**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON,D.C. 20549**

**FORM 10-Q**

**(Mark One)**

x                               **Quarterly Report Pursuant to Section 13or 15(d) of the Securities Exchange Act of 1934**

**For thequarterly period ended June 30, 2005**

**or**

o                                  **Transition Report Pursuant to Section 13or 15(d) of the Securities Exchange Act of 1934**

**For thetransition period from               to               .**

**Commission File No. 000-50724**

**DIVIDEND CAPITAL TRUST INC.**

(Exact name of registrant as specified in its charter)

| **Maryland**                                                     | **82-0538520**                        |
|------------------------------------------------------------------|---------------------------------------|
| (State or other  jurisdiction of  incorporation or organization) | (I.R.S. Employer  Identification No.) |
| **518 Seventeenth Street, Suite 1700  Denver, CO**          | **     80202**              |
| (Address of  principal executive offices)                        | (Zip Code)                            |

 

Registrant’s telephone number, including area code: **(303) 228-2200**

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

Indicate by a check markwhether the registrant is an accelerated filer (as defined in Rule 12b-2of the Exchange Act).  Yes  oNo  x

As of July 30, 2005, 102,264,040shares of common stock of Dividend Capital Trust Inc., par value $0.01 pershare, were outstanding.

 

----

**Dividend Capital Trust Inc. and SubsidiariesIndex to Form 10-Q**
|                   | ** ** | ** **                                                                                                                                           | ** ** | **Page** |
|-------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------|
| **PART I.**  |       | FINANCIAL  INFORMATION                                                                                                                               |       |     |
| Item  1.          |       | Financial  Statements:                                                                                                                               |       |     |
|              |       | Condensed Consolidated Balance Sheets as of  June 30, 2005 (Unaudited) and December 31, 2004                                               |       | 1        |
|              |       | Condensed Consolidated Statements of Operations for  the Three and Six Months Ended June 30, 2005 and 2004 (Unaudited)                          |       | 2        |
|              |       | Condensed Consolidated Statement of Shareholders’  Equity and Other Comprehensive Loss for the Six Months Ended June 30,  2005 (Unaudited) |       | 3        |
|              |       | Condensed Consolidated Statements of Cash Flows for  the Six Months Ended June 30, 2005 and 2004 (Unaudited)                                    |       | 4        |
|              |       | Notes to Condensed Consolidated Financial Statements  (Unaudited)                                                                                    |       | 5        |
| Item 2.           |       | Management’s Discussion and Analysis of Financial  Condition and Results of Operations                                                |       | 22       |
| Item 3.           |       | Quantitative and Qualitative Disclosure About Market  Risk                                                                                           |       | 31       |
| Item 4.           |       | Controls and Procedures                                                                                                                              |       | 31       |
| **PART II.** |       | OTHER  INFORMATION                                                                                                                                   |       |     |
| Item  1.          |       | Legal  Proceedings                                                                                                                                   |       | 32       |
| Item 2.           |       | Unregistered Sales of Equity Securities and Use of  Proceeds                                                                                         |       | 32       |
| Item 3.           |       | Defaults upon Senior Securities                                                                                                                      |       | 33       |
| Item 4.           |       | Submission of Matters to a Vote of Security Holders                                                                                                  |       | 33       |
| Item  5.          |       | Other  Information                                                                                                                                   |       | 33       |
| Item 6.           |       | Exhibits                                                                                                                                             |       | 34       |
| **SIGNATURES**    |       | 35                                                                                                                                                   |

 

----

**PART I.**   FINANCIALINFORMATION

**ITEM 1.**                FINANCIALSTATEMENTS

**Dividend Capital Trust Inc. and SubsidiariesCondensed ConsolidatedBalance Sheets**
| ** **                                                                                                                                                                                  | ** ** | **As of**    | ** **    | **As of**        | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------|---------------|-----------------------|------------|
| ** **                                                                                                                                                                                  | ** ** | **June 30,** | ** **    | **December 31,** | ** ** |
| ** **                                                                                                                                                                                  | ** ** | **2005**          | ** **    | **2004**              | ** ** |
| ** **                                                                                                                                                                                  | ** ** | **(Unaudited)**   | ** **    | ** **            | ** ** |
| **ASSETS**                                                                                                                                                                                  |       |              |          |                  |       |
| Land                                                                                                                                                                                        |       | $                 | 172,489,708   |                  | $          | 120,054,674 |   |
| Buildings and  improvements                                                                                                                                                                 |       | 788,408,233       |          | 572,284,194           |       |
| Intangible lease assets                                                                                                                                                                     |       | 88,036,276        |          | 61,724,701            |       |
| Less accumulated  depreciation and amortization                                                                                                                                             |       | (49,690,640       | )             | (21,862,036           | )          |
| **Net  Investment in Real Estate**                                                                                                                                                          |       | 999,243,577       |          | 732,201,533           |       |
| Cash and cash  equivalents                                                                                                                                                                  |       | 174,020,909       |          | 23,520,267            |       |
| Restricted cash                                                                                                                                                                             |       | 6,972,399         |          | 5,414,224             |       |
| Notes receivable                                                                                                                                                                            |       | 8,178,700         |          | 4,238,700             |       |
| Deferred loan costs, net                                                                                                                                                                    |       | 10,284,393        |          | 7,156,477             |       |
| Deferred acquisition  costs and deposits                                                                                                                                                    |       | 17,135,191        |          | 5,406,882             |       |
| Straight line rent  receivable                                                                                                                                                              |       | 3,630,410         |          | 2,219,466             |       |
| Other receivables                                                                                                                                                                           |       | 10,409,546        |          | 3,484,597             |       |
| Other assets, net                                                                                                                                                                           |       | 381,927           |          | 1,166,124             |       |
| **Total  Assets**                                                                                                                                                                           |       | $                 | 1,230,257,052 |                  | $          | 784,808,270 |   |
| **LIABILITIES & SHAREHOLDERS’ EQUITY**                                                                                                                                        |       |              |          |                  |       |
| Liabilities:                                                                                                                                                                                |       |              |          |                  |       |
| Accounts payable and  accrued expenses                                                                                                                                                      |       | $                 | 5,867,542     |                  | $          | 4,021,807 |   |
| Accrued real estate  taxes                                                                                                                                                                  |       | 5,517,701         |          | 2,281,115             |       |
| Dividends payable                                                                                                                                                                           |       | 14,126,108        |          | 9,737,171             |       |
| Tenant prepaids and  security deposits                                                                                                                                                      |       | 4,735,113         |          | 4,038,534             |       |
| Other liabilities                                                                                                                                                                           |       | 5,379,023         |          | 2,842,538             |       |
| Intangible lease  liability, net                                                                                                                                                            |       | 7,651,068         |          | 5,518,657             |       |
| Line of credit                                                                                                                                                                              |       | 12,000            |          | 4,000                 |       |
| Mortgage notes                                                                                                                                                                              |       | 295,288,282       |          | 142,754,768           |       |
| Financing obligations                                                                                                                                                                       |       | 63,924,046        |          | 32,394,877            |       |
| **Total  Liabilities**                                                                                                                                                                      |       | 402,500,883       |          | 203,593,467           |       |
| Minority Interest                                                                                                                                                                           |       | 3,890,403         |          | 1,000                 |       |
| Shareholders’ Equity:                                                                                                                                                                  |       |              |          |                  |       |
| Preferred shares,  50,000,000 shares authorized, none outstanding                                                                                                                           |       | —            |          | —                |       |
| Shares-in-trust,  100,000,000 shares authorized, none outstanding                                                                                                                           |       | —            |          | —                |       |
| Common shares, $0.01 par  value, 350,000,000 shares authorized, 96,685,220 and 67,719,883 shares issued  and outstanding as of June 30, 2005 and December 31, 2004,  respectively |       | 966,852           |          | 677,199               |       |
| Additional paid-in  capital                                                                                                                                                                 |       | 885,340,490       |          | 611,440,163           |       |
| Distributions in excess  of earnings                                                                                                                                                        |       | (54,280,636       | )             | (26,635,877           | )          |
| Accumulated other  comprehensive income (loss)                                                                                                                                              |       | (8,160,940        | )             | (4,267,682            | )          |
| **Total  Shareholders’ Equity**                                                                                                                                                        |       | 823,865,766       |          | 581,213,803           |       |
| **Total Liabilities and Shareholders’ Equity**                                                                                                                                         |       | $                 | 1,230,257,052 |                  | $          | 784,808,270 |   |

 

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

1

----

**Dividend Capital Trust Inc. and SubsidiariesCondensed ConsolidatedStatements of Operations(Unaudited)**
| ** **                                                | ** ** | **Three Months Ended** | ** ** | **Six Months Ended** | ** ** |
|-----------------------------------------------------------|------------|----------------------------------|------------|--------------------------------|------------|
| ** **                                                | ** ** | **June 30,**                | ** ** | **June 30,**              | ** ** |
| ** **                                                | ** ** | **2005**                         | ** ** | **2004**                       | ** ** | **2005** | ** ** | **2004** | ** ** |
| **REVENUE:**                                              |       |                             |       |                           |       |   |   |   |   |
| Rental revenue                                            |       | $                                | 19,459,832 |                           | $          | 4,487,466 |   | $ | 35,392,556 |   | $ | 7,469,124 |   |
| Other real estate income                                  |       | 4,095,837                        |       | 1,018,938                      |       | 7,765,158 |   | 1,619,191 |   |
| Gain on early lease terminations                          |       | 2,817,322                        |       | —                         |       | 2,817,322 |   | — |   |
| Interest income                                           |       | 980,745                          |       | 227,352                        |       | 1,591,135 |   | 240,676 |   |
| **Total Revenue**                                         |       | 27,353,736                       |       | 5,733,756                      |       | 47,566,171 |   | 9,328,991 |   |
| **EXPENSES:**                                             |       |                             |       |                           |       |   |   |   |   |
| Real estate taxes                                         |       | 2,892,340                        |       | 622,195                        |       | 5,327,595 |   | 1,021,393 |   |
| Operating expenses                                        |       | 2,466,040                        |       | 493,809                        |       | 4,849,569 |   | 892,461 |   |
| Depreciation and amortization expense                     |       | 14,192,197                       |       | 2,764,558                      |       | 26,542,358 |   | 4,410,835 |   |
| Interest expense                                          |       | 4,827,468                        |       | 894,016                        |       | 8,545,089 |   | 1,544,604 |   |
| General and administrative expenses                       |       | 700,900                          |       | 311,032                        |       | 1,428,775 |   | 639,106 |   |
| Asset management fees, related party                      |       | 1,523,657                        |       | 145,294                        |       | 2,703,130 |   | 145,294 |   |
| **Total Expenses**                                        |       | 26,602,602                       |       | 5,230,904                      |       | 49,396,516 |   | 8,653,693 |   |
| **Net Income Before Minority Interest**                   |       | 751,134                          |       | 502,852                        |       | (1,830,345 | ) | 675,298 |   |
| **Minority Interest**                                     |       | (3,301                           | )          | —                         |       | (3,301 | ) | — |   |
| **NET INCOME (LOSS)**                                     |       | $                                | 747,833    |                           | $          | 502,852 |   | $ | (1,833,646 | ) | $ | 675,298 |   |
| **WEIGHTED  AVERAGE NUMBER OF COMMON SHARES OUTSTANDING** |       |                             |       |                           |       |   |   |   |   |
| Basic                                                     |       | 88,065,641                       |       | 29,536,541                     |       | 81,331,123 |   | 23,062,383 |   |
| Diluted                                                   |       | 88,472,687                       |       | 29,556,541                     |       | 81,544,646 |   | 23,082,383 |   |
| **NET INCOME (LOSS) PER COMMON  SHARE**                   |       |                             |       |                           |       |   |   |   |   |
| Basic                                                     |       | $                                | 0.01       |                           | $          | 0.02 |   | $ | (0.02 | ) | $ | 0.03 |   |
| Diluted                                                   |       | $                                | 0.01       |                           | $          | 0.02 |   | $ | (0.02 | ) | $ | 0.03 |   |

 

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

2

----

**Dividend CapitalTrust Inc. and Subsidiaries**

**CondensedConsolidated Statement of Shareholders’ Equity and Other Comprehensive LossFor the Six Months Ended June 30, 2005**

**(Unaudited)**
| ** **                                              | ** ** | ** **             | ** ** | ** **     | ** ** | ** **                 | ** ** | ** **        | ** ** | **Accumulated**        | ** ** | ** ** | ** **  |
|---------------------------------------------------------|------------|------------------------|------------|----------------|------------|----------------------------|------------|-------------------|------------|------------------------|------------|------------|-------------|
| ** **                                              | ** ** | ** **             | ** ** | **Additional** | ** ** | **Distributions**          | ** ** | **Other**         | ** ** | **Total**              | ** ** |
| ** **                                              | ** ** | **Common Shares** | ** ** | **Paid-in**    | ** ** | **in Excess of** | ** ** | **Comprehensive** | ** ** | **Shareholders’** | ** ** |
| ** **                                              | ** ** | **Shares**             | ** ** | **Amount**     | ** ** | **Capital**                | ** ** | **Earnings**      | ** ** | **Loss**               | ** ** | **Equity** | ** **  |
| **Balances, December 31, 2004**                    |       | 67,719,883             |       |           | $          | 677,199                    |       |              | $          | 611,440,163            |       | $          | (26,635,877 | ) |   | $ | (4,267,682 | ) |   | $ | 581,213,803 |   |
| Comprehensive loss:                                     |       |                   |       |           |       |                       |       |              |       |                   |       |       |        |   |   |   |   |
| Net loss                                                |       | —                 |       |           | —     |                       |       | —            |       | (1,833,644             | )          |       | —      |   |   | $ | (1,833,644 | ) |
| Net unrealized change in cash flow hedging  derivatives |       | —                 |       |           | —     |                       |       | —            |       | —                 |       |       | (4,138,875  | ) |   | (4,138,875 | ) |
| Amortization of cash flow hedging derivatives           |       | —                 |       |           | —     |                       |       | —            |       | —                 |       |       | 245,617     |   |   | 245,617 |   |
| Comprehensive loss                                      |       |                   |       |           |       |                       |       |              |       |                   |       |       |        |   |   | (5,726,902 | ) |
| Issuance of common shares, net of offering costs        |       | 29,273,640             |       |           | 292,736    |                       |       | 277,034,564       |       | —                 |       |       | —      |   |   | 277,327,300 |   |
| Redemption of common shares                             |       | (308,303               | )          |           | (3,083     | )                          |       | (3,147,667        | )          | —                 |       |       | —      |   |   | (3,150,750 | ) |
| Amortization of stock options                      |       | —                 |       |           | —     |                       |       | 13,430            |       | —                 |       |       | —      |   |   | 13,430 |   |
| Dividends on common shares                         |       | —                 |       |           | —     |                       |       | —            |       | (25,811,115            | )          |       | —      |   |   | (25,811,115 | ) |
| **Balances,  June 30, 2005**                       |       | 96,685,220             |       |           | $          | 966,852                    |       |              | $          | 885,340,490            |       | $          | (54,280,636 | ) |   | $ | (8,160,940 | ) |   | $ | 823,865,766 |   |

 

The accompanyingnotes are an integral part of these condensed consolidated financialstatements.

3

----

**Dividend Capital Trust Inc. and SubsidiariesCondensed ConsolidatedStatements of Cash Flows(Unaudited)**
| ** **                                                                                     | ** ** | **For the Six Months Ended June 30,** | ** ** |
|------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------|------------|
| ** **                                                                                     | ** ** | **2005**                                                            | ** ** | **2004** | ** ** |
| **OPERATING ACTIVITIES:**                                                                      |       |                                                                |       |   |   |
| Net income (loss)                                                                              |       | $                                                                   | (1,833,646 | ) | $ | 675,298 |   |
| Adjustments to reconcile net income (loss) to net  cash provided by operating activities: |       |                                                                |       |   |   |
| Minority interest                                                                              |       | 3,301                                                               |       | — |   |
| Real estate depreciation  and amortization                                                     |       | 25,651,864                                                          |       | 4,332,464 |   |
| Straight-line rents and  amortization of above/below market  rents                             |       | (637,389                                                            | )          | (299,226 | ) |
| Other depreciation and  amortization                                                           |       | 1,653,852                                                           |       | 312,777 |   |
| (Increase) decrease in  other assets                                                           |       | (1,101,823                                                          | )          | 180,478 |   |
| Loss on hedging  activities                                                                    |       | 71,850                                                              |       | — |   |
| Increase in accounts  payable, accrued expenses and other liabilities                     |       | 3,538,963                                                           |       | 1,306,335 |   |
| **Net cash  provided by operating activities**                                                 |       | 27,346,972                                                          |       | 6,508,126 |   |
| **INVESTING ACTIVITIES:**                                                                      |       |                                                                |       |   |   |
| Real estate investments                                                                        |       | (202,067,965                                                        | )          | (177,975,422 | ) |
| Decrease in restricted  cash                                                                   |       | 4,854,224                                                           |       | — |   |
| Increase in deferred  acquistion costs                                                         |       | (6,384,949                                                          | )          | (25,190 | ) |
| Increase in notes  receivable                                                                  |       | (3,940,000                                                          | )          | (4,314,000 | ) |
| Master lease payments                                                                          |       | 1,981,203                                                           |       | 572,784 |   |
| **Net cash  used in investing activities**                                                     |       | (205,557,487                                                        | )          | (181,741,828 | ) |
| **FINANCING ACTIVITIES:**                                                                      |       |                                                                |       |   |   |
| Net proceeds from line of  credit                                                              |       | 8,000                                                               |       | 3,402,000 |   |
| Proceeds from mortgage  notes                                                                  |       | 57,000,000                                                          |       | — |   |
| Principal payments on  mortgage notes                                                          |       | (1,052,756                                                          | )          | (245,351 | ) |
| Proceeds from financing  obligations                                                           |       | 36,332,008                                                          |       | 3,271,718 |   |
| Principal payments on  financing obligations                                                   |       | (552,466                                                            | )          | (32,430 | ) |
| Increase in deferred loan  costs                                                               |       | (4,599,135                                                          | )          | (2,348,966 | ) |
| Proceeds from sale of  common shares                                                           |       | 291,053,477                                                         |       | 244,934,660 |   |
| Offering costs for  issuance of common shares, related party                                   |       | (27,658,303                                                         | )          | (22,898,894 | ) |
| Redemption of common  shares                                                                   |       | (3,150,751                                                          | )          | — |   |
| Increase in restricted  cash                                                                   |       | (6,412,399                                                          | )          | — |   |
| Settlement of cash flow  hedging derivative                                                    |       | (2,232,154                                                          | )          | — |   |
| Distributions to common  shareholders                                                          |       | (10,024,364                                                         | )          | (2,070,616 | ) |
| **Net cash  provided by financing activities**                                                 |       | 328,711,157                                                         |       | 224,012,121 |   |
| NET INCREASE IN  CASH AND CASH EQUIVALENTS                                                     |       | 150,500,642                                                         |       | 48,778,419 |   |
| CASH AND CASH  EQUIVALENTS, beginning of period                                                |       | 23,520,267                                                          |       | 4,076,642 |   |
| CASH AND CASH  EQUIVALENTS, end of period                                                      |       | 174,020,909                                                         |       | 52,855,061 |   |
| **Supplemental Disclosures of Cash Flow  Information:**                                        |       |                                                                |       |   |   |
| Cash paid for  interest expense                                                                |       | $                                                                   | 7,970,444  |   | $ | 1,172,756 |   |
| Assumption of secured  debt in connection with real estate aquired                             |       | $                                                                   | 91,627,159 |   | $ | 44,410,729 |   |
| Amount issued  pursuant to the distribution reinvestment plan                                  |       | $                                                                   | 11,456,483 |   | $ | 2,070,616 |   |

 

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

4

----

**Dividend Capital Trust Inc. and SubsidiariesNotes to CondensedConsolidated Financial Statements(Unaudited)**

**Note1—Organizationand Summary of Significant Accounting Policies**

***Organization***

Dividend Capital Trust Inc., was formed as aMaryland corporation in April 2002 in order to invest in commercial realestate properties, consisting primarily of high-quality, generic distributionwarehouses and light industrial properties net leased to creditworthy corporatecustomers. We have qualified as a real estate investment trust (“REIT”) forfederal tax purposes commencing with our taxable year ended December 31,2003. We are structured as an umbrella partnership REIT (“UPREIT”) under whichsubstantially all of our current and future business is and will be conductedthrough a majority owned subsidiary, Dividend Capital Operating Partnership LP(our partnership), a Delaware limited partnership, and certain wholly ownedsubsidiaries of our partnership. As used herein, “Dividend Capital”, “we” and “us”refer to Dividend Capital Trust Inc. and its consolidated subsidiaries exceptwhere the context otherwise requires.

Our day to day activitiesare managed by Dividend Capital Advisors LLC (our advisor), an affiliate, underthe terms and conditions of an advisory agreement. Our advisor is currentlymajority owned and/or controlled by three of our directors and certain officersand/or their affiliates and other third parties. In addition, under the termsof a dealer manager agreement, Dividend Capital Securities LLC (the “DealerManager”) serves as the dealer manager of our public offerings and privateofferings. The Dealer Manager is currently majority owned and/or controlled bythree of our directors and certain officers and/or their affiliates and otherthird parties. Our advisor and the Dealer Manager receive compensation and feesfor services relating to our offering and for the investment andmanagement of our assets (see “Note 8—Related Party Transactions”).

***Summary of Significant Accounting Policies***

*Interim FinancialInformation*

The accompanying unauditedcondensed consolidated financial statements have been prepared in accordancewith U.S. generally accepted accounting principles (“GAAP”) and with theinstructions to Form 10-Q and Article 10 of Regulation S-X forinterim financial information. Accordingly, these statements do not include allof the information and footnotes required by GAAP for complete financialstatements. In the opinion of management, the accompanying unaudited condensedconsolidated financial statements include all adjustments, consisting only ofnormal recurring items necessary for their fair presentation in conformity withGAAP. Interim results are not necessarily indicative of results for a full year.The information included in this Form 10-Q should be read in conjunctionwith our audited consolidated financial statements as of December 31,2004, and related notes thereto.

*Principles ofConsolidation*

Our financial statementsand the financial statements of our subsidiaries are consolidated in theaccompanying condensed consolidated financial statements. All significantintercompany accounts and transactions have been eliminated in consolidation.

5

----

*Use of Estimates*

The preparation ofcondensed consolidated financial statements in conformity with GAAP requiresmanagement to make estimates and assumptions relating to the reported amountsof assets and liabilities and the disclosure of contingent assets andliabilities at the date of the consolidated financial statements and thereported amounts of revenues and expenses during the reporting period. Actualresults could differ from those estimates. Estimates and assumptions arereviewed periodically and the effects of revision are reflected in the periodthey are determined to be necessary.

*Investment in RealEstate*

We capitalize direct costs associated with theacquisition, development or improvement of real estate, including acquisitionfees paid to our advisor. Costs associated with acquisition or developmentpursuits are capitalized as incurred and if the pursuit is abandoned, thesecosts are expensed in the period in which the pursuit is abandoned.

Upon acquisition, the total estimated cost of aproperty is allocated to land, building, land improvements, tenant improvementsand intangible lease assets and liabilities pursuant to Statement of FinancialAccounting Standards (“SFAS”) No. 141, *“Business Combinations”*(“SFASNo. 141”). The allocation of the total estimated cost to land, building,land improvements and tenant improvements is based on our estimate of theirfair value based on all available information such as appraisals, propertycondition reports and other related information. Pursuant to SFAS No. 141,the difference between the fair value and the face value of debt assumed in anacquisition should be recorded as a premium or discount and amortized tointerest expense over the life of the debt assumed. The valuation of assumedliabilities is based on our estimate of the current market rate for similarliabilities. The allocation of the total estimated cost of a property to anintangible lease asset includes the value associated with the in-place leaseswhich may include estimates for leasing commissions, legal and other costs. Inaddition, the allocation of the total cost of a property requires allocatingcosts to an intangible asset or liability resulting from in-place leases beingabove or below the market rental rates on the date of the acquisition. Thisasset or liability will be amortized over the life of the remaining in-placeleases as an adjustment to rental revenue.

Realestate, including land, building, building and land improvements, tenantimprovements and leasing costs, and intangible lease assets and liabilities arestated at historical cost less accumulated depreciation and amortization. Depreciationand amortization is computed on a straight-line basis over the estimated usefullives as follows:
| **Description**                              | ** ** | ** **                           | ** ** | ** ** | **Standard Depreciable Life** | ** ** |
|----------------------------------------------|------------|--------------------------------------|------------|------------|-------------------------------|------------|
| Land                                         |       | Not  depreciated                     |
| Building                                     |       | 40  years                            |
| Building improvements  and land improvements |       | 5 to  20 years                       |
| Tenant improvements and  leasing costs       |       | Term  of lease                       |
| Intangible lease assets  and liabilities     |       | Average  term of leases for building |
| Above/below market rent assets/liabilities   |       | Term of lease                        |

 

The table above reflectsthe standard depreciable lives typically used to compute depreciation andamortization. However, such depreciable lives may be shorter based on theestimated useful life of such assets or liabilities. Maintenance and repairexpenditures are expensed as incurred and improvements are capitalized. Thecost of assets sold or retired and the related accumulated depreciation and/oramortization will be removed from the accounts and the resulting gain or losswill be reflected in operations in the period in which such sale or retirementoccurs.

6

----

*Cash and CashEquivalents*

Cash and cash equivalentsinclude cash held in financial institutions and other highly liquid short-terminvestments with original maturities of three months or less.

*Restricted Cash*

Restricted cash includescertain cash held in escrow for such things as property acquisitions, utilitydeposits, real estate tax payments, issuance of mortgage debt and collateralfor hedging instruments.

*Long-lived Assets*

Long-lived assets to beheld and used will be reviewed for impairment whenever events or changes incircumstances indicate that the carrying amount of an asset may not berecoverable. We periodically evaluate the recoverability of our long-livedassets based on estimated future cash flows and the estimated liquidation valueof such long-lived assets, and provide for impairment if such undiscounted cashflows are insufficient to recover the carrying amount of the long-lived asset.If impaired, the long-lived asset will be written down to its estimated fairvalue.

*Debt*

Debt consists of fixedrate secured mortgage debt and a senior secured revolving credit facility. Thefixed rate secured mortgage debt includes a premium, net of accumulatedamortization, of approximately $7.5 million as of June 30, 2005.

*ComprehensiveIncome (Loss)*

Comprehensive income(loss) is comprised of net income (loss), net unrealized gain (loss) in cashflow hedging derivatives and accumulated amortization of hedging derivatives,which were approximately $(1.8) million, $(8.4) million and $246,000,respectively, as of, and for the six months ended June 30, 2005. As of,and for the six months ended June 30, 2004, net income and the netunrealized gain in cash flow hedging derivatives was $675,298 and $424,484,respectively, and there was no accumulated amortization of hedging derivatives.We report comprehensive income (loss) in our condensed consolidated statementof shareholders’ equity and other comprehensive income (loss). Amounts reportedin accumulated other comprehensive income (loss) related to settled andassigned hedging transactions will be amortized to interest expense over thelife of our hedged debt issuance(s). Changes in the fair value of unsettledhedging transactions are reflected in accumulated other comprehensive income (loss).Any ineffectiveness, as defined by SFAS No. 133 (defined below), relatedto our hedging transactions are reported on our statements of operations whenthe determination of the ineffectiveness is made. During the three and sixmonths ended June 30, 2005, there was a realized loss of approximately$72,000 related to ineffectiveness on our hedging activities (see “Note 4—Hedging Activities”).There was no gain or loss related to ineffectiveness of hedging activitiesrecognized during the three and six months ended June 30, 2004.

*DerivativeInstruments and Hedging Activities*

SFAS No. 133, “*Accountingfor Derivative Instruments and Hedging Activities”*(“SFAS No. 133”),as amended and interpreted, establishes accounting and reporting standards forderivative instruments, including certain derivative instruments embedded inother contracts, and for hedging activities. As required by SFAS No. 133,we record all derivatives on the balance sheet at fair value. Accounting forchanges in the fair value of derivatives depends on the intended use of thederivative and the designation of the derivative. Derivatives used to hedgeexposure to changes in the fair value of an asset, liability, or firmcommitments attributable to a particular risk are considered “fair value”hedges. Derivatives used to hedge exposure to variability in expected future interestpayments, or other types of forecasted 

7

----

transactions, areconsidered “cash flow” hedges. As of June 30, 2005, none of ourderivatives were designated as fair value hedges.

For derivatives designated as cash flow hedges, thechanges in the fair value of the derivative that represent changes in expectedfuture cash flows that are effectively hedged by the derivative are initiallyreported in other comprehensive income (loss) on the balance sheet (i.e., notincluded in earnings) until the derivative is settled. Upon settlement, theeffective portion of the cash flow hedge is recognized in other comprehensiveincome and amortized over the term of designated cash flow or transaction thederivative was intended to hedge. Any change in value of the derivative that isdeemed to be ineffective is charged directly to earnings when the determinationof ineffectiveness is made. We assess the effectiveness of each cash flow hedgerelationship by comparing the changes in fair value or cash flows of thederivative hedging instrument with the changes in fair value or cash flows ofthe designated hedged item or transaction. We do not use derivatives fortrading or speculative purposes and we currently do not have any derivativesthat are not designated as cash flow hedges.

Our objective in usingderivatives is to add predictability of interest expense related to futurefinancings and to manage our exposure to interest rate movements. To accomplishthis objective, we primarily use treasury locks in our cash flow hedgingstrategy. A treasury lock is designed to mitigate the risk of future interestrate fluctuations by providing a future fixed interest rate for a limited,pre-determined period of time. During the six months ended June 30, 2005and 2004, such derivatives were used to hedge the variability in futureinterest expense associated with forecasted issuances of debt.

*Revenue Recognition*

We record rental revenue for the full term of eachlease on a straight-line basis. Certain properties have leases that provide forcustomer occupancy during periods that no rent is due or where minimum rentpayments increase during the term of the lease. Accordingly, we record areceivable from customers that we expect to collect over the remaining lease termrather than currently, which will be recorded as deferred rents receivable.When we acquire a property, the term of existing leases is considered tocommence as of the acquisition date for the purposes of this calculation. Forthe three and six months ended June 30, 2005, the total increase torental revenues due to straight line rent adjustments was $727,000 and $1.5million, respectively. For the three and six months ended June 30, 2004,the total increase to rental revenues due to straight line rent adjustments was$260,000 and $378,000, respectively.

In connection with property acquisitions, we mayacquire leases with rental rates above and/or below the estimated market rentalrates measured at the date of acquisition. Such differences are recorded as anintangible asset or liability pursuant to SFAS No. 141 and are amortizedto rental revenues over the life of the respective leases. For the three andsix months ended June 30, 2005, the total net decrease to rental revenuesdue to the amortization of above and below market rents was $447,000 and $890,000,respectively. The total net decrease during the same periods in 2004 was$64,000 and $78,000, respectively.

In connection with certain property acquisitions, wehave entered into master lease agreements with various sellers whereby thesellers are obligated to pay monthly rent until the earlier of the expirationof the master lease agreement or commencement of rent from a new customer. Forfinancial reporting purposes, rental payments under master lease agreements arereflected as a reduction of the basis of the underlying property rather thanrental revenue. For the three and six months ended June 30, 2005, totalmaster lease payments were approximately $1.0 million and $2.0 million, respectively.The total master lease payments earned during the same periods in 2004 wereapproximately $302,000 and $573,000, respectively

During the three monthsended June 30, 2005, we had a customer in a building located in Atlanta,Georgia terminate its lease early and pay an early termination fee ofapproximately $3.7 million. The net 

8

----

gain ofapproximately $2.8 million on the early termination of leases is included inthe accompanying condensed consolidated statement of operations.

*Stock-BasedCompensation*

We have a stock-basedemployee compensation plan and an independent director compensation plan. Weaccount for these plans under the fair value recognition provisions of SFAS No. 123,“*Accounting for Stock-Based Compensation*,”and its related interpretations. As of June 30, 2005, and December 31,2004, we had 80,000 and 60,000 options, respectively, outstanding under theDirector Stock Option Plan. As of June 30, 2005 and December 31,2004, 107,500 options had been granted under the Employee Stock Option Plan. Optionsgranted under both the Director Stock Option Plan and the Employee Stock OptionPlan are valued using the Black-Scholes option-pricing model and are amortizedto salary expense on a straight-line basis over the period during which theright to exercise such options fully vests. Such expense is included in generaland administrative expenses on the accompanying condensed consolidatedstatements of operations.

*Basic and DilutedNet Income (Loss) per Common Share*

Basic net income (loss)per common share is determined by dividing net income (loss) attributable tocommon shareholders by the weighted average number of common shares outstandingduring the period. Diluted net income (loss) per common share includes theeffects of potentially issuable common stock, but only if dilutive, includingthe presumed exchange of limited partnership units for common shares (see “Note7—MinorityInterest”).

*New AccountingPronouncements*

In December 2004, the Financial AccountingStandards Board (“FASB”) issued SFAS No. 123R, “*Share-Based Payment”*(“SFAS No. 123R”).This statement is a revision of SFAS No. 123, “*Accounting for Stock-Based Compensation”.* SFAS No. 123R establishesstandards for the accounting for transactions in which an entity exchanges itsequity instruments for goods or services. It also addresses transactions inwhich an entity incurs liabilities in exchange for goods or services that arebased on the fair value of the entity’s equity instruments or that may besettled by the issuance of those equity instruments. This statement focusesprimarily on accounting for transactions in which an entity obtains employeeservices in share-based payment transactions. SFAS No. 123R iseffective for public companies for annual periods beginning after June 15,2005. The adoption of SFAS No. 123R will require the unamortizedportion of any options issued prior to 2002 to be amortized over the remaininglife of those options. Management does not believe the adoption of SFAS No. 123Rwill have a material impact to our financial position, results of operations orcash flows.

In June 2005, theEmerging Issues Task Force (“EITF”) issued EITF 04-5,*“Determining Whether a General Partner, or the General Partners as aGroup, Controls a Limited Partnership or Similar Entity When the LimitedPartners Have Certain Rights”*. Under this consensus, a sole generalpartner is presumed to control a limited partnership (or similar entity) andshould consolidate that entity unless the limited partners possess kick-outrights or other substantive participating rights as described in EITF 96-16,*“Investor’s Accounting for an Investee When theInvestor Has a Majority of the Voting Interest but the Minority Shareholder orShareholders Have Certain Approval or Veto rights”*. As of June 29,2005, this consensus was effective immediately for all new or modifiedagreements, and effective beginning in the first reporting period that endsafter December 15, 2005 for all existing agreements. We intend to adoptthe consolidation requirements of this consensus in the third quarter 2005 anddo not believe that there will be a material impact on our financial position,results of operations or cash flows.

 

9

----

**Note 2—Real Estate**

***Acquisitions***

During the six monthsended June 30, 2005, we acquired 25 properties located in six differenttarget markets for a total estimated cost of approximately $284.9 million,including acquisition fees paid to our advisor. These properties were acquiredusing net proceeds from our public and private offerings and the assumption ofapproximately $91.6 million in mortgage debt, excluding a premium ofapproximately $5.4 million (see “Note 3—Debt”).

*Wickes DistributionCenter—Chicago, Illinois*

On January 5, 2005,we acquired a distribution facility (“Wickes”) comprising 440,000 square feetlocated in Central DuPage County, a submarket of Chicago, Illinois. As of June 30,2005, Wickes was 100% leased. Wickes was acquired for a total investment ofapproximately $21.7 million, including acquisition fees paid to ouradvisor.

*Memphis Portfolio—Memphis,Tennessee*

Beginning on February 2, 2005, and ending on May 13,2005, we acquired the following seven distribution facilities in connectionwith our purchase agreement with Panattoni Development Company LLC (“Panattoni”),an unrelated third party: the Technicolor II Distribution Facility, the Shelby4, 5, 18 & 19 Distribution Facilities and the Eastpark I & IIDistribution Facilities. These facilities are located in Memphis, Tennessee andcombine for approximately 3.6 million total rentable square feet. As of June 30,2005, the aforementioned distribution facilities were collectively 93.6% leased.The remaining vacant space of approximately 234,000 square feet is subject to amaster lease agreement whereby Panattoni is obligated to pay monthly rent untilthe earlier of the expiration of the master lease agreement or commencement ofrent from a new customer. We purchased these facilities for a total investmentof approximately $131.6 million, including acquisition fees paid to ouradvisor. We assumed mortgage debt of approximately $30.6 million, exclusive ofa $2.4 million premium, associated with the acquisition of these properties(see “Note 3—Debt”).

*Iron Run CorporateCenter—Philadelphia, Pennsylvania*

On March 21, 2005, wepurchased a distribution facility (“Iron Run”) comprising 100,000 square feetlocated in the Harrisburg/Lehigh Valley, a submarket of Philadelphia, Pennsylvania.As of June 30, 2005, Iron Run was 100% leased. We purchased Iron Run for atotal investment of approximately $5.2 million, including acquisition fees paidto our advisor.

*Miami Service Center—Miami,Florida*

On April 7, 2005, wepurchased a distribution facility (“Miami Service Center”) comprising 49,384square feet located in Miami, Florida. As of June 30, 2005, Miami ServiceCenter was 72.6% leased. We purchased Miami Service Center for a totalinvestment of approximately $4.9 million, including acquisition fees paid toour advisor.

*Baltimore-WashingtonPortfolio—Baltimore, Maryland*

On April 12, 2005, wepurchased seven distribution facilities (the “Baltimore-Washington portfolio”)comprising 874,455 square feet located in Baltimore, Maryland. As of June 30,2005, the Baltimore-Washington portfolio was 96.7% leased. We purchased theBaltimore-Washington portfolio for a total investment of approximately $45.1million, including acquisition fees paid to our advisor. We assumed mortgagedebt of approximately $27.4 million, exclusive of a $1.8 million premium,associated with the acquisition of these properties (see “Note 3—Debt”).

10

----

*Miami CommerceCenter—Miami, Florida*

On April 13, 2005, wepurchased a distribution facility (“Miami Commerce Center”) comprising 201,399square feet located in Miami, Florida. As of June 30, 2005, Miami CommerceCenter was 100% leased. We purchased Miami Commerce Center for a totalinvestment of approximately $13.5 million, including acquisition fees paid toour advisor. We assumed mortgage debt of approximately $6.4 million, exclusiveof a $539,000 premium, associated with the acquisition of this facility (see “Note3—Debt”).

*Bunzl DistributionCenter—Dallas, Texas*

On May 26, 2005, wepurchased a distribution facility (“Bunzl”) comprising 120,862 square feetlocated in Valwood, a submarket of Dallas, Texas. As of June 30, 2005,Bunzl was 100% leased. We purchased Bunzl for a total investment ofapproximately $3.7 million, including acquisition fees paid to our advisor. Weassumed mortgage debt of approximately $2.5 million, exclusive of a $182,000premium, associated with the acquisition of this facility (see “Note 3—Debt”).

*Blackhawk Portfolio—Chicago,Illinois and Memphis, Tennessee*

On June 13, 2005, wepurchased six distribution facilities (“Blackhawk”) comprising 1,378,660 squarefeet. Five distribution facilities comprising 1,078,660 square feet are locatedin Chicago, Illinois. Another distribution facility comprising 300,000 squarefeet is located in Memphis, Tennessee. As of June 30, 2005, Blackhawk was86.2% leased. We purchased Blackhawk for a total investment of approximately$59.2 million, including acquisition fees paid to our advisor. We assumedmortgage debt of approximately $24.7 million, exclusive of a $503,000 premium,associated with the acquisition of these properties (see “Note 3—Debt”).

***Joint Ventures and Development Projects***

*Buford DistributionCenter*

In October 2004, weentered into a forward capital commitment with Wachovia Bank NationalAssociation (“Wachovia”) in connection with our commitment to acquire twobuildings (the “Buford Distribution Center”) totaling 677,667 square feet from South-eastInvestment Properties, an unrelated third party developer. We have entered intothis binding agreement with Wachovia, the construction lender, to purchase the BufordDistribution Center at a price of up to $29.0 million. Our obligation toacquire the buildings from the developer upon completion (which completion may besatisfied by either South-east Investment Properties or Wachovia) at a pricemostly dependent upon leasing, with a minimum purchase price equal to actualdevelopment costs if not leased. In order to provide security to Wachovia underthis capital commitment, we were required to provide them with a $4.9 million letterof credit. We anticipate funding this commitment in 2006 with net proceeds fromour public and private offerings and debt.

*Deltapoint Park*

On March 28, 2005, awholly-owned subsidiary of our partnership entered into a joint ventureagreement with Deltapoint Park Associates, LLC, an unaffiliated third party, toacquire 47 acres of land and to develop an 885,000 square foot distributionfacility located in Memphis, Tennessee. Deltapoint Park Partners LLC (“Deltapoint”),a Delaware limited liability company, was created for the purpose of conductingbusiness on behalf of the joint venture. Pursuant to the operating agreement ofDeltapoint, we are obligated to make the majority of all capital contributionsand we will receive a preferred annual return equal to 8.5%. On April 8,2005, Deltapoint acquired 47 acres of land for a purchase price ofapproximately $2.2 million, which was funded primarily from the proceeds wecontributed to Deltapoint. In May 2005, our partnership entered into aforward purchase commitment agreement whereby we are 

11

----

obligatedto acquire the building from the joint venture upon completion, which can besatisfied under a variety of scenarios, at a price mostly dependent uponleasing, with a minimum purchase price equal to actual development costs if notleased.

*SouthCreek IVDistribution Facility*

On May 19, 2005, awholly-owned subsidiary of our partnership entered into a joint ventureagreement with SV Atlanta SouthCreek IV, L.P., an unaffiliated third party, toacquire 37 acres of land and to develop a 556,800 square foot distributionfacility located in Atlanta, Georgia. SouthCreek IV-Atlanta, LLC (“SouthCreek”),a Delaware limited liability company, was created for the purpose of conductingbusiness on behalf of the joint venture. Pursuant to the operating agreement ofSouthCreek, SV Atlanta SouthCreek IV, L.P. and our partnership’s subsidiary willprovide approximately 3% and 97%, respectively, of the required equity capitalto fund the development project, which is estimated to be approximately $5.6million. Both parties will receive an 8.25% preferred return on theirrespective capital contributions. We have the right to purchase SV AtlantaSouthCreek IV, L.P.’s interest in South Creek at anytime after the later tooccur of (i) stabilization of the project, and (ii) the date that is 18 monthsafter completion of the project.

*Panattoni Loans*

On March 26,2004, we entered into a strategic relationship with Panattoni Investments, LLC(“Panattoni”) pursuant to which we have committed to fund up to $15 millioninto various development projects. On March 26, 2004, in connection withproperties to be developed in Plainfield, a sub-market of Indianapolis, we madeour initial contribution of cash in exchange for notes receivable. We havesince made subsequent contributions in connection with a property to bedeveloped in Riverside, a sub-market of Los Angeles, Goodson Road, aproperty located in a sub-market of Atlanta and the Plainfield properties. Intotal, we have contributed $8.2 million in exchange for four notes receivablereferred to as the Plainfield (comprised of two notes), Riverside and Goodsonnotes. In addition to the 9.5% interest initially earned on the notes, weobtained certain acquisition rights to the properties being developed. We haveobtained with respect to each development project an option that gives us theright to purchase an equity interest in the entity owning the underlyingproperty. This equity interest may be up to 5% of the total amount of theprincipal note balance outstanding at the time of contribution, which, ifexercised, increases the interest earned on the reduced principal balance ofthe note to 10% thus maintaining our yield. We exercised this option on the Riversidenote on December 31, 2004. For the three and six months ended June 30,2005, we recognized interest income from these notes of approximately $195,000and $328,000, respectively. All costs associated with executing these noteshave been capitalized as deferred loan costs and are included in other assetson the accompanying condensed consolidated balance sheet. Such costs areamortized as a reduction in interest income over the average term of theoutstanding notes receivable. The following table further describes these notesand the respective maturity dates on which the outstanding principal balancesare due in full as balloon payments.
| ** **  | ** ** | **June 30,** | ** ** | **December 31,** | ** ** | **Maturity** | ** ** |
|-------------|------------|-------------------|------------|-----------------------|------------|--------------|------------|
| **Project** | ** ** | ** **        | ** ** | **2005**              | ** ** | **2004**     | ** ** | **Date** | ** ** |
| Plainfield  |       | $                 | 2,808,000  |                  |       | $            | 2,808,000  |   |   | 07/07 &  01/08 |   |
| Riverside   |       | 1,430,700         |       |                  | 1,430,700  |         |       | 09/07 |   |
| Goodson     |       | 3,940,000         |       |                  | —     |         |       | 06/08 |   |
| Total       |       | $                 | 8,178,700  |                  |       | $            | 4,238,700  |   |   |   |   |
|             |            |                   |            |                       |            |              |            |  |  |  |  |  |  |

 

12

----

**Note 3—Debt**

As of June 30,2005 and December 31, 2004, our debt consisted of the following:
| ** **                                      | ** ** | **Stated  Interest** | ** ** | **Effective  Interest** | ** ** | ** **             | ** ** | **Outstanding Balance as of** | ** ** |
|-------------------------------------------------|------------|----------------------|------------|-------------------------|------------|------------------------|------------|----------------------------------------------|------------|
| ** **                                      | ** ** | **Rate**             | ** ** | **Rate(4)**             | ** ** | **Maturity Date** | ** ** | **June 30, 2005**                  | ** ** | **December 31, 2004** | ** ** |
| Secured Mortgage  Debt:                         | ** ** |                 | ** ** | ** **              |       |                   | ** ** | ** **                                   |       | ** ** | ** ** | ** ** | ** ** |   | ** ** | ** ** |   |
| New York Life                                   |       |                 | 5.00       | %                       |       |                   | 5.00       | %                                            |       | March 2011 |   | $ | 39,592,343 |   |   | $ | 39,953,415 | ** ** |   |
| ING Investment Management(1)                    |       |                 | 5.31       | %                       |       |                   | 5.34       | %                                            |       | January 2015 |   | 55,000,000 |   |   | 55,000,000 | ** ** |   |
| ING Investment Management(1)                    |       |                 | 4.40       | %                       |       |                   | 5.42       | %                                            |       | January 2010 |   | 57,000,000 |   |   | — | ** ** |   |
| Assumed Secured  Mortgage Debt(2):              |       |                 |       |                    |       |                   |       |                                         |       |   |   |   |   |   |   | ** ** |   |
| Principal                                       |       |                 | 7.08       | %                       |       |                   | 4.81       | %                                            |       | July 2008 |   | 16,946,680 |   |   | 17,174,107 | ** ** |   |
| Principal                                       |       |                 | 7.21       | %                       |       |                   | 4.81       | %                                            |       | July 2008 |   | 11,472,128 |   |   | 11,570,162 | ** ** |   |
| Prudential                                      |       |                 | 6.40       | %                       |       |                   | 6.09       | %                                            |       | November 2012 |   | 12,700,000 |   |   | 12,700,000 | ** ** |   |
| Principal                                       |       |                 | 6.22       | %                       |       |                   | 4.18       | %                                            |       | September 2012 |   | 3,799,762 |   |   | 3,838,755 | ** ** |   |
| Legacy                                          |       |                 | 7.40       | %                       |       |                   | 5.21       | %                                            |       | December 2017 |   | 1,462,394 |   |   | — | ** ** |   |
| Prudential                                      |       |                 | 5.69       | %                       |       |                   | 5.22       | %                                            |       | December 2013 |   | 8,187,380 |   |   | — | ** ** |   |
| State Farm                                      |       |                 | 6.72       | %                       |       |                   | 5.62       | %                                            |       | November 2022 |   | 12,607,850 |   |   | — | ** ** |   |
| Column Financial, Inc.                     |       |                 | 6.30       | %                       |       |                   | 5.18       | %                                            |       | September 2012 |   | 27,324,261 |   |   | — | ** ** |   |
| John Hancock                                    |       |                 | 6.91       | %                       |       |                   | 5.25       | %                                            |       | September 2013 |   | 6,347,645 |   |   | — | ** ** |   |
| TIAA                                            |       |                 | 8.50       | %                       |       |                   | 4.71       | %                                            |       | October 2008 |   | 8,118,825 |   |   | — | ** ** |   |
| Fortis Benefits Insurance Co.                   |       |                 | 7.25       | %                       |       |                   | 4.70       | %                                            |       | July 2008 |   | 2,530,554 |   |   | — | ** ** |   |
| ING Investment Management                       |       |                 | 4.89       | %                       |       |                   | 4.73       | %                                            |       | February 2008 |   | 19,998,000 |   |   | — | ** ** |   |
| Mass Mutual                                     |       |                 | 6.79       | %                       |       |                   | 4.91       | %                                            |       | July 2011 |   | 4,723,020 |   |   | — | ** ** |   |
| Weighted Avg./Totals(3)                         |       |                 | 5.64       | %                       |       |                   | 5.19       | %                                            |       |   |   | $ | 287,810,842 |   |   | $ | 140,236,439 |   |   |
| Premiums, Net of Amortization(2)                |       |                 |       |                    |       |                   |       |                                         |       |   |   | 7,477,440 |   |   | 2,518,329 | ** ** |   |
| Carrying Value of Debt                          |       |                 |       |                    |       |                   |       |                                         |       |   |   | $ | 295,288,282 |   |   | $ | 142,754,768 | ** ** |   |
| Senior Secured  Revolving Credit Facility: |       |                 |       |                    |       |                   |       |                                         |       |   |   |   |   |   |   | ** ** |   |
| JP Morgan                                       |       |                 | 6.25       | %                       |       |                   | 6.25       | %                                            |       | February 2007 |   | $ | 12,000 |   |   | $ | 4,000 | ** ** |   |

----

(1)    We assigned certain treasury lock hedging transactionsto these notes. Pursuant to SFAS No. 133 (see “Note 1—Organizationand Summary of Significant Accounting Policies”), the fair value of thesehedging instruments will be amortized to interest expense over the life of theassigned notes.

(2)    Thesemortgages were assumed in conjunction with the acquisition of properties and,pursuant to SFAS No. 141 (see “Note 1—Organization and Summary ofSignificant Accounting Policies”), the difference between the fair value andthe face value of these notes at the date of acquisition is reflected as apremium or discount which will be amortized to interest expense over theremaining life of the underlying note.

(3)    Weighted-averageinterest rates are based upon outstanding balances as of June 30, 2005.

(4)    Reflectsthe impact to interest rates of GAAP adjustments for purchase price allocationand hedging transactions. These rates do not reflect the impact of otherinterest expense items such as fees and the amortization of loan costs.

In January 2005, we entered into $57.0 million ofsecured, non-recourse debt with a stated fixed interest rate of 4.40% whichmatures in 2010. The underlying notes require monthly payments of interest onlyuntil January 1, 2006 at which time monthly payments of principal andinterest will be required. During the six months ended June 30, 2005, weassumed nine secured, non-recourse notes, totaling $91.6 million, excludingpremiums, in conjunction with the acquisition of certain properties (see “Note 2—RealEstate”). These assumed notes bear fixed interest rates ranging from 4.89% to8.50% and require monthly payments of principal and interest. The maturitydates of such assumed notes range from February 2008 to November 2022.Pursuant to SFAS No. 141, the difference between the fair value and facevalue of these 

13

----

assumed notes at the dateof acquisition resulted in a premium of approximately $5.4 million, whichwill be amortized to interest expense over the remaining life of the underlyingnotes.

We have a senior secured revolving credit facilitywith a current capacity of $225 million with a syndicated group led by JPMorgan Securities (formerly BankOne). The credit facility currently bearsinterest at either LIBOR plus 1.125% to 1.500%, or, at our election, the primerate and is subject to an annual 0.250% facility fee. This credit facilitycontains various covenants including financial covenants regarding net worth,interest and fixed charge coverage and consolidated leverage.

As of June 30, 2005,the gross book value of all our properties was approximately $1.04 billionand the total gross book value of all properties securing our fixed ratemortgage debt and senior secured credit facility was approximately$514.2 million and $213.1 million, respectively. Our debt has variouscovenants and management believes we were in compliance with all of thesecovenants as of June 30, 2005.

**Note 4—Hedging Activities**

We continue to enter into forward treasury locks inanticipation of issuing future fixed rate debt to fund future propertyacquisitions. We are entering into such treasury locks to hedge our exposure tothe variability in interest rates and therefore mitigating the risk of changesin future payments of interest for anticipated fixed rate debt issuances over amaximum period of 12 months (excluding forecasted transactions related to thepayment of variable interest on our existing senior secured revolving creditfacility). As required by SFAS No. 133, we record all hedging derivatives onthe balance sheet at fair value. These forward treasury lock hedges have beendesignated as cash flow hedges for accounting purposes.

As of June 30, 2005, we had entered into a totalof seven cash flow hedging transactions, of which four have been settled forcash. Of the four settled hedges, two have been attributed to fixed rate debtand the balances of such hedges are being amortized to interest expense overthe life of the assigned debt and the fair value of the other two settledhedges are recorded in other comprehensive loss until the anticipated futurefixed rate debt is issued, at which time such values will be amortized over thelife of the debt to interest expense. The three unsettled hedges are recordedin other comprehensive loss at their fair value.

As a result of ineffectiveness due to the change in estimatedtiming of the anticipated debt issuance, approximately $72,000 was recorded asa realized loss during the three and six months ended June 30, 2005. Therewas no ineffectiveness measured for the same periods in 2004. As of June 30,2005, the outstanding unsettled hedges with a fair value of approximately $3.5million were included in other liabilities. During the three and six monthsended June 30, 2005, we recorded an unrealized loss of approximately $6.3million and $4.1 million, respectively, to shareholders’ equity andcomprehensive loss as a result of the change in fair value of the outstandinghedges. During the three and six months ended June 30, 2004, we recordedan unrealized gain of approximately $275,000 and $424,000, respectively, toshareholders’ equity and comprehensive income as a result of the change in fairvalue of the outstanding hedges.

As of June 30, 2005, and December 31, 2004,the accumulated other comprehensive loss balance pertaining to the cash flowhedges was approximately $8.2 million and $4.3, respectively. Amounts reportedin accumulated other comprehensive loss related to cash flow hedges will beamortized to interest expense as interest payments are made on our anticipatedfuture debt issuance. During the next 12 months, we estimate that approximately$1.0 million will be amortized from other comprehensive loss to interestexpense resulting in an increase of our interest expense.

14

----

**Note 5—Public Offerings**

On June 28, 2004, we filed our third registrationstatement with the Securities Exchange Commission (“SEC”) covering our thirdpublic offering of our common stock. This registration statement was declaredeffective by the SEC and the offering commenced on October 18, 2004. Thecommon stock was offered at a price of $10.50 per share for a maximum of40,000,000 shares. The registration statement also covered up to 13,000,000shares available pursuant to our distribution reinvestment plan. On June 24,2005, we concluded our third public offering having sold approximately 40.3million shares of our common stock for gross proceeds of approximately $421.2million.

Our fourth offering began immediately following thethird offering. The fourth registration statement was filed on January 24,2005, which was declared effective by the SEC on June 9, 2005, and wecommenced the offering on June 27, 2005. The registration statement coversa maximum of $1,000,000,000 in shares of our common stock, including proceedsfrom our distribution reinvestment plan. Up to 72,770,273 shares are beingoffered to the public at a price of $10.50 per share and up to 23,650,339shares are being offered to participants in our distribution reinvestment plan.We will continue to sell shares under this offering and potential follow-onofferings, providing capital primarily for acquisitions. As of June 30,2005, we had sold 938,000 shares pursuant to our fourth public offering fortotal gross proceeds of approximately $9.8 million.

Through our publicofferings of common stock we, raised gross proceeds of $162.4 million and$305.6 million for the three and six months ended June 30, 2005,respectively. During the three and six months ended June 30, 2004, weraised gross proceeds of approximately $143.5 million and $246.5 millionpursuant to our public offerings.

**Note6—Our Partnership’s Private Placement**

Our partnership is currently offering undividedtenancy-in-common interests in our properties to accredited investors in aprivate placement exempt from registration under the Securities Act. Weanticipate that these tenancy-in-common interests may serve as replacementproperties for investors seeking to complete like-kind exchange transactionsunder Section 1031 of the Internal Revenue Code. Additionally, thetenancy-in-common interests sold to investors will be 100% leased by ourpartnership, and such leases will contain purchase options whereby ourpartnership will have the right, but not the obligation, to acquire thetenancy-in-common interests from the investors at a later point in time inexchange for limited partnership units in our partnership under Section 721of the Internal Revenue Code.

Our partnership will pay certain up-front fees andreimburse certain related expenses to our advisor, the Dealer Manager andDividend Capital Exchange Facilitators LLC (the “Facilitator”) for raisingcapital through the private placement. Our advisor is obligated to pay all ofthe offering and marketing related costs associated with the private placement.However, our partnership is obligated to pay our advisor a non-accountableexpense allowance which equals 2% of the gross equity proceeds raised throughthe private placement. In addition, our partnership is obligated to pay theDealer Manager a dealer manager fee of up to 1.5% of gross equity proceedsraised and a commission of up to 5% of gross equity proceeds raised through theprivate placement. The Dealer Manager may re-allow such commissions and aportion of such dealer manager fee to participating broker dealers. Ourpartnership is also obligated to pay a transaction facilitation fee to theFacilitator, an affiliate of our advisor, of up to 1.5% of gross equity proceedsraised through the private placement.

During the three and six months ended June 30,2005, we raised approximately $18.4 million and $36.3 million,respectively, from the sale of undivided interests in our properties, which isincluded in financing obligations in the accompanying condensed consolidatedbalance sheets pursuant to SFAS No. 98 “*Accountingfor Leases*” (“SFAS No. 98”). During the same periods in 2004,we raised approximately $1.3 million and $3.3 million, respectively, from thesale of such interests. In accordance 

15

----

with SFAS No. 98, aportion of the rental payments made by our partnership to owners oftenancy-in-common interests will be recognized by our partnership as interestexpense using the interest method.

During the three and six months ended June 30,2005, our partnership incurred upfront costs of approximately $1.5 million and$3.1 million, respectively, payable to our advisor and other affiliatesfor affecting these transactions which are recorded as deferred loan costs.During the same periods in 2004, our partnership incurred upfront costs ofapproximately $111,000 and $300,000, respectively. Such deferred loan costs areamortized to interest expense over the life of the financing obligation. If ourpartnership elects to exercise any purchase option as described above and issuelimited partnership units, the unamortized portion of the up-front fees andexpense reimbursements paid to affiliates with respect to such transactionswill be recorded against owners’ equity as a selling cost of the limitedpartnership units. If our partnership does not elect to exercise any suchpurchase option, the unamortized portion of the up-front fees and expensereimbursements paid to affiliates with respect to such transactions will be consideredin the calculation of a gain or loss on the sale of real estate.

On April 8, 2005,pursuant to its master lease agreement, our partnership exercised its option tobuy certain tenancy-in-common interests it had previously sold in a propertylocated in Memphis, Tennessee by issuing approximately 424,000 limitedpartnership units worth approximately $4.5 million. Such unit holders will havesubstantially the same economic interest as our common shareholders (see “Note7—Minority Interest”).

**Note 7—Minority Interest**

Minorityinterest consists of the following as of June 30, 2005 and December 31, 2004:
| **Partnership Units**         | ** ** | ** ** | ** ** | **June 30,  2005** | ** ** | **December 31,  2004** | ** ** |
|------------------------------------|------------|------------|------------|-------------------------|------------|-----------------------------|------------|
| Limited partnership  units:        |       |       |       |                    |       |                        |       |
| Net investment                     |       | $          | 3,947,860  |                    |       | $                           | —     |   |   |
| Distributions                      |       | (61,758    | )          |                    | —     |                        |       |
| Share of income                    |       | 3,301      |       |                    | —     |                        |       |
| Sub-total                          |       | 3,889,403  |       |                    |       |                        |       |
| Limited  partnership Special Units |       | 1,000      |       |                    | 1,000      |                        |       |
| Total                              |       | $          | 3,890,403  |                    |       | $                           | 1,000      |   |   |

 

***Limited Partnership Units***

At June 30, 2005, ourpartnership was approximately 99.5% owned by Dividend Capital and 0.5% by othernon-affiliated limited partners (see “Note 6—Our Partnership’s PrivatePlacement”) and our advisor. Limited partnership units are redeemable at theoption of the unit holder. We have the option of redeeming the limitedpartnership units with cash or with common shares. At inception (April 12,2002), our partnership issued 20,000 limited partnership units to our advisorfor gross proceeds of $200,000, which currently represents less than a 0.1%ownership interest in our partnership.

***Limited Partnership Special Units***

During 2002, ourpartnership issued 10,000 Special Units to an affiliate of our advisor forconsideration of $1,000. The holder of the Special Units does not participatein the profits and losses of our partnership. Amounts distributable to theholder of the Special Units will depend on operations and the amount of netsales proceeds received from property dispositions or upon other events. Ingeneral, after holders of regular partnership interests in aggregate have receivedcumulative distributions equal to their capital contributions plus a 7%cumulative non-compounded annual pre-tax return on their net contributions, theholder of the Special Units and the holders of regular partnership interestswill receive 

16

----

15% and85%, respectively, of the net sales proceeds received by our partnership uponthe disposition of our partnership’s assets.

**Note 8—RelatedParty Transactions**

***Advisory Agreement***

We have entered into an Advisory Agreement with ouradvisor pursuant to which we pay certain acquisition and asset management feesto our advisor. Our advisor is considered a related party as certain indirectowners and employees of our advisor serve as our executives. The amount of suchacquisition fees is equal to 1% of the aggregate purchase price of propertieswe acquire. During the three and six months ended June 30, 2005, ouradvisor earned approximately $1.8 million and $2.8 million, respectively, and,for the three and six months ended June 30, 2004, our advisor earned $1.9and $2.7, respectively, for acquisition fees which are accounted for as part ofthe basis of the acquired properties.

We pay our advisor an asset management fee equal to0.75% per annum of the total undepreciated cost of the properties we own inexcess of $170 million. We exceeded this threshold on March 31, 2004.During the three and six months ended June 30, 2005, we incurred assetmanagement fees of $1.5 million and $2.7 million, respectively. During thethree and six months ended June 30, 2004, we incurred, in each case, assetmanagement fees of $145,294.

Pursuant to the Advisory Agreement, our advisor isobligated to advance all of our organization and offering costs subject to itsright to be reimbursed for such costs by us in an amount up to the amountactually incurred by the advisor or 2% of the aggregate gross offering proceedsraised. Such organization and offering costs include, but are not limited to,actual legal, accounting, printing and other expenses attributable toorganizing Dividend Capital, preparing the SEC registration statement,qualification of the shares for sale in the states and filing fees incurred byour advisor, as well as reimbursements for marketing, salaries and directexpenses of its employees while engaged in registering and marketing theshares, other than selling commissions and the dealer manager fee (see below).

During the three and six months ended June 30,2005 our advisor incurred approximately $1.8 million and $3.9 million,respectively, of organization and offering costs. During the three and sixmonths ended June 30, 2004, our advisor incurred approximately $2.1million and $3.8 million, respectively, of organization and offering costs.During the three and six months ended June 30, 2005 we reimbursed ouradvisor approximately $3.1 million and $5.9 million, respectively, for suchcosts and during the three and six months ended June 30, 2004, wereimbursed our advisor approximately $3.0 million and $4.9 million,respectively. These amounts are reflected in equity as offering costs when suchamounts are incurred by Dividend Capital. As of June 30, 2005, the netun-reimbursed amount of organization and offering costs incurred by ouradvisor, since inception (April 12, 2002), was approximately $2.9 million.If we are not successful in raising additional amounts of equity proceeds, noadditional amounts will be payable by us to our advisor for reimbursement oforganization and offering costs.

Our advisor is obligated to pay all of the offeringand marketing related costs associated with our partnership’s privateplacement. However, our partnership is obligated to pay our advisor anon-accountable expense allowance which equals 2% of the gross proceeds raisedthrough our partnership’s private placement. During the three andsix months ended June 30, 2005, our partnership incurredapproximately $307,000 and $628,000, respectively, and, during the same periodsin 2004, our partnership incurred approximately $22,000 and $79,000,respectively, payable to our advisor for such expense allowance.

In accordance with the Advisory Agreement we areobligated, subject to certain limitations, to reimburse our advisor for certainother expenses incurred on our behalf for providing services contemplated inthe Advisory Agreement, provided that our advisor does not receive a specificfee for the 

17

----

activities which generatethe expenses to be reimbursed. For the three and six months ended June 30,2005, we have reimbursed approximately $85,000 and $172,000, respectively forsuch costs and for the same periods in 2004, we reimbursed our advisorapproximately $51,000 and $76,000, respectively, for such expenses.

As of June 30, 2005and December 31, 2004, we owed our advisor approximately $1.5 million and$576,000, respectively, for various fees and reimbursements as described abovewhich is included in other liabilities on the accompanying condensedconsolidated balance sheets.

***Dealer Manager Agreement***

We have entered into a Dealer Manager Agreement withthe Dealer Manager pursuant to which we pay a dealer manager fee of up to 2.0%of gross offering proceeds raised pursuant to our public offerings to theDealer Manager as compensation for managing the offering. The Dealer Managermay re-allow a portion of such fees to broker-dealers who participate in theoffering. We also pay a sales commission of up to 6% of gross offering proceedsraised pursuant to our public offerings. As of June 30, 2005, all salescommissions had been re-allowed to participating broker-dealers. For the threeand six months ended June 30, 2005, we incurred approximately $11.9million and $22.6 million, respectively, and, for the same periods in2004, we incurred approximately $11.1 million and $19.1 million, respectively,payable to the Dealer Manager for dealer manager fees and sales commissions.Such amounts are included as a reduction of additional paid-in capital on theaccompanying condensed consolidated balance sheets.

We have also entered into a dealer manager agreementwith the Dealer Manager pursuant to which we pay a dealer manager fee of up to1.5% of the gross proceeds raised through our partnership’s private placement.We also pay the Dealer Manager a sales commission of up to 5.0% of the grossproceeds raised through our partnership’s private placement. As of June 30,2005, substantially all of the sales commissions were re-allowed toparticipating broker-dealers who are responsible for affecting sales. For thethree and six months ended June 30, 2005, we incurred approximately$1.0 million and $2.0 million, respectively, and, for the same periods in2004, we incurred approximately $60,000 and $145,000, respectively, payable tothe Dealer Manager for dealer manager fees and sales commissions. Such amountsare initially recorded as deferred loan costs on the accompanying condensedconsolidated balance sheets.

Pursuant to our first and second public offerings, theDealer Manager earned one soliciting dealer warrant for every 25 shares sold. Theholder of a soliciting dealer warrant has the right to purchase one share ofcommon stock for $12. No warrants were offered in our third public offering andno warrants are being offered in our fourth public offering. During the sixmonths ended June 30, 2005, the Dealer Manager did not earn any solicitingdealer warrants as all shares sold during such period were in connection withour third and fourth public offering (see “Note 5—Public Offerings”). For thethree and six months ended June 30, 2004, the Dealer Manager earned569,036 and 978,906 soliciting dealer warrants, respectively. As of June 30,2005, the Dealer Manager had earned a total of approximately 2.2 millionwarrants and, using the fair value provisions of SFAS No. 123, theestimated fair value of the warrants earned as of June 30, 2005 wasestimated to be approximately $1.6 million. These warrants do not have animpact on our condensed consolidated statement of operations as the value ofthese warrants is a cost of raising capital and therefore deducted fromadditional paid-in capital within shareholder’s equity.

As of June 30, 2005and December 31, 2004, we owed the Dealer Manager approximately $1.5million and $828,000, respectively, in relation to the fees described abovewhich is included in other liabilities on the accompanying condensedconsolidated balance sheets.

***Facilitator Agreement***

We have entered into anagreement with the Facilitator whereby we pay a transaction facilitation feeassociated with our partnership’s private placement. We pay the Facilitator upto 1.5% of the gross equity 

18

----

proceedsraised through our partnership’s private placement for transactionfacilitation. For the three and six months ended June 30, 2005, weincurred approximately $230,000 and $471,000, respectively, and, for the sameperiods in 2004, we incurred approximately $29,000 and $45,000, respectively,payable to the Facilitator for such fees. In accordance with SFAS No. 98,these fees, as well as the other fees associated with our partnership’s privateplacement, are initially recorded as deferred loan costs and amortized over thelife of the financing obligation (see “Note 6—Our Partnership’s PrivatePlacement”).

**Note 9—Subsequent Events**

***Special Meeting of the Board of Directors***

On July 19, 2005, our board of directors receivedand accepted Robert Masten’s resignation as an independent director. Inaddition, on July 19, 2005 at a special meeting of the board of directors,Bruce Warwick was duly nominated, voted and approved as an independent directorof our board of directors. Mr. Warwick will serve until the next annualmeeting of shareholders in 2006. The following describes Mr. Warwick’sbackground and experience.

*Bruce L.Warwick*, age 67, is an independent director of DividendCapital Trust. Mr. Warwick has been active in real estate constructionactivities since 1961 and is currently a Vice Chairman of The RelatedCompanies, overseeing the development of various real estate developmentprojects including office and residential properties throughout the UnitedStates. Prior to joining The Related Companies, Mr. Warwick served as ViceChairman, Development, of The Galbreath Company, overseeing development andmanagement in the Eastern Region. Mr. Warwick received a Bachelor of ArtsDegree from Colgate University in 1960.

***Real Estate Acquisitions***

*Beltway EightBusiness Park Phase II—Houston, Texas*

On July 1, 2005, wepurchased three distribution facilities (“Beltway Eight II”) comprising 92,000rentable square feet located in Houston, Texas. Upon acquisition, Beltway EightII was 100% leased to 11 customers. We purchased Beltway Eight II for a totalestimated cost of approximately $8.4 million, including acquisition fees paidto our advisor.

*Greens Crossing andWillowbrook Portfolios—Houston, Texas*

On July 1, 2005, wepurchased seven distribution facilities comprising 398,601 rentable square feetlocated in Houston, Texas. Upon acquisition, the facilities were 95.3% leasedto 15 customers. We purchased these facilities for a total estimated cost ofapproximately $23.7 million, including acquisition fees paid to our advisor. Weassumed mortgage debt of approximately $15.9 million in connection with theacquisition of the Greens Crossing and Willowbrook portfolios.

*Binney &Smith Distribution Facility—Fredericksburg, Pennsylvania*

On July 20, 2005, wepurchased a distribution facility (“B&S”) comprising 550,000 rentable squarefeet located in Fredericksburg, Pennsylvania. Upon acquisition, B&S was100% leased to a single customer. We purchased B&S for a total estimatedcost of approximately $23.8 million, including acquisition fees paid to ouradvisor. We assumed mortgage debt of approximately $11.6 million in connectionwith the acquisition of B&S.

19

----

*Acquisition ofCabot Industrial Value Fund*

We entered into an agreement dated June 17, 2005(the “Agreement”) with Cabot Industrial Value Fund, Inc., an unrelated,privately held third party (“Cabot”), to acquire by merger all of theoutstanding shares of Cabot’s common stock.

Pursuantto the Agreement, on July 21, 2005, we completed the aforementioned mergerand through our ownership of Cabot, we acquired an approximate 87% interest in Cabot Industrial Value Fund, LP (the “CabotPartnership”) which owned or controlled a portfolio of 105 industrialbuildings combined for 11.7 million square feet located in 12 markets throughoutthe United States and valued at approximately $695.3 million. Upon acquisition,the portfolio was approximately 84% leased. We completed the merger for a totalexpected investment of approximately $607.5 million, which includes anacquisition fee of approximately $5.6 million that is payable to our advisor.Total consideration for the $695.3 was satisfied as follows.
| Purchase price          |   | $            | 695,300,000 |   |
|-------------------------|--------|--------------|-------------|--------|
| Less:                   |   |         |        |
| Pro rations and credits |   | (31,343,965  | )           |
| Debt assumed            |   | (308,769,750 | )           |
| Interests not acquired  |   | (40,633,808  | )           |
| Line of credit          |   | (65,000,000  | )           |
| New debt                |   | (80,000,000  | )           |
| Cash paid at  closing   |   | $            | 169,552,477 |   |

 

The total consideration for the merger was determinedthrough negotiations between Cabot and our advisor. The total consideration mayincrease by additional costs which have not yet been finally determined. Weexpect any additional costs to be immaterial.

Through our ownership of Cabot, we have an approximate87% interest in the Cabot Partnership, a subsidiary of Cabot through which allits properties are owned and operated, and we are also the sole general partnerof the Cabot Partnership. The remaining interest in the Cabot Partnershipcontinues to be owned by Cabot Industrial Fund Manager, LLC, the previousgeneral partner of the Cabot Partnership and other limited partners. Atclosing, we entered into an agreement whereby we will have the option toacquire the remaining interests in the Cabot Partnership. Through thisagreement, the remaining limited partners have an initial option to put theremaining interests to us beginning April 1, 2006 and ending July 1, 2006 andwe have an initial option to call the remaining interests beginning April 1,2007 and ending July 1, 2007. If either such initial option is exercised, theremaining interests would be acquired through the assumption of debt,applicable pro rations and cash. Subsequent to these initial options, theseller and we will continue to have put and call options and the price of suchremaining interests would be based upon fair value. 

20

----

**Note10—Net Income (Loss) per Common Share**

Reconciliationsof the numerator and denominator used to calculate basic net income (loss) percommon share to the numerator and denominator used to calculate diluted netincome (loss) per common share for the periods indicated are as follows:
| ** **                                                                      | ** ** | **Three Months Ended  June 30,** | ** ** | **Six Months Ended  June 30,** | ** ** |
|---------------------------------------------------------------------------------|------------|-------------------------------------------------|------------|-----------------------------------------------|------------|
| ** **                                                                      | ** ** | **2005**                                        | ** ** | **2004**                                      | ** ** | **2005** | ** ** | **2004** | ** ** |
| Net income (loss)                                                               |       | $                                               | 747,833    |                                          | $          | 502,852 |   | $ | (1,833,646 | ) | $ | 675,298 |   |
| Minority interest  share in net income                                          |       | 3,301                                           |       | —                                        |       | 3,301 |   | — |   |
| Adjusted net  income (loss)                                                     |       | $                                               | 751,134    |                                          | $          | 502,852 |   | $ | (1,830,345 | ) | $ | 675,298 |   |
| Weighted average  common shares outstanding—Basic                          |       | 88,065,641                                      |       | 29,536,541                                    |       | 81,331,123 |   | 23,062,383 |   |
| Incremental weighted average effect of conversion of  limited partnership units |       | 407,046                                         |       | 20,000                                        |       | 213,523 |   | 200,000 |   |
| Weighted average  common shares outstanding—Diluted                        |       | 88,472,687                                      |       | 29,556,541                                    |       | 81,544,646 |   | 23,082,383 |   |
| Net income (loss)  attributable to common shares—Basic                     |       | $                                               | 0.01       |                                          | $          | 0.02 |   | $ | (0.02 | ) | $ | 0.03 |   |
| Net income (loss)  attributable to common shares—Diluted                   |       | $                                               | 0.01       |                                          | $          | 0.02 |   | $ | (0.02 | ) | $ | 0.03 |   |

 

21

----

**ITEM2.**                MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

**Forward-LookingInformation**

This report includescertain statements that may be deemed to be “forward-looking statements” withinthe meaning of Section 27A of the Securities Act of 1933, as amended, orthe Act, and Section 21E of the Securities Exchange Act of 1934, asamended, or the Exchange Act. Such forward-looking statements relate to,without limitation, our future capital expenditures, distributions and acquisitions(including the amount and nature thereof), other development trends of the realestate industry, business strategies, and the expansion and growth of ouroperations. These statements are based on certain assumptions and analyses madeby us in light of our experience and our perception of historical trends,current conditions, expected future developments and other factors we believeare appropriate. We intend such forward-looking statements to be covered by thesafe harbor provisions for forward-looking statements contained in Section 27Aof the Act and Section 21E of the Exchange Act. Such statements aresubject to a number of assumptions, risks and uncertainties which may cause ouractual results, performance or achievements to be materially different fromfuture results, performance or achievements expressed or implied by theseforward-looking statements. Forward-looking statements are generallyidentifiable by the use of the words “may,” “will,” “should,” “expect,” “anticipate,”“estimate,” “believe,” “intend,” “project,” “continue,” or the negative ofthese words, or other similar words or terms. Readers are cautioned not toplace undue reliance on these forward-looking statements. Among the factorsabout which we have made assumptions are general economic and business(particularly real estate) conditions being less favorable than expected, thepotential impact of terrorist attacks on the national, regional and localeconomies, the business opportunities that may be presented to and pursued by us,changes in laws or regulations (including changes to laws governing thetaxation of REITs), risk of acquisitions, availability and creditworthiness ofprospective customers, availability of capital (debt and equity), interest ratefluctuations, competition, supply and demand for properties in our current andany proposed market areas, customers’ ability to pay rent at current orincreased levels, accounting principles, policies and guidelines applicable toREITs, environmental, regulatory and/or safety requirements, customerbankruptcies and defaults, the availability and cost of comprehensiveinsurance, including coverage for terrorist acts, and other factors, many ofwhich are beyond our control. We undertake no obligation to publicly update orrevise any forward-looking statements, whether as a result of future events,new information or otherwise.

**Overview**

Dividend CapitalTrust Inc. was formed as a Maryland corporation in April 2002 inorder to invest in commercial real estate properties consisting primarily ofhigh-quality, generic distribution warehouses and light industrial propertiesnet leased to creditworthy corporate customers. In order to provide capital forthese investments, we are selling our common stock through public offerings,raising capital through our partnership’s private placement and issuing debt.We intend to continue raising significant amounts of capital through our fourthoffering and potential follow-on offerings, through our partnership’s privateplacement more fully described below and through the issuance of debt.

Our primary focus is tobuild a diversified portfolio of properties in terms of geography and theindustry group of our customers that will satisfy our corporate objectives ofmaximizing cash available for distributions to investors, preserving ourcapital, and realizing growth in the value of our portfolio over time.

**Liquidityand Capital Resources**

***Overview***

Other than nationaleconomic conditions affecting real estate in general, our management is notcurrently aware of any material trends or uncertainties, favorable orunfavorable that may have a material 

22

----

impacton either capital resources or the revenues or income to be derived from theoperation of real estate properties.

Managementcurrently expects that our principal sources of working capital and funding foracquisitions and potential capital requirements for expansion and renovation ofproperties will include:

·       Proceedsfrom our current or future public offerings of common stock;

·       Proceedsfrom our partnership’s private placement;

·       Proceedsfrom our distribution reinvestment plan;

·       Borrowingsunder our secured credit facility;

·       Otherforms of secured or unsecured financings;

·       Capitalfrom co-investment partners; and

·       Cashflow from operations.

Over the short term, webelieve that our sources of capital, specifically our cash flow fromoperations, borrowings under our credit facility and our ability to raisecapital through public offerings and our partnership’s private placement areadequate and will continue to be adequate to meet our liquidity requirementsand capital commitments. These liquidity requirements and capital commitmentsinclude the payment of distributions, capital expenditures at our properties,forward purchase commitments (as more fully described below) and theacquisition of 119 buildings which are currently under contract or have closedsince June 30, 2005, including the Cabot merger (see “Note 9—SubsequentEvents” to the condensed consolidated financial statements). These buildingstotal approximately 13.0 million square feet and have an aggregatepurchase price of approximately $765.6 million. We anticipate that theacquisitions that have not yet closed will close over the nextseveral months. However, the contracts related to such acquisitions aresubject to a number of contingencies and there are no assurances that theseacquisitions will transpire.

Over the longer term, inaddition to the same sources of capital we rely on to meet our short termliquidity requirements, we also expect to utilize additional secured andunsecured financings and capital from co-investment partners. We expect theseresources will be adequate to fund our operating activities and distributions,which we presently anticipate will grow over time, and will be sufficient tofund our ongoing acquisition activities as well as providing capital forinvestment in future development and other joint ventures along with additionalpotential forward purchase commitments. Our management anticipates that overtime, cash provided by operating activities, debt proceeds and cash fromco-investment partners will become a larger portion of our capital resources.

During the six monthsended June 30, 2005, and 2004, cash generated from financing activitieswas approximately $328.7 million and $224.0 million, respectively.This increase was generally comprised of an increase in gross proceedsgenerated by our public offerings and our partnership’s private placement ofapproximately $79.2 million compared to the same period in 2004. Additionally,cash provided by operating activities increased to approximately$27.3 million for the six months ended June 30, 2005, fromapproximately $6.5 million for the same period ended June 30, 2004due to the additional properties owned during the 2005 period. These sources ofcapital were primarily utilized to fund approximately $202.1 million and $178.0 millionof in real estate investments during the six months ended June 30, 2005and 2004, respectively.

***Public Offering***

On June 28, 2004, wefiled our third registration statement with the SEC covering our third publicoffering of our common stock. This registration statement was declaredeffective by the SEC and the offering commenced on October 18, 2004. Thecommon stock was offered at a price of $10.50 per share for 

23

----

amaximum of 40,000,000 shares. The registration statement also covered up to13,000,000 shares available pursuant to our distribution reinvestment plan. On June 24,2005, we concluded our third public offering having sold approximately 40.3million shares of our common stock for gross proceeds of approximately $421.2million.

Our fourth offering beganimmediately following the third offering. The fourth registration statement wasfiled on January 24, 2005, which was declared effective by the SEC on June 9,2005, and we commenced the offering on June 27, 2005. The registrationstatement covers a maximum of $1,000,000,000 in shares of our common stock,including proceeds from our distribution reinvestment plan. Up to 72,770,273shares are being offered to the public at a price of $10.50 per share and up to23,650,339 shares are being offered to participants in our distributionreinvestment plan. We will continue to sell shares under this offering andpotential follow-on offerings, providing capital primarily for acquisitions. Asof June 30, 2005, we had sold 938,000 shares pursuant to our fourth publicoffering for total gross proceeds of approximately $9.8 million.

***Our Partnership’sPrivate Placement***

Our partnership iscurrently offering undivided tenancy-in-common interests in our properties toaccredited investors in a private placement exempt from registration under theSecurities Act. We anticipate that these tenancy-in-common interests may serveas replacement properties for investors seeking to complete like-kind exchangetransactions under Section 1031 of the Internal Revenue Code. Additionally,the tenancy-in-common interests sold to investors will be 100% leased by ourpartnership, and such leases will contain purchase options whereby ourpartnership will have the right to acquire the tenancy-in-common interests fromthe investors at a later point in time in exchange for limited partnershipunits in our partnership under Section 721 of the Internal Revenue Code.During the three and six months ended June 30, 2005, we raisedapproximately $18.4 million and $36.3 million, respectively, and, as of June 30,2005, we have raised a total of approximately $69.0 million from the saleof undivided interests in our properties pursuant to our partnership’s privateplacement.

On April 8, 2005,pursuant to its master lease agreement, our partnership exercised its option tobuy certain tenancy-in-common interests it had previously sold in a propertylocated in Memphis, Tennessee by issuing approximately 424,000 limitedpartnership units worth approximately $4.5 million. Such unit holders will havesubstantially the same economic interest as our common shareholders.

***Forward CapitalCommitment Agreements***

On March 28, 2005, awholly-owned subsidiary of our partnership entered into a joint ventureagreement with Deltapoint Park Associates, LLC, an unaffiliated third party, toacquire 47 acres of land and to develop an 885,000 square foot distributionfacility located in Memphis, Tennessee. Deltapoint Park Partners LLC (“Deltapoint”),a Delaware limited liability company, was created for the purpose of conductingbusiness on behalf of the joint venture. Pursuant to the operating agreement ofDeltapoint, we are obligated to make the majority of all capital contributionsand we will receive a preferred annual return equal to 8.5%. On April 8,2005, Deltapoint acquired 47 acres of land for a purchase price ofapproximately $2.2 million, which was funded primarily from the proceeds wecontributed to Deltapoint. In May 2005, our partnership entered into aforward purchase commitment agreement whereby we are obligated to acquire thebuilding from the joint venture upon completion, which can be satisfied under avariety of scenarios, at a price mostly dependent upon leasing, with a minimumpurchase price equal to actual development costs if not leased.

In October 2004, weentered into a forward capital commitment with Wachovia Bank NationalAssociation (“Wachovia”) in connection with our commitment to acquire twobuildings (the “Buford Distribution Center”) totaling 677,667 square feet from South-eastInvestment Properties, an unrelated third party developer. We have entered intothis binding agreement with Wachovia, the construction 

24

----

lender,to purchase the Buford Distribution Center at a price of up to $29.0 million.Our obligation to acquire the buildings from the developer upon completion (whichcompletion may be satisfied by either South-east Investment Properties orWachovia) at a price mostly dependent upon leasing, with a minimum purchaseprice equal to actual development costs if not leased. In order to providesecurity to Wachovia under this capital commitment, we were required to providethem with a  $4.9 million letter ofcredit. We anticipate funding this commitment in 2006 with net proceeds fromour public and private offerings and debt.

***Distributions***

The payment ofdistributions is determined by our Board of Directors and may be adjusted atits discretion at any time. In December 2004, our Board of Directors setthe 2005 distribution level at an annualized $0.64 per share. The distributionwas set by our Board of Directors at a level we believe to be appropriate andsustainable based upon the evaluation of existing assets within our portfolio,anticipated acquisitions and projected levels of additional capital to beraised, debt to be incurred in the future and the anticipated results ofoperations. For the three and six months ended June 30, 2005, our board ofdirectors declared distributions totaling approximately $14.1 million and$25.8 million. We paid distributions for the fourth quarter 2004 on January 17,2005 in the amount of approximately $9.7 million and distributions for thefirst quarter 2005 on April 15, 2005 in the amount of approximately $11.7million. To fund total distributions, we utilized both funds from operationsand debt proceeds.

The short term dilution ofoperating results brought upon by the pace of raising capital meeting orexceeding the pace at which we have deployed such capital during the initialstages of our existence was anticipated and is a byproduct of our continuedeffort to build a high-quality portfolio. It is our objective to conservativelyfund our distributions from funds from operations over time.

***DistributionReinvestment Plan***

Pursuant to ourdistribution reinvestment plan, $7.7 million and $14.0 million of thedistributions declared during the three and six months ended June 30,2005, respectively, was satisfied through the issuance of approximately 772,000and 1.4 million shares of our common stock, respectively, at a 5.0% discountfrom our then current public offering share price. For the three and six monthsended June 30, 2004, $2.5 million and $3.9 million, respectively, ofdistributions declared were satisfied through the issuance of approximately262,000 and 411,000 shares of our common stock, respectively, pursuant to ourdistribution reinvestment plan at a 5.0% discount from our then current publicoffering share price for a discounted purchase price.

***Debt ServiceRequirements***

As of June 30, 2005,we had total outstanding debt, excluding financing obligations (see “Note 6—OurPartnership’s Private Placement” to the condensed consolidated financialstatements), of approximately $295.3 million consisting primarily of secured,fixed-rate, non-recourse mortgage notes. All of these notes require monthlypayments of interest and require, or will ultimately require, monthlyrepayments of principal (see “Note 3—Debt” to the condensed consolidatedfinancial statements). Currently, cash flow from operations is sufficient tosatisfy these debt service requirements and we anticipate that they willcontinue to be sufficient to satisfy these requirements over time.

As of June 30, 2005,the gross book value of all of our properties was approximately$1.04 billion and the gross book value of all properties securing ourfixed rate mortgage debt and secured credit facility was approximately$514.2 million and $213.1 million, respectively. Our debt has variouscovenants and management believes we were in compliance with all of thesecovenants at June 30, 2005.

25

----

**Results of Operations**

***Summary***

As of June 30,2005, we owned 131 properties located in 19 markets across the United States,93 of which were acquired after June 30, 2004. In addition, as of June 30,2005, we had approximately $8.0 million invested in joint ventures and developmentactivities. As a result of the acquisition of the 93 properties made subsequentto June 30, 2004, the revenues and expenses from our operations for thethree and six months ended June 30, 2005 reflect a significantincrease compared to the revenues and expenses from our operations for thethree and six months ended June 30, 2004. The following tabledescribes our portfolio as June 30, 2005 and 2004, respectively:
| ** **    | ** ** | **As of June 30,** | ** ** |
|---------------|------------|-----------------------------------|------------|
| ** **    | ** ** | **2005**                          | ** ** | **2004** | ** ** |
| **Market**    | ** ** | ** **                        | ** ** | **Number  of  Buildings** | ** ** | **Gross Book  Value** | ** ** | **Gross  Leasable  Area** | ** ** | **Occupancy(1)** | ** ** | **Number of  Buildings** | ** ** | **Gross Book  Value** | ** ** | **Gross  Leasable  Area** | ** ** | **Occupancy(1)** | ** ** |
| Atlanta       |       |                              | 18         |   |   | $ | 146,127,717 |   | 3,946,931 |   |   | 85.3 | % |   |   | 4 |   |   | $ | 52,967,041 |   | 1,672,034 |   |   | 76.0 | % |   |
| Baltimore     |       |                              | 7          |   |   | 46,019,273 |   | 874,455 |   |   | 96.7 | % |   |   | — |   |   | — |   | — |   |   | — |   |   |
| Boston        |       |                              | 5          |   |   | 26,918,096 |   | 405,741 |   |   | 75.4 | % |   |   | — |   |   | — |   | — |   |   | — |   |   |
| Chicago       |       |                              | 7          |   |   | 80,643,746 |   | 1,740,445 |   |   | 89.1 | % |   |   | 1 |   |   | 11,369,570 |   | 222,122 |   |   | 100.0 | % |   |
| Cincinnati    |       |                              | 7          |   |   | 78,952,303 |   | 1,797,369 |   |   | 97.6 | % |   |   | 7 |   |   | 78,907,919 |   | 1,797,369 |   |   | 93.6 | % |   |
| Dallas        |       |                              | 19         |   |   | 97,435,439 |   | 2,451,768 |   |   | 90.3 | % |   |   | 3 |   |   | 40,499,804 |   | 982,776 |   |   | 86.8 | % |   |
| Denver        |       |                              | 1          |   |   | 9,000,746 |   | 160,232 |   |   | 100.0 | % |   |   | — |   |   | — |   | — |   |   | — |   |   |
| Houston       |       |                              | 21         |   |   | 83,623,141 |   | 1,622,270 |   |   | 89.2 | % |   |   | 12 |   |   | 51,658,487 |   | 815,829 |   |   | 84.7 | % |   |
| Indianapolis  |       |                              | 1          |   |   | 15,186,013 |   | 442,127 |   |   | 68.3 | % |   |   | 1 |   |   | 15,465,065 |   | 442,127 |   |   | 68.3 | % |   |
| Los Angeles   |       |                              | 4          |   |   | 32,743,856 |   | 444,066 |   |   | 100.0 | % |   |   | 1 |   |   | 10,317,311 |   | 201,493 |   |   | 100.0 | % |   |
| Louisville    |       |                              | 2          |   |   | 18,351,897 |   | 521,000 |   |   | 100.0 | % |   |   | 1 |   |   | 10,091,045 |   | 300,000 |   |   | 100.0 | % |   |
| Memphis       |       |                              | 11         |   |   | 184,282,634 |   | 5,042,018 |   |   | 94.9 | % |   |   | 3 |   |   | 39,736,941 |   | 1,101,006 |   |   | 97.9 | % |   |
| Miami         |       |                              | 2          |   |   | 18,740,276 |   | 250,783 |   |   | 94.6 | % |   |   | — |   |   | — |   | — |   |   |   |   |   |
| Nashville     |       |                              | 3          |   |   | 59,384,914 |   | 1,699,530 |   |   | 100.0 | % |   |   | 3 |   |   | 59,340,369 |   | 1,699,530 |   |   | 100.0 | % |   |
| Orlando       |       |                              | 2          |   |   | 15,692,177 |   | 367,137 |   |   | 100.0 | % |   |   | — |   |   | — |   | — |   |   | — |   |   |
| Philadelphia  |       |                              | 1          |   |   | 5,382,226 |   | 100,000 |   |   | 100.0 | % |   |   | — |   |   | — |   | — |   |   | — |   |   |
| Phoenix       |       |                              | 13         |   |   | 79,374,623 |   | 1,474,963 |   |   | 90.0 | % |   |   | — |   |   | — |   | — |   |   | — |   |   |
| San Antonio   |       |                              | 2          |   |   | 7,699,241 |   | 172,050 |   |   | 100.0 | % |   |   | 2 |   |   | 7,724,491 |   | 172,050 |   |   | 100.0 | % |   |
| San Francisco |       |                              | 5          |   |   | 35,399,041 |   | 474,636 |   |   | 100.0 | % |   |   | — |   |   | — |   | — |   |   | — |   |   |
| Total         |       |                              | 131        |   |   | $ | 1,040,957,359 |   | 23,987,521 |   |   | 92.0 | % |   |   | 38 |   |   | $ | 378,078,043 |   | 9,406,336 |   |   | 90.1 | % |   |
|               |            |                                   |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

----

(1)             The total vacant square footage as of June 30,2005, and 2004, was 1,917,332 and 993,357, respectively. Of the vacant space asof June 30, 2005 and 2004, we had 807,981 and 693,566 square feet,respectively, under master lease agreements with various sellers whereby thesellers are obligated to pay monthly rent until the earlier of the expirationof the master lease agreement or commencement of rent from a new customer. Thetotal percentage of square feet leased, including space covered by masterleases was 95.4% and 97.4% as of June 30, 2005, and 2004, respectively. Forfinancial reporting purposes under GAAP, rental and expense recovery paymentsunder master lease agreement are reflected as a reduction of the basis of theunderlying property rather than rental revenues.

***Three months ended June 30, 2005 compared to thethree months ended June 30, 2004***

During the three months ended June 30, 2005, werecognized net income per share of $0.01 as compared to net income per share of$0.02 for the same period in 2004. The primary reason for the decrease is dueto the increase in depreciation expense caused by proportionately more valuebeing attributed to lease related assets upon acquisition. Depreciation expenseas a percent of total revenues (exclusive of the net gains on early leasetermination discussed below) for the three months ended June 30, 2005compared to the three months ended June 30, 2004 was approximately 58% and48%, respectively. Some of the more notable differences in operating activitybetween the three months ended June 30, 2005 compared to the three months endedJune 30, 2004, other than the revenues derived from the 93 subsequentproperty acquisitions described above, include (i) a gain on the earlytermination of leases in the amount of approximately $2.8 million recognized inthe second quarter of 2005 and (ii) a relative 

26

----

increase in assetmanagement fees in the three months ended June 30, 2005 compared to thethree months ended June 30, 2004 as a result of us, on March 31,2004, becoming newly obligated to pay our advisor an asset management fee equalto 0.75% per annum of the total undepreciated cost of properties we own inexcess of $170 million (see “Note 8—Related Party Transactions” to the condensedconsolidated financial statements). In addition, we carried larger cashbalances during the three months ended June 30, 2005 versus the threemonths ended June 30, 2004 and these cash balances were comprised primarilyof undeployed net proceeds from our public and private offerings. Consequently,there were more shares outstanding during the three months ended June 30, 2005for which the net proceeds had not been deployed resulting in earnings pershare dilution.

Weexperienced an increase in cash provided by operating activities during thethree months ended June 30, 2005, as compared to the three months endedJune 30, 2004. The components of the increase in operating activities arereflected in the changes in rental revenues, interest and other income,property operating expenses and other expenses as more fully described below.
| ** **                                                                     | ** ** | **Three Months Ended  June 30,** | ** ** | ** ** | ** ** |
|--------------------------------------------------------------------------------|------------|-------------------------------------------------|------------|------------|------------|
| **Rental Revenues and Other Real Estate Income** | ** ** | ** **                                      | ** ** | **2005**   | ** ** | **2004** | ** ** | **$ Change** | ** ** |
| Base rental revenue:                                                           |       |                                            |       |       |       |   |   |
| Same store                                                                     |       | $                                               | 3,655,735  |       | $          | 3,407,035 |   | $ | 248,700 |   |
| 2005 acquisitions                                                              |       | 4,251,772                                       |       | —     |       | 4,251,772 |   |
| 2004 acquisitions                                                              |       | 11,272,400                                      |       | 948,020    |       | 10,324,380 |   |
| Gain on the early  termination of leases                                       |       | 2,817,322                                       |       | —     |       | 2,817,322 |   |
| Other real estate  income                                                      |       | 4,095,837                                       |       | 1,018,938  |       | 3,076,899 |   |
| Straight-line  rents                                                           |       | 727,382                                         |       | 259,603    |       | 467,779 |   |
| Above and below  market rents, net                                             |       | (447,457                                        | )          | (127,192   | )          | (320,265 | ) |
| Total                                                                          |       | $                                               | 26,372,991 |       | $          | 5,506,404 |   | $ | 20,866,587 |   |
|                                                                                |            |                                                 |            |            |            |  |  |  |  |  |  |  |

 

Asillustrated in the table above, rental revenues were higher in the three monthsended June 30, 2005 than in the three months ended June 30, 2004,primarily due to (i) the rental revenues generated by the 93 propertiesacquired subsequent to June 30, 2004 and (ii) the rental revenuesgenerated by 23 properties acquired during the three months ended June 30,2004 representing a full three months of operations in the second quarter of2005 as compared to less than three months of operations in the second quarterof 2004. We recorded a gain in the amount of approximately $2.8 million on theearly termination of leases in the second quarter of 2005. Other real estateincome was higher in the second quarter of 2005 compared to the second quarterof 2004 as a result of the aforementioned property acquisitions. The increasein straight-line rents is mainly attributable to the revenue generated by newlyacquired leases resulting from the aforementioned property acquisitions. Thedecrease in above and below market rents is due to the majority of theaforementioned properties acquired having leases with rental ratesproportionately higher than estimated market rental rates measured at the timeof acquisition.
| ** **               | ** ** | **Three Months Ended  June 30,** | ** ** | ** ** | ** ** |
|--------------------------|------------|-------------------------------------------------|------------|------------|------------|
| **Interest Income** | ** ** | ** **                                      | ** ** | **2005**   | ** ** | **2004** | ** ** | **$ Change** | ** ** |
| Interest income          |       | $                                               | 980,745    |       | $          | 227,352 |   | $ | 753,393 |   |
|                          |            |                                                 |            |            |            |  |  |  |  |  |  |  |

 

Interest income consist primarily of interest incomeon cash balances and notes receivable. The increase in interest income is dueto higher cash balances held in interest bearing bank accounts during the threemonths ended June 30, 2005, as compared to the three months ended June 30,2004. In addition, we had $8.2 million in notes receivable outstanding as of June 30,2005, $3.9 million of which was issued subsequent to June 30, 2004 to athird-party national real estate developer. Collectively, these notes earned 

27

----

interest income ofapproximately $195,000 for the three months ended June 30, 2005, ascompared to approximately $59,000 for the three months ended June 30,2004.
| ** **                                | ** ** | **Three Months Ended  June 30,** | ** ** | ** ** | ** ** |
|-------------------------------------------|------------|-------------------------------------------------|------------|------------|------------|
| **Property Operating Expenses** | ** ** | ** **                                      | ** ** | **2005**   | ** ** | **2004** | ** ** | **$ Change** | ** ** |
| Properties:                               |       |                                            |       |       |       |   |   |
| Same Store                                |       | $                                               | 982,737    |       | $          | 944,532 |   | $ | 38,205 |   |
| 2005 acquisitions                         |       | 776,765                                         |       | —     |       | 776,765 |   |
| 2004 acquisitions                         |       | 3,598,878                                       |       | 171,472    |       | 3,427,406 |   |
| Total                                     |       | $                                               | 5,358,380  |       | $          | 1,116,004 |   | $ | 4,242,376 |   |
|                                           |            |                                                 |            |            |            |  |  |  |  |  |  |  |

 

Asillustrated in the table above, property operating expenses were higher in thethree months ended June 30, 2005, than in the three months ended June 30,2004, primarily due to (i) the operating expenses of the 93 propertiesacquired subsequent to June 30, 2004 and (ii) the operating expensesassociated with the 23 properties acquired during the three months ended June 30,2004 representing a full three months operations in the second quarter of 2005as compared to a partial period of operations in the second quarter of 2004.
| ** **                            | ** ** | **Three Months Ended  June 30,** | ** ** | ** ** | ** ** |
|---------------------------------------|------------|-------------------------------------------------|------------|------------|------------|
| **Other Expenses**               | ** ** | ** **                                      | ** ** | **2005**   | ** ** | **2004** | ** ** | **$ Change** | ** ** |
| Depreciation and  amortization        |       | $                                               | 14,192,197 |       | $          | 2,764,558 |   | $ | 11,427,639 |   |
| Interest                              |       | 4,827,468                                       |       | 894,016    |       | 3,933,452 |   |
| General and  administrative           |       | 700,900                                         |       | 311,032    |       | 389,868 |   |
| Asset management  fees, related party |       | 1,523,657                                       |       | 145,294    |       | 1,378,363 |   |
| Total                                 |       | $                                               | 21,244,222 |       | $          | 4,114,900 |   | $ | 17,129,322 |   |
|                                       |            |                                                 |            |            |            |  |  |  |  |  |  |  |

 

Depreciation andamortization expense was higher during the three months ended June 30,2005, than in the three months ended June 30, 2004, primarily due to theacquisition of 93 additional properties subsequent to June 30, 2004. Theincrease in interest expense is attributable to higher mortgage note balancesand higher financing obligation balances that were outstanding during the threemonths ended June 30, 2005, compared to the three months ended June 30,2004. General and administrative expenses were higher during the three monthsended June 30, 2005, than in the three months ended June 30, 2004, asa result of increased in general business activities. The increase in assetmanagement fees payable to our advisor was attributable to (i) theaforementioned acquisition of 93 additional properties and (ii) as aresult of us, on March 31, 2004, becoming newly obligated to pay ouradvisor an asset management fee equal to 0.75% per annum of the totalundepreciated cost of properties we own in excess of $170 million (see “Note 8—RelatedParty Transactions” to the condensed consolidated financial statements).

***Six months ended June 30, 2005 compared to thesix months ended June 30, 2004***

We recognized a net loss per share of $0.02 for thesix months ended June 30, 2005 compared to net income per share of $0.02for the six months ended June 30, 2004; however, our cash provided byoperating activities increased from approximately $6.5 million for the sixmonths ended June 30, 2004, to approximately $27.3 million for the sixmonths ended June 30, 2005. The increase in cash provided by operatingactivities is primarily a result of the 93 property acquisitions that occurredsubsequent to June 30, 2004.  Inaddition, some of the more notable differences in the operating activitybetween the six months ended June 30, 2005 compared to the six monthsended June 30, 2004, other than the revenues derived from the subsequentproperty acquisitions described above, include (i) a gain on the earlytermination of leases in the amount of approximately $2.8 million recognized inthe second quarter of 2005 and  (ii) arelative increase in asset management fees the first and second quarters of2005 compared to the 

28

----

first and second quartersof 2004 as a result of us, on March 31, 2004, becoming newly obligated topay our advisor an asset management fee equal to 0.75% per annum of the totalundepreciated cost of properties we own in excess of $170 million (see “Note 8—RelatedParty Transactions” to the condensed consolidated financial statements). Inaddition, we carried larger cash balances during the six months ended June 30,2005 as compared to the six months ended June 30, 2004 and these cashbalances were comprised primarily of undeployed net proceeds from our publicand private offerings. Consequently, there were more shares outstanding in 2005for which the net proceeds had not been deployed resulting in earnings pershare dilution.

Thecomponents of the increase in operating activities are reflected in the changesin rental revenues, interest and other income, property operating expenses andother expenses as more fully described below.
| ** **                                                                     | ** ** | **Six Months Ended  June 30,** | ** ** | ** ** | ** ** |
|--------------------------------------------------------------------------------|------------|-----------------------------------------------|------------|------------|------------|
| **Rental Revenues and Other Real Estate Income** | ** ** | ** **                                    | ** ** | **2005**   | ** ** | **2004** | ** ** | **$ Change** | ** ** |
| Base rental revenue:                                                           |       |                                          |       |       |       |   |   |
| Same store                                                                     |       | $                                             | 5,980,148  |       | $          | 5,706,555 |   | $ | 273,593 |   |
| 2005 acquisitions                                                              |       | 5,222,459                                     |       | —     |       | 5,222,459 |   |
| 2004 acquisitions                                                              |       | 23,552,560                                    |       | 1,463,343  |       | 22,026,388 |   |
| Gain on the early  termination of lease, net                                   |       | 2,817,322                                     |       | —     |       | 2,817,322 |   |
| Other real estate  income                                                      |       | 7,765,158                                     |       | 1,619,191  |       | 6,145,967 |   |
| Straight-line  rents                                                           |       | 1,527,883                                     |       | 377,597    |       | 1,150,286 |   |
| Above and below  market rents, net                                             |       | (890,494                                      | )          | (78,371    | )          | (749,294 | ) |
| Total                                                                          |       | $                                             | 45,975,036 |       | $          | 9,088,315 |   | $ | 36,886,721 |   |
|                                                                                |            |                                               |            |            |            |  |  |  |  |  |  |  |

 

Asillustrated in the table above, rental revenues were higher in the six monthsended June 30, 2005 than in the six months ended June 30, 2004,primarily due to (i) the rental revenues generated by the 93 propertiesacquired subsequent to June 30, 2004 and (ii) the rental revenuesgenerated by 25 properties acquired during the six months ended June 30,2004 representing a full six months of operations in the first and secondquarters of 2005 as compared to less than six months of operations in the firstand second quarters of 2004. We recognized a gain in the amount ofapproximately $2.8 million on the early termination of leases in the secondquarter of 2005. Other real estate income was higher in the first and secondquarters of 2005 as compared to the first and second quarters of 2004 as aresult of the aforementioned property acquisitions. The increase instraight-line rents over the same periods is mainly attributable to the revenuegenerated by newly acquired leases resulting from the aforementioned propertyacquisitions. The decrease in above and below market rents is due to theaforementioned properties acquired having leases with rental ratesproportionately higher than estimated market rental rates measured at the timeof acquisition.
| ** **               | ** ** | **Six Months Ended  June 30,** | ** ** | ** ** | ** ** |
|--------------------------|------------|-----------------------------------------------|------------|------------|------------|
| **Interest Income** | ** ** | ** **                                    | ** ** | **2005**   | ** ** | **2004** | ** ** | **$ Change** | ** ** |
| Interest income          |       | $                                             | 1,591,135  |       | $          | 240,676 |   | $ | 1,350,459 |   |
|                          |            |                                               |            |            |            |  |  |  |  |  |  |  |

 

29

----

Interestincome consist primarily of interest income on cash balances and notesreceivable. The increase in interest income is due to higher cash balances heldin interest bearing bank accounts during the six months ended June 30,2005, as compared to the six months ended June 30, 2004. In addition, wehad $8.2 million in notes receivable outstanding as of June 30, 2005, $3.9million of which was issued subsequent to June 30, 2004 to a third-partynational real estate developer. Collectively, these notes earned interestincome of approximately $328,339 for the six months ended June 30, 2005,as compared to $60,898 for the six months ended June 30, 2004.
| ** **                                | ** ** | **Six Months Ended  June 30,** | ** ** | ** ** | ** ** |
|-------------------------------------------|------------|-----------------------------------------------|------------|------------|------------|
| **Property Operating Expenses** | ** ** | ** **                                    | ** ** | **2005**   | ** ** | **2004** | ** ** | **$ Change** | ** ** |
| Properties:                               |       |                                          |       |       |       |   |   |
| Same Store                                |       | $                                             | 1,664,020  |       | $          | 1,589,048 |   | $ | 74,972 |   |
| 2005 acquisitions                         |       | 848,032                                       |       | —     |       | 848,032 |   |
| 2004 acquisitions                         |       | 7,665,112                                     |       | 324,806    |       | 7,340,306 |   |
| Total                                     |       | $                                             | 10,177,164 |       | $          | 1,913,854 |   | $ | 8,263,310 |   |
|                                           |            |                                               |            |            |            |  |  |  |  |  |  |  |

 

Asillustrated in the table above, property operating expenses were higher in thesix months ended June 30, 2005, than in the six months ended June 30,2004, primarily due to (i) the operating expenses of the 93 propertiesacquired subsequent to June 30, 2004 and (ii) the operating expensesassociated with the 25 properties acquired during the six months ended June 30,2004 representing a full six months operations in the first and second quartersof 2005 as compared to a partial period of operations in the first and secondquarters of  2004.
| ** **                            | ** ** | **Six Months Ended  June 30,** | ** ** | ** ** | ** ** |
|---------------------------------------|------------|-----------------------------------------------|------------|------------|------------|
| **Other Expenses**               | ** ** | ** **                                    | ** ** | **2005**   | ** ** | **2004** | ** ** | **$ Change** | ** ** |
| Depreciation and  amortization        |       | $                                             | 26,542,358 |       | $          | 4,410,835 |   | $ | 22,131,523 |   |
| Interest                              |       | 8,545,089                                     |       | 1,544,604  |       | 7,000,485 |   |
| General and administrative            |       | 1,428,775                                     |       | 639,106    |       | 789,669 |   |
| Asset management  fees, related party |       | 2,703,130                                     |       | 145,294    |       | 2,557,836 |   |
| Total                                 |       | $                                             | 39,219,352 |       | $          | 6,739,839 |   | $ | 32,479,513 |   |
|                                       |            |                                               |            |            |            |  |  |  |  |  |  |  |

 

Depreciation andamortization expense was higher during the six months ended June 30, 2005,than in the six months ended June 30, 2004, primarily due to theacquisition of 93 additional properties acquired subsequent to June 30, 2004.The increase in interest expense is attributable to higher mortgage notebalances and higher financing obligation balances that were outstanding duringthe six months ended June 30, 2005, compared to the six months ended June 30,2004. General and administrative expenses were higher during the three monthsended June 30, 2005, than in the three months ended June 30, 2004, asa result of an increase in general business activities. The increase in assetmanagement fees payable to our advisor was attributable to (i) theaforementioned acquisition of 93 additional properties and (ii) us, on March 31,2004, becoming newly obligated to pay our advisor an asset management fee equalto 0.75% per annum of the total undepreciated cost of properties we own inexcess of $170 million (see “Note 8—Related Party Transactions” to thecondensed consolidated financial statements).

**Off-Balance Sheet Arrangements**

As of June 30, 2005, December 31,2004 and June 30, 2004, respectively, we had no material off-balance sheetarrangements that have or are reasonably likely to have a current or futureeffect on our financial condition, changes in financial condition, revenues orexpenses, results of operations, liquidity, capital expenditures or capitalresources.

30

----

**Critical Accounting Policies**

***General***

In our Form 10-K filed for the year ended December 31,2004, we discuss the critical accounting policies which management believes aremost “critical” to the presentation of our financial condition and results ofoperations which require our management’s most difficult, subjective or complexjudgments. These judgments often result from the need to make estimates aboutthe effect of matters that are inherently uncertain. The discussion addressesjudgments known to management pertaining to trends, events or uncertaintieswhich were taken into consideration upon the application of those policies andthe likelihood that materially different amounts would be reported upon takinginto consideration different conditions and assumptions. As of June 30,2005, no additional critical accounting policies had been identified other thanthose set forth in our Form 10-K filed for the year ended December 31,2004.

 

31

----

**ITEM 3.**                QUANTITATIVEAND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss from adverse changesin market conditions such as prices and interest rates. Our future earnings andcash flows are dependent upon prevailing market rates. Accordingly, we manageour market risk by matching projected cash inflows from operating, investingand financing activities with projected cash outflows for debt service,acquisitions, capital expenditures, distributions to shareholders andunitholders, and other cash requirements. The majority of our outstanding debthas fixed interest rates, which minimizes our risk related to fluctuatinginterest rates.

Our exposure to market risk includes interest ratefluctuations in connection with our credit facilities and other variable rateborrowings and forecasted fixed rate debt issuances, including refinancing ofexisting fixed rate debt. Interest rate risk may result from many factors,including governmental monetary and tax policies, domestic and internationaleconomic and political considerations and other factors that are beyond ourcontrol. To manage interest rate risk for forecasted issuances of fixed ratedebt, we primarily use treasury locks as part of our cash flow hedgingstrategy. A treasury lock is designed to mitigate the risk of future interestrate fluctuations by providing a future fixed interest rate for a limitedpre-determined period of time. During the three and six months ended June 30,2005 and 2004, such derivatives were used to hedge the variable cash flowsassociated with forecasted issuances of fixed rate debt. We do not usederivatives for trading or speculative purposes and only enter into contractswith major financial institutions based on their credit rating and otherfactors.

As of June 30, 2005, we had three treasury lockhedges which had not been settled and were, therefore, subject to variabilitybased upon market interest rates. We estimate the fair value of our treasurylock agreements by calculating the present value of the difference between thecorresponding locked treasury rates and the expected yield on the specifictreasury obligations referenced in the treasury lock agreement. Based upon thiscalculation, the assets associated with these hedges would increaseapproximately $3.7 million if the market interest rate of the referencedtreasury obligation were to decrease 10% (0.38%, based upon the prevailingmarket rate at June 30, 2005). Similarly, our variable rate debt issubject to risk based upon prevailing market interest rates. If the prevailingmarket interest rates relevant to our variable rate debt as of June 30,2005, were to increase 10% (0.625%, based upon prevailing market rates at June 30,2005), it would not have a material effect on the results of our operations.

As of June 30, 2005,the estimated fair value of our debt was approximately $298.5 millionbased on our estimate of the then current market interest rates.

**ITEM 4.**                CONTROLSAND PROCEDURES

**Evaluationof Disclosure Controls and Procedures**

Under the supervision andwith the participation of our management, including our principal executiveofficer and principal financial officer, we conducted an evaluation of theeffectiveness of our disclosure controls and procedures, as such term is definedunder Rule 13a-15(e) under the Exchange Act, as of June 30,2005, the end of the period covered by this quarterly report. Our management, including our principal executiveofficer and principal financial officer, does not expect that our disclosurecontrols and procedures or our internal controls will prevent all error and allfraud. A control system, no matter how well conceived and operated, can provideonly reasonable, not absolute, assurance that the objectives of the controlsystem are met. Further, the design of a control system must reflect the factthat there are resource constraints, and the benefits of controls must beconsidered relative to their costs. Because of the inherent limitations in allcontrol systems, no evaluation of controls can provide absolute assurance thatall control issues and instances of fraud, if any, within Dividend Capital havebeen detected. Based on this evaluation, our principal executive officerand our principal financial officer concluded that our disclosure controls andprocedures were effective as of June 30, 2005.

32

----

**Changes in Internal Controls**

There were no changes inour internal controls over financial reporting identified in connection withthe evaluation of such internal controls that occurred during our last fiscalquarter that have materially affected, or are reasonably likely to materiallyaffect, our internal controls over financial reporting.

**PART II.   OTHER INFORMATION**

**ITEM 1.**                LEGALPROCEEDINGS

None.

**ITEM 2.**                UNREGISTEREDSALES OF EQUITY SECURITIES AND USE OF PROCEEDS

**Our Partnership’s Private Placement**

On April 8, 2005, ourpartnership issued 424,352 limited partnership units in our partnership tocertain accredited investors in conjunction with the exercise of a purchaseoption pursuant to which our partnership had the right to acquiretenancy-in-common interests in an industrial property from such investors. Suchinvestors had previously acquired such tenancy-in-common interests from awholly-owned subsidiary of our partnership primarily to serve as replacementproperty for such investors seeking to complete a like-kind exchangetransaction under Section 1031 of the Internal Revenue Code. Such limitedpartnership units had a collective issue price of approximately $4.45 million. Thesecurities were issued relying on Rule 506 of Regulation D and/or Section 4(2) ofthe Securities Act of 1933, as amended. The investors received a confidentialprivate placement memorandum containing information about our operatingpartnership and their investment therein and made certain writtenrepresentations, including representations as to their accredited investorstatus.

**Share Redemption Program**

Aslong as our common stock is not listed on a national securities exchange ortraded on an over-the-counter market, shareholders of Dividend Capital Trustwho have held their shares for at least one year may be able to redeem all orany portion of their shares in accordance with the procedures outlined in theprospectus relating to the shares they purchased. At that time, we may, subjectto certain conditions and limitations, redeem the shares presented forredemption for cash to the extent that we have sufficient funds available to usto fund such redemption. The amount received from the redemption of shares willbe equal to the lesser of the price actually paid for the shares or theredemption price, which is dependent on the number of years the shares areheld. For shares purchased in our third and fourth public offerings, theredemption price is as described in the following table.
| **Share Purchase Anniversary** | ** ** | ** **                      | ** ** | **Redemption Price as a  Percentage of  Purchase Price(1)** | ** ** |
|------------------------------------------|------------|---------------------------------|------------|--------------------------------------------------------------------------------------|------------|
| Less than 1                    |       | No Redemption Allowed |       |
| 1                              |       | 92.5                            | %          |
| 2                              |       | 95.0                            | %          |
| 3                              |       | 97.5                            | %          |
| 4                              |       | 100.0                           | %          |

----

(1)          This program isadministered and governed by our board of directors and is subject to change atthe board’s discretion and in no event will the redemption price exceed thecurrent offering price of our common shares (excluding the discounted price pershare pursuant to our dividend reinvestment plan).

33

----

Weexpect to fund the redemption price of any share redemptions with proceedsreceived from the sale of shares pursuant to the distribution reinvestmentplan. Our board of directors may, at its sole discretion, choose to use othersources of funds to redeem shares. The table below sets forth informationregarding our redemption of common stock from our shareholders for the quarterended June 30, 2005.
| **Period**      | ** ** | ** ** | ** ** | **Total Number  of Shares  Repurchased(1)** | ** ** | **Average Price  per Share** | ** ** |
|-----------------|------------|------------|------------|-------------------------------------------------------|------------|----------------------------------------|------------|
| April 2005 |       |       | —     |                                                  |       |                                   | $          | — |   |   |
| May 2005   |       |       | —     |                                                  |       |                                   | —     |   |   |
| June 2005  |       |       | 202,695    |                                                  |       |                                   | 9.68       |   |   |
| Total           |       |       | 202,695    |                                                  |       |                                   | $          | 9.68 |   |   |

----

(1)          Theseshares were redeemed pursuant to our share redemption program.

**ITEM 3.**                DEFAULTSUPON SENIOR SECURITIES

None.

**ITEM 4.**                SUBMISSIONOF MATTERS TO A VOTE OF SECURITY HOLDERS

On June 14,2005, we held our annual meeting of shareholders to elect seven directors toour board of directors, each to hold office until the 2006 annual shareholder’smeeting. Seven individuals were nominated by our board of directors. Theseindividuals were: Thomas G. Wattles, Evan H. Zucker, James R. Mulvihill,Tripp H. Hardin, III, Robert F. Masten, John C. O’Keeffe, and Lars O.Soderberg.****A plurality of the shares voted atthis meeting approved the election of the seven directors listed above asdescribed in the table below.
| ** **                 | ** ** | **Votes**  | ** ** |
|----------------------------|------------|------------|------------|
| ** **                 | ** ** | **FOR**    | ** ** | **WITHHELD** | ** ** |
| Thomas G. Wattles          |       | 42,764,151 |       | 98.2 | % | 765,693 |   | 1.8 | % |
| Evan H. Zucker             |       | 42,760,710 |       | 98.2 | % | 769,134 |   | 1.8 | % |
| James R.  Mulvihill        |       | 42,762,049 |       | 98.2 | % | 767,795 |   | 1.8 | % |
| Tripp H.  Hardin, III |       | 42,764,372 |       | 98.2 | % | 765,472 |   | 1.8 | % |
| Robert F. Masten           |       | 42,765,969 |       | 98.3 | % | 763,875 |   | 1.8 | % |
| John C. O’Keeffe      |       | 42,760,704 |       | 98.2 | % | 769,740 |   | 1.8 | % |
| Lars O. Soderberg          |       | 42,763,433 |       | 98.2 | % | 766,410 |   | 1.8 | % |

 

**ITEM 5.**                OTHERINFORMATION

None.

34

----

**ITEM 6.**                EXHIBITS

**a.     Exhibits**
| +2.1  |   | Agreement and Plan of Merger, dated June 17,  2005, among Dividend Capital Trust Inc., DCT Acquisition Corporation, Cabot  Industrial Value Fund Inc. and Cabot Industrial Value Fund Manager, LLC                                                                        |
|-------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| +2.2  |   | Put/Call Agreement, dated July 21, 2005, among  Cabot Industrial Fund Manager, LLC, the limited partners named therein and  Dividend Capital Trust Inc.                                                                                                                   |
| *10.1 |   | Amended and Restated Dealer Manager Agreement, dated  June 27, 2005, between Dividend Capital Securities LLC and Dividend  Capital Trust Inc. (Exhibit 1.1 to Form S-3 Registration Statement,  as amended on Form S-11, (Commission File No. 333-122260)) |
| +10.2 |   | Cabot Industrial Value Fund, L.P. Second Amended and  Restated Limited Partnership Agreement, dated July 21, 2005                                                                                                                                                         |
| +31.1 |   | Rule 13a-14(a) Certification of Principal  Executive Officer                                                                                                                                                                                                         |
| +31.2 |   | Rule 13a-14(a) Certification of Principal  Financial Officer                                                                                                                                                                                                         |
| +32.1 |   | Section 1350 Certification of Principal  Executive Officer                                                                                                                                                                                                                |
| +32.2 |   | Section 1350 Certification of Principal  Financial Officer                                                                                                                                                                                                                |

----

+                Filed herewith

*                    PreviouslyFiled.

35

----

**SIGNATURES**

Pursuantto the requirements of the Securities Exchange Act of 1934, the Registrant hasduly caused this report to be signed on its behalf by the undersigned thereuntoduly authorized.
|                             |     | DIVIDEND CAPITAL TRUST INC. |
|-----------------------------|----------|-----------------------------|
| Date: August 15,  2005 | * * | /s/* *EVAN H. ZUCKER   |
|                        |     | Evan H. Zucker              |
|                        | * * | *Chief Executive Officer*   |
| Date: August 15,  2005 | * * | /s/ JAMES R. MULVIHILL      |
|                        |     | James R. Mulvihill          |
|                        | * * | *Chief Financial Officer*   |

 

36

----

**EXHIBIT INDEX**
| Exhibit  Number | ** ** | **Exhibit Description**                                                                                                                                                                                                                                                    |
|-----------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| +2.1            |       | Agreement and Plan of Merger, dated June 17,  2005, among Dividend Capital Trust Inc., DCT Acquisition Corporation, Cabot  Industrial Value Fund Inc. and Cabot Industrial Value Fund Manager, LLC                                                                         |
| +2.2            |       | Put/Call Agreement,  dated July 21, 2005, among Cabot Industrial Fund Manager, LLC, the  limited partners named therein and Dividend Capital Trust Inc.                                                                                                                    |
| *10.1           |       | Amended and Restated  Dealer Manager Agreement, dated June 27, 2005, between Dividend Capital  Securities LLC and Dividend Capital Trust Inc. (Exhibit 1.1 to  Form S-3 Registration Statement, as amended on Form S-11,  (Commission File No. 333-122260)) |
| +10.2           |       | Cabot Industrial Value  Fund, L.P. Second Amended and Restated Limited Partnership Agreement, dated  July 21, 2005                                                                                                                                                         |
| +31.1           |       | Rule 13a-14(a) Certification  of Principal Executive Officer                                                                                                                                                                                                          |
| +31.2           |       | Rule 13a-14(a) Certification  of Principal Financial Officer                                                                                                                                                                                                          |
| +32.1           |       | Section 1350  Certification of Principal Executive Officer                                                                                                                                                                                                                 |
| +32.2           |       | Section 1350  Certification of Principal Financial Officer                                                                                                                                                                                                                 |

----

+                Filed herewith

*                    PreviouslyFiled.

----