontinued***

***Operations******                                                        ***Whenassets are identified by management as held for sale, the Operating Partnershipdiscontinues depreciating the assets and estimates the sales price, net ofselling costs, of such assets.  If, inmanagement’s opinion, the estimated net sales price of the assets which havebeen identified as held for sale is less than the net book value of the assets,a valuation allowance is established. Properties identified as held for sale and/or sold are presented indiscontinued operations for all periods presented.  See Note 6: Discontinued Operations.

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

***Investmentsin***

***Unconsolidated***

***JointVentures***                                      TheOperating Partnership accounts for its investments in unconsolidated jointventures for which Financial Accounting Standards Board (“FASB”) InterpretationNo. 46 (revised December 2003), Consolidation of Variable Interest Entities (“FIN46”) does not apply under the equity method of accounting as the OperatingPartnership exercises significant influence, but does not control theseentities.****** These investments are recorded initially atcost, as Investments in Unconsolidated Joint Ventures, and subsequentlyadjusted for equity in earnings and cash contributions and distributions.

FIN 46 provides guidance on the identification ofentities for which control is achieved through means other than voting rights (“variableinterest entities” or “VIEs”) and the 

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determination of which business enterprise, if any,should consolidate the VIE (the “primary beneficiary”).  Generally, FIN 46 applies when either (1) theequity investors (if any) lack one or more of the essential characteristics ofa controlling financial interest, (2) the equity investment at risk isinsufficient to finance that entity’s activities without additionalsubordinated financial support or (3) the equity investors have voting rightsthat are not proportionate to their economic interests and the activities ofthe entity involve or are conducted on behalf of an investor with adisproportionately small voting interest.

On a periodicbasis, management assesses whether there are any indicators that the value ofthe Operating Partnership’s investments in unconsolidated joint ventures may beimpaired.  An investment is impaired onlyif management’s estimate of the value of the investment is less than thecarrying value of the investment, and such decline in value is deemed to beother than temporary.  To the extentimpairment has occurred, the loss shall be measured as the excess of thecarrying amount of the investment over the value of the investment.  Management does not believe that the value ofany of the Operating Partnership’s investments in unconsolidated joint venturesis impaired.  See Note 4: Investments inUnconsolidated Joint Ventures.

***Cash and Cash***

***Equivalents***                                                     Allhighly liquid investments with a maturity of three months or less whenpurchased are considered to be cash equivalents.

***Marketable***

***Securities***                                                                 TheOperating Partnership classifies its marketable securities among threecategories: held-to-maturity, trading and available-for-sale.  Unrealized holding gains and losses relatingto available-for-sale securities are excluded from earnings and reported asother comprehensive income (loss) in stockholders’ equity until realized.  A decline in the market value of anymarketable security below cost that is deemed to be other than temporaryresults in a reduction in the carrying amount to fair value.  Any impairment would be charged to earningsand a new cost basis for the security established.

***Deferred***

***FinancingCosts*****                           **Costsincurred in obtaining financing are capitalized and amortized on astraight-line basis, which approximates the effective interest method, over theterm of the related indebtedness. Amortization of such costs is included in interest expense and was$713,000 and $725,000 for the three months ended June 30, 2007 and 2006,respectively, and $1,421,000 and $1,446,000 for the six months ended June 30,2007 and 2006, respectively.

***Deferred***

***LeasingCosts***                                         Costsincurred in connection with leases are capitalized and amortized on astraight-line basis over the terms of the related leases and included indepreciation and amortization. Unamortized deferred leasing costs are charged to amortization expenseupon early termination of the lease.  Certainemployees of the Operating Partnership are compensated for providing leasingservices to the Properties.  The portionof such compensation, which is capitalized and amortized, approximated $927,000and $817,000 for the three months ended June 30, 2007 and 2006, respectively,and $2,064,000 and $1,666,000 for the six months ended June 30, 2007 and 2006,respectively.

***Derivative***

***Instruments***                                                     TheOperating Partnership measures derivative instruments, including certainderivative instruments embedded in other contracts, at fair value and recordsthem as an asset or liability, depending on the Operating Partnership’s rightsor obligations under the applicable derivative contract.  For derivatives designated and qualifying asfair value hedges, the changes in the fair value of both the derivativeinstrument and the hedged item are recorded in earnings.  For derivatives designated as cash flowhedges, the effective portions of the derivative are reported in other comprehensiveincome (“OCI”) and are subsequently reclassified into 

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earnings when the hedgeditem affects earnings.  Changes in fairvalue of derivative instruments not designated as hedging and ineffectiveportions of hedges are recognized in earnings in the affected period.

***Revenue***

***Recognition***                                                    Baserental revenue is recognized on a straight-line basis over the terms of therespective leases.****** Unbilled rents receivable represents theamount by which straight-line rental revenue exceeds rents currently billed inaccordance with the lease agreements.  Above-marketand below-market lease values for acquired properties are recorded based on thepresent value (using a discount rate which reflects the risks associated withthe leases acquired) of the difference between (i) the contractual amounts tobe paid pursuant to each in-place lease and (ii) management’s estimate of fairmarket lease rates for each corresponding in-place lease, measured over aperiod equal to the remaining term of the lease for above-market leases and theinitial term plus the term of any below-market fixed-rate renewal options forbelow-market leases.  The capitalizedabove-market lease values for acquired properties are amortized as a reductionof base rental revenue over the remaining term of the respective leases, andthe capitalized below-market lease values are amortized as an increase to baserental revenue over the remaining initial terms plus the terms of anybelow-market fixed-rate renewal options of the respective leases.  Escalations and recoveries from tenants arereceived from tenants for certain costs as provided in the leaseagreements.  These costs generallyinclude real estate taxes, utilities, insurance, common area maintenance andother recoverable costs.  See Note 14:Tenant Leases.  Construction servicesrevenue includes fees earned and reimbursements received by the OperatingPartnership for providing construction management and general contractorservices to clients.  Constructionservices revenue is recognized on the percentage of completion method.  Using this method, profits are recorded onthe basis of estimates of the overall profit and percentage of completion ofindividual contracts.  A portion of theestimated profits is accrued based upon estimates of the percentage ofcompletion of the construction contract. This revenue recognition method involves inherent risks relating toprofit and cost estimates.  Real estateservices revenue includes property management, facilities management, leasingcommission fees and other services, and payroll and related costs reimbursedfrom clients.  Other income includesincome from parking spaces leased to tenants, income from tenants foradditional services arranged for by the Operating Partnership and income fromtenants for early lease terminations.

***Allowancefor***

***DoubtfulAccounts******              ***Managementperiodically performs a detailed review of amounts due from tenants and clientsto determine if accounts receivable balances are impaired based on factorsaffecting the collectibility of those balances. Management’s estimate of the allowance for doubtful accounts requiresmanagement to exercise significant judgment about the timing, frequency andseverity of collection losses, which affects the allowance and net income.

***Incomeand***

***OtherTaxes***                                                   TheOperating Partnership is a partnership and, as a result, all income and lossesof the partnership are allocated to the partners for inclusion in theirrespective income tax returns. Accordingly, no provision or benefit for income taxes has been made inthe accompanying financial statements.

Certain of the OperatingPartnership’s corporate subsidiaries are taxable REIT subsidiaries (each a “TRS”).  In general, a TRS may perform additionalservices for tenants of the Operating Partnership and generally may engage inany real estate or non-real estate related business (except for the operationor management of health care facilities or lodging facilities or the providingto any person, under a franchise, license or otherwise, rights to any brandname under which any lodging facility or health care facility isoperated).  A TRS is subject to corporatefederal income tax.  If the Corporationfails to qualify as a REIT in any taxable year, the Corporation will be subjectto federal income tax (including any applicable 

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alternative minimum tax)on its taxable income at regular corporate tax rates.  The Corporation is subject to certain stateand local taxes.

The Corporation adoptedthe provisions of FASB Interpretation No. 48 (“FIN 48), Accounting forUncertainty in Income Taxes, an interpretation of FASB Statement No. 109 (“FASNo. 109”) on January 1, 2007.  As aresult of the implementation of FIN 48, the Corporation recognized no materialadjustments regarding its tax accounting treatment.  The Corporation expects to recognize interestand penalties related to uncertain tax positions, if any, as income taxexpense, which is included in general and administrative expense.

***Earnings***

***PerUnit***                                                                        TheOperating Partnership presents both basic and diluted earnings per unit (“EPU”).  Basic EPU excludes dilution and is computedby dividing net income available to common unitholders by the weighted averagenumber of units outstanding for the period. Diluted EPU reflects the potential dilution that could occur ifsecurities or other contracts to issue common unit were exercised or convertedinto common stock, where such exercise or conversion would result in a lowerEPU amount.

***Distributions***

***Payable******                                                                        ***Thedistributions payable at June 30, 2007 represents distributions payable topreferred unitholders (10,000 Series C preferred units) and common unitholders(83,185,893 common units), for all such holders of record as of July 5, 2007with respect to the second quarter 2007. The second quarter 2007 Series C unit distributions of $50.00 perpreferred unit, and common unit distributions of $0.64 per common unit wereapproved by the Board of Directors on June 13, 2007.  The preferred unit distributions and commonunit distributions payable were paid on July 16, 2007.

The distributions payableat December 31, 2006 represents distributions payable to preferred unitholders(10,000 Series C preferred units) and common unitholders (78,267,554 commonunits), for all such holders of record as of January 4, 2007 with respect tothe fourth quarter 2006.  The fourthquarter 2006 Series C unit distributions of $50.00 per preferred unit andcommon unit distributions of $0.64 per common unit were approved by the Boardof Directors on December 5, 2006.  Thecommon unit distributions payable were paid on January 12, 2007.  The preferred unit distributions payable werepaid on January 16, 2007.

***CostsIncurred For***

***StockIssuances******                              ***Costsincurred in connection with the Corporation’s stock issuances are reflected asa reduction of General Partner’s capital.

***Stock***

***Compensation******                                     ***TheOperating Partnership accounts for stock options and restricted stock awardsgranted prior to 2002 using the intrinsic value method prescribed in AccountingPrinciples Board Opinion No. 25,  “Accountingfor Stock Issued to Employees,” and related Interpretations (“APB No. 25”).  Under APB No. 25, compensation cost for stockoptions is measured as the excess, if any, of the quoted market price of theCorporation’s stock at the date of grant over the exercise price of the optiongranted.  Compensation cost for stockoptions is recognized ratably over the vesting period.  The Corporation’s policy is to grant optionswith an exercise price equal to the quoted closing market price of theCorporation’s stock on the business day preceding the grant date.  Accordingly, no compensation cost has beenrecognized under the Corporation’s stock option plans for the granting of stockoptions made prior to 2002.  Restrictedstock awards granted prior to 2002 are valued at the vesting dates of suchawards with compensation cost for such awards recognized ratably over thevesting period.

In 2002, the OperatingPartnership adopted the provisions of FASB No. 123, and in 2006, the OperatingPartnership adopted the provisions of FASB No. 123(R), which did not have amaterial effect on the Operating Partnership’s financial position and resultsof operations.

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These provisions require that the estimated fair valueof restricted stock (“Restricted Stock Awards”) and stock options at the grantdate be amortized ratably into expense over the appropriate vestingperiod.  The Operating Partnershiprecorded restricted stock and stock options expense of $907,000 and $884,000for the three months ended June 30, 2007 and 2006, respectively, and $1,804,000and $1,614,000 for the six months ended June 30, 2007 and 2006, respectively.

***Other***

***Comprehensive***

***Income******                                                                            ***Othercomprehensive income (loss) includes items that are recorded in equity, such asunrealized holding gains or losses on marketable securities available forsale.  For the six months ended June 30,2007 and 2006, respectively, other comprehensive income was 0 and $790,000.

***Reclassifications***                        Certainreclassifications have been made to prior period amounts in order to conformwith current period presentation.

**3.****              REAL ESTATETRANSACTIONS**

### **PropertyAcquisitions**

The OperatingPartnership acquired the following office properties during the six monthsended June 30, 2007:  *(dollars in thousands)*
| **Acquisition**               | ** ** | ** **                | ** ** | ** **                     | ** ** | **# of** | ** ** | **Rentable**         | ** ** | **Acquisition** | ** ** |
|-------------------------------|------------|---------------------------|------------|--------------------------------|------------|---------------|------------|----------------------|------------|-----------------|------------|
| **Date**                      | ** ** | **Property/Address**      | ** ** | **Location**                   | ** ** | **Bldgs.**    | ** ** | **Square Feet** | ** ** | **Cost**        | ** ** |
| 05/08/07                      |       | AAA Properties  (a)       |       | Hamilton  Township, New Jersey |       | 2             |       | 69,232               |       | $               | 9,048      |   |
| 06/11/07                      |       | 125 Broad Street  (b) (c) |       | New  York, New York            |       | 1             |       | 524,476              |       | 274,091         |       |
|                          |       |                      |       |                           |       |          |       |                 |       |            |       |
| Total Property  Acquisitions: |       | 3                         |       | 593,708                        |       | $             | 283,139    |                 |

 

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| (a) |   | Included in this transaction was the acquisition of  two parcels of developable land aggregating approximately 13 acres.                                                                  |
|-----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Acquisition represented two units of office  condominium interests, which collectively comprise floors 2 through 16, or  39.6 percent, of the 40-story, 1.2 million square-foot building. |
| (c) |   | Transaction was funded primarily through borrowing  on the Operating Partnership’s revolving credit facility.                                                                        |

 

**PropertiesCommencing Initial Operations**

The followingproperty commenced initial operations during the six months ended June 30,2007:  *(dollars inthousands)*
| ** **                                       | ** ** | ** **           | ** ** | ** **                     | ** ** | ** **    | ** ** | ** **           | ** ** | **Investment by** | ** ** |
|--------------------------------------------------|------------|----------------------|------------|--------------------------------|------------|---------------|------------|----------------------|------------|------------------------|------------|
| ** **                                       | ** ** | ** **           | ** ** | ** **                     | ** ** | **# of** | ** ** | **Rentable**         | ** ** | **Operating**          | ** ** |
| **Date**                                         | ** ** | **Property/Address** | ** ** | **Location**                   | ** ** | **Bldgs.**    | ** ** | **Square Feet** | ** ** | **Partnership (a)**    | ** ** |
| 05/08/07                                         |       | 700 Horizon  Drive   |       | Hamilton Township, New  Jersey |       | 1             |       | 120,000              |       | $                      | 16,699     |   |
|                                             |       |                 |       |                           |       |          |       |                 |       |                   |       |
| Total  Properties Commencing Initial Operations: |       | 1                    |       | 120,000                        |       | $             | 16,699     |                 |

 

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(a)          Development costs werefunded primarily through draws on the Operating Partnership’s revolving creditfacility.  Amounts are as of June 30,2007.

**LandAcquisition**

In February 2007,the Operating Partnership exercised its option to acquire approximately 43acres of land sites within its Capital Office Park complex in Greenbelt,Maryland, which is able to accommodate the development of up to 600,000 squarefeet of office space, for $13 million. The option was acquired as part of the acquisition of the office complexin February 2006.  On May 25, 2007, theOperating Partnership completed the purchase of the land for approximately $13million, which consisted of 114,911 common operating partnership units valuedat $5.2 million, and the remainder in cash.

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**PropertySales**

The OperatingPartnership sold the following office properties during the six months endedJune 30, 2007:  *(dollars in thousands)*
| ** **                    | ** ** | ** **           | ** ** | ** **              | ** ** | ** **    | ** ** | **Rentable** | ** ** | **Net**      | ** ** | **Net**   | ** ** | ** **   | ** ** |
|-------------------------------|------------|----------------------|------------|-------------------------|------------|---------------|------------|--------------|------------|--------------|------------|-----------|------------|--------------|------------|
| **Sale**                      | ** ** | ** **           | ** ** | ** **              | ** ** | **# of** | ** ** | **Square**   | ** ** | **Sales**    | ** ** | **Book**  | ** ** | **Realized** | ** ** |
| **Date**                      | ** ** | **Property/Address** | ** ** | **Location**            | ** ** | **Bldgs.**    | ** ** | **Feet**     | ** ** | **Proceeds** | ** ** | **Value** | ** ** | **Gain**     | ** ** |
| 05/10/07                      |       | 1000 Bridgeport      |       | Shelton,  Connecticut   |       | 1             |       | 133,000      |       | $            | 16,411     |      | $          | 13,782       |       | $ | 2,629 |   |
| 06/11/07                      |       | 500 W. Putnam        |       | Greenwich,  Connecticut |       | 1             |       | 121,250      |       | 54,344       |       | 18,113    |       | 36,231       |       |
|                          |       |                 |       |                    |       |          |       |         |       |         |       |      |       |         |       |
| Total Office Property  Sales: |       | 2                    |       | 254,250                 |       | $             | 70,755     |         | $          | 31,895       |       | $         | 38,860     |         |

 

**GaleEarn-Out**

The agreement toacquire the Gale Company (“Gale Agreement”), which was completed as part of theGale/Green transactions on May 9, 2006, contained earn-out provisions (“Earn-Out”)providing for the payment of contingent purchase consideration of up to $18million in cash based upon the achievement of Gross Income and NOI (as such termswere defined in the Gale Agreement) targets and other events for the threeyears following the closing date.

On May 23, 2007, the Operating Partnership enteredinto an amendment (the “Amendment”) to the Gale Agreement.  The Amendment eliminated the Earn-Out andsubstituted an aggregate of $14 million in payments by the OperatingPartnership consisting of the following:

(1)                                  $8million, which was paid on May 31, 2007;

(2)                                  $3million on May 9, 2008; and

(3)                                  $3million on May 9, 2009.

**SubsequentEvent**

On May 25, 2007,the Operating Partnership entered into an agreement to sell its two officebuildings in Egg Harbor Township, New Jersey, for approximately $12.5million.  The buildings, which total80,344 square feet, were subsequently sold on July 13, 2007.

**4.****              INVESTMENTS INUNCONSOLIDATED JOINT VENTURES**

The debt of the OperatingPartnership’s unconsolidated joint ventures aggregating $591.7 million as ofJune 30, 2007 is non-recourse to the Operating Partnership, except forcustomary exceptions pertaining to such matters as intentional misuse of funds,environmental conditions and material misrepresentations, and except asotherwise indicated below.

##### **MEADOWLANDSXANADU**

On November 25, 2003, the Operating Partnership and affiliates of TheMills Corporation (“Mills”) entered into a joint venture agreement (“MeadowlandsXanadu Venture Agreement”) to form Meadowlands Mills/Mack-Cali LimitedPartnership (“Meadowlands Venture”) for the purpose of developing a $1.3billion family entertainment, recreation and retail complex with an office andhotel component to be built at the Meadowlands sports complex in EastRutherford, New Jersey (“Meadowlands Xanadu”). The First Amendment to the Meadowlands Xanadu Venture Agreement wasentered into as of June 30, 2005. Meadowlands Xanadu’s approximately 4.76 million-square-foot complex isexpected to feature a family entertainment, recreation and retail destinationcomprising five themed zones: sports; entertainment; children’s education;fashion; and food and home, in addition to four office buildings, aggregatingapproximately 1.8 million square feet, and a 520-room hotel.

TheOperating Partnership and Mills owned a 20 percent and 80 percent interest,respectively, in the Meadowlands Venture. The Meadowlands Xanadu Venture Agreement required the OperatingPartnership to make an equity contribution up to a maximum of $32.5 million,which it fulfilled in April 2005.

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Millswas to develop, lease and operate the entertainment phase of the MeadowlandsXanadu project (“ERC”).  Upon theOperating Partnership’s exercise of its rights under the Meadowlands XanaduVenture Agreement to develop the office and hotel phases, the MeadowlandsVenture was to convey ownership of the component ventures to the OperatingPartnership and Mills or its affiliate, and the Operating Partnership or itsaffiliate was to own an 80 percent interest and Mills or its affiliate was toown a 20 percent interest in such component ventures.

On August 21, 2006, Mills announced that it had signeda non-binding letter of intent with Colony Capital Acquisitions, LLC (“Colony”)and Kan Am USA Management XXII Limited Partnership (“Kan Am”) under whichColony would arrange for construction financing for Meadowlands Xanadu and makea significant equity infusion into the Meadowlands Venture, and Mills would nothave any financial obligations post closing (“Colony Transaction”).  Kan Am had been a partner with Mills in theMeadowlands Venture since the formation of the venture.

On November 22, 2006, the Operating Partnership enteredinto and consummated a Redemption Agreement (the “Redemption Agreement”) withthe Meadowlands Venture, Meadowlands Developer Holding Corp., a limited partnerin the Meadowlands Venture, and the Meadowlands Limited Partnership (f/k/aMeadowlands/Mills Limited Partnership, and hereafter “MLP”), a general partnerand a limited partner in the Meadowlands Venture.  Immediately prior to entering into theRedemption Agreement, the investors in MLP undertook a restructuring of MLPwhereby Colony became an indirect owner of MLP.

In connection with the Colony Transaction and pursuantto the Redemption Agreement, the Meadowlands Venture redeemed (the “Redemption”)the Operating Partnership’s entire interest in the Meadowlands Venture and itsright to participate in the development of the ERC component in exchange for(i) $22.5 million in cash and (ii) a non-economic partner interest in each ofthe office and hotel components of Meadowlands Xanadu.  In connection with the Redemption, theOperating Partnership also received a non-interest bearing promissory note foran additional $2.5 million, which note is payable in full by MLP only at suchtime as the Operating Partnership exercises one of its options to develop thefirst of the office and hotel components of Meadowlands Xanadu.  The Operating Partnership’s remaininginvestment of approximately $11.9 million is included in deferred charges andother assets, net, as of December 31, 2006 and June 30, 2007.

Concurrent with the execution of the RedemptionAgreement, the Operating Partnership also entered into the Mack-Cali Rights,Obligations and Option Agreement (the “Rights Agreement”) by and among theMeadowlands Venture, MLP, Meadowlands Mack-Cali GP, L.L.C., Mack-Cali, BaseballMeadowlands Limited Partnership, A-B Office Meadowlands Mack-Cali LimitedPartnership, C-D Office Meadowlands Limited Partnership, Hotel MeadowlandsMack-Cali Limited Partnership and ERC Meadowlands Mills/Mack-Cali LimitedPartnership.  Pursuant to the RightsAgreement, the Operating Partnership retained certain rights and obligations itheld under the Meadowlands Xanadu Venture Agreement with respect to thedevelopment of the office and hotel components of Meadowlands Xanadu, includingan option to develop any of the office or hotel components of MeadowlandsXanadu (each, a “Take Down Option”). Upon the exercise of an initial Take Down Option, the OperatingPartnership will receive economic interests in each of the office or hotelcomponent partnerships as both a general partner and a limited partner in theapplicable office or hotel component, and following receipt of $2.5 million infull payment of the note from MLP, the Operating Partnership’s ownershipinterest in each of the office or hotel component partnerships will be reducedfrom 80 percent (as provided in the Meadowlands Xanadu Venture Agreement) to 75percent.

###### **G&GMARTCO (Convention Plaza)**

The OperatingPartnership held a 50 percent interest in G&G Martco, which owns ConventionPlaza, a 305,618 square foot office building, located in San Francisco,California.  On November 6, 2006, theOperating Partnership sold substantially all of its interest in the venture toan affiliate of its joint venture partner for approximately $16.3 million,realizing a gain on the sale of approximately $10.8 million.  The Operating Partnership performedmanagement and leasing services for the property owned by the joint venturethrough the date of sale and recognized $37,000 and $83,000 in fees for suchservices in the three and six months ended June 30, 2006.

**PLAZA VIII AND IX ASSOCIATES, L.L.C.**

Plaza VIII and IXAssociates, L.L.C. is a joint venture between the Operating Partnership andColumbia Development Company, L.L.C. (“Columbia”).  The venture was formed to acquire land forfuture development, located on the Hudson River waterfront in Jersey City, NewJersey, adjacent to the Operating Partnership’s 

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HarborsideFinancial Center office complex.  TheOperating Partnership and Columbia each hold a 50 percent interest in theventure.  Among other things, thepartnership agreement provides for a preferred return on the OperatingPartnership’s invested capital in the venture, in addition to the OperatingPartnership’s proportionate share of the venture’s profit, as defined in theagreement.  The venture owns undevelopedland currently used as a parking facility.

###### **RAMLANDREALTY ASSOCIATES L.L.C. (One Ramland Road)**

On August 20,1998, the Operating Partnership entered into a joint venture with S.B. New YorkRealty Corp. to form Ramland Realty Associates L.L.C.  The venture was formed to own, manage andoperate One Ramland Road, a 232,000 square foot office/flex building andadjacent developable land, located in Orangeburg, New York.  In August 1999, the joint venture completedredevelopment of the property and placed the office/flex building inservice.  The Operating Partnership holdsa 50 percent interest in the joint venture. The venture has a mortgage loan with a $14.9 million balance at June 30,2007 secured by its office/flex property. The mortgage bears interest at a rate of LIBOR plus 175 basis points andwas scheduled to mature in January 2007, with one two-year extension option,subject to certain conditions.  InNovember 2006, the venture exercised its option to extend the term of the loanuntil January 2009.

The OperatingPartnership performs management, leasing and other services for the propertyowned by the joint venture and recognized $16,000 and $31,000 in fees for suchservices in the three months ended June 30, 2007 and 2006, respectively, and $32,000and $47,000 for the six months ended June 30, 2007 and 2006, respectively.

**SOUTH PIER AT HARBORSIDE – HOTELDEVELOPMENT**

On November 17,1999, the Operating Partnership entered into a joint venture with HyattCorporation (“Hyatt”) to develop a 350-room hotel on the South Pier atHarborside Financial Center, Jersey City, New Jersey, which was completed andcommenced initial operations in July 2002. The Operating Partnership owns a 50 percent interest in the venture.

On October 12,2006, the venture obtained a $70.0 million mortgage loan (with a balance as ofJune 30, 2007 of $69.5 million) collateralized by the hotel property using theproceeds principally to retire $38.9 million of floating-rate debt and to makedistributions to partners.  The loan carriesan interest rate of 6.15 percent and matures in November 2016.  The venture has a loan with a balance as ofJune 30, 2007 of $7.3 million with the City of Jersey City, provided by theU.S. Department of Housing and Urban Development.  The loan currently bears interest at fixedrates ranging from 6.09 percent to 6.62 percent and matures in August2020.  The Operating Partnership hasposted a $7.3 million letter of credit in support of this loan, $3.6 million ofwhich is indemnified by Hyatt.

**RED BANK CORPORATEPLAZA L.L.C./RED BANK CORPORATE PLAZA II, L.L.C.**

On March 23, 2006, theOperating Partnership entered into a joint venture with The PRC Group (“PRC”)to form Red Bank Corporate Plaza L.L.C. The venture was formed to develop Red Bank Corporate Plaza, a 92,878square foot office building located in Red Bank, New Jersey, which has beenfully pre-leased to Hovnanian Enterprises, Inc. for a 10-year term.  The Operating Partnership holds a 50 percentinterest in the venture.  PRC contributedthe vacant land for the development of the office building as its initialcapital in the venture.  The OperatingPartnership funded the costs of development up to the value of the landcontributed by PRC of $3.5 million as its initial capital.

On October 20, 2006, theventure entered into a $22.0 million construction loan with a commercial bankcollateralized by the land and development project.  The loan (with a balance as of June 30, 2007of $16.7 million), carries an interest rate of LIBOR plus 130 basis points andmatures in April 2008.  The loancurrently has three one-year extension options subject to certain conditions,each of which requires payment of a fee.

On July 20, 2006,the Operating Partnership entered into a second joint venture agreement withPRC to form Red Bank Corporate Plaza II L.L.C. The venture was formed to hold land on which it plans to develop RedBank Corporate Plaza II, an 18,561 square foot office building located in RedBank, New Jersey.  The OperatingPartnership holds a 50 percent interest in the venture.  The terms of the venture are similar to RedBank Corporate Plaza L.L.C.  PRCcontributed the vacant land as its initial capital in the venture.

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**MACK-GREEN-GALE LLC**

On May 9, 2006, as part of the Gale/Green transactionscompleted in May 2006, the Operating Partnership entered into a joint venture,Mack-Green-Gale LLC (“Mack-Green”), with SL Green, pursuant to which Mack-Greenholds a 96 percent interest in and acts as general partner of Gale SLG NJOperating Partnership, L.P. (the “OP LP”). The Operating Partnership’s acquisition cost for its interest inMack-Green was approximately $125 million, which was funded primarily throughborrowing under the Operating Partnership’s revolving credit facility.  The OP LP owns 100 percent of entities whichown 25 office properties (the “OP LP Properties”) which aggregate 3.5 millionsquare feet (consisting of 17 office properties aggregating 2.3 million squarefeet located in New Jersey and eight properties aggregating 1.2 million squarefeet located in Troy, Michigan), as well as a minor, non-controlling interestin four office properties aggregating 419,000 square feet located inNaperville, Illinois, which was subsequently sold.

As defined in theMack-Green operating agreement, the Operating Partnership sharesdecision-making equally with SL Green regarding:  (i) all major decisions involving theoperations of Mack-Green; and (ii) overall general partner responsibilities inoperating the OP LP.

The Mack-Greenoperating agreement generally provides for profits and losses to be allocatedas follows:

(i)                         99percent of Mack-Green’s share of the profits and losses from 10 specific OP LPProperties allocable to the Operating Partnership and one percent allocable toSL Green;

(ii)                      one percentof Mack-Green’s share of the profits and losses from eight specific OP LPProperties and its minor interest in four office properties allocable to theOperating Partnership and 99 percent allocable to SL Green; and

(iii)                   50 percent ofall other profits and losses allocable to the Operating Partnership and 50percent allocable to SL Green.

Substantially allof the OP LP Properties are encumbered by mortgage loans with an aggregateoutstanding principal balance of $361.4 million at June 30, 2007.  $189.0 million of the mortgage loans bearinterest at a weighted average fixed interest rate of 6.32 percent per annumand mature at various times through May 2016. $172.4 million of the mortgage loans bear interest at a floating rate rangingfrom LIBOR plus 185 basis points to LIBOR plus 400 basis points per annum andmature at various times through January 2009. Included in the floating rate mortgage loans are $90.3 million providedby an affiliate of SL Green.

On August 9, 2006,$69.7 million of mortgage loans were refinanced.  The new loan has a maximum principal amountof $90.0 million with $78.9 million drawn at June 30, 2007.  The loan provides the ability to draw fundsfor qualified leasing and capital improvement costs.  The loan bears interest at a rate of LIBORplus 185 basis points and matures on August 8, 2008 with a two-year extensionoption.

The OperatingPartnership performs management, leasing, and construction services for theproperties owned by the joint venture and recognized $636,000 and $800,000 inincome (net of $267,000 and $427,000 in direct costs) for such services in thethree months ended June 30, 2007, and 2006, respectively, and $1.2 million and$800,000 in income (net of $796,300 and $427,000 in direct costs) for suchservices in the six months ended June 30, 2007 and 2006, respectively.

**GE/GALE FUNDING LLC (PFV)**

The Gale agreementsigned as part of the Gale/Green transactions in May 2006 provides for theOperating Partnership to acquire certain ownership interests in real estateprojects (the “Non-Portfolio Properties”), subject to obtaining certain thirdparty consents and the satisfaction of various project-related and/or otherconditions.  Each of the OperatingPartnership’s acquired interests in the Non-Portfolio Properties provide forthe initial distributions of net cash flow solely to the Operating Partnership,and thereafter an affiliate of Mr. Gale (“Gale Affiliate”) has participationrights (“Gale Participation Rights”) in 50 percent of the excess net cash flowremaining after the distribution to the Operating Partnership of the aggregateamount equal to the sum of: (a) the Operating Partnership’s capitalcontributions, plus (b) an internal rate of return (“IRR”) of 10 percent perannum, accruing on the date or dates of the Operating Partnership’sinvestments.

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On May 9, 2006, aspart of the Gale/Green transactions, the Operating Partnership acquired from aGale Affiliate for $1.8 million a 50 percent controlling interest in GMWVillage Associates, LLC (“GMW Village”). GMW Village holds a 20 percent interest in GE/Gale Funding LLC (“GE Gale”).  GE Gale owns a 100 percent interest in theentity owning Princeton Forrestal Village, a mixed-use, office/retail complexaggregating 527,015 square feet and located in Plainsboro, New Jersey (“PrincetonForrestal Village” or “PFV”).

In addition to thecash consideration paid to acquire the interest, the Operating Partnershipprovided a Gale affiliate with the Gale Participation Rights.

The operatingagreement of GE Gale, which is owned 80 percent by GEBAM, Inc., provides for,among other things, distributions of net cash flow, initially, in proportion toeach member’s interest and subject to adjustment upon achievement of certainfinancial goals, as defined in the operating agreement.

GE Gale has amortgage loan with a balance of $52.8 million at June 30, 2007.  The loan bears interest at a rate of LIBORplus 275 basis points and matures on January 9, 2009, with an extension optionthrough January 9, 2011.

The Operating Partnership performs management, leasing,and construction services for PFV and recognized $173,000 and $226,000 inincome (net of $509,000 and $404,000 in direct costs) for such services in thethree months ended June 30, 2007 and 2006, respectively, and $384,500 and$226,000 in income (net of $1.2 million and $404,000 in direct costs) for suchservices in the six months ended June 30, 2007 and 2006, respectively.

###### **ROUTE93 MASTER LLC (“Route 93 Participant”)/ROUTE 93 BEDFORD MASTER LLC (with theRoute 93 Participant, collectively, the “Route 93 Venture”)**

On June 1, 2006,the Route 93 Venture was formed between the Route 93 Participant, amajority-owned subsidiary of the Operating Partnership, having a 30 percentinterest and the Commingled Pension Trust Fund (Special Situation Property) ofJPMorgan Chase Bank having a 70 percent interest, for the purpose of acquiringseven office buildings, aggregating 666,697 square feet, located in the townsof Andover, Bedford and Billerica, Massachusetts.  Profits and losses are shared by the partnersin proportion to their respective interests until the investment yields an 11percent IRR, then sharing will shift to 40/60, and when the IRR reaches 15percent, then sharing will shift to 50/50.

The Route 93Participant is a joint venture between the Operating Partnership and a Galeaffiliate.  Profits and losses are sharedby the partners under this venture in proportion to their respective interests(83.3/16.7) until the investment yields an 11 percent IRR, then sharing willshift to 50/50.

The Route 93 Ventureshave mortgage loans with an amount not to exceed $58.6 million, with a $41.3million balance at June 30, 2007 collateralized by its office properties.  The loan provides the venture the ability todraw additional monies for qualified leasing and capital improvementcosts.  The loan bears interest at a rateof LIBOR plus 220 basis points and matures on July 11, 2008, with threeone-year extension options.

**GALE KIMBALL, L.L.C.**

On June 15,****2006, the Operating Partnership entered into a jointventure with a Gale Affiliate to form M-C Kimball, LLC (“M-C Kimball”).  M-C Kimball was formed for the sole purposeof acquiring a Gale Affiliate’s 33.33 percent membership interest in GaleKimball, L.L.C. (“Gale Kimball”), an entity holding a 25 percent interest in 100Kimball Drive LLC (“100 Kimball”), which developed and placed in service a175,000 square foot office property that has been fully pre-leased to a singletenant, located at 100 Kimball Drive, Parsippany, New Jersey (the “KimballProperty”).

The operatingagreement of M-C Kimball provides, among other things, for the GaleParticipation Rights (of which Mark Yeager, an Executive Vice President of theCorporation, has a direct 26 percent interest).

Gale Kimball isowned 33.33 percent by M-C Kimball and 66.67 percent by the HampshireGenerational Fund, L.L.C. (“Hampshire”). The operating agreement of Gale Kimball provides, among other things,for the distribution of net cash flow, initially, in accordance with itsmembers’ respective membership interests and, upon achievement of certainfinancial conditions, 50 percent to each of the Operating Partnership andHampshire.

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100 Kimball isowned 25 percent by Gale Kimball and 75 percent by 100 Kimball Drive RealtyMember LLC, an affiliate of JP Morgan****(“JPM”).** **The operatingagreement of 100 Kimball provides, among other things, for the distributions tobe made in the following order:

(i)        first,to JPM, such that JPM is provided with an annual 12 percent compound preferredreturn on Preferred Equity Capital Contributions (as such term is defined inthe operating agreement of 100 Kimball and largely comprised of development andconstruction costs);

(ii)       second,to JPM, as return of Preferred Equity Capital Contributions until completerepayment of such Preferred Equity Capital Contributions;

(iii)      third,to each of JPM and Gale Kimball in proportion to their respective membershipinterests until each member is provided, as a result of such distributions,with an annual twelve percent compound return on the Member’s CapitalContributions (as defined in the operating agreement of 100 Kimball, andexcluding Preferred Equity Capital Contributions, if any); and

(iv)      fourth,50 percent to each of JPM and Gale Kimball.

100 Kimball has aconstruction loan in an amount not to exceed $29 million, with a balance atJune 30, 2007 of $18.6 million.  The loanbears interest at a rate of LIBOR plus 195 basis points and matures on December8, 2008 with a one-year extension option.

The OperatingPartnership performs construction and development services for the propertyowned by 100 Kimball for which it recognized $815,000 and $146,000 in income(net of $1.4 million and $3.3 million in direct costs) in the three monthsended June 30, 2007, and 2006, respectively, and $828,000 and $146,000 inincome (net of $2.1 million and $3.3 million in direct costs) in the six monthsended June 30, 2007 and 2006, respectively.

**55CORPORATE PARTNERS, LLC**

On June 9,****2006, the Operating Partnership entered into a jointventure with a Gale Affiliate to form 55 Corporate Partners, LLC (“55 Corporate”).  55 Corporate wasformed for the sole purpose of acquiring from a Gale Affiliate a 50 percentinterest in SLG 55 Corporate Drive II, LLC (“SLG 55”), an entity indirectlyholding a condominium interest in a vacant land parcel located in Bridgewater,New Jersey, which can accommodate development of an approximately 200,000square foot office building. Sanofi-Aventis, which occupies neighboring buildings, has an option tocause the venture to construct the building, which it would lease on along-term basis.  Sanofi-Aventis isrequired to pay a penalty of $7 million, subject to certain conditions, in theevent it fails to exercise the option by November 2007.  The remaining 50 percent in SLG 55 is ownedby SLG Gale 55 Corporate LLC, an affiliate of SL****GreenRealty Corp****(“SLG Gale 55”).

The operatingagreement of 55 Corporate provides, among other things, for the GaleParticipation Rights (of which Mr. Yeager has a direct 26 percentinterest).  If Mr. Gale receives anycommission payments with respect to a Sanofi lease on the development property,Mr. Gale has agreed to pay to Mr. Yeager 26 percent of such payments.

The operatingagreement of SLG 55 provides, among other things, for the distribution of theavailable net cash flow to each of 55 Corporate and SLG Gale 55 in proportionto their respective membership interests in SLG 55 (50 percent each).

**12VREELAND ASSOCIATES, L.L.C.**

On September 8,****2006, the Operating Partnership entered into a jointventure with a Gale Affiliate to form M-C Vreeland, LLC (“M-C Vreeland”).  M-C Vreeland wasformed for the sole purpose of acquiring a Gale Affiliate’s 50 percentmembership interest in 12 Vreeland Associates, L.L.C., an entity owning anoffice property located at 12 Vreeland Road, Florham Park, New Jersey.

The operatingagreement of M-C Vreeland provides, among other things, for the GaleParticipation Rights (of which Mr. Yeager has a direct 15 percent interest).

The officeproperty at 12 Vreeland is a 139,750 square foot office building that is fullyleased to a single tenant through June 15, 2012.  The property is subject to a mortgage loan,which matures on July 1, 2012, in the initial amount of $18.1 million bearinginterest at 6.9 percent per annum.  As ofJune 30, 2007 the outstanding balance on the mortgage note was $9.3 million.

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Under theoperating agreement of 12 Vreeland Associates, L.L.C., M-C Vreeland has a 50percent interest, with S/K Florham Park Associates, L.L.C. (the managingmember) and its affiliate holding the other 50 percent.

**BOSTON-FILENES**

On October 20,2006, the Operating Partnership formed a joint venture (the “MC/Gale JV LLC”)with Gale International/426 Washington St. LLC (“Gale/426”), which, in turn,entered into a joint venture (the “Vornado JV LLC”) with VNO 426 WashingtonStreet JV LLC (“Vornado”), an affiliate of Vornado Realty LP, which was formedto acquire and redevelop the Filenes property located in the Downtown Crossingdistrict of Boston, Massachusetts (the “Filenes Property”).

On January 25,2007, (i) each of M-C/Gale JV LLC, Gale and Washington Street Realty Member LLC(“JPM”) formed a joint venture (“JPM JV LLC”), (ii) M-C/Gale JV LLC assignedits entire 50 percent ownership interest in the Vornado JV LLC to JPM JV LLC,(iii) the Limited Liability Company Agreement of Vornado JV LLC was amended toreflect, among other things, the change in the ownership structure described insubsection (ii) above, and (iv) the Limited Liability Company Agreement ofMC/Gale JV LLC was amended and restated to reflect, among other things, thechange in the ownership structure described in subsection (ii) above.  The Vornado JV LLC acquired the FilenesProperty on January 29, 2007, for approximately $100 million.

As a result of theforegoing transactions, as of January 29, 2007, (i) the Filenes Property isowned by Vornado JV LLC, (ii) Vornado JV LLC is owned 50 percent by each ofVornado and JPM JV LLC, (iii) JPM JV LLC is owned 30 percent by M-C/Gale JVLLC, 70 percent by JPM and managed by Gale/426, which has no ownership interestin JPM JV LLC, and (iv) M-C/Gale JV LLC is owned 99.99 percent by the OperatingPartnership and 0.01 percent by Gale/426. Thus, the Operating Partnership holds approximately a 15 percentindirect ownership interest in the Vornado JV LLC and the Filenes Property.

Distributions aremade (i) by Vornado JV LLC in proportion to its members’ respective ownershipinterests, (ii) by JPM JV LLC (a) initially, in proportion to its members’respective ownership interests until JPM’s investment yields an 11 percent IRR,(b) thereafter, 60/40 to JPM and MC/Gale JV LLC, respectively, until JPM’sinvestment yields a 15 percent IRR and (c) thereafter, 50/50 to JPM and MC/GaleJV LLC, respectively, and (iii) by MC/Gale JV LLC (w) initially, in proportionto its members’ respective ownership interests until each member has received a10 percent IRR on its investment, (x) thereafter, 65/35 to the OperatingPartnership and Gale/426, respectively, until the Operating Partnership’sinvestment yields a 15 percent IRR, (y) if by the time the OperatingPartnership receives a 15 percent IRR on its investment, Gale/426 has not doneso, 100 percent to Gale/426 until Gale/426’s investment yields a 15 percentIRR, and (z) thereafter,  50/50 to eachof the Operating Partnership and Gale/426.

The joint venture’s current plans for the developmentof the Filenes Property include approximately 1.2 million square feetconsisting of office, retail, condominium apartments, hotel and a garage.  The project is subject to governmentalapprovals.

**NKFGMSOWNERS, LLC**

On December 28,2006, the Operating Partnership contributed its facilities management business,which was acquired on May 9, 2006 as part of the Gale/Green transactions, to anewly-formed joint venture called NKFGMS Owners, LLC.  With the contribution, the OperatingPartnership received $600,000 in cash and a 40 percent interest in the jointventure.  The Operating Partnership and ajoint venture partner agreed to loan up to $3 million in total to the venture fromtime to time until December 28, 2009, which shall be funded by each of theOperating Partnership and the joint venture partner on a pro-rata basis in anamount not to exceed $1.5 million, respectively.  The joint venture operating agreementprovides for, among other things, profits and losses generally to be allocatedin proportion to each member’s interest. In connection with the Contribution, the Operating Partnershiprecognized a loss of approximately $1.5 million.

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**SUMMARIES OF UNCONSOLIDATED JOINTVENTURES**

The following is asummary of the financial position of the unconsolidated joint ventures in whichthe Operating Partnership had investment interests as of June 30, 2007 andDecember 31, 2006:  *(dollars inthousands)*
| ** **                                                                     | ** ** | **June 30, 2007**                                                | ** ** |
|--------------------------------------------------------------------------------|------------|------------------------------------------------------------------|------------|
| ** **                                                                     | ** ** | **Plaza**                                                        | ** ** | ** ** | ** ** | ** ** | ** ** | **Red Bank** | ** ** | **Mack-** | ** ** | **Princeton** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | **NKFGMS** | ** ** | ** ** | ** ** |
| ** **                                                                     | ** ** | **VIII & IX**                                      | ** ** | **Ramland** | ** ** | **Harborside** | ** ** | **Corporate** | ** ** | **Green-** | ** ** | **Forrestal** | ** ** | **Route 93** | ** ** | **Gale** | ** ** | **55** | ** ** | **12** | ** ** | **Boston-** | ** ** | **Owners** | ** ** | **Combined** | ** ** |
| ** **                                                                     | ** ** | **Associates**                                                   | ** ** | **Realty** | ** ** | **South Pier** | ** ** | **Plaza** | ** ** | **Gale** | ** ** | **Village** | ** ** | **Portfolio** | ** ** | **Kimball** | ** ** | **Corporate** | ** ** | **Vreeland** | ** ** | **Filenes** | ** ** | **LLC** | ** ** | **Total** | ** ** |
| **Assets:**                                                                    |       |                                                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Rental  property, net                                                          |       | $     11,095                            |       | $     11,844 |   | $        66,640 |   | $     21,599 |   | $   475,513 |   | $     43,077 |   | $     55,873 |   | $     29,219 |   | $     17,000 |   | $       8,021 |   | — |   | $          280 |   | $   740,161 |   |
| Other  assets                                                                  |       | 1,797                                                            |       | 872 |   | 15,338 |   | 2,245 |   | 71,079 |   | 26,026 |   | 3,612 |   | 654 |   | — |   | 849 |   | $     49,629 |   | 4,757 |   | 176,858 |   |
| Total  assets                                                                  |       | $     12,892                            |       | $     12,716 |   | $        81,978 |   | $     23,844 |   | $   546,592 |   | $     69,103 |   | $     59,485 |   | $     29,873 |   | $     17,000 |   | $       8,870 |   | $     49,629 |   | $       5,037 |   | $   917,019 |   |
| **Liabilities and partners’/members’ capital  (deficit):**           |       |                                                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgages,  loans payable and other obligations                                |       | —                                                           |       | $     14,861 |   | $        76,803 |   | $     16,685 |   | $   361,455 |   | $     52,800 |   | $     41,255 |   | $     18,602 |   | — |   | $       9,256 |   | — |   | — |   | $   591,717 |   |
| Other  liabilities                                                             |       | $          529 |       | 306 |   | 6,433 |   | 7 |   | 33,679 |   | 7,253 |   | 598 |   | — |   | — |   | — |   | $          114 |   | $       3,904 |   | 52,823 |   |
| Partners’/members’  capital (deficit)                                |       | 12,363                                                           |       | (2,451 | ) | (1,258 | ) | 7,152 |   | 151,458 |   | 9,050 |   | 17,632 |   | 11,271 |   | $     17,000 |   | (386 | ) | 49,515 |   | 1,133 |   | 272,479 |   |
| Total  liabilities and partners’/members’ capital (deficit)          |       | $     12,892                            |       | $     12,716 |   | $        81,978 |   | $     23,844 |   | $   546,592 |   | $     69,103 |   | $     59,485 |   | $     29,873 |   | $     17,000 |   | $       8,870 |   | $     49,629 |   | $       5,037 |   | $   917,019 |   |
|                                                                           |       |                                                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating Partnership’s  investment in unconsolidated joint ventures, net |       | $       6,101                 |       | — |   | — |   | $       3,795 |   | $   131,013 |   | $       2,159 |   | $       5,259 |   | $          987 |   | $       8,500 |   | $       7,377 |   | $     15,323 |   | $          545 |   | $   181,059 |   |

 
| ** **                                                                     | ** ** | **December 31, 2006**                                            | ** ** |
|--------------------------------------------------------------------------------|------------|------------------------------------------------------------------|------------|
| ** **                                                                     | ** ** | **Plaza**                                                        | ** ** | ** ** | ** ** | ** ** | ** ** | **Red Bank** | ** ** | **Mack-** | ** ** | **Princeton** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | **NKFGMS** | ** ** | ** ** | ** ** |
| ** **                                                                     | ** ** | **VIII & IX**                                      | ** ** | **Ramland** | ** ** | **Harborside** | ** ** | **Corporate** | ** ** | **Green-** | ** ** | **Forrestal** | ** ** | **Route 93** | ** ** | **Gale** | ** ** | **55** | ** ** | **12** | ** ** | **Boston-** | ** ** | **Owners** | ** ** | **Combined** | ** ** |
| ** **                                                                     | ** ** | **Associates**                                                   | ** ** | **Realty** | ** ** | **South Pier** | ** ** | **Plaza** | ** ** | **Gale** | ** ** | **Village** | ** ** | **Portfolio** | ** ** | **Kimball** | ** ** | **Corporate** | ** ** | **Vreeland** | ** ** | **Filenes** | ** ** | **LLC** | ** ** | **Total** | ** ** |
| **Assets:**                                                                    |       |                                                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Rental property, net                                                           |       | $     11,404                            |       | $     12,141 |   | $        69,303 |   | $     12,462 |   | $   480,867 |   | $     39,538 |   | $     54,684 |   | $     26,601 |   | $     17,000 |   | $       8,221 |   | — |   | $          239 |   | $   732,460 |   |
| Other assets                                                                   |       | 1,408                                                            |       | 851 |   | 11,170 |   | 3,309 |   | 76,897 |   | 24,830 |   | 7,177 |   | 654 |   | — |   | 909 |   | $     10,500 |   | 2,638 |   | 140,343 |   |
| Total assets                                                                   |       | $     12,812                            |       | $     12,992 |   | $        80,473 |   | $     15,771 |   | $   557,764 |   | $     64,368 |   | $     61,861 |   | $     27,255 |   | $     17,000 |   | $       9,130 |   | $     10,500 |   | $       2,877 |   | $   872,803 |   |
| **Liabilities  and partners’/members’ capital (deficit):**           |       |                                                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgages, loans payable  and other obligations                                |       | —                                                           |       | $     14,936 |   | $        77,217 |   | $       8,673 |   | $   358,063 |   | $     47,761 |   | $     39,435 |   | $     15,350 |   | — |   | $     10,253 |   | — |   | — |   | $   571,688 |   |
| Other liabilities                                                              |       | $          532 |       | 259 |   | 4,944 |   | 8 |   | 39,497 |   | 5,972 |   | 846 |   | — |   | — |   | — |   | — |   | $       1,329 |   | 53,387 |   |
| Partners’/members’  capital (deficit)                                |       | 12,280                                                           |       | (2,203 | ) | (1,688 | ) | 7,090 |   | 160,204 |   | 10,635 |   | 21,580 |   | 11,905 |   | $     17,000 |   | (1,123 | ) | $     10,500 |   | 1,548 |   | 247,728 |   |
| Total liabilities and  partners’/members’ capital (deficit)          |       | $     12,812                            |       | $     12,992 |   | $        80,473 |   | $     15,771 |   | $   557,764 |   | $     64,368 |   | $     61,861 |   | $     27,255 |   | $     17,000 |   | $       9,130 |   | $     10,500 |   | $       2,877 |   | $   872,803 |   |
| Operating Partnership’s  investment in unconsolidated joint ventures, net |       | $       6,060                 |       | — |   | — |   | $       3,647 |   | $   119,061 |   | $       2,560 |   | $       6,669 |   | $       1,024 |   | $       8,500 |   | $       7,130 |   | $       5,250 |   | $          400 |   | $   160,301 |   |

 

 

22

----

**SUMMARIES OF UNCONSOLIDATED JOINTVENTURES**

The following is asummary of the results of operations of the unconsolidated joint ventures forthe period in which the Operating Partnership had investment interests duringthe three months ended June 30, 2007 and 2006: *(dollars in thousands)*
| ** **                                                                                             | ** ** | **Three Months  Ended June 30, 2007** | ** ** |
|--------------------------------------------------------------------------------------------------------|------------|---------------------------------------|------------|
| ** **                                                                                             | ** ** | ** **                            | ** ** | ** ** | ** ** | **Plaza** | ** ** | ** ** | ** ** | ** ** | ** ** | **Red Bank** | ** ** | **Mack-** | ** ** | **Princeton** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | **NKFGMS** | ** ** | ** ** | ** ** |
| ** **                                                                                             | ** ** | **Meadowlands**                       | ** ** | **G&G** | ** ** | **VIII & IX** | ** ** | **Ramland** | ** ** | **Harborside** | ** ** | **Corporate** | ** ** | **Green-** | ** ** | **Forrestal** | ** ** | **Route 93** | ** ** | **Gale** | ** ** | **55** | ** ** | **12** | ** ** | **Boston-** | ** ** | **Owners** | ** ** | **Combined** | ** ** |
| ** **                                                                                             | ** ** | **Xanadu**                            | ** ** | **Martco** | ** ** | **Associates** | ** ** | **Realty** | ** ** | **South Pier** | ** ** | **Plaza** | ** ** | **Gale** | ** ** | **Village** | ** ** | **Portfolio** | ** ** | **Kimball** | ** ** | **Corporate** | ** ** | **Vreeland** | ** ** | **Filenes** | ** ** | **LLC** | ** ** | **Total** | ** ** |
| Total revenues                                                                                         |       | —                                |       | — |   | $          215 |   | $       518 |   | $       11,366 |   | — |   | $ 17,251 |   | $     2,386 |   | $       738 |   | $           2 |   | — |   | $        524 |   | $    205 |   | $      8,708 |   | $    41,913 |   |
| Operating and other  expenses                                                                          |       | —                                |       | — |   | (44 | ) | (389 | ) | (6,943 | ) | — |   | (7,716 | ) | (1,516 | ) | (977 | ) | (31 | ) | — |   | (14 | ) | (400 | ) | (8,647 | ) | (26,677 | ) |
| Depreciation and amortization                                                                          |       | —                                |       | — |   | (154 | ) | (175 | ) | (1,488 | ) | — |   | (7,429 | ) | (786 | ) | (467 | ) | (183 | ) | — |   | (88 | ) | — |   | — |   | (10,770 | ) |
| Interest expense                                                                                       |       | —                                |       | — |   | — |   | (265 | ) | (1,199 | ) | — |   | (6,805 | ) | (1,192 | ) | (846 | ) | (321 | ) | — |   | (169 | ) | — |   | — |   | (10,797 | ) |
| ** **                                                                                             |       |                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                             |       | —                                |       | — |   | $            17 |   | $      (311 | ) | $         1,736 |   | — |   | $ (4,699 | ) | $   (1,108 | ) | $  (1,552 | ) | $     (533 | ) | — |   | $        253 |   | $   (195 | ) | $           61 |   | $     (6,331 | ) |
| Operating

  Partnership’s  equity in earnings (loss) of unconsolidated  joint ventures |       | —                                |       | — |   | $              8 |   | $      (175 | ) | $            762 |   | — |   | $ (1,604 | ) | $      (270 | ) | $     (466 | ) | $       (44 | ) | — |   | $        127 |   | $     (58 | ) | $           24 |   | $     (1,696 | ) |

 
| ** **                                                                                             | ** ** | **Three Months  Ended June 30, 2006**                                                                     | ** ** |
|--------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------|------------|
| ** **                                                                                             | ** ** | ** **                                                                                                | ** ** | ** ** | ** ** | **Plaza** | ** ** | ** ** | ** ** | ** ** | ** ** | **Red Bank** | ** ** | **Mack-** | ** ** | **Princeton** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | **NKFGMS** | ** ** | ** ** | ** ** |
| ** **                                                                                             | ** ** | **Meadowlands**                                                                                           | ** ** | **G&G** | ** ** | **VIII & IX** | ** ** | **Ramland** | ** ** | **Harborside** | ** ** | **Corporate** | ** ** | **Green-** | ** ** | **Forrestal** | ** ** | **Route 93** | ** ** | **Gale** | ** ** | **55** | ** ** | **12** | ** ** | **Boston-** | ** ** | **Owners** | ** ** | **Combined** | ** ** |
| ** **                                                                                             | ** ** | **Xanadu**                                                                                                | ** ** | **Martco** | ** ** | **Associates** | ** ** | **Realty** | ** ** | **South Pier** | ** ** | **Plaza** | ** ** | **Gale** | ** ** | **Village** | ** ** | **Portfolio** | ** ** | **Kimball** | ** ** | **Corporate** | ** ** | **Vreeland** | ** ** | **Filenes** | ** ** | **LLC** | ** ** | **Total** | ** ** |
| Total revenues                                                                                         |       | $               158            |       | $ 1,778 |   | $          196 |   | $       502 |   | $         9,774 |   | — |   | $ 9,468 |   | $     4,391 |   | $       558 |   | — |   | — |   | — |   | — |   | — |   | $    26,825 |   |
| Operating and other  expenses                                                                          |       | (83                                                                                                       | )          | (978 | ) | (46 | ) | (364 | ) | (5,752 | ) | — |   | (3,776 | ) | (2,716 | ) | (257 | ) | — |   | — |   | — |   | — |   | — |   | (13,972 | ) |
| Depreciation and  amortization                                                                         |       | —                                                                                                    |       | (357 | ) | (154 | ) | (187 | ) | (1,460 | ) | — |   | (3,378 | ) | (1,421 | ) | (94 | ) | — |   | — |   | — |   | — |   | — |   | (7,051 | ) |
| Interest expense                                                                                       |       | —                                                                                                    |       | (792 | ) | — |   | (253 | ) | (906 | ) | — |   | (3,591 | ) | (1,383 | ) | (263 | ) | — |   | — |   | — |   | — |   | — |   | (7,188 | ) |
| ** **                                                                                             |       |                                                                                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                             |       | $                 75 |       | $   (349 | ) | $            (4 | ) | $      (302 | ) | $         1,656 |   | — |   | $ (1,277 | ) | $   (1,129 | ) | $       (56 | ) | — |   | — |   | — |   | — |   | — |   | $     (1,386 | ) |
| Operating

  Partnership’s  equity in earnings (loss) of unconsolidated  joint ventures |       | —                                                                                                    |       | $   (331 | ) | $            (2 | ) | — |   | $            828 |   | — |   | $ (1,260 | ) | $        (67 | ) | $       (14 | ) | — |   | — |   | — |   | — |   | — |   | $        (846 | ) |

 

23

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**SUMMARIES OF UNCONSOLIDATED JOINTVENTURES**

The following is asummary of the results of operations of the unconsolidated joint ventures forthe period in which the Operating Partnership had investment interests duringthe six months ended June 30, 2007 and 2006: *(dollars in thousands)*
| ** **                                                                                       | ** ** | **Six Months Ended  June 30, 2007** | ** ** |
|--------------------------------------------------------------------------------------------------|------------|-------------------------------------|------------|
| ** **                                                                                       | ** ** | ** **                          | ** ** | ** ** | ** ** | **Plaza** | ** ** | ** ** | ** ** | ** ** | ** ** | **Red Bank** | ** ** | **Mack-** | ** ** | **Princeton** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | **NKFGMS** | ** ** | ** ** | ** ** |
| ** **                                                                                       | ** ** | **Meadowlands**                     | ** ** | **G&G** | ** ** | **VIII & IX** | ** ** | **Ramland** | ** ** | **Harborside** | ** ** | **Corporate** | ** ** | **Green-** | ** ** | **Forrestal** | ** ** | **Route 93** | ** ** | **Gale** | ** ** | **55** | ** ** | **12** | ** ** | **Boston-** | ** ** | **Owners** | ** ** | **Combined** | ** ** |
| ** **                                                                                       | ** ** | **Xanadu**                          | ** ** | **Martco** | ** ** | **Associates** | ** ** | **Realty** | ** ** | **South Pier** | ** ** | **Plaza** | ** ** | **Gale** | ** ** | **Village** | ** ** | **Portfolio** | ** ** | **Kimball** | ** ** | **Corporate** | ** ** | **Vreeland** | ** ** | **Filenes** | ** ** | **LLC** | ** ** | **Total** | ** ** |
| Total revenues                                                                                   |       | —                              |       | — |   | $          474 |   | $     1,045 |   | $       20,304 |   | — |   | $ 33,692 |   | $      5,252 |   | $    1,063 |   | $           2 |   | — |   | $     1,048 |   | $    531 |   | $    17,698 |   | $    81,109 |   |
| Operating and other  expenses                                                                    |       | —                              |       | — |   | (83 | ) | (763 | ) | (12,506 | ) | — |   | (15,158 | ) | (2,990 | ) | (1,864 | ) | (40 | ) | — |   | (33 | ) | (661 | ) | (17,565 | ) | (51,663 | ) |
| Depreciation and  amortization                                                                   |       | —                              |       | — |   | (308 | ) | (351 | ) | (2,966 | ) | — |   | (14,164 | ) | (1,536 | ) | (2,027 | ) | (183 | ) | — |   | (176 | ) | — |   | — |   | (21,711 | ) |
| Interest expense                                                                                 |       | —                              |       | — |   | — |   | (529 | ) | (2,402 | ) | — |   | (13,429 | ) | (2,290 | ) | (1,643 | ) | (414 | ) | — |   | (344 | ) | — |   | — |   | (21,051 | ) |
| ** **                                                                                       |       |                                |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                       |       | —                              |       | — |   | $            83 |   | $      (598 | ) | $         2,430 |   | — |   | $ (9,059 | ) | $    (1,564 | ) | $  (4,471 | ) | $     (635 | ) | — |   | $        495 |   | $   (130 | ) | $         133 |   | $   (13,316 | ) |
| Operating

  Partnership’s equity in earnings (loss) of  unconsolidated joint ventures |       | —                              |       | — |   | $            41 |   | $      (175 | ) | $         1,109 |   | — |   | $ (3,339 | ) | $       (402 | ) | $  (1,370 | ) | $       (52 | ) | — |   | $        247 |   | $     (39 | ) | $           53 |   | $     (3,927 | ) |

 
| ** **                                                                                              | ** ** | **Six Months Ended  June 30, 2006**                                                                  | ** ** |
|---------------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------|------------|
| ** **                                                                                              | ** ** | ** **                                                                                           | ** ** | ** ** | ** ** | **Plaza** | ** ** | ** ** | ** ** | ** ** | ** ** | **Red Bank** | ** ** | **Mack-** | ** ** | **Princeton** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | **NKFGMS** | ** ** | ** ** | ** ** |
| ** **                                                                                              | ** ** | **Meadowlands**                                                                                      | ** ** | **G&G** | ** ** | **VIII & IX** | ** ** | **Ramland** | ** ** | **Harborside** | ** ** | **Corporate** | ** ** | **Green-** | ** ** | **Forrestal** | ** ** | **Route 93** | ** ** | **Gale** | ** ** | **55** | ** ** | **12** | ** ** | **Boston-** | ** ** | **Owners** | ** ** | **Combined** | ** ** |
| ** **                                                                                              | ** ** | **Xanadu**                                                                                           | ** ** | **Martco** | ** ** | **Associates** | ** ** | **Realty** | ** ** | **South Pier** | ** ** | **Plaza** | ** ** | **Gale** | ** ** | **Village** | ** ** | **Portfolio** | ** ** | **Kimball** | ** ** | **Corporate** | ** ** | **Vreeland** | ** ** | **Filenes** | ** ** | **LLC** | ** ** | **Total** | ** ** |
| Total revenues                                                                                          |       | $                299 |       | $ 3,647 |   | $          322 |   | $     1,015 |   | $       17,603 |   | — |   | $  9,468 |   | $      4,391 |   | $       558 |   | — |   | — |   | — |   | — |   | — |   | $    37,303 |   |
| Operating and other  expenses                                                                           |       | (151                                                                                                 | )          | (1,880 | ) | (88 | ) | (704 | ) | (10,636 | ) | — |   | (3,776 | ) | (2,716 | ) | (257 | ) | — |   | — |   | — |   | — |   | — |   | (20,208 | ) |
| Depreciation and  amortization                                                                          |       | —                                                                                               |       | (712 | ) | (308 | ) | (376 | ) | (2,909 | ) | — |   | (3,378 | ) | (1,421 | ) | (94 | ) | — |   | — |   | — |   | — |   | — |   | (9,198 | ) |
| Interest expense                                                                                        |       | —                                                                                               |       | (1,517 | ) | — |   | (489 | ) | (1,857 | ) | — |   | (3,591 | ) | (1,383 | ) | (263 | ) | — |   | — |   | — |   | — |   | — |   | (9,100 | ) |
| ** **                                                                                              |       |                                                                                                 |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                              |       | $                148 |       | $   (462 | ) | $          (74 | ) | $      (554 | ) | $         2,201 |   | — |   | $ (1,277 | ) | $    (1,129 | ) | $       (56 | ) | — |   | — |   | — |   | — |   | — |   | $     (1,203 | ) |
| Operating

  Partnership’s equity in earnings  (loss)  of unconsolidated joint  ventures |       | —                                                                                               |       | $   (322 | ) | $          (37 | ) | — |   | $         1,101 |   | — |   | $ (1,260 | ) | $         (67 | ) | $       (14 | ) | — |   | — |   | — |   | — |   | — |   | $        (599 | ) |

 

24

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**5.****              DEFERRED CHARGESAND OTHER ASSETS**
| ** **                                                       | ** ** | **June 30,** | ** ** | **December 31,** | ** ** |
|------------------------------------------------------------------|------------|-------------------|------------|-----------------------|------------|
| **(dollars in thousands)**                             | ** ** | **2007**          | ** ** | **2006**              | ** ** |
| Deferred leasing costs                                           |       | $                 | 188,352    |                  | $          | 184,175 |   |
| Deferred financing  costs                                        |       | 22,538            |       | 21,252                |       |
|                                                             |       | 210,890           |       | 205,427               |       |
| Accumulated  amortization                                        |       | (78,863           | )          | (76,407               | )          |
| Deferred charges, net                                            |       | 132,027           |       | 129,020               |       |
| Notes receivable                                                 |       | 11,688            |       | 11,769                |       |
| In-place lease values,  related intangible and other assets, net |       | 78,208            |       | 58,495                |       |
| Prepaid expenses and  other assets, net                          |       | 40,042            |       | 41,353                |       |
|                                                             |       |              |       |                  |       |
| Total deferred charges and other assets, net                     |       | $                 | 261,965    |                  | $          | 240,637 |   |

 

**6.****              DISCONTINUEDOPERATIONS**

On May 10, 2007,the Operating Partnership sold its 133,000 square-foot office building locatedat 1000 Bridgeport Avenue in Shelton, Connecticut for net sales proceeds ofapproximately $16.4 million and recognized a gain of approximately $2.6 millionon the sale.

On June 11, 2007,the Operating Partnership sold its 121,250 square-foot office building locatedat 500 West Putnam Avenue in Greenwich, Connecticut for net sales proceeds ofapproximately $54.3 million and recognized a gain of approximately $36.2million on the sale.

On May 25, 2007,the Operating Partnership entered into an agreement to sell two officebuildings in Egg Harbor Township, New Jersey, for approximately $12.5 million.  The buildings, totaling 80,344 square feet,were subsequently sold on July 13, 2007. These buildings are identified as held for sale as of June 30, 2007 andcarried an aggregate book value of $5.8 million, net of accumulateddepreciation of approximately $2.5 million.

The OperatingPartnership has presented these assets as discontinued operations in itsstatements of operations for the periods presented.  As the Operating Partnership sold 300 WestageBusiness Center Drive in Fishkill, New York, 1510 Lancer Drive in Moorestown,New Jersey; a Colorado portfolio in various cities throughout Colorado; and aportfolio in San Francisco, California during the year ended December 31, 2006,the Operating Partnership has presented these assets as discontinued operationsin its statements of operations for all periods presented.

The followingtables summarize income from discontinued operations and the related realizedgains (losses) and unrealized losses on disposition of rental property, net forthe three and six month periods ended June 30, 2007 and 2006:  *(dollars in thousands)*
| ** **                                 | ** ** | **Three Months Ended** | ** ** | **Six Months Ended** | ** ** |
|--------------------------------------------|------------|----------------------------------|------------|--------------------------------|------------|
| ** **                                 | ** ** | **June 30,**                | ** ** | **June 30,**              | ** ** |
| ** **                                 | ** ** | **2007**                         | ** ** | **2006**                       | ** ** | **2007** | ** ** | **2006** | ** ** |
| Total revenues                             |       | $                                | 1,608      |                           | $          | 12,245 |   | $ | 3,819 |   | $ | 24,399 |   |
| Operating and  other expenses              |       | (661                             | )          | (5,015                         | )          | (1,577 | ) | (9,956 | ) |
| Depreciation and  amortization             |       | (18                              | )          | (3,156                         | )          | (424 | ) | (6,319 | ) |
| Interest expense  (net of interest income) |       | (197                             | )          | (344                           | )          | (545 | ) | (693 | ) |
|                                       |       |                             |       |                           |       |   |   |   |   |
| Income from  discontinued operations       |       | $                                | 732        |                           | $          | 3,730 |   | $ | 1,273 |   | $ | 7,431 |   |

 

25

----

 
| ** **                                                                            | ** ** | **Three Months Ended** | ** ** | **Six Months Ended** | ** ** |
|---------------------------------------------------------------------------------------|------------|----------------------------------|------------|--------------------------------|------------|
| ** **                                                                            | ** ** | **June 30,**                | ** ** | **June 30,**              | ** ** |
| ** **                                                                            | ** ** | **2007**                         | ** ** | **2006**                       | ** ** | **2007** | ** ** | **2006** | ** ** |
| Realized gains (losses)  and unrealized losses on disposition of rental property, net |       | $                                | 38,860     |                           | $          | 4,905 |   | $ | 38,860 |   | $ | 4,905 |   |
|                                                                                       |            |                                  |            |                                |            |  |  |  |  |  |  |  |  |

 

**7.****              SENIOR UNSECUREDNOTES**

A summary of theOperating Partnership’s senior unsecured notes as of June 30, 2007 and December31, 2006 is as follows:  *(dollars in thousands)*
| ** **                                            | ** ** | **June 30,** | ** ** | **December 31,** | ** ** | **Effective**     | ** ** |
|-------------------------------------------------------|------------|-------------------|------------|-----------------------|------------|-------------------|------------|
| ** **                                            | ** ** | **2007**          | ** ** | **2006**              | ** ** | **Rate (1)** | ** ** |
| 7.250% Senior  Unsecured Notes, due March 15, 2009    |       | $                 | 299,599    |                  | $          | 299,481           |       | 7.49 | % |
| 5.050% Senior  Unsecured Notes, due April 15, 2010    |       | 149,847           |       | 149,819               |       | 5.27              | %          |
| 7.835% Senior  Unsecured Notes, due December 15, 2010 |       | 15,000            |       | 15,000                |       | 7.95              | %          |
| 7.750% Senior Unsecured  Notes, due February 15, 2011 |       | 299,381           |       | 299,295               |       | 7.93              | %          |
| 5.250% Senior  Unsecured Notes, due January 15, 2012  |       | 99,112            |       | 99,015                |       | 5.46              | %          |
| 6.150% Senior  Unsecured Notes, due December 15, 2012 |       | 92,226            |       | 91,981                |       | 6.89              | %          |
| 5.820% Senior  Unsecured Notes, due March 15, 2013    |       | 25,475            |       | 25,420                |       | 6.45              | %          |
| 4.600% Senior  Unsecured Notes, due June 15, 2013     |       | 99,830            |       | 99,815                |       | 4.74              | %          |
| 5.125% Senior  Unsecured Notes, due February 15, 2014 |       | 201,588           |       | 201,708               |       | 5.11              | %          |
| 5.125% Senior  Unsecured Notes, due January 15, 2015  |       | 149,302           |       | 149,256               |       | 5.30              | %          |
| 5.800% Senior  Unsecured Notes, due January 15, 2016  |       | 200,654           |       | 200,692               |       | 5.81              | %          |
|                                                  |       |              |       |                  |       |              |       |
| Total Senior Unsecured  Notes                         |       | $                 | 1,632,014  |                  | $          | 1,631,482         |       |   |   |

 

----

| (1) |   | Includes the cost of terminated treasury lock  agreements (if any), offering and other transaction costs and the discount on  the notes, as applicable. |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

 

**8.****              UNSECUREDREVOLVING CREDIT FACILITY**

The Operating Partnershiphas an unsecured revolving credit facility with a borrowing capacity of $600million, (expandable to $800 million). On June 22, 2007, the Operating Partnership extended and modified theunsecured facility with a group of 23 Lenders. Amongst other modifications, the facility was extended for an additionaltwo years and matures in June 2011, with an extension option of one year, whichwould require a payment of 15 basis points of the then borrowing capacity ofthe facility upon exercise.  In addition,the interest rate on outstanding borrowings (not electing the OperatingPartnership’s competitive bid feature) was reduced by 10 basis points to LIBORplus 55 basis points at the BBB/Baa2 pricing level.  The interest rate on outstanding borrowings(not electing the Operating Partnership’s competitive bid feature) under theunsecured facility is currently LIBOR plus 55 basis points.

The facility has acompetitive bid feature, which allows the Operating Partnership to solicit bidsfrom lenders under the facility to borrow up to $300 million at interest ratesless than the current LIBOR plus 55 basis point spread.  The Operating Partnership may also elect aninterest rate representing the higher of the lender’s prime rate or the FederalFunds rate plus 50 basis points.  Theunsecured facility also requires a 15 basis point facility fee on the currentborrowing capacity payable quarterly in arrears.

26

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The interest rateand the facility fee are subject to adjustment, on a sliding scale, based uponthe operating partnership’s unsecured debt ratings.  In the event of a change in the OperatingPartnership’s unsecured debt rating, the interest and facility fee rates willbe 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 ratings or  less than BBB-/Baa3/BBB-                                                                              |       | 100.0                                                                                   |       | 25.0                                     |       |
| BBB-/Baa3/BBB-                                                                                                       |       | 75.0                                                                                    |       | 20.0                                     |       |
| BBB/Baa2/BBB  (current)                                                                                              |       | 55.0                                                                                    |       | 15.0                                     |       |
| BBB+/Baa1/BBB+                                                                                                       |       | 42.5                                                                                    |       | 15.0                                     |       |
| A-/A3/A- or higher                                                                                                   |       | 37.5                                                                                    |       | 12.5                                     |       |

 

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(a)          If the OperatingPartnership has debt ratings from two rating agencies, one of which is Standard& Poor’s Rating Services (“S&P”) or Moody’s Investors Service(“Moody’s”), the rates per the above table shall be based on the lower of suchratings.  If the Operating Partnershiphas debt ratings from three rating agencies, one of which is S&P orMoody’s, the rates per the above table shall be based on the lower of the twohighest ratings.  If the OperatingPartnership has debt ratings from only one agency, it will be considered tohave no rating or less than BBB-/Baa3/BBB- per the above table.

The terms of theunsecured facility include certain restrictions and covenants which limit,among other things, the payment of dividends (as discussed below), theincurrence of additional indebtedness, the incurrence of liens and the dispositionof real estate properties (to the extent that: (i) such property dispositionscause the Operating Partnership to default on any of the financial ratios ofthe facility described below, or (ii) the property dispositions are completedwhile the Operating Partnership is under an event of default under thefacility, unless, under certain circumstances, such disposition is beingcarried out to cure such default), and which require compliance with financialratios relating to the maximum leverage ratio, the maximum amount of securedindebtedness, the minimum amount of tangible net worth, the minimum amount offixed charge coverage, the maximum amount of unsecured indebtedness, theminimum amount of unencumbered property interest coverage and certain investmentlimitations.  The dividend restrictionreferred to above provides that, if an event of default has occurred and iscontinuing, the Corporation will not make any excess distributions with respectto common stock or other common equity interests except to enable theCorporation to continue to qualify as a REIT under the Code.

The lending groupfor the credit facility consists of: JPMorgan Chase Bank, N.A., asadministrative agent (the “Agent”); Bank of America, N.A.**,**as** **syndicationagent; Scotiabanc, Inc., Wachovia Bank, National Association, and Wells FargoBank, National Association, as documentation agents; SunTrust Bank, as seniormanaging agent; US Bank National Association, Citicorp North America, Inc. andPNC Bank, National Association, as managing agents; and Bank of China, New YorkBranch, The Bank of New York; Chevy Chase Bank, F.S.B., The Royal Bank ofScotland PLC, Mizuho Corporate Bank, Ltd., The Bank of Tokyo-Mitsubishi UFJ,Ltd. (Successor by merger to UFJ Bank Limited), North Fork Bank, Bank HapoalimB.M., Comerica Bank, Chang Hwa Commercial Bank, Ltd., New York Branch, FirstCommercial Bank, New York Agency, Mega International Commercial Bank Co. Ltd.,New York Branch, Deutsche Bank Trust Company Americas and Hua Nan CommercialBank, New York Agency, as participants.

###### **SUMMARY**

As of June 30,2007 and December 31, 2006, the Operating Partnership had outstandingborrowings of $115 million and $145 million, respectively, under its unsecuredrevolving credit facility.

**9.****              MORTGAGES, LOANSPAYABLE AND OTHER OBLIGATIONS**

The OperatingPartnership has mortgages, loans payable and other obligations which primarilyconsist of various loans collateralized by certain of the Operating Partnership’srental properties.  As of June 30, 2007,17 of the Operating Partnership’s properties, with a total book value ofapproximately $496.5 million, are encumbered by the Operating Partnership’smortgages and loans payable.  Payments onmortgages, loans payable and other obligations are generally due in monthlyinstallments of principal and interest, or interest only.

27

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A summary of theOperating Partnership’s mortgages, loans payable and other obligations as ofJune 30, 2007 and December 31, 2006 is as follows:  *(dollars in thousands)*
| ** **                                            | ** ** | ** **                           | ** ** | **Effective**     | ** ** | **Principal Balance at** | ** ** | ** **            | ** ** |
|-------------------------------------------------------|------------|--------------------------------------|------------|-------------------|------------|------------------------------------|------------|-----------------------|------------|
| ** **                                            | ** ** | ** **                           | ** ** | **Interest**      | ** ** | **June 30,**                  | ** ** | **December 31,** | ** ** | ** ** | ** ** |
| **Property Name**                                | ** ** | **Lender**                           | ** ** | **Rate (a)** | ** ** | **2007**                           | ** ** | **2006**              | ** ** | **Maturity** | ** ** |
| Mack-Cali  Airport                                    |       | Allstate  Life Insurance Co.         |       | 7.05              | %          | —                             |       | $                     | 9,422      |   | (b | ) |
| 6303 Ivy Lane                                         |       | State  Farm Life Insurance Co.       |       | 5.57              | %          | —                             |       | 6,020                 |       | (c | ) |
| 6404 Ivy Lane                                         |       | TIAA                                 |       | 5.58              | %          | $                                  | 13,351     |                  | 13,665     |   | 08/01/08 |   |
| Assumed  obligations                                  |       | Various                              |       | 4.91              | %          | 33,614                             |       | 38,742                |       | 05/01/09 (d | ) |
| Various (e)                                           |       | Prudential  Insurance                |       | 4.84              | %          | 150,000                            |       | 150,000               |       | 01/15/10 |   |
| 105 Challenger  Road                                  |       | Archon  Financial CMBS               |       | 6.24              | %          | 18,858                             |       | 18,748                |       | 06/06/10 |   |
| 2200 Renaissance  Boulevard                           |       | TIAA                                 |       | 5.89              | %          | 17,633                             |       | 17,819                |       | 12/01/12 |   |
| Soundview Plaza                                       |       | TIAA                                 |       | 6.02              | %          | 17,797                             |       | 18,013                |       | 01/01/13 |   |
| 9200 Edmonston  Road                                  |       | Principal  Commercial Funding L.L.C. |       | 5.53              | %          | 5,165                              |       | 5,232                 |       | 05/01/13 |   |
| 6305 Ivy Lane                                         |       | John  Hancock Life Insurance Co.     |       | 5.53              | %          | 7,193                              |       | 7,285                 |       | 01/01/14 |   |
| 395 West Passaic                                      |       | State  Farm Life Insurance Co.       |       | 6.00              | %          | 12,798                             |       | 12,996                |       | 05/01/14 |   |
| 6301 Ivy Lane                                         |       | John  Hancock Life Insurance Co.     |       | 5.52              | %          | 6,739                              |       | 6,821                 |       | 07/01/14 |   |
| 35 Waterview  Blvd.                                   |       | Wachovia  CMBS                       |       | 6.35              | %          | 20,204                             |       | 20,318                |       | 08/11/14 |   |
| 500 West Putnam  Avenue                               |       | New  York Life Insurance Co.         |       | 5.57              | %          | —                             |       | 25,000                |       | (f | ) |
| 23 Main Street                                        |       | JP  Morgan CMBS                      |       | 5.59              | %          | 33,182                             |       | 33,396                |       | 09/01/18 |   |
|                                                  |       |                                 |       |              |       |                               |       |                  |       |   |   |
| Total mortgages,  loans payable and other obligations |       |                                 |       | $                 | 336,534    |                               | $          | 383,477               |       |   |   |

 

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| (a) | Reflects  effective rate of debt, including deferred financing costs, comprised of the  cost of terminated treasury lock agreements (if any), debt initiation costs  and other transaction costs, as applicable. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | On February 5,  2007, the Operating Partnership repaid this mortgage loan at par, using  available cash.                                                                                                         |
| (c) | On February 15,  2007, the Operating Partnership repaid this mortgage loan at par, using  available cash.                                                                                                        |
| (d) | The obligations  mature at various times through May 2009.                                                                                                                                                       |
| (e) | Mortgage is  collateralized by seven properties.                                                                                                                                                                 |
| (f) | On June 11,  2007, the Operating Partnership assigned this loan to the purchaser with the  sale of the property.                                                                                                 |

 

###### **CASHPAID FOR INTEREST AND INTEREST CAPITALIZED**

Cash paid forinterest for the six months ended June 30, 2007 and 2006 was $63,877,000 and$59,106,000 respectively.  Interestcapitalized by the Operating Partnership for the six months ended June 30, 2007and 2006 was $2,510,000 and $3,058,000, respectively.

###### **SUMMARYOF INDEBTEDNESS**

As of June 30, 2007, theOperating Partnership’s total indebtedness of $2,083,548,000 (weighted averageinterest rate of 6.13 percent) was comprised of $115,000,000 of revolvingcredit facility borrowings (weighted average rate of 5.87 percent) and fixedrate debt and other obligations of $1,968,548,000 (weighted average rate of6.15 percent).

As of December 31,2006, the Operating Partnership’s total indebtedness of $2,159,959,000(weighted average interest rate of 6.11 percent) was comprised of $145,000,000of revolving credit facility borrowings (weighted average rate of 5.76 percent)and fixed rate debt of $2,014,959,000 (weighted average rate of 6.14 percent).

**10.****       PARTNERS’ CAPITAL**

Partners’ Capitalin the accompanying consolidated financial statements relates to (a) GeneralPartners’ capital, consisting of common units and Series C preferred units heldby the Corporation in the Operating Partnership, and (b) Limited Partners’capital consisting of common units held by the limited partners.

Any transactionsresulting in the issuance of additional common and preferred stock of theCorporation result in a corresponding issuance by the Operating Partnership ofan equivalent amount of common and preferred units to the Corporation.

28

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**GENERALPARTNER:**

**COMMON STOCK**

On February 7,2007, the Corporation completed an underwritten offer and sale of 4,650,000shares of its common stock and used the net proceeds, which totaledapproximately $252 million (after offering costs), primarily to pay down itsoutstanding borrowings under the Operating Partnership’s revolving creditfacility and for general corporate purposes. Concurrent with this transaction, the Corporation purchased from theOperating Partnership 4,650,000 of its outstanding common units forapproximately $252 million.

**PREFERREDSTOCK**

On March 14, 2003, in a publicly registered transaction with a singleinstitutional buyer, the Corporation completed the sale and issuance of 10,000shares of eight-percent Series C cumulative redeemable perpetual preferred stock(“Series C Preferred Stock”) in the form of 1,000,000 depositary shares ($25stated value per depositary share).  Eachdepositary share represents 1/100th of a share of Series C PreferredStock.  The Corporation received netproceeds of approximately $24.8 million from the sale.

The Series CPreferred Stock has preference rights with respect to liquidation anddistributions over the common stock. Holders of the Series C Preferred Stock, except under certain limitedconditions, will not be entitled to vote on any matters.  In the event of a cumulative arrearage equalto six quarterly dividends, holders of the Series C Preferred Stock will havethe right to elect two additional members to serve on the Corporation’s Boardof Directors until dividends have been paid in full.  At June 30, 2007, there were no dividends inarrears.  The Corporation may issueunlimited additional preferred stock ranking on a parity with the Series C PreferredStock but may not issue any preferred stock senior to the Series C PreferredStock without the consent of two-thirds of its holders.  The Series C Preferred Stock is essentiallyon an equivalent basis in priority with the Series C Preferred Units (the “SeriesC Preferred Units”).

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

In connection withthe Corporation’s issuance of $25 million of Series C Peferred stock, theCorporation acquired from the Operating Partnership $25 million of Series CPreferred Units, which have terms essentially identical to the Series CPreferred Stock.

**REPURCHASEOF GENERAL PARTNER UNITS**

The Corporationhas authorization to repurchase up to $45.5 million of its outstanding commonstock, which it may repurchase from time to time in open market transactions atprevailing prices or through privately negotiated transactions.

###### **STOCKOPTION PLANS**

In May 2004, theCorporation established the 2004 Incentive Stock Plan under which a total of2,500,000 shares have been reserved for issuance.  No options have been granted through June 30,2007 under this plan.  In September 2000,the Corporation established the 2000 Employee Stock Option Plan (“2000 EmployeePlan”) and the Amended and Restated 2000 Director Stock Option Plan (“2000Director Plan”).  In May 2002, shareholdersof the Corporation approved amendments to both plans to increase the totalshares reserved for issuance under both of the 2000 plans from 2,700,000 to4,350,000 shares of the Corporation’s common stock (from 2,500,000 to 4,000,000shares under the 2000 Employee Plan and from 200,000 to 350,000 shares underthe 2000 Director Plan).  In 1994, and assubsequently amended, the Corporation established the Mack-Cali Employee StockOption Plan (“Employee Plan”) and the Mack-Cali Director Stock Option Plan(“Director Plan”) under which a total of 5,380,188 shares (subject toadjustment) of the Corporation’s common stock had been reserved for issuance(4,980,188 shares under the Employee Plan and 400,000 shares under the DirectorPlan).  As the Employee Plan and DirectorPlan expired in 2004, stock options may no longer be issued under thoseplans.  Stock options granted under theEmployee Plan in 1994 and 1995 became exercisable over a three-year period.  Stock options granted under the 2000 EmployeePlan and those options granted subsequent to 1995 under the Employee Planbecome exercisable over a five-year period. All stock options granted under both the 2000 Director Plan and DirectorPlan 

29

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become exercisablein one year.  All options were granted atthe fair market value at the dates of grant and have terms of ten years.  As of June 30, 2007 and December 31, 2006,the stock options outstanding had a weighted average remaining contractual lifeof approximately 4.2 and 4.7 years, respectively.  Stock options exercisable at June 30, 2007and December 31, 2006 had a weighted average remaining contractual life ofapproximately 3.9 and 4.5 years, respectively.

Informationregarding the Corporation’s stock option plans for the six months ended June30, 2007 is summarized below:
| ** **                                           | ** ** | **Shares  Under  Options** | ** ** | **Weighted  Average  Exercise Price** | ** ** | **Aggregate Intrinsic  Value $(000’s)** | ** ** |
|------------------------------------------------------|------------|----------------------------|------------|--------------------------------------------|------------|--------------------------------------------------------|------------|
| Outstanding at  January 1, 2007                      |       | 690,306                    |       | $                                          | 29.68      |                                                   |       |   |
| Exercised                                            |       | (126,160                   | )          | $                                          | 28.65      |                                                   |       |   |
| Lapsed or  canceled                                  |       | (1,460                     | )          | $                                          | 28.47      |                                                   |       |   |
| Outstanding at June  30, 2007 ($24.63 – $45.47) |       | 562,686                    |       | $                                          | 29.92      |                                                   | $          | 7,636 |   |
| Options  exercisable at June 30, 2007                |       | 444,866                    |       | $                                          | 30.30      |                                                   | $          | 5,868 |   |
| Available for grant at  June 30, 2007                |       | 4,535,534                  |       | —                                     |       | —                                                 |       |

 

Cash received fromoptions exercised under all stock option plans was $0.3 million and $0.5million for the three months ended June 30, 2007 and 2006, respectively, and$3.6 million and $5.8 million for the six months ended June 30, 2007 and 2006,respectively.  The total intrinsic value ofoptions exercised during the three months ended June 30, 2007 and 2006 was $0.2million and $0.3 million, respectively, and $3.2 and $3.1 million for the sixmonths ended June 30, 2007 and 2006, respectively.  The Corporation has a policy of issuing newshares to satisfy stock option exercises.

The Operating Partnershiprecognized stock options expense of $33,000 and $139,000 for the three monthsended June 30, 2007 and 2006, respectively, and $65,000 and $176,000 for thesix months ended June 30, 2007 and 2006, respectively.  As of June 30, 2007, the OperatingPartnership had $3.3 million of total unrecognized compensation cost related tounvested stock compensation granted under the Corporation’s stock compensationplans.  That cost is expected to berecognized over a weighted average period of 1.7 years.

**STOCK COMPENSATION**

The Corporationhas granted stock awards (“Restricted Stock Awards”) to officers, certain otheremployees, and non-employee members of the Board of Directors of theCorporation, which allow the holders to each receive a certain amount of sharesof the Corporation’s common stock generally over a one to five-year vestingperiod and generally based on time and service, of which 153,211 shares wereoutstanding at June 30, 2007.  Of theoutstanding Restricted Stock Awards granted to executive officers and seniormanagement, 46,873 are contingent upon the Corporation meeting certainperformance and/or stock price appreciation objectives.  All Restricted Stock Awards provided to theofficers and certain other employees were granted under the 2000 Employee Planand the Employee Plan.  Restricted StockAwards granted to directors were granted under the 2000 Director Plan.

30

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Informationregarding the Restricted Stock Awards for the six months ended June 30, 2007 issummarized below:
| ** **                      | ** ** | **Shares** | ** ** | **Weighted-Average  Grant-Date  Fair Value** | ** ** |
|---------------------------------|------------|------------|------------|---------------------------------------------------|------------|
| Outstanding at  January 1, 2007 |       | 216,620    |       | $                                                 | 39.78      |   |
| Granted                         |       | 13,000     |       | $                                                 | 52.62      |   |
| Vested                          |       | (76,409    | )          | $                                                 | 37.22      |   |
|                            |       |       |       |                                              |       |
| Outstanding at June 30,  2007   |       | 153,211    |       | $                                                 | 42.15      |   |

 

###### **DEFERREDSTOCK COMPENSATION PLAN FOR DIRECTORS**

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

During the sixmonths ended June 30, 2007 and 2006, 3,438 and 3,268 deferred stock units wereearned, respectively.  As of June 30,2007 and December 31, 2006, there were 40,442 and 37,263 deferred stock unitsoutstanding, respectively.

**LIMITED PARTNERS’ CAPITAL**

###### **COMMONUNITS**

Certainindividuals and entities own common units in the Operating Partnership.  A common unit and a share of common stock ofthe Corporation have substantially the same economic characteristics in as muchas they effectively share equally in the net income or loss of the OperatingPartnership.  Common units are redeemableby the common unitholders at their option, subject to certain restrictions, onthe basis of one common unit for either one share of common stock or cash equalto the fair market value of a share at the time of the redemption.  The Corporation has the option to delivershares of common stock in exchange for all or any portion of the cashrequested.  The common unitholders maynot put the units for cash to the Corporation or the OperatingPartnership.  When a unitholder redeems acommon unit for common stock of the Corporation, limited partners’ capital isreduced and the General Partner’s capital is increased.

On May 25, 2007,in connection with the acquisition of various land parcels within its CapitalOffice Park complex in Greenbelt, Maryland, the Operating Partnership issued114,911 common units in the Operating Partnership, valued at approximately $5.2million.

###### **EARNINGSPER UNIT**

Basic EPU excludesdilution and is computed by dividing net income available to common unitholdersby the weighted average number of units outstanding for the period.  Diluted EPU reflects the potential dilutionthat could occur if securities or other contracts to issue common units wereexercised or converted into common units.

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The followinginformation presents the Operating Partnership’s results for the three monthsended June 30, 2007 and 2006 in accordance with FASB No. 128:  *(dollars in thousands)*
| ** **                                                         | ** ** | **Three Months Ended  June 30,** | ** ** |
|--------------------------------------------------------------------|------------|-------------------------------------------------|------------|
| **Computation of Basic EPU**                        | ** ** | **2007**                                        | ** ** | **2006** | ** ** |
| Income from continuing operations                   |       | $                                               | 19,233     |   | $ | 20,231 |   |
| Deduct: Preferred stock  distributions                             |       | (500                                            | )          | (500 | ) |
| Income from continuing  operations available to common unitholders |       | 18,733                                          |       | 19,731 |   |
| Income from  discontinued operations                               |       | 32,345                                          |       | 6,903 |   |
| Net income available to  common unitholders                        |       | $                                               | 51,078     |   | $ | 26,634 |   |
|                                                               |       |                                            |       |   |   |
| Weighted average common  units                                     |       | 67,799                                          |       | 62,182 |   |
|                                                               |       |                                            |       |   |   |
| **Basic EPU:**                                                     | ** ** | ** **                                      | ** ** | ** ** | ** ** |
| Income from continuing  operations                                 |       | $                                               | 0.28       |   | $ | 0.32 |   |
| Income from  discontinued operations                               |       | 0.47                                            |       | 0.11 |   |
| Net income available to common unitholders                         |       | $                                               | 0.75       |   | $ | 0.43 |   |

 
| ** **                                                                                                    | ** ** | **Three Months Ended  June 30,** | ** ** |
|---------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------|------------|
| **Computation of Diluted EPU**                                                                 | ** ** | **2007**                                        | ** ** | **2006** | ** ** |
| Income from continuing  operations available to common unitholders                                            |       | $                                               | 18,733     |   | $ | 19,731 |   |
| Add:  Income  from continuing operations attributable to Operating Partnership – common  units |       | 4,197                                           |       | 4,950 |   |
| Income from continuing  operations for diluted earnings per unit                                              |       | 22,930                                          |       | 24,681 |   |
| Income from  discontinued operations for diluted earnings per unit                                            |       | 39,592                                          |       | 8,635 |   |
| Net income available to  common unitholders                                                                   |       | 62,522                                          |       | $ | 33,316 |   |
|                                                                                                          |       |                                            |       |   |   |
| Weighted average common  units                                                                                |       | 83,193                                          |       | 78,067 |   |
|                                                                                                          |       |                                            |       |   |   |
| **Diluted EPU:**                                                                                              | ** ** | ** **                                      | ** ** | ** ** | ** ** |
| Income from continuing  operations                                                                            |       | $                                               | 0.28       |   | $ | 0.32 |   |
| Income from  discontinued operations                                                                          |       | 0.47                                            |       | 0.11 |   |
| Net income available to common unitholders                                                                    |       | $                                               | 0.75       |   | $ | 0.43 |   |

 

The followinginformation presents the Operating Partnership’s results for the six monthsended June 30, 2007 and 2006 in accordance with FASB No. 128:  *(dollars in thousands)*
| ** **                                                         | ** ** | **Six Months Ended  June 30,** | ** ** |
|--------------------------------------------------------------------|------------|-----------------------------------------------|------------|
| **Computation of Basic EPU**                        | ** ** | **2007**                                      | ** ** | **2006** | ** ** |
| Income from  continuing operations                                 |       | $                                             | 37,873     |   | $ | 50,322 |   |
| Deduct:  Preferred stock distributions                             |       | (1,000                                        | )          | (1,000 | ) |
| Income from  continuing operations available to common unitholders |       | 36,873                                        |       | 49,322 |   |
| Income from  discontinued operations                               |       | 32,784                                        |       | 9,909 |   |
| Net income  available to common unitholders                        |       | $                                             | 69,657     |   | $ | 59,231 |   |
|                                                               |       |                                          |       |   |   |
| Weighted average  common units                                     |       | 66,753                                        |       | 62,085 |   |
|                                                               |       |                                          |       |   |   |
| **Basic  EPU:**                                                    | ** ** | ** **                                    | ** ** | ** ** | ** ** |
| Income from  continuing operations                                 |       | $                                             | 0.55       |   | $ | 0.79 |   |
| Income from  discontinued operations                               |       | 0.49                                          |       | 0.16 |   |
| Net income available to  common unitholders                        |       | $                                             | 1.04       |   | $ | 0.95 |   |

 

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| ** **                                                                                                    | ** ** | **Six Months Ended  June 30,** | ** ** |
|---------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------|------------|
| **Computation of Diluted EPU**                                                                 | ** ** | **2007**                                      | ** ** | **2006** | ** ** |
| Income from  continuing operations available to common unitholders                                            |       | $                                             | 36,873     |   | $ | 49,322 |   |
| Add:  Income  from continuing operations attributable to Operating Partnership – common  units |       | 8,418                                         |       | 11,790 |   |
| Income from  continuing operations for diluted earnings per unit                                              |       | 45,291                                        |       | 61,112 |   |
| Income from  discontinued operations for diluted earnings per unit                                            |       | 40,133                                        |       | 12,336 |   |
| Net income  available to common unitholders                                                                   |       | $                                             | 85,424     |   | $ | 73,448 |   |
|                                                                                                          |       |                                          |       |   |   |
| Weighted average  common units                                                                                |       | 82,220                                        |       | 77,359 |   |
|                                                                                                          |       |                                          |       |   |   |
| **Diluted  EPU:**                                                                                             | ** ** | ** **                                    | ** ** | ** ** | ** ** |
| Income from  continuing operations                                                                            |       | $                                             | 0.55       |   | $ | 0.79 |   |
| Income from  discontinued operations                                                                          |       | 0.49                                          |       | 0.16 |   |
| Net income available to  common unitholders                                                                   |       | $                                             | 1.04       |   | $ | 0.95 |   |

 

The followingschedule reconciles the shares used in the basic EPU calculation to the unitsused in the diluted EPU calculation:
| ** **                     | ** ** | **Three Months Ended  June 30,** | ** ** | **Six Months Ended  June 30,** | ** ** |
|--------------------------------|------------|-------------------------------------------------|------------|-----------------------------------------------|------------|
| ** **                     | ** ** | **2007**                                        | ** ** | **2006**                                      | ** ** | **2007** | ** ** | **2006** | ** ** |
| Basic EPU Units                |       | 82,990                                          |       | 77,781                                        |       | 81,991 |   | 77,053 |   |
| Add:  Stock  options |       | 203                                             |       | 286                                           |       | 229 |   | 306 |   |
| Diluted EPU Units              |       | 83,193                                          |       | 78,067                                        |       | 82,220 |   | 77,359 |   |

 

Not included in thecomputations of diluted EPU were 5,000 stock options, as such securities wereanti-dilutive during the six months ended June 30, 2006.  Unvested shares of restricted stockoutstanding as of June 30, 2007 and 2006 were 153,211 and 194,946,respectively.

**11.  CONSOLIDATEDJOINT VENTURES**

The OperatingPartnership has ownership interests in certain joint ventures which itconsolidates.  Various entities and/orindividuals hold minority interests in these ventures.

**12.****       EMPLOYEE BENEFIT 401(k)PLANS**

Employees of theCorporation, other than those assigned to the Gale Company and affiliatedemployers, who meet certain minimum age and period of service requirements areeligible to participate in a 401(k) defined contribution plan (the “401(k) Plan”).  The 401(k) Plan allows eligible employees todefer from 1 to 30 percent of their annual compensation, subject to certain limitationsimposed by federal law.  The amountscontributed by employees are immediately vested and non-forfeitable.  The Corporation, at management’s discretion,may match employee contributions and/or make discretionary contributions.  Total expense recognized by the OperatingPartnership for the 401(k) Plan for the three months ended June 30, 2007 and2006 was $100,000 and $100,000, respectively, and for the six months ended June30, 2007 and 2006 was $200,000 and $200,000, respectively.

All employees ofthe Gale Company and other affiliated participating employers, other thancertain employees who are represented for collective bargaining purposes by alabor organization, who meet certain minimum age and period of servicerequirements are eligible to participate in a 401(k) defined contribution plan(the “Gale Plan”).  The Gale Plan allowseligible employees to defer from their annual compensation, the maximum amountpermitted 

33

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under federallaw.  The amounts contributed byemployees are immediately vested and non-forfeitable.  The Gale Company or the participant’semployer matches the employee’s deferral at the rate of 50 percent on the firstsix percent of the employee’s annual compensation for employees who have atleast 1,000 hours of service and are employed on the last day of the planyear.  In addition, the Corporation, atmanagement’s discretion, may make discretionary contributions.  Participants become 50 percent vested inemployer contributions after two years of service and become 100 percent vestedafter three years of service.  Totalexpense recognized by the Operating Partnership for the Gale Plan for the threeand six months ended June 30, 2007 was $31,000 and $111,000, respectively.  Total expense recognized by the OperatingPartnership after the completion of the Gale/Green Transactions for the threeand six months ended June 30, 2006 was $96,000.

Effective April 1,2007, the Gale Plan was merged into the 401(k) Plan.  In accordance with the Gale/Greentransactions, the Operating Partnership continued to make matchingcontributions to former Gale Plan participants under the Gale Plan matchingcontribution formula through the payroll period ending May 4, 2007.  Moreover, federal law requires the OperatingPartnership to preserve (i) the Gale Plan vesting schedule for certain GalePlan participants with three or more years of service as of May 4, 2007 and(ii) certain benefits previously offered under the Gale Plan.

**13.****       COMMITMENTS ANDCONTINGENCIES**

###### **TAXABATEMENT AGREEMENTS**

Pursuant to agreementswith the City of Jersey City, New Jersey, the Operating Partnership is requiredto make payments in lieu of property taxes (“PILOT”) on certain of itsproperties located in Jersey City, as follows:

The Harborside Plaza 5 agreement, as amended, whichcommenced in 2002 upon substantial completion of the property, as defined, isfor a term of 20 years.  The PILOT isequal to two percent of Total Project Costs. Total Project Costs, as defined, are $159.6 million.  The PILOT totaled $798,000 and $798,000 forthe three months ended June 30, 2007 and 2006, respectively, and $1.6 millionand $1.6 million for the six months ended June 30, 2007 and 2006, respectively.

The Harborside Plaza 4-A agreement, which commenced in2000, is for a term of 20 years.  ThePILOT is equal to two percent of Total Project costs, as defined, and increasesby 10 percent in years 7, 10 and 13 and by 50 percent in year 16.  Total Project costs, as defined, are $45.5million.  The PILOT totaled $250,000 and$227,000 for the three months ended June 30, 2007 and 2006, respectively, and$500,000 and $455,000 for the six months ended June 30, 2007 and 2006,respectively.

At the conclusionof the above-referenced PILOT agreements, it is expected that the propertieswill be assessed by the municipality and be subject to real estate taxes at thethen prevailing rates.

##### **LITIGATION**

The OperatingPartnership is a defendant in litigation arising in the normal course of itsbusiness activities.  Management does notbelieve that the ultimate resolution of these matters will have a materiallyadverse effect upon the Operating Partnership’s financial condition taken aswhole.

**OPERATING LEASE AGREEMENTS**

Future minimumrental payments under the terms of all non-cancelable operating leases underwhich the Operating Partnership is the lessee, as of June 30, 2007, are asfollows:  *(dollars inthousands)*
| **Year** | ** ** | **Amount** | ** ** |
|----------|------------|------------|------------|
| 2007     |       | $          | 183        |   |
| 2008     |       | 68         |       |
| 2009     |       | 16         |       |
| 2010     |       | 3          |       |
|     |       |       |       |
| Total    |       | $          | 270        |   |

 

34

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**GROUND LEASE AGREEMENTS**

Future minimumrental payments under the terms of all non-cancelable ground leases under whichthe Operating Partnership is the lessee, as of June 30, 2007, are asfollows:  *(dollars inthousands)*
| **Year**           | ** ** | **Amount** | ** ** |
|--------------------|------------|------------|------------|
| 2007               |       | $          | 254        |   |
| 2008               |       | 486        |       |
| 2009               |       | 501        |       |
| 2010               |       | 501        |       |
| 2011               |       | 501        |       |
| 2012 through  2084 |       | 35,454     |       |
|               |       |       |       |
| Total              |       | $          | 37,697     |   |

 

Ground leaseexpense incurred by the Operating Partnership during the three months endedJune 30, 2007 and 2006 amounted to $172,000 and $165,000, respectively, and was$331,000 and $316,000 for the six months ended June 30, 2007 and 2006,respectively.

###### **OTHER**

The Operating Partnershipmay not dispose of or distribute certain of its properties, currentlycomprising 50 properties with an aggregate net book value of approximately $1.3billion, which were originally contributed by members of either the Mack Group(which includes William L. Mack, Chairman of the Corporation’s Board ofDirectors; David S. Mack, a director of the Corporation; Earle I. Mack, aformer director of the Corporation; and Mitchell E. Hersh, president of theCorporation, chief executive officer and a director of the Corporation), theRobert Martin Group (which includes Martin S. Berger, a director of theCorporation; Robert F. Weinberg, a former director of the Corporation; andTimothy M. Jones, former president of the Corporation), the Cali Group (whichincludes John R. Cali, a director of the Corporation, and John J. Cali, aformer director of the Corporation) or certain other common unitholders withoutthe express written consent of a representative of the Mack Group, the RobertMartin Group, the Cali Group or the specific certain other common unitholders,as applicable, except in a manner which does not result in recognition of anybuilt-in-gain (which may result in an income tax liability) or which reimbursesthe appropriate Mack Group, Robert Martin Group, Cali Group members or thespecific certain other common unitholders for the tax consequences of therecognition of such built-in-gains (collectively, the “Property Lock-Ups”).  The aforementioned restrictions do not applyin the event that the Operating Partnership sells all of its properties or inconnection with a sale transaction which the Corporation’s Board of Directorsdetermines is reasonably necessary to satisfy a material monetary default onany unsecured debt, judgment or liability of the Corporation or the OperatingPartnership or to cure any material monetary default on any mortgage secured bya property.  The Property Lock-Ups expireperiodically through 2016.  Upon theexpiration of the Property Lock-Ups, the Operating Partnership is generallyrequired to use commercially reasonable efforts to prevent any sale, transferor other disposition of the subject properties from resulting in therecognition of built-in gain to the appropriate Mack Group, Robert MartinGroup, Cali Group members or the specific certain other commonunitholders.  88 of the OperatingPartnership’s properties, with an aggregate net book value of approximately$842.6 million, have lapsed restrictions and are subject to these conditions.

**14.****       TENANT LEASES**

The Properties areleased to tenants under operating leases with various expiration dates through2026.  Substantially all of the leasesprovide for annual base rents plus recoveries and escalation charges based uponthe tenant’s proportionate share of and/or increases in real estate taxes andcertain operating costs, as defined, and the pass-through of charges forelectrical usage.

35

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Future minimumrentals to be received under non-cancelable operating leases at June 30, 2007are as follows:  *(dollars inthousands)*
| **Year**             | ** ** | **Amount** | ** ** |
|----------------------|------------|------------|------------|
| 2007                 |       | $          | 284,431    |   |
| 2008                 |       | 552,966    |       |
| 2009                 |       | 508,863    |       |
| 2010                 |       | 442,156    |       |
| 2011                 |       | 373,990    |       |
| 2012 and  thereafter |       | 1,221,665  |       |
|                 |       |       |       |
| Total                |       | $          | 3,384,071  |   |

 

**15.****       SEGMENT REPORTING**

The OperatingPartnership operates in two business segments: (i) real estate and (ii)construction services.  The OperatingPartnership provides leasing, property management, acquisition, development,construction and tenant-related services for its portfolio.  In May 2006, in conjunction with theOperating Partnership’s acquisition of the Gale Company and related businesses,the Operating Partnership acquired a business specializing solely inconstruction and related services whose operations comprise the OperatingPartnership’s construction services segment. There were $633,000 in revenues from foreign countries recorded for thethree and six months ended June 30, 2006 and no revenues from foreign countriesfor the three and six months ended June 30, 2007.  The Operating Partnership had no long livedassets in foreign locations as of June 30, 2007 and December 31, 2006.  The accounting policies of the segments arethe same as those described in Note 2: Significant Accounting Policies,excluding depreciation and amortization.

The Operating Partnership evaluates performance based upon net operatingincome for each segment.

36

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Selected resultsof operations for the three and six month periods ended June 30, 2007 and 2006and selected asset information as of June 30, 2007 and December 31, 2006regarding the Operating Partnership’s operating segments are as follows:  *(dollars in thousands)*
| ** **                                                       | ** ** | **Real Estate** | ** ** | **Construction  Services** | ** ** | **Corporate  & Other (d)** | ** ** | **Total  Operating  Partnership** | ** ** |
|------------------------------------------------------------------|------------|----------------------|------------|----------------------------|------------|------------------------------------------|------------|-----------------------------------|------------|
| **Total  revenues:**                                             | ** ** | ** **           | ** ** | ** **                 | ** ** | ** **                               | ** ** | ** **                        | ** ** |
| Three months  ended:                                             |       |                 |       |                       |       |                                     |       |                              |       |
| June 30, 2007                                                    |       | $                    | 172,750    |                       | $          | 26,998                                   |       | $                                 | 782        |   | $ | 200,530 |   |
| June 30, 2006                                                    |       | 179,476              |       | —                     |       | 3,313                                    |       | 182,789                           |       |
| Six months  ended:                                               |       |                 |       |                       |       |                                     |       |                              |       |
| June 30, 2007                                                    |       | $                    | 338,656    |                       | $          | 53,974                                   |       | $                                 | 1,157      |   | $ | 393,787 |   |
| June 30, 2006                                                    |       | 331,390              |       | —                     |       | 3,288                                    |       | 334,678                           |       |
|                                                             |       |                 |       |                       |       |                                     |       |                              |       |
| **Total  operating and interest expenses(a):**                   |       |                 |       |                       |       |                                     |       |                              |       |
| Three months  ended:                                             |       |                 |       |                       |       |                                     |       |                              |       |
| June 30, 2007                                                    |       | $                    | 61,767     |                       | $          | 26,742                                   |       | $                                 | 43,286     |   | $ | 131,795 | (e) |
| June 30, 2006                                                    |       | 72,400               |       | —                     |       | 44,916                                   |       | 117,316                           | (f)        |
| Six months  ended:                                               |       |                 |       |                       |       |                                     |       |                              |       |
| June 30, 2007                                                    |       | $                    | 122,762    |                       | $          | 53,508                                   |       | $                                 | 82,466     |   | $ | 258,736 | (g) |
| June 30, 2006                                                    |       | 127,324              |       | —                     |       | 83,778                                   |       | 211,102                           | (h)        |
|                                                             |       |                 |       |                       |       |                                     |       |                              |       |
| **Equity  in earnings (loss) of unconsolidated joint ventures:** |       |                 |       |                       |       |                                     |       |                              |       |
| Three months  ended:                                             |       |                 |       |                       |       |                                     |       |                              |       |
| June 30, 2007                                                    |       | $                    | (1,696     | )                          | —     |                                     | —     |                              | $          | (1,696 | ) |
| June 30, 2006                                                    |       | (846                 | )          | —                     |       | —                                   |       | (846                              | )          |
| Six months  ended:                                               |       |                 |       |                       |       |                                     |       |                              |       |
| June 30, 2007                                                    |       | $                    | (3,927     | )                          | —     |                                     | —     |                              | $          | (3,927 | ) |
| June 30, 2006                                                    |       | (599                 | )          | —                     |       | —                                   |       | (599                              | )          |
|                                                             |       |                 |       |                       |       |                                     |       |                              |       |
| **Net  operating income (b):**                                   | ** ** | ** **           | ** ** | ** **                 | ** ** | ** **                               | ** ** | ** **                        | ** ** |
| Three months  ended:                                             |       |                 |       |                       |       |                                     |       |                              |       |
| June 30, 2007                                                    |       | $                    | 109,287    |                       | $          | 256                                      |       | $                                 | (42,504    | ) | $ | 67,039 | (e) |
| June 30, 2006                                                    |       | 106,230              |       | —                     |       | (41,603                                  | )          | 64,627                            | (f)        |
| Six months  ended:                                               |       |                 |       |                       |       |                                     |       |                              |       |
| June 30, 2007                                                    |       | $                    | 211,967    |                       | $          | 466                                      |       | $                                 | (81,309    | ) | $ | 131,124 | (g) |
| June 30, 2006                                                    |       | 203,467              |       | —                     |       | (80,490                                  | )          | 122,977                           | (h)        |
|                                                             |       |                 |       |                       |       |                                     |       |                              |       |
| **Total  assets:**                                               | ** ** | ** **           | ** ** | ** **                 | ** ** | ** **                               | ** ** | ** **                        | ** ** |
| June 30, 2007                                                    |       | $                    | 4,435,099  |                       | $          | 31,822                                   |       | $                                 | 153,301    |   | $ | 4,620,222 |   |
| December 31, 2006                                                |       | 4,281,222            |       | 28,353                     |       | 113,314                                  |       | 4,422,889                         |       |
|                                                             |       |                 |       |                       |       |                                     |       |                              |       |
| **Total  long-lived assets (c):**                                | ** ** | ** **           | ** ** | ** **                 | ** ** | ** **                               | ** ** | ** **                        | ** ** |
| June 30, 2007                                                    |       | $                    | 4,272,570  |                       | —     |                                     | $          | 7,017                             |       | $ | 4,279,587 |   |
| December 31,  2006                                               |       | 4,036,393            |       | —                     |       | 1,550                                    |       | 4,037,943                         |       |

 

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| (a) |   | Total operating and interest expenses represent the  sum of: real estate taxes; utilities; operating services; direct construction  costs; real estate services salaries, wages and other costs; general and  administrative and interest expense (net of interest income). All interest  expense, net of interest income, (including for property-level mortgages) is  excluded from segment amounts and classified in Corporate & Other for all  periods. |
|-----|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) |   | Net operating income represents total revenues less  total operating and interest expenses [as defined in Note (a)], plus equity  in earnings (loss) of unconsolidated joint ventures, for the period.                                                                                                                                                                                                                                                          |

 

37

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| (c) |   | Long-lived assets are comprised of net investment in  rental property, unbilled rents receivable and investments in unconsolidated  joint ventures.                                                                                                                                             |
|-----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (d) |   | Corporate & Other represents all corporate-level  items (including interest and other investment income, interest expense and  non-property general and administrative expense) as well as intercompany  eliminations necessary to reconcile to consolidated Operating Partnership  totals. |
| (e) |   | Excludes $43,823 of depreciation and amortization.                                                                                                                                                                                                                                              |
| (f) |   | Excludes $39,476 of depreciation and amortization.                                                                                                                                                                                                                                              |
| (g) |   | Excludes $85,274 of depreciation and amortization.                                                                                                                                                                                                                                              |
| (h) |   | Excludes $75,955 of depreciation and amortization.                                                                                                                                                                                                                                              |

 

**16.****       IMPACT OFRECENTLY-ISSUED ACCOUNTING STANDARDS**

# **FINANCIAL ACCOUNTING STANDARDSBOARD (FASB) Statement No. 159 (“FASB No. 159”),***The Fair Value Option forFinancial Assets and Financial Liabilities—Including an amendment of FASB StatementNo. 115*

FASB No. 159 permitsentities to choose to measure many financial instruments and certain otheritems at fair value.  The objective is toimprove financial reporting by providing entities with the opportunity to mitigatevolatility in reported earnings caused by measuring related assets andliabilities differently without having to apply complex hedge accountingprovisions.  FASB No. 159 is expected toexpand the use of fair value measurement, which is consistent with the FASB’slong-term measurement objectives for accounting for financialinstruments.  This Statement applies to all entities, includingnot-for-profit organizations.  Most ofthe provisions of this Statement apply only to entities that elect the fairvalue option.  However, the amendment toFASB Statement No. 115, *Accounting forCertain Investments in Debt and Equity Securities,* applies to allentities with available-for-sale and trading securities.  Some requirements apply differently toentities that do not report net income.

The following are eligible items for themeasurement option established by FASB No. 159.

1.               Recognizedfinancial assets and financial liabilities except:
|        | a. | An investment in a subsidiary that the entity is  required to consolidate;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | b. | An interest in a variable interest entity that the  entity is required to consolidate;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | c. | Employers’ and plans’ obligations (or assets  representing net overfunded positions) for pension benefits, other  postretirement benefits (including health care and life insurance benefits),  postemployment benefits, employee stock option and stock purchase plans, and  other forms of deferred compensation arrangements, as defined in FASB  Statements No. 35,*Accounting and Reporting by Defined  Benefit Pension Plans,*No. 87,*Employers’ Accounting for Pensions,*No. 106,*Employers’ Accounting for Postretirement Benefits Other Than  Pensions,*No. 112,*Employers’ Accounting for Postemployment  Benefits,*No. 123 (revised December 2004),*Share-Based Paymen*t, No. 43,*Accounting for Compensated Absences,*No. 146,*Accounting for Costs Associated with Exit  or Disposal Activities,*and No. 158,*Employers’ Accounting for Defined Benefit  Pension and Other Postretirement Plans, and*APB Opinion No. 12, *Omnibus Opinion—1967;* |
|   | d. | Financial assets and financial liabilities  recognized under leases as defined in FASB Statement No. 13,*Accounting for  Leases* (This exception does not apply to a guarantee of a  third-party lease obligation or a contingent obligation arising from a  cancelled lease.);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | e. | Deposit liabilities, withdrawable on demand, of  banks, savings and loan associations, credit unions, and other similar  depository institutions; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | f. | Financial instruments that are, in whole or in part,  classified by the issuer as a component of shareholder’s equity (including  “temporary equity”). An example is a convertible debt security with a  noncontingent beneficial conversion feature.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

 

2.               Firm commitmentsthat would otherwise not be recognized at inception and that involve onlyfinancial instruments.

3.               Nonfinancialinsurance contracts and warranties that the insurer can settle by paying athird party to provide those goods or services.

4.               Host financialinstruments resulting from separation of an embedded nonfinancial derivativeinstrument from a nonfinancial hybrid instrument.

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The fair value optionestablished by FASB No. 159 permits all entities to choose to measure eligibleitems at fair value at specified election dates.  A business entity shall report unrealizedgains and losses on items for which the fair value option has been elected inearnings (or another performance indicator if the business entity does notreport earnings) at each subsequent reporting date.  FASB No. 159 is effective as of the beginningof an entity’s first fiscal year that begins after November 15, 2007.  The Operating Partnership does not expectthat the implementation of FASB No. 159 will have a material effect on theOperating Partnership’s consolidated financial position or results ofoperations.

**FASB Statement No. 157 (“FASB NO. 157”),***Fair Value Measurements*

FASB No. 157defines fair value, establishes a framework for measuring fair value ingenerally accepted accounting principles (GAAP), and expands disclosures aboutfair value measurements.  FASB No. 157applies under other accounting pronouncements that require or permit fair valuemeasurements, FASB having previously concluded in those accountingpronouncements that fair value is their relevant measurement attribute.  Accordingly, this FASB No. 157 does not requireany new fair value measurements. However, for some entities, the application of this FASB No. 157 willchange current practice.  This statementis effective for financial statements for fiscal years beginning after November15, 2007.  The Operating Partnership doesnot expect that the implementation of FASB No. 157 will have a material effecton the Operating Partnership’s consolidated financial position or results ofoperations.

39

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**Item 2.        Management’s Discussion and Analysis of  Financial Condition and Results of Operations**

**GENERAL**

The followingdiscussion should be read in conjunction with the Consolidated FinancialStatements of Mack-Cali Realty, L.P. (the “Operating Partnership”) and thenotes thereto (collectively, the “Financial Statements”).  Certain defined terms used herein have themeaning ascribed to them in the Financial Statements.

***Executive Overview***

Mack-Cali RealtyCorporation (the “Corporation” or “General Partner”) is one of the largest realestate investment trusts (REITs) in the United States, with a total marketcapitalization of approximately $5.7 billion at June 30, 2007.  Mack Cali Realty, L.P. (the “OperatingPartnership”) has been involved in all aspects of commercial real estatedevelopment, management and ownership for over 50 years and the Corporation hasbeen a publicly-traded REIT since 1994. The Operating Partnership owns or has interests in 302 properties(collectively, the “Properties”), primarily class A office and office/flexbuildings, totaling approximately 34.8 million square feet, leased toapproximately 2,200 tenants.  Theproperties are located primarily in suburban markets of the Northeast, somewith adjacent, Operating Partnership-controlled developable land sites able toaccommodate up to 11.7 million square feet of additional commercial space.

The OperatingPartnership’s strategy is to be a significant real estate owner and operator inits core, high-barriers-to-entry markets, primarily in the Northeast.

As an owner of realestate, almost all of the Operating Partnership’s earnings and cash flow isderived from rental revenue received pursuant to leased space at theProperties.  Key factors that affect theOperating Partnership’s business and financial results include the following:
|        | · | the general economic climate;                                                |
|--------|--------|------------------------------------------------------------------------------|
|   | · | the occupancy rates of the Properties;                                       |
|   | · | rental rates on new or renewed leases;                                       |
|   | · | tenant improvement and leasing costs incurred to  obtain and retain tenants; |
|   | · | the extent of early lease terminations;                                      |
|   | · | operating expenses;                                                          |
|   | · | cost of capital; and                                                         |
|   | · | the extent of acquisitions, development and sales of  real estate.           |

 

Any negativeeffects of the above key factors could potentially cause a deterioration in theOperating Partnership’s revenue and/or earnings.  Such negative effects could include: (1)failure to renew or execute new leases as current leases expire; (2) failure torenew or execute new leases with rental terms at or above the terms of in-placeleases; and (3) tenant defaults.

A failure to renewor execute new leases as current leases expire or to execute new leases withrental terms at or above the terms of in-place leases may be affected byseveral factors such as: (1) the local economic climate, which may be adverselyimpacted by business layoffs or downsizing, industry slowdowns, changingdemographics and other factors; and (2) local real estate conditions, such asoversupply of office and office/flex space or competition within the market.

The OperatingPartnership’s core markets continue to be weak. The percentage leased in the Operating Partnership’s consolidatedportfolio of stabilized operating properties was 91.9 percent at June 30, 2007as compared to 92.2 percent at March 31, 2007 and 92.0 percent at December 31,2006.  Percentage leased includes allleases in effect as of the period end date, some of which have commencementdates in the future (including, at June 30, 2007, a lease with a commencementdate substantially in the future consisting of 8,590 square feet scheduled tocommence in 2009), and leases that expire at the period end date.  Leases that expired as of June 30, 2007,March 

40

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31, 2007 andDecember 31, 2006 aggregate 174,122, 286,298 and 103,477 square feet, respectively,or 0.6, 1.0 and 0.4 percentage of the net rentable square footage,respectively.  Rental rates on theOperating Partnership’s space that was re-leased (based on first rents payable)during the three months ended June 30, 2007 increased an average of 0.3 percentcompared to rates that were in effect under the prior leases, as compared to a1.7 percent decrease for the three months ended June 30, 2006.  The Operating Partnership believes thatvacancy rates may continue to increase in some of its markets in 2007.  As a result, the Operating Partnership’sfuture earnings and cash flow may continue to be negatively impacted by currentmarket conditions.

The remainingportion of this Management’s Discussion and Analysis of Financial Condition andResults of Operations should help the reader understand:
|        | · | property transactions during the period;                                                                                                  |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | critical accounting policies and estimates;                                                                                               |
|   | · | results of operations for the three and six months  ended June 30, 2007 as compared to the three and six months ended June 30,  2006; and |
|   | · | liquidity and capital resources.                                                                                                          |

 

## ***Summary of 2007Transactions***

### **PropertyAcquisitions**

The OperatingPartnership acquired the following office properties during the six monthsended June 30, 2007:  *(dollars in thousands)*
| **Acquisition**               | ** ** | ** **                | ** ** | ** **                     | ** ** | **# of** | ** ** | **Rentable**         | ** ** | **Acquisition** | ** ** |
|-------------------------------|------------|---------------------------|------------|--------------------------------|------------|---------------|------------|----------------------|------------|-----------------|------------|
| **Date**                      | ** ** | **Property/Address**      | ** ** | **Location**                   | ** ** | **Bldgs.**    | ** ** | **Square Feet** | ** ** | **Cost**        | ** ** |
| 05/08/07                      |       | AAA  Properties (a)       |       | Hamilton  Township, New Jersey |       | 2             |       | 69,232               |       | $               | 9,048      |   |
| 06/11/07                      |       | 125  Broad Street (b) (c) |       | New  York, New York            |       | 1             |       | 524,476              |       | 274,091         |       |
|                          |       |                      |       |                           |       |          |       |                 |       |            |       |
| Total Property  Acquisitions: |       |                      |       | 3                              |       | 593,708       |       | $                    | 283,139    |            |

----

| (a) | Included in this  transaction was the acquisition of two parcels of developable land  aggregating approximately 13 acres.                                                                 |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | Acquisition represented two units of office  condominium interests, which collectively comprise floors 2 through 16, or  39.6 percent, of the 40-story, 1.2 million square-foot building. |
| (c) | Transaction was funded primarily through borrowing  on the Operating Partnership’s revolving credit facility.                                                                        |

 

**PropertiesCommencing Initial Operations**

The followingproperty commenced initial operations during the six months ended June 30, 2007:  *(dollars in thousands)*
| ** **                                       | ** ** | ** **           | ** ** | ** **                     | ** ** | ** **    | ** ** | ** **           | ** ** | **Investment by**   | ** ** |
|--------------------------------------------------|------------|----------------------|------------|--------------------------------|------------|---------------|------------|----------------------|------------|--------------------------|------------|
| ** **                                       | ** ** | ** **           | ** ** | ** **                     | ** ** | **# of** | ** ** | **Rentable**         | ** ** | **Operating**            | ** ** |
| **Date**                                         | ** ** | **Property/Address** | ** ** | **Location**                   | ** ** | **Bldgs.**    | ** ** | **Square Feet** | ** ** | **Partnership (a)** | ** ** |
| 05/08/07                                         |       | 700  Horizon Drive   |       | Hamilton  Township, New Jersey |       | 1             |       | 120,000              |       | $                        | 16,699     |   |
|                                             |       |                 |       |                           |       |          |       |                 |       |
| Total Properties  Commencing Initial Operations: |       |                 |       | 1                              |       | 120,000       |       | $                    | 16,699     |                     |

 

----

| (a) | Development costs were funded primarily through  draws on the Operating Partnership’s revolving credit facility. Amounts are  as of June 30, 2007. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------|

 

**LandAcquisition**

In February 2007, theOperating Partnership exercised its option to acquire approximately 43 acres ofland sites within its Capital Office Park complex in Greenbelt, Maryland, whichis able to accommodate the development of up to 600,000 square feet of officespace, for $13 million.  The option wasacquired as part of the acquisition of the office complex in February2006.  On May 25, 2007, the OperatingPartnership completed the purchase of the land for approximately $13 million,which consisted of 114,911 common operating partnership units valued at $5.2million, and the remainder in cash.

41

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**PropertySales**

The OperatingPartnership sold the following office properties during the six months endedJune 30, 2007:  *(dollars in thousands)*
| ** **                    | ** ** | ** **           | ** ** | ** **              | ** ** | ** **    | ** ** | **Rentable** | ** ** | **Net**      | ** ** | **Net**   | ** ** | ** **   | ** ** |
|-------------------------------|------------|----------------------|------------|-------------------------|------------|---------------|------------|--------------|------------|--------------|------------|-----------|------------|--------------|------------|
| **Sale**                      | ** ** | ** **           | ** ** | ** **              | ** ** | **# of** | ** ** | **Square**   | ** ** | **Sales**    | ** ** | **Book**  | ** ** | **Realized** | ** ** |
| **Date**                      | ** ** | **Property/Address** | ** ** | **Location**            | ** ** | **Bldgs.**    | ** ** | **Feet**     | ** ** | **Proceeds** | ** ** | **Value** | ** ** | **Gain**     | ** ** |
| 05/10/07                      |       | 1000  Bridgeport     |       | Shelton,  Connecticut   |       | 1             |       | 133,000      |       | $            | 16,411     |      | $          | 13,782       |       | $ | 2,629 |   |
| 06/11/07                      |       | 500  W. Putnam       |       | Greenwich,  Connecticut |       | 1             |       | 121,250      |       | 54,344       |       | 18,113    |       | 36,231       |       |
|                          |       |                 |       |                    |       |          |       |         |       |         |       |      |       |
| Total Office Property  Sales: |       |                 |       | 2                       |       | 254,250       |       | $            | 70,755     |         | $          | 31,895    |       | $            | 38,860     |   |

 

***SubsequentEvent***

On May 25, 2007,the Operating Partnership entered into an agreement to sell its two officebuildings in Egg Harbor Township, New Jersey, for approximately $12.5 million.  The buildings, which total 80,344 squarefeet, were subsequently sold on July 13, 2007.

***CriticalAccounting Policies and Estimates***

The FinancialStatements have been prepared in conformity with generally accepted accountingprinciples.  The preparation of theFinancial Statements requires management to make estimates and assumptions thataffect the reported amounts of assets and liabilities and disclosure ofcontingent assets and liabilities at the date of the Financial Statements, andthe reported amounts of revenues and expenses during the reported period.  These estimates and assumptions are based onmanagement’s historical experience that are believed to be reasonable at thetime.  However, because future events andtheir effects cannot be determined with certainty, the determination ofestimates requires the exercise of judgment. The Operating Partnership’s critical accounting policies are those whichrequire assumptions to be made about matters that are highly uncertain.  Different estimates could have a materialeffect on the Operating Partnership’s financial results.  Judgments and uncertainties affecting theapplication of these policies and estimates may result in materially differentamounts being reported under different conditions and circumstances.

**RentalProperty:**

Rental propertiesare 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 constructioncosts include pre-construction costs essential to the development of theproperty, development and construction costs, interest, property taxes,insurance, salaries and other project costs incurred during the period ofdevelopment.  Interest capitalized by theOperating Partnership for the three months ended June 30, 2007 and 2006 was$1.2 million and $1.6 million, respectively, and $2.5 million and $3.1 millionfor the six months ended June 30, 2007 and 2006, respectively.  Ordinary repairs and maintenance are expensedas incurred; major replacements and betterments, which improve or extend thelife of the asset, are capitalized and depreciated over their estimated usefullives.  Fully-depreciated assets are removedfrom the accounts.

The Operating Partnershipconsiders a construction project as substantially completed and held availablefor occupancy upon the completion of tenant improvements, but no later than oneyear from cessation of major construction activity (as distinguished fromactivities such as routine maintenance and cleanup).  If portions of a rental project aresubstantially completed and occupied by tenants, or held available foroccupancy, and other portions have not yet reached that stage, the substantiallycompleted portions are accounted for as a separate project.  The Operating Partnership allocates costsincurred between the portions under construction and the portions substantiallycompleted and held available for occupancy and capitalizes only those costsassociated with the portion under construction.

42

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Properties aredepreciated using the straight-line method over the estimated useful lives ofthe assets.  The estimated useful livesare as follows:
| Leasehold interests                |   | Remaining lease term                                          |
|------------------------------------|--------|---------------------------------------------------------------|
| Buildings and improvements         |   | 5 to 40 years                                                 |
| Tenant  improvements               |   | The shorter of the term  of the  related lease or useful life |
| Furniture,  fixtures and equipment |   | 5 to 10 years                                                 |

 

Upon acquisition ofrental property, the Operating Partnership estimates the fair value of acquiredtangible assets, consisting of land, building and improvements, and identifiedintangible assets and liabilities generally consisting of the fair value of (i)above and below market leases, (ii) in-place leases and (iii) tenantrelationships.  The Operating Partnershipallocates the purchase price to the assets acquired and liabilities assumedbased on their relative fair values.  Inestimating the fair value of the tangible and intangible assets acquired, theOperating Partnership considers information obtained about each property as aresult of its due diligence and marketing and leasing activities, and utilizesvarious valuation methods, such as estimated cash flow projections utilizingappropriate discount and capitalization rates, estimates of replacement costsnet of depreciation, and available market information.  The fair value of the tangible assets of anacquired property considers the value of the property as if it were vacant.

Above-market andbelow-market lease values for acquired properties are recorded based on thepresent value (using a discount rate which reflects the risks associated withthe leases acquired) of the difference between (i) the contractual amounts tobe paid pursuant to each in-place lease and (ii) management’s estimate of fairmarket lease rates for each corresponding in-place lease, measured over aperiod equal to the remaining term of the lease for above-market leases and theremaining initial term plus the term of any below-market fixed rate renewaloptions for below-market leases.  Thecapitalized above-market lease values are amortized as a reduction of baserental revenue over the remaining term of the respective leases, and thecapitalized below-market lease values are amortized as an increase to baserental revenue over the remaining initial terms plus the terms of anybelow-market fixed rate renewal options of the respective leases.

Other intangibleassets acquired include amounts for in-place lease values and tenantrelationship values which are based on management’s evaluation of the specificcharacteristics of each tenant’s lease and the Operating Partnership’s overallrelationship with the respective tenant. Factors to be considered by management in its analysis of in-place leasevalues include an estimate of carrying costs during hypothetical expectedlease-up periods considering current market conditions, and costs to executesimilar leases.  In estimating carryingcosts, management includes real estate taxes, insurance and other operatingexpenses and estimates of lost rentals at market rates during the expectedlease-up periods, depending on local market conditions.  In estimating costs to execute similarleases, management considers leasing commissions, legal and other relatedexpenses.  Characteristics considered bymanagement in valuing tenant relationships include the nature and extent of theOperating Partnership’s existing business relationships with the tenant, growthprospects for developing new business with the tenant, the tenant’s creditquality and expectations of lease renewals. The value of in-place leases are amortized to expense over the remaininginitial terms of the respective leases. The value of tenant relationship intangibles will be amortized toexpense over the anticipated life of the relationships.

On a periodicbasis, management assesses whether there are any indicators that the value ofthe Operating Partnership’s rental properties may be impaired.  A property’s value is impaired only ifmanagement’s estimate of the aggregate future cash flows (undiscounted andwithout interest charges) to be generated by the property is less than thecarrying value of the property.  To theextent impairment has occurred, the loss shall be measured as the excess of thecarrying amount of the property over the fair value of the property.  The Operating Partnership’s estimates ofaggregate future cash flows expected to be generated by each property are basedon a number of assumptions that are subject to economic and marketuncertainties including, among others, demand for space, competition fortenants, changes in market rental rates, and costs to operate eachproperty.  As these factors are difficultto predict and are subject to future events that may alter management’sassumptions, the future cash flows estimated by management in its impairmentanalyses may not be achieved.  Managementdoes not believe that the value of any of the Operating Partnership’s rentalproperties is impaired.

43

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**RentalProperty Held for Sale and Discontinued Operations:**

When assets areidentified by management as held for sale, the Operating Partnershipdiscontinues depreciating the assets and estimates the sales price, net ofselling costs, of such assets.  If, inmanagement’s opinion, the net sales price of the assets which have beenidentified as held for sale is less than the net book value of the assets, avaluation allowance is established. Properties identified as held for sale and/or sold are presented indiscontinued operations for all periods presented.

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

**RevenueRecognition:**

Base rentalrevenue is recognized on a straight-line basis over the terms of the respectiveleases.****** Unbilled rents receivable represents theamount by which straight-line rental revenue exceeds rents currently billed inaccordance with the lease agreements. Above-market and below-market lease values for acquired properties arerecorded based on the present value (using a discount rate which reflects therisks associated with the leases acquired) of the difference between (i) thecontractual amounts to be paid pursuant to each in-place lease and (ii)management’s estimate of fair market lease rates for each correspondingin-place lease, measured over a period equal to the remaining term of the leasefor above-market leases and the initial term plus the term of any below-marketfixed-rate renewal options for below-market leases.  The capitalized above-market lease values foracquired properties are amortized as a reduction of base rental revenue overthe remaining term of the respective leases, and the capitalized below-marketlease values are amortized as an increase to base rental revenue over theremaining initial terms plus the terms of any below-market fixed-rate renewaloptions of the respective leases. Escalations and recoveries from tenants are received from tenants forcertain costs as provided in the lease agreements.  These costs generally include real estatetaxes, utilities, insurance, common area maintenance and other recoverablecosts.

Constructionservices revenue includes fees earned and reimbursements received by theOperating Partnership for providing construction management and generalcontractor services to clients. Construction services revenue is recognized on the percentage ofcompletion method.  Using this method,profits are recorded on the basis of our estimates of the overall profit andpercentage of completion of individual contracts.  A portion of the estimated profits is accruedbased upon estimates of the percentage of completion of the constructioncontract.  This revenue recognitionmethod involves inherent risks relating to profit and cost estimates.  Real estate services revenue includesproperty management, facilities management, leasing commission fees and otherservices, and payroll and related costs reimbursed from clients.  Other income includes income from parkingspaces leased to tenants, income from tenants for additional services arrangedfor the Operating Partnership and income from tenants for early leaseterminations.

**Allowancefor Doubtful Accounts:**

Management periodicallyperforms a detailed review of amounts due from tenants to determine if accountsreceivable balances are impaired based on factors affecting the collectibilityof those balances.  Management’s estimateof the allowance for doubtful accounts requires management to exercisesignificant judgment about the timing, frequency and severity of collectionlosses, which affects the allowance and net income.

44

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***ResultsFrom Operations***

The followingcomparisons for the three and six months ended June 30, 2007 (“2007”), ascompared to the three and six months ended June 30, 2006 (“2006”), makereference to the following:  (i) theeffect of the “Same-Store Properties,” which represent all in-serviceproperties owned by the Operating Partnership at March 31, 2006 (for thethree-month period comparisons), and which represents all in-service propertiesowned by the Operating Partnership at December 31, 2005 (for the six-monthperiod comparisons), excluding properties sold or held for sale through June30, 2007, and (ii) the effect of the “Acquired Properties,” which represent allproperties acquired by the Operating Partnership or commencing initialoperations from April 1, 2006 through June 30, 2007 (for the three-month periodcomparisons), and which represents all properties acquired by the OperatingPartnership from January 1, 2006 through June 30, 2007 (for the six-monthperiod comparisons).

***Three Months Ended June 30,2007 Compared to Three Months Ended June 30, 2006***
| ** **                                                                            | ** ** | **Three Months Ended  June 30,** | ** ** | **Dollar** | ** ** | **Percent** | ** ** |
|---------------------------------------------------------------------------------------|------------|-------------------------------------------------|------------|------------|------------|-------------|------------|
| **(dollars in thousands)**                                                  | ** ** | **2007**                                        | ** ** | **2006**   | ** ** | **Change**  | ** ** | **Change** | ** ** |
| **Revenue from rental operations  and other:**                                        | ** ** | ** **                                      | ** ** | ** ** | ** ** | ** **  | ** ** | ** ** | ** ** |
| Base rents                                                                            |       | $                                               | 142,482    |       | $          | 133,333     |       | $ | 9,149 |   | 6.9 | % |
| Escalations and  recoveries from tenants                                              |       | 25,766                                          |       | 23,272     |       | 2,494       |       | 10.7 |   |
| Other income                                                                          |       | 3,854                                           |       | 5,401      |       | (1,547      | )          | (28.6 | ) |
| Total revenues  from rental operations                                                |       | 172,102                                         |       | 162,006    |       | 10,096      |       | 6.2 |   |
|                                                                                  |       |                                            |       |       |       |        |       |   |   |
| **Property expenses:**                                                                | ** ** | ** **                                      | ** ** | ** ** | ** ** | ** **  | ** ** | ** ** | ** ** |
| Real estate taxes                                                                     |       | 23,852                                          |       | 21,162     |       | 2,690       |       | 12.7 |   |
| Utilities                                                                             |       | 15,329                                          |       | 13,214     |       | 2,115       |       | 16.0 |   |
| Operating services                                                                    |       | 27,348                                          |       | 25,880     |       | 1,468       |       | 5.7 |   |
| Total property  expenses                                                              |       | 66,529                                          |       | 60,256     |       | 6,273       |       | 10.4 |   |
|                                                                                  |       |                                            |       |       |       |        |       |   |   |
| **Non-property revenues:**                                                            | ** ** | ** **                                      | ** ** | ** ** | ** ** | ** **  | ** ** | ** ** | ** ** |
| Construction services                                                                 |       | 23,469                                          |       | 13,049     |       | 10,420      |       | 79.9 |   |
| Real estate services                                                                  |       | 4,959                                           |       | 7,734      |       | (2,775      | )          | (35.9 | ) |
| Total non-property  revenues                                                          |       | 28,428                                          |       | 20,783     |       | 7,645       |       | 36.8 |   |
|                                                                                  |       |                                            |       |       |       |        |       |   |   |
| **Non-property expenses:**                                                            | ** ** | ** **                                      | ** ** | ** ** | ** ** | ** **  | ** ** | ** ** | ** ** |
| Direct construction  costs                                                            |       | 22,634                                          |       | 12,579     |       | 10,055      |       | 79.9 |   |
| General and  administrative                                                           |       | 12,870                                          |       | 11,846     |       | 1,024       |       | 8.6 |   |
| Depreciation and  amortization                                                        |       | 43,823                                          |       | 39,476     |       | 4,347       |       | 11.0 |   |
| Total non-property  expenses                                                          |       | 79,327                                          |       | 63,901     |       | 15,426      |       | 24.1 |   |
| Operating income                                                                      |       | 54,674                                          |       | 58,632     |       | (3,958      | )          | (6.8 | ) |
| **Other (expense) income:**                                                           | ** ** | ** **                                      | ** ** | ** ** | ** ** | ** **  | ** ** | ** ** | ** ** |
| Interest expense                                                                      |       | (31,333                                         | )          | (33,034    | )          | 1,701       |       | 5.1 |   |
| Interest and other  investment income                                                 |       | 1,571                                           |       | 399        |       | 1,172       |       | 293.7 |   |
| Equity in earnings  (loss) of unconsolidated joint ventures                           |       | (1,696                                          | )          | (846       | )          | (850        | )          | (100.5 | ) |
| Minority interest in  consolidated joint ventures                                     |       | 214                                             |       | 30         |       | 184         |       | 613.3 |   |
| Gain on sale of  investment in marketable securities                                  |       | —                                          |       | —     |       | —      |       | — |   |
| Total other (expense)  income                                                         |       | (31,244                                         | )          | (33,451    | )          | 2,207       |       | 6.6 |   |
|                                                                                  |       |                                            |       |       |       |        |       |   |   |
| Income from continuing  operations                                                    |       | 23,430                                          |       | 25,181     |       | (1,751      | )          | (7.0 | ) |
| Discontinued  operations:                                                             |       |                                            |       |       |       |        |       |   |   |
| Income from discontinued  operations                                                  |       | 732                                             |       | 3,730      |       | (2,998      | )          | (80.3 | ) |
| Realized gains (losses)  and unrealized losses on disposition of rental property, net |       | 38,860                                          |       | 4,905      |       | 33,955      |       | 692.2 |   |
| Total discontinued  operations, net                                                   |       | 39,592                                          |       | 8,635      |       | 30,957      |       | 358.5 |   |
| Net income                                                                            |       | 63,022                                          |       | 33,816     |       | 29,206      |       | 86.4 |   |
| Preferred unit  distributions                                                         |       | (500                                            | )          | (500       | )          | —      |       | — |   |
| Net income available to common unitholders                                            |       | $                                               | 62,522     |       | $          | 33,316      |       | $ | 29,206 |   | 87.7 | % |

 

45

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The following is asummary of the changes in revenue from rental operations and other, and propertyexpenses divided into Same-Store Properties and Acquired Properties:
| ** **                                                               | ** ** | **Total**                      | ** ** | **Same-Store** | ** ** | **Acquired**   | ** ** |
|--------------------------------------------------------------------------|------------|--------------------------------|------------|----------------|------------|----------------|------------|
| ** **                                                               | ** ** | **Operating Partnership** | ** ** | **Properties** | ** ** | **Properties** | ** ** |
| ** **                                                               | ** ** | **Dollar**                     | ** ** | **Percent**    | ** ** | **Dollar**     | ** ** | **Percent** | ** ** | **Dollar** | ** ** | **Percent** | ** ** |
| **(dollars in thousands)**                                     | ** ** | **Change**                     | ** ** | **Change**     | ** ** | **Change**     | ** ** | **Change** | ** ** | **Change** | ** ** | **Change** | ** ** |
| **Revenue from rental operations  and other:**                      | ** ** | ** **                     | ** ** | ** **     | ** ** | ** **     | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Base rents                                                               |       | $                              | 9,149      |           | 6.9        | %              | $          | 5,172 |   | 3.9 | % | $ | 3,977 |   | 3.0 | % |
| Escalations and  recoveries  from tenants                           |       | 2,494                          |       | 10.7           |       | 1,847          |       | 7.9 |   | 647 |   | 2.8 |   |
| Other income                                                             |       | (1,547                         | )          | (28.6          | )          | (1,614         | )          | (29.8 | ) | 67 |   | 1.2 |   |
| Total                                                                    |       | $                              | 10,096     |           | 6.2        | %              | $          | 5,405 |   | 3.3 | % | $ | 4,691 |   | 2.9 | % |
|                                                                     |       |                           |       |           |       |           |       |   |   |   |   |   |   |
| **Property expenses:**                                                   | ** ** | ** **                     | ** ** | ** **     | ** ** | ** **     | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Real estate taxes                                                        |       | $                              | 2,690      |           | 12.7       | %              | $          | 2,126 |   | 10.0 | % | $ | 564 |   | 2.7 | % |
| Utilities                                                                |       | 2,115                          |       | 16.0           |       | 1,778          |       | 13.4 |   | 337 |   | 2.6 |   |
| Operating services                                                       |       | 1,468                          |       | 5.7            |       | 3,685          |       | 14.3 |   | (2,217 | ) | (8.6 | ) |
| Total                                                                    |       | $                              | 6,273      |           | 10.4       | %              | $          | 7,589 |   | 12.6 | % | $ | (1,316 | ) | (2.2 | )% |
|                                                                     |       |                           |       |           |       |           |       |   |   |   |   |   |   |
| **OTHER DATA:**                                                          | ** ** | ** **                     | ** ** | ** **     | ** ** | ** **     | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Number of Consolidated  Properties (excluding properties held for sale): |       | 255                            |       |           |       | 247            |       |   |   | 8 |   |   |   |
| Square feet*(in thousands)*                                              |       | 29,245                         |       |           |       | 27,913         |       |   |   | 1,332 |   |   |   |

 

Base rents for theSame-Store Properties increased $5.2 million, or 3.9 percent, for 2007 ascompared to 2006, due primarily to an increase in the percentage of spaceleased at the properties in 2007 from 2006. Escalations and recoveries from tenants for the Same-Store Propertiesincreased $1.8 million, or 7.9 percent, for 2007 over 2006, due primarily to anincreased amount of total property expenses in 2007.  Other income for the Same-Store Propertiesdecreased $1.6 million, or 29.8 percent, due primarily to a decrease in leasetermination fees.

Real estate taxeson the Same-Store Properties increased $2.1 million, or 10.0 percent, for 2007as compared to 2006, due primarily to property tax rate increases in certain municipalitiesin 2007.  Utilities for the Same-StoreProperties increased $1.8 million, or 13.4 percent, for 2007 as compared to2006, due primarily to increased electric rates in 2007 as compared to 2006.  Operating services for the Same-StoreProperties increased $3.7 million, or 14.3 percent due primarily to increasedmaintenance costs of $2.1 million, and an increase in salaries and relatedexpenses of $1.3 million, for 2007 as compared to 2006.  Included in the $2.2 million decrease inoperating services of the Acquired Properties for 2007 as compared to 2006 isthe effect of a decrease of $3.3 million in 2007 resulting from thecontribution of the Gale facilities management business to an unconsolidatedjoint venture in late 2006.

Construction services revenue increased $10.4 million, or 79.9 percent,in 2007 as compared to 2006, due to the effect of the Operating Partnership’sacquisitions of The Gale Company and its related businesses (the “Gale/GreenTransactions”) completed in May 2006. Real estate services revenue decreased by $2.8 million, for 2007 ascompared to 2006, due primarily to the contribution of the Gale facilitiesmanagement business to an unconsolidated joint venture in late 2006.

Direct construction costs increased $10.1 million, or 79.9 percent, in2007 as compared to 2006, due primarily to the effect of the Gale/GreenTransactions.  General and administrativeexpense increased by $1.0 million, or 8.6 percent, for 2007 as compared to 2006due primarily to the effect of the Gale/Green Transactions.

Depreciation andamortization increased by $4.3 million, or 11.0 percent, for 2007 over2006.  Of this increase, $2.6 million, or6.7 percent, is attributable to the Acquired Properties, and $1.7 million, or4.3 percent, is attributable to the Same-Store Properties.

Interest expensedecreased $1.7 million, or 5.1 percent, for 2007 as compared to 2006.  This decrease was due primarily to loweraverage debt balances in 2007 as compared to 2006.

46

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Interest and other investment income increased $1.2 million, or 293.7 percent, for 2007 as compared to2006.  This increase was due primarily tohigher cash balances invested during the period.

Equity in earningsof unconsolidated joint ventures decreased $0.9 million, or 100.5 percent, for2007 as compared to 2006.  The decreasewas due primarily to a loss of $0.5 million in the Route 93 Portfolio and anincreased loss of $0.3 million in the Mack-Green joint venture.

Income fromcontinuing operations decreased to approximately $23.4 million in 2007 from $25.2million in 2006.  The decrease ofapproximately $1.8 million is due to the factors discussed above.

Net income available tocommon unitholders increased by approximately $29.2 million, from $33.3 millionin 2006 to $62.5 million in 2007.  Thisincrease was the result of a realized gain on disposition of rental property of$38.9 million in 2007.  This waspartially offset by a realized gain on disposition of rental property in 2006of $4.9 million, a decrease in income from discontinued operations of $3.0million for 2007 as compared to 2006, and a decrease in income from continuingoperations of $1.8 million.

47

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***Six Months Ended June 30,2007 Compared to Six Months Ended June 30, 2006***
| ** **                                                                            | ** ** | **Six Months Ended  June 30,** | ** ** | **Dollar** | ** ** | **Percent** | ** ** |
|---------------------------------------------------------------------------------------|------------|-----------------------------------------------|------------|------------|------------|-------------|------------|
| **(dollars in thousands)**                                                  | ** ** | **2007**                                      | ** ** | **2006**   | ** ** | **Change**  | ** ** | **Change** | ** ** |
| **Revenue from rental operations  and other:**                                        | ** ** | ** **                                    | ** ** | ** ** | ** ** | ** **  | ** ** | ** ** | ** ** |
| Base rents                                                                            |       | $                                             | 282,039    |       | $          | 260,839     |       | $ | 21,200 |   | 8.1 | % |
| Escalations and  recoveries from tenants                                              |       | 51,986                                        |       | 44,243     |       | 7,743       |       | 17.5 |   |
| Other income                                                                          |       | 6,252                                         |       | 8,184      |       | (1,932      | )          | (23.6 | ) |
| Total revenues  from rental operations                                                |       | 340,277                                       |       | 313,266    |       | 27,011      |       | 8.6 |   |
|                                                                                  |       |                                          |       |       |       |        |       |   |   |
| **Property expenses:**                                                                | ** ** | ** **                                    | ** ** | ** ** | ** ** | ** **  | ** ** | ** ** | ** ** |
| Real estate taxes                                                                     |       | 47,322                                        |       | 41,932     |       | 5,390       |       | 12.9 |   |
| Utilities                                                                             |       | 32,874                                        |       | 27,670     |       | 5,204       |       | 18.8 |   |
| Operating services                                                                    |       | 51,974                                        |       | 46,036     |       | 5,938       |       | 12.9 |   |
| Total property  expenses                                                              |       | 132,170                                       |       | 115,638    |       | 16,532      |       | 14.3 |   |
|                                                                                  |       |                                          |       |       |       |        |       |   |   |
| **Non-property revenues:**                                                            | ** ** | ** **                                    | ** ** | ** ** | ** ** | ** **  | ** ** | ** ** | ** ** |
| Construction services                                                                 |       | 45,810                                        |       | 13,049     |       | 32,761      |       | 251.1 |   |
| Real estate services                                                                  |       | 7,700                                         |       | 8,363      |       | (663        | )          | (7.9 | ) |
| Total non-property  revenues                                                          |       | 53,510                                        |       | 21,412     |       | 32,098      |       | 149.9 |   |
|                                                                                  |       |                                          |       |       |       |        |       |   |   |
| **Non-property expenses:**                                                            | ** ** | ** **                                    | ** ** | ** ** | ** ** | ** **  | ** ** | ** ** | ** ** |
| Direct construction  costs                                                            |       | 43,545                                        |       | 12,579     |       | 30,966      |       | 246.2 |   |
| General and  administrative                                                           |       | 23,940                                        |       | 20,621     |       | 3,319       |       | 16.1 |   |
| Depreciation and  amortization                                                        |       | 85,274                                        |       | 75,955     |       | 9,319       |       | 12.3 |   |
| Total non-property  expenses                                                          |       | 152,759                                       |       | 109,155    |       | 43,604      |       | 40.0 |   |
| Operating income                                                                      |       | 108,858                                       |       | 109,885    |       | (1,027      | )          | (0.9 | ) |
| **Other (expense) income:**                                                           | ** ** | ** **                                    | ** ** | ** ** | ** ** | ** **  | ** ** | ** ** | ** ** |
| Interest expense                                                                      |       | (62,269                                       | )          | (64,109    | )          | 1,840       |       | 2.9 |   |
| Interest and other  investment income                                                 |       | 3,188                                         |       | 1,845      |       | 1,343       |       | 72.8 |   |
| Equity in earnings  (loss) of unconsolidated joint ventures                           |       | (3,927                                        | )          | (599       | )          | (3,328      | )          | (555.6 | ) |
| Minority interest in  consolidated joint ventures                                     |       | 441                                           |       | 30         |       | 411         |       | 1,370.0 |   |
| Gain on sale of  investment in marketable securities                                  |       | —                                        |       | 15,060     |       | (15,060     | )          | (100.0 | ) |
| Total other (expense)  income                                                         |       | (62,567                                       | )          | (47,773    | )          | (14,794     | )          | (31.0 | ) |
|                                                                                  |       |                                          |       |       |       |        |       |   |   |
| Income from continuing  operations                                                    |       | 46,291                                        |       | 62,112     |       | (15,821     | )          | (25.5 | ) |
| Discontinued  operations:                                                             |       |                                          |       |       |       |        |       |   |   |
| Income from  discontinued operations                                                  |       | 1,273                                         |       | 7,431      |       | (6,158      | )          | (82.8 | ) |
| Realized gains (losses)  and unrealized losses on disposition of rental property, net |       | 38,860                                        |       | 4,905      |       | 33,955      |       | 692.2 |   |
| Total discontinued operations,  net                                                   |       | 40,133                                        |       | 12,336     |       | 27,797      |       | 225.3 |   |
| Net income                                                                            |       | 86,424                                        |       | 74,448     |       | 11,976      |       | 16.1 |   |
| Preferred unit  distributions                                                         |       | (1,000                                        | )          | (1,000     | )          | —      |       | — |   |
| Net income available to common unitholders                                            |       | $                                             | 85,424     |       | $          | 73,448      |       | $ | 11,976 |   | 16.3 | % |

 

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The following is asummary of the changes in revenue from rental operations and other, andproperty expenses divided into Same-Store Properties and Acquired Properties:
| ** **                                                               | ** ** | **Total**                      | ** ** | **Same-Store** | ** ** | **Acquired**   | ** ** |
|--------------------------------------------------------------------------|------------|--------------------------------|------------|----------------|------------|----------------|------------|
| ** **                                                               | ** ** | **Operating Partnership** | ** ** | **Properties** | ** ** | **Properties** | ** ** |
| ** **                                                               | ** ** | **Dollar**                     | ** ** | **Percent**    | ** ** | **Dollar**     | ** ** | **Percent** | ** ** | **Dollar** | ** ** | **Percent** | ** ** |
| **(dollars in thousands)**                                     | ** ** | **Change**                     | ** ** | **Change**     | ** ** | **Change**     | ** ** | **Change** | ** ** | **Change** | ** ** | **Change** | ** ** |
| **Revenue  from rental operations  and other:**                     | ** ** | ** **                     | ** ** | ** **     | ** ** | ** **     | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Base rents                                                               |       | $                              | 21,200     |           | 8.1        | %              | $          | 10,997 |   | 4.2 | % | $ | 10,203 |   | 3.9 | % |
| Escalations and  recoveries from tenants                                 |       | 7,743                          |       | 17.5           |       | 6,235          |       | 14.1 |   | 1,508 |   | 3.4 |   |
| Other income                                                             |       | (1,932                         | )          | (23.6          | )          | (2,042         | )          | (25.0 | ) | 110 |   | 1.4 |   |
| Total                                                                    |       | $                              | 27,011     |           | 8.6        | %              | $          | 15,190 |   | 4.9 | % | $ | 11,821 |   | 3.7 | % |
|                                                                     |       |                           |       |           |       |           |       |   |   |   |   |   |   |
| **Property  expenses:**                                                  | ** ** | ** **                     | ** ** | ** **     | ** ** | ** **     | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Real estate  taxes                                                       |       | $                              | 5,390      |           | 12.9       | %              | $          | 3,874 |   | 9.3 | % | $ | 1,516 |   | 3.6 | % |
| Utilities                                                                |       | 5,204                          |       | 18.8           |       | 4,134          |       | 14.9 |   | 1,070 |   | 3.9 |   |
| Operating  services                                                      |       | 5,938                          |       | 12.9           |       | 5,714          |       | 12.4 |   | 224 |   | 0.5 |   |
| Total                                                                    |       | $                              | 16,532     |           | 14.3       | %              | $          | 13,722 |   | 11.9 | % | $ | 2,810 |   | 2.4 | % |
|                                                                     |       |                           |       |           |       |           |       |   |   |   |   |   |   |
| **OTHER  DATA:**                                                         | ** ** | ** **                     | ** ** | ** **     | ** ** | ** **     | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Number of  Consolidated Properties (excluding properties held for sale): |       | 255                            |       |           |       | 240            |       |   |   | 15 |   |   |   |
| Square feet *(in thousands)*                                             |       | 29,245                         |       |           |       | 27,070         |       |   |   | 2,175 |   |   |   |

 

Base rents for theSame-Store Properties increased $11.0 million, or 4.2 percent, for 2007 ascompared to 2006, due primarily to an increase in the percentage of spaceleased at the properties in 2007 from 2006. Escalations and recoveries from tenants for the Same-Store Propertiesincreased $6.2 million, or 14.1 percent, for 2007 over 2006, due primarily to anincreased amount of total property expenses in 2007.  Other income for the Same-Store Propertiesdecreased $2.0 million, or 25.0 percent, due primarily to a decrease in leasetermination fees.

Real estate taxeson the Same-Store Properties increased $3.9 million, or 9.3 percent, for 2007as compared to 2006, due primarily to property tax rate increases in certainmunicipalities in 2007.  Utilities forthe Same-Store Properties increased $4.1 million, or 14.9 percent, for 2007 ascompared to 2006, due primarily to increased electric rates in 2007 as comparedto 2006.  Operating services for theSame-Store Properties increased $5.7 million, or 12.4 percent due primarily toincreased maintenance costs of $2.9 million, and an increase in salaries andrelated expenses of $1.2 million, for 2007. Included in the $224,000 increase in operating services of the AcquiredProperty for 2007 as compared to 2006 is the effect of a decrease of $3.3million in 2007 resulting from the contribution of the Gale facilitiesmanagement business to an unconsolidated joint venture in late 2006.

Construction services revenue increased $32.8 million in 2007 ascompared to 2006, due to the effect of the Operating Partnership’s acquisitionsof The Gale Company and its related businesses (the “Gale/Green Transactions”)completed in May 2006.  Real estateservices revenues decreased by $0.7 million, for 2007 as compared to 2006, dueprimarily to the contribution of the Gale facilities management business to anunconsolidated joint venture in late 2006.

Direct construction costs increased $31.0 million in 2007 as comparedto 2006, due primarily to the effect of the Gale/Green Transactions.  General and administrative expense increasedby $3.3 million, or 16.1 percent, for 2007 as compared to 2006 due primarily tothe effect of the Gale/Green Transactions.

Depreciation andamortization increased by $9.3 million, or 12.3 percent, for 2007 over2006.  Of this increase, $6.7 million, or8.8 percent, is attributable to the Acquired Properties, and $2.6 million, or3.5 percent, is attributable to the Same-Store Properties.

49

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Interest expensedecreased $1.8 million, or 2.9 percent, for 2007 as compared to 2006.  This decrease was due primarily to loweraverage debt balances in 2007 as compared to 2006.

Interest and other investment income increased $1.3 million, or 72.8percent, for 2007 as compared to 2006. This increase was due primarily to higher cash balances invested duringthe period as well as an overall increase in interest rates.

Equity in earningsof unconsolidated joint ventures decreased $3.3 million, or 555.6 percent, for2007 as compared to 2006.  The decreasewas due primarily to an increased loss of $2.1 million in the Mack-Green jointventure, and a loss of $1.4 million in the Route 93 Portfolio.

The OperatingPartnership recognized a gain on sale of investment in marketable securities of$15.1 million in 2006.

Income fromcontinuing operations before minority interest in Operating Partnershipdecreased to approximately $46.3 million in 2007 from $62.1 million in2006.  The decrease of approximately$15.8 million is due to the factors discussed above.

Net income available tocommon unitholders increased by approximately $12.0 million, from $73.4 millionin 2006 to $85.4 million in 2007.  Thisincrease was the result of a realized gain on disposition of rental property of$38.9 million in 2007.  This waspartially offset by a decrease in income from continuing operation of $15.8million for 2007 as compared to 2006, a decrease in income from discontinuedoperations of $6.2 million for 2007 as compared to 2006, and realized a gain ondisposition of rental property of $4.9 million in 2006.

## **LIQUIDITYAND CAPITAL RESOURCES**

## ***Liquidity***

**Overview:**

Historically, rentalrevenue has been the principal source of funds to pay operating expenses, debtservice, capital expenditures and dividends, excluding non-recurring capitalexpenditures.  To the extent that theOperating Partnership’s cash flow from operating activities is insufficient tofinance its non-recurring capital expenditures such as property acquisitions,development and construction costs and other capital expenditures, theOperating Partnership has and expects to continue to finance such activitiesthrough borrowings under its revolving credit facility and other debt andequity financings.

The Operating Partnershipbelieves that with the general downturn in the Operating Partnership’s marketsin recent years, it is reasonably likely that vacancy rates may continue toincrease, effective rental rates on new and renewed leases may continue todecrease and tenant installation costs, including concessions, may continue toincrease in most or all of its markets in 2007. As a result of the potential negative effects on the OperatingPartnership’s revenue from the overall reduced demand for office space, theOperating Partnership’s cash flow could be insufficient to cover increasedtenant installation costs over the short-term. If this situation were to occur, the Operating Partnership expects thatit would finance any shortfalls through borrowings under its revolving creditfacility and other debt and equity financings.

The OperatingPartnership expects to meet its short-term liquidity requirements generallythrough its working capital, net cash provided by operating activities and fromits revolving credit facility.  TheOperating Partnership frequently examines potential property acquisitions anddevelopment projects and, at any given time, one or more of such acquisitionsor development projects may be under consideration.  Accordingly, the ability to fund propertyacquisitions and development projects is a major part of the OperatingPartnership’s financing requirements. The Operating Partnership expects to meet its financing requirementsthrough funds generated from operating activities, proceeds from propertysales, long-term and short-term borrowings (including draws on the OperatingPartnership’s revolving credit facility) and the issuance of additional debtand/or equity securities.

50

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**GaleEarn-Out:**

The agreement toacquire the Gale Company (“Gale Agreement”), which was completed as part of theGale/Green transactions on May 9, 2006, contained earn-out provisions (“Earn-Out”)providing for the payment of contingent purchase consideration of up to $18million in cash based upon the achievement of Gross Income and NOI (as suchterms were defined in the Gale Agreement) targets and other events for thethree years following the closing date.

On May 23, 2007, the Operating Partnership enteredinto an amendment (the “Amendment”) to the Gale Agreement.  The Amendment eliminated the Earn-Out andsubstituted an aggregate of $14 million in payments by the OperatingPartnership consisting of the following:

(1)                                  $8million, which was paid on May 31, 2007;

(2)                                  $3million on May 9, 2008; and

(3)                                  $3million on May 9, 2009.

**Construction Projects:**

On February 22,2007, the Operating Partnership announced that it agreed to develop a 250,000square-foot class A office building for Wyndham Worldwide Corporation for itscorporate headquarters.  The building,which Wyndham Worldwide pre-leased for 15 years, will be developed on a landsite located in the Operating Partnership’s Mack-Cali Business Campus inParsippany, New Jersey.  The building is expected to be completed in thefourth quarter 2008 at a total estimated cost of approximately $64.8 million.

Additionally, theOperating Partnership, through a joint venture with The PRC Group, isconstructing a 92,878 square-foot office property, to be known as Red BankCorporate Plaza, located in Red Bank, New Jersey, on land contributed by itsjoint venture partner.  The project isfully leased to Hovnanian Enterprise, Inc. for a 10-year term.  The total cost of the project, which is expectedto be completed in the third quarter 2007, is estimated to be approximately $27million, of which the Operating Partnership currently expects to fundapproximately $3 million.  On October 20,2006, the venture entered into a $22.0 million construction loan with acommercial bank.  The loan (with abalance as of June 30, 2007, of $16.7 million) carries an interest rate ofLIBOR plus 130 basis points and matures in April 2008.  The loan currently has three one-yearextension options subject to certain conditions, each of which require paymentof a fee.

The OperatingPartnership owns a 15 percent indirect interest in a joint venture which plansto develop approximately 1.2 million square foot mixed-use project in downtownBoston consisting of office and retail space, condominium apartments, a hoteland garage.  The development project,which is subject to government approval, is currently projected to costapproximately $630 million, of which the Operating Partnership is currentlyprojected to invest a total of approximately $20.3 million (of which theOperating Partnership has invested $15.2 million through July 27, 2007).

**REIT Restrictions:**

To maintain its qualification as a REIT, theCorporation must make annual distributions to its stockholders of at least 90percent of its REIT taxable income, determined without regard to the dividendspaid deduction and by excluding net capital gains.  Moreover, the Corporation intends to continueto make regular quarterly distributions to its common stockholders which, basedupon current policy, in the aggregate would equal approximately $173.9 millionon an annualized basis.  However, anysuch distribution, whether for federal income tax purposes or otherwise, wouldonly be paid out of available cash, including borrowings and other sources,after meeting operating requirements, preferred stock dividends anddistributions, and scheduled debt service on the Operating Partnership’s debt.

51

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**Property Lock-Ups:**

The Operating Partnershipmay not dispose of or distribute certain of its properties, currentlycomprising 50 properties with an aggregate net book value of approximately $1.3billion, which were originally contributed by members of either the Mack Group(which includes William L. Mack, Chairman of the Corporation’s Board ofDirectors; David S. Mack, a director of the Corporation; Earle I. Mack, aformer director of the Corporation; and Mitchell E. Hersh, president, chiefexecutive officer and a director of the Corporation), the Robert Martin Group(which includes Martin S. Berger, a director of the Corporation; Robert F.Weinberg, a former director of the Corporation; and Timothy M. Jones, formerpresident of the Corporation), the Cali Group (which includes John R. Cali, adirector of the Corporation and John J. Cali, a former director of theCorporation) or certain other common unitholders, without the express writtenconsent of a representative of the Mack Group, the Robert Martin Group, theCali Group or the specific certain other common unitholders, 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 theappropriate Mack Group, Robert Martin Group, Cali Group members or the specificcertain other common unitholders for the tax consequences of the recognition ofsuch built-in-gains (collectively, the “Property Lock-Ups”).  The aforementioned restrictions do not applyin the event that the Operating Partnership sells all of its properties or inconnection with a sale transaction which the Corporation’s Board of Directorsdetermines is reasonably necessary to satisfy a material monetary default onany unsecured debt, judgment or liability of the Corporation or the OperatingPartnership or to cure any material monetary default on any mortgage secured bya property.  The Property Lock-Ups expireperiodically through 2016.  Upon theexpiration of the Property Lock-Ups, the Operating Partnership generally isrequired to use commercially reasonable efforts to prevent any sale, transferor other disposition of the subject properties from resulting in therecognition of built-in gain to the appropriate Mack Group, Robert MartinGroup, Cali Group members or the specific certain other commonunitholders.  88 of the Corporation’sproperties, with an aggregate net book value of approximately $842.6 million,have lapsed restrictions and are subject to these conditions.

**Unencumbered Properties:**

As of June 30, 2007, the Operating Partnership had 240 unencumberedproperties, totaling 25.7 million square feet, representing 87.7 percent of theOperating Partnership’s total portfolio on a square footage basis.

**Credit Ratings:**

The Operating Partnershiphas 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 seniorunsecured debt of the Operating Partnership. S&P and Fitch have also assigned their BBB- rating to existing andprospective preferred stock offerings of the Corporation.  Moody’s Investors Service (“Moody’s”) hasassigned its Baa2 rating to existing and prospective senior unsecured debt ofthe Operating Partnership and its Baa3 rating to its existing and prospectivepreferred stock offerings of the Corporation.

## ***Cash Flows***

Cash and cash equivalents decreased by $82.3million to $18.9million at June 30, 2007, compared to $101.2 million at December 31,2006.  The decrease is comprised of thefollowing net cash flow items:

(1)                                  $123.3million provided by operating activities.

(2)                                  $303.5million used in investing activities, consisting primarily of the following:

(a)                                     $327.9million used for additions to rental property and related intangibles; plus

(b)                                    $20.1million used in investing in unconsolidated joint ventures; minus

(c)                                     $45.8million received from proceeds from the sales of rental property.

(3)                                  $97.9million provided by financing activities, consisting primarily of thefollowing:

(a)                                  $251.7million in proceeds from the offering of Common Stock; plus

(b)                                 $269million from borrowings under the Operating Partnership’s unsecured creditfacility; minus

(c)                                  $299million used for the repayment of borrowings under the Operating Partnership’sunsecured credit facility; minus

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(d)                                 $21.8million used for the repayment of mortgages, loans payable and otherobligations; minus

(e)                                  $104.2million used for the payment of dividends and distributions.

##### ***Debt Financing***

##### **Summaryof Debt:**

The following is abreakdown of the Operating Partnership’s debt financing as of June 30, 2007:
| ** **                                     | ** ** | **Balance  ($000’s)** | ** ** | **% of  Total** | ** ** | **Weighted Average  Interest Rate (a)** | ** ** | **Weighted Average  Maturity  in Years** | ** ** |
|------------------------------------------------|------------|----------------------------|------------|----------------------|------------|--------------------------------------------------------|------------|----------------------------------------------------|------------|
| Fixed Rate  Unsecured Debt                     |       | $                          | 1,665,629  |                 | 79.94      | %                                                      | 6.29       | %                                                  | 4.80       | ** ** |
| Fixed Rate  Secured Debt and Other Obligations |       | 302,919                    |       | 14.54                | %          | 5.36                                                   | %          | 4.52                                               | ** ** |
| Variable Rate  Unsecured Debt                  |       | 115,000                    |       | 5.52                 | %          | 5.87                                                   | %          | 3.98                                               |       |
|                                           |       |                       |       |                 |       |                                                   |       |                                               |       |
| **Totals/Weighted Average:**                   |       | $                          | 2,083,548  |                 | 100.00     | %                                                      | 6.13       | %                                                  | 4.71       |   |

 

**Debt Maturities:**

Scheduledprincipal payments and related weighted average annual interest rates for theOperating Partnership’s debt as of June 30, 2007 are as follows:
| **Period**                                                                  | ** ** | **Scheduled  Amortization  ($000’s)** | ** ** | **Principal  Maturities  ($000’s)** | ** ** | **Total  ($000’s)** | ** ** | **Weighted Average  Interest Rate of  Future Repayments (a)** | ** ** |
|-----------------------------------------------------------------------------|------------|--------------------------------------------|------------|------------------------------------------|------------|--------------------------|------------|----------------------------------------------------------------------------------------|------------|
| 2007                                                                        |       | $                                          | 11,582     |                                     | $          | —                   |       | $                                                                                      | 11,582     |   | 5.01 | % |
| 2008                                                                        |       | 18,098                                     |       | 12,563                                   |       | 30,661                   |       | 5.25                                                                                   | %          |
| 2009                                                                        |       | 11,258                                     |       | 300,000                                  |       | 311,258                  |       | 7.40                                                                                   | %          |
| 2010                                                                        |       | 2,793                                      |       | 334,500                                  |       | 337,293                  |       | 5.26                                                                                   | %          |
| 2011                                                                        |       | 3,143                                      |       | 415,000                                  |       | 418,143                  |       | 7.35                                                                                   | %          |
| Thereafter                                                                  |       | 9,449                                      |       | 970,766                                  |       | 980,215                  |       | 5.57                                                                                   | %          |
| Sub-total                                                                   |       | 56,323                                     |       | 2,032,829                                |       | 2,089,152                |       | 6.13                                                                                   | %          |
| Adjustment for  unamortized debt discount/premium, net, as of June 30, 2007 |       | (5,604                                     | )          | —                                   |       | (5,604                   | )          |                                                                                   |       |
|                                                                        |       |                                       |       |                                     |       |                     |       |                                                                                   |       |
| Totals/Weighted  Average                                                    |       | $                                          | 50,719     |                                     | $          | 2,032,829                |       | $                                                                                      | 2,083,548  |   | 6.13 | % |

 

**Senior Unsecured Notes:**

The terms of theOperating Partnership’s senior unsecured notes (which totaled approximately$1.6 billion as of June 30, 2007) include certain restrictions and covenantswhich require compliance with financial ratios relating to the maximum amountof debt leverage, the maximum amount of secured indebtedness, the minimumamount of debt service coverage and the maximum amount of unsecured debt as apercent of unsecured assets.

**Unsecured Revolving CreditFacility:**

The Operating Partnership has an unsecured revolving credit facility witha borrowing capacity of $600 million, (expandable to $800 million).  On June 22, 2007, the OperatingPartnership extended and modified the unsecured facility with a group of 23Lenders.  The facility was extended foran additional two years and now matures in June 2011, with an extension optionof one year, which would require a payment of 15 basis points of the thenborrowing capacity of the facility upon exercise.  In addition, the interest rate on outstandingborrowings (not electing the Operating Partnership’s competitive bid feature)was reduced by 10 basis points to LIBOR plus 55 basis points at 

53

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the BBB/Baa2pricing level.  As of July 27, 2007, theOperating Partnership had $160 million of outstanding borrowings under itsunsecured revolving credit facility.

The facility has acompetitive bid feature, which allows the Operating Partnership to solicit bidsfrom lenders under the facility to borrow up to $300 million at interest ratesless than the current LIBOR plus 55 basis point spread.  The Operating Partnership may also elect aninterest rate representing the higher of the lender’s prime rate or the FederalFunds rate plus 50 basis points.  The unsecuredfacility also requires a 15 basis point facility fee on the current borrowingcapacity payable quarterly in arrears.

The interest rate and thefacility fee are subject to adjustment, on a sliding scale, based upon theoperating partnership’s unsecured debt ratings. In the event of a change in the Operating Partnership’s unsecured debtrating, the interest and facility fee rates will be adjusted in accordance withthe 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 ratings or  less than BBB-/Baa3/BBB-                                                                              |       | 100.0                                                                                   |       | 25.0                                     |       |
| BBB-/Baa3/BBB-                                                                                                       |       | 75.0                                                                                    |       | 20.0                                     |       |
| BBB/Baa2/BBB  (current)                                                                                              |       | 55.0                                                                                    |       | 15.0                                     |       |
| BBB+/Baa1/BBB+                                                                                                       |       | 42.5                                                                                    |       | 15.0                                     |       |
| A-/A3/A- or higher                                                                                                   |       | 37.5                                                                                    |       | 12.5                                     |       |

 

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| (a) | If the Operating Partnership has debt ratings from  two rating agencies, one of which is Standard & Poor’s Rating Services  (“S&P”) or Moody’s Investors Service (“Moody’s”), the rates per the above  table shall be based on the lower of such ratings. If the Operating  Partnership has debt ratings from three rating agencies, one of which is  S&P or Moody’s, the rates per the above table shall be based on the lower  of the two highest ratings. If the Operating Partnership has debt ratings  from only one agency, it will be considered to have no rating or less than  BBB-/Baa3/BBB- per the above table. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

The terms of theunsecured facility include certain restrictions and covenants which limit,among other things, the payment of dividends (as discussed below), theincurrence of additional indebtedness, the incurrence of liens and thedisposition of real estate properties (to the extent that: (i) such propertydispositions cause the Operating Partnership to default on any of the financialratios of the facility described below, or (ii) the property dispositions arecompleted while the Operating Partnership is under an event of default underthe facility, unless, under certain circumstances, such disposition is beingcarried out to cure such default), and which require compliance with financialratios relating to the maximum leverage ratio, the maximum amount of securedindebtedness, the minimum amount of tangible net worth, the minimum amount offixed charge coverage, the maximum amount of unsecured indebtedness, theminimum amount of unencumbered property interest coverage and certaininvestment limitations.  The dividendrestriction referred to above provides that, if an event of default hasoccurred and is continuing, the Corporation will not make any excessdistributions with respect to common stock or other common equity interestsexcept to enable the Corporation to continue to qualify as a REIT under theCode.

The lending groupfor the credit facility consists of: JPMorgan Chase Bank, N.A., asadministrative agent (the “Agent”); Bank of America, N.A.**,**as** **syndicationagent; Scotiabanc, Inc., Wachovia Bank, National Association, and Wells FargoBank, National Association, as documentation agents; SunTrust Bank, as seniormanaging agent; US Bank National Association, Citicorp North America, Inc. andPNC Bank, National Association, as managing agents; and Bank of China, New YorkBranch, The Bank of New York; Chevy Chase Bank, F.S.B., The Royal Bank ofScotland PLC, Mizuho Corporate Bank, Ltd., The Bank of Tokyo-Mitsubishi UFJ,Ltd. (Successor by merger to UFJ Bank Limited), North Fork Bank, Bank HapoalimB.M., Comerica Bank, Chang Hwa Commercial Bank, Ltd., New York Branch, FirstCommercial Bank, New York Agency, Mega International Commercial Bank Co. Ltd.,New York Branch, Deutsche Bank Trust Company Americas and Hua Nan CommercialBank, New York Agency, as participants.

**Mortgages,Loans Payable and Other Obligations:**

The Operating Partnershiphas mortgages, loans payable and other obligations which consist of variousloans collateralized by certain of the Operating Partnership’s rentalproperties.  Payments on mortgages, loanspayable and other obligations are generally due in monthly installments ofprincipal and interest, or interest only.

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On February 5,2007, the Operating Partnership repaid its $9.4 million loan with Allstate LifeInsurance Company collateralized by 200 Riser Road, which was scheduled tomature on April 1, 2007, at par, using available cash.

On February 15,2007, the Operating Partnership repaid its $5.9 million loan with State FarmLife Insurance Company collateralized by 6303 Ivy Lane, which was scheduled tomature on July 1, 2007, at par, using available cash.

**DebtStrategy:**

The Operating Partnershipdoes not intend to reserve funds to retire the Operating Partnership’s seniorunsecured notes or its mortgages, loans payable and other obligations uponmaturity.  Instead, the OperatingPartnership will seek to refinance such debt at maturity or retire such debt throughthe issuance of additional equity or debt securities on or before theapplicable maturity dates.  If it cannotraise sufficient proceeds to retire the maturing debt, the OperatingPartnership may draw on its revolving credit facility to retire the maturingindebtedness, which would reduce the future availability of funds under suchfacility.  As of July 27, 2007, theOperating Partnership had $160.0 million in outstanding borrowings under its$600 million unsecured revolving credit facility.  The Operating Partnership is reviewingvarious refinancing options, including the purchase of its senior unsecurednotes in privately-negotiated transactions, the issuance of additional, orexchange of current, unsecured debt, preferred stock, and/or obtaining additionalmortgage debt, some or all of which may be completed during 2007.  The Operating Partnership anticipates thatits available cash and cash equivalents and cash flows from operatingactivities, together with cash available from borrowings and other sources,will be adequate to meet the Operating Partnership’s capital and liquidityneeds both in the short and long-term. However, if these sources of funds are insufficient or unavailable, theOperating Partnership’s ability to make the expected distributions discussedbelow may be adversely affected.

***EquityFinancing and Registration Statements***

**EquityActivity:**

The followingtable presents the changes in the Corporation’s issued and outstanding sharesof Common Stock and the Operating Partnership’s common units for the six monthsended June 30, 2007:
| ** **                                                         | ** ** | **Common** | ** ** | **Common** | ** ** | ** ** | ** ** |
|--------------------------------------------------------------------|------------|------------|------------|------------|------------|------------|------------|
| ** **                                                         | ** ** | **Stock**  | ** ** | **Units**  | ** ** | **Total**  | ** ** |
| Outstanding at  January 1, 2007                                    |       | 62,925,191 |       | 15,342,283 |       | 78,267,474 |       |
| Common Stock offering                                              |       | 4,650,000  |       | —     |       | 4,650,000  |       |
| Stock options exercised                                            |       | 126,160    |       | —     |       | 126,160    |       |
| Common units redeemed for Common Stock                             |       | 206,602    |       | (206,602   | )          | —     |       |
| Common units issued                                                |       | —     |       | 114,911    |       | 114,911    |       |
| Shares issued under Dividend Reinvestment and Stock  Purchase Plan |       | 2,988      |       | —     |       | 2,988      |       |
| Restricted shares issued                                           |       | 13,000     |       | —     |       | 13,000     |       |
|                                                               |       |       |       |       |       |       |       |
| Outstanding at June 30,  2007                                      |       | 67,923,941 |       | 15,250,592 |       | 83,174,533 |       |

 

**ShareRepurchase Program:**

The Corporation hasauthorization to repurchase up to $45.5 million of its outstanding commonstock, which it may repurchase from time to time in open market transactions atprevailing prices or through privately negotiated transactions.

**ShelfRegistration Statements:**

The Corporation has aneffective shelf registration statement on Form S-3 filed with the Securitiesand Exchange Commission (“SEC”) for an aggregate amount of $2.0 billion incommon stock, preferred stock, depositary shares, and/or warrants of theCorporation, under which $260.1 million of securities have been sold throughJuly 27, 2007 and $1.7 billion remains available for future issuances.

55

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The Corporation and theOperating Partnership also have an effective shelf registration statement onForm S-3 filed with the SEC for an aggregate amount of $2.5 billion in commonstock, preferred stock, depositary shares and guarantees of the Corporation anddebt securities of the Operating Partnership, under which $600 million ofsecurities have been sold through July 27, 2007 and $1.9 billion remainsavailable for future issuances.

***Off-BalanceSheet Arrangements***

**UnconsolidatedJoint Venture Debt:**

The debt of the OperatingPartnership’s unconsolidated joint ventures aggregating $591.7 million at June30, 2007, is non-recourse to the Operating Partnership except for customaryexceptions pertaining to such matters as intentional misuse of funds,environmental conditions and material misrepresentations.  The Operating Partnership has also posted a$7.3 million letter of credit in support of the Harborside South Pier jointventure, $3.6 million of which is indemnified by Hyatt.

The OperatingPartnership’s off-balance sheet arrangements are further discussed in Note 4:Investments in Unconsolidated Joint Ventures to the Financial Statements.

***Contractual Obligations***

The followingtable outlines the timing of payment requirements related to the OperatingPartnership’s debt (principal and interest), PILOT agreements, ground lease andother agreements as of June 30, 2007:
| ** **                                            | ** ** | **Payments Due by Period** | ** ** |
|-------------------------------------------------------|------------|-------------------------------------------|------------|
| ** **                                            | ** ** | ** **                                | ** ** | **Less than 1** | ** ** | **1 – 3** | ** ** | **4 – 5** | ** ** | **6 – 10** | ** ** | **After 10** | ** ** |
| **(dollars in thousands)**                  | ** ** | **Total**                                 | ** ** | **Year** | ** ** | **Years** | ** ** | **Years** | ** ** | **Years** | ** ** | **Years** | ** ** |
| Senior unsecured  notes                               |       | $                                         | 2,146,928  |   | $ | 100,494 |   | $ | 629,239 |   | $ | 532,326 |   | $ | 884,869 |   | — |   |
| Revolving credit  facility                            |       | 257,003                                   |       | 6,751 |   | 128,501 |   | 121,751 |   | — |   | — |   |
| Mortgages, loans  payable  and other obligations |       | 409,144                                   |       | 35,731 |   | 231,412 |   | 18,759 |   | 93,874 |   | $ | 29,368 |   |
| Payments in lieu  of taxes (PILOT)                    |       | 68,006                                    |       | 4,194 |   | 12,730 |   | 8,642 |   | 23,532 |   | 18,908 |   |
| Operating lease  payments                             |       | 270                                       |       | 218 |   | 52 |   | — |   | — |   | — |   |
| Ground lease  payments                                |       | 37,697                                    |       | 497 |   | 1,496 |   | 1,002 |   | 2,472 |   | 32,230 |   |
| Gale settlement  payments                             |       | 6,000                                     |       | 3,000 |   | 3,000 |   | — |   | — |   | — |   |
| Total                                                 |       | $                                         | 2,925,048  |   | $ | 150,885 |   | $ | 1,006,430 |   | $ | 682,480 |   | $ | 1,004,747 |   | $ | 80,506 |   |

 

***Inflation***

The OperatingPartnership’s leases with the majority of its tenants provide for recoveriesand escalation charges based upon the tenant’s proportionate share of, and/orincreases in, real estate taxes and certain operating costs, which reduce theOperating Partnership’s exposure to increases in operating costs resulting frominflation.

##### **DISCLOSUREREGARDING FORWARD-LOOKING STATEMENTS**

We consider portions of this information, including the documentsincorporated by reference, to be forward-looking statements within themeaning of Section 21E of the Securities Exchange Act of 1934, asamended.  We intend such forward-lookingstatements to be covered by the safe harbor provisions for forward-lookingstatements contained in Section 21E of such act.  Such forward-looking statements relate to,without limitation, our future economic performance, plans and objectives forfuture operations and projections of revenue and other financial items.  Forward-looking statements can be identifiedby the use of words such as “may,” “will,” “plan,” “should,” “expect,” “anticipate,”“estimate,” “continue” or comparable terminology.  Forward-looking statements are inherentlysubject to risks and uncertainties, many of which we cannot predict withaccuracy and some of which we might not even anticipate.  Although we believe that the expectationsreflected in such forward-looking statements are based upon 

56

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reasonableassumptions at the time made, we can give no assurance that such expectationswill be achieved.  Future events andactual results, financial and otherwise, may differ materially from the resultsdiscussed in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-lookingstatements.

Among the factorsabout which we have made assumptions are:
|   | · |   | changes in the general economic climate and  conditions, including those affecting industries in which our principal  tenants compete;                                                                                                                                             |
|--------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |                                                                                                                                                                                                                                                                               |
|   | · |   | the extent of any tenant bankruptcies or of any  early lease terminations;                                                                                                                                                                                                         |
|   |   |   |                                                                                                                                                                                                                                                                               |
|   | · |   | our 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;                                                                                                                                                                                                                                                        |
|   |   |   |                                                                                                                                                                                                                                                                               |
|   | · |   | our ability to obtain adequate insurance, including  coverage for terrorist acts;                                                                                                                                                                                                  |
|   |   |   |                                                                                                                                                                                                                                                                               |
|   | · |   | the availability of financing;                                                                                                                                                                                                                                                     |
|   |   |   |                                                                                                                                                                                                                                                                               |
|   | · |   | changes in governmental regulation, tax rates and  similar matters; 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. |

 

**Item 3.****                       Quantitativeand Qualitative Disclosures About Market Risk**

Market risk is theexposure to loss resulting from changes in interest rates, foreign currencyexchange rates, commodity prices and equity prices.  In pursuing its business plan, the primarymarket risk to which the Operating Partnership is exposed is interest raterisk.  Changes in the general level ofinterest rates prevailing in the financial markets may affect the spreadbetween the Operating Partnership’s yield on invested assets and cost of fundsand, in turn, its ability to make distributions or payments to its investors.

57

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Approximately $2.0billion of the Operating Partnership’s long-term debt and other obligationsbears interest at fixed rates and therefore the fair value of these instrumentsis affected by changes in market interest rates.  The following table presents principal cashflows**based upon maturity dates of the debtobligations and the related weighted-average interest rates by expectedmaturity dates for the fixed rate debt. The interest rate on the variable rate debt as of June 30, 2007, wasLIBOR plus 55 basis points.
| **(dollars in thousands)**    | ** ** | ** **              | ** ** | ** ** | ** ** | ** ** | ** ** |
|-----------------------------------------|------------|-------------------------|------------|------------|------------|------------|------------|
| **June 30, 2007**             | ** ** | **Maturity Date**  | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Debt,**                               | ** ** | **07/1/07 –** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **including current portion** | ** ** | **12/31/07**            | ** ** | **2008**   | ** ** | **2009**   | ** ** | **2010** | ** ** | **2011** | ** ** | **Thereafter** | ** ** | **Total** | ** ** | **Fair Value** | ** ** |
|                                    |       |                    |       |       |       |       |       |   |   |   |   |   |   |   |   |   |   |
| Fixed Rate                              |       | $                       | 10,270     |       | $          | 29,504     |       | $ | 310,404 |   | $ | 336,398 |   | $ | 302,329 |   | $ | 979,643 |   | $ | 1,968,548 |   | $ | 1,962,839 |   |
| Average Interest  Rate                  |       | 5.01                    | %          | 5.25       | %          | 7.40       | %          | 5.26 | % | 7.91 | % | 5.57 | % | 6.15 | % |   |   |
|                                    |       |                    |       |       |       |       |       |   |   |   |   |   |   |   |   |   |   |
| Variable Rate                           |       |                    |       |       |       |       |       |   |   | $ | 115,000 |   |   |   | $ | 115,000 |   | $ | 115,000 |   |
|                                         |            |                         |            |            |            |            |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

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

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# **Item 4.****                      Controls andProcedures**

*DisclosureControls and Procedures*. The Operating Partnership’s management, with the participation of theCorporation’s president and chief executive officer and chief financialofficer, has evaluated the effectiveness of the Operating Partnership’sdisclosure controls and procedures (as such term is defined in Rules 13a-15(e)and 15d-15(e) under the Exchange Act) as of the end of the period covered bythis report.  Based on such evaluation,the Corporation’s president and chief executive officer and chief financialofficer have concluded that, as of the end of such period, the OperatingPartnership’s disclosure controls and procedures are effective in recording,processing, summarizing and reporting, on a timely basis, information requiredto be disclosed by the Operating Partnership in the reports that it files orsubmits under the Exchange Act.

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

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**MACK-CALIREALTY, L.P. AND SUBSIDIARIES**

**Part II – Other Information**

##### Item 1.                        **Legal Proceedings**

There are no materialpending legal proceedings, other than ordinary routine litigation incidental toits business, to which the Operating Partnership is a party or to which any ofthe Properties is subject.

## Item 1A.              **Risk Factors**

 NotApplicable.

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**Item 2.****                      UnregisteredSales of Equity Securities and Use of Proceeds**

 

(a)                                             **COMMON STOCK**

During the three monthsended June 30, 2007, the Corporation issued 65,080 shares of common stock toholders of common units in the Operating Partnership upon the redemption ofsuch common units in private offerings pursuant to Section 4(2) of theSecurities Act.  The holders of thecommon units were limited partners of the Operating Partnership and accreditedinvestors under Rule 501 of the Securities Act. The common units were converted into an equal number of shares of commonstock.  The Corporation has registeredthe resale of such shares under the Securities Act.

**COMMON UNITS**

In addition, on May 25,2007, the Operating Partnership issued 114,911 common units in the OperatingPartnership to accredited investors under Rule 501 of the Securities Act aspartial consideration for the acquisition of the ownership interests in 43acres of land sites within its Capital Office Park complex in Greenbelt,Maryland.

(b)                                            NotApplicable.

(c)                                             None.

##### **Item3.****                      DefaultsUpon Senior Securities**

Not Applicable.

##### **Item4.****                      Submissionof Matters to a Vote of Security Holders**

(a)                                             On May 23, 2007, the Corporation held itsAnnual Meeting of Stockholders (the “Annual Meeting”) to elect four members ofthe Board of Directors of the Corporation, among other things.

(b)                                            At the Annual Meeting, the Corporation’sstockholders elected the following four Class I directors to serve until theCorporation’s annual meeting of stockholders to be held in 2010; Alan S.Bernikow (Number of shares for: 63,624,592, Number of shares withheld: 516,745,Number of shares abstained: 0), Kenneth M. Duberstein (Number of shares for:63,452,545, Number of shares withheld: 688,792, Number of shares abstained: 0),Vincent Tese (Number of shares for: 62,071,356, Number of shares withheld:2,069,981, Number of shares abstained: 0), and Roy J. Zuckerberg (Number ofshares for: 35,006,701, Number of shares withheld: 29,134,636, Number of sharesabstained: 0).

The following directors’ terms of office as directorsof the Corporation continued following the Annual Meeting: John R. Cali,Mitchell E. Hersh, Nathan Gantcher, David S. Mack, William L. Mack, Alan G.Philibosian, Irvin D. Reid and Robert F. Weinberg.  Immediately following the Annual Meeting,Robert F. Weinberg resigned from the Board of Directors and became a member ofits Advisory Board. Upon Mr. Weinberg’s resignation, the Board of Directorsappointed Martin S. Berger to fill the vacancy of Mr. Weinberg’s unexpired termas a Class II director, which term shall expire on the earlier to occur of the2009 annual meeting of stockholders or Mr. Berger’s resignation or removal.

(c)                                             At the Annual Meeting, the Corporation’sstockholders also voted upon and approved the ratification of the appointmentof PricewaterhouseCoopers LLP as the Corporation’s independent registeredpublic accounting firm for the ensuing year (Number of shares for: 64,055,501,Number of shares against: 41,427, Number of shares abstained: 44,409, Number ofbroker non-votes: 0.)

(d)                                            None.

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**Item 5.****                      OtherInformation**

(a)                                              None.

(b)                                             None.

### **Item 6.****                      Exhibits**

The exhibits required by this item are set forth onthe Exhibit Index attached hereto.

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**MACK-CALIREALTY, L.P. AND SUBSIDIARIES**

**Signatures**

Pursuant to therequirements of the Securities Exchange Act of 1934, the Registrant has dulycaused this report to be signed on its behalf by the undersigned thereunto dulyauthorized.

 
|                                             | Mack-Cali  Realty, L.P. |
|---------------------------------------------|-------------------------|
|                                        | (Registrant)            |
|                                        | By:                     | Mack-Cali  Realty Corporation |
|                                        |                    |  its  General Partner |
|                                        |                    |   |
| Date:    August 1, 2007 | By:                     | /s/ Mitchell E. Hersh |   |
|                                        |                    | Mitchell E. Hersh |
|                                        |                    | President and |
|                                        |                    | Chief Executive  Officer |
|                                        |                    | * * |
|                                        |                    | * * |
| Date:    August 1, 2007 | By:                     | /s/ Barry Lefkowitz |   |
|                                        |                    | Barry Lefkowitz |
|                                        |                    | Executive Vice President and |
|                                        |                    | Chief Financial  Officer |

 

63

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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             |       | Amendment No. 2 to the Mack-Cali Realty Corporation  Amended and Restated Bylaws dated May 24, 2006 (filed as Exhibit 3.1 to the  Corporation’s Form 8-K dated May 24, 2006 and incorporated herein by  reference).                                                                                                                                     |
|            |       |                                                                                                                                                                                                                                                                                                                                                         |
| 3.5             |       | 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).                                                                                             |
|            |       |                                                                                                                                                                                                                                                                                                                                                         |
| 3.6             |       | 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). |
|            |       |                                                                                                                                                                                                                                                                                                                                                         |
| 3.7             |       | 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).                                                                       |
|            |       |                                                                                                                                                                                                                                                                                                                                                         |
| 3.8             |       | Third Amendment to the Second Amended and Restated  Agreement of Limited Partnership of Mack-Cali Realty, L.P. dated September 30,  2003 (filed as Exhibit 3.7 to the Operating Partnership’s Form 10-Q  dated September 30, 2003 and incorporated herein by reference).                                                            |
|            |       |                                                                                                                                                                                                                                                                                                                                                         |
| 3.9             |       | 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).                                                                    |
|            |       |                                                                                                                                                                                                                                                                                                                                                         |
| 3.10            |       | 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).                                                                                             |
|            |       |                                                                                                                                                                                                                                                                                                                                                         |
| 3.11            |       | Certificate of Designation for the 8% Series C  Cumulative Redeemable Perpetual Preferred Operating Partnership Units dated  March 14, 2003 (filed as Exhibit 3.2 to the Operating Partnership’s  Form 8-K dated March 14, 2003 and incorporated herein by  reference).                                                        |

 

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| Exhibit  Number | ** ** | **Exhibit Title**                                                                                                                                                                                                                                                                                                                      |
|-----------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            |       |                                                                                                                                                                                                                                                                                                                                        |
| 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).                               |
|            |       |                                                                                                                                                                                                                                                                                                                                        |
| 4.11            |       | Supplemental Indenture No. 8 dated as of  February 9, 2004, 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 February 9, 2004 and incorporated  herein by reference).                         |

 

65

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| Exhibit  Number | ** ** | **Exhibit Title**                                                                                                                                                                                                                                                                                                                                     |
|-----------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            |       |                                                                                                                                                                                                                                                                                                                                                       |
| 4.12            |       | Supplemental Indenture No. 9 dated as of  March 22, 2004, 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 22, 2004 and  incorporated herein by reference).                                            |
|            |       |                                                                                                                                                                                                                                                                                                                                                       |
| 4.13            |       | Supplemental Indenture No. 10 dated as of  January 25, 2005, 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 January 25, 2005 and  incorporated herein by reference).                                       |
|            |       |                                                                                                                                                                                                                                                                                                                                                       |
| 4.14            |       | Supplemental Indenture No. 11 dated as of  April 15, 2005, 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 April 15, 2005 and  incorporated herein by reference).                                           |
|            |       |                                                                                                                                                                                                                                                                                                                                                       |
| 4.15            |       | Supplemental Indenture No. 12 dated as of  November 30, 2005, 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 November 30, 2005 and  incorporated herein by reference).                                     |
|            |       |                                                                                                                                                                                                                                                                                                                                                       |
| 4.16            |       | Supplemental Indenture No. 13 dated as of  January 24, 2006, 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 January 18, 2006 and  incorporated herein by reference).                                       |
| ** **      | ** ** | ** **                                                                                                                                                                                                                                                                                                                                                 |
| 4.17            |       | Deposit Agreement dated March 14, 2003 by and  among Mack-Cali Realty Corporation, EquiServe Trust Operating Partnership,  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 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).                                                                 |
|            |       |                                                                                                                                                                                                                                                                                                                                                       |
| 10.3            |       | 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).                                                                 |
|            |       |                                                                                                                                                                                                                                                                                                                                                       |
| 10.4            |       | 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).                                                                        |
|            |       |                                                                                                                                                                                                                                                                                                                                                       |
| 10.5            |       | Employment Agreement dated as of May 9, 2006 by  and between Mark Yeager and Mack-Cali Realty Corporation (filed as Exhibit  10.15 to the Operating Partnership’s Form 8-K dated May 9, 2006 and  incorporated herein by reference).                                                                                                             |

 

66

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| Exhibit  Number | ** ** | **Exhibit Title**                                                                                                                                                                                                                                                                                                    |
|-----------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            |       |                                                                                                                                                                                                                                                                                                                      |
| 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 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).                                                |
|            |       |                                                                                                                                                                                                                                                                                                                      |
| 10.8            |       | 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).                                                |
|            |       |                                                                                                                                                                                                                                                                                                                      |
| 10.9            |       | 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).                                             |
|            |       |                                                                                                                                                                                                                                                                                                                      |
| 10.10           |       | 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).                                            |
|            |       |                                                                                                                                                                                                                                                                                                                      |
| 10.11           |       | 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).                                          |
| ** **      | ** ** | ** **                                                                                                                                                                                                                                                                                                                |
| 10.12           |       | 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).                                                    |
|            |       |                                                                                                                                                                                                                                                                                                                      |
| 10.13           |       | 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). |
|            |       |                                                                                                                                                                                                                                                                                                                      |
| 10.14           |       | 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).                                            |
|            |       |                                                                                                                                                                                                                                                                                                                      |
| 10.15           |       | 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).                                                      |
|            |       |                                                                                                                                                                                                                                                                                                                      |
| 10.16           |       | 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).   |

 

67

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| Exhibit  Number | ** ** | **Exhibit Title**                                                                                                                                                                                                                                                                                                           |
|-----------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            |       |                                                                                                                                                                                                                                                                                                                             |
| 10.17           |       | 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).                                                  |
|            |       |                                                                                                                                                                                                                                                                                                                             |
| 10.18           |       | 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).                                                            |
|            |       |                                                                                                                                                                                                                                                                                                                             |
| 10.19           |       | 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).         |
|            |       |                                                                                                                                                                                                                                                                                                                             |
| 10.20           |       | 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).       |
|            |       |                                                                                                                                                                                                                                                                                                                             |
| 10.21           |       | 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).                                              |
|            |       |                                                                                                                                                                                                                                                                                                                             |
| 10.22           |       | 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).                                                        |
|            |       |                                                                                                                                                                                                                                                                                                                             |
| 10.23           |       | 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).                                                       |
|            |       |                                                                                                                                                                                                                                                                                                                             |
| 10.24           |       | 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). |
|            |       |                                                                                                                                                                                                                                                                                                                             |
| 10.25           |       | 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).   |
|            |       |                                                                                                                                                                                                                                                                                                                             |
| 10.26           |       | Restricted Share Award Agreement effective as of  December 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 December 2, 2003 and incorporated herein by  reference).                                              |

 

68

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| Exhibit  Number | ** ** | **Exhibit Title**                                                                                                                                                                                                                                                            |
|-----------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            |       |                                                                                                                                                                                                                                                                              |
| 10.27           |       | Tax Gross Up Agreement effective as of  December 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 December 2, 2003 and incorporated herein by  reference).         |
|            |       |                                                                                                                                                                                                                                                                              |
| 10.28           |       | Restricted Share Award Agreement effective as of  December 2, 2003 by and between Mack-Cali Realty Corporation and Barry  Lefkowitz (filed as Exhibit 10.5 to the Corporation’s Form 8-K  dated December 2, 2003 and incorporated herein by reference).  |
|            |       |                                                                                                                                                                                                                                                                              |
| 10.29           |       | Tax Gross Up Agreement effective as of  December 2, 2003 by and between Mack-Cali Realty Corporation and Barry  Lefkowitz (filed as Exhibit 10.6 to the Corporation’s Form 8-K  dated December 2, 2003 and incorporated herein by reference).            |
|            |       |                                                                                                                                                                                                                                                                              |
| 10.30           |       | Restricted Share Award Agreement effective as of  December 2, 2003 by and between Mack-Cali Realty Corporation and Roger  W. Thomas (filed as Exhibit 10.7 to the Corporation’s Form 8-K  dated December 2, 2003 and incorporated herein by reference).  |
|            |       |                                                                                                                                                                                                                                                                              |
| 10.31           |       | Tax Gross Up Agreement effective as of  December 2, 2003 by and between Mack-Cali Realty Corporation and Roger  W. Thomas (filed as Exhibit 10.8 to the Corporation’s Form 8-K  dated December 2, 2003 and incorporated herein by reference).            |
|            |       |                                                                                                                                                                                                                                                                              |
| 10.32           |       | Restricted Share Award Agreement effective as of  December 2, 2003 by and between Mack-Cali Realty Corporation and Michael  Grossman (filed as Exhibit 10.9 to the Corporation’s Form 8-K dated  December 2, 2003 and incorporated herein by reference). |
|            |       |                                                                                                                                                                                                                                                                              |
| 10.33           |       | Tax Gross Up Agreement effective as of  December 2, 2003 by and between Mack-Cali Realty Corporation and Michael  Grossman (filed as Exhibit 10.10 to the Corporation’s Form 8-K  dated December 2, 2003 and incorporated herein by reference).          |
|            |       |                                                                                                                                                                                                                                                                              |
| 10.34           |       | Restricted Share Award Agreement effective  December 7, 2004 by and between Mack-Cali Realty Corporation and  Mitchell E. Hersh (filed as Exhibit 10.2 to the Corporation’s  Form 8-K dated December 7, 2004 and incorporated herein by  reference).     |
|            |       |                                                                                                                                                                                                                                                                              |
| 10.35           |       | Tax Gross Up Agreement effective December 7,  2004 by and between Mack-Cali Realty Corporation and Mitchell E. Hersh (filed  as Exhibit 10.3 to the Corporation’s Form 8-K dated  December 7, 2004 and incorporated herein by reference).                |
|            |       |                                                                                                                                                                                                                                                                              |
| 10.36           |       | Restricted Share Award Agreement effective  December 7, 2004 by and between Mack-Cali Realty Corporation and Barry  Lefkowitz (filed as Exhibit 10.4 to the Corporation’s Form 8-K  dated December 7, 2004 and incorporated herein by reference).        |
|            |       |                                                                                                                                                                                                                                                                              |
| 10.37           |       | Tax Gross Up Agreement effective December 7,  2004 by and between Mack-Cali Realty Corporation and Barry Lefkowitz (filed  as Exhibit 10.5 to the Corporation’s Form 8-K dated  December 7, 2004 and incorporated herein by reference).                  |

 

69

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| Exhibit  Number | ** ** | **Exhibit Title**                                                                                                                                                                                                                                                                    |
|-----------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            |       |                                                                                                                                                                                                                                                                                      |
| 10.38           |       | Restricted Share Award Agreement effective  December 7, 2004 by and between Mack-Cali Realty Corporation and Roger  W. Thomas (filed as Exhibit 10.6 to the Corporation’s Form 8-K  dated December 7, 2004 and incorporated herein by reference).                |
|            |       |                                                                                                                                                                                                                                                                                      |
| 10.39           |       | Tax Gross Up Agreement effective December 7,  2004 by and between Mack-Cali Realty Corporation and Roger W. Thomas (filed  as Exhibit 10.7 to the Corporation’s Form 8-K dated  December 7, 2004 and incorporated herein by reference).                          |
|            |       |                                                                                                                                                                                                                                                                                      |
| 10.40           |       | Restricted Share Award Agreement effective  December 7, 2004 by and between Mack-Cali Realty Corporation and Michael  A. Grossman (filed as Exhibit 10.8 to the Corporation’s Form 8-K  dated December 7, 2004 and incorporated herein by reference).            |
|            |       |                                                                                                                                                                                                                                                                                      |
| 10.41           |       | Tax Gross Up Agreement effective December 7,  2004 by and between Mack-Cali Realty Corporation and Michael A. Grossman (filed  as Exhibit 10.9 to the Corporation’s Form 8-K dated  December 7, 2004 and incorporated herein by reference).                      |
|            |       |                                                                                                                                                                                                                                                                                      |
| 10.42           |       | Restricted Share Award Agreement effective  December 6, 2005 by and between Mack-Cali Realty Corporation and  Mitchell E. Hersh (filed as Exhibit 10.2 to the Operating Partnership’s  Form 8-K dated December 6, 2005 and incorporated herein by  reference).   |
|            |       |                                                                                                                                                                                                                                                                                      |
| 10.43           |       | Tax Gross Up Agreement effective December 6,  2005 by and between Mack-Cali Realty Corporation and Mitchell E. Hersh (filed  as Exhibit 10.3 to the Operating Partnership’s Form 8-K dated  December 6, 2005 and incorporated herein by reference).              |
|            |       |                                                                                                                                                                                                                                                                                      |
| 10.44           |       | Restricted Share Award Agreement effective  December 6, 2005 by and between Mack-Cali Realty Corporation and Barry  Lefkowitz (filed as Exhibit 10.4 to the Operating Partnership’s  Form 8-K dated December 6, 2005 and incorporated herein by  reference).     |
|            |       |                                                                                                                                                                                                                                                                                      |
| 10.45           |       | Tax Gross Up Agreement effective December 6,  2005 by and between Mack-Cali Realty Corporation and Barry Lefkowitz (filed  as Exhibit 10.5 to the Operating Partnership’s Form 8-K dated  December 6, 2005 and incorporated herein by reference).                |
|            |       |                                                                                                                                                                                                                                                                                      |
| 10.46           |       | Restricted Share Award Agreement effective  December 6, 2005 by and between Mack-Cali Realty Corporation and Roger  W. Thomas (filed as Exhibit 10.6 to the Operating Partnership’s  Form 8-K dated December 6, 2005 and incorporated herein by  reference).     |
|            |       |                                                                                                                                                                                                                                                                                      |
| 10.47           |       | Tax Gross Up Agreement effective December 6,  2005 by and between Mack-Cali Realty Corporation and Roger W. Thomas (filed  as Exhibit 10.7 to the Operating Partnership’s Form 8-K dated  December 6, 2005 and incorporated herein by reference).                |
|            |       |                                                                                                                                                                                                                                                                                      |
| 10.48           |       | Restricted Share Award Agreement effective  December 6, 2005 by and between Mack-Cali Realty Corporation and Michael  A. Grossman (filed as Exhibit 10.8 to the Operating Partnership’s  Form 8-K dated December 6, 2005 and incorporated herein by  reference). |

 

70

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| Exhibit  Number | ** ** | **Exhibit Title**                                                                                                                                                                                                                                                         |
|-----------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            |       |                                                                                                                                                                                                                                                                           |
| 10.49           |       | Tax Gross Up Agreement effective December 6,  2005 by and between Mack-Cali Realty Corporation and Michael A. Grossman  (filed as Exhibit 10.9 to the Operating Partnership’s Form 8-K  dated December 6, 2005 and incorporated herein by reference). |
|            |       |                                                                                                                                                                                                                                                                           |
| 10.50           |       | Restricted Share Award Agreement by and between  Mack-Cali Realty Corporation and Mark Yeager (filed as Exhibit 10.16 to the  Operating Partnership’s Form 8-K dated May 9, 2006 and incorporated herein by  reference).                                                  |
|            |       |                                                                                                                                                                                                                                                                           |
| 10.51           |       | Restricted Share Award Agreement effective December  5, 2006 by and between Mack-Cali Realty Corporation and Mitchell E. Hersh  (filed as Exhibit 10.1 to the Operating Partnership’s Form 8-K dated December  5, 2006 and incorporated herein by reference).             |
|            |       |                                                                                                                                                                                                                                                                           |
| 10.52           |       | Tax Gross Up Agreement effective December 5, 2006 by  and between Mack-Cali Realty Corporation and Mitchell E. Hersh (filed as  Exhibit 10.2 to the Operating Partnership’s Form 8-K dated December 5, 2006  and incorporated herein by reference).                       |
|            |       |                                                                                                                                                                                                                                                                           |
| 10.53           |       | Restricted Share Award Agreement effective December  5, 2006 by and between Mack-Cali Realty Corporation and Mitchell E. Hersh  (filed as Exhibit 10.3 to the Operating Partnership’s Form 8-K dated December  5, 2006 and incorporated herein by reference).             |
|            |       |                                                                                                                                                                                                                                                                           |
| 10.54           |       | Tax Gross Up Agreement effective December 5, 2006 by  and between Mack-Cali Realty Corporation and Mitchell E. Hersh (filed as  Exhibit 10.4 to the Operating Partnership’s Form 8-K dated December 5, 2006  and incorporated herein by reference).                       |
|            |       |                                                                                                                                                                                                                                                                           |
| 10.55           |       | Restricted Share Award Agreement effective December  5, 2006 by and between Mack-Cali Realty Corporation and Barry Lefkowitz  (filed as Exhibit 10.5 to the Operating Partnership’s Form 8-K dated December  5, 2006 and incorporated herein by reference).               |
|            |       |                                                                                                                                                                                                                                                                           |
| 10.56           |       | Tax Gross Up Agreement effective December 5, 2006 by  and between Mack-Cali Realty Corporation and Barry Lefkowitz (filed as  Exhibit 10.6 to the Operating Partnership’s Form 8-K dated December 5, 2006  and incorporated herein by reference).                         |
|            |       |                                                                                                                                                                                                                                                                           |
| 10.57           |       | Restricted Share Award Agreement effective December  5, 2006 by and between Mack-Cali Realty Corporation and Barry Lefkowitz  (filed as Exhibit 10.7 to the Operating Partnership’s Form 8-K dated December  5, 2006 and incorporated herein by reference).               |
|            |       |                                                                                                                                                                                                                                                                           |
| 10.58           |       | Tax Gross Up Agreement effective December 5, 2006 by  and between Mack-Cali Realty Corporation and Barry Lefkowitz (filed as  Exhibit 10.8 to the Operating Partnership’s Form 8-K dated December 5, 2006  and incorporated herein by reference).                         |

 

71

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| Exhibit  Number | ** ** | **Exhibit Title**                                                                                                                                                                                                                                                |
|-----------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            |       |                                                                                                                                                                                                                                                                  |
| 10.59           |       | Restricted Share Award Agreement effective December  5, 2006 by and between Mack-Cali Realty Corporation and Roger W. Thomas  (filed as Exhibit 10.9 to the Operating Partnership’s Form 8-K dated December  5, 2006 and incorporated herein by reference).      |
|            |       |                                                                                                                                                                                                                                                                  |
| 10.60           |       | Tax Gross Up Agreement effective December 5, 2006 by  and between Mack-Cali Realty Corporation and Roger W. Thomas (filed as  Exhibit 10.10 to the Operating Partnership’s Form 8-K dated December 5, 2006  and incorporated herein by reference).               |
|            |       |                                                                                                                                                                                                                                                                  |
| 10.61           |       | Restricted Share Award Agreement effective December  5, 2006 by and between Mack-Cali Realty Corporation and Roger W. Thomas  (filed as Exhibit 10.11 to the Operating Partnership’s Form 8-K dated  December 5, 2006 and incorporated herein by reference).     |
|            |       |                                                                                                                                                                                                                                                                  |
| 10.62           |       | Tax Gross Up Agreement effective December 5, 2006 by  and between Mack-Cali Realty Corporation and Roger W. Thomas (filed as  Exhibit 10.12 to the Operating Partnership’s Form 8-K dated December 5, 2006  and incorporated herein by reference).               |
|            |       |                                                                                                                                                                                                                                                                  |
| 10.63           |       | Restricted Share Award Agreement effective December  5, 2006 by and between Mack-Cali Realty Corporation and Michael A. Grossman  (filed as Exhibit 10.13 to the Operating Partnership’s Form 8-K dated  December 5, 2006 and incorporated herein by reference). |
|            |       |                                                                                                                                                                                                                                                                  |
| 10.64           |       | Tax Gross Up Agreement effective December 5, 2006 by  and between Mack-Cali Realty Corporation and Michael A. Grossman (filed as  Exhibit 10.14 to the Operating Partnership’s Form 8-K dated December 5, 2006  and incorporated herein by reference).           |
|            |       |                                                                                                                                                                                                                                                                  |
| 10.65           |       | Restricted Share Award Agreement effective December  5, 2006 by and between Mack-Cali Realty Corporation and Michael A. Grossman  (filed as Exhibit 10.15 to the Operating Partnership’s Form 8-K dated  December 5, 2006 and incorporated herein by reference). |
|            |       |                                                                                                                                                                                                                                                                  |
| 10.66           |       | Tax Gross Up Agreement effective December 5, 2006 by  and between Mack-Cali Realty Corporation and Michael A. Grossman (filed as  Exhibit 10.16 to the Operating Partnership’s Form 8-K dated December 5, 2006  and incorporated herein by reference).           |
|            |       |                                                                                                                                                                                                                                                                  |
| 10.67           |       | Restricted Share Award Agreement effective December  5, 2006 by and between Mack-Cali Realty Corporation and Mark Yeager (filed as  Exhibit 10.17 to the Operating Partnership’s Form 8-K dated December 5, 2006  and incorporated herein by reference).         |
|            |       |                                                                                                                                                                                                                                                                  |
| 10.68           |       | Tax Gross Up Agreement effective December 5, 2006 by  and between Mack-Cali Realty Corporation and Mark Yeager (filed as Exhibit  10.18 to the Operating Partnership’s Form 8-K dated December 5, 2006 and  incorporated herein by reference).                   |
|            |       |                                                                                                                                                                                                                                                                  |
| 10.69           |       | Restricted Share Award Agreement effective December  5, 2006 by and between Mack-Cali Realty Corporation and Mark Yeager (filed as  Exhibit 10.19 to the Operating Partnership’s Form 8-K dated December 5, 2006  and incorporated herein by reference).         |
|            |       |                                                                                                                                                                                                                                                                  |

 

72

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| Exhibit  Number | ** ** | **Exhibit Title**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|-----------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.70           |       | Tax Gross Up Agreement effective December 5, 2006 by  and between Mack-Cali Realty Corporation and Mark Yeager (filed as Exhibit  10.20 to the Operating Partnership’s Form 8-K dated December 5, 2006 and  incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.71           |       | 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). |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.72           |       | Second Amended and Restated Revolving Credit  Agreement among Mack-Cali Realty, L.P., JPMorgan Chase Bank, N.A., Bank of  America, N.A., and other lending institutions that are or may become a party  to the Second Amended and Restated Revolving Credit Agreement dated as of  November 23, 2004 (filed as Exhibit 10.1 to the Operating  Partnership’s Form 8-K dated November 23, 2004 and incorporated  herein by reference).                                                                                                                                                                                                                                                                               |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.73           |       | Extension and Modification Agreement dated as of  September 16, 2005 by and among Mack-Cali Realty, L.P., JPMorgan Chase  Bank, N.A., as administrative agent, and the several Lenders Party thereto  (filed as Exhibit 10.1 to the Operating Partnership’s Form 8-K  dated September 16, 2005 and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                              |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.74           |       | Second Modification Agreement dated as of July 14,  2006 by and among Mack-Cali Realty, L.P., JPMorgan Chase Bank, N.A., as  administrative agent, and the several Lenders party thereto (filed as Exhibit  10.1 to the Operating Partnership’s Form 8-K dated July 14, 2006 and  incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.75           |       | Extension and Third Modification Agreement dated as  of June 22, 2007 by and among Mack-Cali Realty, L.P., JPMorgan Chase Bank,  N.A., as administrative agent, and the several Lenders party thereto. (filed  as Exhibit 10.1 to the Operating Partnership’s Form 8-K dated June 22, 2007  and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                     |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.76           |       | Amended and Restated Master Loan Agreement dated as  of November 12, 2004 among Mack-Cali Realty, L.P., and Affiliates of  Mack-Cali Realty Corporation and Mack-Cali Realty, L.P., as Borrowers,  Mack-Cali Realty Corporation and Mack-Cali Realty L.P., as Guarantors and The  Prudential Insurance Company of America, as Lender (filed as  Exhibit 10.1 to the Operating Partnership’s Form 8-K dated November 12,  2004 and incorporated herein by reference).                                                                                                                                                                                                                                               |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.77           |       | 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).                                                                                                                                                                                                                                                                                                                                  |

 

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| Exhibit   Number | ** ** | **Exhibit Title**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|             |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.78            |       | 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).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|             |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.79            |       | 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).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|             |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.80            |       | 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).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|             |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.81            |       | 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 Corporation’s Form 10-Q  dated June 30, 2002 and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|             |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.82            |       | 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).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|             |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.83            |       | Mack-Cali Realty Corporation 2004 Incentive Stock  Plan (filed as Exhibit 10.1 to the Corporation’s Registration Statement  on Form S-8, Registration No. 333-116437, and incorporated herein  by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|             |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.84            |       | 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).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|             |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.85            |       | Form of Indemnification Agreement by and  between Mack-Cali Realty Corporation and each of William L. Mack, John J.  Cali, Mitchell E. Hersh, John R. Cali, David S. Mack, Martin S. Berger, Alan  S. Bernikow, Kenneth M. Duberstein, Martin D. Gruss, Nathan Gantcher, Vincent  Tese, Roy J. Zuckerberg, Alan G. Philibosian, Irvin D. Reid, Robert F.  Weinberg, Barry Lefkowitz, Roger W. Thomas, Michael A. Grossman, Mark Yeager,  Anthony Krug, Dean Cingolani, Anthony DeCaro Jr., Mark Durno, William  Fitzpatrick, John Kropke, Nicholas Mitarotonda, Jr., Michael Nevins,  Virginia Sobol, Albert Spring, Daniel Wagner, Deborah Franklin, John Marazzo,  Christopher DeLorenzo, Jeffrey Warner, Diane Chayes and James Corrigan (filed  as Exhibit 10.28 to the Operating Partnership’s Form 10-Q dated  September 30, 2002 and incorporated herein by reference). |
|             |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.86            |       | Indemnification Agreement dated October 22,  2002 by and between Mack-Cali Realty Corporation and John Crandall (filed as  Exhibit 10.29 to the Operating Partnership’s Form 10-Q dated  September 30, 2002 and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

 

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| Exhibit  Number | ** ** | **Exhibit Title**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|-----------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.87           |       | 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).                                                                                                                                                                                                                                                                                                  |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.88           |       | Limited Partnership Agreement of Meadowlands  Mills/Mack-Cali Limited Partnership by and between Meadowlands Mills Limited  Partnership, Mack-Cali Meadowlands Entertainment L.L.C. and Mack-Cali  Meadowlands Special L.L.C. dated November 25, 2003 (filed as  Exhibit 10.1 to the Corporation’s Form 8-K dated December 3,  2003 and incorporated herein by reference).                                                                                                                                                                                                                                                                                                             |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.89           |       | Redevelopment Agreement by and between the New  Jersey Sports and Exposition Authority and Meadowlands Mills/Mack-Cali  Limited Partnership dated December 3, 2003 (filed as Exhibit 10.2  to the Corporation’s Form 8-K dated December 3, 2003 and  incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.90           |       | First Amendment to Redevelopment Agreement by and  between the New Jersey Sports and Exposition Authority and Meadowlands  Mills/Mack-Cali Limited Partnership dated October 5, 2004 (filed as  Exhibit 10.54 to the Corporation’s Form 10-Q dated  September 30, 2004 and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                          |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.91           |       | Letter Agreement by and between Mack-Cali Realty  Corporation and The Mills Corporation dated October 5, 2004 (filed as Exhibit 10.55  to the Corporation’s Form 10-Q dated September 30, 2004 and  incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.92           |       | First Amendment to Limited Partnership Agreement of  Meadowlands Mills/Mack-Cali Limited Partnership by and between Meadowlands  Mills Limited Partnership, Mack-Cali Meadowlands Entertainment L.L.C. and  Mack-Cali Meadowlands Special L.L.C. dated as of June 30, 2005 (filed as  Exhibit 10.66 to the Operating Partnership’s Form 10-Q dated  June 30, 2005 and incorporated herein by reference).                                                                                                                                                                                                                                                                               |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.93           |       | Mack-Cali Rights, Obligations and Option Agreement  by and between Meadowlands Developer Limited Partnership, Meadowlands Limited  Partnership, Meadowlands Developer Holding Corp., Meadowlands Mack-Cali GP,  L.L.C., Mack-Cali Meadowlands Special, L.L.C., Baseball Meadowlands  Mills/Mack-Cali Limited Partnership, A-B Office Meadowlands Mack-Cali Limited  Partnership, C-D Office Meadowlands Mack-Cali Limited Partnership, Hotel  Meadowlands Mack-Cali Limited Partnership and ERC Meadowlands Mills/Mack-Cali  Limited Partnership dated November 22, 2006 (filed as Exhibit 10.92 to the  Operating Partnership’s Form 10-K dated December 31, 2006 and incorporated  herein by reference). |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.94           |       | Redemption Agreement by and among Meadowlands  Developer Limited Partnership, Meadowlands Developer Holding Corp., Mack-Cali  Meadowlands entertainment L.L.C., Mack-Cali Meadowlands Special L.L.C., and  Meadowlands Limited Partnership dated November 22, 2006 (filed as Exhibit  10.93 to the Operating Partnership’s Form 10-K dated December 31, 2006 and  incorporated herein by reference).                                                                                                                                                                                                                                                                                                       |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

 

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| Exhibit  Number | ** ** | **Exhibit Title**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|-----------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.95           |       | Contribution and Exchange Agreement by and between  Mack-Cali Realty, L.P. and Tenth Springhill Lake Associates L.L.L.P., Eleventh  Springhill Lake Associates L.L.L.P., Twelfth Springhill Lake Associates  L.L.L.P., Fourteenth Springhill Lake Associates L.L.L.P., each a Maryland  limited liability limited partnership, Greenbelt Associates, a Maryland  general partnership, and Sixteenth Springhill Lake Associates L.L.L.P., a  Maryland limited liability limited partnership, and certain other natural  persons, dated as of November 21, 2005 (filed as Exhibit 10.69 to the  Operating Partnership’s Form 10-K dated December 31, 2005 and incorporated  herein by reference). |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.96           |       | Membership Interest Purchase and Contribution  Agreement by and among Mr. Stanley C. Gale, SCG Holding Corp., Mack-Cali  Realty Acquisition Corp. and Mack-Cali Realty, L.P. dated as of March 7, 2006  (filed as Exhibit 10.1 to the Operating Partnership’s Form 8-K dated March 7,  2006 and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                   |
| ** **      | ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.97           |       | Amendment No. 1 to Membership Interest Purchase and  Contribution Agreement dated as of March 31, 2006 (filed as Exhibit 10.1 to  the Operating Partnership’s Form 8-K dated March 28, 2006 and incorporated  herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.98           |       | Amendment No. 2 to Membership Interest Purchase  and Contribution Agreement dated as of May 9, 2006 (filed as Exhibit  10.1 to the Operating Partnership’s Form 8-K dated May 9, 2006 and  incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.99           |       | Amendment No. 8 to Membership Interest Purchase and  Contribution Agreement by and among Mr. Stanley C. Gale, SCG Holding Corp.,  Mack-Cali Realty Acquisition Corp. and Mack-Cali Realty, L.P. dated as of May  23, 2007 (filed as Exhibit 10.1 to the Operating Partnership’s Form 8-K dated  May 23, 2007.                                                                                                                                                                                                                                                                                                                                                                                        |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.100          |       | Contribution and Sale Agreement by and among Gale  SLG NJ LLC, a Delaware limited liability company, Gale SLG NJ MEZZ LLC, a  Delaware limited liability company, and Gale SLG RIDGEFIELD MEZZ LLC, a  Delaware limited liability company and Mack-Cali Ventures L.L.C. dated as of  March 7, 2006 (filed as Exhibit 10.2 to the Operating Partnership’s Form 8-K  dated March 7, 2006 and incorporated herein by reference).                                                                                                                                                                                                                                                                        |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.101          |       | First Amendment to Contribution and Sale Agreement  by and among GALE SLG NJ LLC, a Delaware limited liability company, GALE SLG  NJ MEZZ LLC, a Delaware limited liability company, and GALE SLG RIDGEFIELD  MEZZ LLC, a Delaware limited liability company, and Mack-Cali Ventures  L.L.C., a Delaware limited liability company, dated as of May 9, 2006  (filed as Exhibit 10.4 to the Operating Partnership’s Form 8-K dated May 9,  2006 and incorporated herein by reference).                                                                                                                                                                                                           |
|            | ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.102          |       | Non-Portfolio Property Interest Contribution  Agreement by and among Mr. Stanley C. Gale, Mr. Mark Yeager, GCF II  Investor LLC, The Gale Investments Company, LLC, Gale & Wentworth  Vreeland, LLC, Gale Urban Solutions LLC, MSGW-ONE Campus Investors, LLC,  Mack-Cali Realty Acquisition Corp. and Mack-Cali Realty, L.P. dated as of  May 9, 2006 (filed as Exhibit 10.2 to the Operating Partnership’s Form  8-K dated May 9, 2006 and incorporated herein by reference).                                                                                                                                                                                              |

 

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| Exhibit  Number | ** ** | **Exhibit Title**                                                                                                                                                                                                                                                                                                                                                                                                     |
|-----------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **      |       |                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.103          |       | Loan Agreement by and among the entities set forth  on Exhibit A, collectively, as Borrowers, and Gramercy Warehouse Funding  I LLC, as Lender, dated May 9, 2006 (filed as Exhibit 10.5 to the  Operating Partnership’s Form 8-K dated May 9, 2006 and incorporated herein by  reference).                                                                                                                 |
|            | ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.104          |       | Promissory Note of One Grande SPE LLC, 1280 Wall SPE  LLC, 10 Sylvan SPE LLC, 5 Independence SPE LLC, 1 Independence SPE LLC, and 3  Becker SPE LLC, as Borrowers, in favor of Gramercy Warehouse Funding I, LLC,  as Lender, in the principal amount of $90,286,551 dated May 9, 2006  (filed as Exhibit 10.6 to the Operating Partnership’s Form 8-K dated May 9,  2006 and incorporated herein by reference). |
| ** **      |       |                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.105          |       | Mortgage, Security Agreement and Fixture Filing by and  between 4 Becker SPE LLC, as Borrower, and Wachovia Bank, National  Association, as Lender, dated May 9, 2006 (filed as Exhibit 10.7 to the  Operating Partnership’s Form 8-K dated May 9, 2006 and incorporated herein by  reference).                                                                                                                  |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.106          |       | Promissory Note of 4 Becker SPE LLC, as Borrower, in  favor of Wachovia Bank, National Association, as Lender, in the principal  amount of $43,000,000 dated May 9, 2006 (filed as Exhibit 10.8 to the  Operating Partnership’s Form 8-K dated May 9, 2006 and incorporated herein by  reference).                                                                                                               |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.107          |       | Mortgage, Security Agreement and Fixture Filing by  and between 210 Clay SPE LLC, as Borrower, and Wachovia Bank, National  Association, as Lender, dated May 9, 2006 (filed as Exhibit 10.9 to the  Operating Partnership’s Form 8-K dated May 9, 2006 and incorporated herein by  reference).                                                                                                                  |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.108          |       | Promissory Note of 210 Clay SPE LLC, as Borrower, in  favor of Wachovia Bank, National Association, as Lender, in the principal  amount of $16,000,000 dated May 9, 2006 (filed as Exhibit 10.10 to the  Operating Partnership’s Form 8-K dated May 9, 2006 and incorporated herein by  reference).                                                                                                              |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.109          |       | Mortgage, Security Agreement and Fixture Filing by  and between 5 Becker SPE LLC, as Borrower, and Wachovia Bank, National  Association, as Lender, dated May 9, 2006 (filed as Exhibit 10.11 to the  Operating Partnership’s Form 8-K dated May 9, 2006 and incorporated herein by  reference).                                                                                                                 |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.110          |       | Promissory Note of 5 Becker SPE LLC, as Borrower, in  favor of Wachovia Bank, National Association, as Lender, in the principal  amount of $15,500,000 dated May 9, 2006 (filed as Exhibit 10.12 to the  Operating Partnership’s Form 8-K dated May 9, 2006 and incorporated herein by  reference).                                                                                                              |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.111          |       | Mortgage, Security Agreement and Fixture Filing by  and between 51 CHUBB SPE LLC, as Borrower, and Wachovia Bank, National  Association, as Lender, dated May 9, 2006 (filed as Exhibit 10.13 to the  Operating Partnership’s Form 8-K dated May 9, 2006 and incorporated herein by  reference).                                                                                                                 |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.112          |       | Promissory Note of 51 CHUBB SPE LLC, as Borrower, in  favor of Wachovia Bank, National Association, as Lender, in the principal  amount of $4,500,000 dated May 9, 2006 (filed as Exhibit 10.14 to the  Operating Partnership’s Form 8-K dated May 9, 2006 and incorporated herein by  reference).                                                                                                               |

 

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| Exhibit  Number | ** ** | **Exhibit Title**                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|-----------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.113          |       | Form of Amended and Restated Limited Liability  Company Agreement of Mack-Green-Gale LLC dated                  ,  2006 (filed as Exhibit 10.3 to the Operating Partnership’s Form 8-K dated  March 7, 2006 and incorporated herein by reference).                                                                                                                                     |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.114          |       | Form of Limited Liability Company Operating  Agreement (filed as Exhibit 10.3 to the Operating Partnership’s Form 8-K  dated May 9, 2006 and incorporated herein by reference).                                                                                                                                                                                                                                                                                   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.115          |       | Agreement of Sale and Purchase dated August 9, 2006  by and between Mack-Cali Realty, L.P. and Westcore Properties AC, LLC (filed  as Exhibit 10.91 to the Operating Partnership’s Form 10-Q dated September 30,  2006 and incorporated herein by reference).                                                                                                                                                                                                          |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.116          |       | First Amendment to Agreement of Sale and Purchase  dated September 6, 2006 by and between Mack-Cali Realty, L.P. and Westcore  Properties AC, LLC (filed as Exhibit 10.92 to the Operating Partnership’s  Form 10-Q dated September 30, 2006 and incorporated herein by reference).                                                                                                                                                                                    |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.117          |       | Second Amendment to Agreement of Sale and Purchase  dated September 15, 2006 by and between Mack-Cali Realty, L.P. and Westcore  Properties AC, LLC (filed as Exhibit 10.93 to the Operating Partnership’s  Form 10-Q dated September 30, 2006 and incorporated herein by reference).                                                                                                                                                                                  |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.118          |       | Agreement of Sale and Purchase dated September 25,  2006 by and between Phelan Realty Associates L.P., 795 Folsom Realty  Associates L.P. and Westcore Properties AC, LLC (filed as Exhibit 10.94 to  the Operating Partnership’s Form 10-Q dated September 30, 2006 and  incorporated herein by reference).                                                                                                                                                           |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.119          |       | Membership Interest Purchase and Contribution  Agreement dated as of December 28, 2006, by and among NKFGMS Owners, LLC, The  Gale Construction Services Company, L.L.C., NKFFM Limited Liability Company,  Scott Panzer, Ian Marlow, Newmark & Company Real Estate, Inc. d/b/a  Newmark Knight Frank, and Mack-Cali Realty, L.P (filed as Exhibit 10.117 to the Operating Partnership’s  Form 10-K dated December 31, 2006 and incorporated herein by reference). |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.120          |       | Operating Agreement of NKFGMS Owners, LLC (filed as  Exhibit 10.118 to the Operating Partnership’s Form 10-K dated December 31,  2006 and incorporated herein by reference).                                                                                                                                                                                                                                                                                           |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.121          |       | Loans, Sale and Services Agreement dated December  28, 2006 by and between Newmark & Company Real Estate, Inc. d/b/a Newmark  Knight Frank, Mack-Cali Realty, L.P., and Newmark Knight Frank Global  Management Services, LLC (filed  as Exhibit 10.119 to the Operating Partnership’s Form 10-K dated December 31,  2006 and incorporated herein by reference).                                                                                                   |
|            |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.122          |       | Term Loan Agreement among Mack-Cali Realty, L.P. and  JPMorgan Chase Bank, N.A. as Administrative Agent, J.P. Morgan Securities Inc.  as Arranger, and other lender which may become parties to this Agreement  dated November 29, 2006 (filed as  Exhibit 10.120 to the Operating Partnership’s Form 10-K dated December 31,  2006 and incorporated herein by reference).                                                                                             |

 

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| Exhibit  Number | ** ** | **Exhibit Title**                                                                                                                                                                                                                                                                                                                      |
|-----------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            |       |                                                                                                                                                                                                                                                                                                                                        |
| 10.123          |       | Agreement of Purchase and Sale among SLG Broad  Street A LLC and SLG Broad Street C LLC, as Sellers, and M-C Broad 125 A  L.L.C. and M-C Broad 125 C L.L.C., as Purchasers, dated as of March 15, 2007  (filed as Exhibit 10.121 to the Operating Partnership’s Form 10-Q dated March  31, 2007 and incorporated herein by reference). |
|            |       |                                                                                                                                                                                                                                                                                                                                        |
| 10.124          |       | Agreement of Purchase and Sale among 500 West Putnam  L.L.C., as Seller, and SLG 500 West Putnam LLC, as Purchaser, dated as of  March 15, 2007 (filed as Exhibit 10.122 to the Operating Partnership’s Form  10-Q dated March 31, 2007 and incorporated herein by reference).                                                         |
|            |       |                                                                                                                                                                                                                                                                                                                                        |
| 31.1*           |       | Certification of the Corporation’s President and  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 President and 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.                                                                                                   |

 

----

*filed herewith

 

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