##### Table of Contents



United States
Securities and Exchange Commission
 Washington, D.C. 20549
 FORM 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarter ended September 30, 2005
  ARDEN REALTY LIMITED PARTNERSHIP
  Maryland
(State or other jurisdiction of incorporation or organization)
    
    95-4599813
(I.R.S. Employer Identification No.)
 11601 Wilshire Boulevard,
4th Floor
Los Angeles, California 90025-1740
 (310) 966-2600
 þ o
 þ o
 o þ




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ARDEN REALTY LIMITED PARTNERSHIP
FORM 10-Q
TABLE OF CONTENTS
 PAGE NO.PART I.
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsConsolidated Balance Sheets as of September 30, 2005 (unaudited) and
December 31, 2004
    
    
    3Consolidated Statements of Income for the three and nine months ended
September 30, 2005 and 2004 (unaudited)
    
    
    4Consolidated Statements of Cash Flows for the nine months ended
September 30, 2005 and 2004 (unaudited)
    
    
    5Notes to Consolidated Financial Statements
    
    
    6Item 2.
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    13Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    31Item 4.
    
    Controls and Procedures
    
    
    32PART II.
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    33Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    33Item 3.
    
    Defaults Upon Senior Securities
    
    
    33Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    33Item 5.
    
    Other Information
    
    
    33Item 6.
    
    Exhibits
    
    
    33SIGNATURES
    
    
    34EX-31.1EX-31.2EX-32.1EX-32.2




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##### Table of Contents



Part I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 Arden Realty Limited Partnership
 
 Consolidated Balance Sheets
 (in thousands, except per share data)
 September 30,
    
    
    December 31,2005
    
    
    2004(unaudited)AssetsInvestment in real estate:Land
    
    $
    495,155
    
    
    $
    432,291Buildings and improvements
    
    
    2,407,296
    
    
    
    2,097,058Tenant improvements and leasing commissions
    
    
    385,417
    
    
    
    347,6403,287,868
    
    
    
    2,876,989Less: accumulated depreciation and amortization
    
    
    (535,465
    )
    
    
    (468,716
    )2,752,403
    
    
    
    2,408,273Properties under renovation
    
    
    
    
    
    
    16,295Land available for development
    
    
    24,355
    
    
    
    23,795Properties held for disposition, net
    
    
    
    
    
    
    103,618Net investment in real estate
    
    
    2,776,758
    
    
    
    2,551,981Cash and cash equivalents
    
    
    12,465
    
    
    
    13,040Restricted cash
    
    
    71,119
    
    
    
    27,285Rent and other receivables, net of allowance of $3,674
and $3,748 at September 30, 2005 and December 31, 2004,
respectively
    
    
    6,609
    
    
    
    5,953Deferred rent, net of allowance of $1,043 and $1,933 at
September 30, 2005 and December 31, 2004, respectively
    
    
    39,638
    
    
    
    42,886Prepaid financing costs, expenses and other assets, net
of accumulated amortization of $11,425 and $13,244 at
September 30, 2005 and December 31, 2004, respectively
    
    
    22,349
    
    
    
    18,852Total assets
    
    $
    2,928,938
    
    
    $
    2,659,997LiabilitiesMortgage loans payable
    
    $
    422,114
    
    
    $
    371,548Mortgage loans payable  properties held for disposition
    
    
    
    
    
    
    11,091Unsecured lines of credit
    
    
    234,000
    
    
    
    121,500Unsecured loans
    
    
    150,000
    
    
    
    125,000Unsecured senior notes, net of discount
    
    
    794,417
    
    
    
    696,945Accounts payable and accrued expenses
    
    
    68,776
    
    
    
    58,215Security deposits
    
    
    25,411
    
    
    
    25,498Total liabilities
    
    
    1,694,718
    
    
    
    1,409,797Minority interest
    
    
    3,204
    
    
    
    2,903Partners CapitalGeneral and limited partners, 68,717,953 and 67,997,458
common OP Units outstanding at September 30, 2005 and
December 31, 2004, respectively
    
    
    1,241,135
    
    
    
    1,264,177Deferred compensation
    
    
    (10,240
    )
    
    
    (12,830
    )Accumulated other comprehensive income (loss)
    
    
    121
    
    
    
    (4,050
    )Total partners capital
    
    
    1,231,016
    
    
    
    1,247,297Total liabilities and partners capital
    
    $
    2,928,938
    
    
    $
    2,659,997
 See accompanying notes to consolidated financial statements.
 3




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##### Table of Contents



Arden Realty Limited Partnership
 
 Consolidated Statements of Income
 (in thousands, except per share data)
 (unaudited)
 For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Property revenues
    
    $
    114,599
    
    
    $
    99,561
    
    
    $
    327,588
    
    
    $
    291,279Property operating expenses
    
    
    39,771
    
    
    
    33,124
    
    
    
    110,782
    
    
    
    95,26474,828
    
    
    
    66,437
    
    
    
    216,806
    
    
    
    196,015General and administrative expense
    
    
    7,101
    
    
    
    4,823
    
    
    
    22,906
    
    
    
    13,972Interest expense
    
    
    25,030
    
    
    
    21,264
    
    
    
    72,869
    
    
    
    65,253Depreciation and amortization
    
    
    34,331
    
    
    
    29,414
    
    
    
    101,224
    
    
    
    85,457Interest and other loss (income)
    
    
    289
    
    
    
    179
    
    
    
    1,433
    
    
    
    (151
    )Impairment on investment in securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,700Minority interest
    
    
    143
    
    
    
    53
    
    
    
    301
    
    
    
    114Income from continuing operations
    
    
    7,934
    
    
    
    10,704
    
    
    
    18,073
    
    
    
    28,670Discontinued operations
    
    
    948
    
    
    
    1,951
    
    
    
    4,826
    
    
    
    7,960Gain on sale of discontinued properties
    
    
    33,923
    
    
    
    937
    
    
    
    40,299
    
    
    
    7,766Loss from debt defeasance related to sale of discontinued properties
    
    
    (278
    )
    
    
    
    
    
    
    (835
    )
    
    
    Net income
    
    $
    42,527
    
    
    $
    13,592
    
    
    $
    62,363
    
    
    $
    44,396Net income allocated to:Preferred partner
    
    $
    
    
    
    $
    2,153
    
    
    $
    
    
    
    $
    4,309General and limited partners
    
    $
    42,527
    
    
    $
    11,439
    
    
    $
    62,363
    
    
    $
    40,087Basic net income per common operating partnership unit:Income from continuing operations
    
    $
    0.12
    
    
    $
    0.13
    
    
    $
    0.26
    
    
    $
    0.36Income from discontinued operations
    
    
    0.50
    
    
    
    0.04
    
    
    
    0.65
    
    
    
    0.24Net income per common operating partnership unit  basic
    
    $
    0.62
    
    
    $
    0.17
    
    
    $
    0.91
    
    
    $
    0.60Weighted average number of common operating partnership units 
basic
    
    
    68,489
    
    
    
    67,157
    
    
    
    68,259
    
    
    
    66,818Diluted net income per common operating partnership unit:Income from continuing operations
    
    $
    0.12
    
    
    $
    0.13
    
    
    $
    0.26
    
    
    $
    0.36Income from discontinued operations
    
    
    0.50
    
    
    
    0.04
    
    
    
    0.65
    
    
    
    0.24Net income per common operating partnership unit  diluted
    
    $
    0.62
    
    
    $
    0.17
    
    
    $
    0.91
    
    
    $
    0.60Weighted average number of common operating partnership units 
diluted
    
    
    68,927
    
    
    
    67,564
    
    
    
    68,636
    
    
    
    67,188Distributions per common operating partnership unit
    
    $
    0.505
    
    
    $
    0.505
    
    
    $
    1.515
    
    
    $
    1.515
 See accompanying notes to consolidated financial statements.
 4




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Arden Realty Limited Partnership
 
 Consolidated Statements of Cash Flows
 (in thousands)
 (unaudited)
 For the Nine Months EndedSeptember 30,2005
    
    
    2004Operating Activities:Net income
    
    $
    62,363
    
    
    $
    44,396Adjustments to reconcile net income to net cash provided by operating activities:Minority interest
    
    
    301
    
    
    
    114Gain on sale of discontinued properties
    
    
    (40,299
    )
    
    
    (7,766
    )Impairment on investment in securities
    
    
    
    
    
    
    2,700Depreciation and amortization, including discontinued operations
    
    
    102,511
    
    
    
    94,755Amortization of loan costs
    
    
    2,543
    
    
    
    2,911Non-cash compensation expense
    
    
    3,790
    
    
    
    2,331Changes in operating assets and liabilities:Rent and other receivables
    
    
    (656
    )
    
    
    (2,594
    )Deferred rent
    
    
    (3,105
    )
    
    
    (1,907
    )Prepaid financing costs, expenses and other assets
    
    
    (2,162
    )
    
    
    (2,066
    )Accounts payable and accrued expenses
    
    
    14,851
    
    
    
    4,122Security deposits
    
    
    712
    
    
    
    807Net cash provided by operating activities
    
    
    140,849
    
    
    
    137,803Investing Activities:Acquisitions and improvements to commercial properties
    
    
    (330,795
    )
    
    
    (70,508
    )Proceeds from sale of properties
    
    
    67,947
    
    
    
    77,552Net cash (used in) provided by investing activities
    
    
    (262,848
    )
    
    
    7,044Financing Activities:Repayments of mortgage loans
    
    
    (17,764
    )
    
    
    (179,972
    )Proceeds from unsecured lines of credit and unsecured loans
    
    
    382,500
    
    
    
    323,500Repayments of unsecured lines of credit
    
    
    (245,000
    )
    
    
    (348,000
    )Proceeds from issuance of unsecured senior notes, net of discount and other issuance costs
    
    
    293,216
    
    
    
    197,033Repayment of unsecured senior notes
    
    
    (200,000
    )
    
    
    Proceeds from issuance of common stock
    
    
    14,571
    
    
    
    24,072Termination of fair value hedges
    
    
    (466
    )
    
    
    Distributions to preferred operating partnership unit holders
    
    
    
    
    
    
    (3,234
    )Redemption of preferred operating partnership units
    
    
    
    
    
    
    (50,000
    )Decrease (increase) in restricted cash
    
    
    (2,039
    )
    
    
    4,035Distributions to minority interests
    
    
    
    
    
    
    (153
    )Distributions to common operating partnership unit holders
    
    
    (103,594
    )
    
    
    (101,240
    )Net cash provided by (used in) financing activities
    
    
    121,424
    
    
    
    (133,959
    )Net (decrease) increase in cash and cash equivalents
    
    
    (575
    )
    
    
    10,888Cash and cash equivalents at beginning of period
    
    
    13,040
    
    
    
    4,707Cash and cash equivalents at end of period
    
    $
    12,465
    
    
    $
    15,595Supplemental Disclosure of Cash Flow Information:Cash paid during the period for interest, net of amounts capitalized
    
    $
    77,267
    
    
    $
    66,193
 Non-cash
transactions:
 See accompanying notes to consolidated financial statements.
 5




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##### Table of Contents



Arden Realty Limited Partnership
 
 Notes to Consolidated Condensed Financial Statements
 September 30, 2005
 (unaudited)
 1.
    
    Organization and Basis of PresentationOrganization
       Basis of Presentation
    Interim Financial Data
  Reclassifications
  6




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Recent Accounting Pronouncements
  2.
    
    Commercial Properties
 Property Dispositions
 Gross SalesProperty
    
    
    
    
    
    PriceProperty
    
    County
    
    Submarket
    
    Date of Sale
    
    Type
    
    Square Feet
    
    

($000s)Activity Business
Center
    
    San Diego
    
    Miramar
    
    January 5, 2005
    
    Office
    
    
    167,170
    
    
    $
    16,6505832 Bolsa
    
    Orange
    
    West County
    
    June 29, 2005
    
    Office
    
    
    49,355
    
    
    
    8,6704900 California
    
    Kern
    
    Bakersfield
    
    August 4, 2005
    
    Office
    
    
    153,181
    
    
    
    (A
    )Parkway Center
    
    Kern
    
    Bakersfield
    
    August 4, 2005
    
    Office
    
    
    60,885
    
    
    
    (A
    )100 W. Broadway
    
    Los
Angeles
    
    Downtown Long Beach
    
    August 4, 2005
    
    Office
    
    
    192,975
    
    
    
    (A
    )145 S. Fairfax
    
    Los
Angeles
    
    Miracle Mile
    
    August 11, 2005
    
    Office
    
    
    55,181
    
    
    
    12,000Irvine Corporate Center
    
    Orange
    
    Greater Airport
    
    September 28,
2005
    
    Office
    
    
    127,561
    
    
    
    17,840
    (1)Oceangate Tower
    
    Los
Angeles
    
    Downtown Long
Beach
    
    September 28,
2005
    
    Office
    
    
    211,620
    
    
    
    38,000
    (1)Sub-total
    
    
    
    
    
    
    
    
    
    
    1,017,928
    
    
    
    93,160(A) Portfolio sale
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,600
    (2)1,017,928
    
    
    $
    148,760
 Property Acquisitions
 Gross AcquisitionDate of
    
    Property
    
    Square
    
    
    PriceProperty
    
    County
    
    Submarket
    
    Acquisition
    
    Type
    
    Feet
    
    
($000s)707 Broadway
    
    San Diego
    
    Downtown
    
    January 5, 2005
    
    Office
    
    
    169,536
    
    
    $
    48,000
    (3)Arden Towers at Sorrento
    
    San Diego
    
    Sorrento
Mesa
    
    March 22, 2005
    
    Office/Retail
    
    
    608,253
    
    
    
    185,0005670 Wilshire Boulevard
    
    Los
Angeles
    
    Miracle Mile
    
    April 8, 2005
    
    Office
    
    
    409,118
    
    
    
    92,650
    (4)Agoura Hills Business Park
    
    Los
Angeles
    
    Agoura Hills
    
    August 5, 2005
    
    Office
    
    
    115,227
    
    
    
    23,1751,302,134
    
    
    $
    348,825
 
 (1)
    
    The net proceeds from these dispositions of approximately
$54.3 million are currently held in escrow accounts for
potential like-kind exchanges and are included as part
of restricted cash in our consolidated balance sheet at
September 30, 2005.(2)
    
    Approximately $22.5 million of this amount was used to acquire Agoura Hills
Business Park as part of a like-kind exchange.(3)
    
    Approximately $2.0 million of the acquisition price was funded through the issuance of
54,950 common operating partnership units at an average price of
$37.27 per unit.(4)
    
    The gross acquisition price includes the assumption of a
$51.5 million mortgage loan payable secured by the property. In
addition, approximately $12.5 million of the acquisition price was funded from an
escrow account to complete a like-kind exchange for a property sold in December 2004. This amount has been included as part of
restricted cash in our consolidated balance sheet at
December 31, 2004.  7




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3.
    
    Discontinued Operations and Properties Held for Disposition
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Revenues from rental operations
    
    $
    2,013
    
    
    $
    8,529
    
    
    $
    10,483
    
    
    $
    28,430Property expenses
    
    
    (970
    )
    
    
    (3,304
    )
    
    
    (4,128
    )
    
    
    (10,413
    )Depreciation and amortization
    
    
    (42
    )
    
    
    (3,022
    )
    
    
    (1,287
    )
    
    
    (9,298
    )Interest expense
    
    
    (56
    )
    
    
    (253
    )
    
    
    (245
    )
    
    
    (761
    )Interest and other income
    
    
    3
    
    
    
    1
    
    
    
    3
    
    
    
    2Discontinued operations
    
    $
    948
    
    
    $
    1,951
    
    
    $
    4,826
    
    
    $
    7,960Gain on sale of discontinued properties
    
    $
    33,923
    
    
    $
    937
    
    
    $
    40,299
    
    
    $
    7,766Loss from debt defeasance related to
sale of discontinued properties
    
    $
    (278
    )
    
    $
    
    
    
    $
    (835
    )
    
    $
    
 8




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##### Table of Contents



4.
    
    Outstanding Indebtedness
  AnnualInterest Rate at
    
    
    
    
    
    
    Number ofSeptember 30,
    
    
    December 31,
    
    
    September 30,
    
    
    Rate
    
    PropertiesType of Debt
    
    2005
    
    
    2004
    
    
    2005
    
    
    Fixed/Floating
    
    Securing Loan
    
    
    Maturity(in thousands)Mortgage Loans Payable:Mortgage Financing III(1)
    
    $
    130,517
    
    
    $
    132,323
    
    
    
    6.74
    %
    
    Fixed
    
    
    21
    
    
    
    4/08Mortgage Financing IV(1)
    
    
    106,758
    
    
    
    108,194
    
    
    
    6.61
    %
    
    Fixed
    
    
    12
    
    
    
    4/08Mortgage Financing V(1)
    
    
    101,582
    
    
    
    103,504
    
    
    
    6.94
    %
    
    Fixed
    
    
    12
    
    
    
    4/09Mortgage Financing VI(1)
    
    
    21,116
    
    
    
    21,325
    
    
    
    7.54
    %
    
    Fixed
    
    
    3
    
    
    
    4/095670 Wilshire(1), (2)
    
    
    56,213
    
    
    
    
    
    
    
    5.02
    %
    
    Fixed
    
    
    1
    
    
    
    9/28Activity Business Center(1), (3)
    
    
    
    
    
    
    7,222
    
    
    
    
    
    
    
    
    
    
    
    
    
    145 South Fairfax(1), (4)
    
    
    
    
    
    
    3,869
    
    
    
    
    
    
    
    
    
    
    
    
    
    Marin Corporate Center(1)
    
    
    2,473
    
    
    
    2,585
    
    
    
    9.00
    %
    
    Fixed
    
    
    1
    
    
    
    7/15Conejo Business Center(1)
    
    
    2,420
    
    
    
    2,531
    
    
    
    8.75
    %
    
    Fixed
    
    (Note 5
    )
    
    
    7/15Conejo Business Center(1)
    
    
    1,035
    
    
    
    1,086
    
    
    
    7.88
    %
    
    Fixed
    
    (Note 5
    )
    
    
    7/15422,114
    
    
    
    382,639Unsecured Lines of Credit:Wells Fargo  $310 mm(6)
    
    
    224,000
    
    
    
    111,500
    
    
    
    4.58
    %
    
    LIBOR + 0.85% (Notes 7,8)
    
    
    
    
    
    
    4/09City National Bank  $20 mm(6), (9)
    
    
    10,000
    
    
    
    10,000
    
    
    
    4.65
    %
    
    LIBOR + 0.85%
    
    
    
    
    
    
    8/07234,000
    
    
    
    121,500Unsecured Loans:Wells Fargo Term Loan  $125 mm(6)
    
    
    125,000
    
    
    
    125,000
    
    
    
    5.10
    %
    
    Fixed (Note 11)
    
    
    
    
    
    
    2/12Wells Fargo Bridge Loan  $25mm(6), (10)
    
    
    25,000
    
    
    
    
    
    
    
    4.93
    %
    
    LIBOR + 1.05%
    
    
    
    
    
    
    1/06150,000
    
    
    
    125,000Unsecured Senior Notes:2005 Notes(12)
    
    
    
    
    
    
    199,974
    
    
    
    
    
    
    
    
    
    
    
    
    
    2007 Notes(13)
    
    
    149,260
    
    
    
    149,395
    
    
    
    7.00
    %
    
    Fixed
    
    
    
    
    
    
    11/072010 Notes(13)
    
    
    49,816
    
    
    
    49,785
    
    
    
    9.15
    %
    
    Fixed
    
    
    
    
    
    
    3/102010 Notes(13)
    
    
    99,575
    
    
    
    99,513
    
    
    
    8.50
    %
    
    Fixed
    
    
    
    
    
    
    11/102011 Notes(13)
    
    
    198,472
    
    
    
    198,278
    
    
    
    5.20
    %
    
    Fixed
    
    
    
    
    
    
    9/112015 Notes(13)
    
    
    297,294
    
    
    
    
    
    
    
    5.25
    %
    
    Fixed
    
    
    
    
    
    
    3/15794,417
    
    
    
    696,945Total Debt
    
    $
    1,600,531
    
    
    $
    1,326,084
 
 (1)
    
    Requires monthly payments of principal and interest.(2)
    
    In April 2005, we assumed this mortgage loan in conjunction with the acquisition of
an office building (5670 Wilshire). The stated interest rate of this loan is 8.50% and the balance is approximately
$51.3 million at September 30, 2005. This loan was recorded at its fair market value at the
date of acquisition and can be prepaid without penalty beginning in September 2008.(3)
    
    This loan was repaid in full on January 3, 2005.(4)
    
    This loan was repaid in full on August 11, 2005.(5)
    
    Both mortgage loans are secured by the Conejo Business Center property.(6)
    
    Requires monthly payments of interest only, with outstanding principal balance due upon
maturity.(7)
    
    This line of credit also has an annual 20 basis point facility fee on the entire $310
million commitment amount. In July 2005, we renewed this line of credit, extending the
maturity to April of 2009 and reducing the interest rate from LIBOR + 0.90% to LIBOR + 0.85%.(8)
    
    We have entered into interest rate swap agreements that fixed the interest rate on $50
million of the outstanding balance on this line of credit at 3.90% through April 2006.(9)
    
    In July 2005, we renewed this line of credit extending the maturity to August 2007 and
reduced the interest rate from LIBOR + 0.90% to LIBOR + 0.85%.(10)
    
    We entered into this loan in the third quarter of 2005. This loan has a three month
extension option and bears interest at LIBOR + 1.05% during both the initial and extension
period.(11)
    
    We have entered into interest rate swap agreements that fixed the interest rate on
this loan at 4.55% in 2005, 4.70% from January through June 2006, 5.29% from June 2006 through
May 2007, 5.55% from June 2007 through November 2008, 5.76% from December 2008 through May
2010 and 5.99% from June 2010 through February 2012.(12)
    
    These senior unsecured notes were redeemed on March 1, 2005.(13)
    
    Requires semi-annual interest payments only, with the principal balance due upon
maturity. 9




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##### Table of Contents



5.
    
    Interest Rate Hedge Agreements
        10




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##### Table of Contents



6.
    
    Partners Capital
      7.
    
    Interest and Other Loss (Income)
  For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Net loss from TRS
    
    $
    (492
    )
    
    $
    (292
    )
    
    $
    (1,521
    )
    
    $
    (171
    )Interest and other income
    
    
    203
    
    
    
    113
    
    
    
    88
    
    
    
    322$
    (289
    )
    
    $
    (179
    )
    
    $
    (1,433
    )
    
    $
    151
 8.
    
    Stock Option Plan
   For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Net income allocated to general and limited partners, as reported
    
    $
    42,527
    
    
    $
    11,439
    
    
    $
    62,363
    
    
    $
    40,087Stock based employee compensation costs for options granted
prior to 2003 assuming fair value method
    
    
    
    
    
    
    (24
    )
    
    
    (11
    )
    
    
    (178
    )Net income allocated to general and limited partners, as adjusted
    
    $
    42,527
    
    
    $
    11,415
    
    
    $
    62,352
    
    
    $
    39,909Earnings per share:Basic as reported
    
    $
    0.62
    
    
    $
    0.17
    
    
    $
    0.91
    
    
    $
    0.60Basic as adjusted
    
    $
    0.62
    
    
    $
    0.17
    
    
    $
    0.91
    
    
    $
    0.60Diluted as reported
    
    $
    0.62
    
    
    $
    0.17
    
    
    $
    0.91
    
    
    $
    0.60Diluted as adjusted
    
    $
    0.62
    
    
    $
    0.17
    
    
    $
    0.91
    
    
    $
    0.59
 11




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##### Table of Contents



9.
    
    Comprehensive Income
  For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Net income
    
    $
    42,527
    
    
    $
    13,592
    
    
    $
    62,363
    
    
    $
    44,396Other comprehensive income:Unrealized derivative gain (loss) on cash flow hedges
    
    
    7,143
    
    
    
    (7,387
    )
    
    
    3,558
    
    
    
    (6,029
    )Reclassification adjustment
    
    
    (9
    )
    
    
    (1,356
    )
    
    
    613
    
    
    
    1,689Comprehensive income
    
    $
    49,661
    
    
    $
    4,849
    
    
    $
    66,534
    
    
    $
    40,056
 
 (1)
    
    Reclassification adjustment consists of amounts reclassified
into interest expense during the period related to previously
terminated cash flow hedges (see footnote 5) and payments made
or cash received during the period relating to currently outstanding
cash flow hedges. 10.
    
    Commitments and Contingencies
  12




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
 The following discussion relates to our unaudited consolidated financial statements included
herein, which should be read in conjunction with the financial statements and related notes thereto
included elsewhere in this Form 10-Q and in our Report on Form 10-K for the fiscal year ended
December 31, 2004, as amended.
       Critical Accounting Policies
  Off-Balance Sheet Arrangements
  13




---



##### Table of Contents



RESULTS OF OPERATIONS
  Comparison of the three months ended September 30, 2005 to the three months ended September 30, 2004
(in thousands, except number of properties and percentages):
 Three Months EndedSeptember 30,
    
    
    
    
    
    
    Percent2005
    
    
    2004
    
    
    Change
    
    
    ChangeTotal Portfolio:Revenue from rental operations:Scheduled cash rents
    
    $
    97,642
    
    
    $
    84,964
    
    
    $
    12,678
    
    
    
    15
    %Straight-line rents
    
    
    532
    
    
    
    27
    
    
    
    505
    
    
    
    1,870Tenant reimbursements
    
    
    5,522
    
    
    
    5,227
    
    
    
    295
    
    
    
    6Parking, net of expense
    
    
    7,409
    
    
    
    6,062
    
    
    
    1,347
    
    
    
    22Other rental operations
    
    
    3,494
    
    
    
    3,281
    
    
    
    213
    
    
    
    6Total revenue from rental operations
    
    
    114,599
    
    
    
    99,561
    
    
    
    15,038
    
    
    
    15Property expenses:Repairs and maintenance
    
    
    13,293
    
    
    
    10,695
    
    
    
    2,598
    
    
    
    24Utilities
    
    
    10,936
    
    
    
    9,254
    
    
    
    1,682
    
    
    
    18Real estate taxes
    
    
    8,335
    
    
    
    7,277
    
    
    
    1,058
    
    
    
    15Insurance
    
    
    1,828
    
    
    
    1,762
    
    
    
    66
    
    
    
    4Ground rent
    
    
    317
    
    
    
    207
    
    
    
    110
    
    
    
    53Administrative
    
    
    5,062
    
    
    
    3,929
    
    
    
    1,133
    
    
    
    29Total property expenses
    
    
    39,771
    
    
    
    33,124
    
    
    
    6,647
    
    
    
    20Property Operating Results(1)
    
    
    74,828
    
    
    
    66,437
    
    
    
    8,391
    
    
    
    13General and administrative
    
    
    7,101
    
    
    
    4,823
    
    
    
    2,278
    
    
    
    47Interest expense
    
    
    25,030
    
    
    
    21,264
    
    
    
    3,766
    
    
    
    18Depreciation and amortization
    
    
    34,331
    
    
    
    29,414
    
    
    
    4,917
    
    
    
    17Interest and other loss
    
    
    289
    
    
    
    179
    
    
    
    110
    
    
    
    61Minority interest
    
    
    143
    
    
    
    53
    
    
    
    90
    
    
    
    170Income from continuing operations
    
    $
    7,934
    
    
    $
    10,704
    
    
    $
    (2,770
    )
    
    
    (26
    )%Discontinued operations
    
    $
    948
    
    
    $
    1,951
    
    
    $
    (1,003
    )
    
    
    (51
    )%Number of Properties:Disposed of during period
    
    
    (6
    )
    
    
    (1
    )Acquired during period
    
    
    1
    
    
    
    In service at end of period
    
    
    116
    
    
    
    127Net Rentable Square Feet:Disposed of during period
    
    
    (801
    )
    
    
    (70
    )Acquired during period
    
    
    115
    
    
    
    In service at end of period
    
    
    18,536
    
    
    
    18,726Same Property Portfolio(2):Revenue from rental operations
    
    $
    101,936
    
    
    $
    98,973
    
    
    $
    2,963
    
    
    
    3
    %Property expenses
    
    
    35,210
    
    
    
    32,938
    
    
    
    2,272
    
    
    
    7
    %$
    66,726
    
    
    $
    66,035
    
    
    $
    691
    
    
    
    1
    %Straight-line rents
    
    $
    (317
    )
    
    $
    56
    
    
    $
    (373
    )
    
    
    (666
    )%Number of non-development properties
    
    
    110
    
    
    
    110Number of buildings
    
    
    180
    
    
    
    180Average occupancy
    
    
    91.4
    %
    
    
    90.8
    %Net rentable square feet
    
    
    16,713
    
    
    
    16,713
 
 (1)
    
    Property Operating Results is commonly used by investors to evaluate the
performance of real estate companies, to determine trends in earnings and to compute
the fair value of properties as it is not affected by (a) the cost of funds of the
property owner or (b) the impact of depreciation and amortization expenses as well as
gains or losses from the sale of operating real estate assets that are included in
net income computed in accordance with Generally Accepted Accounting Principles, or
GAAP. The first factor is commonly eliminated from net income because it is specific
to the particular financing capabilities and constraints of the owner. The second
factor is commonly eliminated because it may not accurately represent the actual
change in value in real estate properties that results from use or changes in market
conditions. We believe that eliminating these costs from net income gives investors 14




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##### Table of Contents



an additional measure of operating performance that, when used as an adjunct to net
income computed in accordance with GAAP, can be a useful measure of our operating
results.Property Operating Results captures trends in occupancy rates, rental rates and
operating costs. However, Property Operating Results excludes
general and administrative costs, interest expense, interest income, depreciation and
amortization expense, loss from debt defeasance and gains or losses from the sale of properties,
changes in value in our real estate properties that result from use or permanent impairment to
carrying costs as stipulated by GAAP, the level of capital
expenditures and leasing costs necessary to maintain the operating performance of our
properties, all of which are significant economic costs.
Therefore, Property Operating Results may fail to capture significant trends which limits its
usefulness.Property Operating Results is a non-GAAP measure of performance. Property Operating
Results is not a substitute for net income as computed in accordance with GAAP. It
excludes significant expense components such as depreciation and
amortization expense
and financing costs. This measure should be analyzed in conjunction with net income
and cash flow from operating activities as computed in accordance with GAAP. Other
companies may use different methods for calculating Property Operating Results or
similarly entitled measures and, accordingly, our Property Operating Results may not be
comparable to similarly entitled measures reported by other companies that do not
define the measure exactly as we do.The following is a reconciliation of net income computed in accordance with GAAP to
Property Operating Results (in thousands): Three Months Ended September 30,2005
    
    
    2004Net income
    
    $
    42,527
    
    
    $
    13,592Add:General and administrative expense
    
    
    7,101
    
    
    
    4,823Interest expense
    
    
    25,030
    
    
    
    21,264Depreciation and amortization
    
    
    34,331
    
    
    
    29,414Minority interest
    
    
    143
    
    
    
    53Interest and other loss
    
    
    289
    
    
    
    179Loss from debt defeasance related to sale of discontinued properties
    
    
    278
    
    
    
    Less:Gain on sale of discontinued properties
    
    
    (33,923
    )
    
    
    (937
    )Discontinued operations
    
    
    (948
    )
    
    
    (1,951
    )Property Operating Results
    
    $
    74,828
    
    
    $
    66,437
  (2)
    
    Consists of non-development/renovation properties classified as part of
continuing operations and owned for the entirety of the periods presented. VARIANCES FOR RESULTS OF OPERATIONS
   Revenue from Rental Operations
   Property Expenses
   15




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##### Table of Contents



General and Administrative Expenses
  Interest Expense
  Depreciation and Amortization
  16




---



##### Table of Contents



Comparison of the nine months ended September 30, 2005 to the nine months ended September 30, 2004
(in thousands, except number of properties and percentages):
 Nine Months EndedSeptember 30,
    
    
    
    
    
    
    Percent2005
    
    
    2004
    
    
    Change
    
    
    ChangeTotal Portfolio:Revenue from rental operations:Scheduled cash rents
    
    $
    283,043
    
    
    $
    251,023
    
    
    $
    32,020
    
    
    
    13
    %Straight-line rents
    
    
    2,210
    
    
    
    1,427
    
    
    
    783
    
    
    
    55Tenant reimbursements
    
    
    14,984
    
    
    
    13,892
    
    
    
    1,092
    
    
    
    8Parking, net of expense
    
    
    20,098
    
    
    
    17,418
    
    
    
    2,680
    
    
    
    15Other rental operations
    
    
    7,253
    
    
    
    7,519
    
    
    
    (266
    )
    
    
    (4
    )Total revenue from rental operations
    
    
    327,588
    
    
    
    291,279
    
    
    
    36,309
    
    
    
    12Property expenses:Repairs and maintenance
    
    
    37,943
    
    
    
    31,489
    
    
    
    6,454
    
    
    
    20Utilities
    
    
    26,504
    
    
    
    23,468
    
    
    
    3,036
    
    
    
    13Real estate taxes
    
    
    25,097
    
    
    
    22,038
    
    
    
    3,059
    
    
    
    14Insurance
    
    
    5,404
    
    
    
    5,397
    
    
    
    7
    
    
    
    0Ground rent
    
    
    954
    
    
    
    539
    
    
    
    415
    
    
    
    77Administrative
    
    
    14,880
    
    
    
    12,333
    
    
    
    2,547
    
    
    
    21Total property expenses
    
    
    110,782
    
    
    
    95,264
    
    
    
    15,518
    
    
    
    16Property Operating Results(1)
    
    
    216,806
    
    
    
    196,015
    
    
    
    20,791
    
    
    
    11General and administrative
    
    
    22,906
    
    
    
    13,972
    
    
    
    8,934
    
    
    
    64Interest expense
    
    
    72,869
    
    
    
    65,253
    
    
    
    7,616
    
    
    
    12Depreciation and amortization
    
    
    101,224
    
    
    
    85,457
    
    
    
    15,767
    
    
    
    18Interest and other loss (income)
    
    
    1,433
    
    
    
    (151
    )
    
    
    1,584
    
    
    
    1,049Impairment on investment in securities
    
    
    
    
    
    
    2,700
    
    
    
    (2,700
    )
    
    
    (100
    )Minority interest
    
    
    301
    
    
    
    114
    
    
    
    187
    
    
    
    164Income from continuing operations
    
    $
    18,073
    
    
    $
    28,670
    
    
    $
    (10,597
    )
    
    
    (37
    )%Discontinued operations
    
    $
    4,826
    
    
    $
    7,960
    
    
    $
    (3,134
    )
    
    
    (39
    )%Number of Properties:Disposed of during period
    
    
    (8
    )
    
    
    (3
    )Acquired during period
    
    
    4
    
    
    
    Completed and placed in service during period
    
    
    
    
    
    
    1In service at end of period
    
    
    116
    
    
    
    127Net Rentable Square Feet:Disposed of during period
    
    
    (1,018
    )
    
    
    (365
    )Acquired during period
    
    
    1,302
    
    
    
    Completed and placed in service during period
    
    
    
    
    
    
    283In service at end of period
    
    
    18,536
    
    
    
    18,726Same Property Portfolio(2):Revenue from rental operations
    
    $
    291,607
    
    
    $
    285,470
    
    
    $
    6,137
    
    
    
    2
    %Property expenses
    
    
    98,312
    
    
    
    93,091
    
    
    
    5,221
    
    
    
    6
    %$
    193,295
    
    
    $
    192,379
    
    
    $
    916
    
    
    
    
    %Straight-line rents
    
    $
    (716
    )
    
    $
    58
    
    
    $
    (774
    )
    
    
    (1,334
    )%Number of non-development properties
    
    
    109
    
    
    
    109Number of buildings
    
    
    179
    
    
    
    179Average occupancy
    
    
    91.1
    %
    
    
    90.1
    %Net rentable square feet
    
    
    16,427
    
    
    
    16,427
 
 (1)
    
    Property Operating Results is commonly used by investors to evaluate the
performance of real estate companies, to determine trends in earnings and to compute
the fair value of properties as it is not affected by (a) the cost of funds of the
property owner or (b) the impact of depreciation and amortization expenses as well as
gains or losses from the sale of operating real estate assets that are included in
net income computed in accordance with GAAP. The first factor is commonly eliminated
from net income because it is specific to the particular financing capabilities and
constraints of the owner. The second factor is commonly eliminated because it may
not accurately represent the actual change in value in real estate properties that
results from use or changes in market conditions. We believe that eliminating these
costs from net income gives investors an additional measure of operating performance
that, when used as an adjunct to net income computed in accordance with GAAP, can be
a useful measure of our operating results.Property Operating Results captures trends in occupancy rates, rental rates and
operating costs. However, Property Operating Results excludes general and administrative costs, interest expense, interest income, depreciation and
amortization expense, loss from debt defeasance and gains or losses from the sale of properties, 17




---



##### Table of Contents



changes in value in our real estate properties that result from use or permanent impairment to
carrying costs as stipulated by GAAP, the level of capital
expenditures and leasing costs necessary to maintain the operating performance of our
properties, all of which are significant economic costs.
Therefore, Property Operating Results may fail to capture significant trends which limits its
usefulness.Property Operating Results is a non-GAAP measure of performance. Property Operating
Results is not a substitute for net income as computed in accordance with GAAP. It
excludes significant expense components such as depreciation and amortization expense
and financing costs. This measure should be analyzed in conjunction with net income
and cash flow from operating activities as computed in accordance with GAAP. Other
companies may use different methods for calculating Property Operating Results or
similarly entitled measures and, accordingly, our Property Operating Results may not be
comparable to similarly entitled measures reported by other companies that do not
define the measure exactly as we do.The following is a reconciliation of net income computed in accordance with GAAP to
Property Operating Results (in thousands): Nine Months Ended September 30,2005
    
    
    2004Net income
    
    $
    62,363
    
    
    $
    44,396Add:General and administrative expense
    
    
    22,906
    
    
    
    13,972Interest expense
    
    
    72,869
    
    
    
    65,253Depreciation and amortization
    
    
    101,224
    
    
    
    85,457Minority interest
    
    
    301
    
    
    
    114Impairment on investment in securities
    
    
    
    
    
    
    2,700Interest and other loss
    
    
    1,433
    
    
    
    Loss from debt defeasance related to sale of discontinued properties
    
    
    835
    
    
    
    Less:Gain on sale of discontinued properties
    
    
    40,299
    
    
    
    7,766Discontinued operations
    
    
    4,826
    
    
    
    7,960Interest and other income
    
    
    
    
    
    
    151Property Operating Results
    
    $
    216,806
    
    
    $
    196,015
  (2)
    
    Consists of non-development/renovation properties classified as part of continuing
operations and owned for the entirety of the periods presented. VARIANCES FOR RESULTS OF OPERATIONS
   Revenue from Rental Operations
   Property Expenses
   18




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##### Table of Contents



General and Administrative Expenses
  Interest Expense
  Depreciation and Amortization
  Interest and Other Loss (Income)
  LIQUIDITY AND CAPITAL RESOURCES
 Cash Flows
    19




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##### Table of Contents



Cash Balances and Available Borrowings
   Capital Recycling Program
  20




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##### Table of Contents



Debt Summary
  Year
    
    Amount2005
    
    $
    1,7882006
    
    
    34,527
    (1)2007
    
    
    169,781
    (2)2008
    
    
    281,5062009
    
    
    335,936
    (3)2010
    
    
    149,9442011
    
    
    200,1632012
    
    
    125,3932013
    
    
    4532014
    
    
    520Thereafter
    
    
    300,520Total
    
    $
    1,600,531
 
 (1)
    
    Includes $25 million outstanding on our Wells Fargo bridge loan which matures in January
2006.(2)
    
    Includes $10 million outstanding on our City National Bank unsecured line of credit that was
extended to August 2007 in July 2005.(3)
    
    Includes $224 million outstanding on our Wells Fargo unsecured line of credit that was
extended to April 2009 in July 2005.  Unsecured and Secured Debt:
 Weighted
    
    
    WeightedBalance
    
    
    
    
    
    
    Average
    
    
    Average(000s)
    
    
    Percent
    
    
    Interest Rate(1)
    
    
    Maturity (in years)Unsecured Debt
    
    $
    1,178,416
    
    
    
    74
    %
    
    
    5.91
    %
    
    
    6.6Secured Debt
    
    
    422,115
    
    
    
    26
    
    
    
    6.86
    
    
    
    2.7Total Debt
    
    $
    1,600,531
    
    
    
    100
    %
    
    
    6.16
    %
    
    
    5.6
 
 (1)
    
    Includes amortization of prepaid financing costs. Floating and Fixed Rate Debt:
 Weighted
    
    
    WeightedBalance
    
    
    
    
    
    
    Average
    
    
    Average(000s)
    
    
    Percent
    
    
    Interest Rate(1)
    
    
    Maturity (in years)Floating Rate Debt
    
    $
    209,000
    
    
    
    13
    %
    
    
    4.70
    %
    
    
    3.1Fixed Debt (2)
    
    
    1,391,531
    
    
    
    87
    
    
    
    6.29
    
    
    
    5.1Total Debt
    
    $
    1,600,531
    
    
    
    100
    %
    
    
    6.16
    %
    
    
    5.6
 
 (1)
    
    Includes amortization of prepaid financing costs.(2)
    
    Includes $175 million of floating rate debt that has been fixed through interest rate
swap agreements.  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Total interest incurred (1)
    
    $
    25,322
    
    
    $
    21,777
    
    
    $
    73,682
    
    
    $
    66,628Amount capitalized
    
    
    236
    
    
    
    260
    
    
    
    568
    
    
    
    614Amount expensed (1)
    
    $
    25,086
    
    
    $
    21,517
    
    
    $
    73,114
    
    
    $
    66,014
 
 (1)
    
    Includes interest expense for loans secured by one property sold during the three months
ended March 31, 2005 and one property sold during the three months ended September 30, 2005. 21




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##### Table of Contents



Consolidated Income Available for Debt Service and Compliance with Principal Financial Covenants
      Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Net cash provided by operating activities
    
    $
    61,914
    
    
    $
    55,115
    
    
    $
    140,849
    
    
    $
    137,650Add:Interest expense including discontinued operations
    
    
    25,086
    
    
    
    21,517
    
    
    
    73,114
    
    
    
    66,014Loss from debt defeasance related to sale of discontinued properties
    
    
    278
    
    
    
    
    
    
    
    835
    
    
    
    Less:Amortization of loan costs and fees
    
    
    (825
    )
    
    
    (828
    )
    
    
    (2,543
    )
    
    
    (2,911
    )Straight-line rent
    
    
    (345
    )
    
    
    (15
    )
    
    
    (2,146
    )
    
    
    (1,356
    )Changes in operating assets and liabilities:Rent and other receivables
    
    
    (1,048
    )
    
    
    760
    
    
    
    656
    
    
    
    2,594Deferred rent
    
    
    769
    
    
    
    (75
    )
    
    
    3,105
    
    
    
    1,907Prepaid financing costs, expenses and other assets
    
    
    2,424
    
    
    
    (139
    )
    
    
    2,162
    
    
    
    2,066Accounts payable and accrued expenses
    
    
    (18,688
    )
    
    
    (8,958
    )
    
    
    (14,851
    )
    
    
    (3,969
    )Security deposits
    
    
    152
    
    
    
    69
    
    
    
    (712
    )
    
    
    (807
    )Consolidated Income Available for Debt Service
    
    $
    69,717
    
    
    $
    67,446
    
    
    $
    200,469
    
    
    $
    201,188
 22




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Net Income
    
    $
    41,601
    
    
    $
    11,176
    
    
    $
    61,091
    
    
    $
    39,164Add:Interest expense including discontinued operations
    
    
    25,086
    
    
    
    21,517
    
    
    
    73,114
    
    
    
    66,014Depreciation and amortization
    
    
    34,331
    
    
    
    29,414
    
    
    
    101,224
    
    
    
    85,457Amortization of deferred compensation
    
    
    1,578
    
    
    
    800
    
    
    
    3,790
    
    
    
    2,331Minority interest
    
    
    201
    
    
    
    2,398
    
    
    
    461
    
    
    
    4,954Loss from debt defeasance related to sale of discontinued properties
    
    
    278
    
    
    
    
    
    
    
    835
    
    
    
    Minority interest from discontinued operations
    
    
    868
    
    
    
    71
    
    
    
    1,112
    
    
    
    392Depreciation from discontinued operations
    
    
    42
    
    
    
    3,022
    
    
    
    1,287
    
    
    
    9,298Impairment on investment in securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,700Less:Gain on sale of discontinued properties
    
    
    (33,923
    )
    
    
    (937
    )
    
    
    (40,299
    )
    
    
    (7,766
    )Straight-line rent
    
    
    (345
    )
    
    
    (15
    )
    
    
    (2,146
    )
    
    
    (1,356
    )Consolidated Income Available for Debt Service
    
    $
    69,717
    
    
    $
    67,446
    
    
    $
    200,469
    
    
    $
    201,188
    23




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##### Table of Contents



Net investment in real estate
    
    $
    2,776,758Cash and cash equivalents
    
    
    12,465Restricted cash
    
    
    71,119Accumulated depreciation and amortization
    
    
    535,465Total Gross Assets
    
    $
    3,395,807Gross Value of Unencumbered Assets
    
    $
    2,281,117Mortgage loans payable(1)
    
    $
    422,114Unsecured lines of credit
    
    
    234,000Unsecured loans
    
    
    150,000Unsecured senior notes, net of discount
    
    
    794,417Total Outstanding Debt
    
    $
    1,600,531Consolidated Income Available for Debt Service(2)
    
    $
    269,501Interest incurred(2)
    
    $
    97,505Loan fee amortization(2)
    
    
    (2,676
    )Debt Service(2)
    
    $
    94,829
 Senior Unsecured Notes Covenant Ratios
    
    Test
    
    ActualTotal Outstanding Debt/Total Gross Assets
    
    Less than 60%
    
    
    47
    %Secured Debt/Total Gross Assets
    
    Less than 40%
    
    
    12
    %Ratio of Consolidated Income Available for Debt Service to Debt
Service
    
    Greater than 1.5
    
    
    2.8Gross Value of Unencumbered Assets/Unsecured Debt
    
    Greater than 150%
    
    
    194
    %
 Wells Fargo Unsecured Line of Credit Covenant Ratios
    
    Test
    
    ActualRatio of Consolidated Income Available for Debt Service to fixed charges
(3)
    
    Greater than 1.50
    
    
    2.1
 
 (1)
    
    Represents 8 secured loans that are secured by 51 of the properties in our portfolio.(2)
    
    Represents amounts for the most recent four consecutive quarters. Loan fee
amortization excludes discount amortization on senior unsecured notes.(3)
    
    Fixed charges consist of interest costs, whether expensed or capitalized, principal
payments on all debt, an amount equal to $0.3125 per quarter multiplied by the
weighted average gross leaseable square feet of the portfolio at the end of the period and
preferred unit distributions. In conjunction with the amendment of this unsecured line of
credit in July 2005, the benchmark for this compliance calculation was reduced from 1.75
to 1.50. 24




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##### Table of Contents



Funds from Operations
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Funds From Operations:(1)Net income
    
    $
    42,527
    
    
    $
    13,592
    
    
    $
    62,363
    
    
    $
    44,396Depreciation from discontinued operations
    
    
    42
    
    
    
    3,022
    
    
    
    1,287
    
    
    
    9,298Gain on sale of discontinued properties
    
    
    (33,923
    )
    
    
    (937
    )
    
    
    (40,299
    )
    
    
    (7,766
    )Depreciation and amortization
    
    
    34,331
    
    
    
    29,414
    
    
    
    101,224
    
    
    
    85,457Minority interest
    
    
    143
    
    
    
    53
    
    
    
    301
    
    
    
    114Income allocated to Preferred Operating Partnership Units
    
    
    
    
    
    
    (2,153
    )(2)
    
    
    
    
    
    
    (4,309
    )(2)Funds From Operations(3)
    
    $
    43,120
    
    
    $
    42,991
    
    
    $
    124,876
    
    
    $
    127,190Weighted average common shares and Operating Partnership
units outstanding  Diluted
    
    
    68,927
    
    
    
    67,564
    
    
    
    68,636
    
    
    
    67,188
 
 (1)
    
    We believe that funds from operations, or FFO, is a useful supplemental measure
of our operating performance. We compute FFO in accordance with standards established
by the White Paper on FFO approved by the Board of Governors of the National Association
of Real Estate Investment Trusts, or NAREIT, in April 2002. The White Paper defines FFO
as net income or loss computed in accordance with GAAP, excluding extraordinary items,
as defined by GAAP, and gains and losses from sales of depreciable operating property
plus real estate-related depreciation and amortization and after adjustments for
unconsolidated partnerships and joint ventures.We believe that FFO, by excluding depreciation costs, the gains or losses from the sale of
operating real estate properties and the extraordinary items as defined by GAAP, provides
an additional perspective on our operating results. However, because these excluded items
have a real economic effect, FFO is a limited measure of performance.FFO captures trends in occupancy rates, rental rates and operating costs. FFO excludes
depreciation and amortization costs and it does not capture the changes in value in our
properties that result from use or changes in market conditions or the level of capital
expenditures and leasing costs necessary to maintain the operating performance of our
properties, all of which are significant economic costs. Therefore, its ability to measure
performance is limited.Because FFO excludes significant economic components of net income determined in
accordance with GAAP, FFO should be used as an adjunct to net income and not as an
alternative to net income. FFO should also not be used as an indicator of our financial
performance, or as a substitute for cash flow from operating activities determined in
accordance with GAAP or as a measure of our liquidity. FFO is not by itself indicative of
funds available to fund our cash needs, including our ability to pay dividends or service
our debt.FFO is used by investors to compare our performance with other real estate companies.
Other real estate companies may use different methods for calculating FFO and,
accordingly, our FFO may not be comparable to other real estate companies.(2)
    
    Includes approximately $1.1 million allocated to the preferred partners relating to the
original issuance costs of the Preferred Operating Partnership Units which were redeemed
on September 28, 2004.(3)
    
    Includes approximately $1.6 million and $0.8 million in non-cash compensation expense
for the three months ended September 30, 2005 and 2004, respectively, and approximately
$3.8 million and $2.3 million in non-cash compensation expense for the nine months ended
September 30, 2005 and 2004, respectively. 25




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##### Table of Contents



Portfolio and Lease Information
  PORTFOLIO SUMMARY
 Property Operating ResultsNumber of
    
    
    Number of
    
    
    Approximate Net
    
    
    Three Months Ended
    
    
    Nine Months EndedLocation
    
    Properties
    
    
    Buildings
    
    
    Rentable (Sq. Ft.)
    
    
    September 30, 2005
    
    
    September 30, 2005(in thousands)
    
    
    (in thousands)Total
    
    
    % of Total
    
    
    Total
    
    
    % of Total
    
    
    Total
    
    
    % of Total
    
    
    Total
    
    
    % of Total
    
    
    Total
    
    
    % of TotalLos Angeles CountyWest
    
    
    30
    
    
    
    26
    %
    
    
    32
    
    
    
    16
    %
    
    
    5,411,449
    
    
    
    29
    %
    
    $
    29,730
    
    
    
    40
    %
    
    $
    85,083
    
    
    
    39
    %North
    
    
    29
    
    
    
    25
    %
    
    
    46
    
    
    
    24
    %
    
    
    3,571,693
    
    
    
    20
    %
    
    
    13,092
    
    
    
    17
    %
    
    
    40,048
    
    
    
    18
    %South
    
    
    11
    
    
    
    9
    %
    
    
    15
    
    
    
    8
    %
    
    
    2,452,070
    
    
    
    13
    %
    
    
    8,146
    
    
    
    11
    %
    
    
    23,292
    
    
    
    11
    %Subtotal
    
    
    70
    
    
    
    60
    %
    
    
    93
    
    
    
    48
    %
    
    
    11,435,212
    
    
    
    62
    %
    
    
    50,968
    
    
    
    68
    %
    
    
    148,423
    
    
    
    68
    %Orange County
    
    
    18
    
    
    
    16
    %
    
    
    50
    
    
    
    26
    %
    
    
    3,214,272
    
    
    
    17
    %
    
    
    9,224
    
    
    
    12
    %
    
    
    27,936
    
    
    
    13
    %San Diego County
    
    
    24
    
    
    
    21
    %
    
    
    36
    
    
    
    19
    %
    
    
    3,310,227
    
    
    
    18
    %
    
    
    12,784
    
    
    
    17
    %
    
    
    34,743
    
    
    
    16
    %Ventura County
    
    
    4
    
    
    
    3
    %
    
    
    13
    
    
    
    7
    %
    
    
    575,861
    
    
    
    3
    %
    
    
    1,852
    
    
    
    3
    %
    
    
    5,704
    
    
    
    3
    %Total
    
    
    116
    
    
    
    100
    %
    
    
    192
    
    
    
    100
    %
    
    
    18,535,572
    
    
    
    100
    %
    
    $
    74,828
    
    
    
    100
    %
    
    $
    216,806
    
    
    
    100
    %
 PORTFOLIO OCCUPANCY AND IN-PLACE RENTS
 Percent
    
    
    Percent
    
    
    Annualized Base RentLocation
    
    Occupied
    
    
    Leased
    
    
    Per Leased Square Foot(1)Portfolio
    
    
    Full ServiceTotal
    
    
    Gross Leases(2)Los Angeles CountyWest
    
    
    94.6
    %
    
    
    95.8
    %
    
    $
    28.12
    
    
    $
    28.14North
    
    
    92.8
    %
    
    
    93.7
    %
    
    
    22.87
    
    
    
    23.47South
    
    
    91.2
    %
    
    
    92.5
    %
    
    
    19.21
    
    
    
    20.57Subtotal/Weighted Average
    
    
    93.3
    %
    
    
    94.4
    %
    
    
    24.63
    
    
    
    25.32Orange County
    
    
    91.6
    %
    
    
    95.3
    %
    
    
    19.53
    
    
    
    22.11San Diego County
    
    
    83.0
    %
    
    
    85.8
    %
    
    
    22.89
    
    
    
    25.55Ventura County
    
    
    96.7
    %
    
    
    96.7
    %
    
    
    19.93
    
    
    
    19.93Total/Weighted Average
    
    
    91.3
    %
    
    
    93.1
    %
    
    $
    23.28
    
    
    $
    24.67
 
 (1)
    
    Based on monthly contractual base rent under existing leases as of September 30,
2005, multiplied by 12 and divided by leased net rentable square feet. For those leases
where rent has not yet commenced or that are in a free rent period, the first month in
which rent is to be received is used to determine annualized base rent.(2)
    
    Excludes 26 properties and approximately 2.9 million square feet under triple net
and modified gross leases. 26




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##### Table of Contents



TEN LARGEST TENANTS
 Weighted
    
    
    Percentage of
    
    
    Percentage ofAverage
    
    
    Aggregate
    
    
    AggregateRemaining
    
    
    Portfolio
    
    
    Portfolio
    
    
    
    
    
    
    AnnualizedNumber of
    
    
    Lease Term
    
    
    Leased
    
    
    Annualized
    
    
    Net Rentable
    
    
    Base RentTenant
    
    Locations
    
    
    in Months
    
    
    Square Feet
    
    
    Base Rent(1)
    
    
    Square Feet
    
    
    (in thousands)(1)Vivendi Universal
    
    
    2
    
    
    
    36
    
    
    
    1.34
    %
    
    
    1.99
    %
    
    
    231,681
    
    
    $
    7,980State of California
    
    
    16
    
    
    
    43
    
    
    
    1.51
    %
    
    
    1.43
    %
    
    
    261,120
    
    
    
    5,749U.S. Government
    
    
    14
    
    
    
    48
    
    
    
    0.90
    %
    
    
    1.08
    %
    
    
    155,240
    
    
    
    4,349Ceridian Corporation
    
    
    2
    
    
    
    55
    
    
    
    0.88
    %
    
    
    0.95
    %
    
    
    152,612
    
    
    
    3,833Atlantic Richfield
    
    
    1
    
    
    
    12
    
    
    
    0.83
    %
    
    
    0.88
    %
    
    
    143,885
    
    
    
    3,551Pepperdine University
    
    
    1
    
    
    
    158
    
    
    
    0.66
    %
    
    
    0.85
    %
    
    
    113,488
    
    
    
    3,400Walt Disney Pictures & Television
    
    
    1
    
    
    
    34
    
    
    
    0.87
    %
    
    
    0.84
    %
    
    
    149,413
    
    
    
    3,387University of Phoenix
    
    
    5
    
    
    
    63
    
    
    
    0.84
    %
    
    
    0.83
    %
    
    
    144,498
    
    
    
    3,319Westfield Corporation
    
    
    1
    
    
    
    90
    
    
    
    0.62
    %
    
    
    0.81
    %
    
    
    107,300
    
    
    
    3,249Homestore.com, Inc.
    
    
    1
    
    
    
    28
    
    
    
    0.80
    %
    
    
    0.79
    %
    
    
    137,762
    
    
    
    3,158Total/Weighted Average(2)
    
    
    44
    
    
    
    52
    
    
    
    9.25
    %
    
    
    10.45
    %
    
    
    1,596,999
    
    
    $
    41,975
 
 (1)
    
    Annualized base rent is calculated as monthly contractual base rent under
existing leases as of September 30, 2005 multiplied by 12. For those leases where rent
has not yet commenced or that are in a free rent period, the first month in which rent
is to be received is used to determine annualized base rent.(2)
    
    The weighted average calculation is based on net rentable square footage leased
by each tenant. 27




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##### Table of Contents



LEASING ACTIVITY
 Three MonthsEnded
    
    
    Nine Months EndedSeptember 30, 2005
    
    
    September 30, 2005Net Absorption (square feet)
    
    
    98,621
    
    
    
    161,097Gross New Leasing Activity (square feet)(1)
    
    
    509,695
    
    
    
    1,500,381Gross Renewal Leasing Activity (square feet)
    
    
    653,832
    
    
    
    1,670,853Retention Rate
    
    
    73
    %
    
    
    67
    %Cash Rent Growth(2):Expiring Rate
    
    $
    25.03
    
    
    $
    23.01New / Renewed Rate
    
    $
    23.55
    
    
    $
    22.42Increase (decrease)
    
    
    (5.9
    )%
    
    
    (2.6
    )%GAAP Rent Growth(3):Expiring Rate
    
    $
    24.09
    
    
    $
    22.10New / Renewed Rate
    
    $
    24.32
    
    
    $
    23.09Increase
    
    
    1.0
    %
    
    
    4.5
    %Weighted Average Lease Term in Months  New
    
    
    62
    
    
    
    58Weighted Average Lease Term in Months  Renewal
    
    
    50
    
    
    
    43Tenant Improvements and Commissions (per square foot):New(2)
    
    $
    21.92
    
    
    $
    21.10Renewal
    
    $
    7.99
    
    
    $
    8.91Capital Expenditures (per square foot):Recurring
    
    $
    0.20
    
    
    $
    0.64Non-recurring
    
    $
    0.11
    
    
    $
    0.19
 
 (1)
    
    Excludes development/renovation space.(2)
    
    Represents the difference between initial stabilized cash rents on new and
renewal leases as compared to the expiring cash rents on the same space. For leases
with reduced initial rents, the first month of full rent is used.(3)
    
    Represents cash rent growth adjusted for straight-line rents. 28




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##### Table of Contents



PORTFOLIO DIVERSIFICATION
 Percentage ofOccupied
    
    
    TotalNAICS
    
    
    Square
    
    
    OccupiedNorth American Industrial Classification System Description
    
    Code
    
    
    Feet
    
    
    PortfolioProfessional, Scientific, and Technical Services
    
    
    541
    
    
    
    4,248,211
    
    
    
    25.11
    %Finance and Insurance
    
    
    521-525
    
    
    
    3,098,108
    
    
    
    18.31
    %Information
    
    
    511-519
    
    
    
    1,848,132
    
    
    
    10.92
    %Manufacturing
    
    
    311-339
    
    
    
    1,522,830
    
    
    
    9.00
    %Health Care and Social Assistance
    
    
    621-624
    
    
    
    1,038,797
    
    
    
    6.14
    %Real Estate, Rental and Leasing
    
    
    531-533
    
    
    
    999,220
    
    
    
    5.91
    %Educational Services
    
    
    611
    
    
    
    726,670
    
    
    
    4.30
    %Public Administration
    
    
    921-928
    
    
    
    686,080
    
    
    
    4.05
    %Administrative and Support and Waste Management and Remediation Services
    
    
    561-562
    
    
    
    663,048
    
    
    
    3.92
    %Wholesale Trade
    
    
    423-425
    
    
    
    433,991
    
    
    
    2.56
    %Construction
    
    
    236-238
    
    
    
    333,695
    
    
    
    1.97
    %Transportation and Warehousing
    
    
    481-493
    
    
    
    318,441
    
    
    
    1.88
    %Arts, Entertainment, and Recreation
    
    
    711-713
    
    
    
    237,352
    
    
    
    1.40
    %Other Services (except Public Administration)
    
    
    811-814
    
    
    
    236,323
    
    
    
    1.40
    %Retail Trade
    
    
    441-454
    
    
    
    222,205
    
    
    
    1.31
    %Accommodation and Food Services
    
    
    721-722
    
    
    
    201,065
    
    
    
    1.19
    %Management of Companies and Enterprises
    
    
    551
    
    
    
    51,756
    
    
    
    0.31
    %Utilities
    
    
    221
    
    
    
    16,490
    
    
    
    0.10
    %Agriculture, Forestry, Fishing and Hunting
    
    
    111-115
    
    
    
    3,595
    
    
    
    0.02
    %Mining
    
    
    211-213
    
    
    
    2,894
    
    
    
    0.02
    %Other  Uncategorized
    
    
    
    
    
    
    30,317
    
    
    
    0.18
    %16,919,220
    
    
    
    100.00
    %
 29




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##### Table of Contents



LEASE EXPIRATIONS  ANNUAL
 2010 and2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    ThereafterLos Angeles County:West
    
    Expiring SF (1)
    
    
    132,139
    
    
    
    683,976
    
    
    
    704,812
    
    
    
    699,932
    
    
    
    734,370
    
    
    
    2,203,262% of Leased SF (2)
    
    
    0.76
    %
    
    
    3.96
    %
    
    
    4.08
    %
    
    
    4.06
    %
    
    
    4.26
    %
    
    
    12.77
    %Rent per SF (3)
    
    $
    29.10
    
    
    $
    29.94
    
    
    $
    29.45
    
    
    $
    29.18
    
    
    $
    27.42
    
    
    $
    33.02North
    
    Expiring SF (1)
    
    
    130,758
    
    
    
    535,923
    
    
    
    540,645
    
    
    
    901,976
    
    
    
    428,236
    
    
    
    739,994% of Leased SF (2)
    
    
    0.76
    %
    
    
    3.10
    %
    
    
    3.13
    %
    
    
    5.23
    %
    
    
    2.48
    %
    
    
    4.29
    %Rent per SF (3)
    
    $
    23.96
    
    
    $
    23.71
    
    
    $
    23.13
    
    
    $
    24.76
    
    
    $
    25.12
    
    
    $
    24.36South
    
    Expiring SF (1)
    
    
    57,139
    
    
    
    232,187
    
    
    
    207,989
    
    
    
    344,098
    
    
    
    295,851
    
    
    
    1,052,063% of Leased SF (2)
    
    
    0.33
    %
    
    
    1.35
    %
    
    
    1.21
    %
    
    
    1.99
    %
    
    
    1.71
    %
    
    
    6.09
    %Rent per SF (3)
    
    $
    21.48
    
    
    $
    21.91
    
    
    $
    22.51
    
    
    $
    22.53
    
    
    $
    20.74
    
    
    $
    19.40Subtotal  Los Angeles County
    
    Expiring SF (1)
    
    
    320,036
    
    
    
    1,452,086
    
    
    
    1,453,446
    
    
    
    1,946,006
    
    
    
    1,458,457
    
    
    
    3,995,319% of Leased SF (2)
    
    
    1.85
    %
    
    
    8.41
    %
    
    
    8.42
    %
    
    
    11.28
    %
    
    
    8.45
    %
    
    
    23.15
    %Rent per SF (3)
    
    $
    25.64
    
    
    $
    26.36
    
    
    $
    26.10
    
    
    $
    25.96
    
    
    $
    25.39
    
    
    $
    27.83Orange County
    
    Expiring SF (1)
    
    
    110,208
    
    
    
    561,611
    
    
    
    601,059
    
    
    
    391,688
    
    
    
    337,369
    
    
    
    1,033,994% of Leased SF (2)
    
    
    0.64
    %
    
    
    3.26
    %
    
    
    3.48
    %
    
    
    2.27
    %
    
    
    1.95
    %
    
    
    5.99
    %Rent per SF (3)
    
    $
    21.04
    
    
    $
    20.62
    
    
    $
    18.36
    
    
    $
    20.10
    
    
    $
    21.21
    
    
    $
    23.96San Diego County
    
    Expiring SF (1)
    
    
    43,243
    
    
    
    472,088
    
    
    
    375,635
    
    
    
    507,103
    
    
    
    371,053
    
    
    
    1,001,540% of Leased SF (2)
    
    
    0.25
    %
    
    
    2.74
    %
    
    
    2.18
    %
    
    
    2.94
    %
    
    
    2.15
    %
    
    
    5.81
    %Rent per SF (3)
    
    $
    27.56
    
    
    $
    24.46
    
    
    $
    26.35
    
    
    $
    27.51
    
    
    $
    25.33
    
    
    $
    23.86All Others
    
    Expiring SF (1)
    
    
    96,078
    
    
    
    140,427
    
    
    
    45,621
    
    
    
    67,967
    
    
    
    91,016
    
    
    
    110,891% of Leased SF (2)
    
    
    0.56
    %
    
    
    0.81
    %
    
    
    0.27
    %
    
    
    0.39
    %
    
    
    0.53
    %
    
    
    0.64
    %Rent per SF (3)
    
    $
    20.52
    
    
    $
    21.20
    
    
    $
    20.83
    
    
    $
    21.82
    
    
    $
    18.03
    
    
    $
    22.56Total Portfolio
    
    Expiring SF (1)
    
    
    569,565
    
    
    
    2,626,212
    
    
    
    2,475,761
    
    
    
    2,912,764
    
    
    
    2,257,895
    
    
    
    6,141,744% of Leased SF (2)
    
    
    3.30
    %
    
    
    15.22
    %
    
    
    14.35
    %
    
    
    16.88
    %
    
    
    13.08
    %
    
    
    35.59
    %Rent per SF (3)
    
    $
    24.03
    
    
    $
    24.51
    
    
    $
    24.16
    
    
    $
    25.34
    
    
    $
    24.46
    
    
    $
    26.43
 
 (1)
    
    Represents the square footage of expiring leases, not including month-to-month
tenants.(2)
    
    Percentage of total rentable square footage expiring during the period.(3)
    
    Represents annualized ending cash rents of expiring leases. QUARTERLY LEASE EXPIRATIONS  NEXT FOUR QUARTERS
 Q4-05
    
    
    Q1-06
    
    
    Q2-06
    
    
    Q3-06Los Angeles County:West
    
    Expiring SF (1)
    
    
    132,139
    
    
    
    201,981
    
    
    
    68,516
    
    
    
    254,433% of Leased SF (2)
    
    
    0.76
    %
    
    
    1.17
    %
    
    
    0.40
    %
    
    
    1.48
    %Rent per SF (3)
    
    $
    29.10
    
    
    $
    26.90
    
    
    $
    27.16
    
    
    $
    32.89North
    
    Expiring SF (1)
    
    
    130,758
    
    
    
    114,264
    
    
    
    109,278
    
    
    
    134,850% of Leased SF (2)
    
    
    0.76
    %
    
    
    0.66
    %
    
    
    0.63
    %
    
    
    0.78
    %Rent per SF (3)
    
    $
    23.96
    
    
    $
    23.12
    
    
    $
    23.83
    
    
    $
    23.92South
    
    Expiring SF (1)
    
    
    57,139
    
    
    
    38,346
    
    
    
    81,104
    
    
    
    59,059% of Leased SF (2)
    
    
    0.33
    %
    
    
    0.22
    %
    
    
    0.47
    %
    
    
    0.34
    %Rent per SF (3)
    
    $
    21.48
    
    
    $
    21.33
    
    
    $
    22.36
    
    
    $
    22.04Subtotal  Los Angeles County
    
    Expiring
SF (1)
    
    
    320,036
    
    
    
    354,591
    
    
    
    258,898
    
    
    
    448,342% of Leased SF (2)
    
    
    1.85
    %
    
    
    2.05
    %
    
    
    1.50
    %
    
    
    2.60
    %Rent per SF (3)
    
    $
    25.64
    
    
    $
    25.08
    
    
    $
    24.25
    
    
    $
    28.76Orange County
    
    Expiring SF (1)
    
    
    110,208
    
    
    
    77,436
    
    
    
    197,943
    
    
    
    190,812% of Leased SF (2)
    
    
    0.64
    %
    
    
    0.45
    %
    
    
    1.15
    %
    
    
    1.10
    %Rent per SF (3)
    
    $
    21.04
    
    
    $
    14.94
    
    
    $
    19.81
    
    
    $
    22.51San Diego County
    
    Expiring SF (1)
    
    
    43,243
    
    
    
    91,391
    
    
    
    125,913
    
    
    
    162,240% of Leased SF (2)
    
    
    0.25
    %
    
    
    0.53
    %
    
    
    0.73
    %
    
    
    0.94
    %Rent per SF (3)
    
    $
    27.56
    
    
    $
    26.50
    
    
    $
    21.25
    
    
    $
    26.04All Others
    
    Expiring SF (1)
    
    
    96,078
    
    
    
    21,433
    
    
    
    8,510
    
    
    
    74,271% of Leased SF (2)
    
    
    0.56
    %
    
    
    0.13
    %
    
    
    0.05
    %
    
    
    0.43
    %Rent per SF (3)
    
    $
    20.52
    
    
    $
    20.16
    
    
    $
    19.68
    
    
    $
    21.33Total Portfolio
    
    Expiring SF (1)
    
    
    569,565
    
    
    
    544,851
    
    
    
    591,264
    
    
    
    875,665% of Leased SF (2)
    
    
    3.30
    %
    
    
    3.16
    %
    
    
    3.43
    %
    
    
    5.07
    %Rent per SF (3)
    
    $
    24.03
    
    
    $
    23.68
    
    
    $
    22.06
    
    
    $
    26.26
 
 (1)
    
    Represents the square footage of expiring leases, not including month-to-month
tenants.(2)
    
    Percentage of total rentable square footage expiring during the period.(3)
    
    Represents annualized ending cash rents of expiring leases. 30




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##### Table of Contents



Development
      
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Interest Rate Risk
        31




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##### Table of Contents



Item 4. Controls and Procedures
    32




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##### Table of Contents



Part II            OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds  None
 
 Item 3. Defaults Upon Senior Securities  None
 
 Item 4. Submission of Matters to a Vote of Security Holders   None
 
 Item 5. Other Information  None
 
 Item 6. Exhibits
 Exhibit Number
    
    Description10.1
    
    
    Fourth Amended and Restated Revolving Credit Agreement dated July 7, 2005, incorporated herein by reference to
Item 10.1 of Arden Realty, Inc.s current Report on Form 8-K filed with the Commission on July 13, 2005.10.2
    
    
    Summary of Increase of Fiscal 2005 Base Salary of Richard S. Davis, Executive Vice President and Chief
Financial Officer, incorporated herein by reference to Item 1.01(B) of Arden Realty, Inc.s current Report on Form
8-K filed with the Commission on July 13, 2005.31.1
    
    
    Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    
    Certificate of Chief Financial Officer and Other Executive Officers pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    
    Certificate of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(1)32.2
    
    
    Certificate of Chief Financial Officer and Other Executive Officers pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.(1)
 
 (1)
    
    In accordance with SEC Release No. 33-8212, the following exhibit is being furnished, and
is not being filed as part of this Report on Form 10-Q or as a separate
disclosure document, and is not being incorporated by reference into any Securities Act of
1933 registration statement. 33




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##### Table of Contents



SIGNATURES
  ARDEN REALTY LIMITED PARTNERSHIP
By: ARDEN REALTY, INC.
Its: General PartnerDate: November 9, 2005
    
    By:
    
    /s/ Robert C. PeddicordRobert C. Peddicord
Executive Vice President,
Leasing and Property OperationsDate: November 9, 2005
    
    By:
    
    /s/ Richard S. DavisRichard S. Davis
Executive Vice President and
Chief Financial Officer
 34